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EXHIBIT (e)(4)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 31st day of March, 1999, by and between
Northern Funds, a Massachusetts business trust ("Northern Funds") and Northern
Funds Distributors, LLC, a Wisconsin limited liability company (the
"Distributor").
W I T N E S S E T H :
WHEREAS, Northern Funds is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company
and is authorized to issue shares of beneficial interest ("Shares") in separate
series with each such series representing the interests in a separate portfolio
of securities and other assets;
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, the Fund and Distributor desire to enter into an agreement
pursuant to which Distributor shall be the distributor of the Shares of Northern
Funds representing the investment portfolios listed on Schedule A hereto and any
additional investment portfolios Northern Funds and Distributor may agree upon
and include on Schedule A as such Schedule may be amended from time to time
(such investment portfolios and any additional investment portfolios are
individually referred to as a "Fund" and collectively the "Funds").
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Appointment of the Distributor.
Northern Funds hereby appoints the Distributor as agent for the
distribution of the Shares, on the terms and for the period set forth in this
Agreement. Distributor hereby accepts such appointment as agent for the
distribution of the Shares on the terms and for the period set forth in this
Agreement.
2. Services as Distributor.
2.1(a) Distributor will act as agent for the distribution of Shares in
accordance with the instructions of Northern Funds' Board of Trustees and the
registration statement and prospectuses then in effect with respect to the Funds
under the Securities Act of 1933, as
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amended (the "1933 Act"), and will transmit promptly any orders received for the
purchase or redemption of Shares either directly to the transfer agent for the
Funds or to any qualified broker/dealer for transmittal to said agent.
2.1(b) Distributor shall use appropriate efforts to solicit orders for
the sale of Shares. Distributor, at its own expense, shall finance appropriate
activities which it deems reasonable which are primarily intended to result in
the sale of Shares, including, but not limited to, advertising, the printing and
mailing of prospectuses to other than current shareholders, and the printing and
mailing of sales literature. In addition, Distributor will provide at least one
person, during normal business hours, to respond to telephone questions with
respect to the Funds. Distributor may enter into servicing and/or selling
agreements with qualified broker/dealers and other persons with respect to the
offering of Shares to the public, and if it so chooses Distributor will act only
on its own behalf as principal. The Distributor shall not be obligated to sell
any certain number of Shares of any Fund.
2.1(c) All Shares of the Funds offered for sale by Distributor shall be
offered for sale to the public at a price per unit (the "offering price") equal
to their net asset value (determined in the manner set forth in Northern Funds'
then current prospectuses). The offering price, if not an exact multiple of one
cent, shall be adjusted to the nearest cent.
2.2 Distributor shall act as distributor of the Shares in compliance
with all applicable laws, rules and regulations, including, without limitation,
all rules and regulations made or adopted pursuant to the 1940 Act, by the
Securities and Exchange Commission (the "Commission") or any securities
association registered under the 1934 Act. Northern Funds represents that it is
registered as an open-end management investment company under the 1940 Act and
that it shall comply with all applicable laws, rules and regulations including
the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder.
2.3 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by circumstances of any kind, Northern
Funds' officers may decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such orders and to
make such sales and Northern Funds shall advise Distributor promptly of such
determination.
2.4 Northern Funds shall take all necessary action to register and
maintain the registration of the Shares under the 1933 Act for sale as herein
contemplated and shall pay all costs and expenses in connection with the
registration of Shares under the 1933 Act, and be responsible for all expenses
in connection with maintaining facilities for the issue and transfer of Shares
and for supplying information, prices and other data to be furnished by Northern
Funds hereunder.
2.5 Northern Funds shall execute any and all documents and furnish any
and all information and otherwise take all actions which may be reasonably
necessary in the discretion of Northern Funds' officers in connection with the
qualification of the Shares for sale in such states as Distributor and Northern
Funds may approve, and Northern Funds shall pay all expenses which may be
incurred in connection with such qualification. Distributor shall pay all
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expenses connected with its own qualification as a broker 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 by
Distributor of Shares as contemplated in this Agreement.
2.6 Northern Funds shall furnish Distributor from time to time, for use
in connection with the sale of Shares, such information with respect to Northern
Funds and the Shares as Distributor may reasonably request, and Northern Funds
warrants that the statements contained in any such information shall be true and
correct. Northern Funds also shall furnish Distributor upon request with: (a)
annual audited reports of Northern Funds' books and accounts with respect to
each of the Funds, made by independent public accountants regularly retained by
Northern Funds, (b) semi-annual reports with respect to each of the Funds
prepared by Northern Funds, and (c) from time to time such additional
information regarding Northern Funds' financial condition as Distributor may
reasonably request.
2.7 Northern Funds represents to Distributor that all registration
statements and prospectuses filed by Northern Funds with the Commission under
the 1933 Act with respect to the Shares have been prepared in conformity with
the requirements of the 1933 Act, the 1940 Act, and the rules and regulations of
the Commission thereunder. As used in this Agreement the terms "registration
statement" and "prospectus" shall mean any registration statement and prospectus
(together with the related statement of additional information) at any time
filed with the Commission with respect to any of the Shares and any amendments
and supplements thereto which at any time shall have been filed with said
Commission. Northern Funds represents and warrants to Distributor that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with the 1933 Act, the 1940 Act and the rules and regulations of the
Commission; that all statements of fact contained in the registration statement
and prospectus will be true and correct in all material respects when such
registration statement becomes effective; and that neither the registration
statement nor any prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading to a purchaser of Shares. Northern Funds agrees to file from time
to time such amendments, supplements, reports and other documents as may be
necessary in order to comply with the 1933 Act and the 1940 Act and in order
that there may be no untrue statement of a material fact in a registration
statement or prospectus, or necessary in order that there may be no omission to
state a material fact in the registration statement or prospectus which omission
would make the statements therein misleading. If Northern Funds shall not
propose an amendment or amendments and/or supplement or supplements within
fifteen days after receipt by Northern Funds of a written request from
Distributor to do so, Distributor may, at its option, terminate this Agreement.
Northern Funds shall not file any amendment to the registration statement or
supplement to any prospectus without giving Distributor reasonable notice
thereof in advance; provided, however, that nothing contained in this Agreement
shall in any way limit Northern Funds' right to file at any time such amendments
to any registration statement and/or supplements to any prospectus, of whatever
character, as Northern Funds may deem advisable, such right being in all
respects absolute and unconditional.
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2.8(a) Northern Funds authorizes Distributor to use any prospectus, in
the form furnished to Distributor from time to time, in connection with the sale
of Shares. Northern Funds shall indemnify, defend and hold the Distributor, and
each of its present or former directors, officers, employees, representatives
and any person who controls or previously controlled the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all losses, claims, demands, liabilities, damages and expenses (including
the costs of investigating or defending any alleged losses, claims, demands,
liabilities, damages or expenses and any counsel fees incurred in connection
therewith) which Distributor, each of its present and former directors,
officers, employees or representatives or any such controlling person, may incur
under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, arising out
of or based upon any untrue statement, or alleged untrue statement, of a
material fact contained in the registration statement or any prospectus, as from
time to time amended or supplemented, or an annual or interim report to
shareholders, or arising out of or based upon any omission, or alleged omission,
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that Northern
Funds' obligation to indemnify Distributor and any of the foregoing indemnitees,
shall not be deemed to cover any losses, claims, demands, liabilities, damages
or expenses arising out of any untrue statement or alleged untrue statement or
omission or alleged omission made in the registration statement, prospectus, or
annual or interim report in reliance upon and in conformity with information
furnished to Northern Funds or its counsel by Distributor for the purpose of,
and used in, the preparation thereof; and provided further that Northern Funds'
agreement to indemnify Distributor and any of the foregoing indemnitees shall
not be deemed to cover any liability to Northern Funds or its shareholders to
which Distributor would otherwise be subject by reason of its 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. Northern Funds' agreement to indemnify the Distributor, and each of
its present or former directors, officers, employees, representatives or any
controlling person, as the case may be, with respect to any action, is expressly
conditioned upon Northern Funds being notified of such action brought against
Distributor, or each of its present or former directors, officers, employees,
representatives or any such controlling person, 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 Distributor, or such person, such
notification to be given by letter or by telegram addressed to Northern Funds'
Chairman, but the failure so to notify Northern Funds of any such action shall
not relieve Northern Funds from any liability which Northern Funds may have to
the person against whom such action is brought by reason of any such untrue, or
alleged untrue, statement or omission, or alleged omission, otherwise than on
account of Northern Funds' indemnity agreement contained in this paragraph
2.8(a).
2.8(b) Northern Funds shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any such loss, claim, demand, liability, damage or expense,
but if Northern Funds elects to assume the defense, such defense shall be
conducted by counsel chosen by Northern Funds and approved by the Distributor,
which approval shall not be unreasonably withheld. In the event Northern Funds
elects to assume the defense of any such suit and retain such counsel, the
indemnified defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by
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them. If Northern Funds does not elect to assume the defense of any such suit,
or in case the Distributor does not, in the exercise of reasonable judgment,
approve of counsel chosen by Northern Funds, Northern Funds will reimburse the
indemnified person or persons named as defendant or defendants in such suit, for
the fees and expenses of any counsel retained by Distributor and them. Northern
Funds' indemnification agreement contained in this paragraph 2.8 and Northern
Funds' representations and warranties in this Agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Distributor, and each of its present or former directors,
officers, employees, representatives or any controlling person, and shall
survive the delivery of any Shares and the termination of this Agreement. This
Agreement of indemnity will inure exclusively to the Distributor's benefit, to
the benefit of each of its present or former directors, officers, employees or
representatives or to the benefit of any controlling persons and their
successors. Northern Funds agrees promptly to notify Distributor of the
commencement of any litigation or proceedings against Northern Funds or any of
its officers or directors in connection with the issue and sale of any of the
Shares.
2.9 Distributor shall indemnify, defend and hold Northern Funds, and
each of its present or former directors, officers, employees, representatives,
and any person who controls or previously controlled Northern Funds within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all losses, claims, demands, liabilities, damages and expenses (including
the costs of investigating or defending any alleged losses, claims, demands,
liabilities, damages or expenses, and any counsel fees incurred in connection
therewith) which Northern Funds, and each of its present or former directors,
officers, employees, representatives, or any such controlling person, may incur
under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, arising out
of or based upon any untrue, or alleged untrue, statement of a material fact
contained in Northern Funds' registration statement or any prospectus, as from
time to time amended or supplemented, or annual or interim report to
shareholders or the omission, or alleged omission, to state therein a material
fact required to be stated therein or necessary to make the statement not
misleading, but only if such statement or omission was made in reliance upon,
and in conformity with, information furnished to Northern Funds or its counsel
by the Distributor for the purpose of, and used in, the preparation thereof.
Distributor's agreement to indemnify Northern Funds and any of the foregoing
indemnitees shall not be deemed to cover any liability to Distributor to which
Northern Funds would otherwise be subject by reason of its 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. The
Distributor's Agreement to indemnify Northern Funds, its present or former
directors, officers, employees, representatives, and any such controlling
person, as aforesaid, is expressly conditioned upon the Distributor's being
notified of any action brought against Northern Funds, its present or former
directors, officers, employees, representatives, or any such controlling person,
such notification to be given by letter or telegram addressed to Distributor's
President, 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 Northern Funds or such person, but the failure so to notify Distributor of
any such action shall not relieve Distributor from any liability which
Distributor may have to the person against whom such action is brought by reason
of any such untrue, or alleged untrue, statement or omission, otherwise than on
account of Distributor's indemnity agreement contained in this paragraph 2.9(a).
In case any action shall be brought against Northern Funds, and each of its
present or
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former directors, officers, employees, representatives, or controlling persons,
in respect of which indemnity may be sought against the Distributor, the
Distributor shall have the rights and duties given to Northern Funds, and
Northern Funds and each person so indemnified shall have the rights and duties
given to the Distributor by the provisions of paragraph 2.8(b).
2.10 No Shares shall be offered by either Distributor or Northern Funds
under any of the provisions of this Agreement and no orders for the purchase or
sale of such Shares hereunder shall be accepted by Northern Funds if and so long
as the effectiveness of the registration statement then in effect or any
necessary amendments thereto shall be suspended under any of the provisions of
the 1933 Act, or if and so long as current prospectuses as required by Section
10 of the 1933 Act, as amended, are not on file with the Commission; provided,
however, that nothing contained in this paragraph 2.10 shall in any way restrict
or have an application to or bearing upon Northern Funds' obligation to
repurchase Shares from any shareholder in accordance with the provisions of the
prospectus or Declaration of Trust.
2.11 Northern Funds agrees to advise Distributor promptly in writing:
(a) of any request by the Commission for amendments to the
registration statement or prospectuses then in effect;
(b) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or
prospectuses then in effect or the initiation of any proceeding
for that purpose;
(c) of the happening of any event which makes untrue any statement of
a material fact made in the registration statement or
prospectuses then in effect or which requires the making of a
change in such registration statement or prospectuses in order to
make the statements therein not misleading; and
(d) of all actions of the Commission with respect to any amendments
to any registration statement or prospectus which may from time
to time be filed with the Commission.
3. Term.
3.1(a) This Agreement shall become effective with respect to each Fund
listed on Schedule A hereof as of the date hereof and, with respect to each Fund
not in existence on that date, on the date an amendment to Schedule A to this
Agreement relating to that Fund is executed. Unless sooner terminated as
provided herein, this Agreement shall continue in effect with respect to each
Fund until March 31, 2000. Thereafter, if not terminated, this Agreement shall
continue automatically in effect as to each Fund for successive annual periods,
provided such continuance is specifically approved at least annually by (i)
Northern Funds' Board of Trustees or (ii) the vote of a majority (as defined in
the 0000 Xxx) of the outstanding voting securities of a Fund, and provided that
in either event the continuance is also approved by a majority of Northern
Funds' Trustees who are not "interested persons" (as defined in the 1940
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Act) of any party to this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval.
3.1(b) This Agreement may be terminated without penalty with respect to
a particular Fund (1) through a failure to renew this Agreement at the end of a
term, (2) upon mutual consent of the parties, or (3) on not less than sixty (60)
days' written notice, by Northern Funds' Trustees, by vote of a majority (as
defined with respect to voting securities in the 1940 Act) of the outstanding
voting securities of the Fund, or by Distributor. The terms of this Agreement
shall not be waived, altered, modified, amended or supplemented in any manner
whatsoever except by a written instrument signed by the Distributor and Northern
Funds. This Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act).
4. Miscellaneous.
4.1 The services of the Distributor rendered to the Funds are not
deemed to be exclusive. The Distributor may render such services and any other
services to others, including other investment companies. Northern Funds
recognizes that from time to time directors, officers, and employees of the
Distributor may serve as directors, trustees, officers and employees of other
corporations or trusts (including other investment companies), that such other
entities may include the name of the Distributor as part of their name and that
the Distributor or its affiliates may enter into distribution, administration,
fund accounting or other agreements with such other corporations or trusts.
4.2 Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of Northern Funds all records and
other information relative to the Funds and prior, present or potential
shareholders of the Funds (and clients of said shareholders), and not to use
such records and information for any purpose other than performance of
Distributor's responsibilities and duties hereunder, except after prior
notification to and approval in writing by Northern Funds, 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
requested to divulge such information by duly constituted authorities, or when
so requested by Northern Funds.
4.3 This Agreement shall be governed by Wisconsin law (except as to
paragraph 4.5 hereof which shall be construed in accordance with the laws of the
State of Massachusetts). To the extent that the applicable laws of the State of
Wisconsin, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control, and nothing herein shall
be construed in a manner inconsistent with the 1940 Act or any rule or order of
the Commission thereunder. Any provision of this Agreement which may be
determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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4.4 Any notice required or to be permitted to be given by either party
to the other shall be in writing and shall be deemed to have been given when
hand delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, as follows: Notice to the Distributor shall be sent to
Northern Funds Distributors, LLC, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxx, 00000, Attention: Xxxxxx X. Xxxxxxx, and notice to Northern Funds
shall be sent to Xxxxx Xxxxxxxx, President, c/o Xxxxx Xxxxxxxx, 00 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx, 00000, with a copy to Xxxxxxx Xxxxx, Secretary, c/o
Drinker Xxxxxx & Xxxxx LLP, 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx,
Xxxxxxxxxxxx, 00000.
4.5 This Agreement is executed by or on behalf of Northern Funds with
respect to each of the Funds and the obligations hereunder are not binding upon
any of the Trustees, officers or shareholders of Northern Funds individually but
are binding only upon the Funds to which such obligations pertain and the assets
and property of such Funds. Northern Funds' Declaration of Trust is on file with
the Secretary of State of Massachusetts.
4.6 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original agreement but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
NORTHERN FUNDS
("Northern Funds")
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
President
NORTHERN FUNDS DISTRIBUTORS, LLC
("Distributor")
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President
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SCHEDULE A
TO THE
DISTRIBUTION AGREEMENT
BY AND BETWEEN
NORTHERN FUNDS
AND
NORTHERN FUNDS DISTRIBUTORS, LLC
Money Market Fund International Fixed Income Fund
U.S. Government Money Market Fund High Yield Municipal Fund
U.S. Government Select Money Market Fund High Yield Fixed Income Fund
Municipal Money Market Fund Income Equity Fund
California Municipal Money Market Fund Stock Index Fund
U.S. Government Fund Growth Equity Fund
Short-Intermediate U.S. Government Fund Select Equity Fund
Intermediate Tax-Exempt Fund Mid Cap Growth Fund
California Intermediate Tax-Exempt Fund Small Cap Index Fund
Florida Intermediate Tax-Exempt Fund Small Cap Fund
Fixed Income Fund International Growth Equity Fund
Tax-Exempt Fund International Select Equity Fund
Arizona Tax-Exempt Fund Technology Fund
California Tax-Exempt Fund
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