DISTRIBUTION AGREEMENT
MERRIMAC SERIES
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
June 1, 1998
Funds Distributor, Inc.
00 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the above-named investment company (the "Fund") has agreed that you
shall be, for the period of this Agreement, the distributor of (a) shares of
each Series of the Fund set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series") or (b) if no Series are set forth
on such Exhibit, shares of the Fund. For purposes of this Agreement the term
"Shares" shall mean the authorized shares of the relevant Series, if any, and
otherwise shall mean the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of Shares covered by, and in
accordance with, the registration statement and prospectus then in effect under
the Securities Act of 1933, as amended (the "1933 Act"), and will transmit
promptly any orders received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Fund of which the Fund has
notified you in writing.
1.2 You agree to use your best efforts to solicit orders for the sale of
Shares. It is contemplated that you may enter into sales or servicing agreements
with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms, and in so doing you will act only on your own behalf as principal.
1.3 You shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including, without limitations, the
Investment Company Act of 1940, as amended (the "1940 Act"), the 1933 Act, the
Securities Exchange Act of 1934, as amended and the National Association of
Securities Dealers, Inc.'s (the "NASD") Conduct Rules, Constitution and By-Laws.
You represent and warrant that you are a broker-dealer registered with the
Securities and Exchange Commission (the "SEC") and that you are registered with
the relevant
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securities regulatory agencies in all fifty states, the District of Columbia
and Puerto Rico. You also represent and warrant that you are a member of the
NASD.
1.4 You shall file Fund advertisements, sales literature and other
marketing and sales related materials with the appropriate regulatory agencies
and shall obtain such approvals for their use as may be required by the SEC, the
NASD and/or state securities administrators.
1.5 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind
deemed by the parties hereto to render sales of a Fund's Shares not in the best
interest of the Fund, the parties hereto may decline to accept any orders for,
or make any sales of, any Shares until such time as those parties deem it
advisable to accept such orders and to make such sales and each party shall
advise promptly the other party of any such determination.
1.6 The Fund agrees to pay all costs and expenses in connection with the
registration of Shares under the 1933 Act and 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 the Fund hereunder, and
all expenses in connection with the preparation and printing of the Fund's
prospectuses and statements of additional information for regulatory purposes
and for distribution to shareholders; provided however, that the Fund shall not
pay any of the costs of advertising or promotion for the sale of Shares, except
as authorized by a plan adopted pursuant to Rule 12b-1 under the 1940 Act. You
shall also be entitled to compensation for your services as provided in any
Distribution Plan adopted as to any Series and class of the Fund's Shares
pursuant to Rule 12b-1.
1.7 The Fund agrees to execute any and all documents and to furnish any and
all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Fund's officers in connection with the
qualification of Shares for sale in such states as you may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all expenses which may be
incurred in connection with such qualification. You shall pay all expenses
connected with your own qualification as a dealer under state or Federal laws
and, except as otherwise specifically provided in this Agreement, all other
expenses incurred by you in connection with the sale of Shares as contemplated
in this Agreement.
1.8 The Fund shall furnish you from time to time, for use in connection
with the sale of Shares, such information with respect to the Fund or any
relevant Series and the Shares as you may reasonably request, all of which shall
be signed by one or more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such information, when so signed
by the Fund's officers, shall be true and correct. The Fund also shall furnish
you upon request with: (a) semi-annual reports and annual audited reports of the
Fund's books and accounts made by independent public accountants regularly
retained by the Fund, (b) quarterly earnings statements prepared by the Fund,
(c) a monthly itemized list of the securities in the Fund's or, if applicable,
each Series' portfolio, (d) monthly balance sheets as soon as practicable after
the end of each month, and (e) from time to time such additional information
regarding the Fund's financial condition as you may reasonably request.
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1.9 The Fund represents to you that all registration statements and
prospectuses filed by the Fund with the SEC under the 1933 Act and under the
1940 Act with respect to the Shares have been carefully prepared in conformity
with the requirements of said Acts and rules and regulations of the SEC
thereunder. As used in this Agreement the terms "registration statement" and
"prospectus" shall mean any registration statement and prospectus, including the
statement of additional information incorporated by reference therein, filed
with the SEC and any amendments and supplements thereto which at any time shall
have been filed with the SEC. The Fund represents and warrants to you that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of the SEC; that all
statements of fact contained in any such registration statement and prospectus
will be true and correct when such registration statement becomes effective; and
that neither any 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. The Fund may, but shall
not be obligated to, propose from time to time such amendment or amendments to
any registration statement and such supplement or supplements to any prospectus
as, in the light of future developments, may, in the opinion of the Fund's
counsel, be necessary or advisable. If the Fund shall not propose such amendment
or amendments and/or supplement or supplements within fifteen days after receipt
by the Fund of a written request from you to do so, you may, at your option,
terminate this Agreement or decline to make offers of the Fund's securities
until such amendments are made. The Fund shall not file any amendment to any
registration statement or supplement to any prospectus without giving you
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Fund's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus, of whatever character, as the Fund may deem advisable, such right
being in all respects absolute and unconditional.
1.10 The Fund authorizes you and any dealers with whom you have entered
into dealer agreements to use any prospectus in the form furnished by the Fund
in connection with the sale of Shares. The Fund agrees to indemnify, defend and
hold you, your several officers and directors, and any person who controls you
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
reasonable cost of investigating or defending such claims, demands or
liabilities and any reasonable counsel fees incurred in connection therewith)
which you, your officers and directors, or any such controlling persons, may
incur under the 1933 Act, the 1940 Act, or common law or otherwise, arising out
of or on the basis of any untrue statement, or alleged untrue statement, of a
material fact required to be stated in either any registration statement or any
prospectus or any statement of additional information, or arising out of or
based upon any omission, or alleged omission, to state a material fact required
to be stated in any registration statement, any prospectus or any statement of
additional information or necessary to make the statements in any of them not
misleading, except that the Fund's agreement to indemnify you, your officers or
directors, and any such controlling person will not be deemed to cover any such
claim, demand, liability or expense to the extent that it arises out of or is
based upon any such untrue statement, alleged untrue statement, omission or
alleged omission made in any registration statement, any prospectus or any
statement of additional information in reliance upon information furnished by
you, your officers, directors or any such controlling person to the Fund
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or its representatives for use in the preparation thereof, and except that the
Fund's agreement to indemnify you and the Fund's representations and warranties
set out in paragraph 1.9 of this Agreement will not be deemed to cover any
liability to the Funds or their shareholders to which you would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties under this Agreement ("Disqualifying Conduct"). The
Fund's agreement to indemnify you, your officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Fund's being
notified of any action brought against you, your officers or directors, or any
such controlling person, such notification to be given by letter, by facsimile
or by telegram addressed to the Fund at its address set forth above within a
reasonable period of time after the summons or other first legal process shall
have been served. The failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund 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
the Fund's indemnity agreement contained in this paragraph 1.10. The Fund will
be entitled to assume the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, such defense shall be conducted by
counsel of good standing chosen by the Fund and approved by you. In the event
the Fund elects to assume the defense of any such suit and retain counsel of
good standing approved by you, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of them;
but in case the Fund does not elect to assume the defense of any such suit, the
Fund will reimburse you, your officers and directors, or the controlling person
or persons named as defendant or defendants in such suit, for the reasonable
fees and expenses of any counsel retained by you or them. The Fund's
indemnification agreement contained in this paragraph 1.10 and the Fund's
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
you, your officers and directors, or any controlling person, and shall survive
the delivery of any Shares. This agreement of indemnity will inure exclusively
to your benefit, to the benefit of your several officers and directors, and
their respective estates, and to the benefit of any controlling persons and
their successors. The Fund agrees promptly to notify you of the commencement of
any litigation or proceedings against the Fund or any of its officers or Board
members in connection with the issue and sale of Shares.
1.11 You agree to indemnify, defend and hold the Fund, its several officers
and Board members, and any person who controls the Fund 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 reasonable cost of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which the Fund, its
officers or Board members, or any such controlling person, may incur under the
1933 Act, the 1940 Act, or under common law or otherwise, but only to the extent
that such liability or expense incurred by the Fund, its officers or Board
members, or such controlling person resulting from such claims or demands, (a)
shall arise out of or be based upon any unauthorized sales literature,
advertisements, information, statements or representations or any Disqualifying
Conduct in connection with the offering and sale of any Shares, or (b) shall
arise out of or be based upon any untrue, or alleged untrue, statement of a
material fact contained in information furnished in writing by you to the Fund
specifically for use in the Fund's registration statement and used in the
answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission, or
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alleged omission, to state a material fact in connection with such information
furnished in writing by you to the Fund and required to be stated in such
answers or necessary to make such information not misleading. Your agreement to
indemnify the Fund, its officers and Board members, and any such controlling
person, as aforesaid, is expressly conditioned upon your being notified of any
action brought against the Fund, its officers or Board members, or any such
controlling person, such notification to be given by letter, by facsimile or by
telegram addressed to you at your address set forth above within a reasonable
period of time after the summons or other first legal process shall have been
served. You shall have the right to control the defense of such action, with
counsel of your own choosing, satisfactory to the Fund, if such action is based
solely upon such alleged misstatement or omission on your part, and in any other
event the Fund, its officers or Board members, or such controlling person shall
each have the right to participate in the defense or preparation of the defense
of any such action. The failure so to notify you of any such action shall not
relieve you from any liability which you may have to the Fund, its officers or
Board members, or to such controlling person by reason of any such untrue, or
alleged untrue, statement or omission, or alleged omission, otherwise than on
account of your indemnity agreement contained in this paragraph 1.11. This
agreement of indemnity will inure exclusively to the Fund's benefit, to the
benefit of the Fund's officers and Board members, and their respective estates,
and to the benefit of any controlling persons and their successors. You agree
promptly to notify the Fund of the commencement of any litigation or proceedings
against you or any of your officers or directors in connection with the issue
and sale of Shares.
1.12 No Shares shall be offered by either you or the Fund under any of the
provisions of this Agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Fund 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 a current prospectus as required by Section 10 of said
Act, as amended, is not on file with the SEC; provided, however, that nothing
contained in this paragraph 1.12 shall in any way restrict or have an
application to or bearing upon the Fund's obligation to repurchase any Shares
from any shareholder in accordance with the provisions of the Fund's prospectus
or charter documents.
1.13 The Fund agrees to advise you immediately in writing:
(a) of any request by the SEC for amendments to the registration
statement or prospectus then in effect or for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or prospectus
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 prospectus then in
effect or which requires the making of a change in such registration
statement or prospectus in order to make the statements therein not
misleading; and
(d) of all actions of the SEC with respect to any amendments to any
registration statement or prospectus which may from time to time be filed
with the SEC.
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2. Offering Price
Shares of any class of the Fund offered for sale by you shall be offered at
a price per share (the "offering price") approximately equal to (a) the net
asset value (determined in the manner set forth in the Fund's charter documents)
plus (b) a sales charge, if any and except to those persons set forth in the
then-current prospectus, which shall be the percentage of the offering price of
such Shares as set forth in the Fund's then-current prospectus. The offering
price, if not an exact multiple of one cent, shall be adjusted to the nearest
cent. In addition, Shares of any class of the Fund offered for sale by you may
be subject to a contingent deferred sales charge as set forth in the Fund's
then-current prospectus. You shall be entitled to receive any sales charge or
contingent deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you and such dealer
and the Fund's then-current prospectus.
3. Term
This Agreement shall become effective with respect to the Fund as of the
date hereof and will continue for an initial two-year term and will continue
thereafter so long as such continuance is specifically approved at least
annually (i) by the Fund's Board or (ii) by a vote of a majority of the Shares
of the Fund or the relevant Series, as the case may be, provided that in either
event its continuance also is approved by a majority of the Board members who
are not "interested persons" of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable with respect to a Fund, without penalty, on not less
than sixty days' notice, by the Fund's Board of Trustees, by vote of a majority
of the outstanding voting securities of such Fund, or by you. This Agreement
will automatically and immediately terminate in the event of its "assignment."
(As used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the 1940 Act). You agree to notify the Fund immediately
upon the event of your expulsion or suspension by the NASD. This Agreement will
automatically and immediately terminate in the event of your expulsion or
suspension by the NASD.
4. Miscellaneous
4.1 The Fund recognizes that, except to the extent otherwise agreed to by
the parties hereto, your directors, officers and employees may from time to time
serve as directors, trustees, officers and employees of corporations and
business trusts (including other investment companies), and that you or your
affiliates may enter into distribution or other agreements with such other
corporations and trusts.
4.2 No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
4.3 This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts without giving effect to principles of conflicts
of laws.
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4.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
Please confirm that the foregoing is in accordance with your understanding
and indicate your acceptance hereof by signing below, whereupon it shall become
a binding agreement between us.
Very truly yours,
MERRIMAC SERIES
By: /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Treasurer and Chief
Financial Officer
Accepted:
FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
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EXHIBIT A
Series of Funds
MERRIMAC SERIES
Merrimac Cash Series
Merrimac Treasury Series
Merrimac Short-Term Asset Reserve Series
8
