DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of September 15, 1999 between The
OFFITBANK Investment Fund, Inc., a Maryland corporation (herein called the
"Company"), and OFFIT Funds Distributor, Inc. (herein called "Distributor"), a
wholly-owned subsidiary of Provident Distributors, Inc.
WHEREAS, the Company is an open-end, management investment company and is
so registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Company will offer and maintain multiple investment portfolios
as specified in its Registration Statement on Form N-1A (each individually a
"Fund" and collectively 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 common
stock 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 Charter and all amendments thereto (such Charter, as
presently in effect and as it shall from time to time be amended,
herein called the "Company's Charter");
(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 Directors 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 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
Directors 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 hereunder are not deemed exclusive,
and 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. 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 Charter,
Bylaws and Prospectuses and with the instructions and directions
of the Board of Directors of the Company, and shall conform to
and comply with the requirements of the 1933 Act, the 1940 Act,
the regulations of the NASD Regulation, 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
2
the Funds and the Shares as Distributor may reasonably request.
(c) Except to the extent permitted by a plan adopted by the Company
under Rule 12b-1 of the 1940 Act, 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.
(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 Directors.
(f) It is understood that certain expenses to be incurred in
connection with the shares may be paid as provided in a
shareholder service plan or similar plan adopted by the Company.
The Distributor agrees to be responsible for the operation of
such plan in accordance with the terms thereof.
(g) The Company shall have the right at any time to inspect the
records of the Company (including work papers and other related
documents) in the possession of the Distributor.
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.
3
(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
Charter, 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.
(e) The proceeds of any redemption of shares shall be paid by the
Company (or its agent) 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 (the "Rules").
(g) The Company reserves the right to reject in its discretion any
order for Shares.
III. LIMITATIONS OF LIABILITY
Distributor shall not be liable for any error of judgement 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
4
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.
V. INDEMNIFICATION
1. COMPANY REPRESENTATIONS.
The Company represents and warrants to Distributor that (a) it is duly
organized as a Maryland corporation 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 (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 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
and (d) Distributor is at all times during the term of this Agreement
a registered broker-dealer under the Securities Exchange Act of 1934.
3. COMPANY INDEMNIFICATION.
The Company shall indemnify, defend and hold harmless Distributor, its
several officers and directors, and any person who controls
Distributor within the
5
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 Applications"), 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 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 or
information 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 any person pursuant to this subsection
3 of Section V 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 directors 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 V 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
6
(b) such person shall provide security for such undertaking, or 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 directors 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.
4. DISTRIBUTOR INDEMNIFICATION
Distributor shall indemnify, defend and hold harmless the Company,
each Fund, the Company's several officers and directors 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 V or its agreements in
subsection 2 of the 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, 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 the Distributor filed in any 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
necessary to make the statements therein not misleading, which
statement or omission was made in reliance upon and in conformity with
information furnished to the Company or any of its several officers
and directors 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 directors, 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 reasonable
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 V 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
7
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 bear the fees and
expenses of any additional counsel retained by the indemnified party.
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 February 27, 2000. 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 Directors 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
Directors 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 Directors 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 ninety (90) 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. Any documents, records or work papers prepared by Distributor on
behalf of the Company in order to maintain the regulatory records of the
Funds shall become the property of the Company. In the event of
termination, Distributor shall promptly, upon written request, turn over
such documents, records or work papers to the Company.
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:
8
The OFFITBANK Investment Fund, Inc.
c/o OFFITBANK
520 Madison Avenue, 27th floor
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx Xxxxx
or such other address or to such individual as shall be so specified by the
one party to the other party.
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 Xxxxxxxxx
Provident Distributors, Inc.
Four Falls Corporate Center, 0xx Xxxxx
Xxxx Xxxxxxxxxxxx, XX 00000-0000
or such other address or to such individual as shall be so specified by the
one party to the other party.
IX. MISCELLANEOUS
The obligations of each Fund under this Agreement shall be the several (and
not joint or joint and several) obligations of each Fund. 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 the 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 VI 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 Delaware law (without regard to principles of
conflicts of law); provided, however, that nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any rule or
regulation of the Commission thereunder. This Agreement may be executed in
two or more parts which together shall constitute a single agreement.
9
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.
The OFFITBANK Investment Fund, Inc.
By: /s/ Xx. Xxxxxxx Xxxxxx-Xxxxx
-----------------------------
Provident Distributors, Inc.
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------
Chief Executive Officer
10
