FORM OF DISTRIBUTION AGREEMENT
AGREEMENT made as of the ___ day of __________, 2003, between X.X. Xxxxxx
Mutual Fund Trust (the "Trust"), having its principal place of business at 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, and X.X. Xxxxxx Fund Distributors, Inc.
("Distributor"), having its principal place of business at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, XX 00000.
WHEREAS, the Company is an open-end management investment company,
organized as a Massachusetts business trust or a Delaware business trust and
registered with the Securities and Exchange Commission (the "Commission") under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, Distributor is acting as the distributor of the shares of
beneficial interest ("Shares") of each of the investment portfolios of the
Company set forth in Schedule A (such portfolios being referred to individually
as a "Fund" and collectively as the "Funds").
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, the parties agree as follows:
1. SERVICES AS DISTRIBUTOR.
1.1 Distributor will act as agent for the distribution of the
Shares covered by the registration statement and prospectus of the Company then
in effect under the Securities Act of 1933, as amended (the "Securities Act").
As used in this Agreement, the term "registration statement" shall mean Parts A
(the prospectus), B (the Statement of Additional Information) and C of each
registration statement that is filed on Form N-1A, or any successor thereto,
with the Commission, together with any amendments thereto. The term "prospectus"
shall mean each form of prospectus and Statement of Additional Information used
by the Funds for delivery to shareholders and prospective shareholders after the
effective dates of the above referenced registration statements, together with
any amendments and supplements thereto.
1.2 Distributor agrees to use best efforts to solicit orders for
the sale of the Shares and will undertake such advertising and promotion as it
believes reasonable in connection with such solicitation; provided, however,
that all sales and marketing materials shall have been approved by the Company.
The Company understands that Distributor's affiliates are now and may in the
future be the distributor of the shares of several investment companies or
series (together, "Investment Companies") including Investment Companies having
investment objectives similar to those of the Company. The Company further
understands that investors and potential investors in the Company may invest in
shares of such other Investment Companies. The Company agrees that Distributor's
and/or its affiliates' duties to such Investment Companies shall not be deemed
in conflict with their duties to the Company under this paragraph 1.2.
Except as provided in Section 2 herein, Distributor shall, at its own
expense, finance appropriate activities which it deems reasonable, which are
primarily intended to result
in the sale of the Shares, including, but not limited to, advertising,
compensation of underwriters, dealers and sales personnel, the printing and
mailing of prospectuses to other than current Shareholders, and the printing and
mailing of sales literature.
1.3 In its capacity as distributor of the Shares, all activities of
Distributor and its partners, agents, and employees shall comply with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, all rules and regulations promulgated by the Commission thereunder and all
rules and regulations adopted by any securities association registered under the
Securities Exchange Act of 1934.
1.4 Distributor will provide one or more persons, during normal
business hours, to respond to telephone questions with respect to the Company.
1.5 Distributor will transmit any orders received by it for
purchase or redemption of the Shares to the transfer agent and custodian for the
Funds.
1.6 The Company's officers may decline to accept any orders for, or
make any sales of, the Shares until such time as those officers deem it
advisable to accept such orders and to make such sales.
1.7 Distributor will act only on its own behalf as principal if it
chooses to enter into selling agreements with selected dealers or others.
1.8 The Company agrees at its own expense to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the qualification of
the Shares for sale in such states as Distributor may designate.
1.9 The Company shall furnish from time to time, for use in
connection with the sale of the Shares, such information with respect to the
Funds and the Shares as Distributor may reasonably request; and the Company
warrants that the statements contained in any such information shall fairly show
or represent what they purport to show or represent. The Company shall also
furnish Distributor upon request with: (a) unaudited semi-annual statements of
the Funds' books and accounts prepared by the Company, (b) a monthly itemized
list of the securities in the Funds, (c) monthly balance sheets as soon as
practicable after the end of each month, and (d) from time to time such
additional information regarding the financial condition of the Funds as
Distributor may reasonably request.
1.10 The Company represents to Distributor that, with respect to the
Shares, all registration statements and prospectuses filed by the Company with
the Commission under the Securities Act have been carefully prepared in
conformity with requirements of said Act and rules and regulations of the
Commission thereunder. The registration statement and prospectus contain all
statements required to be stated therein in conformity with said Act and the
rules and regulations of said Commission and all statements of fact contained in
any such registration
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statement and prospectus are true and correct in all material respects.
Furthermore, neither any registration statement nor any prospectus includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
to a purchaser of the Shares. The Company may, but shall not be obligated to,
propose from time to time such amendment or amendments to any registration
statement and such supplement or supplements to any prospectus as, in the light
of future developments, may, in the opinion of the Company's counsel, be
necessary or advisable. If the Company shall not propose such amendment or
amendments and/or supplement or supplements within fifteen days after receipt by
the Company of a written request from Distributor to do so, Distributor may, at
its option, terminate this Agreement. The Company shall not file any amendment
to any registration statement or supplement to any prospectus without giving
Distributor reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the Company's right
to file at any time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Company may deem
advisable, such right being in all respects absolute and unconditional.
1.11 The Company may request Distributor to use an electronic
processing system over the internet in which electronically transmitted orders
are forwarded electronically for processing by a third party known to the
Company under circumstances in which Distributor will not review the orders.
Under such circumstances, the Company acknowledges and agrees that it will
independently determine that the third party is a satisfactory service provider
and that Distributor's review will not be necessary. The Company authorizes
Distributor and dealers to use any prospectus in the form furnished from time to
time in connection with the sale of the Shares. The 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 matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the Distributor's part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. In the
absence of willful misfeasance, bad faith or gross negligence or reckless
disregard of obligations or duties hereunder on the part of Distributor or any
of its officers, directors or employees, the Company agrees to indemnify, defend
and hold Distributor, its several partners and employees, and any person who
controls Distributor within the meaning of Section 15 of the Securities 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 reasonable counsel fees incurred in connection therewith)
which Distributor, its partners and employees, or any such controlling person,
may incur (a) arising out of or based upon the electronic processing of orders
over the internet; (b) based on any act or omission in the course of, or
connected with, rendering services hereunder; (c) based on any representations
made herein by the Company; (d) based on any act or omission of any prior
Distributor (in its capacity as Distributor or Sub-Administrator), Administrator
or Adviser to the Company, including the registration or failure to register any
shares of the Company in accordance with state or federal laws or resulting from
or relating to any books or records delivered to the Distributor in connection
with its responsibilities under this Agreement and occurring prior to the date
of this Agreement; or (e) under the Securities Act or
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under common law or otherwise, arising out of or based upon (i) any untrue
statement, or alleged untrue statement, of a material fact contained in any
registration statement or any prospectus, (ii) any omission, or alleged
omission, to state a material fact required to be stated in any registration
statement or any prospectus or necessary to make the statements in either
thereof not misleading or (iii) any Company advertisement or sales literature
that is not in compliance with applicable laws, rules or regulations (including,
but not limited to the Conduct Rules of the National Association of Securities
Dealers, Inc.); provided, however, that the Company's agreement to indemnify
Distributor, its partners or employees, and any such controlling person shall
not be deemed to cover any claims, demands, liabilities or expenses arising out
of any statements or representations as are contained in any prospectus,
advertisement or sales literature and in such financial and other statements as
are furnished in writing to the Company by Distributor and used in the answers
to the registration statement or in the corresponding statements made in the
prospectus, advertisement or sales literature, or arising out of or based upon
any omission or alleged omission to state a material fact in connection with the
giving of such information required to be stated in such answers or necessary to
make the answers not misleading; and further provided that the Company's
agreement to indemnify Distributor and the Company's representations and
warranties hereinbefore set forth in paragraph 1.10 shall not be deemed to cover
any liability to the Company or its Shareholders to which Distributor would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of Distributor's
reckless disregard of its obligations and duties under this Agreement. The
Company's agreement to indemnify Distributor, its partners and employees and any
such controlling person, as aforesaid, is expressly conditioned upon the Company
being notified of any action brought against Distributor, its partners or
employees, or any such controlling person, such notification to be given by
letter or by telegram addressed to the Company at its principal office in New
York, NY and sent to the Company by the person against whom such action is
brought, within 10 days after the summons or other first legal process shall
have been served. The failure to so notify the Company of any such action shall
not relieve the Company from any liability which the Company may have to the
person against whom such action is brought by reason of any such untrue, or
allegedly untrue, statement or omission, or alleged omission, otherwise than on
account of the Company's indemnity agreement contained in this paragraph 1.11.
The Company will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by the Company and
approved by Distributor, which approval shall not be unreasonably withheld. In
the event the Company elects to assume the defense of any such suit and retain
counsel of good standing approved by Distributor, the defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel retained by
any of them; but in case the Company does not elect to assume the defense of any
such suit, or in case Distributor reasonably does not approve of counsel chosen
by the Company, the Company will reimburse Distributor, its partners and
employees, or the controlling person or persons named as defendant or defendants
in such suit, for the fees and expenses of any counsel retained by Distributor
or them. The Company's indemnification agreement contained in this paragraph
1.11 and the Company'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
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Distributor, its partners and employees, or any controlling person, and shall
survive the delivery of any Shares.
This Agreement of indemnity will inure exclusively to Distributor's
benefit, to the benefit of its several partners and employees, and their
respective estates, and to the benefit of the controlling persons and their
successors. The Company agrees promptly to notify Distributor of the
commencement of any litigation or proceedings against the Company or any of its
officers or Directors in connection with the issue and sale of any Shares.
1.12 Distributor agrees to indemnify, defend and hold the Company,
its several officers and Trustees/Directors (hereinafter referred to as
"Directors") and any person who controls the Company within the meaning of
Section 15 of the Securities Act free and harmless from and against any and all
claims, demands, liabilities and expenses (including the costs of investigating
or defending such claims, demands, or liabilities and any reasonable counsel
fees incurred in connection therewith) which the Company, its officers or
Directors or any such controlling person, may incur under the Securities Act or
under common law or otherwise, but only to the extent that such liability or
expense incurred by the Company, its officers or Directors or such controlling
person resulting from such claims or demands, shall arise out of or be based
upon any untrue, or alleged untrue, statement of a material fact contained in
information furnished in writing by Distributor to the Company and used in the
answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus, or shall arise out of or be
based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by Distributor to the
Company required to be stated in such answers or necessary to make such
information not misleading. Distributor's agreement to indemnify the Company,
its officers and Directors, and any such controlling person, as aforesaid, is
expressly conditioned upon Distributor being notified of any action brought
against the Company, its officers or Directors, or any such controlling person,
such notification to be given by letter or telegram addressed to Distributor at
its principal office in Columbus, Ohio, and sent to Distributor by the person
against whom such action is brought, within 10 days after the summons or other
first legal process shall have been served. Distributor shall have the right of
first control of the defense of such action, with counsel of its own choosing,
satisfactory to the Company, if such action is based solely upon such alleged
misstatement or omission on Distributor's part, and in any other event the
Company, its officers or Directors or such controlling person shall each have
the right to participate in the defense or preparation of the defense of any
such action. The failure to so notify Distributor of any such action shall not
relieve Distributor from any liability which Distributor may have to the
Company, its officers or Directors, or to such controlling person by reason of
any such untrue or alleged untrue statement, or omission or alleged omission,
otherwise than on account of Distributor's indemnity agreement contained in this
paragraph 1.12.
1.13 No Shares shall be offered by either Distributor or the Company
under any of the 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 the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the
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provisions of the Securities Act or if and so long as a current prospectus as
required by Section 10(b)(2) of said Act is not on file with the Commission;
provided, however, that nothing contained in this paragraph 1.13 shall in any
way restrict or have an application to or bearing upon the Company's obligation
to repurchase Shares from any Shareholder in accordance with the provisions of
the Company's prospectus, Declaration of Trust, or Bylaws.
1.14 The Company agrees to advise Distributor as soon as reasonably
practical by a notice in writing delivered to Distributor or its counsel:
(a) of any request by the Commission for amendments to the
registration statement or prospectus then in effect or
for additional information;
(b) in the event of the issuance by the Commission of any
stop order suspending the effectiveness of the
registration statement or prospectus then in effect or
the initiation by service of process on the Company of
any proceeding for that purpose;
(c) of the happening of any event that makes untrue any
statement of a material fact made in the registration
statement or prospectus then in effect or which
requires the making of a change in such registration
statement or prospectus in order to make the statements
therein not misleading; and
(d) of all action of the Commission with respect to any
amendment to any registration statement or prospectus
which may from time to time be filed with the
Commission.
For purposes of this section, informal requests by or acts of the Staff of the
Commission shall not be deemed actions of or requests by the Commission.
1.15 Distributor agrees on behalf of itself and its partners and
employees to treat confidentially and as proprietary information of the Company
all records and other information relative to the Company and its prior, present
or potential Shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except, after prior notification to and approval in writing by the Company,
which approval shall not be unreasonably withheld and may not be withheld where
Distributor may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company.
1.16 This Agreement shall be governed by the laws of the State of
New York.
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1.17 In the event Distributor purchases the initial shares of the
Company for purposes of satisfying the minimum net worth requirements set forth
in Section 14 (a) of the 1940 Act, and a notice of termination is subsequently
given or this Agreement is otherwise terminated pursuant to Section 6 herein for
any reason prior to the time that organizational expenses incurred by the
Company have been fully amortized, then the Company shall cause the successor
distributor of the shares (the "Successor Distributor") to pay to Distributor,
within ten (10) days prior to the termination of this Agreement, an amount of
cash that is sufficient to purchase the initial shares that are held by
Distributor
1.18 The Company and Distributor each represents and warrants that
(a) it has adopted a policy for the safeguarding of non-public personal
information pertaining to their respective customers and consumers ("Privacy
Policy") and (b) its Privacy Policy will, at all times during the term of this
Agreement, be in substantial compliance with all applicable statutes, rules and
regulations. The Company and Distributor further represent and warrant that (1)
each has delivered a copy of its Privacy Policy to the other party and (2) in
the event that its Privacy Policy is amended or restated, it will promptly
deliver to the other party a copy of the amended and restated Privacy Policy.
The Distributor represents and warrants that, in connection with its provision
of services hereunder, it will, at all times during the term of this Agreement,
be in substantial compliance with the Company's Privacy Policy, as and to the
extent the same may be applicable to it in respect of the Company's shareholders
and other consumers.
2. RESERVED.
3. SALE AND PAYMENT.
Shares of a Fund may be subject to a sales load and may be subject to the
imposition of a distribution fee pursuant to the Distribution Plan for the
Funds. To the extent that Shares of a Fund are sold at an offering price which
includes a sales load or at net asset value subject to a contingent deferred
sales load with respect to certain redemptions (either within a single class of
Shares or pursuant to two or more classes of Shares), such Shares shall
hereinafter be referred to collectively as "Load Shares" (in the case of Shares
that are sold with a front-end sales load or Shares that are sold subject to a
contingent deferred sales load), "Front-End Load Shares" or "CDSL Shares" and
individually as a "Load Share," a "Front-End Load Share" or a "CDSL Share." A
Fund that contains Front-End Load Shares shall hereinafter be referred to
collectively as "Load Funds" or "Front-End Load Funds" and individually as a
"Load Fund" or a "Front-end Load Fund." A Fund that contains CDSL Shares shall
hereinafter be referred to collectively as "Load Funds" or "CDSL Funds" and
individually as a "Load Fund" or a "CDSL Fund." Under this Agreement, the
following provisions shall apply with respect to the sale of, and payment for,
Load Shares.
3.1 Distributor shall have the right to purchase Load Shares at
their net asset value and to sell such Load Shares to the public against orders
therefor at the applicable public offering price, as defined in Section 4
hereof. Distributor shall also have the right to sell Load Shares to dealers
against orders therefor at the public offering price less a concession
determined
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by Distributor, which concession shall not exceed the amount of the sales charge
or underwriting discount, if any, referred to in Section 4 below.
3.2 Prior to the time of delivery of any Load Shares by a Load Fund
to, or on the order of, Distributor, Distributor shall pay or cause to be paid
to the Load Fund or to its order an amount in Boston or New York clearing house
funds equal to the applicable net asset value of such Shares. Distributor may
retain so much of any sales charge or underwriting discount as is not allowed by
Distributor as a concession to dealers.
4. PUBLIC OFFERING PRICE.
The public offering price of a Load Share shall be the net asset value
of such Load Share, plus any applicable sales charge, all as set forth in the
current prospectus of the Load Fund. The net asset value of Shares shall be
determined in accordance with the provisions of the Declaration or Trust and
Bylaws of the Company and the then-current prospectus of the Load Fund.
5. ISSUANCE OF SHARES.
The Company reserves the right to issue, transfer or sell Load Shares
at net asset value (a) in connection with the merger or consolidation of the
Company or the Load Fund(s) with any other investment company or the acquisition
by the Company or the Load Fund(s) of all or substantially all of the assets or
of the outstanding Shares of any other investment company; (b) in connection
with a pro rata distribution directly to the holders of Shares in the nature of
a stock dividend or split; (c) upon the exercise of subscription rights granted
to the holders of Shares on a pro rata basis; (d) in connection with the
issuance of Load Shares pursuant to any exchange and reinvestment privileges
described in any then-current prospectus of the Load Fund; and (e) otherwise in
accordance with any then-current prospectus of the Load Fund.
6. TERM, DURATION AND TERMINATION.
This Agreement shall become effective with respect to each Fund listed
on Schedule A hereof as of the date first written above (or, if a particular
Fund is not in existence on such date, on the date an amendment to Schedule A to
this Agreement relating to that Fund is executed) and, unless sooner terminated
as provided herein, shall continue until August 31, 2002. Thereafter, if not
terminated, this Agreement shall continue with respect to a particular Fund
automatically for successive one-year terms, provided that such continuance is
specifically approved at least annually by (a) by the vote of a majority of
those members of the Company's Directors who are not parties to this Agreement
or interested persons of any such party, cast in person at a meeting for the
purpose of voting on such approval and (b) by the vote of the Company's
Directors or the vote of a majority of the outstanding voting securities of such
Fund. The termination of this Agreement with respect to one Fund or Company
shall not result in the termination of this Agreement with respect to any other
Fund or Company listed on Schedule A. This Agreement is terminable without
penalty, on not less than sixty days' prior written notice,
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by the Company's Directors, by vote of a majority of the outstanding voting
securities of the Company or by the Distributor. This Agreement will also
terminate automatically in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as ascribed
to such terms in the 1940 Act.)
7. CERTAIN MATTERS RELATING TO A MASSACHUSETTS BUSINESS TRUST.
If the Company is a Massachusetts business trust, a copy of the
Declaration of Trust is on file with the Secretary of the State of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Directors of the Company as Directors and not individually, and
that the obligations of this instrument are not binding upon any of the
Directors or shareholders individually, but are binding only upon the assets and
property of the Company, and all persons dealing with any class of shares of the
Company must look solely to the Company property belonging to such class for the
enforcement of any claims against the Company.
8. NOTICES.
Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed, postage paid, to the other party at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the address of the Company for notice
shall be 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, attn: Xxxxx Xxxxxxxx, with a copy
to Xxxxxx X. Xxxxxxx, Esq., and the address of the Distributor shall be 0000
Xxxxxxx Xxxx, Xxxxxxxx, XX 00000.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.
X.X. XXXXXX MUTUAL FUND SERIES
By:
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Title:
------------------------
Date:
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X.X. XXXXXX FUND DISTRIBUTORS, INC.
By:
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Title:
------------------------
Date:
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SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
X.X. XXXXXX MUTUAL FUND SERIES
X.X. Xxxxxx Intrepid Growth Fund
X.X. Xxxxxx Intrepid Value Fund
X.X. Xxxxxx Intrepid All Cap Fund
X.X. Xxxxxx Intrepid Investor Fund
