FORM OF
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of October __, 1998, between Golf Associated
Fund ("Fund"), a business trust organized and existing under the laws of the
Commonwealth of Massachusetts, and Xxxxxxxx Capital Markets, Inc. ("RCM"), a
corporation organized and existing under the laws of the State of New York.
WHEREAS the Fund is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company, and has
registered one or more distinct series of shares of beneficial interest
("Shares") for sale to the public under the Securities Act of 1933, as amended
("1933 Act"), and has qualified its shares for sale to the public under various
state securities laws; and
WHEREAS the Fund desires to retain RCM as principal underwriter in
connection with the offering and sale of the Shares of each series listed on
Schedule A (as amended from time to time) to this Agreement; and
WHEREAS this Agreement has been approved by a vote of the Fund's board of
trustees or directors ("Board") and its disinterested trustees/directors in
conformity with Section 15(c) under the 1940 Act; and
WHEREAS RCM is willing to act as principal underwriter for the Fund on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints RCM as its agent to be the
principal underwriter so as to hold itself out as available to receive and
accept orders for the purchase and redemption of the Shares and redemption of
Shares on behalf of the Fund, subject to the terms and for the period set forth
in this Agreement. RCM hereby accepts such appointment and agrees to act
hereunder. The Fund understands that any solicitation activities conducted on
behalf of the Fund will be conducted primarily, if not exclusively, by employees
of the Fund's sponsor who shall become registered representatives of RCM.
2. SERVICES AND DUTIES OF RCM.
(a) RCM agrees to sell Shares on a best efforts basis from time to
time during the term of this Agreement as agent for the Fund and upon the terms
described in the Registration Statement. As used in this Agreement, the term
"Registration Statement" shall mean the currently effective registration
statement of the Fund, and any supplements thereto, under the 1933 Act and the
0000 Xxx.
(b) RCM will hold itself available to receive purchase and
redemption orders satisfactory to RCM for Shares and will accept such orders on
behalf of the Fund. Such purchase orders shall be deemed effective at the time
and in the manner set forth in the Registration Statement.
(c) RCM, with the operational assistance of the Fund's transfer
agent, shall make Shares available through the National Securities Clearing
Corporation's Fund/SERV System.
(d) RCM shall provide to investors and potential investors only such
information regarding the Fund as the Fund or its investment adviser ("Adviser")
shall provide or approve. RCM shall review and file all proposed advertisements
and sales literature with appropriate regulators and consult with the Fund
regarding any comments provided by regulators with respect to such materials. No
employee of RCM, other than a registered representative who is an employee of
the Adviser, shall make any oral statement or representation regarding the Fund.
(e) The offering price of the Shares shall be the price determined
in accordance with, and in the manner set forth in, the most-current Prospectus.
The Fund shall make available to RCM a statement of each computation of net
asset value and the details of entering into such computation.
(f) RCM at its sole discretion may repurchase Shares offered for
sale by the shareholders. Repurchase of Shares by RCM shall be at the price
determined in accordance with, and in the manner set forth in, the most-current
Prospectus. At the end of each business day, RCM shall notify, by any
appropriate means, the Fund and its transfer agent of the orders for repurchase
of Shares received by RCM since the last such report, the amount to be paid for
such Shares, and the identity of the shareholders offering Shares for
repurchase. The Fund reserves the right to suspend such repurchase right upon
written notice to RCM. RCM further agrees to act as agent for the Fund to
receive and transmit promptly to the Fund's transfer agent shareholder requests
for redemption of Shares.
(g) RCM shall not be obligated to sell any certain number of Shares.
(h) RCM shall prepare reports for the Board regarding its activities
under this Agreement as from time to time shall be reasonably requested by the
Board.
(i) RCM shall provide the services as contemplated by Schedule B to
this Agreement.
3. DUTIES OF THE FUND.
(a) The Fund shall keep RCM fully informed of its affairs and shall
provide to RCM from time to time copies of all information, financial
statements, and other papers that RCM may reasonably request for use in
connection with the distribution of Shares, including, without limitation,
certified copies of any financial statements prepared for the Fund by its
independent public accountant and such reasonable number of copies of the most
current Prospectus, Statement of Additional Information ("SAI"), and annual and
interim reports as RCM may request, and the Fund shall fully cooperate in the
efforts of RCM to sell and arrange for the sale of Shares.
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(b) The Fund shall maintain a currently effective Registration
Statement on Form N-1A with the Securities and Exchange Commission (the "SEC"),
maintain qualification with applicable states and file such reports and other
documents as may be required under applicable federal and state laws. The Fund
shall notify RCM in writing of the states in which the Shares may be sold and
shall notify RCM in writing of any changes to such information. The Fund shall
bear all expenses related to preparing and typesetting such Prospectuses, SAI
and other materials required by law and such other expenses, including printing
and mailing expenses, related to the Fund's communication with persons who are
shareholders.
(c) The Fund shall not use any advertisements or other sales
materials that have not been (i) submitted to RCM for its review and approval,
and (ii) filed with the appropriate regulators.
(d) The Fund represents and warrants that its Registration Statement
and any advertisements and sales literature (excluding statements relating to
RCM and the services it provides that are based upon written information
furnished by RCM expressly for inclusion therein) of the Fund shall not contain
any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that all statements or information furnished to RCM, pursuant to
Section 3(a) hereof, shall be true and correct in all material respects.
4. OTHER BROKER-DEALERS. RCM in its discretion may enter into agreements
to sell Shares to such registered and qualified retail dealers, as reasonably
requested by the Fund. In making agreements with such dealers, RCM shall act
only as principal and not as agent for the Fund. The form of any such dealer
agreement shall be mutually agreed upon and approved by the Fund and RCM.
5. WITHDRAWAL OF OFFERING. The Fund reserves the right at any time to
withdraw all offerings of any or all Shares by written notice to RCM at its
principal office. No Shares shall be offered by either RCM or the Fund under any
provisions of this Agreement and no orders for the purchase or sale of Shares
hereunder shall be accepted by the Fund if and so long as 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.
6. SERVICES NOT EXCLUSIVE. The services furnished by RCM hereunder are not
to be deemed exclusive and RCM shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
7. EXPENSES OF THE FUND. The Fund shall bear all costs and expenses of
registering the Shares with the SEC and state and other regulatory bodies, and
shall assume expenses related to communications with shareholders of the Fund
including, but not limited to, (i) fees and disbursements of its counsel and
independent public accountant; (ii) the preparation, filing, and printing of
Registration Statements and/or Prospectuses or SAIs; (iii) the preparation and
mailing of annual and interim reports, Prospectuses, SAIs, and proxy materials
to shareholders; (iv) such other expenses related to the communications with
persons who are shareholders of the Fund; and (v) the qualifications of Shares
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for sale under the securities laws of such jurisdictions as shall be selected by
the Fund pursuant to Paragraph 3(b) hereof, and the costs and expenses payable
to each such jurisdiction for continuing qualification therein. In addition, the
Fund shall bear all costs of preparing, printing, mailing and filing any
advertisements and sales literature. RCM does not assume responsibility for any
expenses not assumed hereunder.
8. COMPENSATION. As compensation for the services performed and the
expenses assumed by RCM under this Agreement including, but not limited to, any
commissions paid for sales of Shares, the Fund shall pay RCM, as promptly as
possible after the last day of each month, a fee as set forth in Schedule B to
this Agreement.
9. SHARE CERTIFICATES. The Fund shall not issue certificates representing
Shares unless requested to do so by a shareholder. If such request is
transmitted through RCM, the Fund will cause certificates evidencing the Shares
owned to be issued in such names and denominations as RCM shall from time to
time direct.
10. STATUS OF RCM. RCM is an independent contractor and shall be agent of
the Fund only with respect to the sale and redemption of Shares.
11. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend, and hold RCM, its officers
and directors, and any person who controls RCM 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) that RCM, its officers, directors, or any such controlling person may
incur under the 1933 Act, or under common law or otherwise, arising out of or
based upon any (i) alleged untrue statement of a material fact contained in the
Registration Statement, Prospectus, SAI or sales literature, (ii) alleged
omission to state a material fact required to be stated in the either thereof or
necessary to make the statements therein not misleading, or (iii) failure by the
Fund to comply with the terms of the Agreement; provided, that in no event shall
anything contained herein be so construed as to protect RCM against any
liability to the Fund or its shareholders to which RCM 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.
(b) The Fund shall not be liable to RCM under this Agreement with
respect to any claim made against RCM or any person indemnified unless RCM or
other such person shall have notified the Fund 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 RCM or such
other person (or after RCM or the person shall have received notice of service
on any designated agent). However, failure to notify the Fund of any claim shall
not relieve the Fund from any liability that it may have to RCM or any person
against whom such action is brought otherwise than on account of this Agreement.
(c) The Fund 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
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enforce any claims subject to this Agreement. If the Fund elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
the Fund and satisfactory to indemnified defendants in the suit whose approval
shall not be unreasonably withheld. In the event that the Fund elects to assume
the defense of any suit and retain counsel, the indemnified defendants shall
bear the fees and expenses of any additional counsel retained by them. If the
Fund does not elect to assume the defense of a suit, it will reimburse the
indemnified defendants for the reasonable fees and expenses of any counsel
retained by the indemnified defendants. The Fund agrees to promptly notify RCM
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 its
Shares.
(d) RCM agrees to indemnify, defend, and hold the Fund, its officers
and directors, 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 cost of investigating
or defending against such claims, demands, or liabilities and any counsel fees
incurred in connection therewith) that the Fund, its directors or officers, or
any such controlling person may incur under the 1933 Act, or under common law or
otherwise arising out of or based upon (i) any alleged untrue statement of a
material fact contained in information furnished in writing by RCM to the Fund
for use in the Registration Statement, Prospectus or SAI arising out of or based
upon any alleged omission to state a material fact in connection with such
information required to be stated in either thereof or necessary to make such
information not misleading; or (ii) the failure by RCM to comply with the terms
of the Agreement.
(e) RCM 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 RCM elects to assume the defense, the defense shall be
conducted by counsel chosen by RCM and satisfactory to the indemnified
defendants whose approval shall not be unreasonably withheld. In the event that
RCM elects to assume the defense of any suit and retain counsel, the defendants
in the suit shall bear the fees and expenses of any additional counsel retained
by them. If RCM does not elect to assume the defense of any suit, it will
reimburse the indemnified defendants in the suit for the reasonable fees and
expenses of any counsel retained by them. RCM agrees to promptly notify the Fund
of the commencement of any litigation or proceeding against it or any of its
officers or directors.
12. DURATION AND TERMINATION.
(a) This Agreement shall become effective on the date first written
above or such later date as indicated in Schedule A and, unless sooner
terminated as provided herein, will continue in effect for one year from the
above written date. Thereafter, if not terminated this Agreement shall continue
in effect for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of the
Fund's Board who are neither interested persons (as defined in the 0000 Xxx) of
the Fund ("Independent trustees/directors") or RCM, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Board or by
vote of a majority of the outstanding voting securities of the Fund.
(b) Notwithstanding the foregoing, this Agreement may be terminated
in its entirety at any time, without the payment of any penalty, by vote of the
Board, by vote of a majority of the Independent trustees/directors, or by vote
of a majority of the outstanding voting securities of the Fund on sixty days'
written notice to RCM or by RCM at any time, without the payment of any penalty,
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on sixty days' written notice to the Fund. This Agreement will automatically
terminate in the event of its assignment.
13. 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 the party against which enforcement of the change, waiver,
discharge, or termination is sought. This Agreement may be amended with the
approval of the Board or of a majority of the outstanding voting securities of
the Fund; provided, that in either case, such amendment also shall be approved
by a majority of the Independent trustees/directors.
14. LIMITATION OF LIABILITY. The Board and shareholders of the Fund shall
not be personally liable for obligations of the Fund in connection with any
matter arising from or in connection with this Agreement. If the Fund is a
Massachusetts business trust, this Agreement is not binding upon any trustees,
officer or shareholder of the Fund individually, and no such person shall be
individually liable with respect to any action or inaction resulting from this
Agreement.
15. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient upon receipt in writing at the other
party's principal offices.
16. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person," and "assignment" shall have the same meaning as such terms
have in the 1940 Act.
17. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York and the 1940 Act (without regard, however, to
the conflicts of law principles). To the extent that the applicable laws of the
State of New York conflict with the applicable provisions of the 1940 Act, the
latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first above
written.
ATTEST: ____________________ GOLF ASSOCIATED FUND
By:________________________________
ATTEST: ____________________ XXXXXXXX CAPITAL MARKETS, INC.
By:________________________________
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SCHEDULE A
to the
DISTRIBUTION AGREEMENT
between
GOLF ASSOCIATED FUND
and
XXXXXXXX CAPITAL MARKETS, INC.
Pursuant to section 1 of the Distribution Agreement between the Golf
Associated Fund ("Fund") and Xxxxxxxx Capital Markets, Inc. ("RCM"), the Fund
hereby appoints RCM as its agent to be the principal underwriter of Fund with
respect to its following series:
Dated October __, 1998
SCHEDULE B
to the
DISTRIBUTION AGREEMENT
between
GOLF ASSOCIATED FUND
and
XXXXXXXX CAPITAL MARKETS, INC.
A. As compensation pursuant to section 8 of the Distribution Agreement between
Golf Associated Fund (the "Fund") and Xxxxxxxx Capital Markets, Inc.
("RCM"), the Fund agrees to pay to RCM the sum of:
1. an annual fee of $15,000 for the first series of the Fund and $3,000
for each series thereafter or .01% of the average daily net assets of
each series, computed daily and paid monthly, whichever is greater;
2. the ongoing licensing fees and incidental costs of those
employees of the Fund's investment adviser ("Adviser") who are
designated by the Adviser to become registered representatives of
RCM;
3. the compensation paid by RCM to such registered representatives
in accordance with compensation schedules, as agreed upon by RCM and
the Adviser from time to time;
4. the reasonable fees associated with listing and maintaining shares on
the National Securities Clearing Corporation's Fund/SERV System, as
agreed upon by RCM and the Adviser; and
5. incidental expenses associated with printing and distributing
advertising and sales literature, such as filings with the National
Association of Securities Dealers, Inc.
B. RCM shall receive the entire amount of any sales charge (except to the extent
that sales are made at net asset value) or contingent deferred sales charge
applicable in connection with the sale of Fund Shares; however, RCM shall
reallow all or any portion of such charges to broker-dealers with which RCM has
executed dealer agreements that sell Shares as set forth in the Fund's
then-current Prospectus or as otherwise agreed to by the Fund in writing.
C. RCM shall collect fees pursuant to any Distribution Plan adopted by the Fund
pursuant to Rule 12b-1 under the 1940 Act Investment Company Act of 1940 ("1940
Act") applicable to Shares in an amount equal to a percentage (annual rate) of
the assets of Fund accounts during the preceding month, as provided in the
Fund's then-current Prospectus. RCM shall pay such fees to broker-dealers with
which it has executed dealer agreements as compensation for distribution and
personal services rendered to shareholders of the Fund, including providing
shareholder liaison services such as responding to shareholder inquiries and
providing information to shareholders about their Fund accounts.
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Such amounts shall be paid by the Fund at the end of each calendar
month. The Fund's obligation to make payments described in this paragraph shall
be contingent upon the continuance of the applicable Distribution Plan, and in
that connection it is understood that:
(i) Such Plan shall remain in effect for one year from its
adoption date and may be continued from year to year thereafter only if the Plan
and any related agreements are approved at least annually by a majority vote of
the Trustees of the Plan, including a majority of the Trustees who are not
"interested persons" of the Plan and who have no direct or indirect financial
interest in the operation of the Plan or in any related agreement ("Independent
Trustee"), cast in person at a meeting called for the purpose of voting on such
Plan and agreements; and
(ii) the Plan may be terminated at any time by a majority
vote of the Independent Trustees or by vote of a majority of the outstanding
voting securities of the Series. In the event the Plan is not continued or is
terminated with respect to a Series, the provisions of this Agreement pursuant
to which fees are paid to RCM shall automatically terminate.
D. The Fund and RCM agree that any portion of any sales charge, contingent
deferred sales charge, distribution fee or service fee described in Paragraphs B
and C hereof that is not distributed to any broker-dealer and is retained by RCM
shall be an offset to reduce the amounts payable by the Fund to RCM pursuant to
Paragraph A hereof.
E. It is agreed and understood that in no event shall fees payable by the Fund
under this Schedule B exceed the permissible payments authorized under any
Distribution Plan adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act.
Dated: October __, 1998
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