EXHIBIT 23(E)
DISTRIBUTION AGREEMENT BETWEEN REGISTRANT,
LEVERAGED INDEX MANAGEMENT COMPANY, AND DECLARATION DISTRIBUTORS, INC.
DISTRIBUTION AGREEMENT
OPTIMAL FUNDS, INC.
THIS DISTRIBUTION AGREEMENT (the "Agreement") is made as of the 1st day of
May, 1999 by and among Optimal Funds, Inc. (the "Fund"), a Maryland corporation,
Leveraged Index Management Company (the "Adviser"), a Vermont corporation, and
Declaration Distributors, Inc. (the "Distributor"), a Pennsylvania corporation.
WITNESSETH THAT:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and has registered its shares of common stock (the "Shares") under the
Securities Act of 1933, as amended (the "1933 Act") in one or more distinct
series of Shares (the "Portfolio" or "Portfolios");
WHEREAS, the Adviser has been appointed investment adviser to the Fund;
WHEREAS, the Distributor is a broker-dealer registered with the U.S.
Securities and Exchange Commission (the "SEC") and a member in good standing of
the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Fund, the Adviser and the Distributor desire to enter into
this Agreement pursuant to which the Distributor will provide distribution
services to the Portfolios of the Fund identified on Schedule A, as may be
amended from time to time, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Fund, the Adviser and the Distributor,
intending to be legally bound hereby, agree as follows:
1. Appointment of Distributor.
The Fund hereby appoints the Distributor as its exclusive agent for the
distribution of the Shares, and the Distributor hereby accepts such appointment
under the terms of this Agreement. The Fund shall not sell any Shares to any
person except to fill orders for the Shares received through the Distributor;
provided, however, that the foregoing exclusive right shall not apply:
(i) to Shares issued or sold in connection with the merger or consolidation of
any other investment company with the Fund or the acquisition by purchase
or otherwise of all or substantially all of the assets of any investment
company or substantially all of the outstanding shares of any such company
by the Fund;
(ii) to Shares which may be offered by the Fund to its shareholders for
reinvestment of cash distributed from capital gains or net investment
income of the Fund; or
(iii) to Shares which may be issued to shareholders of other funds who exercise
any exchange privilege set forth in the Fund's Prospectus.
Notwithstanding any other provision hereof, the Fund may terminate, suspend, or
withdraw the offering of the Shares whenever, in its sole discretion, it deems
such action to be desirable, and the Distributor shall process no further orders
for Shares after it receives notice of such termination, suspension or
withdrawal.
2. Fund Documents.
The Fund has provided the Administrator with properly certified or authenticated
copies of the following Fund related documents in effect on the date hereof:
(a) the Fund's organizational documents, including Articles of Incorporation
and by-laws;
(b) the Fund's Registration Statement on Form N-1A, including all exhibits
thereto;
(c) the Fund's most current Prospectus and Statement of Additional Information;
and
(d) resolutions of the Fund's Board of Directors authorizing the appointment of
the Distributor and approving this Agreement.
The Fund shall promptly provide to the Distributor copies, properly certified or
authenticated, of all amendments or supplements to the foregoing. The Fund shall
provide to the Distributor copies of all other information which the Distributor
may reasonably request for use in connection with the distribution of Shares,
including, but not limited to, a certified copy of all financial statements
prepared for the Fund by its independent public accountants. The Fund shall also
supply the Distributor with such number of copies of the current Prospectus,
Statement of Additional Information and shareholder reports as the Distributor
shall reasonably request.
3. Distribution Services.
The Distributor shall sell and repurchase Shares as set forth below, subject to
the registration requirements of the 1933 Act and the rules and regulations
thereunder, and the laws governing the sale of securities in the various states
("Blue Sky Laws"):
a. The Distributor, as agent for the Fund, shall sell Shares to the public
against orders therefor at the public offering price, as determined in
accordance with the Fund's then current Prospectus and Statement of
Additional Information.
b. The net asset value of the Shares shall be determined in the manner
provided in the then current Prospectus and Statement of Additional
Information. The net asset value of the Shares shall be calculated by the
Fund or by another entity on behalf of the Fund. The Distributor shall have
no duty to inquire into or liability for the accuracy of the net asset
value per Share as calculated.
3
c. Upon receipt of purchase instructions, the Distributor shall transmit such
instructions to the Fund or its transfer agent for registration of the
Shares purchased.
d. The Distributor shall also have the right to take, as agent for the Fund,
all actions which, in the Distributor's judgment, are necessary to effect
the distribution of Shares.
e. Nothing in this Agreement shall prevent the Distributor or any "affiliated
person" from buying, selling or trading any securities for its or their own
account or for the accounts of others for whom it or they may be acting;
provided, however, that the Distributor expressly agrees that it shall not
for its own account purchase any Shares of the Fund except for investment
purposes and that it shall not for its own account sell any such Shares
except for redemption of such Shares by the Fund, and that it shall not
undertake activities which, in its judgment, would adversely affect the
performance of its obligations to the Fund under this Agreement.
f. The Distributor, as agent for the Fund, shall repurchase Shares at such
prices and upon such terms and conditions as shall be specified in the
Prospectus.
4. Distribution Support Services.
In addition to the sale and repurchase of Shares, the Distributor shall perform
the distribution support services set forth on Schedule B attached hereto, as
may be amended from time to time.
Such distribution support services shall include: Review of sales and marketing
literature and submission to the NASD; NASD recordkeeping; and quarterly reports
to the Fund's Board of Directors. Such distribution support services may also
include: fulfillment services, including telemarketing, printing, mailing and
follow-up tracking of sales leads; and licensing Adviser or Fund personnel as
registered representatives of the Distributor and related supervisory
activities.
5. Reasonable Efforts.
The Distributor shall use all reasonable efforts in connection with the
distribution of Shares. The Distributor shall have no obligation to sell any
specific number of Shares and shall only sell Shares against orders received
therefor. The Fund shall retain the right to refuse at any time to sell any of
its Shares for any reason deemed adequate by it.
6. Compliance.
In furtherance of the distribution services being provided hereunder, the
Distributor and the Fund agree as follows:
a. The Distributor shall comply with the Rules of Conduct of the NASD and the
securities laws of any jurisdiction in which it sells, directly or
indirectly, Shares.
b. The Distributor shall require each dealer with whom the Distributor has a
selling agreement to conform to the applicable provisions of the Fund's
most current Prospectus and Statement of Additional Information, with
respect to the public offering price of the Shares.
c. The Fund agrees to furnish to the Distributor sufficient copies of any
agreements, plans, communications with the public or other materials it
intends to use in connection with any sales of Shares in a timely manner in
order to allow the Distributor to review, approve and file such materials
with the appropriate regulatory authorities and obtain clearance for use.
The Fund agrees not to use any such materials until so filed and cleared
for use by appropriate authorities and the Distributor.
d. The Distributor, at its own expense, shall qualify as a broker or dealer,
or otherwise, under all applicable Federal or state laws required to permit
the sale of Shares in such states as shall be mutually agreed upon by the
parties; provided, however that the Distributor shall have no obligation to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
if it determines that registering or maintaining registration in such
jurisdiction would be uneconomical.
4
e. The Distributor shall not, in connection with any sale or solicitation of a
sale of the Shares, or make or authorize any representative, service
organization, broker or dealer to make, any representations concerning the
Shares except those contained in the Fund's most current Prospectus
covering the Shares and in communications with the public or sales
materials approved by the Distributor as information supplemental to such
Prospectus.
7. Expenses.
Expenses shall be allocated as follows:
a. The Fund shall bear the following expenses: preparation, setting in type,
and printing of sufficient copies of the Prospectus and Statement of
Additional Information for distribution to existing shareholders;
preparation and printing of reports and other communications to existing
shareholders; distribution of copies of the Prospectus, Statement of
Additional Information and all other communications to existing
shareholders; registration of the Shares under the Federal securities laws;
qualification of the Shares for sale in the jurisdictions mutually agreed
upon by the Fund and the Distributor; transfer agent/shareholder servicing
agent services; supplying information, prices and other data to be
furnished by the Fund under this Agreement; and any original issue taxes or
transfer taxes applicable to the sale or delivery of the Shares or
certificates therefor.
b. The Adviser shall pay all other expenses incident to the sale and
distribution of the Shares sold hereunder, including, without limitation:
printing and distributing copies of the Prospectus, Statement of Additional
Information and reports prepared for use in connection with the offering of
Shares for sale to the public; advertising in connection with such
offering, including public relations services, sales presentations, media
charges, preparation, printing and mailing of advertising and sales
literature; data processing necessary to support a distribution effort;
distribution and shareholder servicing activities of broker-dealers and
other financial institutions; filing fees required by regulatory
authorities for sales literature and advertising materials; any additional
out-of-pocket expenses incurred in connection with the foregoing and any
other costs of distribution.
8. Compensation.
For the distribution and distribution support services provided by the
Distributor pursuant to the terms of the Agreement, the Adviser shall pay to the
Distributor the compensation set forth in Schedule A attached hereto, which
schedule may be amended from time to time.
The Adviser shall also reimburse the Distributor for its out-of-pocket expenses
related to the performance of its duties hereunder, including, without
limitation, telecommunications charges, postage and delivery charges, record
retention costs, reproduction charges and traveling and lodging expenses
incurred by officers and employees of the Distributor. The Adviser shall pay the
Distributor's monthly invoices for distribution fees and out-of-pocket expenses
within ten days of the respective month-end. If this Agreement becomes effective
subsequent to the first day of the month or terminates before the last day of
the month, the Fund shall pay to the Distributor a distribution fee that is
prorated for that part of the month in which this Agreement is in effect. All
rights of compensation and reimbursement under this Agreement for services
performed by the Distributor as of the termination date shall survive the
termination of this Agreement.
9. Use of Distributor's Name.
The Fund shall not use the name of the Distributor or any of its affiliates in
the Prospectus, Statement of Additional Information, sales literature or other
material relating to the Fund in a manner not approved prior thereto in writing
by the Distributor; provided, however, that the Distributor shall approve all
uses of its and its affiliates' names that merely refer in accurate terms to
their appointments or that are required by the Securities and Exchange
Commission (the "SEC") or any state securities commission; and further provided,
that in no event shall such approval be unreasonably withheld.
10. Use of Fund's Name.
Neither the Distributor nor any of its affiliates shall use the name of the Fund
or material relating to the Fund on any forms (including any checks, bank drafts
or bank statements) for other than internal use in a manner not approved prior
thereto by the Fund; provided, however, that the Fund shall approve all uses of
its name that merely refer in accurate terms to the appointment of the
Distributor hereunder or that are required by the SEC or any state securities
commission; and further provided, that in no event shall such approval be
unreasonably withheld.
5
11. Liability of Distributor.
The duties of the Distributor shall be limited to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against the
Distributor hereunder. The Distributor shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except to the extent of a loss
resulting from willful misfeasance, bad faith or negligence, or reckless
disregard of its obligations and duties under this Agreement. As used in this
Section 9 and in Section 10 (except the second paragraph of Section 10), the
term "Distributor" shall include directors, officers, employees and other agents
of the Distributor.
12. Indemnification of Distributor.
The Fund shall indemnify and hold harmless the Distributor against any and all
liabilities, losses, damages, claims and expenses (including, without
limitation, reasonable attorneys' fees and disbursements and investigation
expenses incident thereto) which the Distributor may incur or be required to pay
hereafter, in connection with any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or legislative body, in
which the Distributor may be involved as a party or otherwise or with which the
Distributor may be threatened, by reason of the offer or sale of the Fund shares
prior to the effective date of this Agreement.
Any director, officer, employee, shareholder or agent of the Distributor who may
be or become an officer, director, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any business of the
Fund (other than services or business in connection with the Distributor's
duties hereunder), to be rendering such services to or acting solely for the
Fund and not as a director, officer, employee, shareholder or agent, or one
under the control or direction of the Distributor, even though receiving a
salary from the Distributor.
The Fund agrees to indemnify and hold harmless the Distributor, and each person,
who controls the Distributor within the meaning of Section 15 of the 1933 Act,
or Section 20 of the Securities Exchange Act of 1934, as amended ("1934 Act"),
against any and all liabilities, losses, damages, claims and expenses, joint or
several (including, without limitation, reasonable attorneys' fees and
disbursements and investigation expenses incident thereto) to which they, or any
of them, may become subject under the 1933 Act, the 1934 Act, the 1940 Act or
other Federal or state laws or regulations, at common law or otherwise, insofar
as such liabilities, losses, damages, claims and expenses (or actions, suits or
proceedings in respect thereof) arise out of or relate to any untrue statement
or alleged untrue statement of a material fact contained in a Prospectus,
Statement of Additional Information, supplement thereto, sales literature or
other written information prepared by the Fund and provided by the Fund to the
Distributor for the Distributor's use hereunder, or arise out of or relate to
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Distributor (or any person controlling the Distributor) shall not be entitled to
indemnity hereunder for any liabilities, losses, damages, claims or expenses (or
actions, suits or proceedings in respect thereof) resulting from (i) an untrue
statement or omission or alleged untrue statement or omission made in the
Prospectus, Statement of Additional Information, or supplement, sales or other
literature, in reliance upon and in conformity with information furnished in
writing to the Fund by the Distributor specifically for use therein or (ii) the
Distributor's own willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations in the performance of this Agreement.
The Distributor agrees to indemnify and hold harmless the Fund, and each person
who controls the Fund within the meaning of Section 15 of the 1933 Act, or
Section 20 of the 1934 Act, against any and all liabilities, losses, damages,
claims and expenses, joint or several (including, without limitation reasonable
attorneys' fees and disbursements and investigation expenses incident thereto)
to which they, or any of them, may become subject under the 1933 Act, the 1934
Act, the 1940 Act or other Federal or state laws, at common law or otherwise,
insofar as such liabilities, losses, damages, claims or expenses arise out of or
relate to any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or Statement of Additional Information or any
supplement thereto, or arise out of or relate to any 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 based upon
information furnished in writing to the Fund by the Distributor specifically for
use therein.
6
The Distributor agrees to indemnify and hold harmless the Adviser, and each
person who controls the Adviser within the meaning of Section 15 of the 1933
Act, or Section 20 of the 1934 Act, against any and all liabilities, losses,
damages, claims and expenses, joint or several (including, without limitation
reasonable attorneys' fees and disbursements and investigation expenses incident
thereto) to which they, or any of them, may become subject under the 1933 Act,
the 1934 Act, the 1940 Act or other Federal or state laws, at common law or
otherwise, insofar as such liabilities, losses, damages, claims or expenses
arise out of or relate to any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or Statement of Additional Information
or any supplement thereto, or arise out of or relate to any 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 based upon
information furnished in writing to the Adviser by the Distributor specifically
for use therein.
A party seeking indemnification hereunder (the "Indemnitee") shall give prompt
written notice to the party from whom indemnification is sought ("Indemnitor")
of a written assertion or claim of any threatened or pending legal proceeding
which may be subject to indemnity under this Section; provided, however, that
failure to notify the Indemnitor of such written assertion or claim shall not
relieve the Indemnitor of any liability arising from this Section. The
Indemnitor shall be entitled, if it so elects, to assume the defense of any suit
brought to enforce a claim subject to this Indemnity and such defense shall be
conducted by counsel chosen by the Indemnitor and satisfactory to the
Indemnitee; provided, however, that if the defendants include both the
Indemnitee and the Indemnitor, and the Indemnitee shall have reasonably
concluded that there may be one or more legal defenses available to it which are
different from or additional to those available to the Indemnitor ("conflict of
interest"), the Indemnitor shall not have the right to elect to defend such
claim on behalf of the Indemnitee, and the Indemnitee shall have the right to
select separate counsel to defend such claim on behalf of the Indemnitee. In the
event that the Indemnitor elects to assume the defense of any suit pursuant to
the preceding sentence and retains counsel satisfactory to the Indemnitee, the
Indemnitee shall bear the fees and expenses of additional counsel retained by
it, except for reasonable investigation costs which shall be borne by the
Indemnitor. If the Indemnitor (i) does not elect to assume the defense of a
claim, (ii) elects to assume the defense of a claim but chooses counsel that is
not satisfactory to the Indemnitee or (iii) has no right to assume the defense
of a claim because of a conflict of interest, the Indemnitor shall advance or
reimburse the Indemnitee, at the election of the Indemnitee, reasonable fees and
disbursements of any counsel retained by Indemnitee, including reasonable
investigation costs.
13. Dual Employees.
The Adviser agrees that only its employees who are registered representatives of
the Distributor ("dual employees") shall offer or sell Shares of the Portfolios
and further agrees that the activities of any such employees as registered
representatives of the Distributor shall be limited to offering and selling
Shares. If there are dual employees, one employee of the Adviser shall register
as a principal of the Distributor and assist the Distributor in monitoring the
marketing and sales activities of the dual employees. The Adviser shall maintain
errors and omissions and fidelity bond insurance policies providing reasonable
coverage for its employees activities and shall provide copies of such policies
to the Distributor. The Adviser shall indemnify and hold harmless the
Distributor against any and all liabilities, losses, damages, claims and
expenses (including reasonable attorneys' fees and disbursements and
investigation costs incident thereto) arising from or related to the Adviser's
employees' activities as registered representatives of the Distributor,
including, without limitation, any and all such liabilities, losses, damages,
claims and expenses arising from or related to the breach by such dual employees
of any rules or regulations of the NASD or SEC.
14. Force Majeure.
The Distributor shall not be liable for any delays or errors occurring by reason
of circumstances not reasonably foreseeable and beyond its control, including,
but not limited, to acts of civil or military authority, national emergencies,
work stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot
or failure of communication or power supply. In the event of equipment
breakdowns which are beyond the reasonable control of the Distributor and not
primarily attributable to the failure of the Distributor to reasonably maintain
or provide for the maintenance of such equipment, the Distributor shall, at no
additional expense to the Fund, take reasonable steps in good faith to minimize
service interruptions, but shall have no liability with respect thereto.
7
15. Scope of Duties.
The Distributor and the Fund shall regularly consult with each other regarding
the Distributor's performance of its obligations and its compensation under the
foregoing provisions. In connection therewith, the Fund shall submit to the
Distributor at a reasonable time in advance of filing with the SEC copies of any
amended or supplemented Registration Statement of the Fund (including exhibits)
under the 1940 Act and the 1933 Act, and at a reasonable time in advance of
their proposed use, copies of any amended or supplemented forms relating to any
plan, program or service offered by the Fund. Any change in such materials that
would require any change in the Distributor's obligations under the foregoing
provisions shall be subject to the Distributor's approval. In the event that a
change in such documents or in the procedures contained therein increases the
cost or burden to the Distributor of performing its obligations hereunder, the
Distributor shall be entitled to receive reasonable compensation therefore.
16. Duration.
This Agreement shall become effective as of the date first above written, and
shall continue in force for two years from that date and thereafter from year to
year, provided continuance is approved at least annually by either (i) the vote
of a majority of the Directors of the Fund, or by the vote of a majority of the
outstanding voting securities of the Fund, and (ii) the vote of a majority of
those Directors of the Fund who are not interested persons of the Fund, and who
are not parties to this Agreement or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on the approval.
17. Termination.
This Agreement shall terminate as follows:
a. This Agreement shall terminate automatically in the event of its
assignment.
b. This Agreement shall terminate upon the failure to approve the continuance
of the Agreement after the initial two year term as set forth in Section 16
above.
c. This Agreement shall terminate at any time upon a vote of the majority of
the Directors who are not interested persons of the Fund or by a vote of
the majority of the outstanding voting securities of the Fund, upon not
less than 60 days prior written notice to the Distributor.
d. The Distributor may terminate this Agreement upon not less than 60 days
prior written notice to the Fund.
Upon the termination of this Agreement, the Adviser shall pay to the Distributor
such compensation and out-of-pocket expenses as may be payable for the period
prior to the effective date of such termination. In the event that the Fund
designates a successor to any of the Distributor's obligations hereunder, the
Distributor shall, at the expense and direction of the Fund, transfer to such
successor all relevant books, records and other data established or maintained
by the Distributor pursuant to the foregoing provisions.
Sections 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 21, 22, 24, 25 and 26 shall
survive any termination of this Agreement.
18. Amendment.
The terms of this Agreement shall not be waived, altered, modified, amended or
supplemented in any manner whatsoever except by a written instrument signed by
the Distributor, the Adviser and the Fund and shall not become effective unless
its terms have been approved by the majority of the Directors of the Fund or by
a "vote of a majority of the outstanding voting securities" of the Fund and by a
majority of those Directors who are not "interested persons" of the Fund or any
party to this Agreement.
19. Non-Exclusive Services.
The services of the Distributor rendered to the Fund are not exclusive. The
Distributor may render such services to any other investment company.
20. Definitions.
As used in this Agreement, the terms "vote of a majority of the outstanding
voting securities," "assignment," "interested person" and "affiliated person"
shall have the respective meanings specified in the 1940 Act and the rules
enacted thereunder as now in effect or hereafter amended.
8
21. Confidentiality.
The Distributor shall treat confidentially and as proprietary information of the
Fund all records and other information relating to the Fund and prior, present
or potential shareholders and shall not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except as may be required by administrative or judicial tribunals or as
requested by the Fund.
22. Notice.
Any notices and other communications required or permitted hereunder shall be in
writing and shall be effective upon delivery by hand or upon receipt if sent by
certified or registered mail (postage prepaid and return receipt requested) or
by a nationally recognized overnight courier service (appropriately marked for
overnight delivery) or upon transmission if sent by telex or facsimile (with
request for immediate confirmation of receipt in a manner customary for
communications of such respective type and with physical delivery of the
communication being made by one or the other means specified in this Section 20
as promptly as practicable thereafter). Notices shall be addressed as follows:
If to the Fund: If to the Adviser: If to the Distributor:
Optimal Funds, Inc. LIMCO Declaration Distributors, Inc.
000 X XX Xxxxx 00 000 X XX Xxxxx 15 000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx Xxxxxxxx X. Xxxxxxx Attn: Xxxxxxx X. Xxxxx
President President Chief Executive Offficer
or to such other respective addresses as the parties shall designate by like
notice, provided that notice of a change of address shall be effective only upon
receipt thereof.
23. Severability.
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.
24. Governing Law.
This Agreement shall be administered, construed and enforced in accordance with
the laws of the Commonwealth of Pennsylvania to the extent that such laws are
not preempted by the provisions of any law of the United States heretofore or
hereafter enacted, as the same may be amended from time to time.
25. Entire Agreement.
This Agreement (including the Exhibits attached hereto) contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior written or oral agreements and understandings
with respect thereto.
26. Miscellaneous.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof. 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. This Agreement may be executed in two counterparts, each of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
Optimal Funds, Inc. Leveraged Index Management Company
------------------------------ ----------------------------------
Xxxxxxxx X. Xxxxxxx Xxxxxxxx X. Xxxxxxx
President President
Declaration Distributors, Inc.
------------------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer
9
SCHEDULE A
Optimal Funds, Inc.
Portfolio and Fee Schedule
Portfolios covered by Distribution Agreement:
The Optimal Fund
Fees for distribution and distribution support services on behalf of the
Portfolios:
$20,000.00 per year.
Plus out-of-pocket expenses to include, but not limited to: travel, printing,
postage, telephone, registration fees for Adviser/Fund personnel, broker/dealer
and registered representative registration fees specific to Adviser/Fund, and
other miscellaneous items.
SCHEDULE B
Optimal Funds, Inc.
Distribution Support Services
1. Provide national broker dealer for Fund registration.
2. Review and submit for approval to the NASD all advertising and promotional
materials.
3. Maintain all books and records required by the NASD.
4. Subject to approval of Distributor, license personnel as registered
representatives of the Distributor to distribute no load fund shares
sponsored by the Adviser.
5. Telemarketing services (additional cost- to be negotiated).
6. Fund fulfillment services, including sampling prospective shareholders
inquiries and related mailings (additional cost - to be negotiated).
