DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 27th day of August,
2001, by and among Zodiac Trust, a Delaware business trust (the "Trust"),
Conning Asset Management Company, a Missouri corporation (the "Adviser")
and Quasar Distributors, LLC, a Delaware limited liability company (the
"Distributor").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment
company, and is authorized to issue shares of beneficial interests
("Shares") in separate series, with each such series representing interests
in a separate portfolio of securities and other assets;
WHEREAS, the Adviser is duly registered under the Investment Advisers
Act of 1940, as amended, and any applicable state securities laws, as an
investment adviser;
WHEREAS, the Trust desires to retain the Distributor as principal
underwriter in connection with the offering and sale of the Shares of each
series listed on Exhibit A hereto (as amended from time to time) (each a
"Portfolio", collectively the "Portfolios");
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 of the National Association of Securities Dealers, Inc. (the
"NASD");
WHEREAS, this Agreement has been approved by a vote of the Trust's
board of trustees ("Board") and its disinterested trustees in conformity
with Section 15(c) of the 1940 Act; and
WHEREAS, the Distributor is willing to act as principal underwriter
for the Trust on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. Appointment of Quasar as the Distributor
The Trust hereby appoints the Distributor as its agent for the sale
and distribution of Shares of the Portfolios, on the terms and conditions
set forth in this Agreement, and the Distributor hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement.
2. Services and Duties of the Distributor
A. The Distributor agrees to sell Shares of the Portfolios on a best
efforts basis as agent for the Trust during the term of this Agreement,
upon the terms and at the current offering price (plus sales charge, if
any) described in the Prospectus. As used in this Agreement, the term
"Prospectus" shall mean the current prospectus, including the statement of
additional information, as amended or supplemented, relating to the
Portfolios and included in the currently effective registration statement
or post-effective amendment thereto (the "Registration Statement") of the
Trust under the Securities Act of 1933 (the "1933 Act") and the 0000 Xxx.
B. During the continuous public offering of Shares of the Portfolios,
the Distributor will hold itself available to receive orders, satisfactory
to the Distributor, for the purchase of Shares of the Portfolios and will
accept such orders on behalf of the Trust. Such purchase orders shall be
deemed effective at the time and in the manner set forth in the Prospectus.
C. The Distributor, with the operational assistance of the Trust's
transfer agent, shall make Shares available for sale and redemption through
the National Securities Clearing Corporation's Fund/SERV System.
D. In connection with all matters relating to this Agreement, the
Distributor agrees to act in conformity with the Trust's Declaration of
Trust and By-Laws and with the instructions of the Board and to comply with
the requirements of the 1933 Act, the 1934 Act, the 1940 Act, the
regulations of the NASD and all other applicable federal or state laws and
regulations. The Distributor acknowledges and agrees that it is not
authorized to provide any information or make any representations other
than as contained in the Prospectus and any sales literature specifically
approved by the Trust and the Distributor.
E. The Distributor agrees to cooperate with the Trust in the
development of all proposed advertisements and sales literature relating to
the Portfolios. The Distributor agrees to review all proposed
advertisements and sales literature for compliance with applicable laws and
regulations, and shall file with appropriate regulators those
advertisements and sales literature it believes are in compliance with such
laws and regulations. The Distributor agrees to furnish to the Trust any
comments provided by regulators with respect to such materials and to use
its best efforts to obtain the approval of the regulators to such
materials.
F. The Distributor at its sole discretion may repurchase Shares
offered for sale by shareholders of the Portfolios. Repurchase of Shares by
the Distributor shall be at the price determined in accordance with, and in
the manner set forth in, the current Prospectus. At the end of each
business day, the Distributor shall notify, by any appropriate means, the
Trust and its transfer agent of the orders for repurchase of Shares
received by the Distributor since the last report, the amount to be paid
for such Shares, and the identity of the shareholders offering Shares for
repurchase. The Trust reserves the right to suspend such repurchase right
upon written notice to the Distributor. The Distributor further agrees to
act as agent for the Trust to receive and transmit promptly to the Trust's
transfer agent shareholder requests for redemption of Shares.
G. The Distributor may, in its discretion, enter into agreements with
such qualified broker-dealers as it may select, in order that such
broker-dealers also may sell Shares of the Portfolios. The form of any
dealer agreement shall be mutually agreed upon and approved by the Trust
and the Distributor. The Distributor may pay a portion of any applicable
sales charge, or allow a discount, to a selling broker-dealer, as described
in the Prospectus or, if not described, as agreed upon with the
broker-dealer. The Distributor shall include in the forms of agreement with
selling broker-dealers a provision for the forfeiture by them of their
sales charge or discount with respect to Shares sold by them and redeemed,
repurchased or tendered for redemption within seven business days after the
date of confirmation of such purchases.
H. The Distributor shall devote its best efforts to effect sales of
Shares of the Portfolios but shall not be obligated to sell any certain
number of Shares.
I. The Distributor shall prepare reports for the Board regarding its
activities under this Agreement as from time to time shall be reasonably
requested by the Board, including reports regarding the use of 12b-1
payments received by the Distributor, if any.
J. The services furnished by the Distributor hereunder are not to be
deemed exclusive and the Distributor shall be free to furnish similar
services to others so long as its services under this Agreement are not
impaired thereby. The Trust recognizes that from time to time officers and
employees of the Distributor may serve as directors, trustees, officers and
employees of other entities (including investment companies), that such
other entities may include the name of the Distributor as part of their
name and that the Distributor or its affiliates may enter into
distribution, administration, fund accounting, transfer agent or other
agreements with such other entities.
3. Duties and Representations of the Trust
A. The Trust represents that it is duly organized and in good standing
under the law of its jurisdiction of incorporation and registered as an
open-end management investment company under the 1940 Act. The Trust agrees
that it will act in material conformity with its Declaration of Trust,
By-Laws, its Registration Statement as may be amended from time to time and
resolutions and other instructions of its Board. The Trust agrees to comply
in all material respects with the 1933 Act, the 1940 Act, and all other
applicable federal and state laws and regulations. The Trust represents and
warrants that this Agreement has been duly authorized by all necessary
action by the Trust under the 1940 Act, state law and the Trust's
Declaration of Trust and By-Laws.
B. The Trust, or its agent, shall take or cause to be taken all
necessary action to register Shares of the Portfolios under the 1933 Act
and to maintain an effective Registration Statement for such Shares in
order to permit the sale of Shares as herein contemplated. The Trust
authorizes the Distributor to use the Prospectus, in the form furnished to
the Distributor from time to time, in connection with the sale of Shares.
C. The Trust represents and agrees that all Shares to be sold by it,
including those offered under this Agreement, are validly authorized and,
when issued in accordance with the description in the Prospectus, will be
fully paid and nonassessable. The Trust further agrees that it shall have
the right to suspend the sale of Shares of any Portfolio at any time in
response to conditions in the securities markets or otherwise, and to
suspend the redemption of Shares of any Portfolio at any time permitted by
the 1940 Act or the rules of the Securities and Exchange Commission
("SEC"). The Trust shall advise the Distributor promptly of any such
determination.
D. The Trust agrees to advise the Distributor promptly in writing:
(i) of any correspondence or other communication by the SEC or
its staff relating to the Portfolios, including requests by the SEC
for amendments to the Registration Statement or Prospectus;
(ii) in the event of the issuance by the SEC of any stop-order
suspending the effectiveness of the Registration Statement then in
effect or the initiation of any proceeding for that purpose;
(iii) of the happening of any event which makes untrue any
statement of a material fact made in the Prospectus or which requires
the making of a change in such Prospectus in order to make the
statements therein not misleading; and
(iv) of all actions taken by the SEC with respect to any
amendments to any Registration Statement or Prospectus which may from
time to time be filed with the SEC.
E. The Trust shall file such reports and other documents as may be
required under applicable federal and state laws and regulations. The Trust
shall notify the Distributor in writing of the states in which the Shares
may be sold and shall notify the Distributor in writing of any changes to
such information.
F. The Trust agrees to file from time to time such amendments to its
Registration Statement and Prospectus as may be necessary in order that its
Registration Statement and Prospectus will not contain any untrue statement
of material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
G. The Trust shall fully cooperate in the efforts of the Distributor
to sell and arrange for the sale of Shares and shall make available to the
Distributor a statement of each computation of net asset value. In
addition, the Trust shall keep the Distributor fully informed of its
affairs and shall provide to the Distributor from time to time copies of
all information, financial statements, and other papers that the
Distributor may reasonably request for use in connection with the
distribution of Shares, including, without limitation, certified copies of
any financial statements prepared for the Trust by its independent public
accountants and such reasonable number of copies of the most current
Prospectus, statement of additional information and annual and interim
reports to shareholders as the Distributor may request. The Trust shall
forward a copy of any SEC filings, including the Registration Statement, to
the Distributor within one business day of any such filings. The Trust
represents that it will not use or authorize the use of any advertising or
sales material unless and until such materials have been approved and
authorized for use by the Distributor.
H. The Trust represents and warrants that its Registration Statement
and any advertisements and sales literature of the Trust (excluding
statements relating to the Distributor and the services it provides that
are based upon written information furnished by the Distributor expressly
for inclusion therein) shall not contain any untrue statement of material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that all
statements or information furnished to the Distributor pursuant to this
Agreement shall be true and correct in all material respects.
4. Compensation
As compensation for the services performed and the expenses assumed by
Distributor under this Agreement including, but not limited to, any
commissions paid for sales of Shares, Distributor shall be entitled to the
fees and expenses set forth in Exhibit A hereto (as amended from time to
time), which are payable promptly after the last day of each month. Such
fees shall be paid to Distributor by the Trust pursuant to its Rule 12b-1
plan or, if Rule 12b-1 payments are not sufficient to pay such fees and
expenses, or if the Rule 12b-1 plan is discontinued, or if the Portfolio's
sponsor, the Adviser, otherwise determines that Rule 12b-1 fees shall not,
in whole or in part, be used to pay Distributor, the Adviser shall be
responsible for the payment of the amount of such fees not covered by Rule
12b-1 payments.
5. Expenses
A. The Trust shall bear all costs and expenses in connection with
registration of the Shares with the SEC and related compliance with state
securities laws, as well as all costs and expenses in connection with the
offering of the Shares and communications with shareholders of its
Portfolios, including but not limited to (i) fees and disbursements of its
counsel and independent public accountants; (ii) costs and expenses of the
preparation, filing, printing and mailing of Registration Statements and
Prospectuses and amendments thereto, as well as related advertising and
sales literature, (iii) costs and expenses of the preparation, printing and
mailing of annual and interim reports, proxy materials and other
communications to shareholders of the Portfolios; and (iv) fees required in
connection with the offer and sale of Shares in such jurisdictions as shall
be selected by the Trust pursuant to Section 3(E) hereof.
B. The Distributor shall bear the expenses of registration or
qualification of the Distributor as a dealer or broker under federal or
state laws and the expenses of continuing such registration or
qualification. The Distributor does not assume responsibility for any
expenses not expressly assumed hereunder.
6. Indemnification
A. The Trust shall indemnify, defend and hold the Distributor, and
each of its present or former members, officers, employees, representatives
and any person who controls or previously controlled the Distributor within
the meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all losses, claims, demands, liabilities, damages and
expenses (including the costs of investigating or defending any alleged
losses, claims, demands, liabilities, damages or expenses and any
reasonable counsel fee incurred in connection therewith) which the
Distributor, each of its present and former members, officers, employees or
representatives or any such controlling person, may incur under the 1933
Act, the 1934 Act, any other statute (including Blue Sky laws) or any rule
or regulation thereunder, or under common law or otherwise, arising out of
or based upon any untrue statement, or alleged untrue statement of a
material fact contained in the Registration Statement or any Prospectus, as
from time to time amended or supplemented, or in any annual or interim
report to shareholders, or in any advertisement or sales literature, or
arising out of or based upon 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; provided, however, that the Trust's
obligation to indemnify the Distributor and any of the foregoing
indemnitees shall not be deemed to cover any losses, claims, demands,
liabilities, damages or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, Prospectus, annual or interim report, or any such
advertisement or sales literature in reliance upon and in conformity with
information relating to the Distributor and furnished to the Trust or its
counsel by the Distributor in writing and acknowledging the purpose of its
use for the purpose of, and used in, the preparation thereof. The Trust's
agreement to indemnify the Distributor, and any of the foregoing
indemnitees, as the case may be, with respect to any action, is expressly
conditioned upon the Trust being notified of such action brought against
the Distributor, or any of the foregoing indemnitees, within a reasonable
time after the summons or other first legal process giving information of
the nature of the claim shall have been served upon the Distributor, or
such person, unless the failure to give notice does not prejudice the
Trust. Such notification shall be given by letter or by telegram addressed
to the Trust's President, but the failure so to notify the Trust of any
such action shall not relieve the Trust from any liability which the Trust
may have to the person against whom such action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or alleged omission,
otherwise than on account of the Trust's indemnity agreement contained in
this Section 6(A).
B. The Trust shall be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce any such loss, claim, demand, liability, damage or expense, but
if the Trust elects to assume the defense, such defense shall be conducted
by counsel chosen by the Trust and approved by the Distributor, which
approval shall not be unreasonably withheld. In the event the Trust elects
to assume the defense of any such suit and retain such counsel, the
indemnified defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by them. If the Trust does not
elect to assume the defense of any such suit, or in case the Distributor
does not, in the exercise of reasonable judgment, approve of counsel chosen
by the Trust or, if under prevailing law or legal codes of ethics, the same
counsel cannot effectively represent the interests of both the Trust and
the Distributor, and each of its present or former members, officers,
employees, representatives or any controlling person, the Trust will
reimburse the indemnified person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained
by Distributor and them. The Trust's indemnification agreement contained in
Sections 6(A) and 6(B) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Distributor,
and each of its present or former members, officers, employees,
representatives or any controlling person, and shall survive the delivery
of any Shares and the termination of this Agreement. This agreement of
indemnity will inure exclusively to the Distributor's benefit, to the
benefit of each of its present or former members, officers, employees or
representatives or to the benefit of any controlling persons and their
successors. The Trust agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against the Trust or any of
its officers or directors in connection with the issue and sale of any of
the Shares.
C. The Trust shall advance attorney's fees and other expenses incurred
by any person in defending any claim, demand, action or suit which is the
subject of a claim for indemnification pursuant to this Section 6 to the
maximum extent permissible under applicable law.
D. The Distributor shall indemnify, defend and hold the Trust, and
each of its present or former trustees, officers, employees,
representatives, and any person who controls or previously controlled the
Trust within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all losses, claims, demands, liabilities, damages
and expenses (including the costs of investigation or defending any alleged
losses, claims, demands, liabilities, damages or expenses, and any
reasonable counsel fee incurred in connection therewith) which the Trust,
and each of its present or former trustees, officers, employees,
representatives, or any such controlling person, may incur under the 1933
Act, the 1934 Act, any other statute (including Blue Sky laws) or any rule
or regulation thereunder, or under common law or otherwise, arising out of
or based upon any untrue, or alleged untrue, statement of a material fact
contained in the Trust's Registration Statement or any Prospectus, as from
time to time amended or supplemented, or arising out of or based upon the
omission, or alleged omission, to state therein a material fact required to
be stated therein or necessary to make the statement not misleading, but
only if such statement or omission was made in reliance upon, and in
conformity with, written information relating to the Distributor and
furnished to the Trust or its counsel by the Distributor for the purpose
of, and used in, the preparation thereof. The Distributor's agreement to
indemnify the Trust, and any of the foregoing indemnitees, is expressly
conditioned upon the Distributor's being notified of any action brought
against the Trust, and any of the foregoing indemnitees, such notification
to be given by letter or telegram addressed to the Distributor's President,
within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon
the Trust or such person unless the failure to give notice does not
prejudice the Distributor, but the failure so to notify the Distributor of
any such action shall not relieve the Distributor from any liability which
the Distributor may have to the person against whom such action is brought
by reason of any such untrue, or alleged untrue, statement or omission,
otherwise than on account of the Distributor's indemnity agreement
contained in this Section 6(D).
E. The Distributor shall be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any such loss, claim, demand, liability, damage or
expense, but if the Distributor elects to assume the defense, such defense
shall be conducted by counsel chosen by the Distributor and approved by the
Trust, which approval shall not be unreasonably withheld. In the event the
Distributor elects to assume the defense of any such suit and retain such
counsel, the indemnified defendant or defendants in such suit shall bear
the fees and expenses of any additional counsel retained by them. If the
Distributor does not elect to assume the defense of any such suit, or in
case the Trust does not, in the exercise of reasonable judgment, approve of
counsel chosen by the Distributor or, if under prevailing law or legal
codes of ethics, the same counsel cannot effectively represent the
interests of both the Trust and the Distributor, and each of its present or
former members, officers, employees, representatives or any controlling
person, the Distributor will reimburse the indemnified person or persons
named as defendant or defendants in such suit, for the fees and expenses of
any counsel retained by the Trust and them. The Distributor's
indemnification agreement contained in Sections 6(D) and (E) shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of the Trust, and each of its present or former directors,
officers, employees, representatives or any controlling person, and shall
survive the delivery of any Shares and the termination of this Agreement.
This Agreement of indemnity will inure exclusively to the Trust's benefit,
to the benefit of each of its present or former directors, officers,
employees or representatives or to the benefit of any controlling persons
and their successors. The Distributor agrees promptly to notify the Trust
of the commencement of any litigation or proceedings against the
Distributor or any of its officers or directors in connection with the
issue and sale of any of the Shares.
F. No person shall be obligated to provide indemnification under this
Section 6 if such indemnification would be impermissible under the 1940
Act, the 1933 Act, the 1934 Act or the rules of the NASD; provided,
however, in such event indemnification shall be provided under this Section
6 to the maximum extent so permissible.
7. Obligations of the Trust
This Agreement is executed by and on behalf of the Trust and the
obligations of the Trust hereunder are not binding upon any of the
trustees, officers or shareholders of the Trust individually but are
binding only upon the Trust and with respect to the Portfolios to which
such obligations pertain.
8. 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.
9. Duration and Termination
A. This Agreement shall become effective with respect to each
Portfolio listed on Exhibit A hereof as of the date hereof and, with
respect to each Portfolio not in existence on that date, on the date an
amendment to Exhibit A to this Agreement relating to that Portfolio is
executed. Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from the date hereof. Thereafter, if not
terminated, this Agreement shall continue automatically in effect as to
each Portfolio for successive one-year periods, provided such continuance
is specifically approved at least annually by (i) the Trust's Board or (ii)
the vote of a "majority of the outstanding voting securities" of a
Portfolio, and provided that in either event the continuance is also
approved by a majority of the Trust's Board who are not "interested
persons" of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval.
B. Notwithstanding the foregoing, this Agreement may be terminated,
without the payment of any penalty, with respect to a particular Portfolio
(i) through a failure to renew this Agreement at the end of a term, (ii)
upon mutual consent of the parties, or (iii) upon no less than 60 days'
written notice, by either the Trust through a vote of a majority of the
members of the Board who are not "interested persons" of the Trust and have
no direct or indirect financial interest in the operation of this Agreement
or by vote of a "majority of the outstanding voting securities" of a
Portfolio, or by the Distributor. 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 and the Trust. If
required under the 1940 Act, any such amendment must be approved by the
Trust's Board, including a majority of the Trust's Board who are not
"interested persons" of any party to this Agreement, by vote cast in person
at a meeting for the purpose of voting on such amendment. In the event that
such amendment affects the Adviser, the written instrument shall also be
signed by the Adviser. This Agreement will automatically terminate in the
event of its assignment.
10. Confidentiality
The Distributor agrees on behalf of its employees to treat all records
relative to the Trust and prior, present or potential shareholders of the
Trust as confidential, and not to use such records for any purpose other
than performance of the Distributor's responsibilities and duties under
this Agreement, except after notification and prior approval by the Trust,
which approval shall not be unreasonably withheld, and may not be withheld
where the Distributor may be exposed to civil or criminal proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, when subject to governmental or regulatory audit
or investigation, or when so requested by the Trust. Records and
information which have become known to the public through no wrongful act
of the Distributor or any of its employees, agents or representatives shall
not be subject to this paragraph.
11. Miscellaneous
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. Any provision of this
Agreement which may be determined by competent authority to be prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors. As used in this Agreement, the terms "majority
of the outstanding voting securities," "interested person," and
"assignment" shall have the same meaning as such terms have in the 1940
Act.
12. Notices
Any notice required or permitted to be given by any party to the
others shall be in writing and shall be deemed to have been given on the
date delivered personally or by courier service or 3 days after sent by
registered or certified mail, postage prepaid, return receipt requested or
on the date sent and confirmed received by facsimile transmission to the
other parties' respective addresses set forth below:
Notice to the Distributor shall be sent to:
Quasar Distributors, LLC
Attn: President
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
notice to the Trust shall be sent to:
Zodiac Trust
Attention: Xxx Xxxxxxxxx
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
notice to the Adviser shall be sent to:
Conning Asset Management
City Place II
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by a duly authorized officer on one or more counterparts as of
the date first above written.
ZODIAC TRUST QUASAR DISTRIBUTORS, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
---------------------- ----------------------
Title: President Title: President
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CONNING ASSET MANAGEMENT
COMPANY
By:/s/ Xxxxx X. Xxxxxxxx
---------------------
Title: Executive Vice President
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