EXHIBIT 99.e(i)
AMERICAN BEACON FUNDS
AMERICAN BEACON MILEAGE FUNDS
AMERICAN BEACON SELECT FUNDS
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 1st day of March, 2005, by and between American
Beacon Funds, American Beacon Mileage Funds and American Beacon Select Funds,
each a Massachusetts business trust that acts as an open-end investment company,
with its principal office and place of business at 4151 Xxxx Xxxxxx Blvd., MD
2450, Xxxx Xxxxx, XX 00000 (each a "Client" and, collectively, the "Clients"),
and Foreside Fund Services, LLC, a Delaware limited liability company with its
principal office and place of business at Two Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
00000 ("Foreside").
WHEREAS, the Clients are each registered under the 1940 Act (as defined
below) as an open-end management investment company that issues or intends to
issue shares of beneficial interest (the "Shares"), in separate funds and
classes;
WHEREAS, the Clients offer Shares in the funds as listed in Schedule 1
hereto (the funds, together with all other funds subsequently established by the
Clients and made subject to this Agreement in accordance with Section 7.5 of
this Agreement being herein referred to as a "Fund," and collectively as the
"Funds") and the Clients intend to offer shares of various classes of each Fund
as listed in Schedule 1 hereto (each such class together with all other classes
subsequently established by the Clients in a Fund in accordance with Section 7.5
of this Agreement being herein referred to as a "Class," and collectively as the
"Classes"); and
WHEREAS, the Clients desire that Foreside offer, as distributor, the
Shares of each Fund and Class thereof to the public and Foreside is willing to
provide those services on the terms and conditions set forth in this Agreement
in order to promote the growth of the Funds and facilitate the distribution of
the Shares;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Clients and Foreside hereby agree as follows:
SECTION 1. DEFINITIONS; APPOINTMENT; DELIVERY OF DOCUMENTS
1.1 FREQUENTLY USED DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:
(a) "1940 Act" means the Investment Company Act of 1940, as amended.
(b) "Adviser" means American Beacon Advisors, Inc., the adviser to each
of the Funds listed in Schedule 1 hereto.
(c) "Affiliate" means, with respect to any Person, any other Person that
is controlled by, controls, or is under common control with such
Person; for purposes hereof, "control" of a Person means (i)
ownership of, or possession of the right to vote, more than 25% of
the outstanding voting equity of that person or (ii) the right to
control the appointment of the board of directors, management or
executive officers of that person.
(d) "Agreement" means this Agreement and any appendices and schedules
attached hereto, in each case as they may be amended from time to
time.
(e) "Authorized Person(s)" means the persons described or listed on
Schedule 2 hereto.
(f) "Conduct Rules" means the Conduct Rules of the NASD.
(g) "Class" and "Classes" have the meaning set forth in the preamble to
this Agreement.
(h) "Clients" has the meaning set forth in the preamble to this
Agreement and includes successors-in-interest; unless the context
shall require otherwise, references to the Clients shall include any
Funds or Classes thereof.
(i) "Effective Date" means the date first set forth above.
(j) "Governing Body" means, for any entity, the Person or body of
Persons governing the operations of the entity under its Organic
Documents (for example, if the entity is a corporation, its board of
directors).
(k) "Foreside" has the meaning set forth in the preamble to this
Agreement and includes successors-in-interest.
(l) "Fund" and "Funds" have the meaning set forth in the preamble to
this Agreement.
(m) "Instruction" means any oral and written notice or statement
directing action or inaction, including any such notice or statement
transmitted to Foreside (i) in electronic format by machine readable
input, electronic mail, CRT data entry or other similar means, or
(ii) in person or by telephone, telecopy, vocal telegram or similar
means.
(n) "Laws" means any statutes, rules and regulations of any governmental
authority and applicable judicial or regulatory interpretations
thereof including without limitation the Conduct Rules of the NASD.
(o) "NASD" means the National Association of Securities Dealers, Inc.
(p) "NSCC" means the National Securities Clearing Corporation.
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(q) "Organic Documents" means, for any entity, the documents pursuant to
which the entity was formed as a legal entity, as such documents may
be amended from time to time.
(r) "Parties" means the Clients and Foreside.
(s) "Person" means any natural person or incorporated or unincorporated
entity.
(t) "Predecessor Records" has the meaning set forth in Section 2.9(b).
(u) "Prospectus" has the meaning set forth in Section 2.5(a).
(v) "Registration Statement" means a registration statement filed under
the Securities with respect to the Shares, as amended from time to
time.
(w) "SEC" means the United States Securities and Exchange Commission and
any successor governmental authority.
(x) "Securities Act" means the Securities Act of 1933, as amended.
(y) "Servicing Agent" has the meaning in Section 2.3.
(z) "Services" means the services provided by Foreside to the Clients
set forth in Section 2.4.
(aa) "Services Commencement Date" means, with respect to any Fund or
Class thereof, (i) if the registration statement of the Fund or
Class is effective as of the Effective Date, then such Effective
Date; (ii), if such registration statement is not effective as of
the Effective Date, then the date such registration statement is
declared effective; or (iii) such other date as may be agreed in
writing by the Parties.
(bb) "Shareholder" means any Person that holds Shares of record.
(cc) "Shares" has the meaning set forth in the preamble to this
Agreement.
(dd) "State" means any of the various states and territories of the
United States.
Other capitalized terms used but not defined in this Section 1.1 shall have the
meanings set forth in this Agreement.
1.2 APPOINTMENT. The Clients hereby appoint Foreside to act as distributor for
the period and on the terms set forth in this Agreement, and Foreside hereby
accepts such appointment and in connection with such appointment agrees to
provide the Services on the terms and conditions set forth in this Agreement,
subject to applicable Laws, Organic Documents and the current Registration
Statement of each Clients.
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SECTION 2. OFFERING AND REDEMPTION OF SHARES; FORESIDE'S DUTIES; OTHER RELATED
TERMS AND CONDITIONS
2.1. OFFERING OF SHARES.
(a) Foreside shall act as the Clients' agent to offer, and to solicit
offers to subscribe to, unsold Shares of the Funds as shall then be
effectively registered under the Securities Act. Foreside will promptly
forward all orders and subscriptions to the Clients, or their designated
agent. The price at which Foreside shall offer the Shares shall be the net
asset value per Share, determined as set forth in Section 2.1(b) hereof.
The Clients reserve the right to sell Shares directly to investors through
subscriptions received by the Clients.
(b) The public offering price of the Shares of a Fund (i.e., the price
per Share at which Foreside or Servicing Agents may offer or sell Shares
to the public or to those persons eligible to invest in Shares as
described in the applicable Prospectus) shall be the public offering price
determined in accordance with the then-currently effective Prospectus of
the Fund or Class thereof under the Securities Act relating to such
Shares. The Clients will advise Foreside of the net asset value per Share
at each time as the net asset value per Share shall have been determined
by the Clients and at such other times as Foreside may reasonably request.
(c) The net asset value per Share of each Fund or Class thereof shall be
determined by the Clients, or their designated agent, in accordance with
and at the times indicated in the applicable Prospectus in accordance with
the method set forth in the Prospectus and guidelines established by the
Clients' Governing Body.
(d) The Clients reserve the right to suspend the offering of Shares of a
Fund or of any Class thereof at any time in the absolute discretion of
their Governing Body, and upon notice of such suspension Foreside shall
cease to offer Shares of the Funds or Classes thereof specified in the
notice.
(e) The Clients, or any agent of the Clients designated in writing to
Foreside by the Clients, shall be promptly advised by Foreside or
Servicing Agents of all purchase orders for Shares received by Foreside or
such Servicing Agents, and all such subscriptions for Shares obtained by
Foreside as agent shall be directed to the Clients or their agent for
acceptance and shall not be binding until accepted by the Clients. The
Clients, in their discretion, may refuse to accept any order for the
purchase of shares that Foreside or Servicing Agents may tender to it.
Foreside acknowledges that the Clients seek to avoid so called "market
timers" and may reject or refuse to accept or confirm orders or
subscriptions from any persons who exhibit or who may exhibit market
timing behavior. The Clients or their designated agent will confirm orders
and subscriptions upon their receipt, will make appropriate book entries
and, upon receipt by the Clients or their designated agent of payment
thereof, will issue such Shares in uncertificated form pursuant to the
instructions of Foreside.
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(f) None of Foreside, any Servicing Agent or any other person is
authorized by the Clients to give any information or to make any
representations other than as is contained in a Fund's Prospectus or any
advertising materials or sales literature specifically approved in writing
by the Clients or their agents.
2.2. REPURCHASE AND REDEMPTION OF SHARES.
(a) Any of the outstanding Shares of a Fund or Class thereof may be
tendered for redemption at any time, and the Clients agree to redeem or
repurchase the Shares so tendered in accordance with their obligations as
set forth in the Organic Documents and the Prospectus relating to the
Shares. The price to be paid to redeem or repurchase the Shares of a Fund
or Class thereof shall be equal to the net asset value calculated in
accordance with the provisions of Section 2.1(b) hereof less any
redemption fees or other applicable fees or expenses as set forth in the
then-current Prospectus.
(b) The Clients or their designated agent shall pay (i) the total
amount of the redemption price consisting of the redemption price after
applicable redemption or other fees and (ii) except as may be otherwise
required by the Conduct Rules and any interpretations thereof, in
accordance with Foreside's instructions, on or before the seventh day (or
such other earlier business day as is customary in the investment company
industry) subsequent to the Clients or their agent having received the
notice of redemption in proper form.
(c) Redemption of Shares or payment therefor may be suspended at times
when the New York Stock Exchange is closed for any reason other than its
customary weekend or holiday closings, when trading thereon is restricted,
when an emergency exists as a result of which disposal by the Clients of
securities owned by a Fund is not reasonably practicable or it is not
reasonably practicable for the Clients fairly to determine the value of a
Fund's net assets, or during any other period when the SEC so requires or
permits.
2.3. SERVICING AGENTS.
At the request of the Clients, Foreside shall enter into Servicing Agent
agreements with securities dealers, depository institutions and other financial
intermediaries for the purpose of facilitating the offer, sale and redemption of
Shares by Shareholders; provided, that the Clients and the Clients' Adviser
shall pre-approve the forms of agreements with Servicing Agents and shall have
the right to approve any compensation set forth therein or any material changes
from such pre-approved forms. Shares of each Fund or Class thereof shall be
offered and resold by Servicing Agents only at the public offering prices and
under the terms set forth in the Prospectus relating to the Shares. Within the
United States, Foreside shall enter into Servicing Agent agreements only with
members in good standing of the NASD or financial intermediaries otherwise
exempt from registration as a broker-dealer for receiving transaction based
compensation, such as banks and trust companies.
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2.4. FORESIDE'S SERVICES AND DUTIES; EXCLUSIVITY.
(a) Foreside shall use reasonable efforts to solicit orders to purchase
Shares of the Funds upon the terms and conditions contained herein and in
the then current Prospectus. Foreside shall devote reasonable time and
effort to effect sales of Shares but shall not be obligated to sell any
specific number of Shares.
(b) Foreside shall maintain its registration as a broker-dealer in all
States. Foreside will notify the Clients immediately if it ceases
maintaining registration in advance of any required filing or renewal
date.
(c) In performing its services under this Agreement, Foreside shall
conform in all respects with the requirements of all Federal and State
Laws relating to the offer and sale of the Shares.
(d) Foreside shall, at the request of the Clients (i) attempt to
maintain active agreements with any Servicing Agents related to the
servicing of the Funds that, prior to the Effective Date of this
Agreement, acted in similar capacities for a Fund, and (ii) assist the
Adviser to the Fund in obtaining additional agreements with broker-dealers
and other financial intermediaries.
(e) Foreside shall maintain membership with the NSCC and any other
similar successor organization to sponsor a participant number for the
Funds so as to enable the Shares to be traded through FundSERV. Foreside
is not responsible for any operational matters associated with FundSERV or
Networking transactions.
(f) Nothing contained herein shall be construed to require Foreside to
perform any service that could cause Foreside to be deemed an investment
adviser for purposes of the 1940 Act or the Investment Advisers Act of
1940, as amended.
(g) Neither Foreside,, nor any other person acting on behalf of Foreside
is authorized to give any information or to make any representations other
than as is contained in a Fund's Prospectus, statement of additional
information, or any advertising materials or sales literature specifically
approve in writing by the Client or its agents.
(h) Except as specifically set forth in this Agreement to the contrary,
Foreside assumes no responsibility for compliance by the Clients with any
Laws applicable to the Clients with which Foreside has no role in
achieving compliance; and, notwithstanding any other provision of this
Agreement to the contrary, Foreside assumes no responsibility under this
Agreement to Clients or any other Person for compliance by the Clients or
Foreside with the Laws of any jurisdiction other than those of the United
States.
(i) Nothing contained in this Agreement shall require Foreside to
perform any functions or duties on any weekend day or on any other day on
which the Clients does not accept subscriptions and redemptions of its
Shares (a "Business Day"). Functions or duties normally scheduled to be
performed on any day that is not a Business Day shall be performed on, and
as of, the next Business Day, unless otherwise required by applicable Law.
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(j) Foreside shall be the exclusive representative of the Clients to act
as distributor of the Shares of the Funds and Classes, except that the
rights given under this Agreement to Foreside shall not apply to: (i)
Shares issued in connection with the merger, consolidation or
reorganization of any other investment company or series or class thereof
with a Fund or Class thereof; (ii) a Fund's acquisition by purchase or
otherwise of all or substantially all of the assets or stock of any other
investment company or series or class thereof; (iii) the reinvestment in
Shares by a Fund's shareholders of dividends or other distributions; or
(iv) any other offering by the Clients of securities to their
shareholders.
2.5. CERTAIN DOCUMENTS; CHANGES IN LAW.
(a) Contemporaneous with the Effective Date, the Clients shall deliver
to Foreside copies of the following documents: (i) the Clients's Organic
Documents; (ii) the Prospectuses for the Funds and Classes thereof (each,
a "Prospectus"); and (iii) any relevant policies and procedures adopted by
the Clients pursuant to Rule 38a-1 of the 1940 Act that are applicable to
the services provided by Foresides. The Clients shall also deliver to
Foreside: (x) a copy of the resolution of the Board of Trustees of the
Clients (the "Board") appointing Foreside and authorizing the execution
and delivery of this Agreement; and (y) any other documents, materials or
information that Foreside shall reasonably request to enable it to perform
its duties pursuant to this Agreement.
(b) Clients shall deliver to Foreside as soon as is reasonably
practical any and all amendments to the documents required to be delivered
under Section 2.5(a).
(c) In the event there is a change in Law related to or affecting the
Services, Foreside shall begin performing new service(s) as soon as such
change is effective or enforceable. If such new service(s) are materially
different or more burdensome than the current level of service(s), the
parties shall agree to mutually acceptable policies and procedures for
such new service(s).
2.6. RELIANCE ON INSTRUCTIONS, DOCUMENTS AND ADVICE.
(a) With respect to the subject matter of this Agreement, Foreside may
rely on (i) with respect to any matter, advice or Instruction that it
receives and that it reasonably believes in good faith was transmitted by
the Clients's Governing Body or an Authorized Person; or (ii) with respect
to any factual matter, any signature, Instruction, request, letter of
transmittal, certificate, opinion of counsel, statement, instrument,
report, notice, consent, order, or other document of or presented by any
Person (including any authorized representative(s) of any predecessor
service providers to the Clients).
(b) Notwithstanding any other provisions of this Agreement to the
contrary, Foreside shall have no duty or obligation to inquire into (i)
the authenticity of any statement, oral or written Instruction,
resolution, signature, request, letter of transmittal, certificate,
opinion of counsel, instrument, report, notice, consent, order, or any
other document or
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instrument that Foreside reasonably believes in good faith to be genuine;
or (ii) the authority or lack thereof of any Person to represent or act as
an agent for any other Person, provided that Foreside reasonably believes
in good faith that such authority exists, and, provided,further, that with
respect to Instructions of the Clients, Foreside may only rely on
Instructions of the Clients' Governing Body or Authorized Persons.
(c) Foreside may assume that any Instructions are not in any way
inconsistent with the Organizational Documents, the Prospectus, or any
proceeding or resolution of the Clients' Governing Body or the
Shareholders of the Clients, unless and until Foreside receives written
notice to the contrary from the Clients' Governing Body or an Authorized
Person, and provided that Foreside makes reasonable inquiry into any
instructions if Foreside has doubts regarding the intention of any
instructions.
(d) Absent specific written notice to the contrary, Foreside may assume
that Authorized Persons are authorized to deliver instructions relating to
all or any matter under this Agreement. The Clients' Governing Body may at
any time (i) change the list of Authorized Persons or (ii) limit an
Authorized Person's authority upon delivery of written notice from a
representative thereof to Foreside.
(e) About any matter related to the Clients or the Services, Foreside
may apply to any Authorized Person for advice or Instructions.
(f) Nothing in this Section 2.6 shall be construed as imposing on
Foreside any obligation to seek advice or Instructions, or, subject to
Section 3.1(b), to act in accordance with such advice or Instructions if
and when received.
2.7. OTHER ACTIVITIES. Foreside may provide services similar to those
provided under this Agreement for any other Person on such terms as may be
arranged with such Person, and Foreside shall not be required to disclose to the
Clients any fact or thing that may come to the knowledge of Foreside in the
course of so doing.
2.8 COOPERATION WITH INDEPENDENT AUDITORS AND COUNSEL. Foreside shall
cooperate with the independent auditor(s) and attorneys of the Clients and shall
take reasonable action to make all necessary information related to the Services
available to such auditors and attorneys for the performance of their duties.
2.9 CERTAIN RESPONSIBILITIES OF THE CLIENTS. The Clients agree to:
(a) Comply in all material respects with all applicable provisions of
the 1940 Act, the Securities Act, Conduct Rules and all other Laws
governing the issuance and sale of Shares or otherwise applicable to the
Clients.
(b) Prior to the Services Commencement Date, deliver or cause to be
delivered to Foreside all books, records and other documents relating to
the Clients's prior operations and service providers, if any, that, in
Foreside's reasonable opinion, are necessary for Foreside properly to
provide the Services (collectively "Predecessor Records").
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(c) Provide, and cause each other agent or service provider to the
Clients to provide, to Foreside all such information (and in such
reasonable medium) that Foreside may reasonably request in connection with
the Services and this Agreement.
(d) Upon request, deliver to Foreside in advance of filing thereof with
the SEC any relevant portions of the Registration Statement in order to
permit Foreside and its agents to review and comment upon, at Foreside's
discretion, those portions thereof that describe Foreside and Foreside's
duties and obligations under this Agreement, including the indemnity
provisions hereof, and the Clients shall not make any reference to
Foreside and such duties, obligations and indemnities in any Registration
Statement without Foreside's consent, which consent shall not be
unreasonably withheld or delayed.
(e) Upon request, furnish to Foreside copies of all financial statements
and other documents to be delivered to shareholders or investors within a
reasonable period of time prior to such delivery and shall furnish
Foreside copies of all other financial statements, documents and other
papers or information which Foreside may reasonably request for use in
connection with the distribution of Shares. The Clients shall make
available to Foreside the number of copies of the Funds' Prospectuses as
Foreside shall reasonably request.
(f) Cause the transfer agent for each Fund and Class, where necessary or
appropriate, to provide Foreside with any information that may be
necessary for Foreside to perform its duties under this Agreement.
(g) Advise Foreside as soon as reasonably possible: (i) of the issuance
by the SEC of any stop order suspending the effectiveness of the Clients'
Registration Statement or any Prospectus or the initiation of any
proceedings for that purpose; or (ii) of the happening of any material
event which makes untrue any statement made in the Clients' Registration
Statement or which requires the making of a change in either thereof in
order to make the statements therein not misleading.
SECTION 3. RECORDKEEPING; PROPRIETARY INFORMATION; CONFIDENTIALITY
3.1 PREDECESSOR RECORDS; OWNERSHIP; INSPECTION; SUCCESSORS.
(a) Predecessor Records received by Foreside pursuant to Section 2.9(b)
shall be the property of the Clients. The Clients and the Clients's
authorized representatives shall have access to such Predecessor Records
at all times during Foreside's normal business hours. Upon the reasonable
advance request of the Clients or such authorized representatives, copies
of any such Predecessor Records shall be provided by Foreside, at the
Clients's expense, to the Clients or their authorized representatives.
(b) If Foreside receives a request or demand from a third party to
inspect any Predecessor Records, Foreside will endeavor to notify the
Clients and to secure
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Instructions from the Clients or an Authorized Person about such
inspection. Foreside shall abide by such Instructions for granting or
denying the inspection; provided, that Foreside may grant the inspection
without Instructions or in contravention of specific Instructions if
Foreside is advised by counsel to Foreside or the Clients that failure to
do so is substantially likely to result in liability to Foreside; and
provided, further, that in such event, Foreside shall endeavor promptly to
advise the Clients of such contrary advice, to the extent practicable in
advance of any actual inspection.
(d) Upon termination of this Agreement, Foreside shall, at the expense
and direction of the Clients, transfer to Clients or any successor service
provider all Predecessor Records in the electronic or other medium in
which such material is then maintained by Foreside.
3.2 PROPRIETARY INFORMATION OF FORESIDE. The Clients acknowledge that the
databases, computer programs, screen formats, report formats, interactive design
techniques, and documentation manuals maintained by Foreside on databases under
the control and ownership of Foreside or a third party constitute copyrighted,
trade secret, or other proprietary information (collectively, "Proprietary
Information") of substantial importance to Foreside or the third party. The
Clients agree to treat all Proprietary Information as proprietary to Foreside
and further agrees that it shall maintain as confidential any Proprietary
Information, except as may be provided under this Agreement, and that breach by
the Clients of this confidentiality obligation would cause irreparable injury to
Foreside.
3.3 CONFIDENTIALITY.
(a) Each Party (for purposes of this Section 3.3, a "Receiving Party")
agrees to keep confidential all information disclosed by the other Party
(for purposes of this Section 3.3, a "Disclosing Party"), including,
without limitation all forms and types of financial, business, marketing,
operations, technical, economic and engineering information of the
Disclosing Party, whether tangible or intangible.
(b) Notwithstanding any provision of this Agreement to the contrary,
the Parties agree that the following information shall not be deemed
confidential information: (i) information that was known to the receiving
Party before receipt thereof from or on behalf of the Disclosing Party;
(ii) information that is disclosed to the Receiving Party by a third
person who has a right to make such disclosure without any obligation of
confidentiality to the Party seeking to enforce its rights under this
Section 3; (iii) information that is or becomes generally known in the
trade without violation of this Agreement by the Receiving Party; or (iv)
information that is independently developed by the Receiving Party or its
employees or affiliates without reference to the Disclosing Party's
information.
(c) Notwithstanding any provision of this Agreement to the contrary,
Foreside may: (i) provide information to Foreside's counsel and to Persons
engaged by Foreside or the Clients to provide services with respect to the
Clients; (ii) provide information consistent with the Procedures or with
operating procedures that are customary with respect to the
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Services in the industry; (iii) identify the Clients as a client of
Foreside for Foreside's sales and marketing purposes; and (iv) provide
information as approved by an Authorized Person, provided, that such
approval shall not be unreasonably withheld or delayed.
(d) Foreside acknowledges that certain Shareholder information made
available by the Clients to Foreside or otherwise maintained by Foreside
under this Agreement may be deemed nonpublic personal information under
the Xxxxx-Xxxxx-Xxxxxx Act and other applicable privacy Laws
(collectively, "Privacy Laws"). Foreside agrees (i) not to disclose or use
such information except as required to carry out its duties under the
Agreement or as otherwise permitted by law in the ordinary course of
business; (ii) to limit access to such information to authorized
representatives of Foreside and the Clients; (iii) to establish and
maintain reasonable physical, electronic and procedural safeguards to
protect such information; and (iv) to cooperate with the Clients and
provide reasonable assistance in ensuring compliance with such Privacy
Laws to the extent applicable to either or both of the Parties.
SECTION 4. RESPONSIBILITY OF FORESIDE; INDEMNIFICATION; OTHER LIABILITY-RELATED
MATTERS
4.1. RESPONSIBILITY OF FORESIDE; LIMITATIONS.
(a) Foreside shall be under no duty to take any action under this
Agreement except as specifically set forth in this Agreement or as may be
specifically agreed to by Foreside and the Clients in a written amendment
to this Agreement.
(b) In performing the Services, Foreside (i) shall act in good faith
and shall be obligated to exercise care and diligence; and (ii) may,
without limiting the generality of any other provision of this Agreement,
rely on Instructions, advice and information pursuant to Section 2.6.
4.2 INDEMNIFICATION; NOTIFICATION OF CLAIMS.
(a) Notwithstanding anything in this Agreement to the contrary,
Foreside shall not be responsible for, and the Clients shall on behalf of
each applicable Fund or Class thereof, indemnify and hold harmless
Foreside, its employees, directors, officers and managers and any person
who controls Foreside within the meaning of section 15 of the Securities
Act or section 20 of the Securities Exchange Act of 1934, as amended, (for
purposes of this Section 4.2(a), "Foreside Indemnitees") from and against,
any and all losses, damages, costs, charges, reasonable counsel fees,
payments, liabilities and other expenses of every nature and character
(including, but not limited to, direct and indirect reasonable
reprocessing costs) arising out of or attributable to all and any of the
following (for purposes of this Section 4.2(a), a "Foreside Claim"):
(i) any action (or omission to act) of Foreside or its agents taken in
connection with this Agreement; provided, that such action (or
omission to act) is taken in good
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faith and without willful misfeasance, negligence or reckless
disregard by Foreside of its duties and obligations under this
Agreement;
(ii) any 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 therein or
necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon, and in conformity
with, information furnished to the Clients in connection with the
preparation of the Registration Statement or exhibits to the
Registration Statement by or on behalf of Foreside;
(iii) any material breach of the Clients' agreements, representations,
warranties, and covenants in Sections 2.9 and 5.2 of this Agreement;
or
(iv) the reliance on or use by Foreside or its agents or subcontractors
of information, records, documents or services which have been
prepared, maintained or performed by the Clients or any agent of the
Clients, including but not limited to any Predecessor Records
provided pursuant to Section 2.9(b).
(b) Foreside will indemnify, defend and hold the Clients and their
several officers and members of their Governing Bodies and any person who
controls the Clients within the meaning of section 15 of the Securities
Act or section 20 of the Securities Exchange Act of 1934, as amended,
(collectively, the "Clients Indemnitees" and, with the Foreside
Indemnitees, an "Indemnitee"), free and harmless from and against any and
all claims, demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character (including the cost of investigating or
defending such claims, demands, actions, suits or liabilities and any
reasonable counsel fees incurred in connection therewith), but only to the
extent that such claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other
expenses result from, arise out of or are based upon all and any of the
following (for purposes of this Section 4.2(c), a "Clients Claim" and,
with a Foreside Claim, a "Claim"):
(i) any material action (or omission to act) of Foreside or its agents
taken in connection with this Agreement, provided that such action
(or omission to act) is not taken in good faith and with willful
misfeasance, negligence or reckless disregard by Foreside of its
duties and obligations under this Agreement.
(ii) any untrue statement of a material fact contained in the
Registration Statement or any alleged omission of a material fact
required to be stated or necessary to make the statements therein
not misleading, if such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Clients
in writing in connection with the preparation of the Registration
Statement by or on behalf of Foreside; or
(iii) any material breach of Foreside's agreements, representations,
warranties and covenants set forth in Section 2.4 and 5.1 hereof.
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(d) The Clients or Foreside (for purpose of this Section 4.2(d), an
"Indemnifying Party") may assume the defense of any suit brought to
enforce any Foreside Claim or Clients Claim, respectively, and may retain
counsel chosen by the Indemnifying Party and approved by the other Party,
which approval shall not be unreasonably withheld or delayed. The
Indemnifying Party shall advise the other Party that it will assume the
defense of the suit and retain counsel within ten (10) days of receipt of
the notice of the claim. If the Indemnifying Party assumes the defense of
any such suit and retains counsel, the other Party shall bear the fees and
expenses of any additional counsel that they retain. If the Indemnifying
Party does not assume the defense of any such suit, or if other Party does
not approve of counsel chosen by the Indemnifying Party, or if the other
Party has been advised that it may have available defenses or claims that
are not available to or conflict with those available to the Indemnifying
Party, the Indemnifying Party will reimburse any Indemnitee named as
defendant in such suit for the reasonable fees and expenses of any counsel
that the Indemnitee retains. An Indemnitee shall not settle or confess any
claim without the prior written consent of the applicable Client, which
consent shall not be unreasonably withheld or delayed.
(e) An Indemnifying Party's obligation to provide indemnification under
this section is conditioned upon the Indemnifying Party receiving notice
of any action brought against an Indemnitee within twenty (20) days after
the summons or other first legal process is served. Such notice shall
refer to the Person or Persons against whom the action is brought. The
failure to provide such notice shall not relieve the Indemnifying Party of
any liability that it may have to any Indemnitee except to the extent that
the ability of the party entitled to such notice to defend such action has
been materially adversely affected by the failure to provide notice.
(f) The provisions of this section and the parties' representations and
warranties in this Agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any
Indemnitee and shall survive the sale and redemption of any Shares made
pursuant to subscriptions obtained by Foreside. The indemnification
provisions of this section will inure exclusively to the benefit of each
person that may be an Indemnitee at any time and their respective
successors and assigns (it being intended that such persons be deemed to
be third party beneficiaries under this Agreement).
4.3 OTHER LIABILITY-RELATED MATTERS. Notwithstanding anything in this
Agreement to the contrary, except as specifically set forth below:
(a) Neither Party shall be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by reason of
circumstances beyond its reasonable control, including, without
limitation, acts of God; action or inaction of civil or military
authority; public enemy; war; terrorism; riot; fire; flood; sabotage;
epidemics; labor disputes; civil commotion; interruption, loss or
malfunction of utilities, transportation, computer or communications
capabilities; insurrection; or elements of nature;
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(b) Neither Party shall be liable for any consequential, special or
indirect losses or damages suffered by the other Party, whether or not the
likelihood of such losses or damages was known by the Party;
(c) No affiliate, director, officer, employee, manager, shareholder,
partner, agent, counsel or consultant of either Party shall be liable at
law or in equity for the obligations of such Party under this Agreement or
for any damages suffered by the other Party related to this Agreement;
(d) Except as set forth in Section 4.2(f), there are no third party
beneficiaries of this Agreement;
(e) Each Party shall have a duty to mitigate damages for which the other
Party may become responsible;
(f) The assets and liabilities of each Fund are separate and distinct
from the assets and liabilities of each other Fund, and no Fund shall be
liable or shall be charged for any debt, obligation or liability of any
other Fund, whether arising under this Agreement or otherwise; and in
asserting any rights or claims under this Agreement, Foreside shall look
only to the assets and property of the Fund to which Foreside's rights or
claims relate in settlement of such rights or claims; and
(g) Each Party agrees promptly to notify the other party of the
commencement of any litigation or proceeding of which it becomes aware
arising out of or in any way connected with the issuance or sale of
Shares.
SECTION 5. REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF FORESIDE. Foreside represents and
warrants to the Clients that:
(a) It is a limited liability company duly organized and existing and in
good standing under the laws of the State of Delaware and it is duly
qualified to carry on its business in the State of Maine;
(b) It is empowered under applicable Laws and by its Organic Documents
to enter into this Agreement and perform its obligations under this
Agreement;
(c) All requisite limited liability company proceedings have been taken
to authorize it to enter into this Agreement and perform its obligations
under this Agreement;
(d) It has and will continue to have access to the necessary facilities,
equipment, and personnel to perform its duties and obligations under this
Agreement;
- 14 -
(e) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of Foreside, enforceable against
Foreside in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured parties;
(f) The performance by Foreside of its obligations under this Agreement
does not and will not contravene any provision of its Organic Documents;
(g) It is registered under the 1934 Act with the SEC as a broker-dealer,
it is a member in good standing of the NASD, it will abide by the rules
and regulations of the NASD, and it will immediately notify the Clients if
any regulatory actions are instituted against it by the SEC or NASD or its
membership in the NASD or registration with any State is terminated or
suspended.
5.2 REPRESENTATIONS AND WARRANTIES OF THE CLIENTS. The Clients represent and
warrants to Foreside that:
(a) They are duly organized and existing and in good standing under the
laws of the jurisdiction of their organization;
(b) They are empowered under applicable Laws and by their Organic
Documents to enter into this Agreement and perform their obligations under
this Agreement;
(c) All requisite corporate or similar proceedings have been taken to
authorize them to enter into this Agreement and perform their obligations
under this Agreement.
(d) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Clients, enforceable against
the Clients in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties;
(e) With respect to all Shares from time to time being offered for sale
to the public, a Registration Statement is currently effective or will be
effective at the time of sale, and will remain effective, and all
appropriate Federal and State securities law filings have been made and
will continue to be made;
(f) The Registration Statement has been, and any amendment thereto will
be, as the case may be, prepared in conformity with the requirements of
the Securities Act and the 1940 Act and the rules and regulations
thereunder, and all material statements of fact contained or to be
contained in the Registration Statement are or will be true and correct in
all material respects at the time indicated or on the effective date, as
the case may be; and the Registration Statement, when it shall become
effective or be authorized for use, will not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading to a
purchaser of Shares; and
- 15 -
(g) It shall not file any amendment to the Registration Statement or
Prospectuses without giving Foreside reasonable advance notice thereof;
provided, however, that nothing contained in this Agreement shall in any
way limit the Clients's right to file at any time such amendments to the
Registration Statement or Prospectuses, of whatever character, as the
Clients may deem advisable, such right being in all respects absolute and
unconditional.
SECTION 6. COMPENSATION AND EXPENSES
6.1 COMPENSATION.
Foreside shall be entitled to no compensation or reimbursement of expenses
from Clients for the services provided by Foreside pursuant to this
Agreement. Foreside may receive compensation from the Clients' Adviser
related to its services hereunder or for additional services as may be
agreed to between the Adviser and Foreside.
6.2 EXPENSES.
(a) The Clients shall bear the cost and expenses: (i) of the
registration of the Shares for sale under the Securities Act; and (ii) of
the registration or qualification of the Shares for sale under the
securities laws of the various States;
(b) Foreside shall pay all expenses relating to Foreside's broker-dealer
qualification. Foreside shall also pay all expenses incurred in providing
office space, equipment, and personnel as may be necessary or convenient
to provide the Services.
6.3 OTHER COMPENSATION. Notwithstanding anything in this Agreement to the
contrary, Foreside and its affiliates may receive compensation or reimbursement
from the Clients and the Adviser with respect to any services not included under
this Agreement.
SECTION 7. EFFECTIVENESS, DURATION, TERMINATION; ADDITIONAL FUNDS AND CLASSES
7.1. EFFECTIVENESS. This Agreement shall become effective on the Effective
Date, and shall become effective with respect to each Fund or Class thereof on
the Services Commencement Date with respect to such Fund or Class.
7.2. DURATION. This Agreement shall continue in effect with respect to each
Client for one year following the Effective Date and thereafter shall continue
in effect with respect to each Fund until terminated; provided, that continuance
is specifically approved at least annually pursuant to Section 15 of the 1940
Act and otherwise as required pursuant to any Plan.
7.3. TERMINATION.
(a) This Agreement may be terminated at any time with respect to a Fund,
without the payment of any penalty, (i) by the applicable Client's
Governing Body or by a vote of a majority of the outstanding voting
securities of the Fund or, with respect to each Class
- 16 -
of a Fund for which there is an effective Plan, a majority of members of
the Client's Governing Body who do not have any direct or indirect
financial interest in any such Plan or in any agreements related to the
Plan, on sixty (60) days' written notice to Foreside or (ii) by Foreside
on sixty (60) days' written notice to the Client.
(b) This Agreement shall automatically terminate upon its assignment or
upon the termination of Foreside's membership in the NASD.
7.4 SURVIVAL. The provisions of Sections 2.6, 2.8, 3.1(c), 3.2, 3.3, 4, 6.1,
6.2, 7 and 8 shall survive any termination of this Agreement.
7.5 ADDITIONAL FUNDS AND CLASSES.
(a) In the event that the Clients request Foreside to provide services
with respect to one or more additional funds and/or classes of the Clients
after the Effective Date, such funds and/or classes shall become Funds
and/or Classes under this Agreement for all purposes hereof upon the
execution of a joinder to this Agreement by the Clients and Foreside.
(b) In the event that after the Effective Date the Clients wind up one
or more Funds and/or Classes or otherwise terminate this Agreement with
respect to a Fund and its Classes, such Fund or Class shall from the date
of such winding up or termination no longer be deemed a Fund or Class
under this Agreement, provided, that the Clients shall remain obligated
pursuant to Section 6 to make any payments for obligations incurred
through the date of termination respecting such Fund and its Classes,
including any obligations that specifically survive the termination of
this Agreement with respect to such Fund or Class.
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS. No provisions of this Agreement may be amended or modified in
any manner except by a written agreement properly authorized and executed by the
Parties; provided, that (i) the Clients may amend Schedule 2 as permitted by
Section 2.6(d); and (ii) the Clients and/or Foreside may, as a result of the
addition or termination of a Fund or Class hereunder as contemplated by Section
7.5, amend Schedule 1 as permitted by Section 7.5.
8.2 GOVERNING OF LAW. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the Laws of the State of
Delaware, without giving effect to the conflicts of laws, principles and rules
thereof.
8.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the Parties hereto and supersedes any prior agreement with respect to the
subject matter hereof, whether oral or written.
8.4 COUNTERPARTS. This Agreement may be executed by the Parties hereto in any
number of counterparts, and all of the counterparts taken together shall be
deemed to constitute one and the same instrument.
- 17 -
8.5 SEVERABILITY. If any part, term or provision of this Agreement is held to
be illegal, in conflict with any law or otherwise invalid, the remaining portion
or portions shall be considered severable and unaffected, and the rights and
obligations of the Parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
8.6 HEADINGS. Section and paragraph headings in this Agreement are included
for convenience only and are not to be used to construe or interpret this
Agreement.
8.7 NOTICES AND OTHER COMMUNICATIONS; ELECTRONIC RECORDS.
(a) Any notice required or permitted to be given hereunder by either
party to the other shall be deemed sufficiently given if in writing and
personally delivered or sent by, facsimile or registered, certified or
overnight mail, postage prepaid, addressed by the party giving such notice
to the other party at the address furnished below unless and until changed
by Foreside or Clients, as the case may be. Notice shall be given to each
party at the following addresses:
If to Foreside:
Foreside Fund Services, LLC
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
XXX
Fax: (000) 000-0000
Attn: Legal Department
If to Clients:
American Beacon Funds
American Beacon Mileage Funds
American Beacon Select Funds
0000 Xxxx Xxxxxx Xxxx., XX 2450
Xxxx Xxxxx, XX 00000
Fax: (000) 000-0000
Attn: President
(b) This Agreement and electronic signatures and records delivered and
maintained under the Agreement shall be effective to the fullest extent
permitted by Law, provided that references in this Agreement to written
approval or approval in writing of either Party shall be restricted to a
writing executed by a then-current executive officer of such Party. Each
Party agrees to maintain a copy of this Agreement and any amendments to
this Agreement for its records.
- 18 -
8.8 INTERPLEADER. In the event of a dispute about any funds of the Clients
held by Foreside from time to time under this Agreement, Foreside or its agents
may commence an action in interpleader and pay the disputed funds into a court
of competent jurisdiction, and the Clients shall reimburse Foreside for its
reasonable costs and expenses related to any such action in interpleader.
8.9. CERTAIN TERMS. The terms "vote of a majority of the outstanding voting
securities," "interested person," "affiliated person" and "assignment" shall
have the meanings ascribed thereto in the 1940 Act.
SECTION 9. ANTI-MONEY LAUNDERING COMPLIANCE
9.1 FORESIDE ANTI-MONEY LAUNDERING PROGRAM. Foreside hereby represents and
warrants that it has implemented and enforces an anti-money laundering program
("AMLP") that complies with laws, regulations and regulatory guidance applicable
to Foreside, and includes, at a minimum:
a. written policies, procedures, and controls to detect and
prevent money laundering, as appropriate to the nature of
Foreside's business;
b. a designated compliance officer with sufficient authority to
oversee the AML Program;
c. an ongoing training program for relevant FFS employees and
associated persons; and
d. scheduled annual independent testing of FFS' AML Program.
9.2 DELIVERY OF DOCUMENTS. Foreside agrees to furnish to the Clients the
following documents:
a. a copy of Foreside's AMLP as in effect on the date hereof, and
any material amendment thereto promptly after the adoption of
any such amendment;
b. a copy of any deficiency letter sent by federal examination
authorities concerning Foreside's AMLP; and
c. periodically, upon request from the Clients, a report on
Foreside's AMLP that includes a certification to the Clients
concerning Foreside's implementation of, and ongoing
compliance with, its AMLP and a copy of any audit report
prepared with respect to Foreside's AMLP.
9.3. REPORTS. Foreside agrees to provide periodic reports concerning its
compliance with Foreside's AMLP and/or the Clients' AML Program at such times as
may be reasonably requested by the Clients' Boards of Trustees or AML Compliance
Officer.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers or representatives, as of the day and year first above written.
AMERICAN BEACON FUNDS
AMERICAN BEACON MILEAGE FUNDS
AMERICAN BEACON SELECT FUNDS
BY: _______________________________
Xxxxxxx X. Xxxxx
President
FORESIDE FUND SERVICES, LLC
BY: _______________________________
Xxxx Xxxxxx
President
LIST OF SCHEDULES AND APPENDICES THAT ARE PART OF THIS AGREEMENT:
Schedule 1 Funds and Classes of the Clients
Schedule 2 Authorized Persons
- 20 -
AMERICAN BEACON FUNDS
AMERICAN BEACON MILEAGE FUNDS
AMERICAN BEACON SELECT FUNDS
DISTRIBUTION AGREEMENT
SCHEDULE 1
FUNDS AND CLASSES OF THE CLIENTS
AS OF THE EFFECTIVE DATE:
FUNDS CLASSES
----- -------
AMERICAN BEACON FUNDS
Balanced Fund AMR, Institutional, PlanAhead
Large Cap Value Fund AMR, Institutional, PlanAhead
Large Cap Growth Fund Institutional
Mid-Cap Value Fund Institutional
Small Cap Value Fund AMR, Institutional, PlanAhead, Service
S&P 500 Index Fund Institutional, PlanAhead
Small Cap Index Fund Institutional
International Equity Index Fund Institutional
International Equity Fund AMR, Institutional, PlanAhead, Service
Emerging Markets Fund AMR, Institutional, PlanAhead
High Yield Bond Fund Institutional, PlanAhead, Service
Enhanced Income Fund PlanAhead
Treasury Inflation Protected Securities Fund Institutional
Intermediate Bond Fund Institutional, PlanAhead
Short-Term Bond Fund Institutional, PlanAhead
Money Market Fund Cash Management, Institutional, PlanAhead
U.S. Government Money Market Fund Cash Management, PlanAhead
Municipal Money Market Fund Institutional, PlanAhead
AMERICAN BEACON MILEAGE FUNDS
Money Market Mileage Fund Mileage, Platinum
U.S. Gov't. Money Market Mileage Fund Mileage, Platinum
Municipal Money Market Mileage Fund Mileage, Platinum
AMERICAN BEACON SELECT FUNDS
Money Market Select Fund
U.S. Gov't. Money Market Select Fund
- Schedule 1 page 1 -
AMERICAN BEACON FUNDS
AMERICAN BEACON MILEAGE FUNDS
AMERICAN BEACON SELECT FUNDS
DISTRIBUTION AGREEMENT
SCHEDULE 2
AUTHORIZED PERSONS
1. AUTHORIZED PERSONS:
In addition to the officers (including assistant officers) of the Clients, the
following persons are authorized to give Instructions to Foreside with respect
to this Agreement:
NAME TITLE
---- -----
Xxxxxxx X. Xxxxx President
Xxxxxxx Xxxxx Vice President/Chief Compliance Officer
Xxxxxxx X. Xxxxxx Treasurer
Xxxxx X. Xxxxxxxxx Vice President/Secretary
2. CHANGE IN AUTHORIZED PERSONS
Any change in Authorized Persons shall only be made in accordance with Section
2.6(d) of the Agreement.
1
