DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of December 21, 1998, between T.O. Xxxxxxxxxx
Trust (the "Trust"), a Massachusetts Business Trust and T.O. Xxxxxxxxxx
Securities, Inc. ("TORS"), a corporation organized and existing under the laws
of the State of Connecticut.
WHEREAS the Trust is registered under the Investment Company Act of
1940, as amended (the "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
(the "1933 Act"), and has qualified its shares for sale to the public under
various state securities laws, and
WHEREAS the Trust desires to retain TORS 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 Trust's Board
of Trustees (the "Board") and its disinterested trustees in conformity with
Section 15(c) under the 1940 Act; and
WHEREAS TORS is willing to act as principal underwriter for the Trust 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 Trust hereby appoints 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 on behalf of the
Trust, subject to the terms and for the period set forth in this Agreement. TORS
hereby accepts such appointment and agrees to act hereunder. The Trust
understands that any solicitation activities conducted on behalf of the Trust
will be conducted primarily, if not exclusively, by employees of the Trust's
sponsor who shall become registered representatives or by registered
representatives of other NASD member firms which have entered into a selling
agreement with TORS.
2. Services and Duties (a) TORS agrees to sell Shares on a best efforts
basis from time to time during the term of this Agreement as agent for the Trust
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 Trust, and any supplements thereto, under the 1933
Act and the 1940 Act.
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(b) TORS will hold itself available to receive purchase and redemption
orders satisfactory to the Trust for Shares and will accept such orders on
behalf of the Trust. Such purchase orders shall be deemed effective at the time
and in the manner set forth in the Registration Statement.
(c) TORS, with the operational assistance of the Trust's transfer
agent, shall make Shares available through the National Securities Clearing
Corporation's Fund/SERV System.
(d) TORS shall provide to investors and potential investors only such
information regarding the Trust as the Trust shall provide or approve. TORS
shall review and file all proposed advertisements and sales literature with
appropriate regulators and consult with the Trust regarding any comments
provided by regulators with respect to such materials.
(e) 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 Trust shall make available to TORS a statement of each computation of net
asset value and the details of entering into such computation.
(f) TORS at its sole discretion may repurchase Shares offered for sale
by the shareholders. Repurchase of Shares by TORS 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, TORS shall notify, by any
appropriate means, the Trust and its transfer agent of the orders for repurchase
of Shares received by TORS since the last such report, the amount to be paid for
such Shares, and the identity of the shareholders offering Shares for
repurchase. The Trust reserves the right to suspend such repurchase right upon
written notice to TORS and TORS further agrees to act as agent for the Trust to
receive and transmit promptly to the Trust's transfer agent shareholder requests
for redemption of Shares.
(g) TORS shall not be obligated to sell any certain number of Shares.
(h) TORS 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 Trust. The Trust shall keep TORS fully informed of its
affairs and shall provide to TORS from time to time copies of all information,
financial statements, and other papers that TORS may reasonably request for use
in connection with the distribution of Shares, including, without limitation,
certified copies of any financial statements prepared for the Trust 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 may request, and the Trust shall fully cooperate in the
efforts of TORS to sell and arrange for the sale of Shares.
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(b) The Trust 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 Trust
shall notify TORS in writing of the states in which the Shares may be sold and
shall notify TORS in writing of any changes to such information. The Trust 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 Trust's communication with persons who are
shareholders.
(c) The Trust shall not use any advertisements or other sales materials
that have not been (i) submitted to for its review and approval, and (ii) filed
with the appropriate regulators.
(d) The Trust represents and warrants that its Registration Statement
and any advertisements and sales literature (excluding statements relating to
TORS and the services it provides that are based upon written information
furnished by TORS expressly for inclusion therein) of the Trust 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 TORS pursuant to
Section 3(a) hereof, shall be true and correct in all material respects.
4. Other Broker-Dealers. TORS in its discretion may enter into
agreements to sell Shares to such registered and qualified retail dealers, as
reasonably requested by the Trust. The form of any such dealer agreement shall
be mutually agreed upon and approved by the Trust and TORS.
5. Withdrawal of Offering . The Trust reserves the right at any time to
withdraw all offerings of any or all Shares by written notice to TORS at its
principal office. No Shares shall be offered by TORS or the Trust under any
provisions of this Agreement and no orders for the purchase or sale of Shares
hereunder shall be accepted by the Trust 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.
6. Services Not Exclusive. The services furnished by TORS hereunder are
not to be deemed exclusive and TORS 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 Trust. The Trust 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
Trust including, but not limited to: (i) fees and disbursements of its counsel
and independent pubic
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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 Trust; and (v) the qualification of Shares
for sale under the securities laws of such jurisdictions as shall be selected by
the Trust pursuant to Paragraph 3(b) hereof, and the costs and expenses payable
to each such jurisdiction for continuing qualification therein. In addition, the
Trust shall bear all costs of preparing, printing, mailing and filing any
advertisements and sales literature. TORS does not assume responsibility for any
expenses not assumed hereunder.
8. Compensation. TORS shall receive no compensation for the services
performed and the expenses assumed by it under this Agreement.
9. Share Certificates. The Trust shall not issue certificates
representing Shares unless requested to do so by a shareholder. If such request
is transmitted through TORS the Trust will cause certificates evidencing the
Shares owned to be issued in such names and denominations as TORS shall from
time to time direct.
10. Status of TORS. TORS is an independent contractor and shall be
agent of the Trust only with respect to the sale and redemption of Shares.
11. Indemnification. (a) The Trust agrees to indemnify, defend, and
hold TORS, its officers and directors, and any person who controls TORS 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 TORS, 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
or necessary to make the statements therein not misleading, or (iii) failure by
the Trust to comply with the terms of the Agreement; provided, that in no event
shall anything contained herein be so construed as to protect TORS against any
liability to the Trust or its shareholders to which TORS 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 Trust shall not be liable to TORS under this Agreement with
respect to any claim made against TORS or any person indemnified unless TORS or
such other 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 on the nature of the claim shall have been served upon TORS or such
other person (or after or the person shall have received notice of service on
any designated agent). However, failure to
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notify the Trust of any claim shall not relieve the Trust from any liability
that it may have to TORS or any person against who such action is brought
otherwise than on account of this Agreement.
(c) 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 subject to this Agreement. If the Trust elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
the Trust and satisfactory to indemnified defendants in the suit whose approval
shall not be unreasonably withheld. In the event that the Trust 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
Trust 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 Trust agrees to promptly notify TORS
of the commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of its
Shares.
(d) TORS agrees to indemnify, defend, and hold the Trust, its officers
and trustees, and any person who controls the Trust 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 Trust, its trustees, or officers, or
any such controlling person may incur under the 1933 Act, or under common law or
otherwise, resulting from TORS' 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 TORS to the Trust
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.
TORS shall be entitled to participate, at its own expense, in the
defense or, if TORS so elects, the defense shall be conducted by counsel chosen
by TORS and satisfactory to the indemnified defendants whose approval shall not
be unreasonably withheld. In the event that TORS 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 TORS 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
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at least annually (i) by a vote of a majority of the Trust's Board who are
neither interested persons (as defined in the 0000 Xxx) of the Trust
("Independent Trustees") or 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 Trust.
(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, or by vote
of a majority of the outstanding voting securities of the Trust on sixty days
written notice to TORS or by TORS at any time, without the payment of any
penalty, on sixty days' written notice to the Trust. 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 Trust; provided, that in either case, such amendment also shall be approved
by a majority of the Independent Trustees.
14. Limitation of Liability. The Board and shareholders of the Trust
shall not be personally liable for obligations of the Trust in connection with
any matter arising from or in connection with this Agreement. This Agreement is
not binding upon any trustees, officers or shareholders of the Trust
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 any 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,
state, rule, or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding upon and shall 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 Connecticut and the 1940 Act. To the extent that the
applicable laws of the State of Connecticut conflict with the applicable
provisions of the 1940 Act, the latter shall control.
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18. Notice. The name T.O. Xxxxxxxxxx Trust is the designation of the
Trustees under the Declaration of Trust, dated June 2, 1998, as amended from
time to time. The Declaration of Trust has been filed with the Secretary of
State of the Commonwealth of Massachusetts. The obligations of the Trust are not
personally binding upon, nor shall resort be had to the private property of, any
of the Trustees, shareholders, officers, employees or agents of the Trust, but
the Trust's property only shall be bound.
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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.
T. O. XXXXXXXXXX TRUST
By: /s/ Xxxxxx Xxxxxx, Jr.
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Xxxxxx Xxxxxx, Jr.
T. O. XXXXXXXXXX SECURITIES, INC.
By: /s/ Xxxxxx Xxxxxx, Jr.
---------------------------------------
Xxxxxx Xxxxxx, Jr.
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SCHEDULE A
to the
DISTRIBUTION AGREEMENT
Between
and
Pursuant to section I of the Distribution Agreement between the T. O.
XXXXXXXXXX TRUST (the "Trust") and T.O. XXXXXXXXXX SECURITIES, INC.
("TORS"), the Trust hereby appoints TORS as its agent to be the principal
underwriter of the Trust with respect to its following series:
T. O. Xxxxxxxxxx Sector Rotation Fund
Dated: December 21, 1998
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