ZACK MUTUAL FUNDS
DISTRIBUTING AGREEMENT
AGREEMENT dated as of ________, 1999, between ZACKS SERIES TRUST d/b/a/ ZACKS
MUTUAL FUNDS, a Delaware business trust, hereinafter called the "Company", and
ZACKS & COMPANY, an Illinois corporation, hereinafter called the "Distributor".
WITNESSETH
1. APPOINTMENT OF FUND DISTRIBUTOR. The Company hereby appoints the
Distributor as the exclusive distributor to sell as principal and not as agent
shares of capital stock of the Company during the term of this Agreement.
2. SALES OF CAPITAL STOCK. The Company agrees to sell and deliver to
the Distributor, upon the terms set forth herein, such fully-paid and
non-assessable shares of beneficial interest of the Company ("Shares") then
effectively registered for continuous offering under the Securities Act of 1933
(the "1933 Act") as the Distributor shall order from the Company, but only to
the extent that the Distributor shall have received purchase orders therefor.
All orders from the Distributor shall be subject to confirmation by the Company,
and the Company authorizes the Distributor to reject any purchase order.
The Distributor as principal may sell and distribute any Shares so
purchased, through dealers or otherwise, in such manner not inconsistent with
law and all applicable rules and regulations, including those of any applicable
self-regulatory organizations, and the provisions of this Agreement, as the
Distributor may from time to time determine. The Distributor agrees to use its
best efforts to effect sales of Shares, but does not undertake to sell any
specific number of Shares thereof.
The Distributor may in its discretion sell the Shares to or through
such registered and qualified retail dealers as it may select. In making
agreements with its dealers or others for sale of the Shares, the Distributor
shall act only as principal and in no sense as agent for the Company.
3. SALES BY DISTRIBUTOR - OFFERING PRICE. All Shares, whether purchased
from the Company or otherwise, shall be offered for sale and sold by the
Distributor at a price per share (hereinafter called the "Offering Price") in
accordance with the provisions of the current prospectus applicable to such
offer and sale. Any initial or deferred sales charge and any reduction or
elimination thereof shall be determined by the Distributor in a manner not
inconsistent with law and all applicable rules and regulations and the
provisions of this Agreement, and the Company agrees to amend its current
prospectus to the extent necessary from time to time to reflect any such
determination. The Company will cause such net asset value to be determined with
such frequency and as of such times and will cause the Offering Price to be
effective for such periods as are set forth in the current prospectus of the
Company. The Company
will cause such determinations to be furnished to the Distributor as often as
they are made and shall make available to the Distributor upon request the
computations underlying any such determination.
Anything to the contrary herein notwithstanding, the Company may
suspend the Offering Price currently in effect and may decline to accept or
confirm any orders for, or to make any sales of, any Shares to the Distributor
under this Agreement until such time as it shall deem it advisable to accept and
confirm such orders and to make such sales. During any period during which the
Offering Price currently in effect shall be suspended or during which the
Company shall decline to acceptor confirm any such orders or make any such
sales, the Company shall be under no obligation to confirm or accept any such
orders or make any such sale at any price.
4. PAYMENT. At or prior to the time of delivery by the Company to, or
on the order of the Distributor of any Shares, the Distributor will pay or cause
to be paid to the Company or to its order an amount equal to the Offering Price
of such Shares at which such order had been confirmed, less the initial or
deferred sales charge, if any, included thereon as aforesaid. The Distributor
agrees to cause to be remitted to the Company for the benefit of the Company or
to its order all such funds promptly after receipt thereof.
5. DELIVERY OF SHARE CERTIFICATES. Delivery of certificates for Shares
shall be made as promptly as practicable after receipt by the Company of the
purchase price therefor and written request by the Distributor for such
certificates. Such certificates shall be registered in such names and amounts as
the Distributor may specify to the Company in writing.
6. COMPENSATION OF THE DISTRIBUTOR. Any initial or deferred sales
charges and any compensation to be paid the Distributor out of any Distribution
Plan described in 7(e) below shall constitute the entire compensation of the
Distributor. The Distributor may allow concessions to dealers, out of sales
charges, as the Distributor shall from time to time determine.
7. ALLOCATION OF EXPENSES. Except as otherwise provided herein, the
Company shall pay all expenses connected with (i) the organization of the
Company or any Series thereof, and (ii) the offering of Shares, including
without limitation all expenses of:
(a) Registering Shares for offer or sale under the federal
securities laws, except for prospectus printing costs as set forth
below; and
(b) Reports required by and under the federal securities laws; and
(c) Issuance of Shares, including cost of certificates, issue
taxes (if any) and fees of legal counsel and of the transfer agent; and
(d) Registering or qualifying Shares for offer or sale under the
securities laws of any state or other jurisdiction in which the
Distributor may arrange for the sale of the Shares; and
(e) Any Distribution Plan adopted in accordance with Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") providing for
any payments by the Company or any Series thereof.
The Distributor will pay, or promptly reimburse the Company for, all
expenses in connection with:
(a) Preparing, printing and distributing advertising and sales
literature for use in offering the Shares to the public, including the
cost of printing copies of the prospectus and the additional cost of
printing reports to stockholders other than copies thereof required for
distribution to stockholders or for filing with any securities
authorities; and
(b) The registration or qualification of the Distributor as a
dealer or broker under state or federal laws.
Transfer taxes, if any, which may be payable in connection with the
issue and delivery of certificates in a name or names other than the name of the
Distributor will not be borne by the Company, and the Distributor agrees to
indemnify and hold the Company harmless against any such transfer taxes. Any
other taxes in connection with the sale of Shares pursuant to this Agreement
will be borne by the Company.
8. COMPANY TO FURNISH INFORMATION. The Company shall furnish to the
Distributor for use in connection with the sale of the Shares such information
with respect to the Company and the Shares as the Distributor may reasonably
request, including copies of documents filed with or furnished to any federal or
state securities authorities or sent to its stockholders.
9. REPRESENTATIONS AND AGREEMENTS WITH RESPECT TO REGISTRATION
STATEMENT AND PROSPECTUS.
(a) As used in this Agreement, the term "registration statement"
shall include any registration statement with respect to the Shares
which is effective under the Act including any amendment thereto, and
the term "prospectus" shall include any prospectus and statement of
additional information filed as part of such registration statement.
(b) The Company represents that the registration statement and
prospectus will conform in all material respects to the requirements of
the 1933 Act and the 1940 Act and the rules and regulations thereunder
and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that
this representation will not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by the Distributor expressly for use in the
registration statement or prospectus.
(c) The Company agrees to advise the Distributor promptly:
(i) of any request of the Securities and Exchange Commission
for amendments to the registration statement or prospectus or for
additional information;
(ii) in the event of the issuance by the Securities and
Exchange Commission of any stop order suspending the effectiveness
of the registration statement or prospectus or the initiation of
any proceedings for that purpose;
(iii) of the happening of any event which makes untrue any
statement, or which requires the making of any change, in the
registration statement or prospectus in order to make the
statements therein not misleading; and
(iv) of all actions of the Securities and Exchange Commission
with respect to any amendments to the registration statement or
prospectus which may from time to time be filed with the
Securities and Exchange Commission under the 1933 Act or the 1940
Act.
10. INDEMNIFICATION. The Company agrees to indemnify, defend and hold
the Distributor, its officers and directors and any person who controls the
Distributor with 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 the 1940 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 relating to the Company 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 in writing provided by the Distributor to the Company for use in the
registration statement or prospectus relating to the Company; provided, however,
that this indemnity agreement, to the extent that it might require indemnity for
liability arising out under the 1933 Act 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 persons as
aforesaid is expressly conditioned upon the Company being promptly notified of
any action brought against the Distributor, its officers or directors, or any
such controlling person, such notification to be given by letter or telegram
addressed to the Company at its principal business office. The Company agrees to
promptly 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
officers and directors 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 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 Company's
registration statement or prospectus or shall arise out of or be based upon any
alleged omission to state a material fact in connection with such information
not misleading or shall arise out of or be based on any false or misleading or
allegedly false or misleading sales literature relating to the Company and
prepared by the Distributor. 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 being promptly notified
of any action brought against the Company, its officers or directors or any such
controlling person, such notification being given to the Distributor at its
principal business office.
11. COMPLIANCE WITH SECURITIES LAWS. The Company represents that it is
registered as an open-end diversified management investment company under the
1940 Act, and agrees that it will comply with all of the provisions of such Act
and of the rules and regulations thereunder. The Company and the Distributor
each agree to comply with all of the applicable terms and provisions of the 1940
Act, the 1933 Act and, subject to the following provisions of this paragraph 11,
all applicable state securities ("Blue Sky") laws. The Distributor agrees to
comply with all of the applicable terms and provisions of the Securities
Exchange Act of 1934. The Company will cooperate with the Distributor (to the
extent of supplying all necessary documents, exhibits and information), and will
execute and permit to be filed with the proper public bodies, such applications
(including amendments and renewals thereof), instruments, papers and exhibits as
may be appropriate to enable the Shares to be offered for sale under the laws of
such states as the Distributor shall reasonably determine, and will cooperate
with the Distributor in the
presentation of said applications (including amendments and renewals thereof),
to the end that Shares may be qualified in such states under the respective Blue
Sky laws thereof; provided that the Company shall not be required to amend its
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 Shares
in any state from the terms set forth in its registration statement and
prospectus, to qualify in any state or to consent to service of process in any
state other than with respect to claims arising out of Shares. The Distributor
will furnish to the Company any information known to the Distributor which is
necessary or desirable in the preparation of the Company's registration
statement and prospectus and any amendments or supplements thereto.
12. EFFECTIVE DATE, TERM, TERMINATION. This Agreement shall become
effective for an initial period of not more than two years from its effective
date, and shall continue in full force and effect continuously thereafter
provided that such continuance is approved at least annually as required by the
1940 Act. The effective date of this Agreement shall be the later of (i) the
effective date of the initial registration statement covering the offer and sale
of our shares under the Securities Act of 1933, or (ii) the date this Agreement
has been approved as required by the 1940 Act. This Agreement shall
automatically terminate in the event of its assignment (as defined by the 1940
Act). In addition, this Agreement may be terminated at any time, without
penalty, by either party on not more than sixty days' nor less than thirty days'
written notice delivered or mailed by registered mail, postage prepaid, to the
other party.
IN WITNESS WHEREOF, ZACKS SERIES TRUST and ZACKS & COMPANY have caused
this instrument to be signed in several counterparts, each of which shall be an
original and which together shall constitute one and the same Agreement, by an
officer or officers thereunto duly authorized, as of the day and year first
above written.
ZACKS SERIES TRUST
By:
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Its:
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ZACKS & COMPANY
By:
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Its:
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