Exhibit (e)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this ___ day of _______, 2004, by and between
The Vantage Funds, a Massachusetts business trust (the "Trust"), and XxXxx
Capital, Inc., a Delaware corporation (the "Distributor").
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act") and is authorized to
issue shares of beneficial interests in separate series with each such series
representing interests in a separate portfolio of securities and other assets;
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member of
the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Distributor desire to enter into an agreement
pursuant to which Distributor shall be the distributor of the shares of the
Trust representing the investment portfolios described on Schedule A hereto and
any additional shares and/or investment portfolios the Trust and Distributor may
agree upon and include on Schedule A, as such Schedule may be amended from time
to time (such shares and any additional shares are referred to as the "Shares"
and such investment portfolios and any additional investment portfolios are
individually referred to as a "Fund" and collectively referred to as the
"Funds").
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Appointment of the Distributor.
The Trust hereby appoints the Distributor as agent for the distribution of
the Shares, on the terms and for the period set forth in this Agreement.
Distributor hereby accepts such appointment as agent for the distribution
of the Shares on the terms and for the period set forth in this Agreement.
2. Services and Duties of the Distributor.
2.1 Distributor will act as agent for the distribution of Shares in
accordance with the instructions of the Trust's Board of Trustees and the
registration statement and prospectuses then in effect with respect to the
Funds under the Securities Act of 1933, as amended (the "1933 Act").
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2.2 Distributor may incur expenses for appropriate distribution activities
which it deems reasonable which are primarily intended to result in the
sale of Shares, including, but not limited to, advertising, the printing
and mailing of prospectuses to other than current shareholders, and the
printing and mailing of sales literature. At the direction of the Trust,
Distributor may enter into servicing and/or selling agreements with
qualified broker/dealers and other persons with respect to the offering of
Shares to the public, and if it so chooses Distributor may act as
principal. The Distributor shall not be obligated to incur any specific
expenses nor sell any certain number of Shares of any Fund.
2.3 All Shares of the Funds offered for sale by Distributor shall be
offered for sale to the public at a price per share (the "offering price")
provided in the Funds' then current prospectus. The Distributor shall have
no liability for the payment of the purchase price of the Shares sold
pursuant to this Agreement or with respect to redemptions or repurchases
of Shares.
2.4 Distributor shall act as distributor of the Shares in compliance in
all material respects with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or adopted
pursuant to the 1940 Act, by the Securities and Exchange Commission (the
"Commission") and the NASD.
2.5 Distributor shall not utilize any materials in connection with the
sales or offering of Shares except the Trust's prospectus and statement of
additional information and such other materials as the Trust shall provide
or approve. The Distributor agrees to provide compliance review of all
sales literature and marketing materials prepared for use by or on behalf
of the Trust in advance of the use of such materials. The Fund agrees to
incorporate such changes to such materials as the Distributor shall
request. The Distributor will file the materials as may be required with
the NASD, SEC or state securities commissioners. The Trust represents that
it will not use or authorize the use of any advertising or sales material
unless and until such materials have been approved and authorized for use
by the Distributor.
2.6 As compensation for the services performed hereunder and the expenses
incurred by Distributor, the Distributor shall be entitled to the fees and
be reimbursed the expenses as provided in Exhibit B hereto.
3. Duties and Representations of the Trust.
3.1 The Trust represents that it is registered as an open-end management
investment company under the 1940 Act and that it has and will continue to
act in conformity with its Declaration of Trust, By-Laws, its registration
statement, as may be amended from time to time, and resolutions and other
instructions of its Board of Trustees and has and will continue to comply
with all applicable laws, rules and regulations, including, without
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limitation, the 1933 Act, the 1934 Act, the 1940 Act, the laws of the
states in which shares of the Funds are offered and sold, and the rules
and regulations thereunder.
3.2 The Trust shall take or cause to be taken all necessary action to
register and maintain the registration of the Shares under the 1933 Act
for sale as herein contemplated and shall pay all costs and expenses in
connection with the registration of Shares under the 1933 Act, and be
responsible for all expenses in connection with maintaining facilities for
the issue and transfer of Shares and for supplying information, prices and
other data to be furnished by the Trust hereunder.
3.3 The Trust shall execute any and all documents and furnish any and all
information and otherwise take all actions which may be reasonably
necessary in the discretion of the Trust's Trustees in connection with the
qualification of the Shares for sale in such states as Distributor and the
Trust may approve, shall maintain the qualification of a sufficient number
or amount of shares thereunder, and shall pay all costs and expenses in
connection with such qualification. The Trust shall notify the
Distributor, or cause it to be notified, of the states in which the Shares
may be sold and shall notify the Distributor of any change to the
information.
3.4 The Trust shall, at its expense, keep the Distributor fully informed
with regard to its affairs. In addition, the Trust shall furnish
Distributor from time to time such information, documents and reports with
respect to the Trust and the Shares as Distributor may reasonably request,
and the Trust warrants that the statements contained in any such
information shall be true and correct and fairly represent what they
purport to represent.
3.5 The Trust represents to Distributor that all registration statements
and prospectuses of the Trust filed or to be filed with the Commission
under the 1933 Act and 1940 Act with respect to the Shares have been and
will be prepared in conformity with the requirements of the 1933 Act, the
1940 Act, and the rules and regulations of the Commission thereunder. As
used in this Agreement the terms "registration statement" and "prospectus"
shall mean any registration statement and prospectus (together with the
related statement of additional information) at any time now or hereafter
filed with the Commission with respect to any of the Shares and any
amendments and supplements thereto which at any time shall have been or
will be filed with said Commission. The Trust represents and warrants to
Distributor that any registration statement and prospectus, when such
registration statement becomes effective, will contain all statements
required to be stated therein in conformity with the 1933 Act, the 1940
Act and the rules and regulations of the Commission; that all information
contained in the registration statement and prospectus will be true and
correct in all material respects when such registration statement becomes
effective; and that neither the registration statement nor any prospectus
when such registration statement becomes effective will include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Trust agrees to file from time to time such amendments,
supplements, reports and other documents as may be necessary or required
in order to comply with the 1933 Act and the
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1940 Act and in order that there may be no untrue statement of a material
fact in a registration statement or prospectus, or necessary or required
in order that there may be no omission to state a material fact in the
registration statement or prospectus which omission would make the
statements therein misleading. The Trust shall promptly notify the
Distributor of any advice given to it by counsel to the Trust regarding
the necessity or advisability of amending or supplementing the
registration statement.
3.6 The Trust shall not file any amendment to the registration statement
or supplement to any prospectus without giving Distributor reasonable
notice thereof in advance and if the Distributor declines to assent to
such amendment (after a reasonable time), the Trust may terminate this
Agreement forthwith by written notice to the Distributor without payment
of any penalty. If the Trust shall not propose an amendment or amendments
and/or supplement or supplements promptly after receipt by the Trust of a
written request in good faith from Distributor to do so, Distributor may,
at its option, immediately terminate this Agreement. In addition, if, at
any time during the term of this Agreement, the Distributor requests the
Trust to make any change in its governing instruments or in its methods of
doing business which are necessary in order to comply with any requirement
of applicable law or regulation, and the Trust fails to make any such
change as requested, the Distributor may terminate this Agreement
forthwith by written notice to the Trust without payment of any penalty.
Nothing contained in this Agreement shall in any way limit the Trust's
right or obligation to file at any time any amendments to any registration
statement and/or supplements to any prospectus, of whatever character, as
the Trust may deem advisable, with advice of its counsel, such right being
in all respects absolute and unconditional.
3.7 Whenever in its judgment such action is warranted by market, economic
or political conditions, or by circumstances of any kind, the Trust may
decline to accept any orders for, or make any sales of, any Shares until
such time as it deems it advisable to accept such orders and to make such
sales and the Trust shall advise Distributor promptly of such
determination.
3.8 The Trust agrees to advise the Distributor promptly in writing:
(i) of any correspondence or other communication by the Commission
or its staff relating to the Funds, including requests by the
Commission for amendments to the registration statement or
prospectuses;
(ii) in the event of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement or
prospectuses then in effect or the initiation of any proceeding for
that purpose;
(iii) of the happening of any event which makes untrue any statement
of a material fact made in the registration statement or
prospectuses or which requires the making of a change in such
registration statement or prospectuses in order to make the
statements therein not misleading; and
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(iv) of all actions taken by the Commission with respect to any
amendments to any registration statement or prospectus which may
from time to time be filed with the Commission.
4. Indemnification.
4.1(a) The Trust authorizes Distributor to use any prospectus or statement
of additional information, in the form furnished to Distributor from time
to time, in connection with the sale of Shares. The Trust shall indemnify,
defend and hold the Distributor, and each of its present or former
directors, members, officers, employees, representatives and any person
who controls or previously controlled the Distributor within the meaning
of Section 15 of the 1933 Act ("Distributor Indemnitees"), free and
harmless (a) from and against any and all losses, claims, demands,
liabilities, damages, charges, payments, costs and expenses (including the
costs of investigating or defending any alleged losses, claims, demands,
liabilities, damages, charges, payments, costs or expenses and any counsel
fees incurred in connection therewith) of any and every nature ("Losses")
which Distributor and/or each of the Distributor Indemnitees may incur
under the 1933 Act, the 1934 Act, the 1940 Act, any other statute
(including Blue Sky laws) or any rule or regulation thereunder, or under
common law or otherwise, arising out of or based upon any untrue
statement, or alleged untrue statement, of a material fact contained in
the registration statement or any prospectus, an annual or interim report
to shareholders or sales literature, or any amendments or supplements
thereto, or arising out of or based upon any omission, or alleged
omission, to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided,
however, that the Trust's obligation to indemnify Distributor and any of
the foregoing Distributor Indemnitees shall not be deemed to cover any
Losses arising out of any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with information relating to the Distributor and furnished to
the Trust or its counsel by Distributor in writing for the purpose of, and
used in, the preparation thereof; (b) from and against any and all Losses
which Distributor and/or each of the Distributor Indemnitees may incur in
connection with this Agreement or the Distributor's performance hereunder,
except to the extent the Losses result from the Distributor's 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, (c) from and against any and all Losses which
Distributor and/or each of the Distributor Indemnitees may incur resulting
from the actions or inactions of any prior service provider to the Funds,
or (d) from and against any and all Losses which Distributor and/or each
of the Distributor Indemnitees may incur when acting in accordance with
instructions from the Trust or its representatives. Promptly after receipt
by the Distributor of notice of the commencement of an investigation,
action, claim or proceeding, the Distributor shall, if a claim for
indemnification in respect thereof is to made under this section, notify
the Trust in writing of the commencement thereof, although the failure to
do so shall not prevent recovery by the Distributor or any Distributor
Indemnitee.
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4.1(b) 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 such loss, claim, demand, liability, damage or expense, but
if the Trust elects to assume the defense, such defense shall be conducted
by counsel chosen by the Trust and approved by the Distributor, which
approval shall not be unreasonably withheld. In the event the Trust elects
to assume the defense of any such suit and retain such counsel and
notifies the Distributor of such election, the indemnified defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by them subsequent to the receipt of the Trust's
election. If the Trust does not elect to assume the defense of any such
suit, or in case the Distributor does not, in the exercise of reasonable
judgment, approve of counsel chosen by the Trust, or in case there is a
conflict of interest between the Trust and the Distributor or any of the
Distributor Indemnitees, the Trust will reimburse the indemnified person
or persons named as defendant or defendants in such suit, for the fees and
expenses of any counsel retained by Distributor and them. The Trust's
indemnification agreement contained in this Section 4.1 and the Trust'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 the Distributor and each of the Distributor Indemnitees, and
shall survive the delivery of any Shares and the termination of this
Agreement. This agreement of indemnity will inure exclusively to the
Distributor's benefit, to the benefit of each of the Distributor
Indemnitees, and their estates and successors. The Trust agrees promptly
to notify Distributor of the commencement of any litigation or proceedings
against the Trust or any of its officers or trustees in connection with
the issue and sale of any of the Shares.
4.1(c) The Trust acknowledges and agrees that in the event the
Distributor, at the direction of the Trust, is required to give
indemnification to any entity selling Shares or providing shareholder
services to shareholders or others and such entity shall make a claim for
indemnification against the Distributor, the Distributor shall make a
similar claim for indemnification against the Trust and shall be entitled
to such indemnification.
4.2(a) Distributor shall indemnify, defend and hold the Trust, and each of
its present or former trustees, officers, employees, representatives, and
any person who controls or previously controlled the Trust within the
meaning of Section 15 of the 1933 Act ("Trust Indemnitees"), free and
harmless from and against any and all Losses which the Trust, and each of
its present or former trustees, officers, employees, representatives, or
any such controlling person, may incur under the 1933 Act, the 1934 Act,
the 1940 Act, any other statute (including Blue Sky laws) or any rule or
regulation thereunder, or under common law or otherwise, (a) arising out
of or based upon any untrue, or alleged untrue, statement of a material
fact contained in the Trust's registration statement or any prospectus, as
from time to time amended or supplemented, or the omission, or alleged
omission, to state therein a material fact required to be stated therein
or necessary to make the statement not misleading, but only if such
statement or omission was made in reliance upon, and in conformity with,
information relating to the Distributor and furnished in writing to the
Trust or its counsel by the Distributor for the purpose of, and used in,
the preparation thereof, and (b) to the extent any Losses arise out of or
result from the Distributor's willful misfeasance, bad faith or gross
negligence in the
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performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement; Distributor's agreement to
indemnify the Trust and any of the Trust Indemnitees shall not be deemed
to cover any Losses to the extent they arise out of or result from the
Trust's willful misfeasance, bad faith or negligence in the performance of
its duties, or by reason of its reckless disregard of its obligations and
duties, under this Agreement. Promptly after receipt by the Trust of
notice of the commencement of an investigation, action, claim or
proceeding, the Trust shall, if a claim for indemnification in respect
thereof is to made under this section, notify the Distributor in writing
of the commencement thereof, although the failure to do so shall not
prevent recovery by the Trust or any Trust Indemnitee.
4.2(b) 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 any such loss, claim, demand, liability, damage or
expense, but if the Distributor elects to assume the defense, such defense
shall be conducted by counsel chosen by the Distributor and approved by
the Trust, which approval shall not be unreasonably withheld. In the event
the Distributor elects to assume the defense of any such suit and retain
such counsel and notifies the distributor of such election, the
indemnified defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by them subsequent to the
receipt of the Distributor's election. If the Distributor does not elect
to assume the defense of any such suit, or in case the Trust does not, in
the exercise of reasonable judgment, approve of counsel chosen by the
Distributor, the Distributor will reimburse the indemnified person or
persons named as defendant or defendants in such suit, for the fees and
expenses of any counsel retained by the Trust and them. The Distributor's
indemnification agreement contained in this Section 4.2 and the
Distributor'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 the Trust or any of the Trust
Indemnitees, and shall survive the delivery of any Shares and the
termination of this Agreement. This agreement of indemnity will inure
exclusively to the Trust's benefit, to the benefit of each of the Trust
Indemnitees and their estates and successors. The Distributor agrees
promptly to notify the Trust of the commencement of any litigation or
proceedings against the Distributor or any of its officers or members in
connection with the issue and sale of any of the Shares.
5. Offering of Shares.
No Shares shall be offered by either the Distributor or the Trust under
any of the provisions of this Agreement and no orders for the purchase or
sale of such Shares hereunder shall be accepted by the Trust 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 the current prospectus as
required by Section 10 of the 1933 Act, as amended, is not on file with
the Commission; provided, however, that nothing contained in this
paragraph 5 shall in any way restrict or have an application to or bearing
upon the Trust's obligation to repurchase
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Shares from any shareholder in accordance with the provisions of the
prospectus or Declaration of Trust of the Trust.
6. Limitation of Liability
6.1 The Distributor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with
the performance of its obligations and duties under this Agreement, except
a loss resulting from the Distributor's willful misfeasance, bad faith or
gross negligence in the performance of such duties and obligations, or by
reason of its reckless disregard thereof. Furthermore, notwithstanding
anything herein to the contrary, the Distributor shall not be liable for
any action taken or omitted to be taken in accordance with instructions
received by the Distributor from a Trustee, officer or representative of
the Trust or for any action taken or omitted to be taken by any prior
service provider of the Funds.
6.2 The Distributor assumes no responsibility hereunder, and shall not be
liable, for any default, damage, loss of data, errors, delay or any other
loss whatsoever caused by events beyond its reasonable control. The
Distributor will, however, take all reasonable steps to minimize service
interruptions for any period that such interruption continues beyond its
control. Notwithstanding anything in this Agreement to the contrary, in no
event shall either party, its affiliates or any of its or their trustees,
members, officers, employees, agents or subcontractors, be liable for lost
profits or consequential damages.
6.3 The Distributor acknowledges that the Declaration of Trust of the
Trust states that all persons extending credit to, contracting with or
having any claim against the Trust or a particular series of shares of the
Trust shall look only to the assets of the Trust or the assets of that
particular series of shares for payment under such credit, contract or
claim; and neither the shareholders nor the trustees, nor any of the
Trust's officers, employees or agents, whether past, present or future,
shall be personally liable therefor.
7. Term.
7.1 This Agreement shall become effective with respect to each Fund listed
on Schedule A hereof as of the date hereof and, with respect to each Fund
not in existence on that date, on the date an amendment to Schedule A to
this Agreement relating to that Fund is executed. Unless sooner terminated
as provided herein, this Agreement shall continue in effect with respect
to each Fund until May 1, 2007. Thereafter, if not terminated, this
Agreement shall continue automatically in effect as to each Fund for
successive annual periods, provided such continuance is specifically
approved at least annually by (i) the Trust's Board of Trustees or (ii)
the vote of a majority (as defined in the 1940 Act and Rule 18f-2
thereunder) of the outstanding voting securities of a Fund, and provided
that in either event the continuance is also approved by a majority of the
Trust's Board of Trustees who are not "interested persons" (as defined in
the 0000 Xxx) of
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any party to this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval.
7.2 This Agreement may be terminated without penalty with respect to a
particular Fund (1) through a failure to renew this Agreement at the end
of a term, (2) upon mutual consent of the parties, or (3) on no less than
thirty (30) days' written notice, by the Trust's Board of Trustees, by
vote of a majority (as defined with respect to voting securities in the
1940 Act and Rule 18f-2 thereunder) of the outstanding voting securities
of a Fund, or by the Distributor (which notice may be waived by the party
entitled to such notice). The terms of this Agreement shall not be waived,
altered, modified, amended or supplemented in any manner whatsoever except
by a written instrument signed by the Distributor and the Trust. This
Agreement will also terminate automatically in the event of its assignment
(as defined in the 1940 Act).
7.3 In the event of termination of this Agreement, all reasonable expenses
associated with movement of records and materials and conversion thereof
shall be borne by the Funds.
8. Miscellaneous.
8.1 The services of the Distributor rendered to the Funds are not deemed
to be exclusive. The Distributor may render such services and any other
services to others, including other investment companies. The Trust
recognizes that from time to time members, officers, and employees of the
Distributor may serve as directors, trustees, officers and employees of
other entities (including other investment companies), that such other
entities may include the name of the Distributor as part of their name and
that the Distributor or its affiliates may enter into distribution,
administration, fund accounting, transfer agent or other agreements with
such other entities.
8.2 The Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records
relative to the Funds' shareholders, not to use such records and
information for any purpose other than performance of its responsibilities
and duties hereunder, and not to disclose such information, except where
the Distributor may be exposed to civil or criminal proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities or court process, when subject to governmental or
regulatory audit or investigation, or when so requested by the Trust. In
case of any requests or demands for inspection of the records of the
Funds, the Distributor will endeavor to notify the Trust promptly and to
secure instructions from a representative of the Trust as to such
inspection. Records and information which have become known to the public
through no wrongful act of the Distributor or any of its employees, agents
or representatives, and information which was already in the possession of
the Distributor prior to receipt thereof, shall not be subject to this
paragraph.
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8.3 This Agreement shall be governed by New York law, excluding the laws
on conflicts of laws. To the extent that the applicable laws of the State
of New York, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control, and nothing herein
shall be construed in a manner inconsistent with the 1940 Act or any rule
or order of the Commission thereunder. Any provision of this Agreement
which may be determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In such case, the
parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties.
8.4 Any notice required or to be permitted to be given by either party to
the other shall be in writing and shall be deemed to have been given when
sent by registered or certified mail, postage prepaid, return receipt
requested, as follows: XxXxx Capital, Inc., Xxxxxxxx Business Center, 000
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX, 00000, Attention Xxxxx J, Xxxxxx,
and notice to the Trust shall be sent to Vantage Funds,, Xxxxxxxx Business
Center, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX, 00000, Attention Xxx
Xxxxx-Xxxxx.
8.5 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original agreement but such counterparts
shall together constitute but one and the same instrument.
8.6 The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise effect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
THE VANTAGE FUNDS
By:________________________________________
XxXXX CAPITAL, INC.
By: ______________________________________
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Schedule A
to the
Distribution Agreement by and between
THEVANTAGE FUNDS
and
XxXXX CAPITAL INC.
Name of Funds Effective Date
Vantage Money Market Fund _________, 2004
Vantage Balanced Fund _________, 2004
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Schedule B
to the
Distribution Agreement by and between
THE VANTAGE FUNDS
and
XxXXX CAPITAL, INC.
Name of Funds Effective Date
Vantage Money Market Fund ________, 2004
Vantage Balanced Fund ________, 2004
FEES
Vantage Money Market Fund 10 Basis Points Annually
Vantage Balanced Fund 25 Basis Points Annually
Fees are computed against the average daily net assets of each Fund and are
accrued daily and charged monthly, with proceeds to be assessed directly against
the asset base of each Fund respectively.
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