DISTRIBUTION AGREEMENT
between
The Xxxxx Funds
and
T.O. Xxxxxxxxxx Securities, Inc.
THIS AGREEMENT is made as of December 1, 1998 between The Xxxxx Funds (the
"Trust"), a Delaware 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 "Securities 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 ("Board") and its disinterested trustees in conformity with Section
15(c) of 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 TORS 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 and redemption of
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 of
TORS
2. Services and Duties of TORS
(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 Securities Act
and the 0000 Xxx.
(b) TORS will hold itself available to receive purchase and
redemption orders satisfactory to TORS 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 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. Please refer to amendment A that provides further
details to TORS's role and responsibility to the Xxxxx Funds.
3. Duties of the Trust.
(a) 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 TORS may request, and the Trust shall fully cooperate in the
efforts of TORS to sell and arrange for the sale of Shares.
(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
2
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 TORS 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. In making agreements with such dealers, TORS shall act
only as principal and not as agent for 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 either TORS or the Trust under
any provisions of this agreement and no orders for the purchase 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 Securities Act, or if and so
long as a current prospectus as required by Section 5(b)(2) of the Securities
Act is not on file with the SEC.
6. Services Not Exclusive. The services furnished by TORS hereunder are
not to be deemed exclusive. TORS shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
The Trust reserves the right to (i) sell Shares to investors on applications
received and accepted by the Trust; (ii) issue Shares in connection with a
merger, consolidation, or recapitalization of the Trust; or (iii) issue
additional Shares to holders of Shares.
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 public 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;
3
and (v) the qualifications of Shares for sale under the securities laws of such
jurisdictions as shall be selected by the Trust pursuant to the Paragraph 3(b)
hereof, and the costs and expenses payable to each 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. As compensation for the services performed and the
expenses assumed by TORS under this Agreement including, but not limited to, any
commissions paid for sales of Shares, the Trust shall pay TORS, as promptly as
possible after the last day of each month, any fees that may become payable to
TORS pursuant to the Distribution Plan and any retention of sales loads that may
become payable to TORS See Schedule B for TORS's compensation. The Trust's
obligation for payment of fees under this agreement are limited to the aggregate
amount of dealer retention and fees payable under a distribution plan
established pursuant to Rule 12b-1 under the 1940 Act.
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 Securities Act, free and harmless from and against any and all
claims, demands, or liabilities, and expenses (including the cost of
investigating or defending such claims, demands, liabilities, and any counsel
fees incurred in connection therewith) that TORS, its officers and directors, or
any such controlling person may incur under the Securities Act, or under common
law or otherwise, arising out of 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 in the either thereof 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
other such 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 of the nature of the claim shall have been served upon TORS or such
other person (or after TORS or other person shall have received notice of
service on any designated agent). However, failure to notify the Trust of any
claim
4
shall not relieve the Trust from any liability that it may have to TORS or
any person against whom 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 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 and directors 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 directors, and any person who controls the Trust within the meaning
of Section 15 of the Securities 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 directors and
officers, or any such controlling person may incur under the Securities Act, or
under common law or otherwise, resulting from TORS's 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.
(e) TORS 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 the claim, but if TORS elects to assume the defense, 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 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
5
TORS 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. If the Trust is a
Delaware business trust, this Agreement is not binding upon any trustees,
officer, or shareholder 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 and 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,
statute, 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 (without regard, however,
to the conflicts of law principles). 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.
6
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.
The Xxxxx Funds T.O. Xxxxxxxxxx Securities, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx Xxxxxx, Jr.
--------------------------- ---------------------------------
Print Xxxxxx X. Xxxxxxxx Print Xxxxxx Xxxxxx, Jr.
------------------------- ------------------------------
Title Chief Financial Officer Title President
------------------------- ------------------------------
Date 11/19/98 Date 11/24/98
-------------------------- --------------------------------
Attest /s/Xxxxx Xxxxxxxxx Attest /s/ Xxxxxxxx Xxxxx
------------------ ------------------------------
AMENDMENT A
The Xxxxx Funds (the "Trust") and T.O. Xxxxxxxxxx Securities, Inc. (TORS)
further agree that the Trust has entered into the Fund Administrative Services
Agreement, Fund Accounting Services Agreement, Transfer Agent Agreement,
Custodian Agreement, and Fulfillment Services Agreement with Firstar Mutual Fund
Services, LLC of Milwaukee, Wisconsin (FMFS) or an affiliate, copies of which
are in the hands of the parties hereto and to which reference may be had (which
agreements are herein collectively referred to as the "Trust Operating
Agreements."). The Trust agrees to maintain the Trust Operating Agreements in
effect during the term of this Agreement. The parties hereto agree that TORS. is
a third party beneficiary to the Trust Operating Agreements and that substantial
portions of the duties and services to be provided by TORS. hereunder are to be
performed by FMFS for TORS.'s and the Trust's benefit. The Trust shall be
responsible for all amounts due under the Trust Operating Agreements and TORS.
shall not be responsible for duplication of duties or services provided for in
the Trust Operating Agreements or any fees or expenses thereunder.
The Xxxxx Funds T.O. Xxxxxxxxxx Securities, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx Xxxxxx, Jr.
--------------------------- ---------------------------------
Print Xxxxxx X. Xxxxxxxx Print Xxxxxx Xxxxxx, Jr.
------------------------- ------------------------------
Title Chief Financial Officer Title President
------------------------- ------------------------------
Date 11/19/98 Date 11/24/98
-------------------------- --------------------------------
Attest /s/Xxxxx Xxxxxxxxx Attest /s/Xxxxxxxx Xxxxx
------------------ ------------------------------
SCHEDULE A
to the
DISTRIBUTION AGREEMENT
between
The Xxxxx Funds
and
T.O. Xxxxxxxxxx Securities, Inc.
Pursuant to Section 1 of the Distribution Agreement between The Xxxxx
Funds (the "Trust") and T.O. Xxxxxxxxxx Securities, Inc. ("T.O.R."), the
Trust hereby appoints T.O.R. as its agent to be the principal underwriter of
Trust with respect to its following series:
1.____U.S. Equity Fund, Class A and Class Y Shares
2. International Equity Fund, Class A and Class Y Shares
Dated: December 1, 1998
Reapproved August 16, 2001 for a term ending October 1, 2002.
T.O. Xxxxxxxxxx Securities, Inc.
Nominal Mutual Fund Distribution Services
Fee Schedule B
To the extent not covered by Rule 12b-1 Fees or offset by the retention of
sales loads, we shall pay you the following:
1. Annual Fees. The greater of:
o an annual fee of $7,500 for the initial share class of the
first Fund of the Trust and $4,000 per year per the initial
share class of each additional Fund and $1,500 per year per
each additional share class of each Fund, or
o 0.01% of the average daily net assets of each Fund,
computed daily and paid monthly;
2. Licensing of Xxxxx Capital Management Staff. An annual fee of
$450 per Series 7 registered representative ("registered rep");
ongoing licensing fees and incidental costs;
3. Registered Rep Compensation. The compensation you pay to such
registered reps in accordance with compensation schedules as we
agree upon from time to time;
4. NSCC Fees. The pass through fees associated with listing and
maintaining shares on the National Securities Clearing
Corporation's Fund/SERV System, as we agree upon; and
5. Advertising Review and NASD Filing.
o Reviewing fees: $150 per job for the first ten pages of an
advertisement and $20 per page thereafter.
o Incidental expenses associated with printing and distributing
advertising and sales literature, such as filing with the
National Association of Securities Dealers, Inc.
Plus out-of-pocket expenses, including but not limited to:
o Travel expenses
o All associated NASD fees for Registered Representatives securities
licenses
o Review and filing of NASD advertising material
o Retention of records
Dated: September 14, 1998
