DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of _____________, 1999, between Ingenuity
Capital Management LLC, a Delaware limited liability corporation (hereinafter
referred to as the "ICM"), as investment advisor for the Ingenuity Capital
Trust, (hereinafter referred to as the "Trust"), and Xxxxxxxx Capital Markets,
Inc. ("RCM"), a corporation organized and existing under the laws of the State
of New York.
WHEREAS the Fund is registered under the Investment Act of 1940, as
amended ("1940 Act"), as an open-end management investment company, and has
registered one or more distinct series of shares of beneficial interest
("Shares") for sale to the public under the Securities Act of 1933, as amended
("1933 Act"), and has qualified its shares for sale to the public under various
state securities laws; and
WHEREAS the Fund desires to retain RCM as principal underwriter in
connection with the offering and sale of the Shares of each series listed on
Schedule A ( as amended from time to time) to this Agreement; and
WHEREAS this Agreement has been approved by a vote of the Fund's board
of trustees or directors ("Board") and its disinterested trustees/directors in
conformity with Section 15(c) under the 1940 Act; and
WHEREAS RCM is willing to act as principal underwriter for the Fund on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows;
1. Appointment. The Fund hereby appoints RCM as its agent to be the principal
underwriter so as to hold itself out as available to receive and accept orders
for the purchase and redemption of the Shares and redemption of Shares on behalf
of the Fund, subject to the terms and for the period set forth in this
Agreement. RCM hereby accepts such appointment and agrees to act hereunder. The
Fund understands that any solicitation activities conducted on behalf of the
Fund will be conducted primarily, if not exclusively, by employees of the Fund's
sponsor who shall become registered representatives of RCM.
2. Services and Duties of RCM.
(a) RCM agrees to sell Shares on a best efforts basis from
time to time during the term of this Agreement as agent for the Fund and upon
the terms described in the Registration Statement. As used in this Agreement,
the term "Registration Statement" shall mean the currently effective
registration statement of the Fund, and any supplements thereto, under the 1933
Act and the 0000 Xxx.
(1) RCM will hold itself available to receive purchase and redemption
orders satisfactory to RCM for Shares and will accept such orders on behalf of
the Fund. Such purchase orders shall be deemed effective at the time and in the
manner set forth in the Registration Statement.
(2) RCM, with the operational assistance of the Fund's transfer agent,
shall make Shares available through the National Securities Clearing
Corporation's Fund/SERV System.
(3) RCM shall provide to investors and potential investors only such
information regarding the Fund as the Fund shall provide or approve. RCM shall
review and file all proposed advertisements and sales literature with
appropriate regulators and consult with the Fund regarding any comments provided
by regulators with respect to such materials.
(4) The offering price of the Shares shall be the price determined in
accordance with, and in the manner set forth in, the most-current Prospectus.
The Fund shall make available to RCM a statement of each computation of net
asset value and the details of entering into such computation.
(5) RCM at its sole discretion may repurchase Shares offered for sale by
the shareholders. Repurchase of Shares by RCM shall be at the price determined
in accordance with, and in the manner set forth in, the most-current Prospectus.
At the end of each business day, RCM shall notify, by any appropriate means, the
Fund and its transfer agent of the orders for repurchase of Shares received by
RCM since the last report, the amount to be paid for such Shares, and the
identity of the shareholders offering Shares for repurchase. The Fund reserves
the right to suspend such repurchase right upon written notice to RCM. RCM
further agrees to act as agent for the Fund to receive and transmit promptly to
the Fund's transfer agent shareholder requests for redemption of Shares.
(6) RCM shall not be obligated to sell any certain number of Shares.
(7) RCM shall prepare reports for the Board regarding its activities under
this Agreement as from time to time shall be reasonably requested by the Board.
3. Duties of the Fund.
(1) The Fund shall keep RCM fully informed of its affairs and shall provide
to RCM from time to time copies of all information, financial statements, and
other papers that RCM may reasonably request for use in connection with the
distribution of Shares, including, without limitation, certified copies of any
financial statements prepared for the Fund by its independent public accountant
and such reasonable number of copies of the most current Prospectus, Statement
of Additional Information ("SAI"), and annual and interim reports as RCM may
request, and the Fund shall fully cooperate in the efforts of RCM to sell and
arrange for the sale of Shares.
(2) The Fund shall maintain a currently effective Registration Statement on
Form N-1A with the Securities and Exchange Commission (the "SEC"), maintain
qualification with applicable states and file such reports and other documents
as may be required under applicable federal and state laws. The Fund shall
notify RCM in writing of the states in which the Shares may be sold and shall
notify RCM in writing of any changes to such information. The Fund shall bear
all expenses related to preparing and typesetting such Prospectuses, SAI and
other materials required by law and such other expenses, including printing and
mailing expenses, related to the Fund's communication with persons who are
shareholders.
(3) The Fund shall not use any advertisements or other sales materials that
have not been (i) submitted to RCM for its review and approval, and (ii) filed
with the appropriate regulators.
(4) The Fund represents and warrants that its Registration Statement and
any advertisements and sales literature (excluding statements relating to RCM
and the services it provides that are based upon written information furnished
by RCM expressly for inclusion therein) of the Fund 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 RCM, pursuant to Section 3(a)
hereof, shall be true and correct in all material respects.
4. Other Broker-Dealers. RCM in its discretion may enter into agreements to sell
Shares to such registered and qualified retail dealers, as reasonably requested
by the Fund. In making agreements with such dealers, RCM shall not act only as
principal and not as agent for the Fund. The form of any such dealer agreement
shall be mutually agreed upon and approved by the Fund and RCM.
5. Withdrawal of Offering. The Fund reserves the right at any time to withdraw
all offerings of any or all Shares by written notice to RCM at its principal
office. No Shares shall be offered by either RCM or the Fund under any
provisions of this Agreement and no orders for the purchase or Sale of Shares
hereunder shall be accepted by the Fund if and so long as effectiveness of the
Registration Statement then in effect or any necessary amendments thereto shall
be suspended under any of the provisions of the 1933 Act, or if and so long as a
current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file
with the SEC.
0.Xxxxxxxx Not Exclusive. The services furnished by RCM hereunder are not to be
deemed exclusive and RCM shall be free to furnish similar services to others
so long as its services under this Agreement are not impaired thereby.
7. Expenses of the Fund. The Fund shall bear all costs and expenses of
registering the Shares with the SEC and state and other regulatory bodies, and
shall assume expenses related to communications with shareholders of the Fund
including, but not limited to, (i) fees and disbursements of its counsel and
independent public accountant; (ii) the preparation, filing, and printing of
Registration Statements and/or Prospectuses or SAIs; (iii) the preparation and
mailing of annual and interim reports, Prospectuses, SAIs, and proxy materials
to shareholders; (iv) such other expenses related to the communications with
persons who are shareholders of the Fund; and (v)the qualifications of Shares
for sale under the securities laws of such jurisdictions as shall be selected by
the Fund pursuant to Paragraph 3(b) hereof, and the costs and expenses payable
to each such jurisdiction for continuing qualification therein. In addition, the
Fund shall bear all costs of preparing, printing, mailing and filing any
advertisements and sales literature. RCM does not assume responsibility for any
expenses not assumed hereunder.
8. Compensation. As compensation for the services performed and the expenses
assumed by RCM under this Agreement including, but not limited to, any
commissions paid for sales of Shares, the Fund shall pay RCM, as promptly as
possible after receipt of a quarterly invoice, a fee for services as set forth
in Schedule B to this Agreement.
9. Share Certificates. The Fund shall not issue certificates representing Shares
unless requested to do so by a shareholder. If such request is transmitted
through RCM, the Fund will cause certificates evidencing the Shares owned to be
issued in such names and denominations as RCM shall from time to time direct.
10. Status of RCM. RCM is an independent contractor and shall be agent of the
Fund only with respect to the sale and redemption of Shares.
11. Indemnification.
(a) The Fund agrees to indemnify, defend, and hold RCM, its
officers and directors, and any person who controls RCM 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) that RCM, 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 (i) alleged untrue statement of a
material fact contained in the Registration Statement, Prospectus, SAI or sales
literature, (ii) alleged omission to state a material fact required to be stated
in the either thereof or necessary to make the statements therein not
misleading, or (iii) failure by the Fund to comply with the terms of the
Agreement; provided, that in no event shall anything contained herein be so
construed as to protect RCM against any liability to the Fund or its
shareholders to which RCM 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.
(b) The Fund shall not be liable to RCM under this Agreement
with respect to any claim made against RCM on any person indemnified unless RCM
or other such person 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 RCM or such
other person (or after RCM or the person shall have received notice of service
on any designated agent). However, failure to notify the Fund of any claim shall
not relieve the Fund from any liability that it may have to RCM or any other
person against whom such action is brought otherwise than on account of this
Agreement.
(c) 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 subject to this Agreement. If the Fund elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Fund and satisfactory to indemnified defendants in the suit whose
approval shall not be unreasonably withheld. In the event that the Fund elects
to assume the defense of any suit and retain counsel, the indemnified defendants
shall bear the fees and expenses of any additional counsel retained by them. If
the Fund does not elect to assume the defense of a suit, it will reimburse the
indemnified defendants for the reasonable fees and expenses of any counsel
retained by the indemnified defendants. The Fund agrees to promptly notify RCM
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 its
Shares.
(d) RCM agrees to indemnify, defend, and hold the Fund, its
officers and directors, and any person who controls the Fund 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) that the Fund, its directors or officers, or
any such controlling person may incur under the 1933 Act, or under common law or
otherwise, resulting from RCM's willful misfeasance, bad faith or gross
negligence in the performance of its obligations and duties under this
Agreement, or arising out of or based upon any alleged untrue statement of a
material fact contained in information furnished in writing by RCM to the Fund
for use in the Registration Statement, Prospectus or SAI arising out of or based
upon any alleged omission to state a material fact in connection with such
information required to be stated in either thereof or necessary to make such
information not misleading.
(e) RCM 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 RCM elects to assume the defense, the defense shall be
conducted by counsel chosen by RCM and satisfactory to the indemnified
defendants whose approval shall not be unreasonably withheld. In the event that
RCM elects to assume the defense of any suit and retain counsel, the defendants
in the suit shall bear the fees and expenses of any additional counsel retained
by them. If RCM does not elect to assume the defense of any suit, it will
reimburse the indemnified defendants in the suit for the reasonable fees and
expenses of any counsel retained by them.
12. Duration and Termination.
(a) This Agreement shall become effective on the date first
written above or such later date as indicated in Schedule A and, unless sooner
terminated as provided herein, will continue in effect for two years from the
above written date. Thereafter, if not terminated this Agreement shall continue
in effect for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of the
Fund's Board who are neither interested persons (as defined in the 0000 Xxx) of
the Fund ("Independent trustees/directors") or RCM, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Board or by
vote of a majority of the outstanding voting securities of the Fund.
(b) Notwithstanding the foregoing, this Agreement may be
terminated in its entirety at any time, without the payment of any penalty, by
vote of the Board, by vote of a majority of the Independent trustees/directors,
or by vote of a majority of the outstanding voting securities of the Fund on
sixty days' written notice to RCM or by RCM at any time, without the payment of
any penalty, on sixty days' written notice to the Fund. This Agreement will
automatically terminate in the event of its assignment.
13. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge,
or termination is sought. This Agreement may be amended with the approval of the
Board or of a majority of the outstanding voting securities of the Fund;
provided, that in either case, such amendment also shall be approved by a
majority of the Independent trustees/directors.
14. Limitation of Liability. The Board and shareholders of the Fund shall not be
personally liable for obligations of the Fund in connection with any matter
arising from or in connection with this Agreement. If the Fund is a
Massachusetts business trust, this Agreement is not binding upon any trustees,
officer or shareholder of the Fund individually, and no such person shall be
individually liable with respect to any action or inaction resulting from this
Agreement.
15. Notice. Any notice required or permitted to be given by either party to the
other shall be deemed sufficient upon receipt in writing at the other party's
principal offices.
16. 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. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule, or
otherwise, the remainder of this Agreement shall not be affected thereby. 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.
17. Governing Law. This Agreement shall be construed in accordance with the laws
of the State of New York and the 1940 Act. To the extent that the applicable
laws of the State of New York conflict with the applicable provisions of the
1940 Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated as of the day and year
first above written.
ATTEST: INGENUITY CAPITAL MANAGEMENT LLC
___________________________ By:______________________________
Title:_____________________________
ATTEST: XXXXXXXX CAPITAL MARKETS, INC.
___________________________ By:_______________________________
Title:_____________________________
SCHEDULE A
to the
DISTRIBUTION AGREEMENT
between
INGENUITY CAPITAL MANAGEMENT LLC
and
XXXXXXXX CAPITAL MARKETS, INC.
Pursuant to Section 1 of the Distribution Agreement between Ingenuity
Capital Management LLC (the "Adviser"), on behalf of Ingenuity Capital Trust
(the "Fund"), and Xxxxxxxx Capital Markets, Inc. ("RCM"), the Adviser hereby
appoints RCM as its agent to be the principal underwriter of the Fund with
respect to its following series:
The Medical Specialist Fund
Dated___________________,1999
