EXHIBIT 99.23(e)
DISTRIBUTION AGREEMENT
between
The Xxxxxxx Funds
and
T. 0. Xxxxxxxxxx Securities, Inc.
THIS AGREEMENT is made as of the ____ day of ___________, 1998, by and between
The Xxxxxxx Funds, a Delaware business trust (the "Fund") and T.O. Xxxxxxxxxx
Securities, a corporation organized and existing under the laws of the State of
Connecticut ("TORS").
WHEREAS the Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company, and will
register one or more distinct series of shares of beneficial interest ("Shares")
for sale to the public under the Securities Act of 1933, as amended (the "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 Fund 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
Fund 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 Fund 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 Fund, subject to the terms and for the period set forth
in this Agreement. TORS hereby accepts such appointment and agrees to act
hereunder. The Fund understands that any solicitation activities conducted on
behalf of the Fund will be conducted primarily by employees of the Fund'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 Fund 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 Fund, and any supplements thereto, under the 1933 Act and the
1940 Act.
(b) TORS, with the operational assistance of the Fund's transfer agent, will
hold itself available to receive purchase and redemption orders satisfactory to
T.O.R for shares and will accept such orders on behalf of the Fund. 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 Fund'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 Fund as the Fund shall provide or
approve. TORS shall review and file all proposed advertisements and sales
literature with regulators, as appropriate, and consult with the Fund 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 Fund 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, T.O.R shall notify, by any appropriate means, the
Fund 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 Fund reserves
the right to suspend such repurchase right upon written notice to TORS. TORS
further agrees to act as agent for the Fund to receive and transmit promptly to
the Fund'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 Fund 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 Fund's sponsor, Xxxxxxx Associates, Inc., who will be
registered as TORS broker-dealer representatives.
3. Duties of the Fund.
(a) The Fund 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 Fund 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 Fund shall fully cooperate in the efforts of TORS to distribute
and arrange for the distribution of Shares.
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(b) The Fund 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 Fund 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 Fund 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 Fund's
communication with persons who are shareholders.
(c) The Fund 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 Fund 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 Fund 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 Fund Operating Agreements. The Fund and TORS further agree that the
Fund has entered into the Fund Administrative Services Agreement, Fund
Accounting Services Agreement, Transfer Agent Agreement, Custodian Agreement,
and Fulfillment Services Agreement with Firstar Mutual Fund Services, LLC of
Milwaukee, Wisconsin ("FMFS"), 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 Fund 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 Fund's
benefit. The Fund 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.
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 Fund. In making agreements with such dealers, TORS shall act
only as principal and not as agent for the Fund. The form of any such dealer
agreement shall be mutually agreed upon and approved by the Fund and TORS.
6. Withdrawal of Offering. The Fund 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 Fund under any
provisions of this Agreement and no orders for the purchase of Shares hereunder
shall be accepted by the Fund if and so long as effectiveness of the
Registration Statement then in effect or any necessary amendments thereto shall
be
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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 Fund
reserves the right to (i) sell Shares to investors on applications received and
accepted by the Fund; (ii) issue Shares in connection with a merger,
consolidation, or recapitalization of the Fund; (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 Fund. The Fund 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 Fund
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 Fund; and (v) the qualifications of Shares
for sale under the securities laws of such jurisdictions as shall be selected by
the Fund pursuant to the Paragraph 3(b) hereof, and the costs and expenses
payable to each jurisdiction for continuing qualification therein. In addition,
the Fund 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 Fund
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
Fund's sponsor, Xxxxxxx Associates, Inc. otherwise determines that Rule 12b-1
fees shall not, in whole or in part, be used to pay TORS, Xxxxxxx Associates,
Inc. shall be responsible for the payment of the amount of such fees not covered
by Rule 12b-1 payments.
10. Status of TORS. TORS is an independent contractor and shall be agent of
the Fund only with respect to the sale and redemption of Shares.
11. Indemnification.
(a) The Fund 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 Fund's
registration statement or necessary to make the statements therein not
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misleading; or (iii) failure by the Fund 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 Fund 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 Fund 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 Fund 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 Fund of any claim shall not
relieve the Fund 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 Fund 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 Fund elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
the Fund and satisfactory indemnified defendants in the suit whose consent shall
not be unreasonably withheld. In the event that the Fund 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 Fund
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 Fund 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 Fund, its officers and
directors, and any person who controls the Fund 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 Fund, 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 Fund
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
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assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
12. Duration and Termination.
(a) This Agreement shall become effective on the date first written above or
such later date as indicated in Schedule A and, unless sooner terminated as
provided herein, will continue in effect for two years from the above written
date. Thereafter, if not terminated, this Agreement shall continue in effect for
successive annual periods, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Fund's Board who
are neither interested persons (as defined in the 0000 Xxx) of the Fund
("Independent Trustees") or TORS cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of the Fund.
(b) Notwithstanding the foregoing, this Agreement may be terminated in its
entirety at any time, without the payment of any penalty, by vote of the Board,
by vote of a majority of the Independent Trustees, or by vote of a majority of
the outstanding voting securities of the Fund 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 Fund. This Agreement will automatically terminate in the
event of its assignment.
13. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge, or termination is sought. This Agreement may be amended with the
approval of the Board or of a majority of the outstanding voting securities of
the Fund; provided, that in either case, such amendment also shall be approved
by a majority of the Independent trustees/directors.
14. Limitation of Liability. The Board and shareholders of the Fund shall not
be personally liable for obligations of the Fund in connection with any matter
arising from or in connection with this Agreement. This Agreement is not binding
upon any trustee, officer, or shareholder of the Fund 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 Delaware and the 1940 Act (without regard, however, to the
conflicts of law principles).
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To the extent that the applicable laws of the state of Delaware 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.
ATTEST: THE XXXXXXX FUNDS
By:___________________________
ATTEST: T.O. XXXXXXXXXX SECURITIES
By:___________________________
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SCHEDULE A
to the
DISTRIBUTION AGREEMENT
between
The Xxxxxxx Funds
and
T.O. Xxxxxxxxxx Securities
Pursuant to Section 1 of the Distribution Agreement between The Xxxxxxx Funds
("Fund") and T.O. Xxxxxxxxxx Securities ("TORS"), the Fund hereby appoints TORS
as its agent to be the principal underwriter of Fund with respect to its
following series:
Xxxxxxx Growth Fund
Dated:_________________ ,1998
