DISTRIBUTION AGREEMENT
AGREEMENT dated as of May 29, 1998 by and between FFTW FUNDS, Inc., a
Maryland corporation ("Fund"), and AMT Capital Securities, L.L.C., a Delaware
corporation ("AMT Capital").
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and offers several investment portfolios (individually, a "Series," and
collectively, the "Series"), which have been registered under the Securities Act
of 1933, as amended (the "1933 Act");
WHEREAS, AMT Capital is registered as a broker-dealer under the
Securities Act of 1934, as amended (the "1934 Act"), and is a member of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Fund desires to appoint AMT Capital as the distributor of
the Shares, and AMT Capital wishes to become the distributor of such Shares.
NOW, THEREFORE, in consideration of the above premises and of other
good and valuable consideration, the parties hereto, intending to be legally
bound, agree as follows:
1. Appointment of Distributor
The Fund hereby appoints AMT Capital as the distributor of the Fund's
Shares for the period and on the terms set forth in this Agreement. This
appointment applies to each existing Series of Shares, as well as any future
series provided (i) the Fund does not object to AMT Capital in writing or (ii)
AMT Capital does not object to the Fund in writing on the basis of the
capabilities of AMT Capital. AMT Capital accepts such appointment and agrees to
render the services and provide, at its own expense, the office space,
furnishings and equipment, and the personnel required by it to perform the
services on the terms herein provided.
2. Duties of the Fund
The Fund shall use its best efforts in maintaining registration of
itself and its securities under the 1940 Act and the 1933 Act, and shall bear
all expenses in connection therewith.
The Fund shall cooperate in the qualification by the investment adviser
or other service provider of the Fund of each Series of Shares under the laws of
such states and other jurisdictions of the United States as the Fund shall
determine and shall execute and deliver such documents as may reasonably be
required for such purpose, but the Fund shall not be required to qualify as a
foreign business entity in any jurisdiction, nor effect any modification of its
policies or practices without prior approval of the Fund's Directors. The Fund's
officers, subject to the direction of the Board of Directors of the Fund and
with the advice of AMT Capital, shall determine whether it is desirable to
qualify or continue to offer Shares of any Series in any jurisdiction. AMT
Capital shall have no obligation hereunder to assist in the qualification of
Shares of any Series in any jurisdiction or in the maintenance of any
qualification, other than its obligation to serve as registered agent to the
Fund and execute required filings.
The Fund will deliver to AMT Capital copies of each of the following
documents and will deliver to AMT Capital all future amendments and supplements,
if any:
A. a certified copy of the Articles of
Incorporation of the Fund as amended and currently in effect
("Charter");
B. a certified copy of the Fund's By-laws as
amended and currently in effect ("By-laws");
C. the Fund's prospectus and statement of additional information
(including supplements thereto) which relate to the Shares (the "Prospectus" and
"SAI"); and
D. the Fund's current Registration Statement on Form N-1A as filed
under the 1940 and 1933 Acts, as such shall be amended from time to time (the
"Registration Statement").
The Fund shall also furnish AMT Capital , with respect to a Series or
the Fund, as applicable:
E. annual audit reports of the Fund's books
and accounts made by independent public accountants
regularly retained by the Fund;
F. such additional copies of the Prospectus and SAI and annual,
semi-annual and other reports and communications to shareholders which relate to
the Shares as AMT Capital may reasonably require for sales purposes;
G. a monthly itemized list of the securities
held by each Series;
H. monthly balance sheets as soon as
practicable after the end of each month;
I. a survey indicating the states and jurisdictions in which each
Series is qualified for sale or exempt from the requirements of the securities
laws of such state or jurisdiction and the amounts of Shares of such Series that
may be sold in such states and jurisdictions, as such may be amended from time
to time ("Blue Sky Report"); and
J. from time to time such additional information regarding the Fund's
financial condition or the financial condition of a Series of Shares as AMT
Capital may reasonably request.
3. Duties of AMT Capital
AMT Capital agrees that all solicitations for subscriptions to Shares
of each Series shall be made in accordance with the Charter, By-Laws, and the
Registration Statement, to the extent such documents have been provided to AMT
Capital, and in accordance with the Prospectus and the SAI, and shall not at any
time or in any manner violate any provisions of the laws of the United States or
of any state or other jurisdiction in which solicitations are then being made,
or of any rules and regulations made or adopted by duly authorized agencies
thereunder, including without limitation those promulgated by the U.S.
Securities and Exchange Commission (the "SEC") and the NASD; provided that AMT
Capital shall not be deemed to have violated any state securities laws if it has
acted in good faith and in accordance with the Blue Sky Report.
AMT Capital acknowledges that the only information provided to it by
the Fund is that contained in the Registration Statement, the Prospectus, the
SAI, and reports and financial information referred to in Section 2 herein.
Neither AMT Capital nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in such
documents and any sales literature or advertisements approved by appropriate
representatives of the Fund.
AMT Capital may undertake or arrange for such advertising and promotion
as it believes reasonable in connection with the solicitation of orders to
purchase Shares; provided, however, that it shall provide the Fund with and
obtain the Fund's approval of copies of any advertising and promotional
materials approved, produced or used by AMT Capital prior to their use. AMT
Capital shall file such materials with the SEC and the NASD to the extent
required by the 1934 Act and the 1940 Act and the rules and regulations
thereunder, and by the rules of the NASD.
In carrying out its obligations hereunder, AMT Capital shall take, on
behalf of the Fund, all actions which appear to the Fund necessary to carry into
effect the distribution of the Shares of each Series.
4. Distribution of Shares of each Series
The price at which Shares of each Series may be sold shall be the net
asset value per Share of such Series computed in the manner set forth in the
Fund's Prospectus and SAI in effect at the time of sale of the Shares of such
Series.
It is mutually understood and agreed that AMT Capital does not
undertake to sell all or any specific portion of the Shares of any Series. The
Fund shall not sell Shares of any Series except through AMT Capital , except
that the Fund may issue Shares of any Series at their net asset value to any
shareholder of the Fund purchasing Shares with dividends or other distributions
received from the Fund pursuant to an offer made to all shareholders. In
addition, the Fund may issue Shares in connection with the merger or
consolidation of any other investment company or series thereof with the Fund or
one of its Series, or in connection with its acquisition, by purchase or
otherwise, of all or substantially all of the assets of any investment company
or series thereof or substantially all of the outstanding shares of any such
company or series thereof.
AMT Capital may, and when requested by the Fund shall, suspend its
efforts to effectuate sales of Shares of any Series at any time when in the
opinion of AMT Capital or of the Fund no sales should be made because of market
or other economic considerations or abnormal circumstances of any kind. The Fund
may withdraw the offering of Shares of any Series (i) at any time with the
consent of AMT Capital , or (ii) without such consent when so required by the
provisions of any statute or of any order, rule or regulation of any
governmental body having jurisdiction.
Whenever in the judgment of the Fund's officers such action is
warranted by unusual market, economic or political conditions, or by abnormal
circumstances of any kind, the Fund's officers may, after notice is received by
AMT Capital , decline to accept any orders for, or make any sales of the Shares
of any Series until such time as those officers deem it advisable to accept such
orders and to make such sales. In the event of such suspension of sales and
until AMT Capital receives written notification from the Fund that AMT Capital
may resume accepting orders for and making sales of the Shares of such Series,
AMT Capital 's duty to distribute Shares of such Series shall be suspended.
5. Effectiveness of Registration
None of the Shares of any Series shall be offered by either AMT Capital
or the Fund under any of the provisions of this Agreement and no orders for the
purchase or sale of the Shares of any Series shall be accepted by the Fund if
and so long as the 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 5 shall in any way restrict or have
application to or bearing upon the Fund's obligation to repurchase Shares of any
Series from any shareholder in accordance with the provisions of the Prospectus,
SAI, or Charter.
The Fund agrees to advise AMT Capital immediately in writing:
(a) of any request by the SEC for amendments to the Registration
Statement, Prospectus or SAI then in effect or for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement, Prospectus or SAI
then in effect or the initiation of any proceeding for that purpose; and
(c) of the happening of any event that makes untrue any statement of a
material fact made in the Registration Statement, Prospectus or SAI then in
effect or that requires the making of a change in such Registration Statement,
Prospectus or SAI in order to make the statement therein not misleading in any
material respect.
For the purpose of this paragraph 5, informal requests by the staff of the SEC
shall to be deemed requests by the SEC.
6. Expenses
The expenses connected with the Fund shall be allocable between the
Fund and AMT Capital as follows:
(a) AMT Capital shall furnish, at its expense and without cost to the
Fund, the services of personnel to the extent that such services are required to
carry out its obligations under this Agreement.
(b) The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund, including, with limitation: the fees of the Fund's
investment adviser; the charges and expenses of any registrar, any custodian or
depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any stock transfer, dividend or accounting
agent or agents appointed by the Fund; any administrator; brokers' commissions
chargeable to the Fund in connection with portfolio securities transactions to
which the Fund is a party; any fee paid pursuant to any distribution plan, if
and when adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act; all
taxes, including securities issuance and initial transfer taxes, and corporate
fees payable by the Fund to federal, state or other governmental agencies; all
costs and expenses in connection with the organization of the Fund and the
Series and the registration of the Shares with the SEC and under state
securities laws and in connection with maintenance of registration of the Fund,
Series and the Shares with the SEC and various states and other jurisdictions
(including filing fees and legal fees and disbursements of counsel); the
expenses of printing, including printing setup charges, and distributing
Prospectuses and SAIs of the Fund and supplements thereto the Fund's
shareholders; all expenses of shareholders' and Directors' meetings and of
preparing, printing and mailing of proxy statements and reports to shareholders;
fees and travel expenses of Directors who are not interested persons (as such
term is defined in the 0000 Xxx) of the Fund ("Non-Interested Directors") or
members of any advisory board or committee established by the Non-Interested
Directors; all expenses incident to the payment of any dividend, distribution,
withdrawal or redemption, whether in Shares or in cash; charges and expenses of
any outside service used for pricing of the Fund's Shares; charges and expenses
of legal counsel to the Fund and to the Non-Interested Directors, and of
independent accountants to the Fund, in connection with any matter relating to
the Fund; membership dues of industry associations; interest payable on Fund
borrowings; postage; insurance premiums on property or personnel (including
officers and directors) of the Fund which inure to its benefit; extraordinary
expenses of the Fund (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification related thereto); and
all other charges and costs of the Fund's operation unless otherwise explicitly
provided herein.
7. Indemnity by Fund
The Fund agrees to indemnify and hold AMT Capital , its officers and
directors and each person (if any) who controls AMT Capital within the meaning
of Section 15 of the 1933 Act harmless from and against any losses, claims,
damages or liabilities to which any of such persons may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, or the SAI or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse such persons for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such action
or claim; provided, however, that the Fund shall not be liable in any case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission made in
the Registration Statement, the Prospectus or the SAI in reliance upon and in
conformity with written information furnished to the Fund by AMT Capital
expressly for use therein. AMT Capital , its officers, directors and control
persons shall be entitled to advances from the Fund for payment of the
reasonable expenses incurred by it or them in connection with the matter as to
which it or they are seeking indemnification in the manner and to the fullest
extent permissible under the Maryland General Corporation law.
AMT Capital agrees that, promptly upon its receipt of notice of the
commencement of any action against AMT Capital, its officers and/or directors or
against any person so controlling AMT Capital, in respect of which indemnity or
reimbursement may be sought from the Fund on account of its agreement in the
preceding paragraph, notice in writing will be given to the Fund within 10 days
after the summons or other first legal process shall have been service. The
failure to notify the Fund of any such action shall not relieve the Fund from
any liability which the Fund may have to the person against whom such action is
brought other than by reason of the indemnity agreement contained in this
Section 7. Thereupon, the Fund shall be entitled to participate, to the extent
that it shall wish (including the selection of counsel with AMT Capital 's
reasonable approval), in defense thereof. In the event the Fund elects to assume
the defense of any such suit and retain counsel of good standing reasonably
approved by AMT Capital , the defendant or defendants in such suit shall bear
the expense of any additional counsel retained by any of them; but in the case
the Fund does not elect to assume the defense of any such suit or in the case
AMT Capital does not reasonably approve of counsel chosen by the Fund, the Fund
will reimburse AMT Capital , its officers and directors or the controlling
person or persons named as defendant or defendants in such suit for the fees and
expenses of any one counsel or firm which may be retained on behalf of AMT
Capital , its officers and directors and such control persons.
In the event that any such claim for indemnification is made by any
director or person in control of AMT Capital who is also an officer or director
of the Fund, the Fund, at its expense to the extent permitted by law, will
submit to a court of appropriate jurisdiction the question of whether or not
indemnification by it is against public policy as expressed in the 1933 Act, the
1934 Act, and the 1940 Act, and the Fund and AMT Capital will be governed by the
final adjudication of such question.
The Fund's indemnification agreement contained in this paragraph and
the Fund's representations and warranties in this agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of AMT Capital , its officers and directors or any control person
and shall survive the sale of any of the Shares made pursuant to this Agreement.
This agreement of indemnity will inure exclusively to the benefit of AMT Capital
, its officers, directors and control persons, and the extent permitted by the
1940 Act to the benefit of any of their successors and assigns. The Fund agrees
promptly to notify AMT Capital of the commencement of any litigation or
proceeding against the Fund in connection with the issue and sale of any Shares.
8. Indemnity by AMT Capital
AMT Capital agrees to indemnify and hold harmless the Fund, its
officers and directors and persons who control the Fund with the meaning of
Section 15 of the 1933 Act, against any losses, claims, damages or liabilities
to which any of such persons may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof), arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Prospectus, or the SAI or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the Prospectus or the SAI in reliance upon and in conformity with
written information furnished to the Fund by AMT Capital expressly for use
therein; and will reimburse the Fund for any legal or other expenses reasonably
incurred by the Fund in connection with investigating or defending any such
action or claim. AMT Capital also agrees to indemnify and hold harmless the
Fund, its officers and directors and control persons from and against any and
all losses, claims, damages and liabilities arising by reason of any person
acquiring any Shares, which may be based upon the 1933 Act or any other statute
or at common law, on account of any wrongful sales activities of AMT Capital or
any of its registered representatives, as defined under the By-Laws of the NASD,
including any failure to conform with any requirement of any state and federal
law relating to the sale of such Shares. Notwithstanding anything contained
herein to the contrary, AMT Capital shall not be responsible to the Fund for and
shall not indemnify and hold harmless the Fund, its officers and director as and
control persons from and against any such losses, claims, damages or liabilities
arising solely as a result of actions taken or omitted by AMT Capital in good
faith reliance on, and in conformity with, the Blue Sky Report.
AMT Capital shall also indemnify and hold harmless the Fund, its
officers and directors and control persons for any liability to the Fund or to
the holders of Shares by reason of AMT Capital 's willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligation and duties under this Agreement.
The Fund, its officers, directors and control persons shall be entitled
to advances from AMT Capital for payment of the reasonable expenses incurred by
it or them in connection with the matters as to which it or they are seeking
indemnification in the manner and to the fullest extent permissible under
Delaware Corporation law.
In case any action shall be brought against the Fund, its officers and
directors and control persons in respect of which it may seek indemnity or
reimbursement from AMT Capital on account of the agreement of AMT Capital
contained in this Section 8, AMT Capital shall have the rights and duties given
to the Fund, and the Fund, its officers and directors and control persons shall
have the rights and duties given to AMT Capital in the second and third
paragraphs of Section 7.
9. Services Not Exclusive
Nothing herein shall be deemed to limit or restrict AMT Capital 's
right or that of any of its affiliates or employees, to engage in any other
business or to devote time and attention to the distribution or other related
aspects of any other registered investment company or to render services of any
kind to any other corporation, firm, individual or association.
10. Term
This agreement shall become effective at the close of business on the
date hereof and shall continue in full force and effect, subject to paragraph 13
hereof for one year.
11. Renewal
This Agreement shall continue in full force and effect from year to
year with respect to a Series, provided that such continuance is specifically
approved at least annually;
(a) (i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the outstanding voting securities (as defined) in Section 2(a)(42)
of the 0000 Xxx) that constitute Shares of such Series; and
(b) by the affirmative vote of a majority of the Non-Interested
Directors of the Fund by votes cast in person at a meeting specifically called
for the purpose of voting on such approval.
12. Amendment
This Agreement may be amended by the parties hereto with respect to a
Series only if such amendment is specifically approved (i) by the Board of
Directors of the Fund or by the vote of a majority of outstanding Shares, and
(ii) by a majority of the Non-Interested Directors of the Fund, which vote must
be cast in person at a meeting called for the purpose of voting on such
approval.
13. Termination
This Agreement may be terminated at any time, without the payment of
any penalty, by vote of the Fund's Board of Directors, by vote of a majority of
outstanding Shares (as defined in Section 2(a)(42) of the 1940 Act), or by AMT
Capital , on sixty (60) days' written notice to the other party. The notice
provided for herein may be waived by either party. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for this purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
14. Miscellaneous
(a) AMT Capital agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Fund all records and other
information relative to the Fund and its prior, present or potential
shareholders, and not to use such record and information for any purpose other
than performance of its responsibilities and hereunder, except after prior
notification to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where AMT Capital 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 Fund.
(b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act shall be resolved by reference to such term or provision of the
1940 Act and to interpretations thereof, if any, by the United States courts or,
in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC issued pursuant to the 1940 Act. In addition,
where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is revised by rule, regulation or order of the SEC, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. Otherwise, the provisions of this Agreement shall be governed by the laws
of the State of New York.
(c) Any notice or other communication authorized or required hereunder
shall be in writing or by confirming telegram, cable, telex or facsimile sending
device. Notice shall be addressed (a) if to the Fund, 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX, Attention: Treasurer, and (b) if to AMT Capital , 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX, Attention: Art Xxxxxxxxx. Either party may
designate a different address by notice to the other party. Any such notice or
other communication shall be deemed given when actually received.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year above
written.
FFTW FUNDS, INC.
BY:_______________________
Xxxxxxx X. Xxxxxx
Director
AMT CAPITAL SECURITIES, L.L.C.
BY:_______________________
Xxxxxx Xxxxxxxxx
President
