1
Exhibit (6)(m)
CLASS A DISTRIBUTION AGREEMENT
Dated July 7, 1989, as amended and
supplemented as of July 1, 1995
Sierra Investment Services Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Dear Sirs:
This is to confirm our agreement that, in consideration of the
agreements hereinafter contained, the undersigned, Sierra Trust Funds (the
"Company"), an open-end, management investment company organized as a business
trust under the laws of the Commonwealth of Massachusetts, agrees that Sierra
Investment Services Corporation ("Sierra Services"), a corporation organized
under the laws of the state of California, shall be, for the period of this
Agreement, the distributor of the Class A shares of beneficial interest issued
by the Company with respect to each of its investment funds (the "Shares"), on
the following terms:
1. Services as Distributor
1.1 Sierra Services will act as agent for the
distribution of the Shares covered by the registration statement, prospectuses
and statements of additional information then in effect (the "Registration
Statement") under the Securities Act of 1933, as amended (the "1933 Act"), and
the Investment Company Act of 1940, as amended (the "1940 Act").
1.2 Sierra Services agrees to use its best efforts to
solicit orders for the sale of the Shares at the public offering price, as
determined in accordance with the Registration Statement, and will undertake
such advertising and promotion as it believes is reasonable in connection with
such solicitation.
1.3 All activities by Sierra Services as distributor of
the Shares shall comply with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or adopted by the
Securities and Exchange Commission (the "SEC") or by any securities association
registered under the Securities Exchange Act of 1934, as amended.
1.4 Sierra Services will provide one or more persons
during normal business hours to respond to telephone questions concerning the
Company.
2
1.5 Sierra Services acknowledges that, whenever in the
judgment of the Company's officers such action is warranted for any reason,
including, without limitation, market, economic or political conditions, those
officers may decline to accept any orders for, or make any sales of, any series
of the Shares until such time as those officers deem it advisable to accept
such orders and to make such sales.
1.6 Sierra Services will act only on its own behalf as
principal should it choose to enter into selling agreements with selected
dealers or others.
1.7 In consideration of the services rendered pursuant to
this Agreement, as promptly as is possible after the last day of each month
this Agreement is in effect, the Company shall pay to or at the direction of
Sierra Services a fee or portions thereof, calculated daily and paid monthly,
in the aggregate at the annual rate of .25% of the average daily net assets for
the prior month of each series of the Shares. The payment by the Company of
fees under this Agreement is authorized pursuant to the Company's Distribution
Plan, as amended, adopted in accordance with Rule 12b-1 under the 1940 Act (the
"Plan").
1.8 Sierra Services or any other person with which Sierra
Services has a written agreement to provide services as permitted by this
Agreement and the Plan (each, a "Designated Provider") will bear all expenses
in connection with the performance of services and the incurring of
distribution expenses under this Agreement. For purposes of this Agreement,
"distribution expenses" of Sierra Services shall mean all expenses borne by
Sierra Services or by any one or more Designated Providers, which expenses
represent payment for activities primarily intended to result in the sale of
Shares, including, but not limited to, the following:
(a) payments made to, and expenses of, Sierra Services,
registered representatives and other employees of Sierra Services,
each of the Designated Providers, or other broker-dealers that engage
in the distribution of Shares;
(b) payments made to, and expenses of, persons who
provide support services in connection with the distribution of
Shares, including, but not limited to, office space and equipment,
telephone facilities, answering routine inquiries regarding the
Company, processing shareholder transactions and providing any other
shareholder services not otherwise provided by the Company's transfer
agent or any shareholder servicing agent;
(c) costs relating to the formulation and implementation
of marketing and promotional activities,
2
3
including, but not limited to, direct mail promotions and television,
radio, newspaper, magazine and other mass media advertising;
(d) costs of printing and distributing prospectuses and
reports of the Company to prospective shareholders of the Company;
(e) costs involved in preparing, printing and
distributing advertising and sales literature pertaining to the
Company; and
(f) costs involved in obtaining whatever information,
analyses and reports with respect to marketing and promotional
activities that the Company may, from time to time, deem advisable;
except that distribution expenses shall not include any expenditures in
connection with services which Sierra Services, any of its affiliates, or any
other person have agreed to bear without reimbursement.
1.9 Sierra Services shall prepare and deliver reports to
the Treasurer of the Company and to the advisor, administrator and/or
sub-administrator to each series of the Shares on a regular, at least
quarterly, basis, showing the distribution expenses incurred pursuant to this
Agreement and the Plan and the purposes therefor, as well as any supplemental
reports as the Trustees, from time to time, may reasonably request.
2. Duties of the Company
2.1 The Company agrees at its own expense to execute any
and all documents, to furnish any and all information and to take any other
actions that may be reasonably necessary in connection with the qualification
of the Shares for sale in those states that Sierra Services may designate.
2.2 The Company shall furnish from time to time, for use
in connection with the sale of the Shares, such information reports with
respect to the Company and the Shares as Sierra Services may reasonably
request, all of which shall be signed by one or more of the Company's duly
authorized officers; and the Company warrants that the statements contained in
any such reports, when so signed by one or more of the Company's officers,
shall be true and correct. The Company shall also furnish Sierra Services upon
request with: (a) annual audits of the Company's books and accounts made by
independent public accountants regularly retained by the Company, (b)
semiannual unaudited financial statements pertaining to the Company, (c)
quarterly earnings statements prepared by the Company, (d) a monthly
3
4
itemized list of the securities in the portfolios of all series of the Shares,
(e) monthly balance sheets as soon as practicable after the end of each month
and (f) from time to time such additional information regarding the Company's
financial condition as Sierra Services may reasonably request.
2.3 The Company shall pay to Sierra Services the proceeds
from any front-end sales charge and any contingent deferred sales charge
imposed on the purchase and redemption, respectively, of the Shares as
specified in the Registration Statement.
3. Representations and Warranties
(a) The Company represents to Sierra Services that all
registration statements, prospectuses and statements of additional information
filed by the Company with the SEC under the 1933 Act and the 1940 Act with
respect to the Shares have been carefully prepared in conformity with the
requirements of the 1933 Act, the 1940 Act and the rules and regulations of the
SEC thereunder. As used in this Agreement the terms "registration statement",
"prospectus" and "statement of additional information" shall mean any
registration statement, prospectus and statement of additional information
filed by the Company with the SEC and any amendments and supplements thereto
which at any time shall have been filed with the SEC. The Company represents
and warrants to Sierra Services that any registration statement, prospectus and
statement of additional information., when such registration statement becomes
effective, will include all statements required to be contained therein in
conformity with the 1933 Act, the 1940 Act and the rules and regulations of the
SEC; that all statements of fact contained in any registration statement,
prospectus or statement of additional information will be true and correct when
such registration statement becomes effective; and that neither any
registration statement nor any prospectus or statement of additional
information 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. Sierra Services 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 or statement of
additional information as, in the light of future developments, may, in the
opinion of Sierra Services' counsel, be necessary or advisable. If the Company
shall not propose such amendment or amendments and/or supplement or supplements
within fifteen days after receipt by the Company of a written request from
Sierra Services to do so, Sierra Services may, at its option, terminate this
Agreement. The Company shall not file any amendment to any registration
4
5
statement or supplement to any prospectus or statement of additional
information without giving Sierra Services reasonable notice thereof in
advance; provided, however, that nothing contained in this Agreement shall in
any way limit the Company's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus or statement of
additional information, of whatever character, as the Company may deem
advisable, such right being in all respects absolute and unconditional.
(b) Sierra Services represents to the Company that it is
authorized to perform the services described herein.
4. Indemnification
4.1 The Company authorizes Sierra Services and any
dealers with whom Sierra Services has entered into dealer agreements to use any
prospectus or statement of additional information furnished by the Company from
time to time, in connection with the sale of Shares. The Company agrees to
indemnify, defend and hold Sierra Services, its several officers and directors,
and any person who controls Sierra Services 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 Sierra Services, its officers and directors, or any such
controlling person, may incur under the 1933 Act, the 1940 Act or common law or
otherwise, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement, 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; provided, however, that the Company's agreement to indemnify Sierra
Services, its officers or directors, and any such controlling person shall not
be deemed to cover any claims, demands, liabilities or expenses arising out of
or based upon any statements or representations made by Sierra Services or its
representatives or agents other than such statements and representations as are
contained in any registration statement, prospectus or statement of additional
information and in such financial and other statements as are furnished to
Sierra Services pursuant to paragraph 2.2 hereof; and further provided that the
Company's agreement to indemnify Sierra Services and the Company's
representations and warranties hereinbefore set forth in paragraph 3 shall not
be deemed to cover any liability to the Company or its shareholders to which
Sierra Services would otherwise be subject by reason of willful misfeasance,
bad faith
5
6
or gross negligence in the performance of its duties, or by reason of Sierra
Services' reckless disregard of its obligations and duties under this
Agreement. The Company's agreement to indemnify Sierra Services, its officers
and directors, and any such controlling person, as aforesaid, is expressly
conditioned upon the Company's being notified of any action brought against
Sierra Services, its officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed to the Company
at its principal office in Los Angeles, California and sent to the Company by
the person against whom such action is brought, within ten days after the
summons or other first legal process shall have been served. The failure so to
notify the Company of any such action shall not relieve the Company from any
liability that the Company 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 Company's indemnity agreement
contained in this paragraph 4.1. The Company's indemnification agreement
contained in this paragraph 4.1 and the Company'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 Sierra Services,
its officers and directors, or any controlling person, and shall survive the
delivery of any Shares. This agreement of indemnity will inure exclusively to
Sierra Services' benefit, to the benefit of its several officers and directors,
and their respective estates, and to the benefit of the controlling persons and
their successors. The Company agrees to notify Sierra Services promptly of the
commencement of any litigation or proceedings against the Company or any of its
officers or trustees in connection with the issuance and sale of any Shares.
4.2 Sierra Services agrees to indemnify, defend and hold
the Company, its several officers and trustees, and any person who controls the
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 costs of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) that the
Company, its officers or trustees or any such controlling person may incur
under the 1933 Act, the 1940 Act or common law or otherwise, but only to the
extent that such liability or expense incurred by the Company, its officers or
trustees or such controlling person resulting from such claims or demands shall
arise out of or be based upon (a) any unauthorized sales literature,
advertisements, information, statements or representations or (b) any untrue or
alleged untrue statement of a material fact contained in information furnished
in writing by Sierra Services to the Company 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
6
7
information, or shall arise out of or be based upon any omission or alleged
omission to state a material fact in connection with such information furnished
in writing by Sierra Services to the Company and required to be stated in such
answers or necessary to make such information not misleading. Sierra Services'
agreement to indemnify the Company, its officers and trustees, and any such
controlling person, as aforesaid, is expressly conditioned upon Sierra
Services' being notified of any action brought against the Company, its
officers or trustees, or any such controlling person, such notification to be
given by letter or telegram addressed to Sierra Services at its principal
office in Los Angeles, California and sent to Sierra Services by the person
against whom such action is brought, within ten days after the summons or other
first legal process shall have been served. The failure so to notify Sierra
Services of any such action shall not relieve Sierra Services from any
liability that Sierra Services may have to the Company, its officers or
trustees, 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
Sierra Services' indemnity agreement contained in this paragraph 4.2. Sierra
Services agrees to notify the Company promptly of the commencement of any
litigation or proceedings against Sierra Services or any of its officers or
directors in connection with the issuance and sale of any Shares.
4.3 In case any action shall be brought against any
indemnified party under paragraph 4.1 or 4.2, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish to do so, to
assume the defense thereof with counsel satisfactory to such indemnified party.
If the indemnifying party opts to assume the defense of such action, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than (a) reasonable costs of investigation or
the furnishing of documents or witnesses and (b) all reasonable fees and
expenses of separate counsel to such indemnified party if (i) the indemnifying
party and the indemnified party shall have agreed to the retention of such
counsel or (ii) the indemnified party shall have concluded reasonably that
representation of the indemnifying party and the indemnified party by the same
counsel would be inappropriate due to actual or potential differing interests
between them in the conduct of the defense of such action.
5. Effectiveness of Registration
None of the Shares shall be offered by either Sierra Services
or the Company under any of the provisions of this Agreement and no orders for
the purchase or sale of the Shares
7
8
hereunder shall be accepted by the Company 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 5(b)(2) of the 1933
Act is not on file with the SEC; provided, however, that nothing contained in
this paragraph 5 shall in any way restrict or have an application to or bearing
upon the Company's obligation to repurchase Shares from any shareholder in
accordance with the provisions of the Company's prospectus, statement of
additional information or articles of incorporation.
6. Notice to Sierra Services
The Company agrees to advise Sierra Services immediately in
writing:
(a) of any request by the SEC for amendments to the
registration statement, prospectus or statement of additional
information 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, prospectus
or statement of additional information then in effect or the
initiation of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any
statement of a material fact made in the registration statement,
prospectus or statement of additional information then in effect or
that requires the making of a change in such registration statement,
prospectus or statement of additional information in order to make the
statements therein not misleading; and
(d) of all actions of the SEC with respect to any amendment to
any registration statement, prospectus or statement of additional
information which may from time to time be filed with the SEC.
7. Term of Agreement
This Agreement shall continue for an initial two-year period
and shall continue thereafter for so long as such continuance is specifically
approved at least annually by (a) the Company's Board of Trustees and (b) a
vote of a majority (as defined in the 0000 Xxx) of the Company's Trustees who
are not interested persons (as defined in the 0000 Xxx) of the Company and who
have no direct or indirect financial interest in the operation of the Plan, in
this Agreement or any agreement related
8
9
to the Plan (the "Qualified Trustees"), by any vote cast in person at a meeting
called for the purpose of the voting on such approval. This Agreement is
terminable with respect to the Company or any series of the Shares, as the case
may be, without penalty, (a) on 60 days' written notice, by vote of a majority
of the Qualified Trustees or by vote of a majority (as defined in the 0000 Xxx)
of the outstanding voting securities of the Company or such series, as the case
may be, or (b) on 90 days' written notice by Sierra Services. This Agreement
may remain in effect with respect to a series of the Shares even if it has been
terminated in accordance with this paragraph with respect to one or more other
series of the Shares. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act). Sierra Services agrees
to notify the Company of any circumstances that might result in this Agreement
being deemed to be assigned.
8. Miscellaneous
The Company recognizes that directors, officers and employees
of Sierra Services may from time to time serve as directors, trustees, officers
and employees of corporations and business trusts (including other investment
companies) and that Sierra Services or its affiliates may enter into
distribution or other agreements with such other corporations and trusts.
The Company represents that a copy of its Master Trust
Agreement, dated February 22, 1989, together with all amendments thereto, is on
file in the office of the Secretary of the Commonwealth of Massachusetts.
This Agreement constitutes the entire agreement between the
parties hereto. This Agreement shall be governed in accordance with the laws
of the Commonwealth of Massachusetts.
It is expressly agreed that the obligations of the Company
hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Company, personally, but bind
only the trust property of the Company, as provided in the Master Trust
Agreement of the Company. The execution and delivery of this Agreement have
been authorized by the Trustees and the sole shareholder of each series of the
Shares and signed by an authorized officer of the Company, acting as such, and
neither such authorization by such Trustees and shareholder nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Company as provided in its Master Trust
Agreement.
9
10
Please confirm that the foregoing accurately sets forth our
agreement by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us as of July 1, 1995.
Very truly yours,
SIERRA TRUST FUNDS
By:/s/ F. Xxxxx Xxxxxx
---------------------------
Name: F. Xxxxx Xxxxxx
Title: President
ACCEPTED:
SIERRA INVESTMENT SERVICES CORPORATION
By:/s/ Xxxxx Xxxxx
---------------------------
Name: Xxxxx Xxxxx
Title: Authorized Officer
10
