Exhibit (e.3)
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
between
Grand Prix Funds, Inc.
and
T.O. Xxxxxxxxxx Securities, Inc.
THIS AGREEMENT is made effective as of the 29th
day of December, 2000, by and between Grand Prix Funds,
Inc., a Maryland Corporation (the "Company") and T.O.
Xxxxxxxxxx Securities, Inc., a corporation organized
and existing under the laws of the State of Connecticut
("TORS").
WHEREAS, the Company 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 common stock ("Shares") for sale to the
public under the Securities Act of 1933, as amended
(the "1933 Act"), and will qualify its shares for sale
to the public under various state securities laws; and
WHEREAS, TORS is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended
(the "1934 Act") and under each state's securities
laws, and is also a member of the National Association
of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Company desires to retain TORS as
principal underwriter and national distributor 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 TORS is willing to act
as principal underwriter and national distributor for
the Company 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 Company hereby appoints TORS
as its agent to be the principal underwriter and
national distributor of its Shares and to hold itself
out as available to receive and accept orders for the
purchase and redemption of the Shares on behalf of the
Company, subject to the terms and for the period set
forth in this Agreement. TORS hereby accepts such
appointment and agrees to act hereunder. The Company
understands that any solicitation activities conducted
on behalf of the Company will be conducted primarily by
employees of the Company's sponsor who shall become
registered representatives of TORS.
2. Services and Duties of TORS
(a) TORS agrees to distribute Shares on a best
efforts basis from time to time during the term of this
Agreement as agent for the Company 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 Company, and any supplements thereto, under the
1933 Act and the 1940 Act.
(b) TORS, with the operational assistance of the
Company's transfer agent, will hold itself available to
receive purchase and redemption orders satisfactory to
TORS and will accept such orders on behalf of the
Company. 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
Company's transfer agent, shall make Shares available
through the National Securities Clearing Corporation's
Fund/SERV System.
(d) TORS and its registered personnel shall
provide to investors and potential investors only such
information regarding the Company as the Company shall
provide or approve. TORS shall review and file all
proposed advertisements and sales literature with
regulators, as appropriate, and consult with the
Company 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 Company
shall make available to TORS a statement of each
computation of net asset value and the details of
entering into such computation.
(f) TORS in 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 Company 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 Company reserves
the right to suspend such repurchase right upon written
notice to TORS. TORS further agrees to act as agent
for the Company to receive and transmit promptly to the
Company'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.
(i) TORS shall at all times during the term of
this Agreement remain registered as a broker-dealer
under the 1934 Act and with all 50 states, and shall
also remain a member in good standing of the NASD.
TORS shall immediately notify the Company in writing if
it receives written notification that such
registrations or membership have been temporarily or
permanently suspended, limited or terminated.
(j) TORS will serve as licensing/regulatory agent
for employees and other personnel of the Company's
sponsor, Target Investors, Inc., who will be registered
as broker-dealer representatives of TORS.
3. Duties of the Company.
(a) The Company 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 Company 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
Company shall fully cooperate in the efforts of TORS to
distribute and arrange for the distribution of Shares.
(b) The Company shall maintain a currently
effective Registration Statement on Form N-1A with the
Securities and Exchange Commission (the "SEC"), satisfy
proper notice filing and fee payment provisions of
applicable states and file such reports and other
documents as may be required under applicable federal
and state laws. The Company 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 Company 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 Company's communication with persons who
are shareholders.
(c) The Company shall not use any advertisements
or other sales materials that have not been (i)
submitted to TORS for its review and approval, and (ii)
if required, filed with the appropriate regulators.
(d) The Company 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 Company 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 Company Operating Agreements. The
Company and TORS further agree that the Company has
entered into the Fund Administration Servicing
Agreement, Fund Accounting Servicing Agreement,
Transfer Agent Servicing Agreement and Custodian
Servicing Agreement with Firstar Mutual Fund Services,
LLC of Milwaukee, Wisconsin ("FMFS"), 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 "Fund Operating
Agreements.") The Company agrees to maintain the Fund
Operating Agreements in effect during the term of this
Agreement. The parties hereto agree that TORS is a
third party beneficiary to the Fund Operating
Agreements and that portions of the duties and services
to be provided by TORS hereunder can be performed by
FMFS for TORS' and the Company's benefit. The Company
shall be responsible for all amounts due under the Fund
Operating Agreements and TORS shall not be responsible
for duplication of duties or services provided for in
the Fund Operating Agreements or any fees or expenses
thereunder. Furthermore, TORS has entered into an
exclusive servicing agreement with FMFS.
5. Other Broker-Dealers. TORS in its discretion
shall enter into agreements to sell Shares to such
registered and qualified retail dealers, as reasonably
requested by the Company. In making agreements with
such dealers, TORS shall act only as principal and not
as agent for
the Company. The form of any such dealer agreement
shall be mutually agreed upon and approved by the
Company and TORS.
6. Withdrawal of Offering. The Company 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 Company under any provisions of this
Agreement and no orders for the purchase of Shares
hereunder shall be accepted by the Company 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.
7. 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 Company
reserves the right to (i) sell Shares to investors on
applications received and accepted by the Company; (ii)
issue Shares in connection with a merger,
consolidation, or recapitalization of the Company;
(iii) issue additional Shares to holders of Shares; or
(iv) issue Shares in connection with any offer of
exchange permitted by Section 11 of the 1940 Act.
8. Expenses of the Company. The Company 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 Company 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 Company; and (v) the
qualifications of Shares for sale under the securities
laws of such jurisdictions as shall be selected by the
Company pursuant to the Paragraph 3(b) hereof, and the
costs and expenses, payable to each jurisdiction for
continuing qualification therein. In addition, the
Company 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.
9. 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, TORS shall be
entitled to the fees and expenses set forth in Schedule
B to this Agreement which are payable promptly after
the last day of each month. Such fees shall be paid to
TORS by the Company pursuant to its Rule 12b-1 plan or,
if Rule 12b-1 payments are not sufficient to pay such
fees and expenses, or if the Rule 12b-1 plan is
discontinued, or if the Company's sponsor, Target
Investors, Inc. otherwise determines that Rule 12b-1
fees shall not, in whole or in part, be used to pay
TORS, Target Investors, Inc. shall be responsible for
the payment of the amount of such fees not covered by
Rule 12b-1 payments and shall promptly remit payment to
TORS for such amounts.
10. Status of TORS. TORS is an independent
contractor and shall be agent of the Company only with
respect to the sale and redemption of Shares.
11. Indemnification.
(a) The Company agrees to indemnify, defend, and
hold TORS, its officers, and directors, and any person
who controls TORS within the meaning of Section 15 of
the 1933 Act, free and harmless from and against any
and all claims, demands, 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 1933 Act, or under common law or
otherwise, arising out of or based upon any (i) alleged
untrue statement of a material fact contained in the
Registration Statement, Prospectus, SAI, or sales
literature; (ii) alleged omission to state a material
fact required to be stated in the Company's
registration statement or necessary to make the
statements therein not misleading; or (iii) failure by
the Company 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 Company 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 Company 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 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
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
Company of any claim shall not relieve the Company 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 Company 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 Company
elects to assume the defense of any such claim, the
defense shall be conducted by counsel chosen by the
Company and satisfactory to the indemnified defendants
whose approval shall not be unreasonably withheld. In
the event that the Company 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 Company
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 Company 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 Company, its officers and directors, and any person
who controls the Company within the meaning of Section
15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities, and expenses
(including the cost of investigating or defending
against such claims, demands or liabilities, and any
counsel fees incurred in connection therewith) that the
Company, its directors and officers, or any such
controlling person may incur under the 1933 Act, or
under common law or otherwise, resulting from TORS'
willful misfeasance, bad faith, or gross negligence in
the performance of its obligations and duties under
this Agreement, or arising out of or based upon
any alleged untrue statement of a material fact contained
in information furnished in writing by TORS to the
Company 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 any such
document 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, will continue in effect
for a minimum of one year 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
Company's Board of Directors who are neither interested
persons (as defined in the 0000 Xxx) of the Company or
TORS ("Independent Directors") 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
Company.
(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 of
Directors, by vote of a majority of the Independent
Trustees, or by vote of a majority of the outstanding
voting securities of the Company 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 Company. 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 of Directors or of a majority of the outstanding
voting securities of the Company; provided that in
either case, such amendment also shall be approved by a
majority of the Independent Directors.
14. Limitation of Liability. The Board of
Directors and shareholders of the Company shall not be
personally liable for obligations of the Company in
connection with any matter arising from or in
connection with this Agreement. This Agreement is not
binding upon any director, officer, or shareholder of
the Company 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.
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.
Target Investors, Inc./Grand Prix Funds, Inc. T.O. Xxxxxxxxxx Securities, Inc.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxx, Jr.
------------------------- -------------------------
Print: Xxxxxx Xxxxxxx Print: Xxxxxx Xxxxxx, Jr.
Title: President Title: President
Date: December 29, 2000 Date: December 29, 2000
Attest: Xxxx Xxxx Xxxxx Attest: Xxxxxxxx X. Xxxxx
SCHEDULE A
to the
DISTRIBUTION AGREEMENT
between
Grand Prix Funds, Inc.
and
T.O. Xxxxxxxxxx Securities, Inc.
Pursuant to Section 1 of the Distribution
Agreement between Grand Prix Funds, Inc. ("Company")
and T.O. Xxxxxxxxxx Securities, Inc. ("TORS"), the
Company hereby appoints TORS as its agent to be the
principal underwriter of the Company with respect to
the following series effective as of the dates
specified below.
Series Effective Date
Grand Prix Fund June 15, 1999
Super Core Fund December 29, 2000
SCHEDULE B
to the
DISTRIBUTION AGREEMENT
between
Grand Prix Funds, Inc.
and
T.O. Xxxxxxxxxx Securities, Inc.
As compensation for its services pursuant to
Section 9 of the Distribution Agreement between Grand
Prix Funds, Inc. ("Company") and T.O. Xxxxxxxxxx
Securities, Inc. ("TORS"), the Company shall pay to
TORS the sum of:
1. an annual fee of $15,000 for the first series
of the Company and $7,500 for each series or
class thereafter or .01% (1 basis point) of
the average daily net assets of each series,
computed daily and paid monthly, whichever is
greater;
2. an annual compliance fee of $500 for each
employee of the Company's investment adviser
who is designated by the Company to become a
series 6 or series 7 registered
representative of TORS (compliance costs for
other types of licenses may vary), as well as
the ongoing license fees and incidental costs
associated with such registrations;
3. the compensation paid by TORS to such
registered representatives in accordance with
compensation schedules, as agreed upon by
TORS and the Company from time to time;
4. the reasonable fees associated with listing and
maintaining shares on the National Securities Clearing
Corporation's Company/SERV System, on a "pass through"
basis, as agreed upon by TORS and the Company and as
reflected in the attached NSCC fee schedule, which may
change without notice;
5. incidental expenses associated with printing and
distribution of advertising and sales literature;
6. fees for legal review of advertisements and
sales literature at the rate of $150 per job
for the first ten pages of an advertisement
and $20 per page thereafter, plus NASD filing
fees which are billed on an out of pocket
basis; and
7. plus out of pocket expenses including, but
not limited to travel expenses and retention
of records.
Dated: December 29, 2000
NATIONAL SECURITIES CLEARING CORPORATION
Mutual Fund Services Fee Schedule
January 1, 1999
Service Current Fees
Fund/SERV Membership Fee: $50 per month*
Transaction Fee: $0.25 per side per inputted transaction.
Service Current Fees
Networking Membership Fee: $200 per month*
- $0.020 per side per subaccount for funds paying
dividends on a monthly basis.
- $0.010 per side per subaccount for funds paying
dividends less frequently than monthly.
Position File Fee:
- $1.50 per 5,000 records, in excess of twice the
Networking firm's subaccounts.
Service Current Fees
Commission Membership Fee: $50 per month
Settlement
Processing Fee:
- $0.30 per hundred records, per month, for 1 to
500,000 records; there is a $50 per month minimum
processing charge.
- $0.20 per hundred records, per month, for 500,001 to
1,000,000 records.
- $0.10 per hundred records, per month, for 1,000,001
records and above.
Service Current Fees
Mutual Price and Rate - No charge at this time.
Fund
Profile
*Note: For the combination of Fund/SERV and Networking
only there is a cap of $200 per month. An additional
data communications charge will also apply.
