EXHIBIT (E)(1)
DISTRIBUTION AGREEMENT
AGREEMENT made as of this 3rd of December, 1999 between EAGLE FUNDS, a
business trust organized under the laws of the Commonwealth of Massachusetts
(the "Fund"), and XXXXXX & ASSOCIATES, INC., a Kansas corporation (the
"Underwriter").
W I T N E S S E T H
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the distribution
of its shares of beneficial interest, without par value per share, including
such series or classes of shares as may now or hereafter be authorized (the
"Shares") in jurisdictions wherein Shares may legally be offered for sale;
provided, however, that the Fund, in its absolute discretion, may: (a) issue or
sell Shares directly to holders of Shares of the Fund upon such terms and
conditions and for such consideration, if any, as it may determine, whether in
connection with the distribution of subscription or purchase rights, the payment
or reinvestment of dividends or distributions, or otherwise; (b) issue or sell
Shares at net asset value in connection with merger or consolidation with, or
acquisition of the assets of, other investment companies or similar companies;
and (c) in connection with the issue and sale of Shares to Trustees, officers
and employees of the Fund, and to directors, officers and employees of the
investment advisor (or any portfolio manager) of the Fund or any principal
underwriter (including the Underwriter) of the Fund, and to any trust, pension,
profit-sharing or other benefit plan for any of the aforesaid persons or any
other such persons as described in the then current Prospectus of the Fund, as
permitted by Rule 22d-1 under the Investment Company Act of 1940 (the "1940
Act").
2. The Underwriter hereby accepts appointment as agent for the distribution
of the Shares and agrees that it will use its best efforts to sell such part of
the authorized Shares remaining unissued as from time to time shall be
effectively registered under the Securities Act of 1933 ("Securities Act"), at
prices determined as hereinafter provided and on terms hereinafter set forth,
all subject to applicable Federal and State laws and regulations and to the
Agreement and Declaration of Trust of the Fund.
3. The Fund agrees that it will use its best efforts to keep effectively
registered under the Securities Act for sale, as herein contemplated, such
Shares as the Underwriter shall reasonably request and as the Securities and
Exchange Commission shall permit to be so registered.
4. Notwithstanding any other provision hereof, the Fund may terminate,
suspend, or withdraw the offering of the Shares, or Shares of any series or
class, whenever, in its sole discretion, it deems such action to be desirable.
5. The Underwriter shall sell Shares to, or through, brokers, dealers,
banks or other qualified financial intermediaries (hereinafter referred to as
"dealers"), or others, in such manner not inconsistent with the provisions
hereof and the then effective Registration Statement of the Fund under the
Securities Act (and related Prospectus and Statement of Additional Information)
as the Underwriter may determine from time to time, provided that no dealer, or
other person, shall be appointed nor authorized to act as agent of the Fund
without the prior consent of the Fund. The Underwriter shall have the right to
enter into agreements with dealers of its choice for the sale of Shares and fix
therein the portion of the sales charge which may be allocated to such dealers;
provided that the Fund shall approve the form of such agreements and shall
evidence such approval by filing said form and any amendments thereto as
attachments to this Agreement, which shall be filed as an exhibit to the Fund's
currently effective registration statement under the Securities Act. Shares
sold to dealers shall be for resale by such dealers only at the public offering
price(s) set forth in the Fund's then current Prospectus. The current forms of
such agreements are attached herein as Exhibits 1 and 2.
6. Shares offered for sale, or sold by the Underwriter, shall be so offered
or sold at a price per Share determined in accordance with the then current
Prospectus relating to the sale of Shares except as departure from such prices
shall be permitted by the rules and regulations of the Securities and Exchange
Commission. Any public offering price shall be the net asset value per Share
plus a sales charge of not more than 8.50% of such public offering price.
Shares may be sold at net asset value without a sales charge to such class or
classes of investors or in such class or classes of transactions as may be
permitted under applicable rules of the Securities and Exchange Commission and
as described in the then current Prospectus of the Fund. The net asset value
per Share of each series or class shall be calculated in accordance with the
Agreement and Declaration of Trust of the Fund and shall be determined in the
manner, and at the time, set forth in the then current Prospectus of the Fund
relating to such Shares.
7. The price the Fund shall receive for all Shares purchased from the Fund
shall be the net asset value used in determining the public offering price
applicable to the sale of such Shares. The excess, if any, of the sales price
over the net asset value of Shares sold by the Underwriter as agent shall be
retained by the Underwriter as a commission for its services hereunder. Out of
such commission, the Underwriter may allow commissions or concessions to dealers
in such amounts as the Underwriter shall determine from time to time. Except as
may be otherwise determined by the Underwriter and the Fund from time to time,
such commissions or concessions shall be uniform to all dealers.
8. The Underwriter shall issue and deliver, or cause to be issued and
delivered, on behalf of the Fund such confirmations of sales made by it as
agent, pursuant to this Agreement, as may be required. At, or prior to, the
time of issuance of Shares, the Underwriter will pay, or cause to be paid, to
the Fund the amount due the Fund for the sale of such Shares. Certificates
shall be issued (if any), or Shares registered on the transfer books of the
Fund, in such names and denominations as the Underwriter may specify.
9. The Fund will execute any and all documents, and furnish any and all
information, which may be reasonably necessary in connection with the
qualification of the Shares for sale (including the qualification of the Fund as
a dealer, where necessary or advisable) in such states as the Underwriter may
reasonably request (it being understood that the Fund shall not be required,
without its consent, to comply with any requirement which, in its opinion, is
unduly burdensome).
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10. The Fund will furnish to the Underwriter, from time to time, such
information with respect to the Fund and the Shares as the Underwriter may
reasonably request for use in connection with the sale of Shares. The
Underwriter agrees that it will not use or distribute, nor will it authorize
dealers or others to use, distribute or disseminate, in connection with the sale
of such Shares, any statements other than those contained in the Fund's current
Prospectus and Statement of Additional Information, except such supplemental
literature or advertising as shall be lawful under Federal and State securities
laws and regulations, and that it will furnish the Fund with copies of all such
material.
11. The Underwriter shall order Shares from the Fund only to the extent that
it shall have received purchase orders therefor. The Underwriter will not make,
nor authorize any dealers or others, to make: (a) any short sale of Shares; or
(b) any sale of Shares to any officer or trustee of the Fund, nor to any officer
or director of the Underwriter, or of any corporation or association furnishing
investment advisory, managerial, or supervisory services to the Fund, nor to any
such corporation or association, unless such sales are made in accordance with
the then current Prospectus relating to the sale of such Shares.
12. In selling Shares for the account of the Fund, the Underwriter will in
all respects conform to the requirements of all Federal and State laws, and the
Conduct Rules of the National Association of Securities Dealers, Inc., relating
to such sales, and will indemnify and save harmless the Fund from any damage or
expense on account of any wrongful act by the Underwriter or any employee,
representative, or agent of the Underwriter. The Underwriter, however, is not
to be responsible for the acts of other dealers except as and to the extent that
they shall be acting for the Underwriter or under its direction or authority.
The Underwriter will observe and be bound by all the provisions of the Agreement
and Declaration of Trust of the Fund (and of any fundamental policies adopted by
the Fund pursuant to the 1940 Act, notice of which shall have been given by the
Fund to the Underwriter) which at the time in any way require, limit, restrict,
prohibit or otherwise regulate any action on the part of the Underwriter.
13. The Underwriter will require each dealer to conform to the provisions
hereof and of the Registration Statement (and related Prospectus) at the time in
effect under the Securities Act with respect to the public offering price of the
Shares, and neither the Underwriter nor any such dealer shall withhold the
placing of purchase orders so as to make a profit thereby.
14. The Fund will pay, or cause to be paid, expenses (including the fees and
disbursements of its own counsel) of any registration of Shares under the
Securities Act; expenses of qualifying or continuing the qualification of the
Shares for sale under the securities laws of various states and, in connection
therewith, of qualifying or continuing the qualification of the Fund as a dealer
or broker under the laws of such states as may be designated by the Underwriter
under the conditions herein specified; expenses incident to the issuance of the
Shares such as the cost of Share certificates (if any); issue or transfer taxes;
all expenses in connection with the printing of any notices of shareholders'
meetings, proxy and proxy statements and enclosures therewith, as well as any
other notice or communication sent to shareholders or otherwise, any annual,
semi-annual or other report of communications sent to the shareholders, and the
expenses of sending prospectuses relating to the Shares to existing
shareholders; and fees of the transfer and shareholder service agent. The
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Underwriter will pay, or cause to be paid, all expenses (other than expenses
which any dealer may bear pursuant to any agreement with the Underwriter)
incident to the sale and distribution of the Shares issued or sold hereunder,
including, without limiting the generality of the foregoing, all: (a) expenses
of printing and distributing any Prospectus and Statement of Additional
Information (other than deliveries to existing shareholders) and of preparing,
printing and distributing or disseminating any other literature, advertising and
selling aids in connection with such offering of the Shares for sale (except
that such expenses need not include expenses incurred by the Fund in connection
with the preparation, printing and distribution of any report or other
communication to holders of Shares in their capacity as such), and (b) expenses
of advertising in connection with such offering.
15. The Fund agrees to indemnify and hold harmless the Underwriter and each
of its directors and officers and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Securities Act against any
loss, liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages, or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any Shares, based upon the ground that the
registration statement, Prospectus, shareholder or other information filed or
made public by the Fund (as from time to time amended), included an untrue
statement of a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading under the
Securities Act, or any other statute or the common law. However, the Fund does
not agree to indemnify the Underwriter or hold it harmless to the extent that
the statement or omission was made in reliance upon, and in conformity with,
information furnished to the Fund by or on behalf of the Underwriter. In no
case (i) is the indemnity of the Fund in favor of the Underwriter or any person
indemnified to be deemed to protect the Underwriter or any person against any
liability to the Fund or its security holders to which the Underwriter or such
person would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of their duties or by reason of their
reckless disregard of their obligations and duties under this Agreement, or
(ii) is the Fund to be liable under its indemnity agreement contained in this
section with respect to any claim made against the Underwriter or any person
indemnified unless the Underwriter or person, as the case may be, shall have
notified the Fund in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Underwriter or person (or after the
Underwriter or the person shall have received notice or service on any
designated agent). However, failure to notify the Fund of any claim shall not
relieve the Fund from any liability which it may have to the Underwriter or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Fund 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 claims, but if the Fund elects to
assume the defense, the defense shall be conducted by counsel chosen by it and
satisfactory to the Underwriter or persons, defendant or defendants in the suit.
In the event the Fund elects to assume the defense of any suit and retain
counsel, the Underwriter, officers or directors or controlling person or
persons, defendant or defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Fund does not elect to assume
the defense of any suit, it will reimburse the Underwriter, officers or
directors or controlling person or persons, defendant or defendants in the suit
for the reasonable fees and expenses of any counsel retained by them if they are
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entitled to the indemnification hereunder. The Fund agrees to notify the
Underwriter promptly of the commencement of any litigation or proceedings
against it or any of its officers or directors in connection with the issuance
or sale of any of the Shares.
The Underwriter also covenants and agrees that it will indemnify and hold
harmless the Fund and each of its Trustees and officers and each person, if any,
who controls the Fund within the meaning of Section 15 of the Securities Act,
against any loss, liability, damages, claim or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, damages, claim
or expense and reasonable counsel fees incurred in connection therewith) arising
by reason of any person acquiring any Shares, based upon the Securities Act or
any other statute or common law, alleging any wrongful act of the Underwriter or
any of its employees or alleging that the registration statement, Prospectus,
shareholder reports or other information filed or made public by the Fund (as
from time to time amended), included an untrue statement of a material fact or
omitted to state a material fact required to be stated or necessary in order to
make the statements not misleading, insofar as the statement or omission was
made in reliance upon, and in conformity with information furnished to the Fund
by or on behalf of the Underwriter. In no case (i) is the indemnity of the
Underwriter in favor of the Fund or any person indemnified to be deemed to
protect the Fund or any person against any liability to which the Fund or such
person would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Underwriter to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or person, as the case may be, shall have notified
the Underwriter in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Fund or person (or after the Fund or
such person shall have received notice of service on any designated agent).
However, failure to notify the Underwriter of any claim shall not relieve the
Underwriter from any liability which it may have to the Fund or any person
against whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Underwriter, it 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 the claim, but if the Underwriter elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory to the Fund,
to its officers and Trustees and to any controlling person or persons, defendant
or defendants in the suit. In the event that the Underwriter elects to assume
the defense of any suit and retain counsel, the Fund or controlling persons,
defendant or defendants in the suit shall bear the fees and expense of any
additional counsel retained by them. If the Underwriter does not elect to
assume the defense of any suit, it will reimburse the Fund, officers and
Trustees or controlling person or persons, defendant or defendants in the suit,
for the reasonable fees and expenses of any counsel retained by them if entitled
to the indemnification hereunder. The Underwriter agrees to notify the Fund
promptly of the commencement of any litigation or proceedings against them in
connection with the issue and sale of any of the Shares.
16. This agreement shall continue in effect until December 3, 2001, unless
and until terminated by either party as hereinafter provided, and will continue
from year to year thereafter, but only so long as such continuance is
specifically approved, at least annually, in the manner required by the 1940
Act. The Underwriter, the Fund acting pursuant to a resolution by the non-
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interested trustees, or the majority of the outstanding voting securities of the
Fund as defined in the 1940 Act may terminate this agreement on any date,
without payment of any penalty, by giving the other party sixty days' prior
written notice of such termination, specifying the date fixed therefor.
Without prejudice to any other remedies of the Fund in any such event, the
Fund may terminate this Agreement at any time immediately upon any failure of
fulfillment of any of the obligations of the Underwriter hereunder.
17. This Agreement shall automatically terminate in the event of its
"assignment" as defined in the 1940 Act.
18. Any notice under this agreement shall be in writing, addressed, and
delivered or mailed, postage pre-paid, to the other party at such address as
such other party may designate for the receipt of such notice.
19. The parties hereto are expressly put on notice of the Fund's Agreement
and Declaration of Trust dated August 10, 1999 and all amendments thereto, all
of which are on file with the Secretary of The Commonwealth of Massachusetts,
and the limitation of shareholder and Trustee liability contained therein. This
agreement has been executed by and on behalf of the Fund by its representatives
as such representatives and not individually, and the obligations of the Fund
hereunder are not binding upon any of the Trustees, officers or shareholders of
the Fund individually but are binding upon only the assets and property of the
Fund (or applicable portfolio thereof). With respect to any claim by the
Underwriter for recovery of any liability of the Fund arising hereunder
allocated to a particular portfolio, if there is more than one, whether in
accordance with the express terms hereof or otherwise, the Underwriter shall
have recourse solely against the assets of that portfolio to satisfy such claim
and shall have no recourse against the assets of any other portfolio for such
purpose.
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IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
agreement to be executed on its behalf as of the day and year first above
written.
EAGLE FUNDS
BY /s/ XXXX X. XXXXXXXX
----------------------------
Chairman
Attest:
Xxxxxxxx Xxxxxxxx
[SEAL]
XXXXXX & ASSOCIATES, INC.
By /s/ XXXXX X. XXXXXXXXX
---------------------------------
President
Attest:
Xxxxxxxx Xxxxxxxx
[SEAL]
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