FORM OF DISTRIBUTION AGREEMENT
between
The Xxxxx Funds
and
T.O. Xxxxxxxxxx Securities, Inc.
THIS AGREEMENT is made as of December 1, 1998 between The Xxxxx Funds
(the "Trust"), a Delaware business trust, and T.O. Xxxxxxxxxx Securities, Inc.
("T.O.R.") a corporation organized and existing under the laws of the State of
Connecticut.
WHEREAS the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and has registered one or more distinct series of shares of beneficial interest
("Shares") for sale to the public under the Securities Act of 1933, as amended
(the "Securities Act"), and has qualified its shares for sale to the public
under various state securities laws; and
WHEREAS the Trust desires to retain T.O.R. as principal underwriter in
connection with the offering and sale of the Shares of each series listed on
Schedule A (as amended from time to time) to this Agreement; and
WHEREAS this Agreement has been approved by a vote of the Trust's board
of trustees ("Board") and its disinterested trustees in conformity with Section
15(c) of the 1940 Act; and
WHEREAS T.O.R. is willing to act as principal underwriter for the Trust
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints T.O.R. as its agent to be the
principal underwriter so as to hold itself out as available to receive and
accept orders for the purchase and redemption of the Shares and redemption of
Shares on behalf of the Trust, subject to the terms and for the period set forth
in this Agreement. T.O.R. hereby accepts such appointment and agrees to act
hereunder. The Trust understands that any solicitation activities conducted on
behalf of the Trust will be conducted primarily, if not exclusively, by
employees of the Trust's sponsor who shall become registered representatives of
T.O.R.
2. Services and Duties of T.O.R.
(a) T.O.R. agrees to sell Shares on a best efforts basis from
time to time during the term of this Agreement as agent for the Trust and upon
the terms described in the Registration Statement. As used in this Agreement,
the term "Registration Statement" shall mean the currently effective
registration statement of the Trust, and any supplements thereto, under the
Securities Act and the 0000 Xxx.
(b) T.O.R. will hold itself available to receive purchase and
redemption orders satisfactory to T.O.R. for shares and will accept such orders
on behalf of the Trust. Such purchase orders shall be deemed effective at the
time and in the manner set forth in the Registration Statement.
(c) T.O.R. with the operational assistance of the Trust's
transfer agent, shall make Shares available through the National Securities
Clearing Corporation's Fund/SERV System.
(d) T.O.R. shall provide to investors and potential investors
only such information regarding the Trust as the Trust shall provide or approve.
T.O.R. shall review and file all proposed advertisements and sales literature
with appropriate regulators and consult with the Trust regarding any comments
provided by regulators with respect to such materials.
(e) The offering price of the Shares shall be the price
determined in accordance with, and in the manner set forth in, the most-current
Prospectus. The Trust shall make available to T.O.R. a statement of each
computation of net asset value and the details of entering into such
computation.
(f) T.O.R. at its sole discretion may repurchase Shares
offered for sale by the shareholders. Repurchase of Shares by T.O.R. shall be at
the price determined in accordance with, and in the manner set forth in, the
most current Prospectus. At the end of each business day, T.O.R. shall notify,
by any appropriate means, the Trust and its transfer agent of the orders for
repurchase of Shares received by T.O.R. since the last such report, the amount
to be paid for such Shares, and the identity of the shareholders offering Shares
for repurchase. The Trust reserves the right to suspend such repurchase right
upon written notice to T.O.R. T.O.R. further agrees to act as agent for the
Trust to receive and transmit promptly to the Trust's transfer agent shareholder
requests for redemption of shares.
(g) T.O.R. shall not be obligated to sell any certain number
of Shares.
(h) T.O.R. shall prepare reports for the Board regarding its
activities under this Agreement as from time to time shall be reasonably
requested by the Board.
3. Duties of the Trust.
(a) The Trust shall keep T.O.R. fully informed of its affairs
and shall provide to T.O.R. from time to time copies of all information,
financial statements, and other papers that T.O.R. may reasonably request for
use in connection with the distribution of Shares, including, without
limitation, certified copies of any financial statements prepared for the Trust
by its independent public accountant and such reasonable number of copies of the
most current Prospectus, Statement of Additional Information ("SAI"), and annual
and interim reports as T.O.R. may request, and the Trust shall fully cooperate
in the efforts of T.O.R. to sell and arrange for the sale of Shares.
(b) The Trust shall maintain a currently effective
Registration Statement on Form N-1A with the Securities and Exchange Commission
(the "SEC"), maintain qualification
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with applicable states and file such reports and other documents as may be
required under applicable federal and state laws. The Trust shall notify T.O.R.
in writing of the states in which the Shares may be sold and shall notify T.O.R.
in writing of any changes to such information. The Trust shall bear all expenses
related to preparing and typesetting such Prospectuses, SAI and other materials
required by law and such other expenses, including printing and mailing
expenses, related to the Trust's communication with persons who are
shareholders.
(c) The Trust shall not use any advertisements or other sales
materials that have not been (i) submitted to T.O.R. for its review and
approval, and (ii) filed with the appropriate regulators.
(d) The Trust represents and warrants that its Registration
Statement and any advertisements and sales literature (excluding statements
relating to T.O.R. and the services it provides that are based upon written
information furnished by T.O.R. expressly for inclusion therein) of the Trust
shall not contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that all statements or information furnished to
T.O.R. pursuant to Section 3(a) hereof, shall be true and correct in all
material respects.
4. Other Broker-Dealers. T.O.R. in its discretion may enter into
agreements to sell Shares to such registered and qualified retail dealers, as
reasonably requested by the Trust. In making agreements with such dealers,
T.O.R. shall act only as principal and not as agent for the Trust. The form of
any such dealer agreement shall be mutually agreed upon and approved by the
Trust and T.O.R.
5. Withdrawal of Offering. The Trust reserves the right at any time to
withdraw all offerings of any or all Shares by written notice to T.O.R. at its
principal office. No Shares shall be offered by either T.O.R. or the Trust under
any provisions of this agreement and no orders for the purchase of Shares
hereunder shall be accepted by the Trust if and so long as effectiveness of the
Registration Statement then in effect or any necessary amendments thereto shall
be suspended under any of the provisions of the Securities Act, or if and so
long as a current prospectus as required by Section 5(b)(2) of the Securities
Act is not on file with the SEC.
6. Services Not Exclusive. The services furnished by T.O.R. hereunder
are not to be deemed exclusive. T.O.R. shall be free to furnish similar services
to others so long as its services under this Agreement are not impaired thereby.
The Trust reserves the right to (i) sell Shares to investors on applications
received and accepted by the Trust; (ii) issue Shares in connection with a
merger, consolidation, or recapitalization of the Trust; or (iii) issue
additional Shares to holders of Shares.
7. Expenses of the Trust. The Trust shall bear all costs and expenses
of registering the Shares with the SEC and state and other regulatory bodies,
and shall assume expenses related to communications with shareholders of the
Trust including, but not limited to, (i) fees and disbursements of its counsel
and independent public accountant; (ii) the preparation, filing, and printing of
Registration Statements and/or Prospectuses or SAIs; (iii) the preparation and
mailing of annual and interim reports, Prospectuses, SAIs, and proxy materials
to shareholders; (iv) such
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other expenses related to the communications with persons who are shareholders
of the Trust; and (v) the qualifications of Shares for sale under the securities
laws of such jurisdictions as shall be selected by the Trust pursuant to the
Paragraph 3(b) hereof, and the costs and expenses payable to each jurisdiction
for continuing qualification therein. In addition, the Trust shall bear all
costs of preparing, printing, mailing, and filing any advertisements and sales
literature. T.O.R. does not assume responsibility for any expenses not assumed
hereunder.
8. Compensation. As compensation for the services performed and the
expenses assumed by T.O.R. under this Agreement including, but not limited to,
any commissions paid for sales of Shares, the Trust shall pay T.O.R., as
promptly as possible after the last day of each month, any fees that may become
payable to T.O.R. pursuant to the Distribution Plan and any retention of sales
loads that may become payable to T.O.R. See Schedule B for T.O.R.'s fee
schedule. The Trust's obligation for payment of fees under this Agreement are
limited to the aggregate amount of dealer retention and fees payable under a
distribution plan established pursuant to Rule 12b-1 under the 1940 Act.
9. Share Certificates. The Trust shall not issue certificates
representing Shares unless requested to do so by a shareholder. If such request
is transmitted through T.O.R., the Trust will cause certificates evidencing the
Shares owned to be issued in such names and denominations as T.O.R. shall from
time to time direct.
10. Status of T.O.R. T.O.R. is an independent contractor and shall be
agent of the Trust only with respect to the sale and redemption of Shares.
11. Indemnification.
(a) The Trust agrees to indemnify, defend, and hold T.O.R.,
its officers and directors, and any person who controls T.O.R. within the
meaning of Section 15 of the Securities Act, free and harmless from and against
any and all claims, demands, or liabilities, and expenses (including the cost of
investigating or defending such claims, demands, liabilities, and any counsel
fees incurred in connection therewith) that T.O.R., its officers and directors,
or any such controlling person may incur under the Securities Act, or under
common law or otherwise, arising out of based upon any (i) alleged untrue
statement of a material fact contained in the Registration Statement,
Prospectus, SAI, or sales literature; (ii) alleged omission to state a material
fact required to be stated in the either thereof or necessary to make the
statements therein not misleading; or (iii) failure by the Trust to comply with
the terms of the Agreement; provided, that in no event shall anything contained
herein be so construed as to protect T.O.R. against any liability to the Trust
or its shareholders to which T.O.R. would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations under this
Agreement.
(b) The Trust shall not be liable to T.O.R. under this
Agreement with respect to any claim made against T.O.R. or any person
indemnified unless T.O.R. or other such person shall have notified the Trust in
writing of the claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim shall have
been served upon T.O.R. or such other person (or after T.O.R. or other person
shall have received
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notice of service on any designated agent). However, failure to notify the Trust
of any claim shall not relieve the Trust from any liability that it may have to
T.O.R. or any person against whom such action is brought otherwise than on
account of this Agreement.
(c) 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 claims subject to this Agreement. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory indemnified defendants in the suit whose
approval shall not be unreasonably withheld. In the event that the Trust elects
to assume the defense of any suit and retain counsel, the indemnified defendants
shall bear the fees and expenses of any additional counsel retained by them. If
the Trust does not elect to assume the defense of a suit, it will reimburse the
indemnified defendants for the reasonable fees and expenses of any counsel
retained by the indemnified defendants. The Trust agrees to promptly notify
T.O.R. of the commencement of any litigation or proceedings against it or any of
its officers and directors in connection with the issuance or sale of any of its
Shares.
(d) T.O.R. agrees to indemnify, defend, and hold the Trust,
its officers and directors, 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 cost of
investigating or defending against such claims, demands, or liabilities, and any
counsel fees incurred in connection therewith) that the Trust, its directors and
officers, or any such controlling person may incur under the Securities Act, or
under common law or otherwise, resulting from T.O.R.'s willful misfeasance, bad
faith, or gross negligence in the performance of its obligations and duties
under this Agreement, or arising out of or based upon any alleged untrue
statement of a material fact contained in information furnished in writing by
T.O.R. to the Trust for use in the Registration Statement, Prospectus, or SAI
arising out of or based upon any alleged omission to state a material fact in
connection with such information required to be stated in either thereof or
necessary to make such information not misleading.
(e) T.O.R. shall be entitled to participate, at its own
expense, in the defense or, if it so elects, to assume the defense of any suit
brought to enforce the claim, but if T.O.R. elects to assume the defense, the
defense shall be conducted by counsel chosen by T.O.R. and satisfactory to the
indemnified defendants whose approval shall not be unreasonably withheld. In the
event that T.O.R. elects to assume the defense of any suit and retain counsel,
the defendants in the suit shall bear the fees and expenses of any additional
counsel retained by them. If T.O.R. does not elect to assume the defense of any
suit, it will reimburse the indemnified defendants in the suit for the
reasonable fees and expenses of any counsel retained by them.
12. Duration and Termination.
(a) This Agreement shall become effective on the date first
written above or such later date as indicated in Schedule A and, unless sooner
terminated as provided herein, will continue in effect for two years from the
above written date. Thereafter, if not terminated, this
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Agreement shall continue in effect for successive annual periods, provided that
such continuance is specifically approved at least annually (i) by a vote of a
majority of the Trust's Board who are neither interested persons (as defined in
the 0000 Xxx) of the Trust ("Independent Trustees ") or T.O.R. cast in person at
a meeting called for the purpose of voting on such approval, and (ii) by the
Board or by vote of a majority of the outstanding voting securities of the
Trust.
(b) Notwithstanding the foregoing, this Agreement may be
terminated in its entirety at any time, without the payment of any penalty, by
vote of the Board, by vote of a majority of the Independent Trustees, or by vote
of a majority of the outstanding voting securities of the Trust on sixty days'
written notice to T.O.R. or by T.O.R. at any time, without the payment of any
penalty, on sixty days' written notice to the Trust. This Agreement will
automatically terminate in the event of its assignment.
13. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge, or termination is sought. This Agreement may be amended with the
approval of the Board or of a majority of the outstanding voting securities of
the Trust; provided, that in either case, such amendment also shall be approved
by a majority of the Independent Trustees.
14. Limitation of Liability. The Board and shareholders of the Trust
shall not be personally liable for obligations of the Trust in connection with
any matter arising from or in connection with this Agreement. If the Trust is a
Delaware business trust, this Agreement is not binding upon any trustees,
officer, or shareholder of the Trust individually, and no such person shall be
individually liable with respect to any action or inaction resulting from this
Agreement.
15. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient upon receipt in writing at the
other party's principal offices.
16. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule, or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person," and "assignment" shall have the same meaning as such terms
have in the 1940 Act.
17. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Connecticut and the 1940 Act (without regard, however,
to the conflicts of law principles). To the extent that the applicable laws of
the state of Connecticut conflict with the applicable provisions of the 1940
Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first above
written.
The Xxxxx Funds T.O. Xxxxxxxxxx Securities, Inc.
By__________________________ By: ____________________________
Print______________________ Print___________________________
Title_______________________ Title___________________________
Date_______________________ Date____________________________
Attest______________________ Attest__________________________
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AMENDMENT A
The Xxxxx Funds (the "Trust") and T.O. Xxxxxxxxxx Securities, Inc. ("T.O.R.S.")
further agree that the Trust has entered into the Fund Administrative Services
Agreement, Fund Accounting Services Agreement, Transfer Agent Agreement,
Custodian Agreement, and Fulfillment Services Agreement with Firstar Mutual Fund
Services, LLC of Milwaukee, Wisconsin ("FMFS"), or an affiliate, copies of which
are in the hands of the parties hereto and to which reference may be had (which
agreements are herein collectively referred to as the "Trust Operating
Agreements.") During the term of this Agreement, the Trust agrees to maintain
the Trust Operating Agreements (or other similar agreements with comparable
service providers) in effect during the term of this Agreement. The parties
hereto agree that T.O.R.S. is a third party beneficiary to the Trust Operating
Agreements and that substantial portions of the duties and services to be
provided by T.O.R.S. hereunder are to be performed by FMFS for T.O.R.S.'s and
the Trust's benefit. The Trust shall be responsible for all amounts due under
the Trust Operating Agreements and T.O.R.S. shall not be responsible for
duplication of duties or services provided for in the Trust Operating Agreements
or any fees or expenses thereunder.
The Xxxxx Funds T.O. Xxxxxxxxxx Securities, Inc.
Sign: _________________________ Sign: ___________________________
Print: _________________________ Print: __________________________
Title: _________________________ Title: __________________________
Date: _________________________ Date: ___________________________
Attest: _________________________ Attest: _________________________
SCHEDULE A
to the
DISTRIBUTION AGREEMENT
between
The Xxxxx Funds
and
T.O. Xxxxxxxxxx Securities, Inc.
Pursuant to Section 1 of the Distribution Agreement between The Xxxxx
Funds (the "Trust") and T.O. Xxxxxxxxxx Securities, Inc. ("T.O.R."), the Trust
hereby appoints T.O.R. as its agent to be the principal underwriter of Trust
with respect to its following series:
1. U.S. Equity Fund, Class A and Class Y Shares
2. International Equity Fund, Class A and Class Y Shares
3. Global Equity Fund, Class A and Class Y Shares
Dated: December 1, 1998
Schedule B
Mutual Fund Services
Nominal Distribution Services
Fee Schedule
The greater of the annual minimum of $7,500 for the initial share class of the
first Fund of the Trust and $4,000 per year per the initial share class of each
additional Fund and $1,500 per year per each additional share class of each
Fund, or 0.01% of the average daily net assets of each Fund, computed daily and
paid monthly;
Licensing of Investment Advisor's Staff
Annual fee of $450 per series 7 registered representative ("registered rep");
for compliance related costs. Compliance related costs for other licenses may
vary.
Advertising Legal Review and NASD Filing
$150 per job for the first ten pages of an advertisement and $20 per page
thereafter. NASD filing fees will be billed on an out-of-pocket basis. (Pass
through costs may change upon notice).
National Securities Clearing Corporation
Mutual Fund Services Fee Schedule (Pass through costs may change upon notice).
Refer to attached NSCC fee
schedule
Services include:
o Providing access to Fund/Serv as an NSCC member
o Filing marketing material with the NASD
o Providing principal review of marketing materials
o Execution broker dealer selling agreements
o Underwriting mutual fund shares
Plus out-of-pocked expenses, including but not limited to:
o Travel Expenses
o All associated NASD fees for Registered Representatives securities licenses
o Review and filing of NASD advertising material
o Retention of records
The Trust's obligations for payment of fees under this Agreement are limited to
the aggregate amount of dealer retention and fees payable under a distribution
plan established pursuant to Rule 12b-1 under the 1940 Act.
