DISTRIBUTION AGREEMENT
This Agreement, made as of June 30, 2001 by and between iMillennium
Capital Trust (the "Fund"), a Delaware business trust, and Unified Financial
Securities, Inc., an Indiana corporation ("Distributor").
WHEREAS, the Fund is registered as an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, Distributor is a broker-dealer registered with the
Securities and Exchange Commission and a member of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Fund and Distributor are desirous of entering into an
agreement providing for the distribution by Distributor of shares of beneficial
interest (the "Shares") of each series or share class of shares of the Fund (the
"Series");
NOW, THEREFORE, in consideration of the promises and agreements of
the parties contained herein, the parties agree as follows:
1. APPOINTMENT.
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The Fund hereby appoints Distributor as its exclusive agent for the
distribution of the Shares, and Distributor hereby accepts such
appointment under the terms of this Agreement. While this Agreement is in
force, the Fund shall not sell any Shares except on the terms set forth in
this Agreement. Notwithstanding any other provision hereof, the Fund may
terminate, suspend or withdraw the offering of Shares whenever, in its
sole discretion, it deems such action to be desirable.
2. SALE AND REPURCHASE OF SHARES.
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Distributor will have the right, as agent for the Fund, to enter into
dealer agreements with responsible investment dealers, and to sell
Shares to such investment dealers against orders therefor at the
public offering price (as defined in subparagraph 2(d) hereof) stated
in the Fund's effective Registration Statement on Form N-1A under the
Act and the Securities Act of 1933, as amended, including the then
current prospectus and statement of additional information (the
"Registration Statement"). Upon receipt of an order to purchase
Shares from a dealer with whom Distributor has a dealer agreement,
Distributor will promptly cause such order to be filled by the Fund.
Distributor will also have the right, as agent for the Fund, to sell
such Shares to the public against orders therefor at the public offering price.
Distributor will also have the right to take, as agent for the Fund,
all actions which, in Distributor's reasonable judgment, are necessary to carry
into effect the distribution of the Shares.
(d) The public offering price for the Shares of each Series shall be the
respective net asset value of the Shares of that Series then in
effect, plus any applicable sales charge determined in the manner set
forth in the Registration Statement or as permitted by the Act and
the rules and regulations of the Securities and Exchange Commission
promulgated thereunder. In no event shall any applicable sales charge
exceed the maximum sales charge permitted by the Rules of the NASD.
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(e) The net asset value of the Shares of each Series shall be determined
in the manner provided in the Registration Statement, and when
determined shall be applicable to transactions as provided for in the
Registration Statement. The net asset value of the Shares of each
Series shall be calculated by the Fund or by another entity on behalf
of the Fund. Distributor shall have no duty to inquire into or
liability for the accuracy of the net asset value per Share as
calculated.
(f) On every sale, the Fund shall receive the applicable net asset value
of the Shares promptly, but in no event later than the third business
day following the date on which Distributor shall have received an
order for the purchase of the Shares.
(g) Upon receipt of purchase instructions, Distributor will transmit such
instructions to the Fund or its transfer agent for registration of
the Shares purchased.
(h) Nothing in this Agreement shall prevent Distributor or any affiliated
person (as defined in the Act) of Distributor from acting as
Distributor or distributor for any other person, firm or corporation
(including other investment companies) or in any way limit or
restrict Distributor or any such affiliated person from buying,
selling or trading any securities for its or their own account or for
the accounts of others from whom it or they may be acting; provided,
however, that Distributor expressly represents that it will undertake
no activities which, in its reasonable judgment, will adversely
affect the performance of its obligations to the Fund under this
Agreement.
Distributor, as agent of and for the account of the Fund, may
repurchase the Shares at such prices and upon such terms and conditions as shall
be specified in the Registration Statement.
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3. SALE OF SHARES BY THE FUND.
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The Fund reserves the right to issue any Shares at any time directly to
the holders of Shares ("Shareholders"), to sell Shares to its Shareholders
or to other persons at not less than net asset value and to issue Shares
in exchange for substantially all the assets of any corporation or trust
or for the shares of any corporation or trust.
4. BASIS OF SALE OF SHARES.
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Distributor does not agree to sell any specific number of Shares.
Distributor, as agent for the Fund, undertakes to sell Shares on a best
efforts basis only against orders therefor.
5. RULES OF NASD, ETC.
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Distributor will conform to the Rules of the NASD and the securities laws
of any jurisdiction in which it sells, directly or indirectly, any Shares.
Distributor will require each dealer with whom Distributor has a dealer
agreement to conform to the applicable provisions hereof and the
Registration Statement with respect to the public offering price of
the Shares, and neither Distributor nor any such dealers shall
withhold the placing of purchase orders so as to make a profit
thereby.
Distributor agrees to furnish to the Fund sufficient copies of any
agreements, plans or other materials it intends to use in connection
with any sales of Shares in reasonably adequate time for the
Distributor, on behalf of the Fund, to file and clear them with the
proper authorities before they are put in use, and not to use them
until so filed and cleared.
Distributor, at its own expense, will qualify as dealer or broker, or
otherwise, under all applicable state or federal laws required in
order that Shares may be sold in such States as may be mutually
agreed upon by the parties.
Distributor shall not make, or permit any representative, broker or dealer
to make, in connection with any sale or solicitation of a sale of the
Shares, any representations concerning the Shares except those
contained in the then current prospectus and statement of additional
information covering the Shares and in printed information approved
by the Fund as information supplemental to such prospectus and
statement of additional information. Copies of the then effective
prospectus and statement of additional information and any such
printed supplemental information will be supplied by the Fund to
Distributor in reasonable quantities upon request.
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6. RECORDS TO BE SUPPLIED BY FUND.
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The Fund shall furnish to Distributor copies of all information, financial
statements and other papers which Distributor may reasonably request for
use in connection with the distribution of the Shares, and this shall
include, but shall not be limited to, one certified copy, upon request by
Distributor, of all financial statements prepared for the Fund by
independent public accountants.
7. FEES AND EXPENSES.
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(a) As compensation for the services rendered to the Fund pursuant to
this Agreement the Fund shall pay Distributor fees determined as set
forth on Exhibit A to this Agreement. Such fees are to be billed
monthly and shall be due and payable upon receipt of the invoice.
Upon any termination of this Agreement and before the end of any
month, the fee for the part of the month before such termination
shall be equal to the fee normally due for the full monthly period
and shall be payable upon the date of termination of this Agreement.
(b) In the performance of its obligations under this Agreement,
Distributor will pay only the costs incurred in qualifying as a
broker or dealer under state and federal laws and in establishing and
maintaining relationships with the dealers selling the Shares. All
other costs in connection with the offering of the Shares will be
paid by the Fund in accordance with agreements between the Fund and
Distributor as permitted by applicable laws, including the Act and
rules and regulations promulgated thereunder.
(c) Distributor may from time to time employ or associate with such
person or persons as may be appropriate to assist Distributor in the
performance of this Agreement. Such person or persons may be officers
and employees who are employed or designated as officers by both
Distributor and the Fund. Distributor shall pay the compensation of
such person or persons for such employment and no obligation will be
incurred by or on behalf of the Fund in such respect.
(d) Distributor will render, after the close of each month in which
services have been furnished, a statement reflecting all of the
charges for such month. Charges remaining unpaid after thirty (30)
days shall bear interest in finance charges equivalent to, in the
aggregate, the Prime Rate (as publicly announced by Firstar Bank,
N.A., from time to time) plus 2.00% per year and all costs and
expenses of effecting collection of any such sums, including
reasonable attorney's fees, shall be paid by the Fund to Distributor.
8. INDEMNIFICATION OF FUND.
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Distributor agrees to indemnify and hold harmless the Fund and each person
who has been, is, or may hereafter be a trustee, director, officer,
employee, shareholder or control person of the Fund against any loss,
damage or expense (including the reasonable costs of investigation)
reasonably incurred by any of them in connection with any claim or in
connection with any action, suit or proceeding to which any of them may be
a party, which arises out of or is alleged to arise out of or is based
upon any untrue statement or alleged untrue statement of a material fact,
or the omission or alleged omission to state a material fact necessary to
make the statements not misleading, on the part of Distributor or any
agent or employee of Distributor or any other person for whose acts
Distributor is responsible, unless such statement or omission was made in
reliance upon written information furnished by the Fund. Distributor
likewise agrees to indemnify and hold harmless the Fund and each such
person in connection with any claim or in connection with any action, suit
or proceeding which arises out of or is alleged to arise out of
Distributor's failure to exercise reasonable care and diligence with
respect to its services, if any, rendered in connection with investment,
reinvestment, automatic withdrawal and other plans for Shares. The term
"expenses" for purposes of this and the next paragraph includes amounts
paid in satisfaction of judgments or in settlements which are made with
Distributor's consent. The foregoing rights of indemnification shall be in
addition to any other rights to which the Fund or each such person may be
entitled as a matter of law.
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9. INDEMNIFICATION OF DISTRIBUTOR.
The Fund agrees to indemnify and hold harmless Distributor and each person
who has been, is, or may hereafter be a director, officer, employee,
shareholder or control person of Distributor against any loss, damage or
expense (including the reasonable costs of investigation) reasonably
incurred by any of them in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad
faith or negligence, including clerical errors and mechanical failures, on
the part of any of such persons in the performance of Distributor's duties
or from the reckless disregard by any of such persons of Distributor's
obligations and duties under this Agreement, for all of which exceptions
Distributor shall be liable to the Fund. The Fund will advance attorneys'
fees or other expenses incurred by any such person in defending a
proceeding, upon the undertaking by or on behalf of such person to repay
the advance if it is ultimately determined that such person is not
entitled to indemnification.
In order that the indemnification provisions contained in this Paragraph 9
shall apply, it is understood that if in any case the Fund may be asked to
indemnify Distributor or any other person or hold Distributor or any other
person harmless, the Fund shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that Distributor will use all reasonable care to identify and
notify the Fund promptly concerning any situation which presents or
appears likely to present the probability of such a claim for
indemnification against the Fund. The Fund shall have the option to defend
Distributor and any such person against any claim which may be the subject
of this indemnification, and in the event that the Fund so elects it will
so notify Distributor, and thereupon the Fund shall take over complete
defense of the claim, and neither Distributor nor any such person shall in
such situation initiate further legal or other expenses for which it shall
seek indemnification under this Paragraph 9. Distributor shall in no case
confess any claim or make any compromise in any case in which the Fund
will be asked to indemnify Distributor or any such person except with the
Fund's written consent.
Notwithstanding any other provision of this Agreement, Distributor shall
be entitled to receive and act upon advice of counsel (who may be counsel
for the Fund or its own counsel) and shall be without liability for any
action reasonably taken or thing reasonably done pursuant to such advice,
provided that such action is not in violation of applicable federal or
state laws or regulations.
10. TERMINATION AND AMENDMENT OF THIS AGREEMENT.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment. This Agreement may be amended
only if such amendment is approved (i) by Distributor, (ii) either by
action of the Board of Directors of the Fund or at a meeting of the
Shareholders of the Fund by the affirmative vote of a majority of the
outstanding Shares, and (iii) by a majority of the Directors of the Fund
who are not interested persons of the Fund or of Distributor by vote cast
in person at a meeting called for the purpose of voting on such approval.
Either the Fund or Distributor may at any time terminate this Agreement on
sixty (60) days' written notice delivered or mailed by registered mail,
postage prepaid, to the other party.
11. EFFECTIVE PERIOD OF THIS AGREEMENT.
This Agreement shall take effect upon its execution and shall remain in
full force and effect for a period of one (1) year from the date of its
execution (unless terminated automatically as set forth in Section 11),
and from year to year thereafter, subject to annual approval (i) by
Distributor, (ii) by the Board of Directors of the Fund or a vote of a
majority of the outstanding Shares, and (iii) by a majority of the
Directors of the Fund who are not interested persons of the Fund or of
Distributor by vote at a meeting called for the purpose of voting on such
approval.
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12. NEW SERIES.
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The terms and provisions of this Agreement shall become automatically
applicable to any additional series of the Fund established during the
initial or renewal term of this Agreement.
13. SUCCESSOR INVESTMENT FUND.
Unless this Agreement has been terminated in accordance with Paragraph 11,
the terms and provisions of this Agreement shall become automatically
applicable to any investment company which is a successor to the Fund as a
result of reorganization, recapitalization or change of domicile.
14. LIMITATION OF LIABILITY.
It is expressly agreed that the obligations of the Fund hereunder shall
not be binding upon any of the Directors, shareholders, nominees,
officers, agents or employees of the Fund, personally, but bind only the
trust property of the Fund. The execution and delivery of this Agreement
have been authorized by the Directors of the Fund and signed by an officer
of the Fund, acting as such, and neither such authorization by such
Directors nor such execution and delivery by such officer shall be deemed
to have been made by any of them individually or to impose any liability
on any of them personally, but shall bind only the trust property of the
Fund.
15. SEVERABILITY.
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In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
16. QUESTIONS OF INTERPRETATION.
(a) This Agreement shall be governed by the laws of the State of Indiana.
(b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or
provision of the Act shall be resolved by reference to such term or
provision of the Act and to interpretation thereof, if any, by the
United States courts or in the absence of any controlling decision of
any such court, by rules, regulations or orders of the Securities and
Exchange Commission issued pursuant to said Act. In addition, where
the effect of a requirement of the Act, reflected in any provision of
this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
17. NOTICES.
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Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party, with a copy to the
Fund's counsel, at such address as such other party may designate for the
receipt of such notice. Such notice will be effective upon receipt. Until
further notice to the other party, it is agreed that the address of each
party for this purpose shall be:
(a) If to the Fund, to:
iMillennium Capital Trust
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: President
(b) If to Unified, to:
Unified Financial Securities, Inc.
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: President
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18. EXECUTION
This Agreement may be executed by one or more counterparts, each of which
shall be deemed an original, but all of which together will constitute one
in the same instrument.
IN WITNESS WHEREOF, the Fund and Distributor have each caused this
Agreement to be signed in duplicate on their behalf, all as of the day and
year first above written.
IMILLENNIUM CAPITAL TRUST
By: Date_____________
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Print Name:
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Title:
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Attest:
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UNIFIED FINANCIAL SECURITIES, INC.
By: Date______________
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Print Name:
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Title:
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By: Date______________
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Print Name:
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Title:
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Attest:
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EXHIBIT A
to
DISTRIBUTION AGREEMENT
DISTRIBUTION FEE SCHEDULE
The prices contained herein are effective for twenty-four months from the
execution date of the Distribution Agreement. All fees are billed monthly and
are payable upon receipt.
I STANDARD FEES
0.01% of average daily Fund net assets subject to an annual minimum
fee of $6,000 per Trust from $0 to $10 million in average net assets
per month, and $12,000 when average net assets per month are in
excess of $10 million. Fees are billed on a monthly basis.
II ADDITIONAL SERVICES
- Sales literature & document review (including websites) $150 per job
for the first ten pages of an advertisement and/or sales literature
and $20 per page thereafter, plus NASD filing fees.
- NASD and other filing fees Pass thru
- Annual Licensing and Compliance Fees $500 per Registered
Representative (of pre-approved RR's) Site visits charged as out of
pocket expenses.
- Travel Expenses and Out-of-Pockets Pass thru
- Other duties as agreed upon Negotiable
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