Exhibit 5
DISTRIBUTION AGREEMENT
This Agreement made as of the 1st day of October, 2001 between THE PURISIMA
FUNDS, a Delaware business trust (the "Fund"), and QUASAR DISTRIBUTORS, LLC, a
Delaware limited liability company (the "Distributor").
WITNESSETH:
WHEREAS, the Fund proposes to engage in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "1940 Act") and it is in the interest of the Fund to offer
its shares for sale continuously; and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other with respect to the continuous offering of the Fund's shares of
beneficial interest (the "Shares"), $.01 par value.
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Fund hereby appoints the Distributor as
its exclusive agent to sell and to arrange for the sale of the Fund's Shares, on
the terms and for the period set forth in this Agreement, and the Distributor
hereby accepts such appointment and agrees to act hereunder directly and/or
through the Fund's transfer agent in the manner set forth in the Prospectus (as
defined below). It is understood and agreed that the services of the Distributor
hereunder are not exclusive, and the Distributor may act as principal
underwriter for the shares of any other registered investment company.
2. SERVICES AND DUTIES OF THE DISTRIBUTOR.
(a) The Distributor agrees to sell the Shares, as agent for the Fund,
from time to time during the term of this Agreement upon the terms described in
the Fund's Prospectus. As used in this Agreement, the term "Prospectus" shall
mean the prospectus and statement of additional information included as part of
the Fund's Registration Statement, as such prospectus and statement of
additional information may be amended or supplemented from time to time, and the
term "Registration Statement" shall mean the Registration Statement most
recently filed from time to time by the Fund with the Securities and Exchange
Commission and effective under the 1933 Act and the 1940 Act, as such
Registration Statement is amended by any amendments thereto at the time in
effect. The Distributor shall not be obligated to sell any certain number of
Shares.
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(b) The Distributor will hold itself available to receive orders,
satisfactory to the Distributor, for the purchase of the Shares and will accept
such orders and will transmit such orders and funds received by it in payment
for such Shares as are so accepted to the Fund's transfer agent or custodian, as
appropriate, as promptly as practicable. Purchase orders shall be deemed
effective at the time and in the manner set forth in the Prospectus. The
Distributor shall not make any short sales of Shares.
(c) The offering price of the Shares shall be the net asset value per
share of the Shares (as defined in the Declaration of Trust of the Fund). The
Fund shall furnish the Distributor, with all possible promptness, an advice of
each computation of net asset value and offering price.
3. DUTIES OF THE FUND.
(a) MAINTENANCE OF FEDERAL REGISTRATION. The Fund shall, at its
expense, take, from time to time, all necessary action and such steps, including
payment of the related filing fees, as may be necessary to register and maintain
registration of a sufficient number of Shares under the 0000 Xxx. The Fund
agrees to file from time to time such amendments, reports and other documents as
may be necessary in order that there may be no untrue statement of a material
fact in a registration statement or prospectus, or necessary in order that there
may be no untrue statement of a material fact in a registration statement or
prospectus, or necessary 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.
(b) MAINTENANCE OF "BLUE SKY" QUALIFICATIONS. The Fund shall, at its
expense, use its best efforts to qualify and maintain the qualification of an
appropriate number of Shares for sale under the securities laws of such states
as the Distributor and the Fund may approve, and, if necessary or appropriate in
connection therewith, to qualify and maintain the qualification of the Fund as a
broker or dealer in such states; provided that the Fund shall not be required to
amend its Declaration of Trust or By-Laws to comply with the laws of any state,
to maintain an office in any state, to change the terms of the offering of the
Shares in any state, to change the terms of the offering of the Shares in any
state from the terms set forth in its Prospectus, to qualify as a foreign
corporation in any state or to consent to service of process in any state other
than with respect to claims arising out of the offering and sale of the Shares.
The Distributor shall furnish such information and other material relating to
its affairs and activities as may be required by the Fund in connection with
such qualifications.
(c) COPIES OF REPORTS AND PROSPECTUS. The Fund shall, at its expense,
keep the Distributor fully informed with regard to its affairs and in connection
therewith shall furnish to the Distributor copies of all information, financial
statements and other papers which the Distributor may reasonably request for use
in connection with the distribution of Shares, including such reasonable number
of copies of its Prospectus and annual and interim reports as the Distributor
may request and shall cooperate fully in the efforts of the Distributor to sell
and arrange for the sale of the Shares and in the performance of the Distributor
under this Agreement.
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4. CONFORMITY WITH APPLICABLE LAW AND RULES. The Distributor agrees that in
selling Shares hereunder it shall conform in all respects with the laws of the
United States and of any state in which Shares may be offered, and with
applicable rules and regulations of the NASD.
5. INDEPENDENT CONTRACTOR. In performing its duties hereunder, the
Distributor shall be an independent contractor and neither the Distributor, nor
any of its officers, directors, employees, or representatives is or shall be an
employee of the Fund in the performance of the Distributor's duties hereunder.
The Distributor shall be responsible for its own conduct and the employment,
control, and conduct of its agents and employees and for injury to such agents
or employees or to others through its agents or employees. The Distributor
assumes full responsibility for its agents and employees under applicable
statutes and agrees to pay all employee taxes thereunder.
6. INDEMNIFICATION.
(a) INDEMNIFICATION OF FUND. The Distributor agrees to indemnify and
hold harmless the Fund and each of its present or former trustees, officers,
employees, representatives and each person, if any, who controls or previously
controlled the Fund within the meaning of Section 15 of the 1933 Act against any
and all losses, liabilities, damages, claims or expenses (including the
reasonable costs or investigating or defending any alleged loss, liability,
damage, claims or expense and reasonable legal counsel fees incurred in
connection therewith) to which the Fund or any such person may become subject
under the 1933 Act, under any other statute, at common law, or otherwise,
arising out of the acquisition of any Shares by any person which (I) may be
based upon any wrongful act by the Distributor or any of the Distributor's
directors, officers, employees or representatives, or (ii) may be based upon any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement, prospectus, shareholder report or other information
covering Shares filed or made public by the Fund or any amendment thereof or
supplement thereto, or the omission or alleged omission to state therein 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 Fund by the Distributor. In no case (I) is the
Distributor's indemnity in favor of the Fund, or any person indemnified to be
deemed to protect the Fund or such indemnified person against any liability to
which the Fund or such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties or
by reason of his reckless disregard of his obligations and duties under this
Agreement or (ii) is the Distributor to be liable under its indemnity agreement
contained in this Paragraph with respect to any claim made against the Fund or
any person indemnified unless the Fund or such person, as the case may be, shall
have notified the Distributor 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 the Fund or upon such person (or
after the Fund or such person shall have received notice to such service on any
designated agent). However, failure to notify the Distributor of any such claim
shall not relieve the Distributor from any liability which the Distributor may
have to the Fund or any person against whom such action is brought otherwise
than on account of the Distributor's indemnity agreement contained in this
Paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense, or, if the Distributor so elects, to assume the defense of any
suit brought to enforce any such claim, but, if the Distributor elects to assume
the defense, such defense shall be conducted by legal counsel chosen by the
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Distributor and satisfactory to the Fund, to the persons indemnified defendant
or defendants, in the suit. In the event that the Distributor elects to assume
the defense of any such suit and retain such legal counsel, the Fund, the
persons indemnified defendant or defendants in the suit, shall bear the fees and
expenses of any additional legal counsel retained by them. If the Distributor
does not elect to assume the defense of any such suit, the Distributor will
reimburse the Fund and the persons indemnified defendant or defendants in such
suit for the reasonable fees and expenses of any legal counsel retained by them.
The Distributor agrees to promptly notify the Fund of the commencement of any
litigation of proceedings against it or any of its officers, employees or
representatives in connection with the issue or sale of any Shares.
(b) INDEMNIFICATION OF THE DISTRIBUTOR. The Fund agrees to indemnify
and hold harmless the Distributor and each of its present or former officers,
employees, representatives and each person, if any, who controls or previously
controlled the Distributor within the meaning of Section 15 of the 1933 Act
against any and all losses, liabilities, damages, claims or expenses (including
the reasonable costs of investigating or defending any alleged loss, liability,
damage, claim or expense and reasonable legal counsel fees incurred in
connection therewith) to which the Distributor or and such person may become
subject under the 1933 Act, under any other statute, at common law, or
otherwise, arising out of the acquisition of any Shares by any person which (I)
may be based upon any wrongful act by the Fund or any of the Fund's trustees,
officers, employees or representatives, or (ii) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement, prospectus, shareholder report or other information
covering Shares filed or made public by the Fund or any amendment thereof or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading unless such statement or omission was made in reliance
upon information furnished to the Fund by the Distributor. In no case (I) is the
Fund's indemnity in favor of the Distributor, or any person indemnified to be
deemed to protect the Distributor or such indemnified person against any
liability to which the Distributor or such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of his duties or by reason of his reckless disregard of his obligations and
duties under this Agreement, or (ii) is the Fund to be liable under its
indemnity agreement contained in this Paragraph with respect to any claim made
against Distributor, or person indemnified unless the Distributor, or such
person, as the case may be, shall have notified the Fund 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 the
Distributor or upon such person (or after the Distributor or such person shall
have received notice of such service on any designated agent). However, failure
to notify the Fund of any such claim shall not relieve the Fund from any
liability which the Fund may have to the Distributor or any person against whom
such action is brought otherwise than on account of the Fund's indemnity
agreement contained in this Paragraph.
The Fund shall be entitled to participate, at its own expense, in the
defense, or, if the Fund so elects, to assume the defense of any suit brought to
enforce any such claim, but if the Fund elects to assume the defense, such
defense shall be conducted by legal counsel chosen by the Fund and satisfactory
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to the Distributor, to the persons indemnified defendant or defendants, in the
suit. In the event that the Fund elects to assume the defense of any such suit
and retain such legal counsel, the Distributor, the persons indemnified
defendant or defendants in the suit, shall bear the fees and expenses of any
additional legal counsel retained by them. If the Fund does not elect to assume
the defense of any such suit, the Fund will reimburse the Distributor and the
persons indemnified defendant or defendants in such suit for the reasonable fees
and expenses of any legal counsel retained by them. The Fund agrees to promptly
notify the Distributor of the commencement of any litigation or proceedings
against it or any of its trustees, officers, employees or representatives in
connection with the issue or sale of any Shares.
7. AUTHORIZED REPRESENTATION. The Distributor is not authorized by the Fund
to give on behalf of the Fund any information of to make any representations in
connection with the sale of Shares other than the information and
representations contained in a registration statement filed with the Securities
and Exchange Commission ("SEC") under the 1933 Act and/or the 1940 Act, covering
Shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or contained in shareholder reports or other
material that may be prepared by or on behalf of the Fund for the Distributor's
use. This shall not be construed to prevent the Distributor from preparing and
distributing tombstone ads and sales literature or other material as it may deem
appropriate. No person other than the Distributor is authorized to act as
principal underwriter (as such term is defined in the 0000 Xxx) for the Fund.
8. TERM OF AGREEMENT. The term of this Agreement shall begin on the date
first above written, and unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect through July 10, 1999. Thereafter, this
Agreement shall continue in effect from year to year, subject to the termination
provisions and all other terms and conditions thereof, so long as: (a) such
continuation shall be specifically approved at least annually by the Board of
Trustees or by vote of a majority of the outstanding voting securities of the
Fund and, concurrently with such approval by the Board of Trustees or prior to
such approval by the holders of the outstanding voting securities of the Fund,
as the case may be, by the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the trustees of the Fund
who are not parties to the Agreement or interested persons of any such party;
and (b) the Distributor shall not have notified the Fund, in writing, at least
60 days prior to July 10, 1999 or prior to July 10, of any year thereafter, that
it does not desire such continuation. The Distributor shall furnish to the Fund,
promptly upon its request, such information as may reasonably be necessary to
evaluate the terms of this Agreement or any extension, renewal or amendment
hereof.
9. AMENDMENT AND ASSIGNMENT OF AGREEMENT. This agreement may not be amended
or assigned without the affirmative vote of a majority of the outstanding voting
securities of the Fund, and this Agreement shall automatically and immediately
terminate in the event of its assignment.
10. TERMINATION OF AGREEMENT. This Agreement may be terminated by either
party hereto, without the payment of any penalty, on not more than upon 60 days'
nor less than 30 days' prior notice in writing to the other party; provided,
that in the case of termination by the Fund such action shall have been
authorized by resolution of a majority of the trustees of the Fund who are not
parties to this Agreement or interested persons of any such party, or by vote of
a majority of the outstanding voting securities of the Fund.
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11. MISCELLANEOUS. The captions of this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Nothing herein contained shall be deemed to require the Fund to take any
action contrary to its Declaration of Trust or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of Trustees of the Fund of its
responsibility for and control of the conduct of the affairs of the Fund.
12. DEFINITION OF TERMS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities", interested persons",
"assignment", and "affiliated person", as used in Paragraphs 8, 9 and 10 hereof,
shall have the meanings assigned to them by Section 2(a) of the 1940 Act. In
addition, where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is relaxed by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or of general
applications, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
13. COMPLIANCE WITH SECURITIES LAWS. The Funds represents that it is
registered as an open-end management investment company under the 1940 Act, and
agrees that it will comply with all the provisions of the 1940 Act and of the
rules and regulations thereunder. The Fund and the Distributor each agree to
comply with all of the applicable terms and provisions on the 1940 Act, the 1933
Act and, subject to the provisions of the 1940 Act, the 1933 Act and, subject to
the provisions of Section 4(d), all applicable "Blue Sky" laws. The Distributor
agrees to comply with all of the applicable terms and provisions of the
Securities Exchange Act of 1934.
14. NOTICES. Any notice required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid to the Distributor at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx
00000.
15. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Wisconsin, without regard to conflicts of law principles.
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 SEC thereunder.
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16. NO SHAREHOLDER LIABILITY. The Distributor understands that the
obligations of this Agreement are not binding upon any shareholder of the Fund
personally, but bind only the Fund's property; the distributor represents that
it has notice of the provisions of the Fund's Declaration of Trust disclaiming
shareholder liability for acts or obligations of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their fully authorized representatives and their respective corporate
seals to be hereunto affixed, as of the day and year first above written.
THE PURISIMA FUNDS
By:
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Attest:
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Secretary
QUASAR DISTRIBUTORS, LLC
By:
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Name: Xxxxx Xxxxxxxxx
Title: President
Attest:
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Secretary
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