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EXHIBIT (e)
DISTRIBUTION AGREEMENT
AGREEMENT made as of this 12 day of October, 1999, by and
between COMMONFUND INSTITUTIONAL FUNDS, a Delaware business trust (the
"Company"), and COMMONFUND SECURITIES, INC., a Delaware corporation (the
"Distributor").
W I T N E S S E T H :
WHEREAS, the Company is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end
management investment company and it is in the interest of the Company to offer
its shares of beneficial interest in one or more series ("Shares") for sale
continuously and to appoint a principal underwriter for the purpose of
facilitating such offers and sales;
WHEREAS, the Company and the Distributor have entered into an
arrangement with respect to the solicitation of indications of interest in the
Shares in the period before effectiveness (the "Pre-effective Period") of its
initial registration statement filed pursuant to the Securities Act of 1933, as
amended, (the "1933 Act") and the 1940 Act;
WHEREAS, the Company and the Distributor wish to enter into an
agreement and with respect to the continuous offering and sale of Shares, after
the effectiveness of such registration statement.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor.
The Company hereby appoints the Distributor its underwriter in connection with
the offering and sale of the Shares on the terms set forth in this Agreement and
the Distributor hereby accepts such appointment and agrees to act hereunder
Section 2. Services and Duties of the Distributor.
(a) The Distributor hereby confirms its agreement to solicit
indications of interest in the Shares as agent for the Company during the
Pre-effective Period and agrees to offer and sell shares as agent for the
Company after the Pre-effective Period and during the remaining term of this
Agreement. Offers and sales will be upon the terms described in the Prospectus.
As used hereafter in this Agreement, the term "Prospectus" shall mean the
prospectus included as part of the Company's Registration Statement, as such
prospectus may be amended or supplemented from time to time, and the term
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"Registration Statement" shall mean the Registration Statement most recently
filed from time to time by the Company with the Securities and Exchange
Commission and effective under the 1933 Act and the 1940 Act, as such
Registration Statement is amended by any amendments thereto at the time in
effect.
(b) The Distributor will hold itself available to receive
orders, satisfactory to the Distributor, for the purchase of Shares and will
accept such orders on behalf of the Company and will transmit any orders to
purchase Shares received by it to the Company's transfer and shareholder
servicing agent as promptly as practicable after receipt. The Distributor will
not accept funds tendered to purchase Shares and shall promptly forward to the
Company"s Custodian any checks or other orders for payment in favor of the
Company in respect of purchases of Shares in accordance with the instructions of
the Company"s Administrator. Purchase orders shall be deemed effective at the
time and in the manner set forth in the Prospectus.
(c) The offering price of the Shares shall be the net asset
value (determined as set forth in the Prospectus) per Share next determined
following receipt of an order.
(d) The Distributor shall not be obligated to sell any certain
number of Shares and nothing herein contained shall prevent the Distributor from
entering into like distribution arrangements with other investment companies. At
the present time, Distributor privately places shares for certain private
investment companies.
Section 3. Duties of the Company.
(a) The Company agrees to sell its Shares so long as it has
Shares available for sale and to cause the Company"s transfer and shareholder
servicing agent to record on its books the ownership of (or deliver
certificates, if any, for) such Shares registered in such names and amounts as
the Distributor has requested in writing or other means of data transmission, as
promptly as practicable after receipt by the Company of the net asset value
thereof and written request of the Distributor therefor.
(b) The Company shall keep the Distributor fully informed with
regard to its affairs and shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of Shares of the
Company, and this shall include one certified copy, upon request by the
Distributor, of all financial statements prepared for the Company by independent
accountants and such reasonable number of copies of its most current Prospectus
and annual and interim reports as the Distributor may request and shall
cooperate fully in the efforts of the Distributor to sell and arrange for the
sale of the Shares and in the performance of the Distributor under this
Agreement.
(c) The Company shall take, from time to time, such steps,
including payment of the related filing fees, as may be necessary to register
its Shares under the 1933 Act to the end that there will be available for sale
such number of Shares as the
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Distributor may be expected to sell. The Company agrees to file from time to
time such amendments, reports and other documents as may be necessary in order
that there may be no untrue statement of a material fact in a Registration
Statement or Prospectus, or necessary in order that there may be no omission to
state a material fact in the Registration Statement or Prospectus which omission
would make the statements therein misleading.
(d) The Company shall use its best efforts to qualify and
maintain the qualification of an appropriate number of its Shares for sale under
the securities laws of such states as the Distributor and the Company may
approve provided that the Company shall not be required to amend its Agreement
and Declaration of Trust or By-Laws to comply with the laws of any state, to
maintain an office in any state, to change the terms of the offering of the
Shares in any state from the terms set forth in its Registration Statement and
Prospectus, to qualify as a foreign corporation in any state or to consent to
service of process in any state other than with respect to claims arising out of
the offering of the Shares. The Distributor shall furnish such information and
other material relating to its affairs and activities as may be required by the
Company in connection with such qualifications.
Section 4. Expenses.
(a) The Company shall bear all costs and expenses of the
continuous offering of the Shares in connection with (i) fees and disbursements
of its counsel and independent accountants, (ii) the preparation, filing and
printing of any registration statements and/or prospectuses required to be filed
by and under the federal and state securities laws, (iii) the preparation and
mailing of annual and interim reports, prospectuses and proxy materials to
shareholders and (iv) the qualifications of Shares for sale under the securities
laws of such states or other jurisdictions as shall be selected by the Company
and the Distributor pursuant to Section 3(d) hereof and the cost and expenses
payable to each such state for continuing qualification therein.
(b) The Distributor shall bear (i) the costs and expenses of
preparing, printing and distributing any materials not prepared by the Company
and other materials used by the Distributor in connection with its offering of
the Shares for sale to the public, including the additional cost of printing
copies, at printer's over-run cost, of the Prospectus and of annual and interim
reports to shareholders other than copies thereof required for distribution to
shareholders or for filing with any federal and state securities authorities,
(ii) any expenses of advertising incurred by the Distributor in connection with
such offering and (iii) 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.
Section 5. Compensation. No compensation shall be payable by the
Company to the Distributor for the services to be rendered and the expenses
assumed by the Distributor with respect to this Agreement.
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Section 6. Indemnification. The Company agrees to indemnify, defend and
hold the Distributor, its officers and directors and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its officers, directors or any such controlling person may incur
under the 1933 Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact contained in the Registration
Statement or Prospectus or arising out of or based upon any alleged omission to
state a material fact required to be stated in either thereof or necessary to
make the statements in either thereof not misleading, except insofar as such
claims, demands, liabilities or expenses arise out of or are based upon any such
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished in writing by the
Distributor to the Company for use in the Registration Statement or Prospectus;
provided, however, that this indemnity agreement, to the extent that it might
require indemnity of any person who is also an officer or Director of the
Company or who controls the Company within the meaning of Section 15 of the 1933
Act, shall not inure to the benefit of such officer, Director or controlling
person unless a court of competent jurisdiction shall determine, or it shall
have been determined by controlling precedent, that such result would not be
against public policy as expressed in the 1933 Act; and further provided, that
in no event shall anything contained herein be so construed as to protect the
Distributor against any liability to the Company or to its security holders to
which the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations under this Agreement. The
Company's agreement to indemnify the Distributor, its officers and directors and
any such controlling person as aforesaid is expressly conditioned upon the
Company's being promptly notified of any action brought against the Distributor,
its officers or directors, or any such controlling person, such notification to
be given to the Company at its principal business office. The Company agrees
promptly to notify the Distributor of the commencement of any litigation or
proceedings against it or any of its officers or Directors in connection with
the issue and sale of any Shares.
The Distributor agrees to indemnify, defend and hold the
Company, its Directors and officers and any person who controls the Company, if
any, within the meaning of Section 15 of the 1933 Act, free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending against such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which the Company, its
Directors or officers or any such controlling person may incur under the 1933
Act or under common law or otherwise, but only to the extent that such liability
or expense incurred by the Company, its Directors or officers or such
controlling person resulting from such claims or demands shall arise out of or
be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Company for use in
the preparation of the Registration
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Statement or Prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in such information or a fact necessary to
make such information not misleading, it being understood that the Company will
rely upon the information provided by the Distributor for use in the preparation
of the Registration Statement and Prospectus. The Distributor's agreement to
indemnify the Company, its Directors and officers, and any such controlling
person as aforesaid is expressly conditioned upon the Distributor's being
promptly notified of any action brought against the Company, its Directors or
officers or any such controlling person, such notification to be given to the
Distributor at its principal business office.
Section 7. Compliance with Securities Laws. The Company
represents that it is registered as an open-end management investment company
under the 1940 Act, and agrees that it will comply with the provisions of the
1940 Act and of the rules and regulations thereunder. The Company and the
Distributor each agree to comply with the applicable terms and provisions of the
1940 Act, the 1933 Act and, subject to the provisions of Section 3(d),
applicable state "Blue Sky" laws. The Distributor agrees to comply with the
applicable terms and provisions of the Securities Exchange Act of 1934.
Section 8. Term of Agreement; Termination. This Agreement
shall commence on the date first set forth above. This Agreement shall continue
in effect for a period more than two years from the date hereof only so long as
such continuance is specifically approved at least annually in conformity with
the requirements of the 1940 Act.
This Agreement shall terminate automatically in the event of
its assignment (as defined by the 1940 Act). In addition, this Agreement may be
terminated by either party at any time, without penalty, on not more than sixty
days' nor less than thirty days' written notice to the other party.
Section 9. Notices. Any notice required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Distributor at 000 Xxxx Xxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: President, or (2) to the Company at 000
Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: President. The foregoing
addresses may be changed by the party entitled to notice by providing notice as
contemplated in this Section.
Section 10. Notice. The Directors of the Company have
authorized the execution of this Agreement in their capacity as Directors and
not individually and the Distributor agrees that neither the shareholders nor
the Directors nor any officer, employee, representative or agent of the Company
shall be personally liable upon, nor shall resort be had to their private
property for the satisfaction of, obligations given, executed or delivered on
behalf of or by the Company, that the shareholders, Directors, officers,
employees, representatives and agents of the Company shall not be personally
liable hereunder, and that the Distributor shall look solely to the property of
the Company for the satisfaction of any claim hereunder.
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Section 11. Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
COMMONFUND SECURITIES, INC.
By: __________________________
COMMONFUND INSTITUTIONAL FUNDS
By: __________________________
