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KELMOORE STRATEGIC TRUST
[FORM OF] DISTRIBUTION AGREEMENT Exhibit 99(e)
This Distribution Agreement (the "Agreement") is made as of this ____ day of
____________, 1999, by and between Kelmoore Strategic Trust, a Delaware business
trust (the "Trust"), on behalf of each series of the Trust listed in Schedule I
attached hereto, as may be amended from time to time (individually, a "Fund"
and, collectively, the "Funds") and Kelmoore Investment Company, Inc., a
California corporation (the "Distributor" or "You").
SECTION 1. GENERAL DUTIES AS DISTRIBUTOR OF FUND SHARES.
It is hereby agreed that you shall act as principal distributor for each
series of the Trust set forth on Schedule I and any other series of the
Trust as the parties may agree from time to time. Each Fund may be
authorized to issue multiple classes of shares pursuant to Rule 18f-3 under
the Investment Company Act of 1940, as amended (the "1940 Act"). As
Distributor, you will have the exclusive right to purchase, as principal,
from each Fund, shares of each class authorized and issued by the Fund and
it is further agreed that during the term of this Agreement, you will use
your best efforts to solicit or otherwise cause sales of the shares of each
Fund and any authorized class of the Funds' shares which are registered or
qualified for sale. You agree, as agent for each Fund, to repurchase, and
accept for redemption, the shares of each class authorized and issued by the
Fund; whenever the officers of the Trust deem it advisable for the
protection of shareholders, they may suspend or cancel such authority with
respect to one or more of the Funds. In the performance of these duties you
shall be guided by the requirements of this Agreement, the applicable
provisions of the Trust's Agreement and Declaration of Trust, By-laws, and
applicable federal and state law, all as amended and/or supplemented from
time to time, and each Fund's Prospectus and Statement of Additional
Information, which is from time to time in effect under the Trust's
Registration Statement filed with the U.S. Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended
(the "1933 Act"), and the 1940 Act.
SECTION 2. DEALERS.
You may, as principal, solicit qualified dealers for orders to purchase
shares of the Funds and may enter into dealer Agreements with any such
dealers, the form thereof to be determined by you.
SECTION 3. SALES LITERATURE AND ADVERTISEMENTS.
All sales literature and advertisements used by you in connection with the
sale of the Trust's shares must be submitted to the Trust for its advance
approval. In connection with the sale or arranging for the sale of the
Trust's shares, you are authorized to give only such information and to make
only such statements or representations as are contained in each Fund's
Prospectus in effect under the Trust's Registration Statement, or in sales
literature or advertisements approved by the Trust.
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SECTION 4. LIMITATION UPON INVESTMENT IN THE TRUST
You shall not accept any initial or subsequent investment in shares of a
Fund, except as described in the Fund's then-current Prospectus.
SECTION 5. OFFERING PRICE. NET ASSET VALUE PER SHARE.
Shares of each Fund sold under this Agreement shall be sold only at the
offering price in effect at the time of such sale, as described in the
then-current Prospectus and Statement of Additional Information of each
Fund, and each Fund shall receive not less than the full net asset value
thereof. Any front-end sales charge payable upon purchases shall be retained
by you, it being understood that such amounts will not exceed those set
forth in each Fund's then-current Prospectus. You may re-allow to dealers
all or any part of the sales charge.
Any reference to "net asset value per share" shall refer to each Fund's net
asset value per share computed in accordance with the Trust's Agreement and
Declaration of Trust, each Fund's then-current Prospectus and Statement of
Additional Information and the instructions of the Trustees, all as amended
from time to time. The Trust or its agent will advise you as promptly as
practicable of each Fund's net asset value per share on each day on which it
is determined.
SECTION 6. DUTIES UPON SALE OR REDEMPTION OF SHARES OF THE TRUST.
You shall remit to the Trust's custodian the net asset value per share of
all shares of each Fund sold by you. Each Fund will, as promptly as
practicable, cause the account of the purchaser to be credited with the
number of shares purchased. The Trust will not issue share certificates.
You shall process or cause to be processed requests received from each
Fund's shareholders for redemption of its shares, in the manner prescribed
in the Trust's then-current Prospectus and Statement of Additional
Information. Shares shall be redeemed at their net asset value per share
next computed after receipt of the redemption request, subject to any
applicable redemption fee as set forth in the Fund's then current
prospectus. You shall arrange for payment to such shareholders from each
Fund's account with the custodian.
You shall reimburse the respective Fund for any loss caused by the failure
of a shareholder to confirm in writing any purchase or redemption order
accepted by you. In the event that orders for the purchase or redemption of
shares of a Fund are placed and subsequently canceled, you shall pay to that
Fund, on at least an annual basis, an amount equal to the losses (net of any
gains) realized by the Fund as a result of such cancellations.
SECTION 7. INFORMATION RELATING TO THE TRUST.
The Trust or its agent will furnish you with a certified copy of all
financial statements and a signed copy of each report prepared by its
independent public accountants, and will cooperate fully with you in your
efforts to sell the Funds' shares, and in the performance by you of all of
your duties under this Agreement.
SECTION 8. FILING OF REGISTRATION STATEMENTS.
The Trust or its agent will from time to time file (and furnish you with
copies of) such registration statements, amendments and supplements thereto,
and reports or other documents
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as may be required under the 1933 Act, the 1940 Act, or the laws of the
states in which you desire to sell shares of the Funds.
SECTION 9. MULTIPLE CAPACITIES.
Nothing contained in this Agreement shall be deemed to prohibit you from
acting, and being separately compensated for acting, in one or more
capacities on behalf of the Trust, including, but not limited to, the
capacities of adviser, administrator, broker and distributor. The Trust
understands that you may act in one or more such capacities on behalf of
other investment companies and customers. You shall give the Trust equitable
treatment under the circumstances in supplying services in any capacity, but
the Trust recognizes that it is not entitled to receive preferential
treatment from you as compared with the treatment given to any other
investment company or customer. Whenever you shall act in multiple
capacities on behalf of the Trust, you shall maintain the appropriate
separate account and records for each such capacity.
SECTION 10. PAYMENT OF FEES AND EXPENSES.
You shall be entitled to receive fees for your services as Distributor. The
Funds shall pay you fees in accordance with any plans adopted by the Funds
(or class of shares of the respective Funds) pursuant to Rule 12b-1 under
the 1940 Act.
The Trust, on behalf of the Funds, shall assume and pay, or reimburse you
for, all expenses of the Trust arising from this Agreement, except that the
following expenses shall be allocated to you, and you shall pay for: (i)
expenses of printing all sales literature of the Funds, including
shareholder reports and prospectuses required for your purposes (expenses of
printing quarterly and annual reports and of maintaining and printing a
current Prospectus for the Funds' shareholders will be paid for by the
respective Funds); and (ii) any payments to other persons for selling shares
of the Funds; or (iii) the amount of any service fees payable to you by the
Funds to be used to compensate persons for providing personal service to
shareholders and maintaining shareholder accounts. The foregoing shall not,
however, be deemed to limit your right to receive and retain any front-end
sales charges referred to in Section 5 hereof.
SECTION 11. LIABILITY OF THE DISTRIBUTOR.
You shall be liable for your own acts and omissions caused by your willful
misfeasance, bad faith, or gross negligence in the performance of your
duties, or by your reckless disregard of your obligations under this
Agreement, and nothing herein shall protect you against any such liability
to the Trust or its shareholders. Subject to the first sentence of this
Section, you shall not be liable for any action taken or omitted on advice,
obtained in good faith, of counsel, provided such counsel is satisfactory to
the Trust.
SECTION 12. TERMINATION OF AGREEMENT; ASSIGNMENT.
This Agreement may be terminated at any time, without the payment of any
penalty, on 60 days' written notice (i) by you; (ii) by the Trust, acting
pursuant to a resolution adopted by the non-interested Trustees; or (iii) by
the vote of the holders of the lesser of (1) 67% of the Trust's shares
present at a meeting if the holders of more than 50% of the outstanding
shares are
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present in person or represented by proxy, or (2) more than 50% of the
outstanding shares of the Trust. This Agreement shall automatically
terminate in the event of its assignment. Termination shall not affect the
rights of the parties which have accrued prior thereto.
SECTION 13. DURATION.
Unless sooner terminated, this Agreement shall continue in effect for one
year from the date herein above first written, and from year to year
thereafter until terminated, provided that the continuation of this
Agreement and the terms hereof are specifically approved annually in
accordance with the requirements of the 1940 Act as modified or superseded
by any rule, regulation, order or interpretive position of the Commission.
SECTION 14. DEFINITIONS.
The terms "assignment" and "interested person" when used in this Agreement
shall have the meanings given such terms in the 1940 Act.
SECTION 15. CONCERNING APPLICABLE PROVISIONS OF LAW, ETC.
This Agreement shall be subject to all applicable provisions of law,
including, without being limited to, the applicable provisions of the 1940
Act, the 1933 Act, and the Securities Exchange Act of 1934, as amended; and
to the extent that any provisions of this Agreement are in conflict with
such laws, the latter shall control.
This Agreement is executed and delivered in California, and the laws of the
State of California shall govern the construction, validity and effect of
this Agreement.
SECTION 16. MISCELLANEOUS.
The obligations of the Trust and each Fund are not personally binding upon,
nor shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust or any Fund, but
only the relevant Fund's property shall be bound. No Fund shall be liable
for the obligations of any other Fund.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
KELMOORE STRATEGIC TRUST KELMOORE INVESTMENT COMPANY, INC.
By: ___________________________ By: ____________________________
Name: ___________________________ Name: ____________________________
Title: ___________________________ Title: ____________________________
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SCHEDULE I
Kelmoore Strategic Trust:
Kelmoore Strategy Covered Option Fund
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