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Exhibit 24(b)(6)(a)
DISTRIBUTION AGREEMENT
AGREEMENT made as of this 5th day of August, 1996, between THE KENT FUNDS
(the "Trust"), a Massachusetts business trust having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and BISYS FUND SERVICES
LIMITED PARTNERSHIP d/b/a BISYS FUND SERVICES ("Distributor"), having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust is an open-end management investment company, organized
as a Massachusetts 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, it is intended that Distributor act as the distributor of the
units of beneficial interest ("Shares") of each of the investment portfolios of
the Trust (such portfolios being referred to individually as a "Fund" and
collectively as the "Funds").
NOW, THEREFORE, in consideration of the mutual premises 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 Trust in effect
from time to time 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. The Trust understands that
Distributor is now and may in the future be the distributor of the shares of
several investment companies or series (together, "Companies") including
Companies having investment objectives similar to those of the Funds. The
Trust further understands that investors and potential investors in the Funds
may invest in shares of such other Companies. The Trust agrees that
Distributor's duties to such Companies shall not be deemed in conflict with its
duties to the Trust under this paragraph 1.2.
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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 conform with the
Trust's Declaration of Trust, By-Laws, registration statement and prospectuses
as in effect from time to time and shall conform to and 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 Trust.
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 Trust.
1.6 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind, the
Trust'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 Trust 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 Trust 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 Trust warrants that the
statements contained in any such information shall fairly show or represent
what they purport to show or represent. The Trust shall also furnish
Distributor upon request with: (a) unaudited semi-annual statements of the
Funds' books and accounts prepared by the Trust, (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 Trust represents to Distributor that, with respect to the Shares,
all registration statements and prospectuses filed by the Trust with the
Commission under the Securities
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Act have been prepared in conformity with requirements of said Act and rules
and regulations of the Commission thereunder. As of their effective date, the
Trust's registration statement and prospectus contained all statements
required to be stated therein in conformity with said Act and the rules and
regulations of the Commission and all statements of fact contained in any such
registration statement and prospectus were true and correct. Furthermore, as
of their effective date, neither any registration statement nor any prospectus
included 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 Trust 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 Trust's
counsel, be necessary or advisable. If the Trust shall not propose such
amendment or amendments and/or supplement or supplements within fifteen days
after receipt by the Trust of a written request from Distributor to do so,
Distributor may, at its option, terminate this Agreement. The Trust 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 Trust's right to file at any time such 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.
1.11 The Trust 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 Trust 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 under the
Securities Act 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 any registration statement or any prospectus or arising out of or based upon
any omission, or alleged omission, to state a material fact required to be
stated in either any registration statement or any prospectus necessary to
make the statements in either thereof not misleading; provided, however, that
the Trust'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 untrue statement or omission or
alleged untrue statement or omission made in reliance and in conformity with
information furnished to the Trust by the Distributor or its affiliated persons
and further provided that the Trust's agreement to indemnify Distributor and
the Trust's representations and warranties hereinbefore set forth in paragraph
1.10 shall not be deemed to cover any liability to the Trust or its
Shareholders to which Distributor would otherwise be subject by reason of
willful misfeasance, bad faith or negligence in the performance of its duties,
or by reason of Distributor's reckless disregard of its obligations and duties
under this Agreement. The Trust's agreement to indemnify Distributor, its
partners and employees and any such controlling person, as aforesaid, is
expressly conditioned upon the Trust 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
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telegram addressed to the Trust at its principal office in Columbus, Ohio and
sent to the Trust 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 in good faith to so notify the Trust of any such action shall not
relieve the Trust from any liability which the Trust 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 Trust's indemnity agreement contained in this paragraph 1.11. The Trust
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 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 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 Trust does not elect to assume the defense of any such
suit, or in case Distributor reasonably does not approve of counsel chosen by
the Trust, the Trust 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 Trust's indemnification agreement contained in this paragraph 1.11 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, 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 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 Shares.
1.12 Distributor agrees to indemnify, defend and hold the Trust, its
several officers and Trustees and any person who controls the Trust 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 Trust, its
officers or Trustees 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 Trust, its officers or Trustees or
such controlling person resulting from such claims or demands, shall arise out
of or be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Trust's registration statement or any prospectus
or any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon information furnished to
the Trust by the Distributor or its affiliated persons. Distributor's
agreement to indemnify the Trust, its officers and Trustees, and any such
controlling person, as aforesaid, is expressly conditioned upon Distributor
being notified of any action brought against the Trust, its officers or
Trustees, or any such controlling person, such notification to be given by
letter or telegram addressed to Distributor at its principal
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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. The failure in good faith to so notify
Distributor of any such action shall not relieve Distributor from any liability
which Distributor may have to the Trust, its officers or Trustees, 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. Distributor shall have
the right of first control of the defense of such action, with counsel of its
own choosing, satisfactory to the Trust, if such action is based solely upon
such alleged misstatement or omission on Distributor's part, and the Trust, its
officers or Trustees or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action.
1.13 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 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
Securities Act or if and so long as a current prospectus as required by Section
10 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 Trust's obligation to repurchase Shares from
any Shareholder in accordance with the provisions of the Trust's registration
statement, Declaration of Trust, or Bylaws.
1.14 The Trust 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 Trust 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.
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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 shall review, provide advice with respect to, and file
with the federal and state agencies or other organization as required by
federal, state, and other applicable laws and regulations, all sales literature
for each Fund and any classes of Shares thereof.
1.16 This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
2. Fee.
During the term of this Agreement, Distributor shall receive from the
Funds identified in the Distribution Plans attached as Schedule A hereto (the
"Distribution Plan Funds") a distribution fee at the rate and upon the terms
and conditions set forth in the Trust's registration statement from time to
time.. The distribution fee shall be accrued daily and shall be paid on the
first business day of each month, or at such time(s) as the Distributor shall
reasonably request. Distributor may reallow all or a portion of the
distribution fees paid by the Distribution Plan Funds to such brokers, dealers
or other persons as Distributor may determine.
3. Sale and Payment.
3.1 Sales of Shares by Distributor shall be at the applicable public
offering price determined in the manner set forth in the registration statement
current at the time of the Trust's acceptance of the order for Shares; provided
that Distributor also shall have the right to sell shares at net asset value,
if such sale is permissible under and consistent with applicable statutes,
rules, regulations and orders. All orders shall be subject to acceptance by
the Trust and the Trust reserves the right in its sole discretion to reject any
order received. The Trust shall not be liable to anyone for failure to accept
any order. Shares of a Fund that are subject to a sales load are hereinafter
referred to as "Load Shares."
3.2 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. Distributor shall also have the right
to sell Load Shares to dealers against orders therefor at the public offering
price less a concession determined by Distributor, which concession shall not
exceed the amount set forth in the Trust's then current prospectuses.
3.3 Prior to the time of delivery of any Shares by a Fund to, or on the
order of, Distributor, Distributor shall pay or cause to be paid to the 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 brokers, dealers or other persons.
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4. Issuance of Shares.
The Trust reserves the right to issue, transfer or sell Shares otherwise
subject to a sales load at net asset value (a) in connection with the merger or
consolidation of the Trust or a Fund with any other investment company or the
acquisition by the Trust or a Fund 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 Shares pursuant to any exchange and reinvestment privileges
described in any then-current prospectus of a Fund; and (e) otherwise in
accordance with any then-current prospectus of a Fund.
5. Term, Duration and Termination.
This Agreement shall become effective with respect to each Fund as of the
date first written above and, unless sooner terminated as provided herein,
shall continue for an initial one-year term and thereafter shall be renewed 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 Trust's Board of Trustees 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 Trust's Board of
Trustees or the vote of a majority of the outstanding voting securities of such
Fund. This Agreement is terminable without penalty, on not less than sixty
days' prior written notice, by the Trust's Board of Trustees, by vote of a
majority of the outstanding voting securities of the Trust 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.)
6. Confidentiality.
The Distributor agrees on behalf of itself and its partners and employees
to treat confidentially and as the proprietary information of the Trust, all
records and other information relative to the Trust and 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 Trust, which
approval shall not be unreasonably withheld and may not be withheld where the
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 Trust.
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7. Notices.
Any notice required or permitted to be given by either party to the other
shall be deemed sufficient if sent by facsimile or registered or certified
mail, postage prepaid, addressed by the party giving notice to the other party
at the following address: 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, facsimile
number: 000-000-0000, or at such other address or facsimile number as such
party may from time to time specify in writing to the other party pursuant to
this Section. Notice sent by registered or certified mail shall be deemed to
have been given three days after it is sent. Notice sent by facsimile shall be
deemed to have been given immediately.
8. Amendments.
No provision of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the party against whom
an enforcement of the change, waiver, discharge or termination is sought.
9. Multiple Originals.
This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
10. Matters Relating to the Trust as a Massachusetts Business Trust.
The names "The Kent Funds" and "Trustees of The Kent Funds" refer
respectively to the business trust created and the Trustees, as trustees but
not individually or personally, acting from time to time under a Declaration of
Trust dated as of May 9, 1986 to which reference is hereby made and a copy of
which is on file at the office of the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law, and to any and all amendments
thereto so filed or hereafter filed. The obligations of "The Kent Funds"
entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities,
and are not binding upon any of the Trustees, shareholders or representatives
of the Trust personally, but bind only the assets of the Trust, and all persons
dealing with any Fund must look solely to the assets of the Trust belonging to
such Fund for the enforcement of any claims against the Trust.
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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.
THE KENT FUNDS BISYS FUND SERVICES
LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc.,
General Partner
By: /s/ Xxxxxx X. Xxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Title: President Title: Executive Vice President
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Date: June 14, 1996 Date: June 14, 1996
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Dated: ___________
SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
BETWEEN
THE KENT FUNDS
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
DISTRIBUTION PLANS
A-1
