EXHIBIT 23(e)
HARVEST FUNDS
BOE SECURITIES, INC.
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is made as of September 7,
1999, between HARVEST FUNDS, a Delaware business trust (the "Trust"), having its
principal place of business in Wilmington, Delaware, and BOE SECURITIES, INC., a
corporation organized under the laws of the Commonwealth of Pennsylvania (the
"Distributor"), having its principal place of business in Philadelphia,
Pennsylvania.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company;
WHEREAS, the Trust is authorized to issue an unlimited number of shares of
beneficial interest ("Shares"), par value $0.01 per share, and has registered
the offer and sale of the Shares under the Securities Act of 1933 (the "1933
Act");
WHEREAS, the Trust is further authorized to issue separate series of Shares
("Series"), each Share of a Series shall represent an undivided interest in the
assets, subject to the liabilities, allocated to such Series, and each Series
shall have a separate investment objective and separate investment policies;
WHEREAS, as of the date of this Agreement, the Trust has established one
Series, The RISA Fund, issuing an "Institutional" class of Shares (subject to no
sales or distribution charges), and the Trust may establish additional Series
and/or classes of Shares in the future;
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934 (the "1934 Act") and is a member in good
standing of the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Trust wishes to employ the services of the Distributor for the
purpose of selling and distributing the Trust's Shares, such employment to take
effect as of the date first written above; and
WHEREAS, the Distributor wishes to provide distribution services to the
Trust as set forth below;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, intending to be legally bound the parties agree as follows:
1. Sale of Shares. During the term of this Agreement, the Trust grants to
the Distributor the right to sell on its behalf Shares of each Series listed on
Schedule A hereto, subject to the registration requirements of the 1933 Act and
the laws governing the sale of securities in various states (the "Blue Sky
Laws"), under the terms and conditions set forth herein. In connection
therewith, the Distributor (i) shall have the right to sell, as agent on behalf
of the Trust, Shares authorized for issuance and registered under the 1933 Act
and qualified for sale under Blue Sky Laws; and (ii) shall sell such Shares only
in compliance with the terms set forth in the Trust's then currently effective
registration statement, with any Plan of Distribution as may be in effect from
time to time for any Series, and with any limitations as may be imposed from
time
to time by the Board of Trustees of the Trust. The Distributor is not obligated
to sell any specific number of Shares.
2. Selling Dealer Agreements. Subject to the supervisory authority of the
Trust's Board of Trustees, the Distributor may enter into selling dealer
agreements with selected dealers and others ("Selling Dealers") for the
provision of distribution services related to the sale of Shares as well as
other shareholder services as may be agreed by the affected parties upon terms
and conditions consistent with the provisions of this Agreement. In entering
into such selling agreements, the Distributor will act only on its own behalf,
as principal. Each agreement with a Selling Dealer shall provide that such
Selling Dealer shall act as principal and not as agent of the Trust.
3. Sale of Shares by the Trust. The rights granted to the Distributor shall
be non-exclusive in that the Trust reserves the right to sell its Shares to
investors on applications received and accepted by the Trust. Further, the Trust
reserves the right to issue Shares in connection with (a) the merger or
consolidation of the assets of, or acquisition by the Trust through purchase or
otherwise, with any other investment company, trust or personal holding company;
(b) the payment or reinvestment of dividends or distributions; or (c) any offer
of exchange permitted by Section 11 of the 1940 Act.
4. Shares Covered by this Agreement. This Agreement shall apply to all
Shares of all Series of the Trust listed upon Schedule A.
5. Public Offering Price. Except as otherwise noted in the Trust's current
Prospectus (the "Prospectus") or Statement of Additional Information (the "SAI")
with respect to each Series and each class of Shares, all Shares sold to
investors by the Distributor or the Trust will be sold at the public offering
price without a sales load. The public offering price for all accepted
subscriptions will be the net asset value per Share, determined in the manner
described in the Trust's current Prospectus or SAI with respect to the
applicable Series or class. The Trust shall in all cases receive the net asset
value per Share on all such sales.
6. Suspension of Sales. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further orders
for Shares shall be processed by the Distributor except such unconditional
orders placed with the Distributor before it had knowledge of the suspension. In
addition, the Trust reserves the right to suspend sales and the Distributor's
authority to process orders for Shares on behalf of the Trust if, in the
judgment of the Trust, it is in the best interests of the Trust to do so.
Suspension will continue for such period as may be determined by the Trust. In
addition, the Trust and Distributor reserve the right to reject any purchase
order.
7. Solicitation of Sales. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for Shares of the Trust. This
shall not prevent the Distributor from entering into like arrangements
(including arrangements involving the payment of underwriting commissions) with
other issuers.
8. Authorized Representations. The Distributor is not authorized by the
Trust to give any information or to make any representations other than those
contained in the appropriate registration statements, Prospectuses or SAI's
filed with the Securities and Exchange Commission under the 1933 Act (as those
registration statements, Prospectuses and SAI's may be amended from time to
time), or contained in shareholder reports or other material that may be
prepared by or on behalf of the Trust for the Distributor's use. This shall not
be construed to prevent the Distributor from preparing and distributing, in
compliance with applicable laws and regulations, sales literature or other
material as it may deem appropriate. Distributor will furnish or cause to be
furnished copies of such sales literature or other material to the President of
the Trust or his designee and will provide that designee with a reasonable
opportunity to
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comment on it. Distributor agrees to take appropriate action to cease using such
sales literature or other material to which the Trust reasonably objects as
promptly as practicable after receipt of the objection.
9. Registration of Shares. The Trust agrees that it will take all actions
necessary to register Shares under the 1933 Act (subject to necessary approval,
if any, of its shareholders) and qualify Shares for sale in such states as
determined by the Trust's Board of Trustees so that there will be available for
sale the number of Shares the Distributor may reasonably be expected to sell.
The Trust will at all times keep the Distributor advised of all States in which
the Shares are qualified for sale. The Trust 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 each Series of the Trust.
10. Repurchase of Shares. The Distributor as agent and for the account of
the Trust may repurchase Shares offered for resale to it and redeem such Shares
at their net asset value.
11. Expenses, Compensation and Reimbursement.
(a) The Trust shall pay all fees and expenses:
(i) in connection with the preparation, setting in type and filing
of any registration statement, Prospectus and SAI under the 1933
Act, and any amendments thereto, for the registration of the
Shares;
(ii) in connection with the qualification of Shares for sale in the
various states in which the Trust's Board of Trustees shall
determine it advisable to qualify such shares for sale
(including registering the Trust or Series as a broker or
dealer, or any officer of the Trust as agent or salesperson, in
any state);
(iii) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Trust in their
capacity as such; and
(iv) of preparing, setting in type, printing and mailing
Prospectuses, SAI's, and any supplements thereto, sent to
existing shareholders.
(b) The Distributor shall pay costs of:
(i) advertising and sales literature used in connection with the
offering of Shares for sale to the public including, but not
limited to the following: public relations services, sales
presentations, media charges, preparation, printing and mailing
of advertising and sales literature, data processing necessary
to support a distribution effort, printing and mailing
prospectuses and distribution and shareholder servicing
activities of brokers/dealers and other financial institutions;
and
(ii) filing fees required by regulatory authorities for sales
literature and advertising materials and any additional
out-of-pocket expenses incurred in connection with these and any
other costs of distribution.
(c) In addition to the services described above, Distributor will provide
services including assistance in the production of marketing and
advertising materials for the sale of the Shares and their review for
compliance with applicable regulatory requirements.
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(d) In connection with the services to be provided by the Distributor
under this Agreement, the Distributor shall receive:
(i) from the Trust, in connection with the sale and distribution of
the Shares, such payments as shall be authorized to be paid by
the Trust pursuant to any Plan of Distribution that may be
adopted by the Trust in accordance with Rule 12b-1 under the
1940 Act;
(ii) from the Trust's investment adviser, RISA Investment Advisers,
LLC ("RISA Advisers"), reimbursement for fees and expenses
incurred by the Distributor in connection with the sale and
distribution of Shares to include, without limitation, the fees
and expenses detailed in Section 11(b) above; and
(iii) from RISA Advisers, a distribution fee in the amount of $1,000
per month, payable monthly in arrears on the fifteenth (15th)
day after the end of each calendar month.
12. Indemnification.
(a) The Trust agrees to indemnify and hold harmless the Distributor and
each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933
Act (each an "Indemnified Person" for purposes of this Section 12(a))
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 1933 Act or any other statute or
common law, alleging any wrongful act of the Trust or any of its
employees or representatives, or based upon the grounds that the
registration statements, Prospectuses, SAI's, shareholder reports or
other information filed or made public by the Trust (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. However, the Trust does
not agree to indemnify any Indemnified Person 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 Trust in writing
by or on behalf of any Indemnified Persons. In no case (i) is the
indemnity of the Trust in favor of any Indemnified Person to be deemed
to protect any Indemnified Person against any liability to the Trust
or its security holders to which any Indemnified 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) shall the Trust be liable under its indemnity agreement
contained in this Section 12(a) with respect to any claim made against
any Indemnified Person unless such person shall have notified the
Trust 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 such person or after
such person shall have received notice of service on any designated
agent. However, except to the extent the Trust is harmed thereby,
failure to notify the Trust of any claim shall not relieve the Trust
from any liability which it may have to any Indemnified Person against
whom such action is brought other than on account of its indemnity
agreement contained in this Section 12(a). The Trust 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 Trust elects to assume the defense, the defense shall be
conducted by counsel
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chosen by it and satisfactory to each Indemnified Person who is a
defendant in the suit. In the event the Trust elects to assume the
defense of any suit and retain counsel, each Indemnified Person who is
a defendant in the suit shall bear the fees and expenses of any
additional counsel retained by them. If the Trust does not elect to
assume the defense of any suit, it will reimburse each Indemnified
Person who is a defendant in the suit, for the reasonable fees and
expenses of one counsel retained by them. The Trust agrees to notify
the Distributor promptly of the commencement of any litigation or
proceedings against the Trust or any of its officers or Trustees in
connection with the issuance or sale of any of the Shares.
(b) The Distributor also covenants and agrees that it will indemnify and
hold harmless the Trust and each of its trustees and officers and each
person, if any, who controls the Trust within the meaning of Section
15 of the 1933 Act (each an "Indemnified Person" for purposes of this
Section 12(b)), 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 1933 Act or any other
statute or common law, alleging any wrongful act of the Distributor or
any of its employees or representatives, or alleging that the
registration statements, Prospectuses, SAI's, shareholder reports or
other information filed or made public by the Trust (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 in writing to the Trust by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in
favor of any Indemnified Person to be deemed to protect any
Indemnified Person against any liability to which 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) shall the Distributor be liable under its indemnity agreement
contained in this Section 12(b) with respect to any claim made against
any Indemnified Person unless such person shall have notified the
Distributor 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 such person or after
such person shall have received notice of service on any designated
agent. However, failure to notify the Distributor of any claim shall
not relieve the Distributor from any liability which it may have to
any Indemnified Person against whom the action is brought other than
on account of its indemnity agreement contained in this Section 12(b).
In the case of any notice to the Distributor, 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 any claims, but
if the Distributor elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to each Indemnified
Person who is a defendant in the suit. In the event the Distributor
elects to assume the defense of any suit and retain counsel, each
Indemnified Person who is a defendant in the suit, shall bear the fees
and expenses of any additional counsel retained by them. If the
Distributor does not elect to assume the defense of any suit, it will
reimburse each Indemnified Person who is a defendant in the suit for
the reasonable fees and expenses of one counsel retained by them. The
Distributor agrees to notify the Trust promptly of the commencement of
any litigation or proceedings against it in connection with the issue
and sale of any of the Shares.
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13. Liability of the Distributor. The Distributor shall not be liable for
any damages or loss suffered by the Trust in connection with the matters to
which this Agreement relates, except for damage or loss resulting from the
willful misfeasance, bad faith, reckless disregard or gross negligence on the
Distributor's part in the performance of its duties under this Agreement.
14. Acts of God, etc. The Distributor shall not be liable for any delays or
errors occurring by reason of circumstances not reasonably foreseeable and
beyond its control, including but not limited to acts of civil or military
authority, national emergencies, work stoppages, fire, flood, catastrophe, acts
of God, insurrection, war, riot or failure of communication or power supply. In
addition, in the event of equipment breakdowns which are (i) beyond the
reasonable control of the Distributor and (ii) not primarily attributable to the
failure of the Distributor to reasonably maintain or provide for the maintenance
of such equipment, the Distributor shall, at no additional expense to the Trust,
take reasonable steps in good faith to minimize service interruptions but shall
have no liability with respect thereto.
15. Effectiveness, Termination, etc. This Agreement shall become effective
as of the date first written above, and unless terminated as provided herein,
shall continue in force for two (2) years from the date of its execution and
thereafter from year to year, provided continuance is approved at least annually
by either (i) the vote of a majority of the trustees of the Trust, or by the
vote of a majority of the outstanding voting securities of the Trust, and (ii)
the vote of a majority of those trustees of the Trust who are not interested
persons of the Trust and who are not parties to this Agreement or interested
persons of any party, cast in person at a meeting called for the purpose of
voting on the approval. This Agreement shall automatically terminate in the
event of its assignment. As used in this Section 15, the terms "vote of a
majority of the outstanding voting securities," "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules enacted thereunder as now in effect or as hereafter amended. In addition
to termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated without the payment of any penalty by
vote of a majority of the trustees of the Trust who are not interested persons
of the Trust, or by vote of a majority of the outstanding voting securities of
the Trust, on not more than sixty (60) days' written notice to the Distributor.
This Agreement may be terminated by the Distributor upon not less than sixty
(60) days' prior written notice to the Trust.
16. Amendment. The Distributor and the Trust shall regularly consult with
each other regarding the Distributor's performance of its obligations and its
compensation under the foregoing provisions. In connection therewith, the Trust
shall submit to the Distributor, at a reasonable time in advance of filing with
the SEC, copies of any amended or supplemented registration statement of the
Trust (including exhibits) under the 1933 Act and the 1940 Act and, of a
reasonable time in advance of their proposed use, copies of any amended or
supplemented forms relating to any plan, program or service offered by the
Trust. Any change in such materials that would require any change in
Distributor's obligations under this Agreement shall be subject to the
Distributor's approval, which shall not be unreasonably withheld. In the event
that a change in such documents or in the procedures contained therein increases
the cost or potential liability to the Distributor in performing its obligations
hereunder by more than an insubstantial amount, the Distributor shall be
entitled to receive reasonable compensation therefor.
This Agreement may be amended at any time by mutual consent of the parties,
provided that such consent of the Trust shall have been approved (i) by the
Trustees of the Trust, or by a vote of a majority of the outstanding voting
securities of the Trust, and (ii) by vote of a majority of the Trustees of the
Trust who are not interested persons of the Distributor or of the Trust cast in
person at a meeting called for the purpose of voting on such amendment.
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17. Notice. Any notice given by a party under this Agreement shall be given
in writing addressed and hand delivered or sent by registered or certified mail,
postage prepared, to the other party to this Agreement at the address designated
by such party for receipt of notices. Until further notice pursuant to this
Agreement, each party's address for receipt of notices shall be the address set
forth on the signature page of this Agreement.
18. Severability. 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.
19. Governing Law. To the extent that state law has not been preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws (without regard,
however, to laws as to conflicts of law) of the Commonwealth of Pennsylvania.
20. Shareholder Liability. Distributor acknowledges that it has received
notice of and accepts the limitations of liability set forth in the Trust's
Agreement and Declaration of Trust. Distributor agrees that the Trust's
obligations hereunder shall be limited to the Trust and its assets, and that
Distributor shall have recourse solely against the assets of the Series with
respect to which the Trust's obligations hereunder relate and shall have no
recourse against the assets of any other Series or against any shareholder,
Trustee, officer, employee, or agent of the Trust.
21. Compliance with Laws. The Distributor represents that it is registered
as a broker-dealer under the 1934 Act and a member in good standing of the NASD
and agrees to maintain such registration and membership throughout the terms of
this Agreement. The Distributor shall comply with all applicable provisions of
the 1940 Act, the 1933 Act, the 1934 Act and other Federal and state laws in
connection with the sale of the Shares.
22. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. 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. This Agreement may be executed in two
counterparts, each of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
HARVEST FUNDS
By: /s/ Xxxxxx St. X. Xxxxxxxx
--------------------------------
Xxxxxx St. X. Xxxxxxxx, Chairman
BOE SECURITIES, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx, President
Agreement to expense reimbursement
and payment of monthly distribution fee to
BOE Distributors, Inc. as Distributor:
RISA INVESTMENT ADVISERS, LLC
as Investment Advisor
By: /s/ O. Xxx Xxxxx
-------------------------------
O. Xxx Xxxxx, Managing Director
Date: September 7, 1999
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DISTRIBUTION AGREEMENT
SCHEDULE A
HARVEST FUNDS
Series and Class Listing
The RISA Fund
- Institutional Class Shares
