EXHIBIT (E)(2)
[Form of]
BRAZOS MUTUAL FUNDS
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT is dated as of June __, 1999 by and
between BRAZOS MUTUAL FUNDS, a Delaware business trust (the "Trust") and
SUNAMERICA CAPITAL SERVICES, INC., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
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WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, the Trust is authorized to issue shares of common stock, par value
$.001 per share (the "Shares"), in separately designated series representing
separate funds with their own investment objectives, policies and restrictions
(the "Portfolios") and has registered the Shares of the Portfolios under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
registration statement on Form N-1A (the "Registration Statement"), including a
prospectus (the "Prospectus") and a statement of additional information (the
"Statement of Additional Information"); and
WHEREAS, the Trust has adopted a Plan of Distribution pursuant to Rule
12b-1 under the Investment Company Act on behalf of each Fund (the "Distribution
Plans") and may enter into related agreements providing for the distribution of
the Shares of the Portfolios; and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
WHEREAS, the Trust wishes to engage the services of the Distributor as
distributor of the Shares of the Portfolios and the Distributor is willing to
serve in that capacity;
NOW, THEREFORE, it is hereby agreed between the parties
hereto as follows:
1. EXCLUSIVE DISTRIBUTOR. The Portfolios hereby agree that the
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Distributor shall for the period of this Agreement be exclusive agent for
distribution within the United States and its territories of the Class A, Class
B and Class II shares of the Trust and any additional classes of shares of the
Trust agreed to by the Distributor and the Trust and listed on an addendum to
this Agreement, and the Distributor agrees to use its best efforts during such
period to effect such distribution of the Shares; provided, however, that
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nothing herein shall prevent a
Fund, if it so elects, from selling or otherwise distributing its Shares
directly to any persons other than dealers. In connection therewith, it is
contemplated that the Distributor will enter into agreements with selected
securities dealers. The Portfolios understand that the Distributor also acts as
agent for distribution of shares of capital stock or beneficial interest, as the
case may be, of other open-end investment companies which have entered into
management and advisory agreements with the Portfolios' current investment
adviser and its affiliated companies.
2. SALE OF THE SHARES. The Distributor is authorized as agent for the
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Portfolios and not as principal, to sell the Shares to other purchasers on such
terms as may be provided in the then current Prospectus of the Portfolios;
provided, however, that no sales shall be confirmed by the Distributor at any
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time when, according to advice received by the Distributor from the Trust, the
officers of the Trust have for any reason sufficient to them temporarily or
permanently suspended or discontinued the sale and issuance of such Trust's
Shares. Each sale shall be effected by the Distributor only at the applicable
price, plus the applicable sales charge, if any, determined by the Trust in the
manner prescribed in its then current Prospectus. The Distributor shall,
insofar as they concern it, comply with all applicable laws, rules and
regulations including, without limiting the generality of the foregoing, all
rules or regulations made or adopted pursuant to Section 22 of the Act by the
Securities and Exchange Commission or any securities association registered
under the Exchange Act.
The Portfolios agree, as long as the Shares may legally be issued, to
fill all orders confirmed by the Distributor in accordance with the provisions
of this Agreement.
3. EXPENSES; COMPENSATION. The Distributor agrees promptly to pay or
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reimburse the Portfolios for all expenses (except expenses incurred by the
Portfolios in connection with the preparation, printing and distribution of any
prospectus or report or other communication to shareholders, to the extent that
such expenses are incurred to effect compliance with the Federal or state laws
or to enable such distribution to shareholders) (a) of printing and distributing
copies of any prospectus and of preparing, printing and distributing any other
material used by the Distributor in connection with offering the Shares for
sale, and (b) of advertising in connection with such offering. The Portfolios
agree to pay all expenses in connection with the registration of the Shares
under the Securities Act, all fees and related expenses which may be incurred in
connection with the qualification of the Shares for sale in such states (as well
as the District of Columbia, Puerto Rico and other territories) as the
Distributor may designate, and all expenses in connection with maintaining
facilities for the issue and transfer of the Shares, of supplying information,
prices and other data to be furnished by it hereunder and through its agents of
all data processing and related services related to the share distribution
activity contemplated hereby.
As compensation for its services hereunder, the Portfolios agree to
pay to the Distributor all amounts received as sales charges as described in the
Portfolios' most current Prospectus. Out of such sales charges, the Distributor
may allow such concessions or reallowances to dealers as it may from time to
time determine.
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The Trust agrees to execute such documents and to furnish such
information as may be reasonably necessary, in the discretion of the Board of
Trustees ("Trustees") of the Trust, in connection with the qualification of the
Shares for sale in such states (as well as the District of Columbia, Puerto Rico
and other territories) as the Distributor may designate. The Distributor also
agrees to pay all fees and related expenses connected with its own qualification
as a broker or dealer under Federal or state laws and, except as otherwise
specifically provided in this Agreement or agreed to by the Trust, all other
expenses incurred by the Distributor in connection with the sale of the Shares
as contemplated in this Agreement (including the expenses of qualifying the
Trust as a dealer or broker under the laws of such states as may be designated
by the Distributor, if deemed necessary or advisable by the Trust).
4. PROSPECTUS AND OTHER INFORMATION. The Trust represents and warrants to
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and agrees with the Distributor that:
(a) The Registration Statement, including the Prospectus and
Statement of Additional Information, relating to the Shares has been filed
under both the Act and the Securities Act and has become effective.
(b) At all times during the term of this Agreement, except when the
officers of the Trust have suspended or discontinued the sale and issuance of
the Shares of a Fund as contemplated by Section 2 hereof, the Registration
Statement, Prospectus and Statement of Additional Information will conform in
all material respects to the requirements of the Act and the rules and
regulations of the Securities and Exchange Commission, and none of such
documents will include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not apply to
any statements or omissions in any of such documents based upon written
information furnished to the Trust by the Distributor specifically for use
therein.
(c) The Trust agrees to prepare and furnish to the Distributor from
time to time, a copy of the Prospectus, and authorizes the Distributor to use
such Prospectus, in the form furnished to the Distributor from time to time, in
connection with the sale of the Shares. The Trust also agrees to furnish the
Distributor from time to time, for use in connection with the sale of such
Shares, such information (including the Statement of Additional Information)
with respect to the Portfolios and the Shares as the Distributor may reasonably
request.
5. INDEMNIFICATION.
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(a) The Trust will indemnify and hold harmless the Distributor and
each person, if any, who controls the Distributor within the meaning of the Act
against any losses, claims, damages or liabilities to which the Distributor or
such controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, Prospectus or
Statement of Additional Information or any other written sales material prepared
by the Trust or the Portfolios which is utilized by the Distributor in
connection with the sale of Shares of the Fund or arise out
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of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or (in the case of the Registration
Statement, Prospectus and Statement of Additional Information) necessary to make
the statement therein not misleading or (in the case of such other sales
material) necessary to make the statements therein not misleading in the light
of the circumstances under which they were made; and will reimburse the
Distributor and each such controlling person for any legal or other expenses
reasonably incurred by the Distributor or such controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Trust or the Portfolios will not be
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liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement,
Prospectus or Statement of Additional Information in conformity with written
information furnished to the Trust by the Distributor specifically for use
therein; and provided, further, that nothing herein shall be so construed as to
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protect the Distributor against any liability to the Trust or the Portfolios, or
the security holders of the Portfolios to which the 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 the reckless disregard by the
Distributor of its obligations and duties under this Agreement. This indemnity
provision will be in addition to any liability which the Trust may otherwise
have.
(b) The Distributor will indemnify and hold harmless the Trust, each
of its Trustees and officers and each person, if any, who controls the Trust
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Trust or any such Trustee, officer or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, Prospectus or Statement of
Additional Information or any sales material not prepared by the Trust or the
Portfolios which is utilized in connection with the sale of the Shares or arise
out of or are based upon the omissions or the alleged omission to state therein
a material fact required to be stated therein or (in the case of the
Registration Statement, Prospectus and Statement) necessary to make the
statements therein not misleading or (in the case of such other sales material)
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, in the case of the Registration
Statement, Prospectus and Statement of Additional Information to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in conformity with written information
furnished to the Trust by the Distributor specifically for use therein; and the
Distributor will reimburse any legal or other expenses reasonably incurred by
the Trust or any such Trustee, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity provision will be in addition to any liability which the
Distributor may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from liability
which it may have to any indemnified party otherwise than under this Section. In
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case any such action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish, to
assume the defense thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
6. TERM OF AGREEMENT. This Agreement shall continue in full force and
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effect for two years from the date hereof, and shall continue in full force and
effect from year to year thereafter if such continuance is approved in the
manner required by the Act, and the Distributor has not have notified the Trust
in writing at least 60 days prior to the anniversary date of the previous
continuance that it does not desire such continuance. This Agreement may be
terminated at any time, without payment of penalty by the Trust on 60 days'
written notice to the Distributor by vote of the Trustees of the Trust or by
vote of a majority of the outstanding voting securities of the Trust (as defined
by the Act). This Agreement shall automatically terminate in the event of its
assignment (as defined by the Act).
7. MISCELLANEOUS. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require or to
impose any duty upon either of the parties to do anything in violation of any
applicable laws or regulations.
IN WITNESS WHEREOF, the Trust and the Distributor have caused this
Agreement to be executed by their duly authorized officers as of the date above
written.
BRAZOS MUTUAL FUNDS
By: ________________________________
President
SUNAMERICA CAPITAL SERVICES, INC.
By: ________________________________
Xxxxxx X. Xxxxx
Execitive Vice President
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