Exhibit (e)(1)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this ___ day of _______, 2006, by and between
Xxxxxxx Capital Mutual Funds, a Delaware statutory trust (the "Trust"), and
Grand Distribution Services, LLC, a Wisconsin limited liability company
("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, 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 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 DISTRIBUTOR.
The Trust hereby appoints 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 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").
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. 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. 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. 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 Distributor shall request. Distributor will file the materials
as may be required with the NASD, the Commission 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 Distributor.
2.6 In connection with its duties under this Agreement, Distributor shall
use reasonable efforts to cooperate with all reasonable requests of the Funds
related to the Funds' administration and monitoring of the Funds' compliance
program as adopted by the Board of Trustees pursuant to Rule 38a-1 under the
Investment Company Act of 1940 as amended, a copy of which has been provided to
Distributor.
2.7 As compensation for the services performed hereunder and the expenses
incurred by Distributor, 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
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 officers 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 Distributor, or cause it to be notified,
of the states in which the Shares may be sold and shall notify Distributor of
any change to the information.
3.4 The Trust shall, at its expense, keep Distributor fully informed with
respect to its affairs as necessary for Distributor to perform its services
under this Agreement and to fulfill any applicable regulatory or legal
responsibilities. 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 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 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 in writing affirmatively declines to
assent to such amendment (after a reasonable time), the Trust may immediately
terminate this Agreement pursuant to Section 7.3.
(ii) If Distributor, based on the advice of its counsel, concludes that an
amendment or amendments and/or supplement or supplements to the Trust's
registration statement or any part thereof is required to comply with the 1933
Act or the 1940 Act, Distributor shall provide a written request to the Trust
identifying the reason for the amendment or supplement and its suggested
language for such supplement or amendment. The Trust and the Distributor shall
work together in good faith with counsel to the Trust to resolve the issue
identified by the Distributor and make the appropriate amendments or
supplements. If the Trust refuses to make an amendment or supplement which is
acceptable to Distributor, Distributor may immediately terminate this agreement
pursuant to Section 7.3.
(iii) If Distributor, based on the advice of its counsel, concludes that
the Trust must make a change in its governing instruments or in its methods of
doing business necessary for the Trust to comply with any requirement of
applicable law or regulation, Distributor shall provide a written request to the
Trust identifying the change and the reason for the change. The Trust and
Distributor shall work together in good faith with counsel to the Trust to
resolve the issue identified by Distributor and make the appropriate change or
changes. If the Trust refuses to make a change which is acceptable to
Distributor, Distributor may immediately terminate this Agreement pursuant to
Section 7.3.
(iv) 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 such right being in all respects absolute and
unconditional.
3.7 Whenever in their 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 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
(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.
3.9 From time to time, the Trust shall inform Distributor in writing of the
names of the individuals authorized to provide Distributor with instructions or
directions pursuant to this Agreement ("Authorized Persons"). Distributor shall
not be held to have notice of any change in the authority of any Authorized
Person until receipt of notice from the Trust.
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 Distributor, and each of its present or former directors, members,
officers, employees, representatives and any person who controls or previously
controlled 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 Distributor Indemnitees may incur
under the 1933 Act, the 1934 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
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
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 Distributor's performance
hereunder, except to the extent the Losses result from Distributor'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, (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 any Authorized Person. Promptly
after receipt by Distributor of notice of the commencement of an investigation,
action, claim or proceeding, 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 Distributor or any Distributor Indemnitee.
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 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 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 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 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 reasonable fees and reasonable
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
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 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 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 Distributor,
Distributor shall make a similar claim for indemnification against the Trust and
shall be entitled to such indemnification. Distributor acknowledges that if it
enters into any agreement to indemnify such third party that imposes greater
obligations than the Trust's indemnification obligations under this Agreement,
the Trust's obligation to indemnify Distributor will be limited to the
obligation set forth in this Agreement.
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, 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, an annual or
interim report to shareholders or sales literature, or any amendments or
supplements thereto 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 Distributor and furnished in writing to the Trust or its
counsel by Distributor for the purpose of, and used in, the preparation thereof,
and (b) to the extent any Losses arise out of or result from Distributor'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; 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 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) 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
Distributor elects to assume the defense, such defense shall be conducted by
counsel chosen by Distributor and approved by the Trust, which approval shall
not be unreasonably withheld. In the event Distributor elects to assume the
defense of any such suit and retain such counsel and notifies 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 Distributor's election. If 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 Distributor, Distributor will
reimburse the indemnified person or persons named as defendant or defendants in
such suit, for the reasonable fees and reasonable expenses of any counsel
retained by the Trust and them. Distributor's indemnification agreement
contained in this Section 4.2 and 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. Distributor agrees promptly to notify the Trust of the
commencement of any litigation or proceedings against 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 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 Shares from
any shareholder in accordance with the provisions of the prospectus or Articles
of Trust.
6. LIMITATION OF LIABILITY
6.1 Distributor shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Company in connection with the performance
of its obligations and duties under this Agreement, except a loss resulting from
Distributor's willful misfeasance, bad faith or negligence in the performance of
such duties and obligations, or by reason of its reckless disregard thereof.
Furthermore, notwithstanding anything herein to the contrary, Distributor shall
not be liable for any action taken or omitted to be taken in accordance with
instructions received by Distributor from an Authorized Person of the Trust.
6.2 Distributor shall maintain adequate and reliable computer and other
equipment necessary or appropriate to carry out its obligations under this
Agreement. Upon the Funds' reasonable request, Distributor shall provide
supplemental information concerning the aspects of its disaster recovery and
business continuity plan that are relevant to the services provided hereunder.
Notwithstanding the foregoing or any other provision of this agreement,
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. 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 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.
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 for one year
from the effective date of this Agreement. 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 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 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 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 Distributor rendered to the Funds are not deemed to be
exclusive. 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 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
Distributor as part of their name and that Distributor or its affiliates may
enter into distribution, administration, fund accounting, transfer agent or
other agreements with such other entities.
8.2 Confidentiality.
(a) 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 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, 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
Distributor or any of its employees, agents or representatives, and information
which was already in the possession of Distributor prior to receipt thereof,
shall not be subject to this paragraph.
(b) Distributor hereby acknowledges that in the normal course of its
provision of services to the Funds it will come into possession of material
nonpublic information concerning the Funds. Such information may include
portfolio holdings, trading strategies and pending transactions not generally
known to the public. Distributor acknowledges and agrees that it has
duties of confidentiality and care with respect to such material nonpublic
information. Distributor represents that it has implemented effective policies
and procedures designed to safeguard such information and to ensure that no
employee or other representative trades on such information, communicates it to
others, except as contemplated by this Agreement, or otherwise misuses it.
8.3 This Agreement shall be governed by Wisconsin law, excluding the laws
on conflicts of laws. To the extent that the applicable laws of the State of
Wisconsin, 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: Notice to Distributor shall be sent to Grand Distribution Services,
LLC, 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, XX, 00000, Attention: Xxxxx
Xxxxxxx, and notice to the Trust shall be sent to Xxxxxxx Capital Mutual Funds,
000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, XX, 00000 Attention: Xxxxxxx Xxxxxx.
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.
8.7 Distributor shall maintain a fidelity bond covering larceny and
embezzlement and an insurance policy with respect to directors and officers
errors and omissions coverage in amounts that are appropriate in light of its
duties and responsibilities hereunder. Upon the request of the Funds, the
Distributor shall provide evidence that coverage is in place. Distributor shall
notify the Funds should its insurance coverage with respect to professional
liability or errors or omissions coverage be canceled and not replaced.
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.
XXXXXXX CAPITAL MUTUAL FUNDS
(the "Trust")
By:
------------------------------------
GRAND DISTRIBUTION SERVICES, LLC
("Distributor")
By:
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SCHEDULE A
TO THE
DISTRIBUTION AGREEMENT
BY AND BETWEEN
XXXXXXX CAPITAL MUTUAL FUNDS
AND
GRAND DISTRIBUTION SERVICES, LLC
NAME OF FUNDS
FUND EFFECTIVE DATE
---- ----------------------
Xxxxxxx Capital Mid Cap Fund Date of this Agreement
SCHEDULE B
TO THE
DISTRIBUTION AGREEMENT
BY AND BETWEEN
XXXXXXX CAPITAL MUTUAL FUNDS
AND
GRAND DISTRIBUTION SERVICES, LLC
FEES
Distributor Fees
ANNUAL ASSET-BASED FEES (PER PORTFOLIO)
- First $1 billion 2.00 basis points, plus
- Next $1 billion 1.75 basis points, plus
- Next $1 billion 1.50 basis points, plus
- Over $3 billion 1.25 basis points
This schedule is applied to each of the portfolios and is subject to the
per-portfolio minimum below.
MINIMUM ANNUAL FEE (PER PORTFOLIO)
- Year 1 discount: lower Minimum from $40,000 to $30,000 $30,000
- Year 2 discount: lower Minimum from $40,000 to $36,000 $36,000
- Thereafter $40,000
ADVERTISING COMPLIANCE
Review and comment on advertising not $150 per hour, plus filing fees
prepared by UMB Investment Services Group's
Financial Marketing Group
EMPLOYEE LICENSING
- Tier 1: Base fee $1,000 per month, per person
Appropriate when registered agents of the Adviser
respond to unsolicited inquiries about the
Fund(s)
- Tier 2: Base fee $2,000 per month, per person
Appropriate for registered agents of the Adviser
who are proactively marketing the Fund(s) to
financial intermediaries
Employee licensing activities include: establishing a system to supervise
operations; developing a procedure manual tailored to your requirements (i.e.,
remote location, branch office or office of supervisory jurisdiction); training
your staff on compliance procedures; monthly
compliance review (e.g., email, presentations, marketing materials, websites,
correspondence, incoming mail, etc.); periodic on-site examinations; and more.
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include but are not limited to travel on behalf of the
Adviser or Fund(s), materials, filing fees, registration fees, and expenses,
including but not limited to attorney's fees, incurred in connection with
responding to and complying with SEC or other regulatory investigations,
inquiries or subpoenas, excluding routine examinations of UMB in its capacity as
a service provider to the funds.
The expenses of marketing, promoting and distributing a fund are in addition to
the fees above and include but are not limited to the development and printing
of prospectuses, advertising, and direct mail pieces; public relations
activities; trade show attendance; call management and fulfillment; and fees
paid to broker/dealers.
* For UMB Distribution Services, LLC, or Grand Distribution Services, LLC, as
named distributor
- Fees for services not contemplated by this schedule will be negotiated on a
case-by-case basis.
Domestic Custody Fees
PREPARED FOR XXXXXXX-XXXXXXXX COMPANY
NET ASSET VALUE FEES*
To be computed as of month-end on the average net asset value of each portfolio
at the annual rate of:
- Up to $250 million in assets 1.0 basis point, plus
- Next $250 million in assets .80 basis point, plus
- Next $250 million in assets .75 basis point, plus
- Next $250 million in assets .60 basis point, plus
- Over $1 billion in assets .50 basis point
* Subject to a $750 per month minimum per portfolio
PORTFOLIO TRANSACTION FEES
- DTC - equity** $ 8.00
- DTC - fixed income** $ 8.00
- GNMA** $20.00
- Fed book entry** $ 8.00
- Physical** $25.00
- Unique asset processing (hedge fund of funds only) $40.00
- Principal paydown $10.00
- Option (purchased or written)/future $25.00
- Option exception/exercise $15.00
- Corporate action/call/reorganization $25.00
- Third-party VRDN (bank book entry)** $15.00
- UMB repurchase agreement** $ 7.00
- Tri-party repurchase agreement** $15.00
- Wire in/out and check issued (non-settlement-related) $ 8.00
- Transactions - no security movement $ 8.00
- Holding charge - for each issue maintained $ 5.00
** A transaction includes buys, sells, maturities, or free security movements.
FUND OF MUTUAL FUND SECURITY TRANSACTIONS
- In-house sweep n/a
- Preferred list*** $10.00
- All other $25.00
FUND OF MUTUAL FUND DIVIDEND TRANSACTIONS
- Sweep income n/a
- Preferred list*** $ 5.00
- All other $10.00
*** Preferred list - to be supplied
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include but are not limited to security transfer fees,
certificate fees, shipping/courier fees or charges, FDIC insurance premiums,
specialized programming charges, legal review/processing of restricted and
private placement securities, proxy fees and charges, system access/connect
charges, and expenses, including but not limited to attorney's fees, incurred in
connection with responding to and complying with SEC or other regulatory
investigations, inquiries or subpoenas, excluding routine examinations of UMB in
its capacity as a service provider to the funds.
- This fee schedule pertains to custody of U.S. domestic assets only. UMB
Bank will provide its fee schedule for Euroclear and global custody upon
request.
- Fees for services not contemplated by this schedule will be negotiated on a
case-by-case basis.
