DISTRIBUTION AGREEMENT
BETWEEN
XXXXXX ASSOCIATES INVESTMENT TRUST
AND
XXXXXX ASSOCIATES SECURITIES L.P.
THIS DISTRIBUTION AGREEMENT (the "Agreement") is made as of this 26th day
of January 2001 by and between XXXXXX ASSOCIATES INVESTMENT TRUST, a
Massachusetts business trust ("XXXX"), and XXXXXX ASSOCIATES SECURITIES L.P., a
Delaware limited partnership ("Distributor").
RECITALS:
WHEREAS, XXXX is engaged in business as an open-end management investment
company registered under the Investment Company Act of 1940, as amended
("1940 Act");
WHEREAS, Distributor is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended ("1934 Act"), and the laws of each state
(including the District of Columbia and Puerto Rico) in which it engages in
business to the extent such law requires, and is a member of the National
Association of Securities Dealers, Inc. ("NASD") (such registrations and
membership are referred to collectively as the "Registrations");
WHEREAS, XXXX desires Distributor to act as the distributor in the public
offering of its shares of common stock (hereinafter called "Shares") which
currently are divided into seven series designated The Oakmark Fund, The Oakmark
Select Fund, The Oakmark Small Cap Fund, The Oakmark Equity and Income Fund, The
Oakmark Global Fund, The Oakmark International Fund and The Oakmark
International Small Cap Fund, and including shares of any additional series
which may from time to time be offered for sale to the public (hereinafter
called, collectively, the "Funds" and, individually, the "Fund");
WHEREAS, XXXX has entered into an investment advisory agreement with
Xxxxxx Associates L.P. ("HALP"), an affiliate of Distributor, pursuant to which
HALP has agreed to pay all expenses incurred in the sale and promotion of shares
of XXXX;
NOW, THEREFORE, the parties hereto agree as follows:
1. APPOINTMENT. XXXX appoints Distributor to act as principal
underwriter (as such term is defined in Section 2(a)(29) of the 0000 Xxx) of
its Shares.
2. DELIVERY OF XXXX DOCUMENTS. XXXX has furnished Distributor with
properly certified or authenticated copies of each of the following in effect on
the date hereof and shall furnish Distributor from time to time properly
certified or authenticated copies of all amendments or supplements thereto:
(a) Agreement and Declaration of Trust;
(b) Bylaws;
(c) Resolutions of its Board of Trustees (hereinafter referred to
as the "Board") selecting Distributor as distributor and
approving this form of agreement and authorizing its
execution.
XXXX shall furnish Distributor promptly with copies of any registration
statements filed by it with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933 (the "1933 Act") or the 1940 Act, together with any
financial statements and exhibits included therein, and all amendments or
supplements thereto hereafter filed.
XXXX also shall furnish Distributor such other certificates or documents
which Distributor may from time to time, in its discretion, reasonably deem
necessary or appropriate in the proper performance of its duties.
3. SOLICITATION OF ORDERS FOR PURCHASE OF SHARES.
(a) Subject to the provisions of Paragraphs 5, 6 and 8 hereof, and to
such minimum purchase requirements as may from time to time be indicated in the
prospectus of each Fund, Distributor is authorized to solicit, as agent on
behalf of XXXX, unconditional orders for purchases of Shares authorized for
issuance and registered under the 1933 Act, provided that:
(1) Distributor shall act solely as a disclosed agent on behalf
of and for the account of XXXX;
(2) HAIT's transfer agent shall receive directly from investors
all payments for the purchase of Shares and also shall pay
directly to shareholders amounts due to them for the
redemption or repurchase of all Shares, with Distributor
having no rights or duties to accept such payment or to
effect such redemptions or repurchases; if a payment for the
purchase of Shares is delivered to Distributor, such payment
shall not be negotiated by Distributor but shall be delivered
as soon as reasonably practicable to HAIT's transfer agent;
and
(3) Distributor shall have no liability for payment for purchases
of Shares it sells as agent.
The purchase price to the public of Shares shall be the public offering
price as defined in Paragraph 7 hereof.
(b) In consideration of the rights granted to Distributor under this
Agreement, Distributor will use its best efforts (but only in states in which
Distributor may lawfully do so) to solicit from investors unconditional orders
to purchase Shares. XXXX shall make available to Distributor, at no cost to
Distributor, such number of copies of the currently effective prospectus and
Statement of Additional Information of each Fund and copies of all information,
financial statements and other papers which Distributor may reasonably request
for use in connection with the distribution of Shares.
4. SELLING AGREEMENTS. Distributor is authorized, as agent on behalf of
XXXX, to enter into agreements with other broker-dealers providing for the
solicitation of unconditional orders for purchases of Shares authorized for
issuance and registered under the 1933 Act. All such agreements shall be in a
form as may be approved by the officers of XXXX ("Selling
Agreement"). All solicitations made by other broker-dealers pursuant to a
Selling Agreement shall be subject to the same terms as are applied by this
Agreement to solicitations made by Distributor.
5. SOLICITATION OF ORDERS TO PURCHASE SHARES BY XXXX. The rights
granted to Distributor shall be non-exclusive in that XXXX reserves the right to
solicit purchases from, and sell its Shares to, investors. Further, XXXX
reserves the right to issue Shares in connection with the merger or
consolidation of any other investment company, trust or personal holding company
with XXXX, or XXXX'x acquisition, by the purchase or otherwise, of all or
substantially all of the assets of an investment company, trust or personal
holding company, or substantially all of the outstanding shares or interests of
any such entity. Any right granted to Distributor to solicit purchases of Shares
will not apply to Shares that may be offered by XXXX to shareholders by virtue
of their being shareholders of XXXX.
6. SHARES COVERED BY THIS AGREEMENT. This Agreement relates to the
solicitation of orders to purchase Shares that are duly authorized and
registered and available for sale by XXXX, including redeemed or repurchased
Shares if and to the extent that they may be legally sold and if, but only if,
XXXX authorizes Distributor to sell them. If XXXX establishes one or more series
in addition to The Oakmark Fund, The Oakmark Select Fund, The Oakmark Small Cap
Fund, The Oakmark Equity and Income Fund, The Oakmark Global Fund, The Oakmark
International Fund and The Oakmark International Small Cap Fund and wishes to
appoint Distributor as principal underwriter of the shares of beneficial
interest of such series, XXXX shall so notify Distributor in writing, and if
Distributor agrees in writing to provide such services and HALP acknowledges
that agreement by Distributor, the shares of common stock of such series shall
become Shares under the Agreement.
7. PUBLIC OFFERING PRICE. All solicitations by Distributor pursuant to
this Agreement shall be for orders to purchase Shares through HAIT's transfer
agent at the public offering price. The public offering price for each accepted
subscription for Shares will be the net asset value per share of the particular
Fund subscribed for calculated by XXXX at the next close of regular session
trading on the New York Stock Exchange after such subscription is accepted by
XXXX or by a person authorized by XXXX to accept such subscriptions. The net
asset value per share shall be determined in the manner provided in HAIT's
Agreement and Declaration of Trust as now in effect or as it may be amended, and
as reflected in the then current prospectus and Statement of Additional
Information of each Fund.
8. SUSPENSION OF SALES. If and whenever the determination of a Fund's
net asset value is suspended and until such suspension is terminated, no further
orders for Shares of such Fund shall be accepted by XXXX except such
unconditional orders placed with XXXX and accepted by it before the suspension.
In addition, XXXX reserves the right to suspend sales of Shares if, in the
judgment of the Board of XXXX, it is in the best interest of XXXX to do so, such
suspension to continue for such period as may be determined by HAIT's Board; and
in that event, (i) at the direction of XXXX, Distributor shall suspend its
solicitation of orders to purchase Shares until otherwise instructed by XXXX and
(ii) no orders to purchase Shares shall be accepted by XXXX while such
suspension remains in effect unless otherwise directed by its Board.
9. AUTHORIZED REPRESENTATIONS. Distributor is not authorized by XXXX to
give on behalf of XXXX or any Fund any information or to make any
representations in connection with
the sale of Shares other than information and representations which are
consistent with HAIT's registration statement filed with the SEC under the 1933
Act and/or the 1940 Act, covering Shares, as such registration statement or
HAIT's prospectus may be amended or supplemented from time to time, or contained
in shareholder reports or other material that may be prepared by or on behalf of
XXXX or approved by XXXX for Distributor's use. No person other than Distributor
is authorized to act as principal underwriter (as such term is defined in the
1940 Act, as amended) for XXXX.
10. REGISTRATION OF ADDITIONAL SHARES. XXXX hereby agrees to register an
indefinite number of Shares pursuant to Rule 24f-2 under the 1940 Act, as
amended. XXXX will, in cooperation with Distributor, take such action as may be
necessary from time to time to permit such Shares (so registered or otherwise
qualified for sale under the 0000 Xxx) to be sold in any state mutually
agreeable to Distributor and XXXX, and to maintain such qualification; provided,
however, that nothing herein shall be deemed to prevent XXXX from taking action,
without approval of Distributor, to permit its Shares to be sold in any state it
deems appropriate.
11. CONFORMITY WITH LAW. Distributor agrees that in soliciting orders to
purchase Shares it shall duly conform in all respects with applicable federal
and state laws and the rules and regulations of the NASD. Distributor will use
its best efforts to maintain its Registrations in good standing during the term
of this Agreement and will promptly notify XXXX and HALP in the event of the
suspension or termination of any of the Registrations.
12. INDEPENDENT CONTRACTOR. Distributor shall be an independent
contractor and neither Distributor, nor any of its members, managers, officers,
directors, employees or representatives is or shall be an employee of XXXX in
the performance of Distributor's duties hereunder. Distributor shall be
responsible for its own conduct and the employment, control and conduct of its
agents and employees and for injury to such agents or employees or to others
through its agents and employees and agrees to pay all employee taxes
thereunder.
13. INDEMNIFICATION.
(a) Distributor agrees to indemnify and hold harmless XXXX and each of the
members of its Board and its officers, employees and representatives and each
person, if any, who controls XXXX within the meaning of Section 15 of the 1933
Act against any and all losses, liabilities, damages, claims and expenses
(including the reasonable costs of investigating or defending any alleged loss,
liability, damage, claim or expense and reasonable legal counsel fees incurred
in connection therewith) to which XXXX or such of the members of its Board and
of its officers, employees, representatives, or controlling person or persons
may become subject under the 1933 Act, under any other statute, at common law,
or otherwise, arising out of the acquisition or sale of any Shares by any person
which (i) may be based upon any wrongful act by Distributor or any of
Distributor's members, managers, directors, officers, employees or
representatives, or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, Statement of Additional Information, shareholder report or other
information covering Shares filed, published or otherwise made public by XXXX or
any amendment thereof or supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading if such statement or omission was
made in reliance upon information furnished to XXXX by Distributor in writing.
In no case (i) is Distributor's indemnity in favor of XXXX, or any person
indemnified, to be deemed to protect XXXX or such indemnified
person against any liability to which XXXX or such person would otherwise be
subject by reason of willful misfeasance, bad faith or negligence in the
performance of its or his duties or by reason of its or his reckless disregard
of its or his obligations and duties under this Agreement, or (ii) is
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against XXXX or any person indemnified
unless XXXX or such person, as the case may be, shall have notified 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 served
upon XXXX or upon such person (or after XXXX or such person shall have received
notice of such service on any designated agent). However, failure to notify
Distributor of any such claim shall not relieve Distributor from any liability
unless (and then only to the extent that) the failure to give such notice
prejudices the defense of any such claim or from any liability which Distributor
may have to XXXX or any person against whom such action is brought otherwise
than on account of Distributor's indemnity agreement contained in this
paragraph.
Distributor shall be entitled to participate, at its own expense, in the
defense, or, if Distributor so elects, to assume the defense of any suit brought
to enforce any such claim but, if Distributor elects to assume that defense,
such defense shall be conducted by legal counsel chosen by Distributor and
acceptable to the persons indemnified who are defendants in the suit. In the
event that Distributor elects to assume the defense of any such suit and retain
such legal counsel, persons indemnified who are defendants in the suit shall
bear the fees and expenses of any additional legal counsel retained by them. If
Distributor does not elect to assume the defense of any such suit, Distributor
will reimburse persons indemnified who are defendants in such suit for the
reasonable fees of any legal counsel retained by them in such litigation.
(b) XXXX agrees to indemnify and hold harmless Distributor and each of its
members, managers, directors, officers, employees, and representatives and each
person, if any, who controls Distributor within the meaning of Section 15 of the
1933 Act against any and all losses, liabilities, damages, claims or expenses
(including the damage, claim or expense and reasonable legal counsel fees
incurred in connection therewith) to which Distributor or such of its members,
managers, directors, officers, employees, representatives or controlling person
or persons may otherwise become subject under the 1933 Act, under any other
statute, at common law, or otherwise arising out of the acquisition of any
Shares by any person which (i) may be based upon any wrongful act by XXXX or any
of the members of HAIT's Board, or HAIT's officers, employees or representatives
other than Distributor, or (ii) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement, prospectus, Statement of Additional Information, shareholder report
or other information covering Shares filed, published or otherwise made public
by XXXX or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading unless such statement
or omission was made in reliance upon information furnished in writing by
Distributor to XXXX. In no case (i) is HAIT's indemnity in favor of Distributor
or any person indemnified to be deemed to protect Distributor or such
indemnified person against any liability to which Distributor or such
indemnified person would otherwise be subject by reason of willful misfeasance,
bad faith, or negligence in the performance of its or his duties or by reason of
its or his reckless disregard of its or his obligations and duties under this
Agreement, or (ii) is XXXX to be liable under its indemnity agreement contained
in this Paragraph with respect to any claim made against Distributor or any
person indemnified unless Distributor, or such person, as the case may be, shall
have notified XXXX 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
served upon Distributor or upon such person (or after Distributor or such person
shall have received notice of such service on any designated agent). However,
failure to notify XXXX of any such claim shall not relieve XXXX from any
liability unless (and then only to the extent that) the failure to give such
notice prejudices the defense of any such claim or from any liability which XXXX
may have to Distributor or any person against whom such action is brought
otherwise than on account of HAIT's indemnity agreement contained in this
paragraph.
XXXX shall be entitled to participate, at its own expense, in the defense
or, if XXXX so elects, to assume the defense of any suit brought to enforce such
claim but, if XXXX elects to assume the defense, such defense shall be conducted
by legal counsel chosen by XXXX and satisfactory to the persons indemnified who
are defendants in the suit. In the event that XXXX elects to assume the defense
of any such suit and retain such legal counsel, the persons indemnified who are
defendants in the suit shall bear the fees and expenses of any additional legal
counsel retained by them. If XXXX does not elect to assume the defense of any
such suit, XXXX will reimburse the persons indemnified who are defendants in
such suit for the reasonable fees and expenses of any legal counsel retained by
them in such litigation.
14. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective the later of January 1, 2001 or the approval by the NASD of the
activities contemplated by Distributed hereunder ("Effective Date") and unless
terminated as provided herein, shall remain in effect through January 1, 2002,
and from year to year thereafter, but only so long as such continuance is
specifically approved at least annually by (a) a vote of majority of the members
of the Board of XXXX who are not interested persons of Distributor or XXXX,
voting in person at a meeting called for the purpose of voting on such approval,
and (b) the vote of either the Board of XXXX or a majority of the outstanding
Shares of XXXX. This Agreement may be terminated at any time, without the
payment of any penalty (a) on 60 days' written notice, by the Board of XXXX or
by a vote of a majority of the outstanding Shares of XXXX, or by Distributor, or
(b) immediately, on written notice by the Board of XXXX, in the event of
termination or suspension of any of the Registrations. This Agreement will
automatically terminate in the event of its assignment. In interpreting the
provisions of this Paragraph 14, the definitions contained in Section 2(a) of
the 1940 Act (particularly the definitions of "interested person," "assignment"
and "majority of the outstanding shares") shall be applied.
15. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by each party against which enforcement of the change, waiver,
discharge or termination is sought. If XXXX should at any time deem it necessary
or advisable in the best interests of XXXX that any amendment of this Agreement
be made in order to comply with the recommendations or requirements of the SEC
or any other governmental authority or to obtain any advantage under state or
federal tax laws and notifies Distributor of the form of such amendment and the
reasons therefore, and if Distributor should decline to assent to such
amendment, XXXX may terminate this Agreement forthwith. If Distributor should at
any time request that a change be made in HAIT's Agreement and Declaration of
Trust, Bylaws or its methods of doing business, in order to comply with any
requirements of federal law or regulations of the SEC, or of a national
securities association of which Distributor is or may be a member, relating to
the sale of Shares, and XXXX should not make such necessary changes within a
reasonable time, Distributor may terminate this Agreement forthwith.
16. LIABILITY. A copy of the Declaration of Trust of the Trust is on
file with the Secretary of the Commonwealth of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trust by officers of the Trust as officers and not individually
and that the obligations of or arising out of this instrument are not binding
upon any of the trustees, officers or shareholders individually but are binding
only upon the assets of and property of the Trust.
17. MISCELLANEOUS. The captions in this Agreement are included for
convenience or reference only, and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
18. NOTICE. Any notice required or permitted to be given by a party to
this Agreement or to any other party hereunder shall be deemed sufficient if
delivered in person or sent by registered or certified mail, postage prepaid,
addressed by the party giving notice to each such other party at the address
provided below or to the last address furnished by each such other party to the
party giving notice.
If to XXXX: Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
--------------------
If to Distributor: Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
--------------------
If to HALP: Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
--------------------
XXXXXX ASSOCIATES SECURITIES L.P.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx
XXXXXX ASSOCIATES INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxx
------------------------------
Xxxxxx X. Xxxx
ACKNOWLEDGED:
XXXXXX ASSOCIATES L.P.
By: /s/ Xxxxxx X. Xxxx
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