AMENDMENT OF DISTRIBUTION AGREEMENT AND ASSUMPTION OF
DUTIES AND RESPONSIBILITIES BY XXXX
Xxxxxxxx 0, 0000
XXX Xxxxxxxxxxxx, Inc.
PFS Investments Inc.
0000 Xxxxxxxxxxxx Xxxx., Xxxx. 000
Xxxxxx, XX 00000-0000
Dear Sirs:
Reference is made to that certain distribution agreement (the
"Agreement"), dated as of June 5, 2000, between Xxxxx Xxxxxx California
Municipals Fund Inc. (the "Investment Company"),with respect to one or more
separate series listed on Exhibit A (each a "Fund") and PFS Distributors, Inc.
("PFSD"). This letter agreement (the "Amendment") incorporates all of the
conditions, responsibilities, representations and other terms of the Agreement,
except as amended or modified in this Amendment.
WHEREAS, PFS Investments Inc. ("PFSI") and PFSD intend to effect a
transaction pursuant to which PFSD will merge with and into PFSI (the "Merger");
WHEREAS, effective as of the Merger, PFSI, as the successor of the Merger,
is expected to perform all of the responsibilities, obligations, duties and
liabilities of PFSD under that Agreement, as amended or supplemented by this
Amendment, effective December 1, 2005, and
WHEREAS, PFSD, or its successor, PFSI, wishes to serve as principal
underwriter and distributor for each Fund under the terms of the Agreement, as
modified and amended by this Amendment;
THEREFORE, the Investment Company, on behalf of each Fund, PFSD and PFSI
agree that (i) as of the date hereof, PFSD shall discharge, perform and be
liable for such obligations and responsibilities of PFSD under the Agreement, as
amended by this Amendment and (ii) in the event that the Merger is consummated,
from and after the effective time of the Merger, PFSI shall discharge, perform
and be liable for such obligations and responsibilities of PFSD under the
Agreement, as amended by this Amendment.
Except as expressly amended hereby, the provisions of the Agreement (after
giving effect to the foregoing substitution of parties) will remain in full
force and effect between PFSI and the Investment Company. Capitalized terms not
defined in this Amendment shall have the meanings given to them in the
Agreement.
We acknowledge that Xxxx Xxxxx Inc. ("Xxxx Xxxxx") and Citigroup Inc.
("Citigroup") have entered into that certain Global Distribution Agreement (the
"Global
Distribution Agreement"), dated as of June 23, 2005, which provides, for a
period of three years from December 1, 2005, for the distribution by Citigroup
distributors of Citigroup investment products and Xxxx Xxxxx investment products
within the United States and internationally and for Citigroup's access to
certain Xxxx Xxxxx investment products pursuant to the terms of the Global
Distribution Agreement.
1. Services as a Non-Exclusive Principal Underwriter and Distributor
Notwithstanding anything to the contrary contained in the Agreement:
1.1 You shall be, for the period of the Agreement as amended by this
Amendment, a non-exclusive principal underwriter and distributor of each Fund.
1.2 You may perform any services for any entity, including
investment companies that are not advised or administered by Citigroup or its
subsidiaries.
1.3 You shall retain all rights to the information of your
customers, including, but not limited to, the names, addresses, telephone
numbers and social security numbers of applicants for, purchasers of, and other
customers of each Fund as well as other identity and private information in
respect of your customers, employees, registered representatives and agents
("Confidential Information"); provided, however, that Confidential Information
shall not include any customer information that: (x) was previously known by us
from a source other than you without obligations of confidence; (y) was or is
rightfully received by us from a third party without obligations of confidence
to you or from publicly available sources without obligations of confidence to
you; or (z) was or is developed by means independent of information obtained
from you.
2. Termination
In addition to the termination rights already contained in the Agreement,
(i) at any time prior to the second anniversary hereof, at your option you may
terminate the Agreement at any time in order for you to enter into a mutually
satisfactory mutual fund dealer agreement with the principal underwriter that is
an affiliate of Xxxx Xxxxx for the Investment Company (a "Dealer Agreement") and
(ii) at any time following the second anniversary of the date hereof, either
party may at its option terminate the Agreement at any time in order for you to
enter into a Dealer Agreement ; provided, that any such termination shall only
be effective upon execution and delivery of a Dealer Agreement which shall be,
unless the parties thereto otherwise agree, in substantially the form presented
to the Board of the Investment Company and attached hereto as Exhibit B with
such additional changes as may be appropriate to reflect changes in applicable
laws, regulations or industry practice.
3. Dealer and Other Agreements
You may not enter into dealer or similar agreements with unaffiliated
brokers, dealers, banks or other similar firms or recordkeeping, shareholder
servicing and sub-accounting services with unaffiliated intermediaries without
the written consent of the Investment Company or its authorized designee. No
such unaffiliated intermediary is authorized to act as agent for the Fund in
connection with the offering or sale of Shares of
the Fund to the public or otherwise, except for the limited purpose of
determining the time as of which transactions in Shares are deemed to have been
received.
4. Compliance Matters
(a) You shall act as a distributor and principal underwriter of
Shares in compliance in all material respects with all applicable laws, rules
and regulations, including, without limitation, all rules and regulations made
or adopted pursuant to (i) the 1940 Act, (ii) the Securities Exchange Act of
1934 ("1934 Act"), (iii) any securities association registered under the 1934
Act, including without limitation the NASD Conduct Rules or rules of any other
applicable self-regulatory organization. You shall offer the Shares, and accept
purchases, redemptions and exchanges for Shares, in compliance with the Fund's
registration statement (including its prospectus and statement of additional
information), as it may be amended or supplemented from time to time
("Registration Statement"). You will comply with and abide by the terms of a
Fund's Plan, as it may be amended from time to time.
(b) You agree to submit sales literature and marketing materials
(including memorandums, bulletins, and/or information or related materials)
prepared by you intended for public distribution ("PFSI Marketing Materials") to
the co-principal underwriter of the Investment Company which is an affiliate of
Xxxx Xxxxx prior to distribution or publication for written approval. Such PFSI
Marketing Materials shall be for review in accordance with procedures to be
agreed upon by the parties. You shall be responsible for reviewing and making
such filings with the NASD, as required, of PFSI Marketing Materials relating to
each Fund.
(c) You shall adopt and follow procedures for the confirmation of
sales to investors and qualified securities dealers, banks and other
intermediaries (collectively "Intermediaries") timeliness of orders, the
collection of amounts payable by investors and Intermediaries on such sales, the
correction of errors related to distribution of Shares, the cancellation of
unsettled transactions, and assisting with the solicitation of proxies, and any
other matters governed by Rule 38a-1 under the 1940 Act (as may apply to a
distributor or principal underwriter for a registered investment company), each
as may be necessary to comply with the requirements of the NASD, any other
self-regulatory organization, and the federal securities laws. You shall provide
reports or other information to the Investment Company at the Investment
Company's reasonable request, including, without limitation, reports related to
the operation and implementation of the Investment Company's policies related to
customer privacy, safeguarding of customer information, anti-money-laundering,
sales and marketing practices, the operation of your code of ethics or other
policies and procedures of the Investment Company.
(d) You represent, warrant and agree that you have adopted and
implemented: (i) an anti-money-laundering program in compliance with the USA
Patriot Act of 2001, the regulations thereunder and NASD Conduct Rules,
including, without limitation, customer identification program procedures,
monitoring for suspicious activity, and (ii) procedures to comply with
applicable law and regulation related to cash transaction
reporting requirements, as well as monitoring and reporting under FinCEN, OFAC
and other government watch lists.
(e) The Investment Company agrees that the information exchanged
under the Agreement and information about the respective customers and potential
customers of each is confidential and as such shall not be disclosed by the
Fund, sold or used by the Fund in any way except to carry out the terms of this
Agreement. Notwithstanding the foregoing, such customer information may be
disclosed by the Investment Company on a "need to know" basis as set forth in
applicable privacy rules and regulations. The obligations regarding
confidentiality hereunder shall not apply to any information which is (i)
otherwise publicly available, (ii) already possessed by the entity to whom the
information was disclosed prior to disclosure hereunder, (iii) independently
developed by the entity, or (iv) disclosed pursuant to law, rule, regulation or
court or administrative order. The Investment Company shall have the right to
use any list of shareholders of the Fund or any other list of investors which it
obtains in connection with its provision of services under this Agreement,
provided that such use is consistent with applicable law and your privacy
policies and those of the Fund, including the provision of information to the
Fund's transfer agent or to agents used for the solicitation of proxies. You
agree that you will comply with all of the foregoing obligations of this
paragraph to the extent that information is treated as customer information of
the Fund under applicable law or regulation, including without limitation
Regulation S-P. Each party further agrees to take commercially reasonable steps,
in accordance with applicable law, to safeguard customer information. The
provisions of this paragraph will survive termination of the Agreement.
(f) From time to time, each Fund may implement policies, procedures
or charges in an effort to avoid the potential adverse effects on the Fund of
short-term trading by market timers. You agree to provide other assistance
reasonably designed to achieve compliance with these policies. You will maintain
and enforce policies with respect to frequent trading and share redemption as
are reasonable and customary in the industry. To the extent that accounts are
held in street name, you agree to cooperate with the Investment Company and the
Investment Company's Chief Compliance Officer (including, to the extent
practicable, providing account level sales and redemption information) to assist
in compliance with the frequent trading and redemption fee provisions as set
forth in the Fund's prospectus and other policies set forth in the Fund's
Registration Statement.
(g) Purchases, exchanges and redemptions of Shares through you will
be at the public offering price of such Shares (the net asset value of the
Shares, with appropriate adjustments for any applicable sales charge), as
determined in accordance with the then effective Registration Statement used in
connection with the offer and sale of the Shares. The public offering price will
reflect scheduled variations in or the elimination of sales charges on sales of
Shares either generally to the public or in connection with special purchase
plans, as described in the Registration Statement. You agree to apply any
scheduled variation in or waivers of sales charges uniformly to all customers
meeting the qualifications therefor as specified in the Registration Statement.
With respect to Funds sold with an initial sales charge, your customers will be
entitled to reduced sales charges on purchases made under any letter of intent
or right of accumulation as described in the Registration Statement. In such
case, the
concession from the public offering price retained by you will be based upon
such reduced sales charge. When placing wire trades, your agree to advise the
Funds of any letter of intent executed by its customer or any available right of
accumulation. The minimum initial purchase and the minimum subsequent purchase
of any Shares shall be as set forth in the applicable Registration Statement.
All orders are subject to acceptance or rejection by the applicable Fund in its
sole discretion for any reason.
(h) The handling and settlement of purchase, exchange and redemption
orders will be subject to the provisions of the Registration Statement and such
further procedures as the Investment Company and you may determine to be
appropriate from time-to-time, consistent with this Amendment. Citigroup Global
Markets' internal systems are suitably designed to handle such orders. Each Fund
shall notify you of the states or jurisdictions in which its Shares are
currently available for sale to the public. The Investment Company shall have no
obligation to register or make available Fund shares in any state or
jurisdiction. You will be responsible for the accuracy, timeliness and
completeness of purchase, redemption or exchange orders accepted by you.
(i) PFSI may print current Fund prospectuses and statements of
additional information for PFSI's use, which may not vary in any material
respect from the relevant Fund's then-current prospectus and statement of
additional information. PFSI's printing will comply in all material respects
with all applicable legal and regulatory standards. The Board of the Investment
Company may terminate these printing services at any time upon written notice to
PFSI.
(j) The Investment Company acknowledges that the co-principal
underwriter which is affiliated with Xxxx Xxxxx shall be responsible for
reviewing the Registration Statement of each Fund, as applicable, for the
accuracy and completeness of all disclosure concerning the distribution of
Shares and that you shall not have such responsibility, except, in each case, to
the extent the disclosure information is provided by you or pertains to
information concerning your operations. Notwithstanding the foregoing, nothing
in this paragraph shall alter your responsibilities for complying with the terms
of the Registration Statement in your offering of Shares.
5. Records. Upon the Investment Company's reasonable request, you will
provide access to or make copies of any such records the Investment Company does
not possess in order to: (a) comply with a request from a government body or
self-regulatory organization; (b) verify compliance by the other party of the
terms of this Agreement; or (c) make required regulatory reports.
6. Section 9 of the 1940 Act. You agree to promptly notify the
Investment Company should you cease to be such a member of the NASD through
expulsion or otherwise or if its membership is suspended or should you be
subject to any limitations on your conduct under Section 9 of the 1940 Act.
7. Indemnification
You agree to indemnify, defend and hold the Investment Company, its
several officers and Board members, and any person who controls the Investment
Company within the meaning of Section 15 of the 1933 Act, free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Investment Company, its
officers or Board members, or any such controlling person may incur, under the
1933 Act or under common law or otherwise, on account of (i) any act of yours or
any of your employees constituting willful misfeasance, bad faith, or gross
negligence in the performance of your duties, (ii) by reason of your reckless
disregard of your obligations and duties under the Agreement or this Amendment;
or (iii) any act of yours or any of your employees constituting negligence with
respect to any services performed related to printing prospectuses or statements
of additional information for a Fund, as described in Paragraph 4(i) of this
Amendment. The foregoing indemnification provisions supplement the
indemnification provisions of the Agreement. The indemnifications provisions of
this Amendment and the Agreement shall survive the termination of the Agreement
and/or this Amendment.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance of this Amendment by signing and returning to us the enclosed
copy, whereupon this Amendment will become binding on you.
Very truly yours,
Xxxxx Xxxxxx California Municipals
Fund Inc.
By: /s/ R. Xxx Xxxxxx
---------------------------------
Name: R. Xxx Xxxxxx
Title: Chief Executive Officer
Agreed to as of the date first above written:
PFS Distributors, Inc.
By: _____________________________
Name:
Title:
PFS Investments Inc.
By: _____________________________
Name:
Title:
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance of this Amendment by signing and returning to us the enclosed
copy, whereupon this Amendment will become binding on you.
Very truly yours,
Xxxxx Xxxxxx California Municipals
Fund Inc.
By:
---------------------------------
Name: R. Xxx Xxxxxx
Title: Chief Executive Officer
Agreed to as of the date first above written:
PFS Distributors, Inc.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: CEO
PFS Investments Inc.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: CEO
EXHIBIT A
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Fund Date Added:
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Xxxxx Xxxxxx California Municipals Fund Inc. December 1, 2005
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EXHIBIT B
SELECTED DEALER CONTRACT
Xxxx Xxxxx Investor Services LLC
[Name & address of dealer]
Ladies and Gentlemen:
We, Xxxx Xxxxx Investors Services, LLC ("LMIS"), have agreements with certain
investment companies (each a "Distribution Agreement") for which [name of asset
management entity] or an affiliate serves as investment adviser (each a "Fund")
or series thereof (each a "Series") provided on Schedule A, as it may be amended
from time to time pursuant to which we act as the principal underwriter and
distributor for the sale of common shares of the Funds or Series ("Shares"), and
as such have the right to distribute Shares for resale. Each Fund is an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act") and the Shares being offered to the public are
registered under the Securities Act of 1933, as amended (the "1933 Act"). The
term "Prospectus", as used herein, refers to the prospectus and related
statement of additional information (the "Statement of Additional Information")
incorporated therein by reference (each as amended or supplemented) on file with
the Securities and Exchange Commission at the time in question. We understand
that you wish to act as a dealer with respect to the Shares. You have
represented that you are either a broker-dealer registered with the Securities
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended, ("1934 Act") and a member in good standing of the National Association
of Securities Dealers, Inc. ("NASD"), or a "bank" as defined in Section 3(a)(6)
of the 1934 Act ("Bank") and are not required to register as a broker-dealer
under the 1934 Act, at the time of each transaction subject to this Agreement.
As a broker in the capacity of principal underwriter and distributor for the
Series, we authorize you, and you hereby agree, to sell or to arrange for the
sale of Shares of each Fund or Series upon the following terms and conditions,
and you agree to perform certain other services set forth in this Selected
Dealer Contract ("Contract"):
1. In all sales to the public you shall act as broker-dealer for your
customers or as dealer for your own account, and in no transaction shall you
have any authority to act as agent for the Funds or any Series, for us or for
any other dealer except for the limited purpose of determining the time as of
which transactions in Shares are deemed to have been received, in compliance
with the provisions of this Selected Dealer Agreement.
2. Orders received from you will be accepted through us only at the public
offering price per share (i.e. the net asset value per share plus the applicable
front-end sales charge, if any) applicable to each order, and all orders for
redemption of any Shares shall be executed at the net asset value per share less
any applicable deferred sales charge, if any, in each case as set forth in the
applicable Prospectus. A Fund or Series may additionally impose redemption fees,
as described in the applicable Prospectus. Any contingent deferred sales charge
amounts received or retained by you shall be paid over by you directly to us or
our designated delegate in partial consideration of our payment to you of any
commission amounts provided by us at the time of sale. The procedure
relating to the handling of orders shall be subject to provisions of this
Agreement and instructions that we or the Fund shall forward from time to time
to you. All orders are subject to acceptance or rejection by the applicable Fund
or us in the sole discretion of either. The minimum initial purchase and the
minimum subsequent purchase of any Shares shall be as set forth in the
applicable Prospectus. You agree to comply with provisions of Rule 22c-2 under
the 1940 Act as applicable to each Fund (including reporting procedures adopted
to comply with the Rule).
3. You shall not place orders for any Shares unless you have already
received purchase orders for those Shares at the applicable public offering
price and subject to the terms hereof. You agree that you will not offer or sell
any Shares except under circumstances that will result in compliance with the
applicable Federal and state securities or banking laws (including, without
limitation, applicable provisions of the 1933 Act, 1934 Act, 1940 Act and the
rules and regulations of the NASD), any applicable banking laws, the applicable
rules and regulations thereunder and the rules and regulations of applicable
regulatory agencies or authorities (collectively, "Law and Regulation") and that
in connection with sales and offers to sell Shares you will furnish to each
person to whom any such sale or offer is made, a copy of the Prospectus as and
when required under applicable laws, rules and regulations and, upon request,
the Statement of Additional Information, and will not furnish to any person any
information relating to Shares which is inconsistent in any respect with the
information contained in the Prospectus or Statement of Additional Information
(as then amended or supplemented). You shall not furnish or cause to be
furnished to any person or display or publish any information or materials
relating to the Shares (including, without limitation, promotional materials and
sales literature, advertisements, press releases, announcements, statements,
posters, signs or other similar material), except such information and materials
as may be furnished to you by, or on behalf of, us or the Funds, and such other
information and materials as may be approved in writing by, or on behalf of, us
or the Funds.
4. If you are a broker dealer, you are hereby authorized (i) to place
orders directly with the applicable Fund or Series for Shares subject to the
applicable terms and conditions governing the placement of orders by us set
forth in the Prospectus and (ii) to tender Shares directly to each Fund or
Series or its agent for redemption subject to the applicable terms and
conditions governing the redemption of Shares applicable to us set forth in the
Prospectus.
5. If you are a Bank, with respect to any and all transactions in Shares
of the Funds or Series pursuant to this Agreement, it is understood and agreed
in each case that unless otherwise agreed to by us in writing: (i) you shall be
acting solely as agent for the account of your customer; (ii) each transaction
shall be initiated solely upon the order of your customer; (iii) we shall
execute transactions only upon receiving instructions from you acting as agent
for your customer; (iv) as between you and your customer, your customer will
have full beneficial ownership of all Shares; (v) each transaction shall be for
the account of your customer and not for your account; (vi) we will serve as a
clearing broker for you on a fully disclosed basis, and you shall serve as the
introducing agent for your customers' accounts; and (vii) order will comply with
the applicable terms and conditions governing the placement of orders as set
forth in the Prospectus including frequent trading redemption fee provisions.
6. You shall not withhold placing orders received from your customers so
as to profit yourself as a result of such withholding, e.g., by a change in the
"net asset value" from that used in determining the offering price to your
customers.
7. You shall provide ongoing shareholder liaison services to the
shareholders of each Fund or Series, including responding to shareholder
inquiries, providing shareholders with
information on their investments, and any other services now or hereafter deemed
to be appropriate subjects for the payment of "service fees" under NASD Conduct
Rule 2830.
8. Transactions in the Shares of a Fund or Series may be effected through
the Fund/SERV service of the National Securities Clearing Corporation (the
"NSCC") and, if applicable, account records may be maintained through the
networking service of the NSCC, provided that each party hereto will comply with
all applicable rules of the NSCC and the schedules thereto. Furthermore, you
hereby represent that all of your representations set forth in your agreement
with respect to participating in the NSCC network or in any schedules thereto
are accurate and true as of the date hereof and will remain accurate and true
insofar as the transactions in the Shares of the Fund or Series are effected
through the Fund/SERV service of the NSCC and, if applicable, the account
records are maintained through the networking service of the NSCC. You will be
solely responsible for the accuracy of each instruction through the Fund/SERV
service, and the issuance of a Fund/SERV instruction will constitute your
representation and warranty to us and a Fund's transfer agent that the
instruction is accurate, complete, and issued as duly authorized by the client
whose Shares are the subject of the instruction.
9. In determining the amount of any sales concession payable to you
hereunder, we reserve the right to exclude any sales which we reasonably
determine are not made in accordance with the terms of the Prospectus and the
provisions of this Agreement. Unless at the time of transmitting an order we
advise you or the transfer agent to the contrary, the Shares ordered will be
deemed to be the total holdings of the specified investor.
10. (a) You agree that payment for orders from you for the purchase of
Shares will be made in accordance with the terms of the Prospectus. On or before
the business day following the settlement date of each purchase order for
Shares, you shall transfer same day funds to an account designated by us with
the transfer agent in an amount equal to the public offering price on the date
of purchase of the Shares being purchased less your sales concession, if any,
with respect to such purchase order determined in accordance with the
Prospectus. If payment for any purchase order is not received in accordance with
the terms of the Prospectus, we reserve the right, without notice, to cancel the
sale and to hold you responsible for any loss sustained as a result thereof.
(b) If any Shares sold under the terms of this Agreement are sold
with a sales charge and are redeemed or are tendered for redemption within seven
(7) business days after confirmation of your purchase order for such Shares, you
shall forthwith refund to us the full sales concession received by you on the
sale.
(c) We will pay or cause to be paid to you any ongoing distribution
fees and/or shareholder service fees with respect to Shares of the Series
purchased through you and held by or for your customers at such rates and in
such manner as may be described in the Prospectus.
(d) Certificates evidencing Shares generally will not be available.
Upon payment for Shares in accordance with paragraph 10(a) above, the transfer
agent will issue and transmit to you or your customer a confirmation statement
evidencing the purchase of such Shares. Any transaction in uncertificated
Shares, including purchases, transfers, redemptions and repurchases, shall be
effected and evidenced by book-entry on the records of the transfer agent.
(e) We will not accept any conditional orders for Shares transmitted
by you.
(f) Each Fund's Board has adopted a Distribution Plan pursuant to
Rule 12b-1 of the 1940 Act (the "Plans") with respect to the Shares. Under the
terms of the Plans, we may be entitled
to compensation for distribution related services that it provides to the
Investment Companies, and we are permitted to pay all or a portion of such
compensation to entities that engage in or support the distribution of Shares.
For the services to be provided under this Contract and for so long as this
Contract remains in effect, we agree to pay you in accordance with Schedule B.
(g) In the event we do not receive payment from a Fund or Series
under the relevant Distribution Agreement or plan of distribution adopted
pursuant to the applicable Plan or as otherwise provided in the Prospectus, or
if such Distribution Agreement or Plan is cancelled, you agree to waive your
right to receive compensation until such time, if ever, we receive payment.
11. No person is authorized to make any representations concerning Shares
except those contained in the current Prospectus and Statement of Additional
Information and in printed information subsequently issued by us or the Funds as
information supplemental to the Prospectus and the Statement of Additional
Information. In purchasing or offering Shares pursuant to this Contract you
shall rely solely on the representations contained in the Prospectus, the
Statement of Additional Information and the supplemental information above
mentioned.
12. You agree to deliver to each purchaser making a purchase of Shares
from or through you a copy of the Prospectus as required by applicable Law and
Regulation and, upon request, the Statement of Additional Information. You may
instruct the transfer agent to register Shares purchased in your name and
account as nominee for your customers. You agree thereafter to deliver to any
purchaser whose Shares you or your nominee are holding as record holder copies
of the annual and interim reports and proxy solicitation materials and any other
information and materials relating to the Funds or Series and prepared by or on
behalf of us, the Funds or the investment adviser, custodian, transfer agent or
dividend disbursing agent for distribution to beneficial holders of Shares. The
Funds shall be responsible for the costs associated with forwarding such
reports, materials and other information and shall reimburse you in full for
such costs. You further agree to make reasonable efforts to endeavor to obtain
proxies from such purchasers whose Shares you or your nominee are holding as
record holder. You further agree to obtain from each customer to whom you sell
Shares any taxpayer identification number certification required under Section
3406 of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder, and to provide us or our designee with
timely written notice of any failure to obtain such taxpayer identification
number certification in order to enable the implementation of any required
backup withholding in accordance with Section 3406 of the Code and the
regulations thereunder. Additional copies of the Prospectus, Statement of
Additional Information, annual or interim reports, proxy solicitation materials
and any such other information and materials relating to the Funds will be
supplied to you in reasonable quantities upon request.
13. (a) In accordance with the terms of the Prospectus, a reduced sales
charge or no sales charge (collectively, "discounts") may be available to
purchasers of Shares or certain classes of investors, depending on the amount of
the investment or proposed investment. In each case where a discount is
applicable, you agree to furnish to the transfer agent sufficient information to
permit confirmation of qualification for a discount, and acceptance of the
purchase order is subject to such confirmation. Discounts may be modified or
terminated at any time in the sole discretion of each Fund.
(b) You agree to advise us promptly as to the amount of any and all
sales by you qualifying for a discount.
(c) Exchanges (i.e., the investment of the proceeds from the
liquidation of Shares of one Series in the Shares of another Series, each of
which is managed by the same or an affiliated
investment adviser) shall, where available, be made in accordance with the terms
of each Prospectus.
(d) You represent that you have, and will maintain during the term
of this Contract, adequate written supervisory procedures and internal controls
to ensure that your customers receive all available discounts, and you agree:
(i) to inform your customers of applicable discount opportunities and to inquire
about other qualifying holdings that might entitle customers to receive
discounts; (ii) to advise us, contemporaneously with each purchase order you
forward to us as agent for your customers, of the availability of any discounts;
and (iii) that in the event that you fail to provide us with information
concerning the availability of discounts as provided in (ii) above, you, and not
us or the Funds, shall be responsible for reimbursing your customer any
applicable discount amount.
14. As a result of the necessity to compute the amount of any contingent
deferred sales charge or redemption charge due with respect to the redemption of
Shares, you may hold Shares of a Fund imposing such a charge in a "street name"
account with our consent, and, in such event, you shall be responsible for
computation, collection and payment to us of such charges, the application of
any discounts, the application of Fund or Series' market-timing policies, all in
accordance with the applicable Prospectus for the Fund or Series. Except as
otherwise permitted by us, Shares owned by a shareholder must be in a separate
identifiable account for such shareholder.
15. (a) We and each Fund reserve the right in our discretion, without
notice, to suspend sales or withdraw the offering of any Shares entirely. Each
party hereto has the right to terminate this Contract without penalty upon
notice to the other party; provided, however, that termination shall not affect
any party's obligations hereunder with respect to any transactions or activities
occurring prior to the effective time of termination. Upon termination of this
Contract, ongoing trail commissions and/or shareholder servicing fees shall no
longer accrue or be paid to you. We reserve the right to amend this Contract in
any respect effective on notice to you and your placing of an order after the
effective date of any such amendment shall constitute your acceptance thereof.
Each notice of amendment required by this paragraph shall be given in writing
and delivered personally or mailed by certified mail or overnight courier
service or sent by facsimile to the address identified herein or such other
address as you may by written notice provide.
(b) Each party hereto agrees to provide prompt notice to the other
party in the event of an assignment to this Contract.
16. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the continuous offering of
Shares. We shall be under no liability to you except for lack of good faith and
for obligations expressly assumed by us herein. Nothing contained in this
paragraph 16 is intended to operate as, and the provisions of this paragraph 16
shall not in any way whatsoever constitute a waiver by you of compliance with,
any provisions of the 1933 Act or of the rules and regulations of the SEC issued
thereunder.
17. You agree that: (a) you shall not effect any transactions (including,
without limitation, any purchases and redemptions) in any Shares registered in
the name of, or beneficially owned by, any customer unless such customer has
granted you full right, power and authority to effect such transactions on his
behalf, (b) we shall have full authority to act upon your express instructions
to sell, repurchase or exchange Shares through us on behalf of your customers
under the terms and conditions provided in the Prospectus and (c) you shall
indemnify and hold harmless the Funds, us and both of our respective affiliates,
representatives and agents, successors and assigns, officers and directors, and
each person who controls either us or the Funds (within the meaning of
Section 15 of the 0000 Xxx) from and against any and all direct or indirect
costs, claims, expenses, liabilities or losses, including attorney's fees
resulting from (i) any alleged violation of any statute or regulation or rule of
a self-regulatory organization (including, without limitation, the securities
laws and regulations of the United States or any state or jurisdiction or the
NASD Conduct Rules) or any alleged tort or breach of contract, related to the
offer or sale by you of Shares of the Funds pursuant to this Contract (except to
the extent that our negligence or failure to follow correct instructions
received from you is the cause of such loss, claim, liability, cost or expense);
(ii) requests, directions, actions or inactions of or by you, your officers,
directors, employees, partners or agents regarding the purchase, redemption or
transfer of registration of Shares of the Funds for your accounts, your
customers and other shareholders or from any unauthorized or improper use of any
on-line computer facilities; (iii) incorrect investment instructions received by
us or a Fund or Fund agent from you; or (iv) the breach by you of any of your
representations, warranties or agreements specified herein or your failure to
comply with the terms and conditions of this Contract.
We agree to indemnify you and hold you harmless from and against any and
all liabilities and losses resulting directly from (i) any misstatement of a
material fact in the Prospectus of a Fund or Series or the omission of any
material fact required to be stated in the Prospectus of a Fund or Series or
necessary to make the statements in the Prospectus not misleading; or (ii) our
failure to comply with the terms and conditions of this Contract. The foregoing
indemnification provisions shall survive termination of this Contract.
18. (a) You shall be permitted to accept orders for the purchase, exchange
or redemption of Shares of the Funds on each business day that the New York
Stock Exchange ("NYSE") is open for business and a Fund's net asset value is
determined ("Business Day"). Instructions received in proper form by you prior
to time of acceptance for orders set forth in the applicable Prospectus ("Close
of Trading") (generally the close of regular trading on the NYSE, which is
generally 4:00 p.m. Eastern Time), and with respect to which you transmit orders
to the Fund via the NSCC Fund/SERV system up to the latest time accepted by
Fund/SERV on a given Business Day, will be deemed to have occurred, and will be
credited to the respective account, at the per share NAV next calculated after
the Close of Trading on that Business Day. You will not transmit orders based on
Instructions received from Shareholders after the Close of Trading for that
Business Day's NAV.
(b) The offering price ("Offering Price") of Shares of each
Investment Company shall be the net asset value per share as next determined by
the Investment Company following receipt of an order at Financial Intermediary's
principal office, plus any applicable sales charge.
(c) You agree to maintain records sufficient to identify the date
and time of receipt of all customer transactions or as otherwise required by
applicable Law and Regulation. You further agree to make such records available
upon request for examination by us, or its designated representative, at the
request of the transfer agent or by appropriate governmental authorities. Under
no circumstances shall you change, alter or manipulate any customer transactions
received by you in good order.
19. Solely for the limited purpose of receiving orders for the Shares of
the Funds by customers prior to the Close of Trading on a Business Day and
communicating such orders after the Close of Trading on such Business Day, you
will be deemed to act as agent of the Funds. Each communication of orders by you
shall constitute a representation that such orders were received by us prior to
the calculation of net asset value, as described in the applicable Prospectus on
the Business Day on which the order is priced in accordance with Rule 22c-1
under the Investment Company Act of 1940. You represent and warrant that: (i)
there are controls in place designed to prevent market timing, (ii) you will use
your best efforts to assist us in identifying market timers or
investors who engage in a pattern of short-term trading, and (iii) your internal
systems for processing and transmitting orders are suitably designed to prevent
orders received at or after the Close of Trading from being aggregated with
orders received before the Close of Trading.
20. You agree that, with respect to the compensation you receive in
connection with the offering of Shares or transactions involving Shares
(including payments from us or our affiliates), you will make or cause to be
made disclosure of such payments in accordance with applicable Law and
Regulation.
21. You agree that it is your responsibility to evaluate and determine
that any transaction in Shares (including a transaction in a specific class of
Shares of a Fund or Series) is a suitable transaction for each client based on
the client's objectives and risk profile. If you are a Bank, you further
represent and warrant to us that you will use your best efforts to ensure that
any purchase of Shares by your customers constitutes a suitable investment for
such customers. You shall not effect any transaction in, or induce any purchase
or sale of, any Shares by means of any manipulative, deceptive or other
fraudulent device or contrivance and shall otherwise deal equitably and fairly
with your customers with respect to transactions in Shares.
22. If you are a Bank, you will not make Shares available to your
customers, including your fiduciary customers, or accept any fees or
compensation hereunder except in compliance with all Law and Regulation
applicable to you, or any of your affiliates engaging in such activity,
including without limitation ERISA and regulated rules, regulations and
interpretations, which may affect your business practices.
23. In selling Shares you will comply with all applicable Law and
Regulation, including the applicable Law and Regulation of the jurisdictions in
which you sell any Shares directly or indirectly.
24. You represent and warrant to us and the Funds:
(a) You have in place an anti-money laundering program ("AML
program") that does now and will continue to comply with applicable laws and
regulations, including the relevant provisions of the Bank Secrecy Act and the
USA PATRIOT Act (Pub. L. No. 107-56 (2001)), as they may be amended, and the
regulations issued thereunder by duly vested regulatory authority and the
conduct the Rules of the NASD and the New York Stock Exchange, Inc., as
applicable ("Anti-Money Laundering Law and Regulation").
(b) You have, after undertaking reasonable inquiry, no information
or knowledge that (i) any customers that you introduce to the Funds or on whose
behalf you purchase Shares, or (ii) any person or entity controlling, controlled
by or under common control with such customers is an individual or entity or in
a country or territory that is on an Office of Foreign Assets Control ("OFAC")
list or similar list of sanctioned or prohibited persons maintained by a U.S.
governmental or regulatory body.
(c) You have in place, and have conducted due diligence pursuant to,
policies, procedures and internal controls reasonably designed (i) to verify the
identity of the customers that you introduce to the Funds or on whose behalf you
purchase Shares, and (ii) to identify those customers' sources of funds, and
have no reason to believe that any of the invested funds were derived from
illegal activities.
(d) You will provide us or the Funds (or their service providers)
upon reasonable request any information regarding specific accounts that may be
reasonably necessary for the Funds and their service providers to fulfill their
responsibilities relating to their anti-money laundering programs or any other
information reasonably requested by us or the Funds (or their service providers)
to assist with compliance with the Anti-Money Laundering Law and Regulation, as
may be permitted by law or regulation.
(e) You will promptly notify us should you become aware of any
change in the above representations and warranties. In addition, we on our own
behalf and on behalf of the Funds hereby provide notice to you that we and/or
the Funds reserve the right to make inquires of and request additional
information from you regarding your AML program.
25. (a) You represent and warrant that you have adopted and implemented
procedures to safeguard customer information and records that are reasonably
designed to ensure the security and confidentiality of customer records and
information and to ensure your compliance with the SEC's Regulation S-P or other
applicable privacy law. Both of us agree on behalf of ourselves, our affiliates
and employees that the terms of this Contract, information exchanged hereunder
and information about our respective customers and potential customers is
confidential and as such shall not be disclosed, sold or used in any way except
to carry out the terms of this Contract. Notwithstanding the foregoing, such
confidential information may be disclosed on a "need to know" basis as set forth
in applicable privacy rules and regulations. The obligations regarding
confidentiality hereunder shall not apply to any information which is (i)
otherwise publicly available, (ii) already possessed by the entity to whom the
information was disclosed prior to disclosure hereunder, (iii) independently
developed by the entity, or (iv) disclosed pursuant to law, rule, regulation or
court or administrative order. The provisions of this paragraph shall survive
termination of this Contract.
(b) You represent and warrant that the security of your computer
system is commercially reasonable and reasonably designed to prevent any illegal
or injurious activities of persons (including persons outside of you) attempting
to access a computer system maintained or operated by or on behalf of us or the
Funds through your computer system.
26. You agree that you will promptly forward any client complaints or
threatened or pending litigation notices specifically relating to the management
of the Funds, whether written or if verbal, in the form of a written summary, to
us or our designated party. We or our designated party will undertake to
investigate and respond to the complaint or threatened or pending litigation
notices in line with our complaints and litigation procedures. You agree to
fully cooperate with such investigation and response.
27. (a) If you are a broker-dealer, you represent and warrant that: (a)
you are a member in good standing of the NASD, or, if a foreign dealer who is
not eligible for membership in the NASD, that (i) you will not make any sales of
Shares in, or to nationals of, the United States of America, its territories or
its possessions, and (ii) in making any sales of Shares you will comply with the
NASD's Conduct Rules and (b) you are a member in good standing of the Securities
Investor Protection Corporation ("SIPC"). You agree to notify us immediately in
the event of (i) your expulsion or suspension from the NASD or SIPC, or (ii) the
institution of an investigation or proceeding by any federal, state or
self-regulatory organization against you alleging that you have violated any
applicable federal or state law, rule or regulation or any rule of the NASD or
of SIPC arising out of your activities as a broker-dealer or bank, as
appropriate, or in connection with this Contract, or which may otherwise affect
in any material way its ability to act in accordance with the terms of this
Contract. We shall have the right to terminate immediately upon receipt of such
notice.
(b) You represent and warrant that (i) each employee and agent of
yours who shall engage in the offering or sale of Shares is currently duly
licensed under applicable federal and state laws and regulations, and, if you
are a broker-dealer, with the NASD, and (ii) you shall not permit any employee
or agent to offer or sell Shares unless such person is duly licensed under
applicable federal and state laws and regulations, and with the NASD.
28. If you are a Bank or distributing through a Bank affiliate, you or the
affiliate represent and warrant that you or the affiliate are not in violation
of any banking law, rule or regulations as to which you are subject and that the
transactions contemplated by this Contract will not result in any violations of
any banking law, rule or regulation.
29. You agree that it is your responsibility to provide proper
instruction, training and supervision of appropriate sales personnel in order
that Shares will be offered and sold in accordance with the terms and conditions
of this Contract and in accordance with all applicable laws. You also agree that
it is your responsibility to assure that your sales personnel are properly
licensed, certified and familiar with the Funds, Series and any classes thereof.
30. You represent and warrant that you will not offer Shares of any Fund
or Series for sale in any state or jurisdiction where such Shares may not be
legally sold or where you are not qualified to act as a broker-dealer. We shall
inform you as to the states or other jurisdictions in which the Fund or Series
has advised us that Shares have been qualified for sale under, or are exempt
from the requirements of, the respective securities laws of such states.
31. You agree to distribute or cause to be delivered to your customers
Prospectuses, proxy solicitation materials, shareholder reports and other
materials in compliance with applicable legal requirements, except to the extent
that we undertake to do so.
32. (a) We shall notify you of the states or other jurisdictions in which
Shares are currently available for sale to the public. We shall have no
obligation to register or make available Shares in any state or other
jurisdiction.
(b) [You shall provide to the transfer agent of each Fund or Series
each client's state of residency on each trade record and registration record so
we can monitor trades for blue sky compliance. The Fund or its agent will reject
any ineligible trades and notify you upon cancellation.]
33. You shall not incur, nor does it have the authority to incur, any
debts or obligations on behalf of us or any Fund or Series.
34. You shall provide any assistance that we or the Funds reasonably
request in connection with a Fund's or Series' solicitation of proxies.
35. Any claim, controversy, dispute or deadlock arising under this
agreement (collectively, a "Dispute") shall be settled by arbitration
administered in accordance with the rules and regulations of the NASD. Any
arbitration and award of the arbitrators, or a majority of them, shall be final
and the judgment upon the award rendered may be entered in any state or federal
court having jurisdiction. No punitive damages are to be awarded.
36. All communications to us should be sent, postage prepaid, to
__________________. Any notice to you shall be duly given if mailed, telegraphed
or telecopied to you at the address
specified by you below. Communications regarding placement of orders for Shares
should be sent, postage prepaid, to ________________________________________.
37. This Contract shall be binding upon both parties hereto when signed by
us and accepted by you in the space provided below; provided, however, that you
shall not have any obligations hereunder other than in respect of the duties and
agreements expressly undertaken and made by you herein.
38. This Contract and the terms and conditions set forth herein shall be
governed by, and construed in accordance with, the laws of the State of
Maryland. To the extent that the applicable laws of the State of Maryland
conflict with the applicable provisions of the federal securities laws, the
latter shall control.
39. To the extent a Fund or Series imposes a redemption fee as provided in
the applicable Prospectus, you agree to abide and comply with the terms of the
attached Redemption Fee Addendum.
40. This Contract shall not be construed to constitute a partnership,
joint venture, or agency between you and us or any Fund or Series, nor to create
an employer-employee relationship between you and us. You acknowledge that you
are an independent contractor, that your business is its own and entirely
separate from that of ours and the Funds and Series, and that you will not deal
with or represent itself to the public in any other way.
41. You agree to provide us with any assistance or report that we
reasonably request in order to fulfill our duties to assist the Funds with
compliance with Rule 38a-1 under the 1940 Act, in our capacity as principal
underwriter to each Fund.
Xxxx Xxxxx Investor Services, LLC
By: ____________________________________
Managing Director
Accepted:
Firm Name: _____________________________
NASD Registration
Number: _____________________________
By: _____________________________
Address: _____________________________
_____________________________
Accepted By (signature): _____________________________________
Name (print): ______________________ Title: _____________________________
Date: ______________________
SCHEDULE A - FUNDS
[insert funds]
SCHEDULE B - COMPENSATION
Beginning on the effective date of this Contract, for each Fund listed on
Schedule A, Xxxx Xxxxx will pay the Financial Intermediary a quarterly fee equal
on an annual basis to [0.25%] of the average daily net asset value of [Financial
Intermediary Shares of Funds] owned beneficially by clients of the Financial
Intermediary during such period.
*Institutional shares do not pay service fees
Redemption Fee Addendum
