DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of April 4, 2009 between the Embarcadero Funds ("
Company"), a Maryland corporation, and Xxxxxxxx Capital Markets, LLC, ("RCM"), a
corporation organized and existing under the laws of the State of New York.
WHEREAS the Company is registered under the Investment 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 (" 193 3 Act"), and
has qualified its shares for sale to the public under various state securities
laws; and
WHEREAS the Company 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 Company'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 Company
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 Company 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 Company, subject to the terms and for the period set forth in this
Agreement. RCM hereby accepts such appointment and agrees to act hereunder. The
Company understands that any solicitation activities conducted on behalf of the
Company will be conducted primarily, if not exclusively, by employees of the
Company's sponsor who shall become registered representatives of RCM. 2.
SERVICES AND DUTIES OF RCM.
(1) RCM agrees to sell Shares on a best efforts basis from time to time
during the term of this Agreement as agent for the Company 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 Company, and any supplements thereto, under the 1933 Act and
the 0000 Xxx.
(2) 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 Company. Such purchase orders shall be deemed effective at the time and in
the manner set forth in the Registration Statement.
(3) RCM, with the operational assistance of the Company's transfer
agent, shall make Shares available through the National Securities Clearing
Corporation's Company/SERV System.
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(4) RCM shall provide to investors and potential investors only such
information regarding the Company as the Company shall provide or approve. RCM
shall review and file all proposed advertisements and sales literature with
appropriate regulators and consult with the Company regarding any comments
provided by regulators with respect to such materials.
(5) 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 Company shall make available to RCM a statement of each computation of net
asset value and the details of entering into such computation.
(7) 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
Company and its transfer agent of the orders for repurchase of Shares received
by RCM since the last report, the amount to be paid for such Shares, and the
identity of the shareholders offering Shares for repurchase. The Company
reserves the right to suspend such repurchase right upon written notice to RCM.
RCM further agrees to act as agent for the Company to receive and transmit
promptly to the Company's transfer agent shareholder requests for redemption of
Shares.
(8) RCM shall not be obligated to sell any certain number of Shares.
(9) 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.
3. DUTIES OF THE COMPANY.
(1) the Company 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 Company by its
independent public accountant and such reasonable number of copies of the most
current Prospectus, Statement of Additional Information ("XXx"), and annual and
interim reports as RCM may request, and the Company shall fully cooperate in the
efforts of RCM to sell and arrange for the sale of Shares.
(2) the Company shall maintain a currently effective Registration
Statement on FormN-lA 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
Company 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
Company shall bear all expenses related to preparing and typesetting such
Prospectuses, XXx and other materials required by law and such other expenses,
including printing and mailing expenses, related to the Company's communication
with persons who are shareholders.
(3) the Company 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.
(4) the Company 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 Company 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.
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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 Company. In making agreements with such dealers, RCM shall not act only
as principal and not as agent for the Company. The form of any such dealer
agreement shall be mutually agreed upon and approved by the Company and RCM.
5. WITHDRAWAL OF OFFERING. The Company 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 Company under
any provisions of this Agreement and no orders for the purchase or Sale of
Shares hereunder shall be accepted by the Company 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 COMPANY. the Company 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 Company
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 SAls; (iii) the preparation and
mailing of annual and interim reports, Prospectuses, SAls, and proxy materials
to shareholders; (iv) such other expenses related to the communications with
persons who are shareholders of the Company; and (v) the qualifications of
Shares for sale under the securities laws of such jurisdictions as shall be
selected by the Company pursuant to Paragraph 3(b) hereof, and the costs and
expenses payable to each such jurisdiction for continuing qualification therein.
In addition, the Company 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 Company shall pay RCM, as promptly as
possible after receipt of a quarterly invoice, a fee for services as set forth
in Schedule B to this Agreement.
9. SHARE CERTIFICATES. The Company shall not issue certificates representing
Shares unless requested to do so by a shareholder. If such request is
transmitted through RCM, the Company 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
Company only with respect to the sale and redemption of Shares.
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11. INDEMNIFICATION.
(a) the Company 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, XXx 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
Company 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 Company 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 Company shall not be liable to RCM under this Agreement with
respect to any claim made against RCM on any person indemnified unless RCM or
other such person shall have notified the Company 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 Company of any claim
shall not relieve the Company from any liability that it may have to RCM or any
other person against whom such action is brought otherwise than on account of
this Agreement.
(c) the Company 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 subject to this Agreement.
If the Company elects to assume the defense of any such claim; the defense shall
be conducted by counsel chosen by the Company and satisfactory to indemnified
defendants in the suit whose approval shall not be unreasonably withheld. In the
event that the Company 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 Company 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 Company 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 Company, its officers
and directors, and any person who controls the Company within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities, and expenses (including the cost of investigating
or defending against such claims, demands, or liabilities and any counsel fees
incurred in connection therewith) that the Company, its directors or officers,
or any such controlling person may incur under the 1933 Act, or under common law
or otherwise, resulting from RCM's willful misfeasance, bad faith or gross
negligence in the performance of its obligations and duties under this
Agreement, or arising out of or based upon any alleged untrue statement of a
material fact contained in information furnished in writing by RCM to the
Company for use in the Registration Statement, Prospectus or XXx 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.
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(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.
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 by as provided herein, will continue in effect for two years 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
Company's Board who are neither interested persons (as defined in the 0000 Xxx)
of the Company ("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 Company.
(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 Company on sixty days'
written notice to RCM or by RCM at any time, without the payment of any penalty,
on sixty days' written notice to the Company. 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 Company;
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 Company shall not
be personally liable for obligations of the Company in connection with this
Agreement. If the Company is a Massachusetts Business Trust, this Agreement is
not binding upon any trustees, officer or shareholder of the Company
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.
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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 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. 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: THE EMBARCADERO FUNDS
_____________________ BY:________________________
TITLE: PRESIDENT
ATTEST: XXXXXXXX CAPITAL MARKETS, LLC
_____________________ BY: _________________________
TITLE: PRESIDENT
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SCHEDULE A
TO THE
DISTRIBUTION AGREEMENT
BETWEEN
THE EMBARCADERO FUNDS
AND
XXXXXXXX CAPITAL MARKETS, LLC
Pursuant to Section 1 of the Distribution Agreement among the Embarcadero Funds
(" Company") and Xxxxxxxx Capital Markets, LLC ("RCM"), the Company hereby
appoints RCM as its agent to be the principal underwriter of the Company with
respect to its following series:
All-Cap Growth Fund
Small-Cap Growth Fund
Xxx Xxxxxxx Post-Venture Fund
Xxx Xxxxxxx Technology Fund
Alternative Strategies Fund
Dated:_______________________
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