DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the “Agreement”) is made as of ________, 2017 by and among M3Sixty Funds Trust (the “Fund”), a Delaware Statutory Trust, Xxxxx Xxxxxx Capital Management, LLC, a Colorado limited liability company (the “Adviser”), and Matrix 360 Distributors, LLC (the “Distributor”), a New York corporation.
WITNESSETH THAT:
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a. The Distributor, as agent for the Fund, shall sell Shares to the public against orders therefore at the public offering price, as determined in accordance with the Fund’s then current Prospectus and Statement of Additional Information.
b. The net asset value of the Shares shall be determined in the manner provided in the then current Prospectus and Statement of Additional Information. The net asset value of the Shares shall be calculated by the Fund or by another entity on behalf of the Fund. The Distributor shall have no duty to inquire into or liability for the accuracy of the net asset value per Share as calculated.
c. Upon receipt of purchase instructions, the Distributor shall transmit such instructions to the Fund or its transfer agent for registration of the Shares purchased.
d. The Distributor shall also have the right to take, as agent for the Fund, all actions which, in the Distributor’s judgment, are necessary to effect the distribution of Shares.
e. Nothing in this Agreement shall prevent the Distributor or any “affiliated person” from buying, selling or trading any securities for its or their own account or for the accounts of others for whom it or they may be acting; provided, however, that the Distributor expressly agrees that it shall not for its own account purchase any Shares of the Fund except for investment purposes and that it shall not for its own account sell any such Shares except for redemption of such Shares by the Fund, and that it shall not undertake activities which, in its judgment, would adversely affect the performance of its obligations to the Fund under this Agreement.
f. The Distributor, as agent for the Fund, shall repurchase Shares at such prices and upon such terms and conditions as shall be specified in the Prospectus.
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a. The Distributor shall comply with the Rules of Conduct of the FINRA and the securities laws of any jurisdiction in which it sells, directly or indirectly, Shares.
b. The Distributor shall require each dealer with whom the Distributor has a selling agreement to conform to the applicable provisions of the Fund’s most current Prospectus and Statement of Additional Information, with respect to the public offering price of the Shares.
c. The Fund agrees to furnish to the Distributor sufficient copies of any agreements, plans, and communications with the public or other materials it intends to use in connection with any sales of Shares in a timely manner in order to allow the Distributor to review, approve and file such materials with the appropriate regulatory authorities and obtain clearance for use. The Fund agrees not to use any such materials until so filed and cleared for use by appropriate authorities and the Distributor.
d. The Distributor, at its own expense, shall qualify as a broker or dealer, or otherwise, under all applicable Federal or state laws required to permit the sale of Shares in such states as shall be mutually agreed upon by the parties; provided, however that the Distributor shall have no obligation to register as a broker or dealer under the Blue Sky Laws of any jurisdiction if it determines that registering or maintaining registration in such jurisdiction would be uneconomical.
e. The Distributor shall not, in connection with any sale or solicitation of a sale of the Shares, make or authorize any representative, service organization, broker or dealer to make, any representations concerning the Shares except those contained in the Fund’s most current Prospectus covering the Shares and in communications with the public or sales materials approved by the Distributor as information supplemental to such Prospectus.
a. The Fund shall bear the following expenses: preparation, setting in type, and printing of sufficient copies of the Prospectus and Statement of Additional Information for distribution to existing shareholders; preparation and printing of reports and other communications to existing shareholders; distribution of copies of the Prospectus, Statement of Additional Information and all other communications to existing shareholders; registration of the Shares under the Federal securities laws; qualification of the Shares for sale in the jurisdictions mutually agreed upon by the Fund and the Distributor; transfer agent/shareholder servicing agent services; supplying information, prices and other data to be furnished by the Fund under this Agreement; and any original issue taxes or transfer taxes applicable to the sale or delivery of the Shares or certificates therefore.
b. To the extent permitted under a plan adopted pursuant to rule 12b-1 or otherwise permitted under the 1940 Act, the Fund shall pay expenses incident to the sale and distribution of the Shares sold hereunder, including, without limitation: printing and distributing copies of the Prospectus, Statement of Additional Information and reports prepared for use in connection with the offering of Shares for sale to the public; advertising in connection with such offering, including public relations services, sales presentations, media charges, preparation, printing and mailing of advertising and sales literature; data processing necessary to support a distribution effort; distribution and shareholder servicing activities of broker-dealers and other financial institutions; filing fees required by regulatory authorities for sales literature and advertising materials; any additional out-of-pocket expenses incurred in connection with the foregoing and any other costs of distribution. The Adviser shall be responsible for any of the foregoing expenses that the Fund is ineligible to pay und the 1940 Act.
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Any director, officer, employee, shareholder or agent of the Distributor who may be or become an officer, director, employee or agent of the Fund, shall be deemed, when rendering services to the Fund or acting on any business of the Fund (other than services or business in connection with the Distributor’s duties hereunder), to be rendering such services to or acting solely for the Fund and not as a director, officer, employee, shareholder or agent, or one under the control or direction of the Distributor, even though receiving a salary from the Distributor.
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The Fund agrees to indemnify and hold harmless the Distributor, and each person, who controls the Distributor within the meaning of Section 15 of the 1933 Act, or Section 20 of the Securities Exchange Act of 1934, as amended (“1934 Act”), against any and all liabilities, losses, damages, claims and expenses, joint or several (including, without limitation, reasonable attorneys’ fees and disbursements and investigation expenses incident thereto) to which they, or any of them, may become subject under the 1933 Act, the 1934 Act, the 1940 Act or other Federal or state laws or regulations, at common law or otherwise, insofar as such liabilities, losses, damages, claims and expenses (or actions, suits or proceedings in respect thereof) arise out of or relate to any untrue statement or alleged untrue statement of a material fact contained in a Prospectus, Statement of Additional Information, supplement thereto, sales literature or other written information prepared by the Fund and provided by the Fund to the Distributor for the Distributor’s use hereunder, or arise out of or relate to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading. The Distributor (or any person controlling the Distributor) shall not be entitled to indemnity hereunder for any liabilities, losses, damages, claims or expenses (or actions, suits or proceedings in respect thereof) resulting from (i) an untrue statement or omission or alleged untrue statement or omission made in the Prospectus, Statement of Additional Information, or supplement, sales or other literature, in reliance upon and in conformity with information furnished in writing to the Fund by the Distributor specifically for use therein or (ii) the Distributor’s own willful misfeasance, bad faith, negligence or reckless disregard of its duties and obligations in the performance of this Agreement.
The Distributor agrees to indemnify and hold harmless the Fund, and each person who controls the Fund within the meaning of Section 15 of the 1933 Act, or Section 20 of the 1934 Act, against any and all liabilities, losses, damages, claims and expenses, joint or several (including, without limitation reasonable attorneys’ fees and disbursements and investigation expenses incident thereto) to which they, or any of them, may become subject under the 1933 Act, the 1934 Act, the 1940 Act or other Federal or state laws, at common law or otherwise, insofar as such liabilities, losses, damages, claims or expenses arise out of or relate to: (i) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or Statement of Additional Information or any supplement thereto; (ii) the distributor’s own willful misfeasance, bad faith, negligence or reckless disregard of its duties and obligations in the performance of this Agreement; (iii) or arise out of or relate to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if based upon information furnished to the Fund by the Distributor specifically for use therein.
A party seeking indemnification hereunder (the “Indemnitee”) shall give prompt written notice to the party from whom indemnification is sought (“Indemnitor”) of a written assertion or claim of any threatened or pending legal proceeding which may be subject to indemnity under this Section; provided, however, that failure to notify the Indemnitor of such written assertion or claim shall not relieve the Indemnitor of any liability arising from this Section. The Indemnitor shall be entitled, if it so elects, to assume the defense of any suit brought to enforce a claim subject to this Indemnity and such defense shall be conducted by counsel chosen by the Indemnitor and satisfactory to the Indemnitee; provided, however, that if the defendants include both the Indemnitee and the Indemnitor, and the Indemnitee shall have reasonably concluded that there may be one or more legal defenses available to it which are different from or additional to those available to the Indemnitor (“conflict of interest”), the Indemnitor shall not have the right to elect to defend such claim on behalf of the Indemnitee, and the Indemnitee shall have the right to select separate counsel to defend such claim on behalf of the Indemnitee. In the event that the Indemnitor elects to assume the defense of any suit pursuant to the preceding sentence and retains counsel satisfactory to the Indemnitee, the Indemnitee shall bear the fees and expenses of additional counsel retained by it, except for reasonable investigation costs which shall be borne by the Indemnitor. If the Indemnitor (i) does not elect to assume the defense of a claim, (ii) elects to assume the defense of a claim but chooses counsel that is not satisfactory to the Indemnitee or (iii) has no right to assume the defense of a claim because of a conflict of interest, the Indemnitor shall advance or reimburse the Indemnitee, at the election of the Indemnitee, reasonable fees and disbursements of any counsel retained by Indemnitee, including reasonable investigation costs.
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a. This Agreement shall terminate automatically in the event of its assignment.
b. This Agreement shall terminate upon the failure to approve the continuance of the Agreement after the initial term as set forth in Section 16 above.
c. This Agreement shall terminate at any time upon a vote of the majority of the Trustees who are not interested persons of the Fund or by a vote of the majority of the outstanding voting securities of the Fund, upon not less than 60 days prior written notice to the Distributor.
d. The Distributor may terminate this Agreement upon not less than 60 days prior written notice to the Fund.
Upon the termination of this Agreement, the Fund shall pay to the Distributor such compensation and out-of-pocket expenses as may be payable for the period prior to the effective date of such termination. In the event that the Fund designates a successor to any of the Distributor’s obligations hereunder, the Distributor shall be entitled to reimbursement by the Fund of its reasonable out-of-pocket expenses in connection with such transfer to such successor all relevant books, records and other data established or maintained by the Distributor pursuant to the foregoing provisions.
Sections 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 21, 22, 24, 25 and 26 shall survive any termination of this Agreement.
(a) If to the Fund:
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c/o M3Sixty Administration, LLC
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
(b) If to the Adviser:
Xxxxx Xxxxxx Capital Management, LLC
c/o M3Sixty Administration, LLC
000 Xxxx Xxxx Xx., Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
(c) If to the Distributor:
Matrix 360 Distributors, LLC
c/o M3Sixty Administration, LLC
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxx
or to such other respective addresses as the parties shall designate by like notice, provided that notice of a change of address shall be effective only upon receipt thereof.
24. Governing Law. This Agreement shall be administered, construed and enforced in accordance with the laws of the State of New York to the extent that such laws are not 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.
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By:
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By: Xxxxxxx X. Xxxxxxxx
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Title: President
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Xxxxx Xxxxxx Capital Management, LLC
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By:
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By: Xxxxx X. Xxxxxx
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Title: President and Chief Investment Officer
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Matrix 360 Distributors, LLC
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By:
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By: Xxxxxxx X. Xxxx
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Title: Chief Executive Officer
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SCHEDULE A
Portfolio and Fee Schedule
Portfolios covered by Distribution Agreement:
Xxxxx Xxxxxx Risk Optimized Equity Fund
Fees charged with respect to Xxxxx Xxxxxx Risk Optimized Equity Fund for the Distribution Support Services set forth below on Schedule B are as follows:
· Annual fee of $[4,500]
· The annual fee above includes the first share class of the Portfolio; the Distributor shall receive $[1,500] annually for each additional class; and
· The Distributor shall receive an annualized amount equal to:
[0.025]% on daily net assets between $0 and $50 million;
[0.020]% between $50 million and $150 million of daily net assets; and
[0.015]% in excess of $150 million of daily net assets
The Distributor, in its sole discretion, may waive any of the above-described fees at any time and for any duration.
In addition, the Distributor shall be reimbursed for out of pocket expenses to including, but not limited to: travel, printing, postage, telephone, registration fees for Adviser/Fund personnel, broker/dealer fees specific to Adviser/Fund and other standard miscellaneous items.
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SCHEDULE B
Distribution Support Services
1. Provide national broker dealer for Fund registration.
2. Review, approve and submit all advertising and promotional material to FINRA.
3. Maintain all books and records required by FINRA in connection with this agreement.
4. Monitor Distribution Plan and report to Board of Trustees.
5. Prepare quarterly report to Board of Trustees related to distribution activities.
6. Subject to approval of Distributor, license personnel as registered representatives of the Distributor to distribute shares sponsored by the Adviser.
7. Assist in coordination of Portfolio participation in platform and/or wholesaler-related agreements.
8. Fund fulfillment services, including sampling prospective shareholders inquiries and related mailings (additional cost: to be negotiated).
9. Any other service commonly provided to an investment company registered under the 1940 Act by a third party distributor.
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