Exhibit 0
XXX XXXXXX XXXXXX STRATEGIC FIXED-INCOME FUND
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made as of the 23rd day of February, 1998,
between The Xxxxxx Square Strategic Fixed-Income Fund, a Massachusetts business
trust (the "Fund"), having its principal place of business in Wilmington,
Delaware, and Xxxxxx Square Distributors, Inc., a corporation organized under
the laws of the State of Delaware (the "Distributor"), having its principal
place of business in Wilmington, Delaware.
WHEREAS, the Fund wishes to employ the services of the Distributor, with
such assistance from its affiliates as the latter may provide; and
WHEREAS, the Distributor is a wholly owned subsidiary of Wilmington Trust
Company, which serves as investment adviser to the Fund; and
WHEREAS, the Distributor wishes to provide distribution services to the
Fund as set forth below;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. SALE OF SHARES. The Fund grants to the Distributor the right to sell
shares of beneficial interest (the "shares") of all series, and of all
classes now or hereafter created, on its behalf during the term of this
Agreement and subject to the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and of the laws governing the
sale of securities in various states (the "Blue Sky Laws") under the
following terms and conditions: the Distributor (a) shall have the right
to sell, as agent on behalf of the Fund, shares authorized for issue and
registered under the 1933 Act; (b) may sell shares under offers of
exchange, if available, between and among the funds distributed by
Distributor and advised by Xxxxxx Square Management Corporation or
Wilmington Trust Company; and (c) shall sell such shares only in
compliance with the terms set forth in the Fund's currently effective
registration statement. The Distributor may enter into selling agreements
with selected dealers and others for the sale of Fund shares and will act
only on its own behalf as principal in entering into such selling
agreements.
2. SALE OF SHARES BY THE FUND. The rights granted to the Distributor shall be
non-exclusive in that the Fund reserves the right to sell its shares to
investors on applications received and accepted by the Fund. Further, the
Fund reserves the right to issue shares in connection with (a) the merger
or consolidation, or acquisition by the Fund through purchase or
otherwise, with any other investment company, trust or personal holding
company; and (b) a PRO RATA distribution directly to --- ---- the holders
of shares in the nature of a stock dividend or split-up.
3. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to issued
shares of all series of the Fund, shares of all series of the Fund held in
its treasury in the event that, in the discretion of the Fund, treasury
shares shall be sold, and shares of all series of the Fund repurchased for
resale.
4. PUBLIC OFFERING PRICE. All shares sold to investors by the Distributor or
the Fund will be sold at the public offering price. The public offering
price for all accepted subscriptions will be the net asset value per
share, determined in the manner described in the Fund's current Prospectus
or SAI with respect to the applicable series. The Fund shall in all cases
receive the net asset value per share on all sales.
5. SUSPENSION OF SALES. If and whenever the determination of net asset value
is suspended and until such suspension is terminated, no further orders
for shares shall be processed by the Distributor except such unconditional
orders placed with the Distributor before it had knowledge of the
suspension. In addition, the Fund reserves the right to suspend sales and
the Distributor's authority to process orders for shares on behalf of the
Fund if, in the judgment of the Fund, it is in the best interests of the
Fund to do so. Suspension will continue for such period as may be
determined by the Fund. In addition, the Distributor reserves the right to
reject any purchase order.
6. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Fund. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. The Distributor agrees to use all
reasonable efforts to ensure that taxpayer identification numbers provided
for shareholders of the Fund are correct.
7. AUTHORIZED REPRESENTATIVE. The Distributor is not authorized by the Fund
to give any information or to make any representations other than those
contained in the appropriate registration statements, Prospectuses or SAIs
filed with the Securities and Exchange Commission under the 1933 Act (as
those registration statements, Prospectuses and SAIs may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Fund for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing, in compliance with applicable laws and regulations, sales
literature or other material as it may deem appropriate. The Distributor
will furnish or cause to be furnished copies of such sales literature or
other material to the President of the Fund or his designee and will
provide him with a reasonable opportunity to comment on it. The
Distributor agrees to take appropriate action to cease using such sales
literature or other material to which the Fund reasonably objects as
promptly as practicable after receipt of the objection.
8. REGISTRATION OF SHARES. The Fund agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval, if any, of its shareholders) so that there will be available for
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sale the number of shares the Distributor may reasonably be expected to
sell. The Fund shall furnish to the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of shares of each
series of the Fund.
9. Expenses, Compensation and Reimbursement
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(i) The Fund shall pay all fees and expenses:
(ii) in connection with the preparation, setting in type and filing
of any registration statement, Prospectus and SAI under the
1933 Act, and any amendments thereto, for the issue of its
shares;
(iii) in connection with the registration and qualification of
shares for sale in the various states in which the Board of
Trustees (the "Trustees") of the Fund shall determine it
advisable to qualify such shares for sale (including
registering the Fund or any series as a broker or dealer, or
any officer of the Fund as an agent or salesperson in any
state);
(iv) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Fund in their
capacity as such; and
(v) of printing and mailing Prospectuses, SAIs, and any
supplements thereto, sent to existing shareholders.
(b) The Distributor may, in its sole discretion, pay such expenses as it
deems reasonable for:
(i) printing and distributing Prospectuses, SAIs and reports
prepared for its use in connection with the offering of the
shares for sale to the public;
(ii) any other literature used in connection with such offering;
and
(c) advertising in connection with such offering.
(i) In addition to the services described above, the Distributor
will provide services including assistance in the production
of marketing and advertising materials for the sale of shares
of the Fund and their review for compliance with applicable
regulatory requirements, entering into dealer agreements with
broker-dealers to sell shares of the Fund and monitoring their
financial strength and contractual compliance, providing,
directly or through its affiliates, certain investor support
services, personal service, and the maintenance of shareholder
accounts.
10. Indemnification.
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(a) The Fund agrees to indemnify and hold harmless the Distributor and
each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the
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1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damages, or expense and reasonable
counsel fees incurred in connection therewith) arising by reason of
any person acquiring any shares, based upon the 1933 Act or any
other statute or common law, alleging any wrongful act of the Fund
or any of its employees or representatives, or based upon the
grounds that the registration statements, Prospectuses, SAIs,
shareholder reports or other information filed or made public by the
Fund (as from time to time amended) included an untrue statement of
a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading.
However, the Fund does not agree to indemnify the Distributor or
hold it harmless to the extent that the statement or omission was
made in reliance upon, and in conformity with, information furnished
to the Fund in writing by or on behalf of the Distributor. In no
case (i) is the indemnity of the Fund in favor of the Distributor or
any person indemnified to be deemed to protect the Distributor or
any person against any liability to the Fund or its security holders
to which the Distributor or such person would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard
of its obligations and duties under this Agreement, or (ii) is the
Fund to be liable under its indemnity agreement contained in this
Section 10(a) with respect to any claim made against the Distributor
or any person indemnified unless the Distributor or person, as the
case may be, shall have notified the Fund in writing of the claim
within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall
have been served upon the Distributor or any such person or after
the Distributor or such person shall have received notice of service
on any designated agent. However, failure to notify the Fund of any
claim shall not relieve the Fund from any liability which it may
have to the Distributor or any person against whom such action is
brought other than on account of its indemnity agreement contained
in this Section 10(a). The Fund shall be entitled to participate at
its own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Fund
elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Distributor, or person
or persons, defendant or defendants in the suit. In the event the
Fund elects to assume the defense of any suit and retain counsel,
the Distributor, officers or directors or controlling person(s) or
defendant(s) in the suit, shall bear the fees and expenses of any
additional counsel retained by them. If the Fund does not elect to
assume the defense of any suit, it will reimburse the Distributor,
officers or directors or controlling person(s) or defendant(s) in
the suit, for the reasonable fees and expenses of any counsel
retained by them. The Fund agrees to notify the Distributor promptly
of the commencement of any litigation or proceedings against it or
any of its officers or Trustees in connection with the issuance or
sale of any of the shares.
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(b) The Distributor also covenants and agrees that it will indemnify
and hold harmless the Fund and each of the members of its
Trustees and officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act, against
any loss, liability, damages, claim or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the 1933 Act or any other
statute or common law, alleging any wrongful act of the
Distributor or any of its employees or representatives, or
alleging that the registration statements, Prospectuses, SAIs,
shareholder reports or other information filed or made public by
the Fund (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact
required to be stated or necessary in order to make the
statements not misleading, insofar as the statement or omission
was made in reliance upon, and in conformity with, information
furnished in writing to the Fund by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor
in favor of the Fund or any person indemnified to be deemed to
protect the Fund or any person against any liability to which the
Fund or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard
of its obligations and duties under this Agreement, or (ii) is
the Distributor to be liable under its indemnity agreement
contained in this Section 10(b) with respect to any claim made
against the Fund or any person indemnified unless the Fund or
person, as the case may be, shall have notified the Distributor
in writing of the claim within a reasonable time after the
summons or other first written notification giving information of
the nature of the claim shall have been served upon the Fund or
any such person or after the Fund or such person shall have
received notice of service on any designated agent. However,
failure to notify the Distributor of any claim shall not relieve
the Distributor from any liability which it may have to the Fund
or any person against whom the action is brought other than on
account of its indemnity agreement contained in this Section
10(b). In the case of any notice to the Distributor, it shall be
entitled to participate, at its own expense, in the defense, or,
if it so elects, to assume the defense of any suit brought to
enforce any claims, but if the Distributor elects to assume the
defense, the defense shall be conducted by counsel chosen by it
and satisfactory to the Fund, to its officers and Trustees and to
any controlling person(s) or any defendants(s) in the suit. In
the event the Distributor elects to assume the defense of any
suit and retain counsel, the Fund or controlling person(s) or
defendant(s) in the suit, shall bear the fees and expenses of any
additional counsel retained by them. If the Distributor does not
elect to assume the defense of any suit, it will reimburse the
Fund, its officers or Trustees, controlling person(s) or
defendant(s) in the suit, for the reasonable fees and expenses of
any counsel retained by them. The Distributor agrees to notify
the Fund promptly of the commencement of any litigation or
proceedings against it in connection with the issue and sale of
any of the shares.
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11. EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become effective on
the date first written above, and unless terminated as provided, shall
continue in force for one (1) year from the date of its execution and
thereafter from year to year, provided continuance after the one (1) year
period is approved at least annually by either (a) the vote of a majority
of the Trustees of the Fund, or by the vote of a majority of the
outstanding voting securities of the Fund, and (b) the vote of a majority
of those Trustees of the Fund who are not interested persons of the Fund,
cast in person at a meeting called for the purpose of voting on the
approval. This Agreement shall automatically terminate in the event of its
assignment. As used in this Section 11, the terms "vote of a majority of
the outstanding voting securities," "assignment" and "interested person"
shall have the respective meanings specified in the 1940 Act and the rules
enacted thereunder as now in effect or as hereafter amended. In addition
to termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated without the payment of any penalty
by vote of the Board of Trustees of the Fund or by vote of a majority of
the outstanding voting securities of the Fund, on not more than sixty (60)
days' written notice to the Fund. This Agreement may be terminated by the
Distributor upon not less than sixty (60) days' prior written notice to
the Fund.
12. NOTICE. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail,
postage prepaid, to the other party to this Agreement at its principal
place of business.
13. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
14. GOVERNING LAW. To the extent that state law has not been preempted by the
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of the
State of Delaware.
15. SHAREHOLDER LIABILITY. The Distributor is hereby expressly put on notice
of the limitation of shareholder liability as set forth in the Declaration
of Trust of the Fund and agrees that obligations assumed by the Fund
pursuant to this Agreement shall be limited in all cases to the Fund and
its assets. The Distributor agrees that it shall not seek satisfaction of
any such obligation from the shareholders or any individual shareholder of
the Fund, nor from the Trustees or any individual Trustee of the Fund.
16. MISCELLANEOUS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be
executed in two counterparts, each of which, taken together, shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
THE XXXXXX SQUARE STRATEGIC FIXED-INCOME FUND
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: President
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XXXXXX SQUARE DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: President
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