Exhibit 23 (e)(i)
THE XXXXXX SQUARE STRATEGIC FIXED-INCOME FUND
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made as of the 1st day of January, 1999,
between The Xxxxxx Square Strategic Fixed-Income Fund, a Massachusetts business
trust (the "Fund"), having its principal place of business in Wilmington,
Delaware, and Provident Distributors, Inc., a corporation organized under the
laws of the State of Delaware (the " Distributor"), having its principal place
of business in West Conshohocken, Pennsylvania.
WHEREAS, the Fund wishes to employ the services of the Distributor,
with such assistance from its affiliates as the latter may provide; and
WHEREAS, the Distributor wishes to provide distribution services to the
Fund as set forth below;
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties agree as follows:
1. SALE OF SHARES. The Fund grants to the Distributor the right to sell
shares of beneficial interest (the "shares") of all series, and of all
classes now or hereafter created, on its behalf during the term of this
Agreement and subject to the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and of the laws
governing the sale of securities in various states (the "Blue Sky
Laws") under the following terms and conditions: the Distributor (a)
shall have the right to sell, as agent on behalf of the Fund, shares
authorized for issue and registered under the 1933 Act; (b) may sell
shares under offers of exchange, if available, between and among the
funds distributed by Distributor and advised by Xxxxxx Square
Management Corporation or Wilmington Trust Company; and (c) shall sell
such shares only in compliance with the terms set forth in the Fund's
currently effective registration statement. The Distributor may enter
into selling agreements with selected dealers and others for the sale
of Fund shares and will act only on its own behalf as principal in
entering into such selling agreements.
2. SALE OF SHARES BY THE FUND. The rights granted to the Distributor shall
be non-exclusive in that the Fund reserves the right to sell its shares
to investors on applications received and accepted by the Fund.
Further, the Fund reserves the right to issue shares in connection with
(a) the merger or consolidation, or acquisition by the Fund through
purchase or otherwise, with any other investment company, trust or
personal holding company; and (b) a PRO RATA distribution directly to
the holders of shares in the nature of a stock dividend or split-up.
3. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to issued
shares of all series of the Fund, shares of all series of the Fund held
in its treasury in the event that, in
the discretion of the Fund, treasury shares shall be sold, and shares
of all series of the Fund repurchased for resale.
4. PUBLIC OFFERING PRICE. All shares sold to investors by the Distributor
or the Fund will be sold at the public offering price. The public
offering price for all accepted subscriptions will be the net asset
value per share, determined in the manner described in the Fund's
current Prospectus or SAI with respect to the applicable series. The
Fund shall in all cases receive the net asset value per share on all
sales.
5. SUSPENSION OF SALES. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders placed with the Distributor before it had
knowledge of the suspension. In addition, the Fund reserves the right
to suspend sales and the Distributor's authority to process orders for
shares on behalf of the Fund if, in the judgment of the Fund, it is in
the best interests of the Fund to do so. Suspension will continue for
such period as may be determined by the Fund. In addition, the
Distributor reserves the right to reject any purchase order.
6. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the Fund. This shall not prevent the Distributor from entering into
like arrangements (including arrangements involving the payment of
underwriting commissions) with other issuers. The Distributor agrees to
use all reasonable efforts to ensure that taxpayer identification
numbers provided for shareholders of the Fund are correct.
7. AUTHORIZED REPRESENTATIVE. The Distributor is not authorized by the
Fund to give any information or to make any representations other than
those contained in the appropriate registration statements,
Prospectuses or SAIs filed with the Securities and Exchange Commission
under the 1933 Act (as those registration statements, Prospectuses and
SAIs may be amended from time to time), or contained in shareholder
reports or other material that may be prepared by or on behalf of the
Fund for the Distributor's use. This shall not be construed to prevent
the Distributor from preparing and distributing, in compliance with
applicable laws and regulations, sales literature or other material as
it may deem appropriate. The Distributor shall be responsible for
filing all sales literature relating to the Fund with the National
Association of Securities Dealers, Inc. ("NASD") and any other
applicable regulatory authority. The Distributor will furnish or cause
to be furnished copies of such sales literature or other material to
the President of the Fund or his designee and will provide him with a
reasonable opportunity to comment on it. The Distributor agrees to take
appropriate action to cease using such sales literature or other
material to which the Fund reasonably objects as promptly as
practicable after receipt of the objection.
8. REGISTRATION OF SHARES. The Fund agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the
necessary approval, if any, of its shareholders)
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so that there will be available for sale the number of shares the
Distributor may reasonably be expected to sell. The Fund shall furnish
to the Distributor copies of all information, financial statements and
other papers which the Distributor may reasonably request for use in
connection with the distribution of shares of each series of the Fund.
9. REPORTING. The Distributor shall provide the Fund's Board of Trustees
such information as is reasonably requested. The Distributor shall also
attend any meeting of the Fund's Board of Trustees at which the
Distributor's presence is requested.
10. FEES, EXPENSES AND ADDITIONAL SERVICES
(a) The Fund shall pay all fees and expenses:
(i) in connection with the preparation, setting in type and
filing of any registration statement, Prospectus and SAI
under the 1933 Act, and any amendments thereto, for the
issue of its shares;
(ii) inconnection with the registration and qualification of
shares for sale in the various states in which the Board of
Trustees (the "Trustees") of the Fund shall determine it
advisable to qualify such shares for sale (including
registering the Fund or any series as a broker or dealer, or
any officer of the Fund as an agent or salesperson in any
state);
(iii) of preparing, setting in type, printing and mailing any
report or other communication to shareholders of the Fund in
their capacity as such; and
(iv) of printing and mailing Prospectuses, SAIs, and any
supplements thereto, sent to existing shareholders.
(b) The Distributor may, in its sole discretion, pay such expenses as
it deems reasonable for:
(i) printing and distributing Prospectuses, SAIs and reports
prepared for its use in connection with the offering of the
shares for sale to the public;
(ii) any other literature used in connection with such offering;
and
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(iii) advertising in connection with such offering.
(c) In addition to the services described above, the Distributor will
provide services including assistance in the production of
marketing and advertising materials for the sale of shares of the
Fund and their review for compliance with applicable regulatory
requirements, entering into dealer agreements with broker-dealers
to sell shares of the Fund and monitoring their financial strength
and contractual compliance, providing, directly or through its
affiliates, certain investor support services, personal service,
and the maintenance of shareholder accounts.
11. INDEMNIFICATION.
(a) The Fund agrees to indemnify and hold harmless the Distributor and
each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the
1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damages, or expense and reasonable
counsel fees incurred in connection therewith) arising by reason of
any person acquiring any shares, based upon the 1933 Act or any
other statute or common law, alleging any wrongful act of the Fund
or any of its employees or representatives, or based upon the
grounds that the registration statements, Prospectuses, SAIs,
shareholder reports or other information filed or made public by
the Fund (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact
required to be stated or necessary in order to make the statements
not misleading. However, the Fund does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with,
information furnished to the Fund in writing by or on behalf of the
Distributor. In no case (i) is the indemnity of the Fund in favor
of the Distributor or any person indemnified to be deemed to
protect the Distributor or any person against any liability to the
Fund or its security holders to which the Distributor or such
person would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties
under this Agreement, or (ii) is the Fund to be liable under its
indemnity agreement contained in this Section 10(a) with respect to
any claim made against the Distributor or any person indemnified
unless the Distributor or person, as the case may be, shall have
notified the Fund in writing of the claim within a reasonable time
after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
the Distributor or any such person or after the Distributor or such
person shall have received notice of service on any designated
agent. However, failure to notify the Fund of any claim shall not
relieve the Fund from any liability which it may have to the
Distributor or any person against whom such action is brought other
than on account of its indemnity agreement contained in this
Section 10(a). The Fund shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume the defense
of any suit
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brought to enforce any claims, but if the Fund elects to assume the
defense, the defense shall be conducted by counsel chosen by it and
satisfactory to the Distributor, or person or persons, defendant or
defendants in the suit. In the event the Fund elects to assume the
defense of any suit and retain counsel, the Distributor, officers
or directors or controlling person(s) or defendant(s) in the suit,
shall bear the fees and expenses of any additional counsel retained
by them. If the Fund does not elect to assume the defense of any
suit, it will reimburse the Distributor, officers or directors or
controlling person(s) or defendant(s) in the suit, for the
reasonable fees and expenses of any counsel retained by them. The
Fund agrees to notify the Distributor promptly of the commencement
of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any of the
shares.
(b) The Distributor also covenants and agrees that it will indemnify
and hold harmless the Fund and each of the members of its Trustees
and officers and each person, if any, who controls the Fund within
the meaning of Section 15 of the 1933 Act, against any loss,
liability, damages, claim or expense (including the reasonable cost
of investigating or defending any alleged loss, liability, damages,
claim or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any shares,
based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its
employees or representatives, or alleging that the registration
statements, Prospectuses, SAIs, shareholder reports or other
information filed or made public by the Fund (as from time to time
amended) included an untrue statement of a material fact or omitted
to state a material fact required to be stated or necessary in
order to make the statements not misleading, insofar as the
statement or omission was made in reliance upon, and in conformity
with, information furnished in writing to the Fund by or on behalf
of the Distributor. In no case (i) is the indemnity of the
Distributor in favor of the Fund or any person indemnified to be
deemed to protect the Fund or any person against any liability to
which the Fund or such person would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of
its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in
this Section 10(b) with respect to any claim made against the Fund
or any person indemnified unless the Fund or person, as the case
may be, shall have notified the Distributor in writing of the claim
within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall
have been served upon the Fund or any such person or after the Fund
or such person shall have received notice of service on any
designated agent. However, failure to notify the Distributor of any
claim shall not relieve the Distributor from any liability which it
may have to the Fund or any person against whom the action is
brought other than on account of its indemnity agreement contained
in this Section 10(b). In the case of any notice to the
Distributor, it shall be entitled to participate, at its own
expense, in the defense, or, if it so elects, to assume the
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defense of any suit brought to enforce any claims, but if the
Distributor elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Fund, to
its officers and Trustees and to any controlling person(s) or any
defendants(s) in the suit. In the event the Distributor elects to
assume the defense of any suit and retain counsel, the Fund or
controlling person(s) or defendant(s) in the suit, shall bear the
fees and expenses of any additional counsel retained by them. If
the Distributor does not elect to assume the defense of any suit,
it will reimburse the Fund, its officers or Trustees, controlling
person(s) or defendant(s) in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to
notify the Fund promptly of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any
of the shares.
12. STATUS OF THE DISTRIBUTOR. The Distributor is a member in good standing
of the NASD and a properly registered broker-dealer under the
Securities Exchange Act of 1934, as amended. In carrying out this
Agreement, the Distributor agrees to abide by the rules and regulations
of the NASD and all applicable federal and state laws.
13. EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become effective
on the date first written above, and unless terminated as provided,
shall continue in force for one (1) year from the date of its execution
and thereafter from year to year, provided continuance after the one
(1) year period is approved at least annually by either (a) the vote of
a majority of the Trustees of the Fund, or by the vote of a majority of
the outstanding voting securities of the Fund, and (b) the vote of a
majority of those Trustees of the Fund who are not interested persons
of the Fund, cast in person at a meeting called for the purpose of
voting on the approval. This Agreement shall automatically terminate in
the event of its assignment. As used in this Section 11, the terms
"vote of a majority of the outstanding voting securities," "assignment"
and "interested person" shall have the respective meanings specified in
the 1940 Act and the rules enacted thereunder as now in effect or as
hereafter amended. In addition to termination by failure to approve
continuance or by assignment, this Agreement may at any time be
terminated without the payment of any penalty by vote of the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Fund, on not more than sixty (60) days' written
notice to the Fund. This Agreement may be terminated by the Distributor
upon not less than sixty (60) days' prior written notice to the Fund.
14. NOTICE. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail,
postage prepaid, to the other party to this Agreement at its principal
place of business.
15. SEVERABILITY. 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.
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16. GOVERNING LAW. To the extent that state law has not been preempted by
the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the State of Delaware.
17. SHAREHOLDER LIABILITY. The Distributor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust of the Fund and agrees that obligations assumed by
the Fund pursuant to this Agreement shall be limited in all cases to
the Fund and its assets. The Distributor agrees that it shall not seek
satisfaction of any such obligation from the shareholders or any
individual shareholder of the Fund, nor from the Trustees or any
individual Trustee of the Fund.
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18. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof. 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.
This Agreement may be executed in two counterparts, each of which,
taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THE XXXXXX SQUARE STRATEGIC FIXED-INCOME FUND
By:___________________________________________________
Name:_________________________________________________
Title:________________________________________________
PROVIDENT DISTRIBUTORS, INC.
By:___________________________________________________
Name:_________________________________________________
Title:________________________________________________
