Exhibit e(3)
UNDERWRITING AGREEMENT
THIS AGREEMENT is made as of ___________, 200_ by and among PFPC
DISTRIBUTORS, INC., a Massachusetts corporation ("PFPC Distributors"), BB&T
FUNDS, a Massachusetts business trust (the "Trust") and BB&T ASSET MANAGEMENT,
INC., an investment adviser registered with the Securities and Exchange
Commission (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and is currently offering units of beneficial interest (such units of all series
are hereinafter called the "Shares"), representing interests in investment
portfolios of the Trust identified on Exhibit A hereto (the "Funds") which are
registered with the Securities and Exchange Commission (the "SEC") pursuant to
the Trust's Registration Statement on Form N-1A (the "Registration Statement");
and
WHEREAS, the Trust wishes to retain PFPC Distributors to serve as
distributor for the Funds to provide for the sale and distribution of the Shares
of the Funds identified on Exhibit A and for such additional classes or series
as the Trust may issue, and PFPC Distributors wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. As used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Trust and any other
person duly
authorized by the Fund's Board of Trustees to give Oral Instructions
and Written Instructions on behalf of the Trust. An Authorized
Person's scope of authority may be limited by setting forth such
limitation in a written document signed by both parties hereto.
(d) "NASD" means the National Association of Securities Dealers, Inc.
(e) "Oral Instructions" mean oral instructions received by PFPC
Distributors from an Authorized Person or from a person reasonably
believed by PFPC Distributors to be an Authorized Person. PFPC
Distributors may, in its sole discretion in each separate instance,
consider and rely upon instructions it receives from an Authorized
Person via electronic mail as Oral Instructions.
(f) "Registration Statement" means any Registration Statement, including
the Prospectus and Statement of Additional Information relating to the
Trust filed with the SEC on Form N-1A and any amendments or
supplements thereto then in effect.
(g) "Securities Laws" mean the 1933 Act, the 1934 Act, and the 0000 Xxx.
(h) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PFPC Distributors or (ii) trade
instructions transmitted (and received by PFPC Distributors) by means
of an electronic transaction reporting system access to which requires
use of a password or other authorized identifier. The instructions may
be delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.
2. APPOINTMENT. As of the date first set forth above, the Trust hereby
appoints PFPC Distributors to serve as the distributor of its Shares for
each of the Fund(s) identified on
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Exhibit A in accordance with the terms set forth in this Agreement. PFPC
Distributors accepts such appointment and agrees to furnish such services.
The Trust understands that PFPC Distributors is now, and may in the future
be, the distributor of the shares of several investment companies or series
(collectively, the "Investment Entities"), including Investment Entities
having investment objectives similar to those of the Trust. The Trust
further understands that investors and potential investors in the Trust may
invest in shares of such other Investment Entities. The Trust agrees that
PFPC Distributors' duties to such Investment Entities shall not be deemed
in conflict with its duties to the Trust under this Agreement. For
clarification, PFPC Distributors has no, nor shall it be deemed to have,
responsibility under this Agreement with respect to the Shares of any
investment portfolios of the Trust not listed on Exhibit A.
3. COMPLIANCE WITH RULES AND REGULATIONS. PFPC Distributors undertakes to
comply with all applicable laws, rules and regulations, including, without
limitation, applicable requirements of the Securities Laws and all
applicable rules and regulations promulgated by the SEC thereunder, and all
applicable rules and regulations by any securities association registered
under the 1934 Act. Except as specifically set forth herein, PFPC
Distributors assumes no responsibility for such compliance by the Trust or
any other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Distributors shall
act only upon Oral Instructions or Written Instructions.
(b) PFPC Distributors shall be entitled to rely upon any Oral Instruction
or Written Instruction it receives from an Authorized Person (or from
a person reasonably
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believed by PFPC Distributors to be an Authorized Person) pursuant to
this Agreement. PFPC Distributors may assume that any Oral Instruction
or Written Instruction received hereunder is not in any way
inconsistent with the provisions of organizational documents or of any
vote, resolution or proceeding of the Trust's Board of Trustees or of
the Trust's shareholders, unless and until PFPC Distributors receives
Written Instructions to the contrary.
(c) The Trust agrees to forward to PFPC Distributors Written Instructions
confirming Oral Instructions so that PFPC Distributors receives the
Written Instructions by the close of business on the same day that
such Oral Instructions are received. The fact that such confirming
Written Instructions are not received by PFPC Distributors or differ
from the Oral Instructions shall in no way invalidate the transactions
or enforceability of the transactions authorized by the Oral
Instructions or PFPC Distributors' ability to rely upon such Oral
Instructions.
5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Trust. If PFPC Distributors is in doubt as to any action
it should or should not take, PFPC Distributors may request Written
Instructions from the Trust.
(b) Advice of Counsel. If PFPC Distributors shall be in doubt as to any
question of law pertaining to any action it should or should not take
with respect to the Trust, PFPC Distributors may (i) upon prior
written notice to and after receiving written approval from the Trust,
request advice from the Trust's counsel ("Trust Counsel") at the
Trust's expense; or (ii) upon prior notice to the Trust, request
advise from PFPC Distributors' counsel ("PFPC Distributors Counsel")
at PFPC
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Distributors' own expense.
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Distributors
receives from the Trust and the advice PFPC Distributors receives from
Trust Counsel, PFPC Distributors may, in good faith, rely upon and
follow the advice of such Trust Counsel, provided that reasonable
prior written notice has been given to the Trust. In the event of a
conflict between directions or advice or Oral Instructions or Written
Instructions PFPC Distributors receives from the Trust and the advice
PFPC Distributors receives from PFPC Distributors Counsel, PFPC
Distributors shall notify the Trust in writing regarding such
conflict. The Trust shall, within a reasonable period of time after
receipt of such notice, notify PFPC Distributors in writing of its
agreement or disagreement to any actions or any omissions to act PFPC
Distributors proposes to take pursuant to PFPC Distributors Counsel's
advice. If the Trust (i) does not respond to PFPC Distributors within
a reasonable period of time; or (ii) responds with agreement to PFPC
Distributors's proposed actions or omissions PFPC Distributors
proposes to take pursuant to PFPC Distributors Counsel's advice; then
PFPC Distributors may, in good faith, rely upon and follow the advice
of PFPC Distributors Counsel. However, in the event where the Trust
has timely notified PFPC Distributors in writing of its disagreement
with PFPC Distributors's proposed actions or omissions, PFPC
Distributors and the Trust shall consult with each other in good faith
to reach agreement on the actions or omissions that are the subject of
the Trust's objection. If, after such consultations, PFPC Distributors
and the Trust are unable to agree
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on the actions or omissions in question, PFPC Distributors and the
Trust shall consult independent counsel reasonably acceptable to both
parties ("Independent Counsel"), the expense of such Independent
Counsel to be split 50/50 between PFPC Distributors and the Trust, and
PFPC Distributors may, after such advice is delivered to PFPC
Distributors and the Trust, follow and rely upon the advice of such
Independent Counsel.
(d) Protection of PFPC Distributors. PFPC Distributors shall be
indemnified by the Trust and without liability for any action PFPC
Distributors takes or does not take in reliance upon directions or
advice or Oral Instructions or Written Instructions it receives from
or on behalf of the Trust or from Trust Counsel or, if PFPC
Distributors follows and acts in accordance with the provisions of
paragraph (c) hereof, PFPC Distributors Counsel or Independent
Counsel, as applicable; provided PFPC Distributors believes, in good
faith, that such action or inaction is consistent with those
directions or advice and Oral Instructions or Written Instructions.
Nothing in this section shall be construed so as to impose an
obligation upon PFPC Distributors (i) to seek such directions or
advice or Oral Instructions or Written Instructions, or (ii) to act in
accordance with such directions or advice or Oral Instructions or
Written Instructions unless, under the terms of other provisions of
this Agreement, the same is a condition of PFPC Distributors' properly
taking or not taking such action.
6. RECORDS; VISITS. The books and records pertaining to the Trust, which are
in the possession or under the control of PFPC Distributors, shall be the
property of the Trust. Such books and records shall be prepared and
maintained as required by the 1940 Act
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and other applicable securities laws, rules and regulations. The Trust and
Authorized Persons shall have access to such books and records at all times
during PFPC Distributors' normal business hours. Upon the reasonable
request of the Trust, copies of any such books and records shall be
provided by PFPC Distributors to the Trust or to an Authorized Person, at
the Trust's expense. Any such books or records may be maintained in the
form of electronic media and stored on any magnetic disk or tape or similar
recording method, and in such case copies of such books and records will,
upon request from the Trust, be provided to the Trust or an Authorized
Person in such form of electronic media. PFPC Distributors will return all
such books and records to the Trust upon termination of this Agreement, and
the Trust will reimburse PFPC Distributors for the reasonable actual
out-of-pocket expenses incurred by PFPC Distributors to return all such
books and records to the Trust. PFPC Distributors may retain copies as are
required by applicable law or customary archival purposes. If PFPC
Distributors is required by law to retain copies of certain documents and
the Trust demands the return of applicable original documents, then PFPC
Distributors may make such copies, and the Trust will reimburse PFPC
Distributors for the reasonable actual out-of-pocket expenses incurred by
PFPC Distributors in making such copies.
7. DISASTER RECOVERY. PFPC Distributors shall enter into with appropriate
parties and shall maintain in effect (i) one or more agreements making
reasonable provisions for emergency use of electronic data processing
equipment to the extent appropriate equipment is available, and (ii)
emergency data recovery policies and procedures (a "Disaster Recovery
Plan"), which is commercially reasonable in light of the services to be
provided. In the event of equipment failures, PFPC Distributors shall, at
no expense
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to the Trust, take reasonable steps to minimize service interruptions. PFPC
Distributors shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure, provided such loss or
interruption is not caused by PFPC Distributors' own willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
8. CONFIDENTIALITY.
(a) Each party shall keep confidential any information relating to the
other party's business ("Confidential Information"). Confidential
Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the
public, including, but not limited to, information about investments,
investment strategies, investment research, research and portfolio
management methodologies, product plans, marketing strategies,
finances, operations, customer relationships, customer profiles
(including nonpublic financial and other information relating to
customers), customer lists, sales estimates, business plans, and
internal performance results relating to the past, present or future
business activities of the Trust or PFPC Distributors, their
respective subsidiaries and affiliated companies; (b) any scientific
or technical information, design, process, procedure, formula, or
improvement that is commercially valuable and secret in the sense that
its confidentiality affords the Trust or PFPC Distributors a
competitive advantage over its competitors; (c) all confidential or
proprietary concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated
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as confidential. Notwithstanding the foregoing: information shall not
be Confidential Information and shall not be subject to such
confidentiality obligations if it: (1) is already known to the
receiving party at the time it is obtained; (2) is or becomes publicly
known or available through no wrongful act of the receiving party; (3)
is rightfully received from a third party who, to the best of the
receiving party's knowledge, is not under a duty of confidentiality;
or (4) is released by the protected party to a third party without
restriction. Confidential Information may be disclosed by the
receiving party (the party that received the Confidential Information
from the protected party) where the Confidential Information (1) is
required to be disclosed by the receiving party pursuant to a court
order, subpoena, governmental or regulatory agency request or order
made pursuant to applicable law, provided that the receiving party has
provided the protected party prior written notice of the same, to the
extent such notice is not prohibited by law; or (2) is reasonably
relevant to the defense of any claim or cause of action asserted
against the receiving party; provided that the receiving party has
provided the protected party prior written notice of the same, to the
extent such notice is not prohibited by law; (3) is Trust information
provided by PFPC Distributors in connection with an independent third
party compliance or other review; provided that the recipient is bound
by a duty of confidentiality; or (4) release of such information by
PFPC Distributors is necessary in connection with the provision of
services under this Agreement, provided that the recipient is bound by
a duty of confidentiality. The provisions of this Section 8 shall
survive
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termination of this Agreement for a period of three (3) years after
such termination.
(b) Notwithstanding any provision herein to the contrary, each party
hereto agrees that any Nonpublic Personal Information, as defined
under Section 248.3(t) of Regulation S-P ("Regulation S-P"),
promulgated under the Xxxxx-Xxxxx-Xxxxxx Act (the "Act"), disclosed by
a party hereunder is for the specific purpose of permitting the other
party to perform the services set forth in this Agreement. Each party
agrees that, with respect to such information, it will comply with
Regulation S-P and the Act and that it will not disclose any Nonpublic
Personal Information received in connection with this Agreement to any
other party, except to the extent as necessary to carry out the
services set forth in this Agreement or as otherwise permitted by
Regulation S-P or the Act.
(c) PFPC Distributors shall have in place and maintain physical,
electronic and procedural safeguards reasonably designed to protect
the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information relating to
customers of the Funds.
9. COMPENSATION.
(a) As compensation for services rendered by PFPC Distributors during the
term of this Agreement, PFPC Distributors will be entitled to the
compensation as may be agreed to from time to time in writing by the
Trust and PFPC Distributors (the "Fee Letter"). If the Funds have a
plan of distribution under Rule 12b-1 under the 1940 Act approved by
the Funds and in effect (collectively, the "Distribution Plan") that
permits and authorizes them to compensate PFPC Distributors, and the
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required board approvals have been given, then the Funds shall be
responsible for all such compensation or such portions of it as have
been permitted and authorized under the Distribution Plan. If the
Funds are not permitted and authorized to compensate PFPC Distributors
in full in accordance with the Distribution Plan, the Adviser shall
compensate PFPC in accordance with the Fee Letter to the extent that
the Funds are not so permitted or authorized. The Adviser shall also
reimburse PFPC Distributors for any expenses reimbursable to PFPC
Distributors under this Agreement to the extent that the Funds are not
authorized to reimburse PFPC Distributors in full in accordance with
the Fee Letter.
10. INDEMNIFICATION.
(a) The Trust agrees to indemnify, defend and hold harmless PFPC
Distributors, its officers, directors, employees, agents and any
person who controls PFPC Distributors within the meaning of Section 15
of the 1933 Act (collectively, "Distributor Indemnitees") from all
expenses, claims and liabilities (including, reasonable attorneys'
fees) arising directly or indirectly from any action or omission to
act which PFPC Distributors takes in connection with the provision of
services to the Trust, unless as a result of the willful misfeasance,
bad faith, gross negligence or reckless disregard of PFPC
Distributors.
(b) The Trust agrees to indemnify, defend and hold harmless the
Distributor Indemnitees (a) from and against any and all claims,
costs, expenses (including reasonable attorneys' fees) losses,
damages, charges, payments and liabilities of any sort or kind which
the Distributor Indemnitees, under any other statute, at
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common law or otherwise, arising out of or based upon: (i) any untrue
statement, or alleged untrue statement, of a material fact contained
in the Trust's Registration Statement, Prospectus, Statement of
Additional Information, or sales literature (including amendments and
supplements thereto), or (ii) any omission, or alleged omission, to
state a material fact required to be stated in the Trust's
Registration Statement, Prospectus, Statement of Additional
Information or sales literature (including amendments or supplements
thereto), necessary to make the statements therein not misleading;
provided, however, that insofar as losses, claims, damages,
liabilities or expenses arise out of or are based upon (A) any such
untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information furnished to
the Trust by PFPC Distributors or its affiliated persons for use in
the Trust's Registration Statement, Prospectus, or Statement of
Additional Information or sales literature (including amendments or
supplements thereto), or (B) the willful misfeasance, bad faith or
gross negligence of PFPC Distributors in the performance of its duties
or the reckless disregard of its obligations and duties under the
Agreement, such indemnification is not applicable; and (b) from and
against any and all such claims, demands, liabilities and expenses
(including such costs and counsel fees) which you, your officers and
directors, or such controlling person, may incur in connection with
this Agreement or PFPC Distributors' performance hereunder (but
excluding such claims, demands, liabilities and expenses (including
such costs and counsel fees) arising out of or based upon any untrue
statement, or alleged untrue statement, of a material fact contained
in any Registration
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Statement or any Prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be
stated in either any Registration Statement or any Prospectus or
necessary to make the statements in either thereof not misleading),
unless such claims, demands, liabilities and expenses (including such
costs and counsel fees) arise by reason of PFPC Distributors' willful
misfeasance, bad faith or gross negligence in the performance of PFPC
Distributors' duties hereunder. The Trust acknowledges and agrees that
in the event that PFPC Distributors, at the request of the Trust, is
required to give indemnification comparable to that set forth in this
paragraph to any broker-dealer selling Shares of the Trust or
servicing agent servicing the shareholders of the Trust and such
broker-dealer or servicing agent shall make a claim for
indemnification against PFPC Distributors, PFPC Distributors shall
make a similar claim for indemnification against the Trust.
(c) PFPC Distributors agrees to indemnify, defend and hold harmless the
Trust, its several officers, Trustees, employees, agents, the Adviser
and each person, if any, who controls a Fund within the meaning of
Section 15 of the 1933 Act (the "Trust Indemnitees") against any and
all claims, costs, expenses (including reasonable attorneys' fees),
losses, damages, charges, payments and liabilities of any sort or kind
which the Trust Indemnitees may incur under the 1933 Act, under any
other statute, at common law or otherwise, arising out of or based
upon any untrue statement, or alleged untrue statement, of a material
fact contained in the Trust's Registration Statement, Prospectus or
Statement of Additional Information or sales literature (including
amendments and supplements thereto), or any omission,
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or alleged omission, to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if
such statement or omission was reasonable and made in good faith
reliance upon information furnished by or confirmed in writing to the
Trust by PFPC Distributors or its affiliated persons (as defined in
the 1940 Act). The foregoing rights of indemnification shall be in
addition to any other rights to which the Trust or any such person
shall be entitled to as a matter of law.
(d) In any case in which one party hereto (the "Indemnifying Party") may
be asked to indemnify or hold the other party hereto (the "Indemnified
Party") harmless, the Indemnified Party will notify the Indemnifying
Party promptly after identifying any situation which it believes
presents or appears likely to present a claim for indemnification (an
"Indemnification Claim") against the Indemnifying Party, although the
failure to do so shall not prevent recovery by the Indemnified Party
(except to the extent the Indemnifying Party shows that the delay
prejudiced the defense of the action), and shall keep the Indemnifying
Party advised with respect to all developments concerning such
situation. The Indemnifying Party may participate in the defense
against, and shall have the option to defend the Indemnified Party
against, any Indemnification Claim which may be the subject of this
indemnification, and, in the event that the Indemnifying Party so
elects to assume the defense, such defense shall be conducted by
counsel chosen by the Indemnifying Party and satisfactory to the
Indemnified Party, and thereupon the Indemnifying Party shall take
over complete defense of the Indemnification Claim and the Indemnified
Party shall sustain no further legal or other expenses
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in respect of such Indemnification Claim (except for reasonable
investigation costs). In the event that the Indemnifying Party does
not elect to assume the defense of any such suit within 15 days of its
receipt of notice of the Indemnification Claim, or in case the
Indemnified Party reasonably does not approve of counsel chosen by the
Indemnifying Party, or in case there is a conflict of interest between
the Indemnifying Party or the Indemnified Party, the Indemnifying
Party will reimburse the Indemnified Party for the fees and expenses
of any counsel retained by the Indemnified Party. Each party agrees
promptly to notify the other of the commencement of any litigation or
proceedings against it or any of its officers or directors in
connection with the issue and sale of any Shares. The Indemnified
Party will not confess to any Indemnification Claim or make any
compromise in any case in which the Indemnifying Party will be asked
to provide indemnification, except with the Indemnifying Party's prior
written consent (which shall not be unreasonably withheld, delayed or
conditioned); provided that if the Indemnifying Party fails to
participate in or assume the defense within 15 days after receiving
notice of the action, the Indemnifying Party is bound by any
determination made in the action or by any compromise or settlement
made by the other party.
(e) The provisions of this Section 10 shall survive termination of this
Agreement.
11. RESPONSIBILITY OF PFPC DISTRIBUTORS.
(a) PFPC Distributors shall be under no duty to take any action hereunder
on behalf of the Trust except as specifically set forth herein or as
may be specifically agreed to by PFPC Distributors and the Trust in a
written amendment hereto. PFPC
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Distributors shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith in
performing services provided for under this Agreement. PFPC
Distributors shall be liable only for any damages arising out of PFPC
Distributors' failure to perform its duties under this Agreement to
the extent such damages arise out of PFPC Distributors' willful
misfeasance, bad faith, or gross negligence of PFPC Distributors in
the performance of its obligations or duties under this Agreement,
PFPC Distributors' reckless disregard of its obligations or duties
under this Agreement, or from PFPC Distributors' failure to comply
with the laws, rules and regulations applicable to it in connection
with its activities hereunder.
(b) PFPC Distributors shall not be liable for losses, delays, failures,
errors, interruption or loss of data occurring directly or indirectly
by reason of circumstances beyond its reasonable control, including
without limitation: acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire; flood;
sabotage; epidemics; labor disputes; civil commotion; interruption,
loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party (unless such third party was engaged
by PFPC Distributors); provided that PFPC Distributors has adopted and
implemented a commercially reasonable Disaster Recovery Plan; and (ii)
PFPC Distributors shall not be under any duty or obligation to inquire
into and shall not be liable for the validity or invalidity of
authority or lack thereof, or truthfulness or accuracy or lack
thereof, of any instruction, direction, notice, instrument or other
information
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which PFPC Distributors reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC Distributors nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether or not
the likelihood of such losses or damages was known by PFPC
Distributors or its affiliates.
(e) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(f) The provisions of this Section 10 shall survive termination of this
Agreement.
12. DUTIES AND OBLIGATIONS OF THE FUND.
(a) The Trust represents to PFPC Distributors that all Registration
Statements and Prospectuses filed by the Trust with the SEC under the
1933 Act with respect to the Shares have been prepared in conformity
with the requirements of the 1933 Act and the rules and regulations of
the SEC thereunder. Except as to information included in the
Registration Statement in good faith reliance upon information
provided to the Trust by PFPC Distributors or any affiliate of PFPC
Distributors, the Trust represents and warrants to PFPC Distributors
that any Registration Statement, when such Registration Statement
becomes effective, will contain statements required to be stated
therein in conformity with the 1933 Act and the rules and regulations
of the SEC; that all statements of fact contained in any such
Registration Statement will be true and correct when such Registration
Statement becomes effective; and that no Registration Statement when
such Registration Statement becomes effective will include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the
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statements therein not misleading to a purchaser of the Shares. PFPC
Distributors may but shall not be obligated to propose from time to
time such amendment or amendments to any Registration Statement and
such supplement or supplements to any Prospectus as, in the light of
future developments, may, in the opinion of the PFPC Distributors'
counsel, be necessary or advisable. PFPC Distributors shall promptly
notify the Trust of any advice given to it by its counsel regarding
the necessity or advisability of amending or supplementing such
Registration Statement. If the Trust shall not propose such amendment
or amendments and/or supplement or supplements within fifteen days
after receipt by the Trust of a written request from PFPC Distributors
to do so, PFPC Distributors may, at its option, terminate this
Agreement. The Trust shall not file any amendment to any Registration
Statement or supplement to any Prospectus without giving PFPC
Distributors reasonable notice thereof in advance; provided, however,
that nothing contained in this Agreement shall in any way limit the
Trust's right to file at any time such amendments to any Registration
Statements and/or supplements to any Prospectus, of whatever
character, as the Trust may deem advisable, such right being in all
respects absolute and unconditional. The Trust authorizes PFPC
Distributors to use any Prospectus or Statement of Additional
Information in the form furnished from time to time in connection with
the sale of the Shares.
(b) The Trust represents and warrants to PFPC Distributors that the Trust
is an investment company registered under the 1940 Act and the Shares
sold by each Fund are, and will be, registered under the 1933 Act.
(c) The net asset value of the Shares shall be determined in the manner
provided in
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the then current Prospectus and Statement of Additional Information
relating to the Shares, and when determined shall be applicable to all
transactions as provided in the Prospectus. The net asset value of the
Shares shall be calculated by the Trust or by another entity on behalf
of the Trust. PFPC Distributors shall have no duty to inquire into, or
liability for, the accuracy of the net asset value per Share as
calculated.
(d) Whenever in its judgment such action is warranted by unusual market,
economic or political conditions or abnormal circumstances of any
kind, the Trust may upon reasonable notice instruct PFPC Distributors
to decline to accept any orders for, or make any sales of, the Shares
until such time as the Trust deems it advisable to accept such orders
and to make such sales, and the Trust advises PFPC Distributors
promptly of such determination.
(e) The Trust agrees to execute any and all documents and to furnish any
and all information and otherwise to take all actions that may be
reasonably necessary in connection with the qualification of the
Shares for sale in such states as PFPC Distributors may request. The
Trust shall notify PFPC Distributors in writing of the states in which
the Shares may be sold and shall notify PFPC Distributors in writing
of any changes to the information contained in the previous
notification.
13. DUTIES AND OBLIGATIONS OF PFPC DISTRIBUTORS.
(a) PFPC Distributors will act on behalf of the Trust for the distribution
of the Shares covered by the Registration Statement under the 1933 Act
and provide the distribution services outlined below and as follows:
(i) preparation and execution of sales or servicing agreements, (ii)
preparation of quarterly 12b-1 Reports to the
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Board, (iii) literature review, recommendations and submission to the
NASD and (iv) providing the services listed on Exhibit B.
(b) PFPC Distributors agrees to use efforts deemed appropriate by PFPC
Distributors to solicit orders for the sale of the Shares and will
undertake such advertising and promotion as it believes reasonable in
connection with such solicitation. To the extent that PFPC
Distributors receives fees under any plan adopted by the Trust
pursuant to Rule 12b-1 under the 1940 Act, PFPC Distributors agrees to
furnish and/or enter into arrangements with others for the furnishing
of marketing or sales services with respect to the Shares as may be
required pursuant to such plan. To the extent that PFPC Distributors
receives shareholder services fees under any shareholder services plan
adopted by the Trust, PFPC Distributors agrees to furnish and/or enter
into arrangements with others for the furnishing of, personal and/or
account maintenance services with respect to the relevant shareholders
of the Trust as may be required pursuant to such plan. It is
contemplated that PFPC Distributors will enter into sales or servicing
agreements with securities dealers, financial institutions and other
industry professionals, such as investment advisers, accountants and
estate planning firms. PFPC Distributors will require each dealer with
whom PFPC Distributors has a selling agreement to conform to the
applicable provisions of the Prospectus, with respect to the public
offering price of the Shares, and PFPC Distributors shall not cause
the Trust to withhold the placing of purchase orders so as to make a
profit thereby.
(c) PFPC Distributors shall not utilize any materials in connection with
the sale or offering of Shares except the Trust's Prospectus and
Statement of Additional
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Information and such other materials as the Trust shall provide or
approve. The Trust agrees to furnish PFPC Distributors with sufficient
copies of any and all: agreements, plans, communications with the
public or other materials which the Trust intends to use in connection
any sales of Shares, in adequate time for PFPC Distributors to file
and clear such materials with the proper authorities before they are
put in use. PFPC Distributors and the Trust may agree that any such
material does not need to be filed subsequent to distribution. In
addition, the Trust agrees not to use any such materials until so
filed and cleared for use, if required, by appropriate authorities as
well as by PFPC Distributors.
(d) PFPC Distributors will transmit any orders received by it for purchase
or redemption of the Shares to the transfer agent for the Trust. PFPC
Distributors will have no liability for payment for the purchase of
Shares sold pursuant to this Agreement or with respect to redemptions
or repurchases of Shares.
(e) No Shares shall be offered by either PFPC Distributors or the Trust
under any of the 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; provided, however, that nothing contained in this
paragraph shall in any way restrict or have any application to or
bearing upon the Trust's obligation to redeem Shares tendered for
redemption by any shareholder in accordance with the provisions of the
Trust's Registration Statement, Declaration of Trust, or bylaws.
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14. DURATION AND TERMINATION. This Agreement shall become effective on the date
first written above and, unless sooner terminated as provided herein, shall
continue for an initial one (1) year term and thereafter shall be renewed
for successive one-year terms, provided such continuance is specifically
approved at least annually by (i) the Trust's Board of Trustees or (ii) by
a vote of a majority (as defined in the 1940 Act and Rule 18f-2 thereunder)
of the outstanding voting securities of the Trust, provided that in either
event the continuance is also approved by a majority of the Trustees who
are not parties to this Agreement and who are not interested persons (as
defined in the 0000 Xxx) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, on at least sixty (60) days'
written notice, by the Trust's Board of Trustees, by vote of a majority (as
defined in the 1940 Act and Rule 18f-2 thereunder) of the outstanding
voting securities of the Trust, or by PFPC Distributors. This Agreement
will also terminate automatically in the event of its assignment (as
defined in the 1940 Act and the rules thereunder). In the event the Trust
gives notice of termination, all reasonable, documented expenses associated
with movement (or duplication) of records and materials and conversion
thereof to a successor transfer agent or other service provider will be
borne by the Trust.
15. NOTICES. Notices shall be addressed (a) if to PFPC Distributors, at 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President (or such
other address as PFPC Distributors may inform the Trust in writing); (b) if
to the Trust, 000 Xxxxxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx, XX 00000,
Attention: President (or such other address as the Trust may inform PFPC
Distributors in writing) or (c) if to neither of the foregoing, at
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such other address as shall have been given by like notice to the sender of
any such notice or other communication by the other party. If notice is
sent by confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately. If notice is sent by
first-class mail, it shall be deemed to have been given three days after it
has been mailed. If notice is sent by messenger, it shall be deemed to have
been given on the day it is delivered.
16. AMENDMENTS. No amendment to this Agreement shall be valid unless made in
writing and executed by both parties hereto.
17. NON-SOLICITATION. During the term of this Agreement and for one year
thereafter, the Trust shall not knowingly solicit or recruit for employment
or hire any of PFPC Distributors' employees. To "knowingly" solicit,
recruit or hire within the meaning of this provision does not include, and
therefore does not prohibit, solicitation, recruitment or hiring of a PFPC
Distributors employee by the Trust if the PFPC Distributors employee was
identified by such entity solely as a result of the PFPC Distributors
employee's response to a general advertisement by such entity in a
publication of trade or industry interest or other similar general
solicitation by such entity.
18. COUNTERPARTS. This Agreement may be executed 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.
19. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
20. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement and
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understanding between the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties.
(b) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Trust agrees not to
make any modifications to its registration statement or adopt any
policies which would affect materially the obligations or
responsibilities of PFPC Distributors hereunder without the prior
written approval of PFPC Distributors, which approval shall not be
unreasonably withheld or delayed.
(c) No Representations or Warranties. Except as expressly provided in this
Agreement, PFPC Distributors hereby disclaims all representations and
warranties, express or implied, made to the Trust, Advisor or any
other person, including, without limitation, any warranties regarding
quality, suitability, merchantability, fitness for a particular
purpose or otherwise (irrespective of any course of dealing, custom or
usage of trade), of any services or any goods provided incidental to
services provided under this Agreement. PFPC Distributors disclaims
any warranty of title or non-infringement except as otherwise set
forth in this Agreement.
(d) Captions. 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.
(e) Information. The Trust will provide such information and documentation
as PFPC
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Distributor may reasonably request in connection with services
provided by PFPC Distributor to the Trust.
(f) Governing Law. This Agreement shall be deemed to be a contract made in
Massachusetts and governed by Massachusetts law, without regard to
principles of conflicts of law.
(g) Partial Invalidity. 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.
(h) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(i) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
(j) Customer Identification Program Notice. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S.
Federal law requires each financial institution to obtain, verify, and
record certain information that identifies each person who initially
opens an account with that financial institution on or after October
1, 2003. Consistent with this requirement, PFPC Distributors will
request (or already has requested) the Fund's name, address and
taxpayer identification number or other government-issued
identification number, and, if such party is a natural person, that
party's date of birth. PFPC Distributor may also ask (and may have
already asked) for additional identifying information, and PFPC
Distributor may take steps (and may have already taken steps) to
verify
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the authenticity and accuracy of these data elements.
(k) Anti-Money Laundering Compliance.
(i) Each of PFPC Distributors and the Trust acknowledge that it is a
financial institution subject to the USA Patriot Act of 2001 and the
Bank Secrecy Act (collectively, the "AML Acts"), 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 Acts 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 the Trust's 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.
(ii) PFPC Distributors shall include specific contractual provisions
regarding anti-money laundering compliance obligations in agreements
entered into by PFPC Distributors with any dealer that is authorized
to effect transactions in Shares of the Trust.
(iii) Each of PFPC Distributors and the Trust agrees that it will take
such further steps and cooperate with the other as may be reasonably
necessary, to facilitate compliance with the AML Acts, including but
not limited to the provision of copies of its written procedures,
policies and controls related thereto ("AML Operations"). PFPC
Distributors undertakes that it will grant to the Trust,
26
the Trust's anti-money laundering compliance officer and regulatory
agencies, reasonable access to copies of PFPC's AML Operations, books
and records pertaining to the Trust only. It is expressly understood
and agreed that the Trust and the Trust's compliance officer shall
have no access to any of PFPC Distributors' AML Operations, books or
records pertaining to other clients of PFPC Distributors.
(l) Matters Relating to the Trust as a Massachusetts Business Trust. It is
expressly agreed that the obligations of the Trust hereunder shall not
be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the
trust property of the Trust. The execution and delivery of this
Agreement have been authorized by the Trustees, and this Agreement has
been signed and delivered by an authorized officer of the Trust,
acting as such, and neither such authorization by the Trustees 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
them personally, but shall bind only the trust property of the Trust
as provided in the Trust's Declaration of Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC DISTRIBUTORS, INC.
By:
------------------------------------
Title:
---------------------------------
BB&T FUNDS
By:
------------------------------------
Title:
---------------------------------
BB&T ASSET MANAGEMENT, INC.
By:
------------------------------------
Title:
---------------------------------
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EXHIBIT A
THIS EXHIBIT A, dated as of __________, 200__, is Exhibit A to that certain
Underwriting Agreement dated as of __________, 200__, between PFPC Distributors,
Inc., BB&T Funds and [BB&T Asset Management, Inc].
FUNDS
29
EXHIBIT B
THIS EXHIBIT B, dated as of __________, 200_, is Exhibit B to that certain
Underwriting Agreement dated as of __________, 200_, between PFPC Distributors,
Inc., BB&T Funds and [BB&T Asset Management, Inc.]
ADDITIONAL DISTRIBUTION SERVICES
1. Basic Distribution Services. Providing the distribution entity and related
infrastructure and platform, including requisite registrations and
qualifications, premises, personnel, compliance, ordinary fund board meeting
preparation, maintenance of selling agreements, clearance of advertising and
sale literature with regulators, filing appropriate documentation for advisory
representatives to qualify as registered representatives of PFPC Distributors
(provided that the Adviser is solely responsible for its representatives'
meeting examination requirements) and their related registrations and fees,
ordinary supervisory services and overhead.
2. Special Distribution Services. For special distribution services requested by
the Trust, such as additional personnel, registrations, printing and
fulfillment, proprietary distribution expertise for particular circumstances,
and any other services in addition to the basic distribution services covered by
Paragraph 1 to this Exhibit B, PFPC shall be reimbursed promptly upon invoicing
its expenses for such services, including: (a) all costs to support additional
personnel; (b) regulatory fees including NASD CRD costs associated with
marketing materials; and (c) printing, postage and fulfillment costs, and (d)
amounts payable under additional agreements to which PFPC is a party.
3. Special Conduit Situations. If the Distribution Plan, or any other Fund plans
of distribution under Rule 12b-1that contemplate up front and/or recurring
commission and/or service payments to broker dealers, retirement plan
administrators or others by PFPC Distributors with respect to back-end loads,
level loads, or otherwise, unless expressly agreed otherwise in writing between
the parties, all such payments shall be made by PFPC Distributors, which shall
act as a conduit for making such payments to such broker-dealers, retirement
plan administrators or others. It is expressly agreed and understood by the
parties that PFPC Distributors shall be reimbursed for all fees, costs and other
expenses it incurs in connection with financing arrangements it provides, has
entered into, or enters into at the request of the Trust or the Adviser to the
Trust, including without limitation, financing arrangements with S.G.
Constellation L.L.C. and all payments made in connection therewith. Such
reimbursement obligation shall survive any expiration or termination of this
Agreement, as it is expressly understood and acknowledged that PFPC
Distributor's obligations pursuant to such financing arrangements may continue
and survive beyond the expiration or termination of this Agreement.
4. Other Payments by PFPC Distributors. If PFPC Distributors is required to make
any payments to third parties in respect of distribution, which payments are
contemplated by the parties to the
30
Underwriting Agreement or otherwise arise in the ordinary course of business,
PFPC Distributors shall be promptly reimbursed for such payments upon invoicing
them.
5. Wholesale Personnel Services. Wholesaling personnel may be external
wholesalers and/or internal wholesalers. Services include soliciting support of
the Funds with selling broker dealers, participating in promotional meetings,
presentations, conferences and other and forums; identifying high potential
personnel of the Adviser and selling broker dealers; and assisting with mail
solicitations and literature fulfillment.
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