ETF DISTRIBUTION AGREEMENT
This
Distribution Agreement (the “Agreement”) is made this 26 day of March, 2010, by
and between U.S. One Trust, a Delaware Trust (the “Trust”) having its principal
place of business at 0000 Xxxxxx Xxxxxxx Xxxxxxx, Xxxx, XX 00000, and
Foreside Fund Services, LLC, a Delaware limited liability company (the
“Distributor”) having its principal place of business at Three Xxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000.
WHEREAS, the Trust is a
registered open-end management investment company organized as a series trust
offering a number of portfolios of securities (each a “Fund” and collectively
the “Funds”), having filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form N-1A under the Securities Act of
1933, as amended (the “1933 Act”), and the Investment Company Act of 1940, as
amended (the “1940 Act”);
WHEREAS, the Trust intends to
create and redeem shares of beneficial interest, par value $.001 per Share (the
“Shares”) of each Fund on a continuous basis at their net asset value only in
aggregations constituting a Creation Unit, as such term is defined in the
Registration Statement;
WHEREAS, the Shares of each
Fund will be listed on one or more national securities exchanges (together, the
“Listing Exchanges”);
WHEREAS, the Trust desires to
retain the Distributor to act as the distributor with respect to the issuance
and distribution of Creation Units of each Fund, hold itself available to
receive and process orders for such Creation Units in the manner set forth in
the Trust’s Prospectus, and to enter into arrangements with broker-dealers who
may solicit purchases of Creation Units and with broker-dealers and others to
provide for servicing of shareholder accounts and for distribution assistance,
including broker-dealer and shareholder support;
WHEREAS, the Distributor is a
registered broker-dealer under the Securities Exchange Act of 1934, as amended
(the “1934 Act”) and a member of the Financial Industry Regulatory Authority
(“FINRA”) (the successor organization to the
National Association of Securities Dealers, Inc.); and
WHEREAS, the Distributor
desires to provide the services described herein to the Trust.
NOW, THEREFORE, in
consideration of the mutual promises and undertakings herein contained, the
parties agree as follows:
1.
Appointment.
The Trust hereby appoints the
Distributor as the exclusive distributor for Creation Units of each Fund listed
in Exhibit A hereto, as may be amended by the Trust from time to time on written
notice to the Distributor, on the terms and for the period set forth in this
Agreement and subject to the registration requirements of the federal securities
laws and of the laws governing the sale of securities in the various states, and
the Distributor hereby accepts such appointment and agrees to act in such
capacity hereunder.
2.
Definitions.
Wherever they are used herein, the
following terms have the following respective meanings:
(a) “Prospectus”
means the Prospectus and Statement of Additional Information constituting parts
of the Registration Statement of the Trust under the 1933 Act and the 1940 Act
as such Prospectus and Statement of Additional Information may be amended or
supplemented and filed with the Commission from time to time;
(b) “Registration
Statement” means the registration statement most recently filed from time to
time by the Trust with the Commission and effective under the 1933 Act and the
1940 Act, as such registration statement is amended by any amendments thereto at
the time in effect;
(c) All
capitalized terms used but not defined in this Agreement shall have the meanings
ascribed to such terms in the Registration Statement and the
Prospectus.
3.
Duties of the Distributor
(a) The
Distributor agrees to act as agent of the Trust in connection with the receipt
and processing of all orders for purchases and redemptions of Creation Units of
each Fund from DTC Participants or participants in the Continuous Net Settlement
System of the National Securities Clearing Corporation (the “NSCC Participants”)
that have executed a Participant Agreement (the “Authorized Participants”), as
defined in paragraph 3(b) hereof, with the Distributor and Transfer Agent and to
transmit such orders to the Custodian and Transfer Agent in accordance with the
Registration Statement and Prospectus; provided, however, that nothing herein
shall affect or limit the right and ability of the Custodian to accept Deposit
Securities and related Cash Components through or outside the Clearing Process,
and as provided in and in accordance with the Registration Statement and
Prospectus. The Trust acknowledges that the Distributor shall not be
obligated to accept any certain number of orders for Creation Units and nothing
herein contained shall prevent the Distributor from entering into like
distribution arrangements with other investment companies.
(b) The
Distributor agrees to use commercially reasonable efforts to act as agent of the
Trust with respect to the continuous distribution of Creation Units of each Fund
as set forth in the Registration Statement and in accordance with the provisions
thereof. The Distributor further agrees as follows: (i) at the
request of the Trust, the Distributor shall enter into selected or soliciting
dealer participant agreements (“Participant Agreements”) between and among
Authorized Participants, the Distributor and the Transfer Agent, for the
purchase of Creation Units of the Funds, in accordance with the Registration
Statement and Prospectus; (ii) the Distributor shall generate, transmit and
maintain copies of confirmations of Creation Unit purchase and redemption order
acceptances to the purchaser or redeemer (such confirmations will indicate the
time such orders were accepted and will be made available to the Trust promptly
upon request); (iii) the Distributor shall deliver copies of the Prospectus,
included in the Registration Statement, to purchasers of such Creation Units and
upon request the Statement of Additional Information; and (iv) the Distributor
shall maintain telephonic, facsimile and/or access to direct computer
communications links with the Transfer Agent.
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(c) The
Distributor agrees to use all reasonable efforts, consistent with its other
business, to secure purchasers of Creation Units through Authorized Participants
in accordance with the procedures set forth in the Prospectus.
(d) All
activities by the Distributor and its agents and employees that are primarily
intended to result in the sale of Creation Units shall comply with the
Registration Statement and Prospectus, the instructions of the Adviser and the
Board of Trustees of the Trust, the Agreement and Declaration of Trust, and all
applicable laws, rules and regulations including, without limitation, all rules
and regulations made or adopted pursuant to the 1940 Act by the Commission or
any securities association registered under the 1934 Act, including FINRA and
the Listing Exchanges.
(e) Except
as otherwise noted in the Registration Statement and Prospectus, the offering
price for all Creation Units will be the aggregate net asset value of the Shares
per Creation Unit of the relevant Fund, as determined in the manner described in
the Registration Statement and Prospectus.
(f) If
and whenever the determination of net asset value is suspended and until such
suspension is terminated, no further orders for Creation Units will be processed
by the Distributor except such unconditional orders as may have been placed with
the Distributor before it had knowledge of the suspension. In
addition, the Trust reserves the right to suspend sales and Distributor’s
authority to process orders for Creation Units on behalf of the Trust, upon due
notice to the Distributor, if, in the judgment of the Trust, it is in the best
interests of the Trust to do so. Suspension will continue for such period as may
be determined by the Trust.
(g) The
Distributor is not authorized by the Trust to give any information or to make
any representations other than those contained in the Registration Statement or
Prospectus or contained in shareholder reports or other material that may be
prepared by or on behalf of the Trust for the Distributor’s use. The
Distributor shall be entitled to rely on and shall not be responsible in any way
for information provided to it by the Trust and its respective service providers
and shall not be liable or responsible for the errors and omissions of such
service providers, provided that the foregoing shall not be construed to protect
the Distributor against any liability to the Trust or the Trust’s shareholders
to which the Distributor would otherwise be subject by reason of 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.
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(h) The
Distributor shall ensure that all direct requests for Prospectuses, Statements
of Additional Information and periodic fund reports, as applicable, are
fulfilled. In addition, the Distributor shall arrange to provide the
Listing Exchanges with copies of Prospectuses and Statements of Additional
Information and product descriptions to be provided to purchasers in the
secondary market. The Distributor will generally make it known in the
brokerage community that Prospectuses and Statements of Additional Information
are available, including by (i) advising the Listing Exchanges on behalf of its
member firms of the same, (ii) making such disclosure in all marketing and
advertising materials prepared and/or filed by the Distributor with FINRA, and
(iii) as may otherwise be required by the Commission. The Distributor
shall not bear any costs associated with printing Prospectuses, Statements of
Additional Information and all other such materials.
(i) The
Distributor agrees to make available, at the Trust’s request, one or more
members of its staff to attend Board meetings of the Trust in order to provide
information with regard to the ongoing distribution process and for such other
purposes as may be requested by the Board of Trustees of the Trust.
(j) The
Distributor shall review and approve all sales and marketing materials for
compliance with applicable laws and conditions of any applicable exemptive
order, and file such materials with FINRA as required by the 1933 Act and 1940
Act, and the rules promulgated thereunder. All such sales and
marketing materials must be approved, in writing, by the Distributor prior to
use.
(k) The
Distributor shall not offer any Shares and shall not accept any orders for the
purchase or sale of Shares hereunder 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 the 1933 Act is not on file with
the Commission; provided, however, that nothing contained in this paragraph
shall in any way restrict or have any application to or bearing upon the Trust’s
obligation to redeem or repurchase any Shares from any shareholder in accordance
with provisions of the Prospectus or Registration Statement.
(l) If
the Trust adopts any distribution and/or shareholder servicing plan(s) pursuant
to Rule 12b-1 under the 1940 Act (the “Plan”), the Distributor shall enter into
selling and/or investor servicing agreements (“Sales and Investor Services
Agreements”) with various broker-dealers and any other financial institution
exempt under federal or state securities laws from registration as a broker or
dealer authorized by the Adviser, consistent with applicable law and the
Registration Statement and Prospectus, to sell Shares and provide services to
shareholders. The Distributor further agrees as follows: (i) the
Distributor shall administer on behalf of the Trust any Plan(s) adopted by the
Trust under rule 12b-1; (ii) the Distributor shall, at its own expense, set up
and maintain a system of recording payments of fees and reimbursement of
expenses disseminated pursuant to this Agreement and other agreements related to
any such Plan(s) and, pursuant to the 1940 Act, report such payment activity to
the Trust at least quarterly; (iii) the Distributor shall receive from the Trust
all distribution and shareholder servicing fees, as applicable, at the rate and
to the extent payable under the terms and conditions set forth in any Plan(s)
adopted by the Trust, applicable to the appropriate class of shares of each
Portfolio, as such Plan(s) may be amended from time to time, and subject to any
further limitations on such fees as the Board of Trustees of the Trust may
impose; and (iv) the Distributor shall pay, from the fees received from the
Trust pursuant to any such Plan(s), all fees and make reimbursement of all
expenses, pursuant to and in accordance with such Plan(s) and any and all Sales
and Investor Services Agreements. In no event shall Distributor pay
any fees pursuant to any such Plan(s) until it has received payment of such fees
from the Trust or the Adviser.
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(m) The
Distributor shall provide an order processing system pursuant to which the
Authorized Participants may contact the Distributor (or its affiliates) and
place requests to create and redeem Creation Units, including without
limitation: (i) generating and transmitting confirmations of purchase and
redemption order acceptances to purchasers and redeemers of Creation Units;
(ii) providing acknowledgement to Authorized Participants that orders have
been accepted; (iii) rejecting any orders that were not submitted in proper
form or in a timely fashion; (iv) confirming that Authorized Participants
will not place trades that would raise their total holdings to 80% or more of
any fund; (v) maintain along with the Trust and its Index Receipt Agent the
right to require and rely upon information necessary to determine beneficial
share ownership for purposes of the 80% determination or, in lieu of this,
accept a certification from a Listing Exchange member firm or a member of such
other exchange that the cost basis of the securities so deposited is essentially
identical to their market value at the time of deposit; and
(vi) maintaining a dedicated toll-free line for Authorized Participants to
place share creation and redemption orders.
(n) The
Distributor has as of the date hereof, and shall at all times have and maintain,
net capital of not less than that required by Rule 15c3-1 under the 1934 Act, or
any successor provision thereto. In the event that the net capital of the
Distributor shall fall below that required by Rule 15c3-1, or any successor
provision thereto, the Distributor shall promptly provide notice to the Trust
and the Adviser of such event.
(o) The
Distributor agrees to maintain, and preserve for the periods prescribed by Rule
31a-2 under the 1940 Act, such records as are required to be maintained by Rule
31a-1(d) under the 1940 Act.
(p) The
Distributor agrees to maintain compliance policies and procedures (a “Compliance
Program”) that are reasonably designed to prevent violations of the Federal
Securities Laws (as defined in Rule 38a-1 of the 0000 Xxx) with respect to the
Distributor’s services under this Agreement, and to provide any and all
information with respect to the Compliance Program, including without
limitation, information and certifications with respect to material violations
of the Compliance Program and any material deficiencies or changes therein, as
may be reasonably requested by the Trust’s Chief Compliance Officer or Board of
Trustees.
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4.
Duties of the Trust.
(a) The
Trust agrees to issue Creation Units of each Fund and to request DTC to record
on its books the ownership of the Shares constituting such Creation Units in
accordance with the book-entry system procedures described in the Prospectus in
such amounts as the Distributor has requested through the Index Receipt Agent in
writing or other means of data transmission, as promptly as practicable after
receipt by the Trust of the requisite Deposit Securities and Cash Component
(together with any fees) and acceptance of such order, upon the terms described
in the Registration Statement. The Trust may reject any order for
Creation Units or stop all receipts of such orders at any time upon reasonable
notice to the Distributor, in accordance with the provisions of the Prospectus
and Statement of Additional Information.
(b) The
Trust agrees that it will take all action necessary to register an indefinite
number of Shares under the 1933 Act. The Trust will make available to
the Distributor such number of copies of its then currently effective Prospectus
and Statement of Additional Information as the Distributor may reasonably
request. The Trust will furnish to the Distributor copies of
semi-annual reports and annual audited reports of the Trust’s books and accounts
made by independent public accountants regularly retained by the Trust and such
other publicly available information that the Distributor may reasonably request
for use in connection with the distribution of Creation Units. The
Trust shall keep the Distributor informed of the jurisdictions in which the
Trust has filed notice filings for Shares for sale under the securities laws
thereof and shall promptly notify the Distributor of any change in this
information. The Distributor shall not be liable for damages
resulting from the sale of Shares in authorized jurisdictions where the
Distributor had no information from the Trust that such sale or sales were
unauthorized at the time of such sale or sales.
5.
Fees and Expenses.
(a) The
Distributor shall be entitled to no compensation or reimbursement of expenses
from the Trust for the services provided by the Distributor pursuant to this
Agreement. The Distributor may receive compensation from the Adviser
related to its services hereunder or for additional services as may be agreed to
between the Adviser and Distributor.
(b) The
Trust shall bear the cost and expenses of: (i) the registration of the Shares
for sale under the Securities Act; and (ii) the registration or qualification of
the Shares for sale under the securities laws of the various
States;
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(c) The
Distributor shall pay (i) all expenses relating to Distributor’s broker-dealer
qualification and registration under the 1934 Act; and (ii) the expenses
incurred by the Distributor in connection with routine FINRA filing
fees.
(d) Notwithstanding
anything in this Agreement to the contrary, the Distributor and its affiliates
may receive compensation or reimbursement from the Trust and the Adviser with
respect to any services not included under this Agreement, as may be agreed upon
by the parties from time to time.
6.
Indemnification.
(a) The
Trust agrees to indemnify and hold harmless the Distributor, its affiliates and
each of their respective directors, officers and employees and agents and any
person who controls the Distributor within the meaning of Section 15 of the 1933
Act (any of the Distributor, its officers, employees, agents and directors or
such control persons, for purposes of this paragraph, a “Distributor
Indemnitee”) against any loss, liability, claim, damages or expense (including
the reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith) arising out of or based upon (i) Distributor serving as Distributor
for the Trust pursuant to this Agreement; (ii) any claim that the Registration
Statement, Prospectus, Statement of Additional Information, shareholder reports,
sales literature and advertisements specifically approved by the Trust and
Adviser or other information filed or made public by the Trust (as from time to
time amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein (and in the case of the Prospectus, Statement of
Additional Information and product description, in light of the circumstances
under which they were made) not misleading under the 1933 Act, or any other
statute or the common law; (iii) the breach by the Trust of any obligation,
representation or warranty contained in this Agreement; or (iv) the Trust’s
failure to comply in any material respect with applicable securities
laws.
The Trust
does not agree to indemnify the Distributor or hold it harmless to the extent
that the statement or omission was made in reliance upon, and in conformity
with, information furnished to the Trust by or on behalf of the Distributor. The
Trust will also not indemnify any Distributor Indemnitee with respect to any
untrue statement or omission made in the Registration Statement, Prospectus, or
Statement of Additional Information that is subsequently corrected in such
document (or an amendment thereof or supplement thereto) if a copy of the
Prospectus (or such amendment or supplement) was not sent or given to the person
asserting any such loss, liability, claim, damage or expense at or before the
written confirmation to such person in any case where such delivery is required
by the 1933 Act and the Trust had notified the Distributor of the amendment or
supplement prior to the sending of the confirmation. In no case (i) is the
indemnity of the Trust in favor of any Distributor Indemnitee to be deemed to
protect the Distributor Indemnitee against any liability to the Trust or its
shareholders to which the Distributor Indemnitee would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations under
this Agreement, or (ii) is the Trust to be liable under its indemnity agreement
contained in this Section with respect to any claim made against any Distributor
Indemnitee unless the Distributor Indemnitee shall have notified the Trust in
writing of the claim at its principal offices in Reno, NV within a reasonable
time after the summons or other first written notification giving information of
the nature of the claim shall have been served upon Distributor Indemnitee (or
after Distributor Indemnitee shall have received notice of service on any
designated agent).
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Failure
to notify the Trust of any claim shall not relieve the Trust from any liability
that it may have to any Distributor Indemnitee against whom such action is
brought unless failure or delay to so notify the Trust prejudices the Trust’s
ability to defend against such claim. The Trust 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 claims, but if the Trust elects to assume the
defense, the defense shall be conducted by counsel chosen by it and satisfactory
to Distributor Indemnitee, defendant or defendants in the suit. In the event the
Trust elects to assume the defense of any suit and retain counsel, Distributor
Indemnitee, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the Trust does not elect
to assume the defense of any suit, it will reimburse the Distributor Indemnitee,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Trust agrees to notify the Distributor promptly of
the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Creation Units or the Shares.
(b) The
Distributor agrees to indemnify and hold harmless the Trust and each of its
Trustees and officers and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act (for purposes of this paragraph, the Trust and
each of its Trustees and officers and its controlling persons are collectively
referred to as the “Trust Affiliates”) against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable counsel
fees incurred in connection therewith) arising out of or based upon (i) the
allegation of any wrongful act of the Distributor or any of its directors,
officers, employees or affiliates in connection with its activities as
Distributor pursuant to this Agreement; (ii) the breach of any obligation,
representation or warranty contained in this Agreement by the Distributor; (iii)
the Distributor’s failure to comply in any material respect with applicable
securities laws, including applicable FINRA regulations; or (iv) any allegation
that the Registration Statement, Prospectus, Statement of Additional
Information, shareholder reports, any information or materials relating to the
Funds (as described in section 3(g)) or other information filed or made public
by the Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements not misleading, insofar as such
statement or omission was made in reliance upon, and in conformity with
information furnished to the Trust by or on behalf of the
Distributor.
In no
case (i) is the indemnity of the Distributor in favor of any Trust Affiliate to
be deemed to protect any Trust Affiliate against any liability to the Trust or
its security holders to which such Trust Affiliate would otherwise be subject by
reason of 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, or (ii) is the Distributor to be liable under its
indemnity agreement contained in this Section with respect to any claim made
against any Trust Affiliate unless the Trust Affiliate shall have notified the
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 shall have been served upon the Trust Affiliate (or after the Trust
Affiliate shall have received notice of service on any designated
agent).
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Failure
to notify the Distributor of any claim shall not relieve the Distributor from
any liability that it may have to the Trust Affiliate against whom such action
is brought on account of its indemnity agreement contained in this Section
unless failure or delay to so notify the Distributor prejudices the
Distributor’s ability to defend against such claim. The Distributor 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 the claim, but if the
Distributor elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Trust, its officers and Board and
to any controlling person or persons, defendant or defendants in the suit. In
the event that Distributor elects to assume the defense of any suit and retain
counsel, the Trust or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional counsel retained by
them. If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Trust, its officers and Trustees or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify the
Trust promptly of the commencement of any litigation or proceedings against it
or any of its officers or directors in connection with the issuance or sale of
any of the Creation Units or the Shares.
(c) No
indemnified party shall settle any claim against it for which it intends to seek
indemnification from the indemnifying party, under the terms of section 6(a) or
6(b) above, without prior written notice to and consent from the indemnifying
party, which consent shall not be unreasonably withheld. No
indemnified or indemnifying party shall settle any claim unless the settlement
contains a full release of liability with respect to the other party in respect
of such action. This section 6 shall survive the termination of this
Agreement.
7.
Representations.
(a) The
Distributor represents and warrants that (i) it is duly organized as a Delaware
limited liability company and is and at all times will remain duly authorized
and licensed under applicable law to carry out its services as contemplated
herein; (ii) the execution, delivery and performance of this Agreement are
within its power and have been duly authorized by all necessary action; (iii)
its entering into this Agreement or providing the services contemplated hereby
does not conflict with or constitute a default or require a consent under or
breach of any provision of any agreement or document to which the Distributor is
a party or by which it is bound; (iv) it is registered as a broker-dealer under
the 1934 Act and is a member of FINRA; and (v) it has in place compliance
policies and procedures reasonably designed to prevent violations of the Federal
Securities Laws as that term is defined in Rule 38a-1 under the 1940
Act.
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(b) The
Distributor and the Trust each individually represent that its anti-money
laundering program (“AML Program”), at a minimum, (i) designates a
compliance officer to administer and oversee the AML Program, (ii) provides
ongoing employee training, (iii) includes an independent audit function to
test the effectiveness of the AML Program, (iv) establishes internal
policies, procedures, and controls that are tailored to its particular business,
(v) provides for the filing of all necessary anti-money laundering reports
including, but not limited to, currency transaction reports and suspicious
activity reports, and (vi) allows for appropriate regulators to examine its
anti-money laundering books and records. Notwithstanding the foregoing, the
Trust acknowledges that the Authorized Participants are not “customers” for the
purposes of 31 CFR 103.
(c) The
Distributor and the Trust each individually represent and warrant that: (i) it
has procedures in place reasonably designed to protect the privacy of non-public
personal consumer/customer financial information to the extent required by
applicable law, rule and regulation; (ii) it will comply with all of the
applicable terms and provisions of the 1934 Act; and (iii) it will provide
certifications to the Trust in order to assist the Trust in complying with
certain rules under the 1940 Act (by way of example only, Rules 30a-2, 30a-3 and
38a-1) and in connection with the filing of certain Forms (by way of example
only, Form N-CSR).
(d) The
Trust represents and warrants that (i) it is duly organized as a Delaware trust
and is and at all times will remain duly authorized to carry out its obligations
as contemplated herein; (ii) it is registered as an investment company under the
1940 Act; (iii) the execution, delivery and performance of this Agreement are
within its power and have been duly authorized by all necessary action; (iv) its
entering into this Agreement does not conflict with or constitute a default or
require a consent under or breach of any provision of any agreement or document
to which the Trust is a party or by which it is bound; (v) the Registration
Statement and each Fund’s Prospectus have been prepared, and all sales
literature and advertisements approved by the Trust and the Adviser or other
materials prepared by or on behalf of the Trust for the Distributor’s use
(“Sales Literature and Advertisements”) shall be prepared, in all materials
respects, in conformity with the 1933 Act, the 1940 Act and the rules and
regulations of the Commission (the “Rules and Regulations”); and (vi) the
Registration Statement and each Fund’s Prospectus contain, and all Sales
Literature and Advertisements shall contain, all statements required to be
stated therein in accordance with the 1933 Act, the 1940 Act and the Rules and
Regulations; and (vii) all statements of fact contained therein, or to be
contained in all Sales Literature and Advertisements, are or will be true and
correct in all material respects at the time indicated or the effective date, as
the case may be, and none of the Registration Statement, any Fund’s Prospectus,
nor any Sales Literature and Advertisements shall include any 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, in the case of each Fund’s
Prospectus in light of the circumstances in which made, not misleading. The
Trust shall, from time to time, file such amendment or amendments to the
Registration Statement and each Fund’s Prospectus as, in the light of future
developments, shall, in the opinion of the Trust’s counsel, be necessary in
order to have the Registration Statement and each Fund’s Prospectus at all times
contain all material facts required to be stated therein or necessary to make
the statements therein, in the case of each Fund’s Prospectus in light of the
circumstances in which made, not misleading. The Trust shall not file any
amendment to the Registration Statement or each Fund’s Prospectus without giving
the Distributor reasonable notice thereof in advance, provided that nothing in
this Agreement shall in any way limit the Trust’s right to file at any time such
amendments to the Registration Statement or any Fund’s Prospectus as the Trust
may deem advisable. Notwithstanding the foregoing, the Trust shall not be deemed
to make any representation or warranty as to any information or statement
provided by the Distributor for inclusion in the Registration Statement or any
Fund’s Prospectus.
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(e) The
Trust represents to the Distributor that the Registration Statement and
Prospectus filed by the Trust with the Commission with respect to the Trust have
been prepared in conformity in all material respects with the requirements of
the 1933 Act, the 1940 Act and the rules and regulations of the Commission
thereunder. The Trust will notify the Distributor promptly of any
amendment to the Registration Statement or supplement to the Prospectus and any
stop order suspending the effectiveness of the Registration Statement; provided,
however, that nothing contained in this Agreement shall in any way limit the
Trust’s right to file at any time such amendments to any Registration Statement
and/or supplements to any Prospectus, of whatever character, as the Trust may
deem advisable, such right being in all respects absolute and
unconditional. The Trust and the Adviser shall not be responsible in
any way for any information, statements or representations given or made by the
Distributor or its representatives or agents other than such information,
statements or representations as are contained in such Prospectus or
Registration Statement or financial reports filed on behalf of the Trust or in
any Sales Literature and Advertisements.
8.
Duration, Termination and Amendment.
(a) This
Agreement shall be effective on the date set forth above, and unless terminated
as provided herein, shall continue for two years from its effective date, and
thereafter from year to year, provided such continuance is approved annually (i)
by vote of a majority of the Trustees or by the vote of a majority of the
outstanding voting securities of the Trust and (ii) by the vote of a majority of
those Trustees who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated at any time, without the payment
of any penalty, as to each Fund (i) by vote of a majority of those Trustees who
are not parties to this Agreement or interested persons of any such party or
(ii) by vote of a majority of the outstanding voting securities of the Fund, on
at least sixty (60) days prior written notice to the Distributor. This Agreement
shall automatically terminate without the payment of any penalty in the event of
its assignment. As used in this paragraph, the terms “vote of a
majority of the outstanding voting securities,” “assignment,” “affiliated
person” and “interested person” shall have the respective meanings specified in
the 1940 Act.
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(b) No
provision of this Agreement may be changed, waived, discharged or terminated
except by an instrument in writing signed by the party against which an
enforcement of the change, waiver, discharge or termination is
sought.
9.
Notice.
Any notice or other communication
authorized or required by this Agreement to be given to either party shall be in
writing and deemed to have been given when delivered in person or by confirmed
facsimile, or posted by certified mail, return receipt requested, to the
following address (or such other address as a party may specify by written
notice to the other):
If to the
Distributor:
Foreside Fund Services,
LLC
ATTN: Legal/Compliance
Three Xxxxx Xxxxx, Xxxxx
000
Xxxxxxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
If to the
Trust:
U.S. One, Inc.
ATTN: Xxxx
Xxxxxx
0000 Xxxxxx Xxxxxxx
Xxxxxxx
Xxxx, XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
10. Choice
of Law.
This Agreement shall be governed by,
and construed in accordance with, the laws of the state of Delaware, without
giving effect to the choice of laws provisions thereof.
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11. Counterparts.
This Agreement may be executed 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.
12. Severability.
If any provisions of this Agreement
shall be held or made invalid, in whole or in part, then the other provisions of
this Agreement shall remain in force. Invalid provisions shall, in accordance
with this Agreement’s intent and purpose, be amended, to the extent legally
possible, in order to effectuate the intended results of such invalid
provisions.
13. Insurance.
The Distributor will maintain at its
expense an errors and omissions insurance policy adequate to cover services
provided by the Distributor hereunder.
14. Confidentiality.
During the term of this Agreement, the
Distributor and the Trust may have access to confidential information relating
to such matters as either party’s business, trade secrets, systems, procedures,
manuals, products, contracts, personnel, and clients. As used in this Agreement,
“Confidential Information” means information belonging to one of the parties
that is of value to such party and the disclosure of which could result in a
competitive or other disadvantage to such party. Confidential Information
includes, without limitation, financial information, proposal and presentations,
reports, forecasts, inventions, improvements and other intellectual property;
trade secrets; know-how; designs, processes or formulae; software; market or
sales information or plans; customer lists; and business plans, prospects and
opportunities (such as possible acquisitions or dispositions of businesses or
facilities). Confidential Information includes information developed by either
party in the course of engaging in the activities provided for in this
Agreement, unless: (i) the information is or becomes publicly known through
lawful means; (ii) the information is disclosed to the other party without a
confidential restriction by a third party who rightfully possesses the
information and did not obtain it, either directly or indirectly, from one of
the parties, as the case may be, or any of their respective principals,
employees, affiliated persons, or affiliated entities. The parties understand
and agree that all Confidential Information shall be kept confidential by the
other both during and after the term of this Agreement. Each party shall
maintain commercially reasonable information security policies and procedures
for protecting Confidential Information. The parties further agree that they
will not, without the prior written approval by the other party, disclose such
Confidential Information, or use such Confidential Information in any way,
either during the term of this Agreement or at any time thereafter, except as
required in the course of this Agreement and as provided by the other party or
as required by law. Upon termination of this Agreement for any reason, or as
otherwise requested by the Trust, all Confidential Information held by or on
behalf of Trust shall be promptly returned to the Trust, or an authorized
officer of the Distributor will certify to the Trust in writing that all such
Confidential Information has been destroyed. This section 14 shall
survive the termination of this Agreement. Notwithstanding the
foregoing, a party may disclose the other’s Confidential Information if (i)
required by law, regulation or legal process or if requested by the Commission
or other governmental regulatory agency with jurisdiction over the parties
hereto or (ii) requested to do so by the other party; provided that in the event
of (i), the disclosing party shall give the other party reasonable prior notice
of such disclosure to the extent reasonably practicable and shall reasonably
cooperate with the other party (at such other party’s expense) in any efforts to
prevent such disclosure.
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15. Limitation
of Liability.
This Agreement is executed by or on
behalf of the Trust with respect to each of the Funds and the obligations
hereunder are not binding upon any of the trustees, officers or shareholders of
the Trust individually but are binding only upon the Fund to which such
obligations pertain and the assets and property of such
Fund. Separate and distinct records are maintained for each Fund and
the assets associated with any such Fund are held and accounted for separately
from the other assets of the Trust, or any other Fund of the Trust. The debts,
liabilities, obligations, and expenses incurred, contracted for, or otherwise
existing with respect to a particular Fund of the Trust shall be enforceable
against the assets of that Fund only, and not against the assets of the Trust
generally or any other Fund, and none of the debts, liabilities, obligations,
and expenses incurred, contracted for, or otherwise existing with respect to the
Trust generally or any other Fund shall be enforceable against the assets of
that Fund. The Trust’s Agreement and Declaration of Trust is on file
with the Trust.
16. Use
of Names; Publicity.
The Trust shall not use the
Distributor’s name in any offering material, shareholder report, advertisement
or other material relating to the Trust, other than for the purpose of merely
identifying and describing the functions of the Distributor hereunder, in a
manner not approved by the Distributor in writing prior to such use, such
approval not to be unreasonably withheld. The Distributor hereby
consents to all uses of its name required by the Commission, any state
securities commission, or any federal or state regulatory
authority.
The Distributor shall not use the names
“U.S. One” or “One Fund” in any offering material, shareholder report,
advertisement or other material relating to the Distributor, other than for the
purpose of merely identifying and describing the functions of the Trust
hereunder, in a manner not approved by the Trust in writing prior to such use;
provided, however, that the Trust shall consent to all uses of its name required
by the Commission, any state securities commission, or any federal or state
regulatory authority; and provided, further, that in no case shall such approval
be unreasonably withheld.
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The Distributor will not issue any
press releases or make any public announcements regarding the existence of this
Agreement without the express written consent of the Trust. Neither
the Trust nor the Distributor will disclose any of the economic terms of this
Agreement, except as may be required by law.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their officers
designated below as of the date first set forth above.
By: /s/ Xxxx
Hrabal____________
Name:
Xxxx Xxxxxx
Title:
President
FORESIDE
FUND SERVICES, LLC
By: /s/ Xxxxxxx X.
Berthy_______
Name: Xxxxxxx
X. Xxxxxx
Title: Vice
President
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EXHIBIT
A
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