EXHIBIT (e)
DISTRIBUTION AGREEMENT
AGREEMENT dated as of December 20, 2004, between The Drake Funds Trust,
a statutory trust established under the laws of the State of Delaware (the
"Fund"), having its principal place of business at 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, and ALPS Distributors, Inc., a Colorado corporation and a
registered broker-dealer under the Securities Exchange Act of 1934, having its
principal place of business at 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000
(the "Distributor").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended, presently
consisting of the portfolios and classes listed in Appendix A attached hereto;
WHEREAS, the Fund wishes to employ the services of the Distributor in
connection with the promotion and distribution of its shares (the "Shares");
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties agree as follows:
1. Documents -- The Fund has furnished or will furnish, upon request, the
Distributor with copies of the Fund's Declaration of Trust, advisory agreement,
custodian agreement, transfer agency agreement, administration agreement,
current prospectus(es), and statement(s) of additional information, and all
forms relating to any plan, program or service offered by the Fund. The Fund
shall furnish, within a reasonable time period, to the Distributor a copy of any
amendment or supplement to any of the above-mentioned documents. Upon request,
the Fund shall furnish promptly to the Distributor any additional documents
necessary or advisable to perform its functions hereunder. From time to time,
each party shall be permitted reasonable access to records maintained by the
other party in connection with this Agreement to the extent necessary to perform
its obligations hereunder. As used in this Agreement the terms "registration
statement", "prospectus(es)" and "statement(s) of additional information" shall
mean any registration statement, prospectus(es) and statement(s) of additional
information filed by the Fund with the Securities and Exchange Commission
("SEC") and any amendments and supplements thereto that are filed with the SEC.
2. Sales of Shares -- The Fund grants to the Distributor the right to sell
the Shares as agent on behalf of the Fund, during the term of this Agreement,
subject to the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act") and of the laws governing the sale of securities in the various
states ("Blue Sky Laws"), under the terms and conditions set forth in this
Agreement. The Distributor shall have the right to sell, as agent on behalf of
the Fund, the Shares covered by the registration statement, prospectus(es) and
statement(s) of additional information for the Fund then in effect under the
1933 Act and 1940 Act.
3. Sales of Shares by the Fund -- The rights granted to the Distributor
shall be nonexclusive in that the Fund reserves the right to sell Shares to
investors on applications received and accepted by the Fund.
4. Public Offering Price - Except as otherwise noted in the Fund's current
prospectus(es) and/or statement(s) of additional information, all Shares sold to
investors by the Distributor or the Fund will be sold at the public offering
price. The public offering price for all accepted subscriptions will be the net
asset value per Share, as determined in the manner described in the Fund's
current prospectus(es) and/or statement(s) of additional information, plus a
sales charge (if any) as described in the Fund's current prospectus(es) and/or
statement(s) of additional information. The Fund shall in all cases receive the
net asset value per Share on all sales. If a sales charge is in effect, the
Distributor shall have the right, subject
to such rules or regulations of the SEC as may then be in effect pursuant to
Section 22 of the 1940 Act to pay a portion of the sales charge to dealers who
have sold Shares of the Fund.
5. Suspension of Sales -- The Fund reserves the right to suspend sales and
the Distributor's authority to process orders for Shares on behalf of the Fund
if, in the judgment of the Fund, it is in the best interests of the Fund to do
so. Suspension will continue for such period as may be determined by the Fund.
6. Solicitation of Sales -- In consideration of these rights granted to
the Distributor, the Distributor agrees to use its best efforts to solicit
orders for the sale of the Shares at the public offering price and will
undertake, at its own cost, such advertising and promotion as it believes is
reasonable in connection with such solicitation, subject to the Fund's approval.
The Distributor shall be responsible for reviewing and filing any sales
literature or advertising material (including material disseminated through
radio, television or other electronic media) concerning Fund shares with the SEC
and the National Association of Securities Dealers, Inc. (the "NASD") to the
extent required by the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the 1940 Act and the rules and regulations thereunder, and
by the rules of the NASD. All such materials must be approved by the
Distributor, in writing, prior to use. This shall not prevent the Distributor
from entering into like arrangements (including arrangements involving the
payment of underwriting commissions) with other issuers. The Distributor will
act only on its own behalf as principal should it choose to enter into selling
agreements with selected dealers or others.
7. Authorized Representations -- The Distributor is not authorized by the
Fund to give any information or to make any representations other than those
contained in the registration statement or prospectus(es) and statement(s) of
additional information, or contained in shareholder reports or other material
that may be prepared by or on behalf of the Fund for the Distributor's use.
Consistent with the foregoing, the Distributor may prepare and distribute sales
literature or other material as it may deem appropriate in consultation with the
Fund, provided such sales literature complies with applicable law and
regulations.
8. Registration of Shares -- The Fund agrees that it will take all action
necessary to register the Shares under the 1933 Act and the 1940 Act (subject to
the necessary approval of its shareholders). The Fund shall make available to
the Distributor such number of copies of its prospectus(es) and statement(s) of
additional information as the Distributor may reasonably request. The Fund shall
furnish to the Distributor copies of all information, financial statements and
other papers which the Distributor may reasonably request for use in connection
with the distribution of Shares of the Fund.
9. Distribution Fees and Expenses -- The Distributor 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.
10. Fund Expenses -- Unless otherwise agreed to by the parties hereto in
writing or by the Fund and the Fund's other agents, the Distributor shall not be
responsible for fees and expenses in connection with (a) filing of any
registration statement, printing and the distribution of any prospectus(es) and
statement(s) of additional information under the 1933 Act and/or the 1940 Act
and amendments prepared for use in connection with the offering of Shares for
sale to the public, preparing, setting in type, printing and mailing the
prospectus(es), statement(s) of additional information and any supplements
thereto sent to existing shareholders, (b) preparing, setting in type, printing
and mailing any report (including annual and semi-annual reports) or other
communication to shareholders of the Fund, and (c) the Blue Sky registration and
qualification of Shares for sale in the various states in which the officers of
the Fund shall determine it advisable to qualify such Shares for sale.
11. Use of the Distributor's Name -- The Fund shall not use the name of the
Distributor, or any of its affiliates, in any prospectus(es) or statement(s) of
additional information, sales literature, and other material relating to the
Fund in any manner without the prior written consent of the Distributor (which
shall not be unreasonably withheld); provided, however, that the Distributor
hereby approves all lawful uses of the names of the Distributor and its
affiliates in the prospectus(es) and statement(s) of additional information of
the Fund and in all other materials which merely refer in accurate terms to
their appointment hereunder or which are required by the SEC, NASD, or any state
securities authority.
12. Use of the Fund's Name -- Neither the Distributor nor any of its
affiliates shall use the name of the Fund in any publicly disseminated
materials, including sales literature in any manner without the prior written
consent of the Fund (which shall not be unreasonably withheld); provided,
however, that the Fund hereby approves all lawful uses of its name in any
required regulatory filings of the Distributor which merely refer in accurate
terms to the appointment of the Distributor hereunder, or which are required by
the SEC, NASD, or any state securities authority.
13. Insurance -- The Distributor agrees to maintain liability insurance
coverages which are, in scope and amount, consistent with coverages customary
for distribution activities relating to the Fund. The Distributor shall notify
the Fund upon receipt of any notice of material, adverse change in the terms or
provisions of its insurance coverage. Such notification shall include the date
of change and the reason or reasons therefor. The Distributor shall notify the
Fund of any material claims against it, whether or not covered by insurance, and
shall notify the Fund from time to time as may be appropriate of the total
outstanding claims made by it under its insurance coverage.
14. Indemnification -- The Fund agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act
(collectively, "Distributor Indemnitees"), against any loss, liability, claim,
damages or expenses (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable counsel
fees incurred in connection therewith) arising by reason of any person acquiring
any Shares, based upon the ground that the registration statement,
prospectus(es), statement(s) of additional information, shareholder reports or
other information filed or made public by the Fund (as amended from time to
time) included an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make the statements
not misleading under the 1933 Act, the 1940 Act or any other statute or the
common law. However, the Fund does not agree to indemnify the Distributor
Indemnitees or hold them harmless to the extent that the statement or omission
was made in reliance upon, and in conformity with, information furnished to the
Fund by or on behalf of the Distributor. In no case (i) is the indemnity of the
Fund in favor of the Distributor Indemnitees to be deemed to protect the
Distributor Indemnitees against any liability to the Fund or its security
holders to which the Distributor Indemnitees would otherwise be subject by
reason of willful misfeasance, bad faith or negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement, or (ii) is the Fund to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made against a
Distributor Indemnitee unless the Distributor Indemnitees shall have notified
the Fund in writing of the claim promptly after the summons or other first
written notification giving information of the nature of the claims shall have
been served upon the Distributor Indemnitee (or after the Distributor Indemnitee
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
which it may have to any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. 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, and if
the Fund elects to assume the defense, the defense shall be conducted by counsel
chosen by the Fund. In the event the Fund elects to assume the
defense of any suit and retain counsel, the Distributor Indemnitee(s),
defendant(s) in the suit, shall bear the fees and expenses of any additional
counsel retained by them. If the Fund does not elect to assume the defense of
any suit, it will reimburse the Distributor Indemnitee(s) that are defendant(s)
in the suit for the reasonable fees and expenses of any counsel retained by
them. The Fund agrees to notify the Distributor promptly of the commencement of
any litigation or proceeding against it or any of its officers in connection
with the issuance or sale of any of the Shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Fund and each of its directors, officers and each person, if any,
who controls the Fund within the meaning of Section 15 of the 1933 Act
(collectively "Fund Indemnitees"), against any loss, liability, damages, claims
or expense (including the reasonable cost of investigating or defending any
alleged loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring any
Shares, based upon the 1933 Act, the 1940 Act or any other statute or common
law, alleging (a) any wrongful act of the Distributor or any of its employees or
(b) that any sales literature, advertisements, information, statements or
representations used or made by the Distributor or any of its affiliates or
employees or that the registration statement, prospectus(es), statement(s) of
additional information, (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading, insofar as
the statement or omission was made in reliance upon, and in conformity with,
information furnished to the Fund by or on behalf of the Distributor. In no case
(i) is the indemnity of the Distributor in favor of the Fund Indemnitees to be
deemed to protect the Fund Indemnitees against any liability to which the Fund
Indemnitees would otherwise be subject by reason of willful misfeasance, bad
faith or negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or (ii)
is the Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against a Fund Indemnitee unless the
Fund Indemnitee shall have notified the Distributor in writing of the claim
promptly after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the Fund
Indemnitee (or after the Fund Indemnitee shall have received notice of service
on any designated agent). However, failure to notify the Distributor of any
claim shall not relieve the Distributor from any liability which it may have to
the Fund Indemnitee otherwise than on account of its indemnity agreement
contained in this paragraph. In the case of any notice to the Distributor it
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, and
if the Distributor elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Fund Indemnitee(s), defendant(s)
in the suit. In the event that the Distributor elects to assume the defense of
any suit and retain counsel, the Fund Indemnitee(s) that are defendant(s) in the
suit, shall bear the fees and expense of any additional counsel retained by
them. If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Fund Indemnitee(s) that are defendant(s) in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Distributor
agrees to notify the Fund promptly of the commencement of any litigation or
proceedings against it in connection with the Fund and sale of any of the
Shares.
15. Supplemental Information -- The Distributor and the Fund shall
regularly consult with each other regarding the Distributor's performance of its
obligations under this Agreement. In connection therewith, the Fund shall submit
to the Distributor at a reasonable time in advance of filing with the SEC
reasonably final copies of any amended or supplemented registration statement
(including exhibits) under the 1933 Act and the 1940 Act; provided, however,
that nothing contained in this Agreement shall in any way limit the Fund's right
to file at any time such amendments to any registration statement and/or
supplements to any prospectus(es) or statement(s) of additional information, of
whatever character, as the Fund may deem advisable, such right being in all
respects absolute and unconditional.
The Distributor acknowledges that the only information provided to it by the
Fund is that contained in the registration statement, the prospectus(es), the
statement(s) of additional information and reports and financial information
referred to herein. Neither the Distributor 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
specifically approved by appropriate representatives of the Fund.
16. Term -- This Agreement shall become effective as of December 20, 2004,
and shall continue until one year from such date and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually (i) by the Fund's Board of Trustees or
(ii) by a vote of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act), provided that in either event the continuance is
also approved by the majority of the Trustees of the Fund who are not interested
persons (as defined in the 0000 Xxx) of any party to this Agreement by vote cast
in person at a meeting called for the purpose of voting on such approval. After
the one year initial term, this Agreement may be terminated at any time without
payment of any penalty on sixty days' written notice by the Fund's Board of
Trustees, by vote of the holders of a majority of the outstanding voting
securities of the Fund or by the Distributor. This Agreement shall automatically
terminate in the event of its assignment (as defined in the 1940 Act).
Upon the termination of this Agreement, the Distributor, at the Fund's expense
and direction, shall transfer to such successor as the Fund shall specify all
relevant books, records and other data established or maintained by the
Distributor under this Agreement.
17. Anti-Money Laundering - The Distributor agrees to maintain an
anti-money laundering program in compliance with Title III of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the "USA Patriot Act") and all applicable laws
and regulations promulgated thereunder. The Distributor confirms that, as soon
as possible, following the request from the Fund, the Distributor will supply
the Fund with copies of the Distributor's anti-money laundering policy and
procedures, and such other relevant certifications and representations regarding
such policy and procedures as the Fund may reasonably request from time to time.
18. Notice -- Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by (i) telecopier (fax) or (ii)
registered or certified mail, postage prepaid, addressed by the party giving
notice to the other party at the last address furnished by the other party to
the party giving notice: if to the Fund at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attn: Chief Legal and Compliance Officer; and if to the Distributor,
at 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx, 00000, Attn: General Counsel, or
such other telecopier (fax) number or address as may be furnished by one party
to the other.
19. Confidential Information -- The Distributor, its officers, directors,
employees and agents will treat confidentially and as proprietary information of
the Fund all records and other information relative to the Fund and to prior or
present shareholders or to those persons or entities who respond to the
Distributor's inquiries concerning investment in the Fund, and will not use such
records and information for any purposes other than performance of its
responsibilities and duties hereunder. If the Distributor is requested or
required by, but not limited to, depositions, interrogatories, requests for
information or documents, subpoena, civil investigation, demand or other action,
proceeding or process or as otherwise required by law, statute, regulation,
writ, decree or the like to disclose such information, the Distributor will
provide the Fund with prompt written notice of any such request or requirement
so that the Fund may seek an appropriate protective order or other appropriate
remedy and/or waive compliance with this provision. If such order or other
remedy is not sought, or obtained, or waiver not received within a reasonable
period following such notice, then the Distributor may without liability
hereunder, disclose to
the person, entity or agency requesting or requiring the information, that
portion of the information that is legally required in the reasonable opinion of
the Distributor's counsel.
20. Limitation of Liability -- The Distributor is expressly put on notice
of the limitation of shareholder, officer and Trustee liability as set forth in
the Declaration of Trust of the Fund and agrees that the obligations assumed by
the Fund under this contract shall be limited in all cases to the Fund and its
assets. The Distributor agrees that it shall not seek satisfaction of any such
obligation from the shareholders or any individual shareholder of the Fund. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees, officers or any individual Trustee or officer of the Fund. Any
obligations of the Fund entered into in the name or on behalf thereof by any of
the Trustees or officers, representatives or agents are made not individually,
but in such capacities, and are not binding upon any of the Trustees or
officers, shareholders, or representatives of the Fund personally, but bind only
the Fund property, and all persons dealing with any class of Shares of the Fund
must look solely to the Fund property belonging to such class for the
enforcement of any claims against the Fund.
21. Miscellaneous -- Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed, interpreted, and enforced in
accordance with and governed by the laws of the State of Colorado. 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. This Agreement may not be changed, waived, discharged or
amended except by written instrument that shall make specific reference to this
Agreement and which shall be signed by the party against which enforcement of
such change, waiver, discharge or amendment is sought. This Agreement may be
executed simultaneously in two or more counterparts, each of which taken
together shall constitute one and the same instrument. This Agreement contains
the entire agreement of the parties with respect to the subject matter contained
herein, and supersedes all prior agreements, arrangements and understandings.
All activities by the Distributor and its agents and employees as distributor of
the Shares shall comply with all applicable laws, rules and regulations
including, without limitation, all rules and regulations made or adopted by the
SEC or any securities association registered under the Exchange Act. The
Distributor represents and warrants that it is a member of the NASD and agrees
to abide by all of the rules and regulations of the NASD, including, without
limitation, its Conduct Rules, as defined thereunder. The Distributor agrees to
notify the Fund immediately in the event of its expulsion or suspension by the
NASD. Expulsion of the Distributor by the NASD will terminate this Agreement
immediately without notice. Suspension of the Distributor by the NASD will
terminate this Agreement effective immediately upon written notice of
termination to the Distributor from the Fund. The Distributor further represents
that it is registered in all fifty (50) states, and shall maintain such
registration. The Distributor shall not conduct any activity in any state if to
do so would require a license that the Distributor does not have.
The Distributor will promptly transmit any orders received by it for purchase,
redemption or exchange of the Shares to the Fund's transfer agent.
IN WITNESS WHEREOF, the Fund has executed this instrument in its name and
behalf, and the Distributor has executed this instrument in its name and behalf,
as of the date and year first above written.
THE DRAKE FUNDS TRUST ALPS DISTRIBUTORS, INC.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxx X. May
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Name: Xxxxxx Xxxxxxxx Name: Xxxxxx X. May
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Title: President Title: Managing Director
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APPENDIX A
THE DRAKE FUNDS TRUST
LOW DURATION FUND- DRAKE CLASS AND ADMINISTRATIVE CLASS SHARES
TOTAL RETURN FUND- DRAKE CLASS AND ADMINISTRATIVE CLASS SHARES
