XXXX XXXXXXX FUNDS, LLC
Selling Agreement
[Xxxx Xxxxxxx Funds Logo]
Xxxx Xxxxxxx Funds, LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Selling Agreement
(Broker/Dealer)
Xxxx Xxxxxxx Funds, LLC ("we" or "us") is the principal distributor of the
shares of beneficial interest (the "Shares") of each of the Xxxx Xxxxxxx mutual
funds (the "Funds"). Such Funds are those listed on Schedule A hereto which may
be amended or supplemented from time to time by us, upon written notice. The
Funds are open-end investment companies registered under the Investment Company
Act of 1940, as amended. The Funds offer their Shares for sale in accordance
with the terms and conditions contained in the Prospectus and Statement of
Additional Information of each Fund. As you are a member of the National
Association of Securities Dealers, Inc. ("NASD"), you may serve as a
non-exclusive Participating Broker/Dealer to distribute the Shares under the
following terms and conditions:
SCOPE OF AUTHORITY
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In all transactions in Shares, you shall act as an agent on behalf of your
Client-shareholders and not as our agent or the agent of the Funds except for
the limited purpose of receiving orders from your Clients for the purchase or
redemption of Fund Shares. Neither party shall hold itself out to the public as
the other party's agent and you shall not hold yourself out to the public as an
agent of the Funds. No person is authorized to make any representations
concerning Shares except those contained in the prospectuses (which you shall
deliver to each customer at time of or prior to any purchase) and Statements of
Additional Information (hereinafter referred to collectively as "the
Prospectus(es)") and in such printed information as issued by us. To the extent
that the Prospectus(es) contain terms that are inconsistent with the terms of
this Selling Agreement, the terms of the relevant Prospectus shall be
controlling. Nothing contained in this Selling Agreement shall be deemed to
constitute or create a partnership, association, joint venture or agency
relationship between us or between you and the Funds.
PURCHASE AND REDEMPTION ORDERS
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1. General Procedures for Order and Settlement
(a) Purchases: You shall offer and sell Shares only at the public offering
price which shall be applicable to, and in effect at the time of, each
transaction. All orders to purchase Shares accepted by us before the close of
regular trading on the New York Stock Exchange ("NYSE") will be executed at
that day's share price. Orders received by us after the close of regular
trading on the NYSE will be executed at the next business day's price. Share
certificates will not be issued.
(b) Acceptance: All orders for the purchase of Shares are subject to
acceptance or rejection by us in our sole discretion. The minimum dollar
purchase of Shares of each Fund by any investor shall be the applicable
minimum amount described in the then current Prospectus(es) and no order for
less than such amount will be accepted hereunder.
(c) Settlement: You shall wire payment for Shares so that it is received by
the Fund's custodian within one business day (or such other time period that
we may establish from time to time and of which we notify you) after
acceptance by Xxxx Xxxxxxx Signature Services, Inc. (hereinafter "Transfer
Agent") of a purchase order. If you fail to make payment as aforesaid, we may
cancel the sale or liquidate the Shares at the then prevailing net asset
value without any responsibility or liability on the part of us or the
Xxxxx.Xxx agree that you shall be liable for any loss, including loss of
profit, suffered by us or the Funds resulting from your failure to make
payment as described above.
(d) Redemption Orders: You shall accept orders for the repurchase or
redemption of Shares only at each Fund's net asset value which shall be
applicable to and in effect at the time of the transaction. Except as
permitted by applicable law, you agree not to purchase any Shares from your
customers at a price lower than the redemption or repurchase prices then
computed by the Funds.
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(e) Procedures: The procedures relating to all orders and the handling of
them shall be subject to the terms of the then applicable Prospectus(es), and
new account application, including amendments, for each Fund and each class
of such Fund, and our written instructions provided and amended from time to
time.
(f) Prospectuses, Proxy materials, Reports: With respect to all
Dealer-controlled accounts, you agree that, upon our request, you will
deliver or cause to be delivered to Client-shareholders: (a) copies of
amended prospectuses (including "stickers"); (b) shareholder proxy materials;
and (c) copies of Funds', annual and semi-annual reports.
2. Fund/Serv and Networking
You and we may agree to process all orders for the purchase and redemption of
Shares by you via the National Securities Clearing Corporation ("NSCC")
Fund/SERV system by jointly executing the Schedule B to this Selling Agreement.
WARRANTIES AND REPRESENTATIONS
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1. Each party represents that it has full power and authority to enter
into this Selling Agreement and that it shall perform any and all
duties, functions, procedures and responsibilities assigned to it under
this Selling Agreement. Each party shall maintain facilities, equipment
and skilled personnel sufficient to perform the foregoing activities
and to otherwise comply with the terms of this Selling Agreement. The
foregoing activities shall be conducted by each party in a competent
manner and in compliance with (a) all applicable federal and state
laws, rules and regulations, including, if applicable under the terms
of this Selling Agreement, NSCC rules and procedures relating to
Fund/SERV and Networking; and (b) the then current Prospectuses of the
Funds.
2. The Prospectuses and written marketing materials provided by us to you
shall not contain any untrue statement of a material fact or omission
of a material fact required to be stated. Each Fund's registration
statement complies in all material respects with applicable regulatory
and disclosure requirements.
3. We represent that each Fund's Shares have been registered or qualified
for sale under the federal securities laws and that appropriate notice
filings or other qualifications have been made under the securities
laws of those states and jurisdictions that require registration prior
to sale.
4. You represent that you are a "broker-dealer" as defined in Section
3(a)(4) or 3(a)(5) of the 1934 Act and are registered with the SEC and
that you are licensed to offer and sell securities of open-end
investment companies in all jurisdictions in which you plan to offer
and sell the Fund Shares.
5. You represent that you are a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD") and the Securities
Investor Protection Corporation ("SIPC") and you agree to promptly
notify us if you cease to be a member in good standing of the NASD or
SIPC. You agree to abide by the Constitution and By-Laws of the NASD
including without limitation its Conduct Rules. You agree to abide by
the requirements for breakpoint disclosure set forth in NASD Notice to
Members 02-85. You agree to take full responsibility for the
suitability of your mutual fund recommendations, solicitations and
sales to your customers and to ensure that your customers are aware of
the advantages and disadvantages of selecting one class of Shares over
other classes, including the specific costs and economic advantages or
disadvantages of each Share class in the particular circumstances of
each customer.
6. Each party represents and acknowledges that it maintains policies
relating to the privacy of consumer financial information in accordance
with Regulation S-P. You agree to promptly notify us upon discovery of
the loss or unauthorized disclosure of non-public personal information
of your customers.
7. You represent that you have established and will maintain an anti-money
laundering ("AML") program designed to comply with all applicable AML
laws and regulations, including applicable provisions of the Bank
Secrecy Act and the USA Patriot Act, as well as with all regulations
administered by the U.S. Department of the Treasury's Office of Foreign
Asset Control. You agree that you will perform the Customer
Identification Program requirements of the USA Patriot Act with respect
to orders transacted pursuant to this Selling Agreement. You agree to
provide us with annual certification of your compliance with this
sub-paragraph.
8. You represent that your written policies and procedures provide
reasonable assurance that:
(a) Orders for the purchase, redemption or exchange of Shares of the Funds
received by you prior to the close of the NYSE (the Funds' "Pricing
Time") are properly transmitted to the Funds (or their agents) for
execution at the current day's net asset value ("NAV");
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(b) Fund Orders received by you after the Fund(s) Pricing Time are
properly transmitted to the Fund(s) (or their agents) for execution at
the next day's NAV;
(c) All transactional information is delivered to the Funds in a timely
manner; and
(d) Fund Orders are processed by you in accordance with the requirements
of the Funds' Prospectus(es) and statement of additional information
including, when applicable, the collection of a redemption fee from
Clientshareholders initiating Fund orders.
9. You represent that, after due inquiry and diligence, you believe that
policies and procedures have been designed and implemented effectively by any
third parties to which your firm has designated the responsibility to
distinguish and appropriately process Fund Orders received prior to and after
the Funds' Pricing Time.
10. The public offering price of the Shares may reflect scheduled variations in,
or the elimination of, the sales charge on sales of the Shares either generally
to the public or in connection with special purchase plans, as described in the
Prospectus(es). You agree that you will apply any scheduled variation in, or
elimination of, the sales charge uniformly to all offerees in the class(es)
specified in the Prospectus(es).
FREQUENT EXCHANGES
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You acknowledge the right of the Funds, in their sole discretion, to cancel the
exchange privileges (or reject any exchange or purchase orders) of any parties
who, in the opinion of the Funds, are engaging in so-called "market timing" or
any other excessive trading practices which may disrupt portfolio management
strategies and increase Fund expenses. You agree to cooperate fully with us in
our efforts to detect and eliminate excessive trading in Shares of the Funds,
upon our reasonable request. You represent that you fulfill your
responsibilities under NASD Notice to Members 03-50 to maintain policies and
procedures reasonably designed to prevent collusion between you and any
affiliate of the Funds to circumvent the Prospectuses' stated policy regarding
market timing.
COMPENSATION
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1. Reallowance -- The amount of sales compensation to be paid to you (the
"Reallowance") as a percentage of the offering price is set forth in the then
current Prospectus of each Fund. If, at any time, the sales charges on any class
of Shares offered by the Fund exceed the maximum sales charge permitted by the
NASD Conduct Rules, we reserve the right to amend, modify or curtail payment of
any or all compensation due on such Shares immediately and without notice. We
shall pay a Reallowance subject to the provisions of this Selling Agreement on
all purchases made by your Client-shareholders pursuant to orders accepted by
us: where an order for the purchase of Shares is obtained by your registered
representative and remitted promptly by you; where a subsequent investment is
made to an account established by your registered representative; or where a
subsequent investment is made to an account established by a broker/dealer other
than you and is accompanied by a signed request from the Client-shareholder that
your registered representative receive compensation for that investment and/or
for subsequent investments made in such account. If, for any reason, a purchase
transaction is reversed, you shall not be entitled to receive or retain any part
of the Reallowance on such purchase and shall pay to us on demand in full the
amount of the Reallowance received by you in connection with any such purchase.
We may withhold and retain from the amount of the Reallowance due you a sum
sufficient to discharge any amount due and payable by you to us. All deferred
sales charges may be deducted from any Reallowance paid.
2. Rule12b-1 Fees --Certain of the Funds have adopted and maintain in effect a
plan under Investment Company Act Rule 12b-1, as described in the relevant
Prospectuses. To the extent that you provide distribution services to the
Fund(s) or Fund-related assistance to your Client-shareholders who invest in
such Funds, you may be entitled to receive compensation from us, in addition to
the Reallowance, in the amount and manner set forth in the Prospectus and
Statement of Additional Information. These 12b-1 payments may be made PROVIDED
that your Clientshareholders have invested in the Funds' combined average daily
net assets for the preceding quarter of no less than $1 million in 12b-1
eligible (aged) assets, or an individual registered representative of your firm
has invested in the Funds' combined average daily net assets for the preceding
quarter of no less than $250,000 in 12b-1 (aged) assets. Upon written notice to
you, we or any Fund may change or discontinue any schedule of distribution
payments or service payments, or issue a new schedule. A schedule of
distribution payments or service payments will be in effect with respect to a
Fund that has a 12b-1 plan only so long as that Fund's plan remains in effect.
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SALES CHARGE REDUCTIONS AND WAIVERS
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Our Prospectuses describe various circumstances in which front-end sales charges
are subject to reductions or CDSC fees are subject to waiver. You agree that you
will notify us of any and all fee reductions or waivers to which your
Client-shareholder is entitled at the time the trade is placed with Transfer
Agent. You shall be responsible for any losses caused your Client(s) due to your
failure to timely provide such information.
USE OF NAMES
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We, our affiliates and the Funds (the "JHF parties") are the owners of various
registered trademarks, service marks and Fund names (collectively, "JHF Logos").
We grant you a non-exclusive, non-transferable, royalty-free license to use the
JHF Logos in your sales literature provided: you do nothing inconsistent with
the ownership of the JHF Logos by us and our affiliates; you use the JHF Logos
only in the form and manner preapproved by us in your sales literature; and you
agree to place all necessary and proper notices and legends on the sales
literature in order to protect the interests of the JHF parties in the JHF
Logos. The license granted herein shall terminate automatically upon the
termination of this Selling Agreement.
CONFIDENTIAL INFORMATION
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Notwithstanding anything to the contrary in this Selling Agreement:
1. "Confidential Information": Includes without limitation all information
regarding the customers of the parties to this Selling Agreement and any of
their subsidiaries, affiliates or licensees; or the accounts, account numbers,
names, addresses, social security numbers or any other personal identifier of
such customers; or any information derived therefrom.
2. Neither party may disclose Confidential Information for any purpose other
than to carry out the purpose for which the Confidential Information was
provided to that party as set forth in this Selling Agreement; and each party
agrees to cause its employees, agents and representatives, or any other person
to whom the parties may provide access or disclose Confidential Information to
limit the use and disclosure of Confidential Information to that purpose.
3. The parties agree to implement appropriate measures designed to ensure the
security and confidentiality of Confidential Information, to protect such
information against any anticipated threats or hazards to the security and
integrity of such information, and to protect against unauthorized access to, or
use of, Confidential Information that could result in substantial harm or
inconveniences to any of the Customers of the parties or any of their
subsidiaries, affiliates or licensees; the parties further agree to cause all
their respective agents, representatives or subcontractors, or any other party
to whom they provide access to or disclose Confidential Information, to
implement appropriate measures to meet the objectives set forth in this Section
8.
4. This Section 8 shall survive the termination of this Selling Agreement.
INDEMNITY
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Each party hereto (the "Indemnitor") agrees to indemnify and hold harmless the
others, including their respective affiliates, and each of their current and
former directors, trustees, officers, employees and agents (the "Indemnitees"),
against any losses, claims, damages, liabilities or expenses to which the
Indemnitees may become subject insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof, hereinafter "Actions")
arise out of or are based upon any negligent act or omission in performing its
duties under this Selling Agreement, any failure by the Indemnitor to comply
with the terms of this Selling Agreement or any breach by the Indemnitor of any
representation, warranty or covenant in this Selling Agreement. The Indemnitor
will reimburse the Indemnitees for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim or action. In addition, you shall indemnify us and hold us harmless
against any Actions arising out of exchange requests initiated by you via
facsimile or changes to the broker/dealer of record that do not include original
or underlying documentation supporting such instructions. This indemnity
agreement will be in addition to any other remedies which the Indemnitees may
otherwise have and shall survive the termination of this Selling Agreement. If
any third party threatens
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to commence or commences any action for which the Indemnitor may be required to
indemnify the Indemnitee, the Indemnitee shall promptly give notice thereof to
the Indemnitor. The Indemnitor shall be entitled, at its own expense and without
limiting its obligations to indemnify the Indemnitee, to assume control of the
defense of such action with counsel selected by the Indemnitor, which counsel
shall be reasonably satisfactory to the Indemnitee. If the Indemnitor assumes
the control of the defense, the Indemnitee may participate in the defense of
such claim at its own expense. The Indemnitor may not settle or compromise the
liability of the Indemnitee in such action or consent to or permit the entry of
any judgment in respect thereof without the prior written consent of the
Indemnitee, which consent shall not be unreasonably withheld. It is further
understood that no third party is intended to be made a third party beneficiary
of the provisions of this Section 9.
RECORD RETENTION AND AUDIT
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You shall maintain all records required to be kept by state and federal law
relating to transactions in Shares and, upon our request, shall promptly make
such records available to the Fund(s). We and/or the Fund(s) each reserves the
right to conduct an audit of you and your affiliates to monitor compliance with
the terms of this Selling Agreement and the Fund(s') policies on the acceptance
of orders for purchase or redemption and market timing. Such audit(s) may be
conducted by us or our agent upon reasonable notice. This provision shall
survive the termination of this Selling Agreement with respect to transactions
occurring before such termination.
DISPUTE RESOLUTION
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In the event of a dispute concerning any provision of this Selling Agreement,
either party may require the dispute to be submitted to binding arbitration
under Code of Arbitration Procedure of the NASD. Arbitration shall take place in
the city of Boston, Massachusetts. Any decision that shall be made in such
arbitration shall be final and binding and shall have the same force and effect
as a judgment made in a court of competent jurisdiction. This Selling Agreement
shall be construed in accordance with the laws of the Commonwealth of
Massachusetts. This provision shall survive the termination of this Selling
Agreement.
TERMINATION, AMENDMENT, ASSIGNMENT
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We reserve the right to amend this Selling Agreement at any time by providing
you with written notice of such amendment. Your action of placing an order or
accepting payments of any kind after the effective date and receipt of notice of
any such Amendment shall constitute your acceptance of such Amendment. Either
party may terminate this Selling Agreement upon 30 days' written notice except
that it shall be automatically terminated if either party files for bankruptcy
or is terminated as an NASD member. This Selling Agreement may not be assigned
by you except by our written consent. Upon the termination of this Selling
Agreement, all payments made pursuant to it, including but not limited to
Reallowance compensation and Rule 12b-1 payments (if applicable), shall
terminate.
NOTICES
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All notices required or permitted to be given under this selling Agreement shall
be given in writing and delivered by personal deliver, by postage prepaid mail,
or by facsimile or a similar means of same day delivery (with a confirming copy
by mail). All notices to us shall be given or sent to us at our offices located
at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, ATTN: Xxxxx Xxxxx. All notices to
you shall be given or sent to you at the address specified by you below.
COMPLETE AGREEMENT
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This Selling Agreement supersedes and cancels any prior agreement between us,
whether oral or written, relating to the sale of shares of the Funds or any
other subject covered by it.
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Soliciting Dealer Profile
Date ____________________________ Firm CRD Number ____________
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Name of Participating Dealer
By: __________________________________________________________
Authorized Representative
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Name (please print)
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Title (please print)
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Address
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Telephone Number
Mutual Fund Coordinator: ________________________________________
In order to service you efficiently, please provide the following information on
your Mutual Funds Operations Department:
Operations Manager ___________________________________________
Order Room Manager __________________________________________
Operations Address____________________________________________
Telephone __________________________________ Fax ______________
ACCEPTED AND AGREED
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XXXX XXXXXXX FUNDS, LLC XXXX XXXXXXX SIGNATURE SERVICES, INC.
By: _____________________________ By:__________________________________
_________________________________ _____________________________________
Title Title
_________________________________ _____________________________________
Dated Dated
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Pay Office Branch Number:________________________________________
(If no pay office branch number is indicated, we will assume #001)
Dealer Number:__________________________________________________
(to be assigned by Xxxx Xxxxxxx Signature Services, Inc.)
