FORM OF
DISTRIBUTION AGREEMENT
Xxxx Xxxxx Xxxxxxx Street Trust, Inc.
This DISTRIBUTION AGREEMENT, made this ___ day of ____________, 2006 by
and between Xxxx Xxxxx Xxxxxxx Street Trust, Inc. ("Investment Company"), a
Maryland Corporation and Xxxx Xxxxx Investor Services, LLC ("Distributor").
WHEREAS, the Investment Company is registered with the Securities and
Exchange Commission ("SEC") as an open-end management investment company under
the Investment Company Act of 1940, as amended ("1940 Act"), and has registered
its shares or the series thereof listed on Appendix A ("Shares"), as it may be
amended from time to time by agreement between the Distributor and respective
Investment Company (each such investment company or series thereof, as
appropriate, a "Fund"), for sale to the public under the Securities Act of 1933,
as amended ("1933 Act"), and filed appropriate notices under various state
securities laws; and
WHEREAS, the Investment Company wishes to retain the Distributor as the
principal underwriter in connection with the offering and sale of the Shares and
to furnish certain other services to the Investment Company as specified in this
Agreement; and
WHEREAS, this Agreement has been approved by separate votes of the
Investment Company's Board of Directors ("Board") and of those Board members who
are not "interested persons" of the Investment Company and who have no direct or
indirect financial interest in the operation of a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act ("Plan") of a Fund or in any
agreements related to such plan ("Independent Board Members") in conformity with
Section 15 of, and Rule 12b-1 under, the 1940 Act; and
WHEREAS, the Distributor is willing and able to furnish such services
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. (a) The Investment Company hereby appoints the Distributor as
principal underwriter and distributor in connection with the offering and sale
of Shares of each Fund to the public directly and through registered and
qualified securities dealers, banks and other intermediaries (collectively
"Intermediaries"), and the Distributor hereby accepts such appointment, on the
terms and for the period set forth in this Agreement. The Distributor, as agent
for the Investment Company, shall, in accordance with applicable federal and
state law and the organizational documents of the Investment Company and the
registration statement most recently filed by the Investment Company with the
SEC and effective under the 1940 Act and 1933 Act, as such Registration
Statement may be amended or supplemented from time to time ("Registration
Statement"): (i) promote each Fund; (ii) solicit orders for the purchase of the
Shares subject to such terms and conditions as the Investment Company may
specify; and (iii) accept orders for the purchase of the Shares on behalf of the
Investment Company (collectively, "Distribution Services"). The Distributor
shall comply with all applicable federal and state laws and offer the Shares of
each Fund on an agency or "best efforts" basis under which the Investment
Company shall issue only such Shares as are actually sold.
(b) The Distributor may pay for ongoing shareholder liaison
services, including responding to shareholder inquiries, providing shareholders
with information on their investments, and any other services now or hereafter
deemed to be appropriate subjects for the payments of "service fees" under
Conduct Rule 2820 or 2830 of the National Association of Securities Dealers,
Inc. ("NASD") (collectively, "Shareholder Services"), as appropriate.
2. The Distributor may also enter into dealer or similar
agreements with qualified Intermediaries it may select for the performance of
Distribution Services and Shareholder Services. These agreements for
Distribution Services, Shareholder Services, and recordkeeping and
sub-accounting services shall not be inconsistent with the provisions and terms
of this Agreement. The Distributor may also enter into agreements with
Intermediaries and other qualified entities to perform recordkeeping,
shareholder servicing and sub-accounting services and shall ensure that the
parties with whom it makes such arrangements agree to carry out their
responsibilities in conformance with applicable laws, rules, regulations and the
duties of Distributor as contained in this Agreement to the extent they are
applicable to such parties. In making such arrangements, the Distributor shall
act only as principal and not as agent for the Investment Company and shall
ensure that the parties with whom it makes such arrangements agree to carry out
their responsibilities in conformance with applicable laws, rules, regulations,
and the provisions of the Registration Statement to the extent they are
applicable to such parties and their activities. No such Intermediary is
authorized to act as agent for the Investment Company in connection with the
offering or sale of Shares to the public or otherwise, except for the limited
purpose of determining the time as of which transactions in Shares are deemed to
have been received.
3. The public offering price of the Shares of each Fund shall be
the net asset value per share (as determined by the Investment Company) of the
outstanding Shares of that Fund (or class thereof) next determined after receipt
of an order by the Fund or its designated agent plus any applicable sales charge
as described in the Registration Statement.
4. As compensation for providing Distribution Services under this
Agreement, the Distributor shall retain the sales charge, if any, on purchases
of Shares or retain deferred sales charges upon redemption of Shares, as set
forth in the Registration Statement. The Distributor is authorized to collect
the gross proceeds derived from the sale of the Shares, remit the net asset
value thereof to the Investment Company upon receipt of the proceeds and retain
the sales charge, if any. The Distributor shall receive from each Fund fees at
the rates and under the terms and conditions of the Plan adopted by the
Investment Company with respect to each Fund, as such Plan is in effect from
time to time, and subject to any further limitations on such fees as the Board
may impose. The Distributor may reallow any or all of the sales charges that it
has received under this Agreement to such Intermediaries as it may from time to
time determine, consistent with the Registration Statement and applicable law.
The Distributor may pay any or all of the distribution fees and service fees
that it has received under this Agreement to such Intermediaries as it may from
time to time determine, consistent with the Registration Statement and
applicable law. The Distributor may securitize or borrow against amounts to be
received by the Distributor under a Plan, in which case payments of the fees
under the Plan by a Fund may be made directly to the lender, security-holder or
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an agent thereof pursuant to written instructions of the Distributor; provided,
however, that no such arrangement shall be deemed to give rise to any obligation
on the part of the Investment Company or its Board to continue such payments in
the face of a determination by the Board that such payments are not in the best
interests of a Fund or its shareholders, or to create any obligation of a Fund
or the Investment Company to the lender.
5. As used in this Agreement, the terms "Prospectus" and
"Statement of Additional Information" shall mean, respectively, the form of
prospectus and statement of additional information with respect to each Fund
filed by the Investment Company as part of the Registration Statement, as they
may be amended or supplemented from time to time.
6. The Distributor shall print and distribute to prospective
investors as required by law current Prospectuses, and shall print and
distribute, upon request, to prospective investors or current shareholders
current Statements of Additional Information, and may print and distribute such
other sales literature, reports, forms and advertisements in connection with the
sale and offers of sale of the Shares as it deems appropriate. Except as
specifically provided in this Agreement, the Investment Company shall bear none
of the expenses of the Distributor in connection with its offer and sale of the
Shares.
7. The Investment Company agrees at its own expense to register,
qualify or determine the exemption from registration or qualification of the
Shares with the SEC, state and other regulatory bodies, and to prepare and file
from time to time such Registration Statement, amendments thereto, reports and
other documents as may be necessary to maintain the registration or
qualification. The Distributor and Intermediaries shall provide the Investment
Company promptly with all information required for such registration or
qualification. Each Fund shall bear all expenses related to preparing and
typesetting such Prospectuses, Statements of Additional Information, and other
materials required by law and such other expenses, including printing and
mailing expenses, related to such Fund's communications with persons who are
shareholders of that Fund.
8. (a) The Distributor shall act as distributor of the Shares in
compliance with all applicable laws, rules and regulations, including, without
limitation, all rules and regulations made or adopted (i) pursuant to the 1940
Act; (ii) pursuant to the 1933 Act; (iii) pursuant to the Securities Exchange
Act of 1934, as amended ("1934 Act"); and (iv) by any securities association
registered under the 1934 Act, including without limitation the NASD Conduct
Rules or rules of any other applicable self-regulatory organization. The
Distributor shall offer the Shares, and accept purchases, redemptions and
exchanges for Shares, in compliance with the Registration Statement and
applicable law.
(b) The Distributor shall be responsible for reviewing and
making such filings with the NASD, as required, of advertisements and sales
literature relating to each Fund. The Distributor shall be responsible for
reviewing the Registration Statement for compliance with applicable NASD Conduct
Rules.
(c) The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and Intermediaries, timeliness of orders, the
collection of amounts payable by investors and Intermediaries on such sales, the
correction of errors related to distribution of the Shares, the cancellation of
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unsettled transactions, and assisting with the solicitation of proxies, and any
other matters governed by Rule 38a-1 under the 1940 Act (as may apply to a
principal underwriter for a registered investment company), each as may be
necessary to comply with the requirements of the NASD, any other self-regulatory
organization, and the federal and state securities laws. The Distributor shall
provide reports or other information to the Investment Company at the Investment
Company's reasonable request, including, without limitation, reports related to
the operation and implementation plan of each Fund's policies related to
customer privacy, compliance, safeguarding of customer information, sales and
marketing practices or other policies and procedures of the Investment Company.
9. (a) The Investment Company agrees to indemnify, defend and
hold the Distributor, its officers, directors and employees and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the reasonable cost of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers, directors and employees or any
such controlling person may incur, under the 1933 Act or under common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or arising out of or based
upon any alleged omission to state a material fact required to be stated or
necessary to make the Registration Statement not misleading, provided that in no
event shall anything contained in this Agreement be construed so as to protect
the Distributor or such other parties against any liability to the Investment
Company or its shareholders to which the Distributor or such other parties would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of their duties, or by reason of reckless
disregard of their obligations and duties under this Agreement, and further
provided that, notwithstanding the foregoing, the Investment Company shall not
indemnify the Distributor or such other parties if such indemnification
obligation arose, directly or indirectly, as a result of conduct set forth in
paragraph 9(b).
(b) The Distributor agrees to indemnify, defend and hold the
Investment Company, its several officers and Board members, and any person who
controls the Investment Company within the meaning of Section 15 of the 1933
Act, free and harmless from and against any and all claims, demands, liabilities
and expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection therewith)
which the Investment Company, its officers or Board members, or any such
controlling person may incur, under the 1933 Act or under common law or
otherwise, on account of any act of the Distributor or its directors, officers,
employees or agents constituting willful misfeasance, bad faith, or, gross
negligence or a breach of this Agreement or arising out of or based upon any
alleged untrue statement of a material fact contained in information furnished
in writing by the Distributor to the Investment Company for use in the
Registration Statement or arising out of or based upon any alleged omission to
state a material fact in connection with such information required to be stated
in the Registration Statement or necessary to make such information not
misleading, or arising out of any advertising by the Distributor or any
Intermediary which is not limited to information contained in the Registration
Statement (to the extent supplemented by a subsequent filing with the SEC), or
in information furnished in writing to the Distributor by the Investment Company
and intended for such use.
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(c) Each party agrees to promptly notify the other of the
commencement of any litigation or proceedings involving any indemnified party.
The indemnification provisions of this paragraph 9 shall survive the termination
of this Agreement.
10. The Investment Company reserves the right at any time to
withdraw all offerings of the Shares of any Fund and to recommence offering any
time thereafter by written notice to the Distributor at its principal office.
11. The Distributor may at its sole discretion, directly or
through Intermediaries, repurchase Shares offered for sale by the shareholders
or Intermediaries. Repurchase of Shares by the Distributor shall be at the net
asset value (less any applicable sales, redemption or other charges, as
described in the Registration Statement) next determined after a repurchase
order has been received. The Distributor will receive no commission or other
remuneration for repurchasing Shares, other than deferred sales charges as
described in the Registration Statement. At the end of each business day, the
Distributor shall notify, by means of electronic transmission (as may be
agreed-upon by the parties to this Agreement) or in writing, the Investment
Company and the Investment Company's transfer agent of the orders for repurchase
of Shares received by the Distributor since the last such report, the amount to
be paid for such Shares, and the identity of the shareholders or Intermediaries
offering Shares for repurchase. Upon such notice, the Investment Company shall
pay the Distributor such amounts as are required by the Distributor to pay for
the repurchase of such Shares in cash or in the form of a credit against moneys
due the Investment Company from the Distributor as proceeds from the sale of
Shares. The Investment Company reserves the right to suspend such repurchase
right upon written notice to the Distributor. The Distributor further agrees to
act as agent for the Investment Company to receive and transmit promptly to the
Investment Company's transfer agent shareholder and Intermediary requests for
redemption of Shares
12. The Distributor is an independent contractor and shall be
agent for the Investment Company only in respect to the sale (but not the
advertising, nor contracting with any Intermediaries for the sale), redemption,
and exchange of the Shares, including for the limited purpose of determining the
time as of which Share transactions are deemed to have been received.
13. The services of the Distributor to the Investment Company
under this Agreement are not to be deemed exclusive, and the Distributor shall
be free to render similar services or other services to others so long as its
services hereunder are not impaired thereby.
14. The Distributor shall prepare reports for the Board on a
quarterly basis, or more frequently as reasonably requested by the Board,
showing such information concerning expenditures related to this Agreement or
related to the operation and implementation of each Fund's Plan.
15. As used in this Agreement, the terms "assignment," "interested
person" and "majority of the outstanding voting securities" shall have the
meanings given to them by Section 2(a) of the 1940 Act, subject to such
exemptions as may be granted by the SEC by any rule, regulation, order, or
no-action or interpretative letter.
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16. This Agreement will become effective with respect to a Fund on
the date first written above and, unless sooner terminated as provided herein,
will continue in effect for two years from the above written date. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to each
Fund for successive annual periods ending on the same date of each year,
provided that such continuance is specifically approved at least annually (i) by
the Board or (ii) by a vote of a majority of the outstanding voting securities
(as defined in the1940 Act) of the Fund, provided that in either event the
continuance is also approved by a majority of the Investment Company's Board
members who are not Interested Board Members of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval.
17. This Agreement is terminable with respect to some or all of
the Funds without penalty by the Board, by vote of a majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act), or by the
Distributor, on not less than 60 days' written notice to the other party, and
such notice period may be waived upon the mutual written consent of the
Distributor and the Investment Company. This Agreement will also automatically
and immediately terminate in the event of its assignment as defined in Section
16 of this Agreement.
18. Shares of any Fund may have been divided into separate
classes, as described in the Registration Statement, and may have sales charges
or discounts or waivers available for certain categories of investor.
19. Each Fund and the Distributor agree that the information
exchanged hereunder and information about the respective customers and potential
customers of each is confidential and as such shall not be disclosed, sold or
used in any way except to carry out the terms of this Agreement. Notwithstanding
the foregoing, such confidential information may be disclosed on a "need to
know" basis as set forth in applicable privacy rules and regulations. The
obligations regarding confidentiality hereunder shall not apply to any
information which is (i) otherwise publicly available, (ii) already possessed by
the entity to whom the information was disclosed prior to disclosure hereunder,
(iii) independently developed by the entity, or (iv) disclosed pursuant to law,
rule, regulation, or court or administrative order or regulatory request. The
Distributor shall have the right to use any list of shareholders of the Fund or
any other list of investors which it obtains in connection with its provision of
services under this Agreement, provided that such use is consistent with
applicable law and the privacy policies of the Distributor and the Fund. The
Distributor further agrees to take commercially reasonable steps, in accordance
with applicable law, to safeguard customer information. The provisions of this
paragraph 19 will survive termination of this Agreement.
20. From time to time, each Fund may implement policies,
procedures or charges in an effort to avoid the potential adverse effects on the
Funds of short-term trading by market timers. The Distributor agrees to
cooperate in good faith with the Investment Company in the implementation of any
such policies, procedures and/or charges, including the rejection or
cancellation of any purchase or exchange order, particularly when there appears
to be a pattern of market timing or other frequent purchases and sale, and the
imposition and payment over to the Fund of redemption fees specified in the
prospectus. The Distributor agrees to make reasonable efforts to obtain the
agreement of Intermediaries to comply with the Funds' frequent trading and other
policies set forth in the Funds' Prospectus or to take alternative actions
reasonably designed to achieve compliance with these policies. [The Distributor
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also agrees to enter into an information sharing agreement with each
Intermediary to comply with the requirements of Rule 22c-2 under the 1940 Act.]
21. No provision of this Agreement may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. This Agreement may be executed in multiple counterparts.
22. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
23. Notices shall be provided to each party, as noted below:
To the Distributor: Xxxx Xxxxx Investor Services, LLC
000 Xxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxx
To the Investment Company: Xxxx Xxxxx Xxxxxxx Street Trust, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Fund Secretary
24. The Articles of Incorporation of the Investment Company,
amended from time to time, which is on file with the Secretary of State of
Maryland, provides that to the fullest extent permitted by Maryland law, no
Board member or officer of the Investment Company shall be personally liable to
the Investment Company or its stockholders for money damages, except to the
extent such exemption from liability or limitation thereof is not permitted by
the 1940 Act.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
executed by their officers thereunto duly authorized.
ATTEST: XXXX XXXXX XXXXXXX STREET TRUST, INC.
By: _____________________________ By: ____________________________________
Assistant Secretary
ATTEST: XXXX XXXXX INVESTOR SERVICES, LLC
By: _____________________________ By: _____________________________________
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APPENDIX A
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Investment Company Fund Date Added:
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Xxxx Xxxxx Xxxxxxx Street Trust, Inc. Batterymarch U.S. Small ___________, 2006
Capitalization Equity Portfolio
Global Opportunities Bond Fund ___________, 2006
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