DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of April 17, 2001, by and between The Haven
Capital Management Trust (the "Company"), a Delaware business trust on behalf of
The Haven Fund, a diversified portfolio of the Company and Sunstone Distribution
Services, LLC, a Wisconsin limited liability company (the "Distributor").
W I T N E S S E T H
WHEREAS, the Company is an open-end, diversified management investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company desires to retain the Distributor as its distributor
to provide for the sale and distribution of units of beneficial interest
("shares") in the Company's investment portfolio known as The Haven Fund (the
"Fund"), and the Distributor is willing to render such services.
NOW, THEREFORE, in consideration of the mutual premises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR.
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The Company hereby appoints the Distributor as distributor of the shares
of the Fund on the terms and for the period set forth in this Agreement. The
Distributor hereby accepts such appointment and agrees to render the services
and duties on the terms and for the period set forth in this Agreement.
2. DELIVERY OF DOCUMENTS.
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The Company has furnished the Distributor with copies, properly certified
or authenticated, of each of the following documents and will deliver to it all
future amendments and supplements thereto, if any:
a. The Company's Agreement and Declaration of Trust dated as of March
17, 1994 (the "Declaration of Trust");
b. The Company's By-Laws;
c. Resolutions of the Company's Board of Trustees authorizing the
execution and delivery of this Agreement;
d. The Company's most recent amendment to its Registration Statement
under the Securities Act of 1933, as amended (the "1933 Act"), and the 1940 Act
on Form N-1A as filed with the Securities and Exchange Commission (the
"Commission") relating to the Fund (the Registration Statement, as presently in
effect and as, from time to time, amended or supplemented is herein called the
"Registration Statement");
e. The Company's most recent Prospectus and Statement of Additional
Information and all amendments and supplements thereto (such Prospectus and
Statement of Additional Information and supplements thereto, as presently in
effect and as from time to time amended and supplemented, are herein called the
"Prospectuses");
f. Minutes of the meetings of the Company's Board of Trustees since
the Company's inception;
g. Copies of all non-routine correspondence between the Commission
or its staff and the Company or its agents or representatives; and
h. Copies of all correspondence from PFPC Inc. to the officers of the
Company disclosing actual or potential blue sky violations and information
regarding any other actual or potential blue sky violations which have come to
the attention of the Company.
3. SERVICES AND DUTIES OF THE DISTRIBUTOR.
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The Distributor enters into the following covenants with respect to its
services and duties:
a. The Distributor agrees to sell, as agent, from time to time during the
term of this Agreement, shares of the Fund upon the terms and at the current
offering price as described in the Prospectuses. The Distributor will act only
in its own behalf as principal in entering into agreements with selected
dealers. No broker-dealer or other person which enters into a selling or
servicing agreement with the Distributor shall be authorized to act as agent for
the Company or the Fund in connection with the offering or sale of shares of the
Fund to the public or otherwise. The Distributor shall use reasonable efforts to
sell shares of the Fund but shall not be obligated to sell any certain number of
shares.
b. The Distributor shall prepare and, after review by the Company, file
with the federal and state agencies or other organization as required by
federal, state, or other applicable securities laws and regulations, all sales
literature (advertisements, brochures and shareholder communications) for the
Fund. The Company will not permit the use of any sales literature unless (i) it
has been so reviewed and filed, and (ii) its final version has been approved by
the Distributor.
c. In performing all of its services and duties as the Distributor, the
Distributor will act in conformity with the Declaration of Trust, By-Laws,
Prospectuses and resolutions and other instructions of the Company's Board of
Trustees and will comply with the requirements of the 1933 Act, the Securities
Exchange Act of 1934 (the "1934 Act"), the 1940 Act and all other applicable
federal or state laws.
d. The Distributor shall provide such written reports, describing its
expenditures with respect to its services and duties and the purposes for which
such expenditures were made, as the Company may reasonably request.
4. DUTIES AND REPRESENTATIONS OF THE COMPANY.
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The Company enters into the following covenants and makes the following
representations:
a. The Company represents that it is registered as an open-end management
investment company under the 1940 Act and that it has and will continue to act
in conformity with the Declaration of Trust, By-Laws, Prospectuses and
resolutions and other instructions of its Board of Trustees and has and will
continue to comply with all applicable laws, rules and regulations including
without limitation the 1933 Act, the 1934 Act, the 1940 Act, the laws of the
states in which shares of the Fund are offered and sold, and the rules and
regulations thereunder;
b. The Company shall take all necessary action to maintain the
registration of the shares of the Fund under the 1933 Act for sale as herein
contemplated and shall pay all costs and expenses in connection with the
registration of shares under the 1933 Act, and be responsible for all expenses
in connection with maintaining facilities for the issue and transfer of shares
and for supplying information, prices and other data to be furnished by the
Company;
c. The Company shall qualify and maintain the qualification of an
appropriate number of shares of the Fund and otherwise take all actions which
may be reasonably necessary in the discretion of the Company's officers in
connection with the qualification of the shares of the Fund for sale in such
states as the Distributor and the Company may approve, and the Company shall pay
all expenses which may be incurred in connection with such qualification. The
Distributor shall pay all expenses connected with its own qualification as a
broker under State or Federal laws;
d. The Company represents and warrants to the Distributor that the
Registration Statement contains, and that the Prospectuses at all times will
contain, all statements required by the 1933 Act, the 1940 Act and the rules and
regulations of the Commission, and are in conformity with and will in all
material respects conform to the applicable requirements of the 1933 Act, the
1940 Act and the rules and regulations of the Commission, and will not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation or warranty in this Section 4 shall apply to statements
made in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Distributor specifically for inclusion in the
Registration Statement or Prospectuses.
e. The Company agrees to file from time to time such amendments,
supplements, reports and other documents as may be necessary in order to comply
with the 1933 Act, the 1940 Act and applicable state securities laws and in
order that there may be no untrue statement of a material fact in the
Registration Statement or Prospectuses, or necessary in order that there may be
no omission to state a material fact in the Registration Statement or
prospectuses which omission would make the statements therein misleading. If the
Company shall not propose an amendment or amendments and/or supplement or
supplements within fifteen days after receipt by the Company of a written
request from the Distributor to do so, the Distributor may, at its option,
terminate this Agreement. The Company shall give the Distributor notice and
copies within a reasonable period of time prior to the filing of any amendment
to the Registration Statement or supplement to the Prospectuses; provided,
however, that nothing contained in this Agreement shall in any way limit the
Company's right to file at any time such amendments to the Registration
Statement and/or supplements to the Prospectuses, of whatever character, as the
Company may deem advisable, such right being in all respects absolute and
unconditional;
f. The Company shall, at its expense, keep the Distributor fully informed
with regard to its affairs including, without limitation, all material
communications with the Commission or its staff and state securities regulators
by or on behalf of the Company, and in connection therewith shall furnish the
Distributor from time to time such information as the Distributor may reasonably
request, and the Company warrants that the statements contained in any such
information shall be true and correct. The Company shall also furnish the
Distributor with: (a) annual audited reports of the Company's books and accounts
with respect to the Fund, made by independent public accountants regularly
retained by the Company; (b) semi-annual reports with respect to the Fund
prepared by or on behalf of the Company; (c) materials submitted to the
Company's Board of Trustees and minutes of meetings of the Company's Board of
Trustees; and (d) copies of any correspondence between the Commission or its
staff and the Company or its agents or representatives.
g. The Company shall cause the Company's other service providers to
provide such information and reports as the Distributor may reasonably request
including, without limitation, certifications and supporting documentation
regarding compliance with applicable federal and state laws, rules and
regulations;
h. In addition to the information and reports provided in Section (2)
above and without limiting the reports that may be requested under paragraph
4(g) above, the Company shall (1) cause the Company's other service providers to
provide (i) promptly after the end of each month a report created by the Price
Waterhouse Blue II blue sky computer system known as the "Registration Period
Sales Report" (the "PW Report") or a report providing substantially the same
information as the PW Report, together with current exemption codes being used,
(ii) copies of all non-routine correspondence from or to state securities
regulators and (2) promptly inform Sunstone of each instance of non-compliance
with applicable blue sky laws which comes to the attention of the Company.
i. The Company shall have the right to suspend the sale of shares at any
time in response to conditions in the securities markets or otherwise, and to
suspend the redemption of shares of the Fund at any time permitted by the 1940
Act or the rules and regulations of the Commission, and the Company shall advise
the Distributor promptly of any such suspension;
j. The Company reserves the right to reject any order for shares but will
not do so arbitrarily or without reasonable cause; and
k. The Company agrees to advise the Distributor promptly in writing:
(i) of any request by the Commission for amendments to the
Registration Statement or Prospectuses;
(ii) in the event of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or Prospectuses
then in effect or the initiation of any proceeding for that purpose; and
(iii) of the happening of any event which makes untrue any
statement of a material fact made in the Registration Statement or Prospectuses
or which requires the making of a change in such Registration Statement or
Prospectuses in order to make the statements therein not misleading.
5. EXPENSES.
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a. The Distributor will bear all expenses incurred by it or its employees
in performing its duties hereunder, subject to the terms of Section 6(b).
b. The Fund will bear all expenses not specifically borne by the
Distributor hereunder including without limitation responsibility for the
following:
(i) legal, accounting and auditing expenses, including legal fees
of special counsel at any time retained for those members of the Board who are
not interested persons of the Fund and expenses relating to the use of
consulting services by the Fund provided that the use of such services is
approved by the Fund's trustees;
(ii) charges of custodians, transfer agents, administrators, fund
accountants and other agents;
(iii) costs of preparing share certificates;
(iv) expenses of setting in type and printing prospectuses,
statements of additional information and supplements thereto, shareholder
reports and proxy materials;
(v) costs of mailing prospectuses, statements of additional
information and supplements thereto to all shareholders as well as shareholder
reports and proxy material;
(vi) any extraordinary expenses (including fees and disbursements
of counsel) incurred by the Fund;
(vii) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations;
(viii)costs of mailing and tabulating proxies and costs of
shareholders and directors meetings; and
(ix) except as expressly agreed to by the Distributor, preparing,
printing and distributing any literature, advertisement or material which is
primarily intended to result in the sale of shares.
6. COMPENSATION.
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a. For the services provided pursuant to this Agreement, and subject to
the limitations contained in subsection 5(c) below, the Fund will pay to the
Distributor a fee, payable monthly in arrears, at the annual rate of 0.10% per
annum of the Fund's average daily net assets; provided, however, that such
compensation shall be subject to a minimum monthly fee of $7,083.
b. In addition to the compensation payable pursuant to subsection 6(a)
above, the Fund will reimburse the Distributor or pay directly, at the
Distributor's discretion, the Distributor's (i) out-of-pocket expenses
including, without limitation, typesetting, printing and distribution of
prospectuses and shareholder reports, production, printing and distribution of
sales materials and forms, placement of media advertising, engagement of
designers, free xxxxx writers and public relations firms, long distance
telephone lines, services and charges, postage, overnight delivery charges,
storage of inventory, regulatory filing fees and travel, lodging and meals and
(ii) amounts paid by Distributor to dealers or other persons entering into a
selling or servicing agreement with Distributor.
c. Subject to and calculated in accordance with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., if during any
annual period the total of
(i) the compensation payable under paragraphs (a) and (b) of
this Section 6 to the Distributor when added to
(ii) any amount paid by the Fund, which payment was primarily
intended to result in the sale of shares pursuant to the
Fund's distribution plan adopted under Rule 12b-1 of the
1940 Act and which was approved by the Distributor,
exceeds .25% of the Fund's average daily net assets, the Distributor will rebate
that portion of its fee necessary to result in the total of (i) and (ii) above
not exceeding .25% of the Fund's average daily net assets.
7. LIMITATIONS OF LIABILITY.
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The Distributor shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Company in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION.
-----------------------------------------
The Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Company all records and
other information relative to the Company and prior, present or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be withheld where the Distributor
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Company.
9. INDEMNIFICATION.
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a. The Company on behalf of the Fund agrees that the Fund will indemnify,
defend and hold harmless the Distributor, and each of its present or former
directors, officers, employees or representatives and any person who controls or
previously controlled the Distributor within the meaning of Section 15 of the
1933 Act, from and against any and all losses, claims, demands, liabilities,
damages and expenses (including the costs of investigating, defending or
preparing to defend any alleged losses, claims, demands, liabilities, damages or
expenses and any legal or other expenses incurred in connection therewith) which
Distributor, each of its present and former directors, officers, employees or
representatives or any such controlling person, may incur or become subject
under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, arising out
of or based upon any untrue statement, or alleged untrue statement, of a
material fact contained in the Registration Statement, the Prospectuses, any
annual or interim report to shareholders, any application or other document
executed by or on behalf of the Company with respect to the Fund, or are based
upon information furnished by or on behalf of the Company with respect to such
Fund filed in any state or jurisdiction in order to qualify the shares under the
securities or blue sky laws thereof ("Blue Sky application"), or arising out of
or based upon any omission, or alleged omission, to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Company's obligation to indemnify
Distributor and any of the foregoing indemnitees, shall not be deemed to cover
any losses, claims, demands, liabilities, damages or expenses arising out of any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Prospectuses, annual or interim report
or Blue Sky application with respect to the Fund in reliance upon and in
conformity with written information furnished to the Company or its counsel by
the Distributor specifically for inclusion therein; and provided further that
this indemnity agreement shall not inure to the benefit of any person unless a
court of competent jurisdiction shall determine in a final decision on the
merits, that the person to be indemnified was not liable 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
("disabling conduct"), or, in the absence of such a decision and without
limiting the Distributor's ability subsequently to seek a final decision on the
merits by a court of competent jurisdiction as to whether the person to be
indemnified was not liable by reason of disabling conduct, a reasonable
determination, based upon a review of the facts, that the indemnified person was
not liable by reason of disabling conduct, by (a) a vote of a majority of a
quorum of directors who are neither "interested persons" of the Fund as defined
in Section 2(a)(19) of the Investment Company Act nor parties to the proceeding,
or (b) an independent legal counsel in a written opinion. Notwithstanding
anything herein to the contrary, any indemnity under this Section 9 shall be
paid only out of the assets of the Fund.
b. The Distributor will indemnify, defend and hold harmless the Company
and the Fund, and each of its present or former trustees, officers, employees or
representatives and any person who controls the Company within the meaning of
Section 15 of the 1933 Act, from and against any and all losses, claims,
demands, liabilities, damages or expenses (including the costs of investigating,
defending or preparing to defend any alleged losses, claims, demands,
liabilities, damages or expenses and any legal or other expenses incurred in
connection therewith), to which any of them may become subject under the 1933
Act, the 1934 Act, any other statute (including Blue Sky laws) or any rule or
regulation thereunder, or under common law or otherwise, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectuses, any annual or interim
report to shareholders or any Blue Sky application, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
which statement or omissions was made in reliance upon and in conformity with
written information furnished to the Company or its counsel by the Distributor
specifically for inclusion therein.
10. DURATION AND TERMINATION.
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This Agreement shall become effective upon its execution as of the date
first written above and, unless sooner terminated as provided herein, shall
continue until December 31, 2001. Thereafter, if not terminated, this Agreement
shall continue automatically for successive terms of one year, provided that
such continuance is specifically approved at least annually (a) by a vote of a
majority of those members of the Company's Board of Trustees who are not parties
to this Agreement or "interested persons" of any such party, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the
Company's Board of Trustees or by vote of a "majority of the outstanding voting
securities" of the Company; provided, however, that this Agreement may be
terminated, at any time, without the payment of any penalty, upon 60 days'
written notice, by the Company by vote of a majority of the members of the Board
of Trustees who are not interested persons of the Company and have no direct or
indirect financial interest in the operation of the Company's distribution plan
or in any agreement related to such plan, by a vote of a "majority of the
outstanding voting securities" of the Company, or by the Distributor. This
Agreement will automatically and immediately terminate in the event of its
"assignment." (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.)
11. AMENDMENT OF THIS AGREEMENT.
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No provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
12. NOTICES.
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Notices of any kind to be given to the Company hereunder by the
Distributor shall be in writing and shall be duly given if mailed or delivered
to the Company c/o Haven Capital Management, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: Xxxxx X. Xxxxxxxxx, with a copy to Debevoise &
Xxxxxxxx, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X., 00000, Attention: Xxxxxx X.
XxxXxxx, or at such other address or to such individual as shall be so specified
by the Company to the Distributor.
Notices of any kind to be given to the Distributor hereunder by the
Company shall be in writing and shall be duly given if mailed or delivered to
Sunstone Distribution Services, LLC, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxx, 00000, Attention: Xxxxxx X. Xxxxxxx or at such other
address or to such other individual as shall be so specified by the Distributor
to the Company.
13. GOVERNING LAW.
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This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Investment Company Act.
To the extent the applicable laws of the State of New York, or any provisions
herein, conflict with the applicable provisions of the 1940 Act, the latter
shall control.
14. MISCELLANEOUS.
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a. The services of the Distributor rendered to the Fund are not deemed to
be exclusive. The Distributor may render such services and any other services to
others, including other investment companies. The Company recognizes that from
time to time directors, officers, and employees of the Distributor may serve as
directors, trustees, officers and employees of other corporations or trusts
(including other investment companies), that such other entities may include the
name of the Distributor as part of their name and that the Distributor or its
affiliates may enter into distribution, administration, fund accounting or other
agreements with other corporations or trusts.
b. 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.
c. The names "The Haven Capital Management Trust" and "Trustees of The
Haven Capital Management Trust" refer specifically to the trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under the Declaration of Trust, which is hereby referred to and a copy of
which is on file at the principal office of the Company. The obligations of the
Company and the Fund under this Agreement are not binding upon any of the
trustees, shareholders, officers, employees or agents of the Company
individually but are binding only upon the assets and property of the Fund (as
such assets and property are delineated by the Declaration of Trust).
15. COUNTERPARTS.
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This Agreement may be executed in counterparts, all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THE HAVEN CAPITAL MANAGEMENT TRUST
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
President
SUNSTONE DISTRIBUTION SERVICES, LLC
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President
