DISTRIBUTION AGREEMENT
Form
of Distribution Agreement
This
Agreement made as of February 2, 2007 by and between Monteagle 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:
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1.
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Appointment.
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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.
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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.
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(b)
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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.
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(c)
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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.
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(d)
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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.
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(e)
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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.
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(f)
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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.
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(g)
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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.
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(h)
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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.
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(i)
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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.
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3.
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Sale
of Shares by the Trust.
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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.
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4.
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Basis
of Sale of Shares.
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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.
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5.
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Rules
of NASD, etc.
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(a)
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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.
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(b)
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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)
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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.
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(d)
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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.
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(e)
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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.
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6.
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Records
to be supplied by Trust.
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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.
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7.
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Fees
and Expenses.
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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.
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8.
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Indemnification
of Trust.
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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, 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; and (iii) Distributor’s failure
to comply with applicable laws and the Rules of the NASD. 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.
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9.
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Indemnification
of Distributor.
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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 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.
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10.
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Representations
of the Parties.
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(a)
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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.
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(b)
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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.
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11.
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Termination
and Amendment of this
Agreement.
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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 thirty
(30)
days' written notice delivered or mailed by registered mail, postage prepaid,
to
the other party.
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12.
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Effective
Period of this Agreement.
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This
Agreement shall take effect upon its execution and shall remain in full force
and effect for an initial term of one (1) year 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.
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13.
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Successor
Investment Company.
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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.
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Limitation
of Liability.
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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.
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15.
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Severability.
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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.
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16.
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Questions
of Interpretation.
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(a)
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This
Agreement shall be governed by the laws of the State of
Ohio.
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(b)
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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.
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17.
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Notices.
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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
0000
Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000, Attn: Xxxx X. Xxxxxxx; and that the
address of Distributor for this purpose shall be 000 Xxxxxxxx Xxxxx, Xxxxx
000,
Xxxxxxxxxx, Xxxx 00000, Attn: Xxxxxx X. Xxxxxx.
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18.
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Execution
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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.
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: | MONTEAGLE FUNDS | ||
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| By: | |||
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Name:
Xxxx X. Xxxxxxxx
Its: President
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| ATTEST: | ULTIMUS FUND DISTRIBUTORS, LLC | ||
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| By: | |||
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Name:
Xxxxxx X. Xxxxxx
Its: President
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6
SCHEDULE
A
TO
THE DISTRIBUTION AGREEMENT BETWEEN
AND
ULTIMUS
FUND DISTRIBUTORS, LLC
FUND
PORTFOLIOS
Monteagle
Fixed Income Fund
Monteagle
Quality Growth Fund
Monteagle
Large-Cap Growth Fund
Monteagle
Select Value Fund
Monteagle
Value Fund
7
