EXHIBIT (E)(1)
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
This Amended and Restated Distribution Agreement (the "Agreement"), is
made as of the 15th day of November, 2005, between THE CATHOLIC FUNDS, INC., a
Maryland corporation (the "Fund Company"), and CATHOLIC FINANCIAL SERVICES
CORPORATION, a Wisconsin corporation (the "Distributor").
WITNESSETH:
WHEREAS, the Fund Company proposes to engage in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "1940 Act"), and it is in the interest of
the Fund Company to offer its series of shares entitled the Catholic Equity Fund
and, subject to the mutual agreement of the parties and amendment of this
Agreement, of any other series of mutual fund of the Fund Company presently
designated or designated in the future (the Catholic Equity Fund and any such
additional series are referred to herein as a "Fund") for sale continuously; and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, the Fund Company and the Distributor wish to enter into an
agreement with each other with respect to the continuous offering of the shares
of beneficial interest of all series of shares of the Fund Company (the
"Shares"), to commence after the effectiveness of its initial registration
statement filed pursuant to the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act.
NOW, THEREFORE, the parties agree as follows:
1. Appointment of Distributor
The Fund Company hereby appoints the Distributor as its exclusive agent
to sell and to arrange for the sale of the Shares, on the terms and for the
period set forth in this Agreement, and the Distributor hereby accepts such
appointment and agrees to act hereunder directly and/or through the Fund
Company's transfer agent in the manner set forth in the prospectus (as defined
below). It is understood and agreed that the services of the Distributor
hereunder are not exclusive, and the Distributor may act as principal
underwriter for the shares of any other registered investment company. It is
also understood that purchases of shares of the Fund may be made directly
through the Fund Company's Transfer Agent in the manner set forth in the
prospectus for the relevant Fund.
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2. Services and Duties of the Distributor
(a) The Distributor agrees to sell the Shares of the Fund, as
agent for the Fund Company, from time to time during the term of this Agreement
upon the terms described in the prospectus for the Fund. As used in this
Agreement, the term "prospectus" shall mean the prospectus and statement of
additional information of the Fund included as part of the Fund Company's
Registration Statement, as such prospectus and statement of additional
information may be amended or supplemented from time to time, and the term
"Registration Statement" shall mean the Registration Statement most recently
filed from time to time by the Fund Company with the Securities and Exchange
Commission and effective under the 1933 Act and the 1940 Act, as such
Registration Statement is amended by any amendments thereto at the time in
effect. The Distributor shall not be obligated to sell any certain number of
Shares.
(b) Upon commencement of the Fund Company's operations, the
Distributor will hold itself available to receive orders, satisfactory to the
Distributor, for the purchase of the Shares and will accept such orders and will
transmit such orders and funds received by it in payment for such Shares as are
so accepted by the Fund Company's transfer agent or custodian, as appropriate,
as promptly as practicable. Purchase orders shall be deemed effective at the
time and in the manner set forth in the prospectus for the Fund. The Distributor
shall not make any short sales of Shares.
(c) The offering price of the Shares shall be the net asset
value per share of the Shares (as defined in the Articles of Incorporation) and
as determined as set forth in the prospectus for the Fund, plus the sales charge
(determined as set forth in the prospectus). The Fund Company shall furnish the
Distributor, with all possible promptness, an advice of each computation of net
asset value and offering price.
(d) The above-mentioned sales charge shall constitute the
entire compensation of the Distributor, except that the Distributor may also be
compensated through payments under the Distribution Plan adopted with respect to
the Fund pursuant to Rule 12b-1 under the 1940 Act.
3. Duties of the Fund Company
(a) Maintenance of Federal Registration. The Fund Company
shall, at its expense, take, from time to time, all necessary action and such
steps, including payment of the related filing fees, as may be necessary to
register and maintain registration of a sufficient number of Shares under the
0000 Xxx. The Fund Company agrees to file from time to time such amendments,
reports and other documents as may be necessary in order that there may be no
untrue statement of a material fact in a registration statement or prospectus,
or necessary in order that there may be no omission to state a material fact in
the registration statement or prospectus of the Fund which omission would make
the statements therein misleading.
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(b) Maintenance of "Blue Sky" Qualifications. The Fund Company
shall, at its expense, use its best efforts to qualify and maintain the
qualification of an appropriate number of Shares for sale under the securities
laws of such states as the Distributor and the Fund Company may approve, and, if
necessary or appropriate in connection therewith, to qualify and maintain the
qualification of the Fund Company as a broker or dealer in such states; provided
that the Fund Company shall not be required to amend its Articles of
Incorporation 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 the Shares in any
state from the terms set forth in the prospectus of the Fund, to qualify as a
foreign corporation in any state or to consent to service of process in any
state other than with respect to claims arising out of the offering and sale of
the Shares. The Distributor shall furnish such information and other material
relating to its affairs and activities as may be required by the Fund Company in
connection with such qualifications.
(c) Copies of Reports and Prospectus. The Fund Company shall,
at its expense, keep the Distributor fully informed with regard to its affairs
and in connection therewith 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,
including such number of copies of the prospectus of the Fund and annual and
interim reports as the Distributor reasonably may request in connection with
selling and arranging for the sale of the Shares and in connection with the
performance of its duties and obligations under this Agreement.
4. Conformity with Applicable Laws and Rules
The Distributor agrees that in selling Shares hereunder it
shall conform in all respects with the laws of the United States and of any
state in which Shares may be offered, and with applicable rules and regulations
of the NASD.
In this regard, each of the Distributor and the Fund Company
acknowledges that it is a financial institution subject to the USA PATRIOT Act
of 2001 and the Bank Secrecy Act (collectively, the "AML Laws"), which require,
among other things, that financial institutions adopt compliance programs to
guard against money laundering. Each represents and warrants to the other that
it is in compliance with and will continue to comply with the AML Laws and
applicable regulations in all relevant respects. The Distributor shall also
provide written notice to each person or entity with which it entered an
agreement prior to the date hereof with respect to the sale of Shares, such
notice informing such person of anti-money laundering compliance obligations
applicable to financial institutions under applicable laws and, consequently,
under applicable contractual provisions requiring compliance with laws.
The Distributor shall include specific contractual provisions
regarding anti-money laundering compliance obligations in agreements entered
into by the Distributor with any dealer that is authorized to effect
transactions in Shares.
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Each of Distributor and the Fund Company agrees that it will
take such other steps, and cooperate with the other as may reasonably be
necessary, to facilitate compliance with the AML Laws, including but not limited
to the provisions of copies of its written procedures, policies and controls
related thereto ("AML Operations"). Distributor undertakes that it will grant to
the Fund Company, the Fund Company's anti-money laundering compliance officer
and regulatory agencies, reasonable access to copies of Distributor's AML
Operations, books and records pertaining the Fund Company only. It is expressly
understood and agreed that the Fund Company and the Fund Company's compliance
officer shall have no access to any of Distributor's AML Operations, books or
records pertaining to other clients of Distributor.
5. Expenses
(a) The Fund Company shall bear all costs and expenses of the
continuous offering of its Shares in connection with: (i) fees and disbursements
of its counsel and independent accountants, (ii) the preparation, filing and
printing of any registration statements and/or prospectus(es) required by and
under the federal securities laws, (iii) the preparation and mailing of annual
and interim reports, prospectus(es) and proxy materials to shareholders and (iv)
the qualifications of Shares of the Fund Company for sale under the securities
laws of such states or other jurisdictions as shall be selected by the Fund
Company and the Distributor and the cost and expenses payable to each such state
for continuing qualification therein.
(b) The Distributor shall bear (i) the costs and expenses of
preparing, printing and distributing any materials not prepared by the Fund
Company and other materials used by the Distributor in connection with its
offering of Shares for sale to the public, including the additional cost of
printing copies of the prospectus(es) and of annual and interim reports to
shareholders other than copies thereof required for distribution to shareholders
or for filing with any federal securities authorities, (ii) any expenses of
advertising incurred by the Distributor in connection with such offering and
(iii) the expenses of registration or qualification of the Distributor as a
dealer or broker under federal or state laws and the expenses of continuing such
registration or qualification.
6. Independent Contractor
In performing its duties hereunder, the Distributor shall be
an independent contractor and neither the Distributor, nor any of its officers,
directors, employees, or representatives is or shall be an employee of the Fund
Company in the performance of the Distributor's duties hereunder. The
Distributor shall be responsible for its own conduct and the employment,
control, and conduct of its agents and employees and for injury to such agents
or employees or to others through its agents or employees. The Distributor
assumes full responsibility for its agents and employees under applicable
statutes and agrees to pay all employee taxes thereunder.
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7. Indemnification
(a) Indemnification of Fund Company. The Distributor agrees to
indemnify and hold harmless the Fund Company and each of its present or former
directors, officers, employees, representatives and each person, if any, who
controls or previously controlled the Fund Company within the meaning of Section
15 of the 1933 Act against any and all losses, liabilities, damages, claims or
expenses (including the reasonable costs of investigating or defending any
alleged loss, liability, damage, claims or expense and reasonable legal counsel
fees incurred in connection therewith) to which the Fund Company or any such
person may become subject under the 1933 Act, under any other statute, at common
law, or otherwise, arising out of the acquisition of any Shares by any person
which (i) may be based upon any wrongful act by the Distributor or any of the
Distributor's directors, officers, employees or representatives, or (ii) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, shareholder report or other
information covering Shares filed or made public by the Fund Company or any
amendment thereof or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but if and only if such statement or
omission was made in reliance upon information furnished to the Fund Company by
the Distributor for the specific purpose of inclusion in such registration
statement, prospectus, shareholder report or other information. In no case (i)
is the Distributor's indemnity in favor of the Fund Company, or any person
indemnified to be deemed to protect the Fund Company of such indemnified person
against any liability to which the Fund Company or such person would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of his duties or by reason of his reckless disregard of his
obligations and duties under this Agreement or (ii) is the Distributor to be
liable under its indemnity agreement contained in this Paragraph with respect to
any claim made against the Fund Company or any person indemnified unless the
Fund Company or such person, as the case may be, shall have notified the
Distributor in writing for 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 the Fund Company or upon such person (or after
the Fund Company or such person shall have received notice to such service on
any designated agent). However, failure to notify the Distributor of any such
claim shall not relieve the Distributor from any liability which the Distributor
may have to the Fund Company or any person against whom such action is brought
otherwise than on account of the Distributor's indemnity agreement contained in
this Paragraph.
The Distributor shall be entitled to participate, at its own
expense, in the defense, or, if the Distributor so elects, to assume the defense
of any suit brought to endorse any such claim, but, if the Distributor elects to
assume the defense, such defense shall be conducted by legal counsel chosen by
the Distributor and satisfactory to the Fund Company and to the defendant or
defendants who are entitled to such indemnification. In the event that the
Distributor elects to assume the defense of any suit and retain legal counsel,
the Fund Company and the defendant or defendants who are entitled to such
indemnification, shall bear the fees and expenses of any additional legal
counsel retained by them. If the Distributor does not elect to assume the
defense of any such suit, the Distributor will reimburse the Fund Company and
the defendant or defendants entitled to such indemnification for the reasonable
fees and expenses of any legal counsel retained by them. The Distributor agrees
to promptly notify the Fund Company of the commencement of any litigation of
proceedings against it or any of its officers, employees or representatives in
connection with the issue or sale of any Shares.
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(b) Indemnification of the Distributor. The Fund Company agrees
to indemnify and hold harmless the Distributor and each of its present or former
directors, officers, employees, representatives and each person, if any, who
controls or previously controlled the Distributor within the meaning of Section
15 of the 1933 Act, under any other statute, at common law, or otherwise,
arising out of the acquisition of any Shares by any person which (i) may be
based upon any wrongful act by the Fund Company or any of the Fund Company's
directors, officers, employees or representatives (other than the Distributor),
or (ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, shareholder
report or other information covering Shares filed or made public by the Fund
Company or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon information furnished to the
Fund Company by the Distributor. In no case (i) is the Fund Company's indemnity
in favor of the Distributor, or any person indemnified to be deemed to protect
the Distributor or such indemnified person against any liability to which the
Distributor or such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties or
by reason of his reckless disregard of his obligations and duties under this
Agreement, or (ii) is the Fund Company to be liable under its indemnity
agreement contained in this Paragraph with respect to any claim made against
Distributor or person indemnified unless the Distributor, or such person, as the
case may be, shall have notified the Fund Company 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 the
Distributor or upon such person (or after the Distributor or such person shall
have received notice of such service on any designated agent). However, failure
to notify the Fund Company of any such claim shall not relieve the Fund Company
from any liability which the Fund Company may have to the Distributor or any
person against whom such action is brought otherwise than on account of the Fund
Company's indemnity agreement contained in this Paragraph.
The Fund Company shall be entitled to participate, at its own
expense, in the defense, or, if the Fund Company so elects, to assume the
defense of any suit brought to enforce any such claim, but if the Fund Company
elects to assume the defense, such defense shall be conducted by legal counsel
chosen by the Fund Company and satisfactory to the Distributor and to the
defendant or defendants entitled to such indemnification. In the event that the
Fund Company elects to assume the defense of any suit and retain legal counsel,
the Distributor and the defendant or defendants entitled to such
indemnification, shall bear the fees and expenses of any additional legal
counsel retained by them. If the Fund Company does not elect to assume the
defense of any such suit, the Fund Company will reimburse the Distributor and
the defendant or defendants entitled to such indemnification for the reasonable
fees and expenses of any legal counsel retained by them. The Fund Company agrees
to promptly notify the Distributor of the commencement of any litigation or
proceedings against it or any of its directors, officers, employees or
representatives in connection with the issue or sale of any Shares.
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8. Authorized Representations
The Distributor is not authorized by the Fund Company to give
on behalf of the Fund Company any information or to make any representations in
connection with the sale of Shares other than the information and
representations contained in a registration statement or prospectus filed with
the Securities and Exchange Commission ("SEC") under the 1933 Act and/or the
1940 Act, covering Shares, as such registration statement and prospectus may be
amended or supplemented from time to time, or contained in shareholder reports
or other material that may be prepared by or on behalf of the Fund Company for
the Distributor's use. This shall not be construed to prevent the Distributor
from preparing and distributing tombstone ads and sales literature or other
material as it may deem appropriate. No person other than the Distributor is
authorized to act as principal underwriter (as such term is defined in the 0000
Xxx) for the Fund Company.
9. Term of Agreement
The term of this Agreement shall begin on the effective date
of Post-Effective Amendment No. 10 to the Fund Company's SEC Registration
Statement on Form N-1A, which Amendment was filed with the SEC on December 1,
2005. Unless sooner terminated as hereinafter provided, this Agreement shall
remain in effect for a period of one year from the date hereof. Thereafter, this
Agreement shall continue in effect from year to year, subject to the termination
provisions and all other terms and conditions thereof, so long as such
continuation shall be specifically approved at least annually by the Board of
Directors or by vote of a majority of the outstanding voting securities of the
Fund Company and, concurrently with such approval by the Board of Directors or
prior to such approval by the holders of the outstanding voting securities of
the Fund Company, as the case may be, by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the
directors of the Fund Company who are not parties to this Agreement or
interested persons of any such party. The Distributor shall furnish to the Fund
Company, promptly upon its request, such information as may reasonably be
necessary to evaluate the terms of this Agreement or any extension, renewal or
amendment hereof.
10. Amendment or Assignment of Agreement
This Agreement may not be amended or assigned except as
permitted by the 1940 Act, and this Agreement shall automatically and
immediately terminate in the event of its assignment.
11. Termination of Agreement
This Agreement may be terminated by either party hereto,
without the payment of any penalty, on not more than upon 60 days nor less than
30 days prior notice in writing to the other party provided, that in the case of
termination by the Fund Company such action shall have been authorized by
resolution of a majority of the directors of the Fund Company who are not
parties to this Agreement or interested persons of any such party, or by vote of
a majority of the outstanding voting securities of the Fund Company.
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12. Miscellaneous
The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Nothing herein contained shall be deemed to require the Fund
Company to take any action contrary to its Articles of Incorporation or By-Laws,
or any applicable statutory or regulatory requirement to which it is subject or
by which it is bound, or to relieve or deprive the Board of Directors of the
Fund Company of responsibility for and control of the conduct of the affairs of
the Fund Company.
13. Definition of Terms
Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States court or, in the absence of any controlling decision of any such court,
by rules, regulations or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities", "interested persons",
"assignment", and "affiliated person", as used in Paragraphs 8, 9 and 10 hereof,
shall have the meanings assigned to them by Section 2(a) of the 1940 Act. In
addition, where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is relaxed by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
14. Compliance with Securities Laws
The Fund Company represents that it is registered as an
open-end management investment company under the 1940 Act, and agrees that it
will comply with all the provisions of the 1940 Act and of the rules and
regulations thereunder. The Fund 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 provisions of Section 4(d), all applicable "Blue Sky"
laws. The Distributor agrees to comply with all of the applicable terms and
provisions of the Securities Exchange Act of 1934.
15. Notices
Any notice required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid, to either the Distributor or to the Fund Company at 0000 Xxxx Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
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16. Governing Law
This Agreement shall be governed and construed in accordance
with the laws of the State of Wisconsin.
17. No Shareholder Liability
The Distributor understands that the obligations of this
Agreement are not binding upon any shareholder of the Fund Company personally,
but bind only the Fund Company's property; the Distributor represents that it
has notice of the provisions of the Articles of Incorporation disclaiming
shareholder liability for acts or obligations of the Fund Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized representatives and their respective corporate
seals to be hereunto affixed, as of the day and year first above written.
THE CATHOLIC FUNDS, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
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CATHOLIC FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxx X. Xxxxx
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