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EXHIBIT 6
DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of this 11th day of March, 1997
between PACIFIC INNOVATIONS TRUST, a Delaware Business Trust (herein called the
"Company"), and PROVIDENT DISTRIBUTORS, INC., a Delaware corporation (herein
called "Distributor").
WHEREAS, the Company is an open-end, management investment company and
is so registered under the Investment Company Act of 1940; and
WHEREAS, the Company will offer and maintain the following investment
portfolios: Money Market Fund, Intermediate Bond Fund, Capital Income Fund, Blue
Chip Fund, Mid-Cap Equity Fund, Aggressive Growth Fund, and International Equity
Fund (each individually a "Fund" and collectively the "Funds"); and
WHEREAS, pursuant to a Management Agreement of even date herewith
between the Company and Bank of America National Trust and Savings Association
(the "Manager"), the Company has retained the Manager to provide management
services to the Funds; and
WHEREAS, the Company desires to retain Distributor as distributor for
the Funds to provide for the sale, distribution and redemption of shares of
beneficial interest of the Funds (herein collectively called "Shares"), and
Distributor is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein the parties hereto agree as follows:
I. DELIVERY OF DOCUMENTS
The Company has delivered to Distributor copies of each of the
following documents and shall deliver to it all future amendments and
supplements thereto, if any:
(a) The Company's Declaration of Trust and all amendments thereto (such
Declaration of Trust, as presently in effect and as it shall from
time to time be amended, herein called the "Company's
Declaration");
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(b) Bylaws of the Company (such Bylaws, as presently in effect and as
they shall from time to time be amended, herein called the
"Bylaws");
(c) Resolutions of the Board of Trustees of the Company authorizing the
execution and delivery of this Agreement;
(d) The Company's registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and the Investment Company Act of
1940, as amended (the "1940 Act"), on Form N-1A as filed with the
Securities and Exchange Commission (the "Commission") relating to
the Shares, and all subsequent amendments thereto (said registration
statement, as presently in effect and as amended or supplemented
from time to time, is herein called the "Registration Statement");
(e) Notification of Registration of the Company under the 1940 Act on
Form N-8A as filed with the Commission; and
(f) Prospectuses and statements of additional information of the Company
and of the Funds (such Prospectuses and statements of additional
information, as presently in effect and as they shall from time to
time be amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").
II. DISTRIBUTION
1. APPOINTMENT OF DISTRIBUTOR.
The Company hereby appoints Distributor as Distributor of the Funds'
Shares and Distributor hereby accepts such appointment and agrees to render the
services and duties set forth in this Section II. The Distributor shall for all
purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Board of Trustees of
the Company from time to time, have no authority to act for or represent the
Company in any way or otherwise be deemed its agent. The services furnished by
the Distributor shall be free to furnish similar services to others so long as
its services under this Agreement are not impaired thereby.
2. SERVICES AND DUTIES.
(a) The Company agrees to sell through Distributor, as agent, from time
to time during the term of this Agreement, Shares of the Funds upon
the terms and at the current offering price as described in the
applicable Prospectus.
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Distributor shall act only on its own behalf as principal in making
agreements for the sale and redemption of Shares, and shall sell
Shares only at the offering price thereof as set forth in the
applicable Prospectus. Distributor shall devote its best efforts to
effect sales of Shares of each of the Funds, but shall not be
obligated to sell any certain number of Shares.
(b) In all matters relating to the sale and redemption of Shares,
Distributor shall act in conformity with the Company's Declaration,
Bylaws and Prospectuses and with the instructions and directions of
the Board of Trustees of the Company, and shall conform to and comply
with the requirements of the 1933 Act, the 1940 Act, the regulations
of the National Association of Securities Dealers, Inc. and all other
applicable federal or state laws and regulations. In connection with
such sales, Distributor acknowledges and agrees that it is not
authorized to provide any information or make any representations
other than as contained in the Company's Registration Statement and
Prospectuses and any sales literature specifically approved by the
Company. The Company shall furnish from time to time, for use in
connection with the sale of the Shares, such information with respect
to the Funds and the Shares as Distributor may reasonably request. The
Company shall also furnish Distributor upon request with: (a)
unaudited semi-annual statements of the Funds' books and accounts
prepared by the Company, (b) a monthly itemized list of the securities
in the Funds, (c) monthly balance sheets as soon as practicable after
the end of each month, and (d) from time to time such additional
information regarding the financial condition of the Funds as
Distributor may reasonably request.
(c) Distributor shall bear the cost of (i) printing and distributing any
Prospectus (including any supplement thereto), and (ii) preparing,
printing and distributing any literature, advertisement or material
which is primarily intended to result in the sale of the Shares;
provided, however, that Distributor shall not be obligated to bear the
expenses incurred by the Company in connection with (1) the
preparation and printing of any supplement or amendment to any
Registration Statement or Prospectus necessary for the continued
effective registration of the Shares under the 1933 Act or any state
securities laws; and (2) the printing and distribution of any
Prospectus, supplement or amendment thereto for existing shareholders
of the Fund described therein.
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(d) The Company, or any agent of the Company designated in writing by the
Company, shall be promptly advised of all purchase orders for Shares
received by the Distributor.
(e) The Distributor shall provide the services of certain persons who may
be appointed as officers of the Company by the Company's Board of
Trustees.
3. SALES AND REDEMPTIONS.
(a) Shares of the Company are to be sold by the Distributor to shareholders
at the offering price as set forth in the Prospectuses then in effect.
(b) The Company shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in
connection with maintaining facilities for the issue and transfer of the
Shares and for supplying information, prices and other data to be
furnished by the Company hereunder, and all expenses in connection with
preparing, printing and distributing the Prospectuses except as set
forth in subsection 2(c) of Section II hereof or in any other agreement
entered into by the Company.
(c) The Company shall execute all documents, furnish all information and
otherwise take all actions which may be reasonably necessary in the
discretion of the Company's officers in connection with the
qualification of the Shares for sale in such states as Distributor may
designate to the Company and the Company may approve, and the Company
shall pay all filing fees which may be incurred in connection with such
qualification. Distributor shall pay all expenses connected with its
qualification as a dealer under state or federal laws and, except as
otherwise specifically provided in this Agreement, all other expenses
incurred by Distributor in connection with the sale of the Shares as
contemplated in this Agreement.
(d) Any of the outstanding Shares of the Company may be tendered for
redemption at any time, and the Company agrees to repurchase or redeem
the Shares so tendered in accordance with the Company's Declaration,
Bylaws and Prospectuses. The price to be paid to redeem or repurchase
the Shares shall be equal to the net asset value per Share determined as
set forth in the applicable Prospectus (the "redemption price"). All
payments by the Company hereunder shall be made in the manner set forth
in Section 3(e) below.
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(e) The Company (or its agent) shall pay the total amount of the
redemption price pursuant to the instructions of the Distributor on
or before the seventh calendar day subsequent to the Company (or
its agent) having received the notice of redemption in proper form.
The proceeds of any redemption of shares shall be paid by the
Company (or its agent) to or for the account of the redeeming
shareholder, in each case in accordance with the applicable
provisions of the applicable Prospectus.
(f) The Company shall have the right to suspend the sale of Shares of
any Fund at any time in response to conditions in the securities
markets or otherwise, and to suspend the redemption of Shares of
any Fund at any time as permitted by the 1940 Act or the Rules of
the Commission ("Rules").
(g) The Company reserves the right to reject any order for Shares, but
shall not do so arbitrarily or without reasonable cause.
III. LIMITATIONS OF LIABILITY
Distributor shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Company or any Fund in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
IV. CONFIDENTIALITY
Distributor shall treat confidentially and as proprietary information of
the Company all records and other information relative to the Company and the
Funds and prior or present shareholders or those persons or entities who respond
to Distributor's inquiries concerning investment in the Company, and shall not
use such records and information for any purpose other than the performance of
its responsibilities and duties hereunder or under any other agreement with the
Company, except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where Distributor may be exposed to civil or criminal contempt
proceedings for failure to comply, when Distributor is requested to divulge such
information by duly constituted authorities, or when Distributor is so requested
by the Company.
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V. INDEMNIFICATION
1. COMPANY REPRESENTATIONS.
The Company represents and warrants to Distributor that (a) it is duly
organized as a Delaware business trust and is and at all times will remain duly
authorized to enter into and perform this Agreement, and (b) at all times the
Registration Statement and Prospectuses will in all material respects conform
to the applicable requirements of the 1933 Act and the Rules and will not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
except that no representation or warranty in this subsection shall apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of and with respect to
Distributor expressly for use in the Registration Statement or Prospectuses.
2. DISTRIBUTOR REPRESENTATIONS.
Distributor represents and warrants to the Company that (a) it is duly
organized as a Delaware corporation and is and at all times will remain duly
authorized and licensed to carry out its services as contemplated herein and
(b) at all times any written information furnished to the Company by or on
behalf of Distributor expressly for use in the Registration Statement or
Prospectuses will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
3. COMPANY INDEMNIFICATION.
The Company shall indemnify, defend and hold harmless Distributor, its
several officers and partners, and any person who controls Distributor within
the meaning of Section 15 of the 1933 Act, from and against any losses, claims,
damages or liabilities, joint or several, to which any of them may become
subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectuses or any
application or other document executed by or on behalf of the Company, or arise
out of, or are based upon, information furnished by or on behalf of the Company
filed in any state in order to qualify the Shares under the securities or blue
sky laws thereof ("Blue Sky Application"), or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact required to
be stated therein or
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necessary to make the statements therein not misleading, and shall reimburse
Distributor, its several officers and partners, and any person who controls
Distributor within the meaning of Section 15 of the 1933 Act, for any legal or
other expenses reasonably incurred by any of them in investigating, defending
or preparing to defend any such action, proceeding or claim; provided, however,
that the Company shall not be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue statement, or omission or alleged omission made in
the Registration Statement, the Prospectuses, any Blue Sky application or any
application or other document executed by or on behalf of the Company in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of and with respect to Distributor specifically for
inclusion therein.
The Company shall not indemnify and person pursuant to this subsection
3 of Section VI hereof unless the court or other body before which the
proceeding was brought has rendered a final decision on the merits that such
person was not liable by reason of his willful misfeasance, bad faith or
negligence in the performance of his duties, or his reckless disregard of
obligations and duties, under this Agreement ("disabling conduct") or, in the
absence of such a decision, a reasonable determination (based upon a review of
the facts) that such person was not liable by reason of disabling conduct has
been made by the vote of a majority of a quorum of trustees of the Company who
are neither "interested persons" of the Company (as defined in the 0000 Xxx)
nor parties to the proceeding, or by an independent legal counsel in a written
opinion.
Each Fund shall advance attorneys' fees and other expenses incurred by
any person in defending any claim, demand, action or suit which is the subject
of a claim for indemnification pursuant to this subsection 3 of Section VI
hereof, so long as:
(a) such person shall undertake to repay all such advances unless it is
ultimately determined that he is entitled to indemnification
hereunder; and
(b) such person shall provide security for such undertaking, of the Fund
shall be insured against losses arising by reason of any lawful
advances, or a majority of a quorum of the disinterested, non-party
trustees of the Company (or an independent legal counsel in a
written opinion) shall determine based on a review of readily
available facts (as opposed to a full trial-type inquiry) that there
is reason to believe that such person ultimately will be found
entitled to indemnification hereunder.
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4. DISTRIBUTOR INDEMNIFICATION.
Distributor shall indemnify, defend and hold harmless the Company, each
Fund, the Company's several officers and trustees and any person who controls
the Company or any fund within the meaning of Section 15 of the 1933 Act, from
and against any losses, claims, damages or liabilities, joint or several, to
which any of them may become subject under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any breach of its
representations and warranties in subsection 2 of Section II hereof, or which
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectuses, any Blue Sky Application or any application or other document
executed by or on behalf of the Company, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, which statement or omission was
made in reliance upon and in conformity with information furnished in writing
to the Company or any of its several officers and trustees by or on behalf of
and with respect to Distributor specifically for inclusion therein, and shall
reimburse the Company, each Fund, the Company's several officers and trustees,
and any person who controls the Company or any Fund within the meaning of
Section 15 of the 1933 Act, for any legal or other expenses reasonably incurred
by any of them in investigating, defending or preparing to defend any such
action, proceeding or claim.
5. GENERAL INDEMNITY PROVISIONS.
No indemnifying party shall be liable under its indemnity agreement
contained in subsection 3 or 4 of Section VI hereof with respect to any claim
made against such indemnifying party unless the indemnified party shall have
notified the indemnifying party in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall
not relieve it from any liability which it may otherwise have to the indemnified
party. The indemnifying party shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, and if the indemnifying party elects to
assume the defense, such defense shall be conducted by counsel chosen by it
and reasonably satisfactory to the indemnified party. In the event the
indemnifying party elects to assume the defense of any such suit and retain
such counsel, the indemnified party shall
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bear the fees and expenses of any additional counsel retained by the
indemnified party.
6. NAMES.
The name "Pacific Innovations Trust, a Delaware Business Trust" refers
to the trust created and the trustees, as trustees but not individually or
personally, acting from time to time under a Declaration of Trust dated
September 25, 1996, as amended, which is hereby referred to and a copy of which
is on file at the principal office of the Company. The trustees, officers,
employees and agents of the Company shall not personally be bound by or liable
under any written obligation, contract, instrument, certificate or other
interest or undertaking of the Company made by the trustees or by an officer,
employee or agent of the Company, in his or her capacity as such, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim thereunder. All persons dealing with any series or class of shares of
the Company may enforce claims against the Company only against the assets
belonging to such series or class.
VI. DURATION AND TERMINATION
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue in effect with respect to
each Fund until October 31, 1998. Thereafter, if not terminated, this Agreement
shall continue automatically for successive terms of one year, provided that
such continuance is specifically approved at least annually (a) by a vote of a
majority of those members of the Board of Trustees of the Company who are not
parties to this Agreement or "interested persons" of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Trustees of the Company or by vote of a "majority of the
outstanding voting securities" of the Funds as to which the Agreement is
effective; provided, however, that this Agreement may be terminated by the
Company at any time, without the payment of any penalty, by vote of a majority
of the entire Board of Trustees of the Company or by a vote of a "majority of
the outstanding voting securities" of such Funds on sixty (60) days' prior
written notice to Distributor, or by Distributor at any time, without the
payment of any penalty, on sixty (60) days' prior written notice to the
Company. This Agreement shall automatically and immediately terminate in the
event of its "assignment." As used in this Agreement, the terms "majority of
the outstanding voting securities," "interested person" and "assignment" shall
have the same meanings as such terms have in the 1940 Act.
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VII. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against whom
an enforcement of the change, waiver, discharge or termination is sought.
VIII. NOTICES
Notices of any kind to be given to the Company hereunder by Distributor
shall be in writing and shall be duly given if mailed or delivered to the
Company at:
Xxx X. Nusblalt
Pacific Innovations Trust,
a Delaware Business Trust
c/o PFPC Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
With a copy to
Xxxxx X'Xxxxx, Esq.
Vedder, Price, Xxxxxxx & Kammholz
000 X. XxXxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
Notices of any kind to be given to Distributor hereunder by the Company
shall be in writing and shall be duly given if mailed or delivered to
Distributor at:
Xxxxxx Xxxxxxx
Provident Distributors, Inc.
Four Falls Corporate Center, 0xx Xxxxx
Xxxx Xxxxxxxxxxxx, XX 00000-0000
IX. MISCELLANEOUS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section VII hereof, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by New York law (without regard to
principles of conflicts of law); provided, however, that nothing herein shall
be construed in a manner
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inconsistent with the 1940 Act or any rule or regulation of the Commission
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PACIFIC INNOVATIONS TRUST,
A DELAWARE BUSINESS TRUST
By: /s/ Xxxxxx X. Xxxxxx
--------------------
President
Attest: /s/ Xxxxx X. X'Xxxxx
--------------------
Secretary
PROVIDENT DISTRIBUTORS, INC.
By: /s/ Xxxxxx Xxxxxxx
--------------------------
Chief Executive Officer
Attest: /s/ Xxxxxx X. Xxxxxxxxx
----------------------
Secretary
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