DISTRIBUTION AGREEMENT
This Agreement made as of November 20, 2006 by and between CM Advisers
Family of Funds (the "Trust"), a Delaware business trust, and Ultimus Fund
Distributors, LLC, an Ohio limited liability company ("Distributor").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Distributor is a broker-dealer registered with the Securities and
Exchange Commission and a member of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Distributor are desirous of entering into an
agreement providing for the distribution by Distributor of shares of beneficial
interest (the "Shares") of each series of shares of the Trust listed on Schedule
A attached hereto (the "Series"), as such Schedule A may be amended from time to
time;
NOW, THEREFORE, in consideration of the premises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment.
The Trust hereby appoints Distributor as its exclusive agent for the
distribution of the Shares, and Distributor hereby accepts such appointment
under the terms of this Agreement. While this Agreement is in force, the Trust
shall not sell any Shares except on the terms set forth in this Agreement.
Notwithstanding any other provision hereof, the Trust may terminate, suspend or
withdraw the offering of Shares whenever, in its sole discretion, it deems such
action to be desirable.
2. Sale and Repurchase of Shares.
(a) Distributor will have the right, as agent for the Trust, to enter
into dealer agreements with responsible investment dealers, and to
sell Shares to such investment dealers against orders therefor at
the public offering price (as defined in subparagraph 2(d) hereof)
stated in the Trust's effective Registration Statement on Form N-1A
under the Act and the Securities Act of 1933, as amended, including
the then current prospectus and statement of additional information
(the "Registration Statement"). Upon receipt of an order to purchase
Shares from a dealer with whom Distributor has a dealer agreement,
Distributor will promptly cause such order to be filled by the
Trust. All dealer agreements shall be in such form as has been
approved by the Trust.
(b) Distributor will also have the right, as agent for the Trust, to
sell such Shares to the public against orders therefor at the public
offering price.
(c) Distributor will also have the right to take, as agent for the
Trust, all actions which, in Distributor's reasonable judgment, are
necessary to carry into effect the distribution of the Shares.
(d) The public offering price for the Shares of each Series shall be the
respective net asset value of the Shares of that Series then in
effect, plus any applicable sales charge determined in the manner
set forth in the Registration Statement or as permitted by the
Act and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder. In no event shall any applicable
sales charge exceed the maximum sales charge permitted by the Rules
of the NASD.
(e) The net asset value of the Shares of each Series shall be determined
in the manner provided in the Registration Statement, and when
determined shall be applicable to transactions as provided for in
the Registration Statement. The net asset value of the Shares of
each Series shall be calculated by the Trust or by another entity on
behalf of the Trust. Distributor shall have no duty to inquire into
or liability for the accuracy of the net asset value per Share as
calculated.
(f) On every sale, the Trust shall receive the applicable net asset
value of the Shares promptly, but in no event later than the third
business day following the date on which Distributor shall have
received an order for the purchase of the Shares.
(g) Upon receipt of purchase instructions, Distributor will transmit
such instructions to the Trust or its transfer agent for the
issuance and registration of the Shares purchased.
(h) Nothing in this Agreement shall prevent Distributor or any
affiliated person (as defined in the Act) of Distributor from acting
as distributor for any other person, firm or corporation (including
other investment companies) or in any way limit or restrict
Distributor or any such affiliated person from buying, selling or
trading any securities for its or their own account or for the
accounts of others from whom it or they may be acting; provided,
however, that Distributor expressly represents that it will
undertake no activities which, in its reasonable judgment, will
adversely affect the performance of its obligations to the Trust
under this Agreement.
(i) Distributor, as agent of and for the account of the Trust, may
repurchase the Shares at such prices and upon such terms and
conditions as shall be specified in the Registration Statement.
3. Sale of Shares by the Trust.
The Trust reserves the right to issue any Shares at any time directly to
the holders of Shares ("Shareholders"), to sell Shares to its Shareholders or to
other persons at not less than net asset value and to issue Shares in exchange
for substantially all the assets of any corporation or trust or for the shares
of any corporation or trust.
4. Basis of Sale of Shares.
Distributor does not agree to sell any specific number of Shares.
Distributor, as agent for the Trust, undertakes to sell Shares on a best efforts
basis only against orders therefor.
5. Rules of NASD, etc.
(a) In providing services hereunder, Distributor will comply with the
Rules of the NASD, the federal securities laws and the rules
thereunder and the securities laws and regulations of each state and
other jurisdiction in which it sells, directly or indirectly, any
Shares.
(b) Distributor will require each dealer with whom Distributor has a
dealer agreement to conform to the applicable provisions hereof and
the Registration Statement with respect to the public offering price
of the Shares, and neither Distributor nor any such dealers shall
withhold the placing of purchase orders so as to make a profit
thereby.
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(c) Distributor agrees to furnish to the Trust sufficient copies of any
agreements, plans or other materials it intends to use in connection
with any sales of Shares in reasonably adequate time for the Trust
to file and clear them with the proper authorities before they are
put in use, and not to use them until so filed and cleared. At the
request of the Trust, Distributor will assume responsibility for the
review and clearance of all advertisements and sales literature.
(d) Distributor, at its own expense, will qualify as dealer or broker,
or otherwise, under all applicable state or federal laws required in
order that Shares may be sold in such States as may be mutually
agreed upon by the parties.
(e) Distributor shall not make, or permit any representative, broker or
dealer to make, in connection with any sale or solicitation of a
sale of the Shares, any representations concerning the Shares except
those contained in the then current prospectus and statement of
additional information covering the Shares and in printed
information approved by the Trust as information supplemental to
such prospectus and statement of additional information. Copies of
the then effective prospectus and statement of additional
information and any such printed supplemental information will be
supplied by the Trust to Distributor in reasonable quantities upon
request.
6. Records to be supplied by Trust.
The Trust shall furnish to Distributor copies of all information,
financial statements and other papers which Distributor may reasonably request
for use in connection with the distribution of the Shares, and this shall
include, but shall not be limited to, one certified copy, upon request by
Distributor, of all financial statements prepared for the Trust by independent
public accountants.
7. Fees and Expenses.
For performing its services under this Agreement, Distributor will receive
a fee from the Trust or its investment adviser in accordance with agreements
between them as permitted by applicable laws, including the Act and rules and
regulations promulgated thereunder. The fee is $6,000 per annum, and shall be
paid on a monthly basis. The Trust or its investment adviser shall promptly
reimburse Distributor for any expenses that are to be paid by the Trust in
accordance with the following paragraph.
In the performance of its obligations under this Agreement, Distributor
will pay only the costs incurred in qualifying as a broker or dealer under state
and federal laws and in establishing and maintaining its relationships with the
dealers selling the Shares. All other costs in connection with the offering of
the Shares will be paid by the Trust or its investment adviser in accordance
with agreements between them as permitted by applicable laws, including the Act
and rules and regulations promulgated thereunder. These costs include, but are
not limited to, licensing fees, filing fees (including NASD), travel and such
other expenses as may be incurred by Distributor on behalf of the Trust.
Notwithstanding the foregoing, Distributor agrees that it shall not be
entitled to receive any fee from the Trust or to be reimbursed by the Trust for
any distribution or offering related costs unless and until the Trust has
adopted a plan of distribution pursuant to Rule 12b-1 which permits the payment
of such fee or the reimbursement of such costs.
8. Indemnification of Trust.
Distributor agrees to indemnify and hold harmless the Trust and each
person who has been, is, or may hereafter be a Trustee, officer, employee,
shareholder or control person of the Trust against any loss,
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damage or expense (including the reasonable costs of investigation and
reasonable attorneys' fees) reasonably incurred by any of them in connection
with any claim or in connection with any action, suit or proceeding to which any
of them may be a party, which arises out of or is alleged to arise out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact, or the omission or alleged omission to state a material fact necessary to
make the statements not misleading, on the part of Distributor or any agent or
employee of Distributor or any other person for whose acts Distributor is
responsible, unless such statement or omission was made in reliance upon written
information furnished by the Trust; (ii) Distributor's failure to exercise
reasonable care and diligence with respect to its services, if any, rendered in
connection with investment, reinvestment, automatic withdrawal and other plans
for Shares; (iii) Distributor's failure to comply with applicable laws and the
Rules of the NASD; (iv) any action or inaction by the Distributor or any other
person for whose acts Distributor is responsible constituting willful
misfeasance, bad faith or negligence, including clerical errors and mechanical
failures, or (v) the breach of the terms of this Agreement by Distributor. The
Distributor will advance attorneys' fees or other expenses incurred by any such
person in defending a proceeding, upon the undertaking by or on behalf of such
person to repay the advance if it is ultimately determined that such person is
not entitled to indemnification. The term "expenses" for purposes of this and
the next paragraph includes amounts paid in satisfaction of judgments or in
settlements which are made with Distributor's consent. The foregoing rights of
indemnification shall be in addition to any other rights to which the Trust or
each such person may be entitled as a matter of law.
9. Indemnification of Distributor.
The Trust agrees to indemnify and hold harmless Distributor and each
person who has been, is, or may hereafter be a director, officer, employee,
shareholder or control person of Distributor against any loss, damage or expense
(including the reasonable costs of investigation and reasonable attorneys' fees)
reasonably incurred by any of them in connection with the matters to which this
Agreement relates, except a loss resulting from the failure of Distributor or
any such other person to comply with applicable law or the terms of this
Agreement, or from willful misfeasance, bad faith or negligence, including
clerical errors and mechanical failures, on the part of any of such persons in
the performance of Distributor's duties or from the reckless disregard by any of
such persons of Distributor's obligations and duties under this Agreement, for
all of which exceptions Distributor shall be liable to the Trust. The Trust will
advance attorneys' fees or other expenses incurred by any such person in
defending a proceeding, upon the undertaking by or on behalf of such person to
repay the advance if it is ultimately determined that such person is not
entitled to indemnification.
In order that the indemnification provisions contained in this Paragraph 9
shall apply, it is understood that if in any case the Trust may be asked to
indemnify Distributor or any other person or hold Distributor or any other
person harmless, the Trust shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further understood that
Distributor will use all reasonable care to identify and notify the Trust
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Trust. The Trust
shall have the option to defend Distributor and any such person against any
claim which may be the subject of this indemnification, and in the event that
the Trust so elects it will so notify Distributor, and thereupon the Trust shall
take over complete defense of the claim, and neither Distributor nor any such
person shall in such situation initiate further legal or other expenses for
which it shall seek indemnification under this Paragraph 9. Distributor shall in
no case confess any claim or make any compromise in any case in which the Trust
will be asked to indemnify Distributor or any such person except with the
Trust's written consent.
Notwithstanding any other provision of this Agreement, Distributor shall
be entitled to receive and act upon advice of counsel (who may be counsel for
the Trust or its own counsel) and shall be
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without liability for any action reasonably taken or thing reasonably done
pursuant to such advice, provided that such action is not in violation of
applicable federal or state laws or regulations.
10. Representations of the Parties.
(a) The Trust certifies to Distributor that: (1) as of the date of the
execution of this Agreement, each Series that is in existence as of
such date has an unlimited number of authorized shares, and (2) this
Agreement has been duly authorized by the Trust and, when executed
and delivered by the Trust, will constitute a legal, valid and
binding obligation of the Trust, enforceable against the Trust in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
(b) Distributor represents and warrants that: (1) the various procedures
and systems which Distributor has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any
other cause the records and other data of the Trust and
Distributor's records, data, equipment, facilities and other
property used in the performance of its obligations hereunder are
adequate and that it will make such changes therein from time to
time as are required for the secure performance of its obligations
hereunder, and (2) this Agreement has been duly authorized by
Distributor and, when executed and delivered by Distributor, will
constitute a legal, valid and binding obligation of Distributor,
enforceable against Distributor in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting the rights and remedies
of creditors and secured parties.
11. Termination and Amendment of this Agreement.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment by Distributor. This Agreement may be
amended only if such amendment is approved (i) by Distributor and (ii) by the
Board of Trustees of the Trust, including the approval of a majority of the
Trustees of the Trust who are not interested persons of the Trust or of
Distributor by vote cast in person at a meeting called for the purpose of voting
on such approval.
Either the Trust or Distributor may at any time terminate this Agreement
on sixty (60) days' written notice delivered or mailed by registered mail,
postage prepaid, to the other party.
12. Effective Period of this Agreement.
This Agreement shall take effect upon its execution and shall remain in
full force and effect for an initial term of two (2) years from the date of its
execution (unless terminated as set forth in Section 11), and shall continue in
effect from year to year thereafter, subject to annual approval of such
continuance by the Board of Trustees of the Trust, including the approval of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of Distributor by vote cast in person at a meeting called for the
purpose of voting on such approval.
13. Successor Investment Company.
Unless this Agreement has been terminated in accordance with Paragraph 11,
the terms and provisions of this Agreement shall become automatically applicable
to any investment company which is a successor to the Trust as a result of
reorganization, recapitalization or change of domicile.
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14. Limitation of Liability.
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust. If a matter relates only to a
particular series of the Trust, that series shall be solely responsible for all
liabilities in connection with such matter, and the Distributor agrees that
resort shall be had solely to the assets of such series for the payment or
performance thereof.
15. Severability.
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
16. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of the State of Ohio.
(b) 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 Act shall be resolved by reference to such term
or provision of the 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 issued pursuant to said Act. In
addition, where the effect of a requirement of the Act, reflected in
any provision of this Agreement is revised by rule, regulation or
order of the Securities and Exchange Commission, such provision
shall be deemed to incorporate the effect of such rule, regulation
or order.
17. Notices.
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party, with a copy to the Trust's
counsel, at such address as such other party may designate for the receipt of
such notice. Such notice will be effective upon receipt. Until further notice to
the other party, it is agreed that the address of the Trust for this purpose
shall be 000 Xxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000; and that the
address of Distributor for this purpose shall be 000 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxx 00000, Attn: Xxxxxx X. Xxxxxx.
18. Execution
This Agreement may be executed by one or more counterparts, each of which
shall be deemed an original, but all of which together will constitute one in
the same instrument.
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IN WITNESS WHEREOF, the Trust and Distributor have each caused this Agreement to
be signed in duplicate on their behalf, all as of the day and year first above
written.
ATTEST: CM ADVISERS FAMILY OF FUNDS
_______________________________ By: /s/ Xxxxxx Van Den Xxxx
-------------------------------
Name: Xxxxxx Van Den Xxxx
Its: President
ATTEST: ULTIMUS FUND DISTRIBUTORS, LLC
_______________________________ By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Its: President
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SCHEDULE A
TO THE DISTRIBUTION AGREEMENT BETWEEN
CM ADVISERS FAMILY OF FUNDS
AND
ULTIMUS FUND DISTRIBUTORS, LLC
FUND PORTFOLIOS
CM Advisers Fund
CM Advisers Fixed Income Fund
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