DISTRIBUTION AGREEMENT
Exhibit 28 (e)
AGREEMENT made as of March 31, 2009 between Performance Funds Trust (the “Trust”), having an
office at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and Performance Funds Distributor, Inc.
(“Distributor”), having an office at 00 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
WHEREAS, the Trust is an open-end management investment company, organized as a Delaware
business trust and registered with the Securities and Exchange Commission (the “Commission”) under
the Investment Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS, it is intended that Distributor act as the distributor of the shares of beneficial
interest (“Shares”) of each series of the Trust, as listed on Schedule A, and such series as are
hereafter created (all of the foregoing series individually referred to herein as a “Fund” and
collectively as the “Funds”).
NOW, THEREFORE, in consideration of the mutual premises and covenants herein set forth, the
parties agree as follows:
1. | Services as Distributor. |
1.1 Distributor will act as agent of Trust on behalf of each Fund for the distribution of the
Shares covered by the registration statement of Trust then in effect under the Securities Act of
1933, as amended (the “Securities Act”) and the 1940 Act. As used in this Agreement, the term
“registration statement” shall mean the registration statement of the Trust and any amendments
thereto, then in effect, including Parts A (the Prospectus), B (the Statement of Additional
Information) and C of each registration statement, as filed on Form N-1A, or any successor thereto,
with the Commission, together with any amendments thereto. The term “Prospectus” shall mean the
then-current form of Prospectus and Statement of Additional Information used by the Funds, in
accordance with the rules of the Commission, for delivery to shareholders and prospective
shareholders after the effective dates of the above-referenced registration statements, together
with any amendments and supplements thereto. The Trust will notify Distributor in advance of any
proposed changes to Schedule A to this Agreement.
1.2 Consistent with the understanding between the Funds and the Distributor, Distributor may
solicit orders for the sale of the Shares and may undertake such advertising and promotion as it
believes reasonable in connection with such solicitation.
The Trust understands that Distributor is now and may in the future be the distributor of the
shares of many other investment companies or series, including investment companies having
investment objectives similar to those of the Trust. The Trust further understands that
shareholders and potential shareholders in the Trust may invest in shares of such other investment
companies. The Trust agrees that Distributor’s duties to other
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investment companies shall not be deemed in conflict with its duties to the Trust under this
Section 1.2.
1.3 Consistent with the understanding between the Funds and the Distributor, and subject to
the last sentence of this Section 1.3, Distributor may engage in such activities as it deems
appropriate in connection with the promotion and sale of the Shares, which may include advertising,
compensation of underwriters, dealers and sales personnel, the printing and mailing of Prospectuses
to prospective shareholders other than current shareholders, and the printing and mailing of sales
literature. Distributor may enter into dealer agreements and other selling agreements with
broker-dealers and other intermediaries; provided, however, that Distributor shall have no
obligation to make any payments to any third parties, whether as finder’s fees, compensation or
otherwise, unless (i) Distributor has received a corresponding payment from the applicable Fund’s
Distribution Plan (as defined in Section 2 of this Agreement), the Fund’s investment adviser (the
“Adviser”) or from another source as may be permitted by applicable law, and (ii) such
corresponding payment has been approved by the Trust’s Board of Trustees.
1.4 In its capacity as distributor of the Shares, all activities of the Distributor and its
directors, officers, agents, and employees shall comply with all applicable laws, rules and
regulations, including, without limitation, the 1940 Act, all applicable rules and regulations
promulgated by the Commission thereunder, and all applicable rules and regulations adopted by any
securities association registered under the Securities Exchange Act of 1934.
1.5 Whenever in their judgment such action is warranted by unusual market, economic or
political conditions or by abnormal circumstances of any kind, the Trust’s officers may upon
reasonable notice instruct the Distributor to decline to accept any orders for or make any sales of
the Shares until such time as those officers deem it advisable to accept such orders and to make
such sales.
1.6 The Trust agrees to inform the Distributor from time to time of the states in which the
Fund or its administrator has registered or otherwise qualified Shares for sale, and the Trust
agrees at its own expense to execute any and all documents and to furnish any and all information
and otherwise to take all actions that may be reasonably necessary in connection with the
qualification of the Shares for sale in such states as the Distributor may designate.
1.7 The Trust shall furnish from time to time, for use in connection with the sale of the
Shares, such supplemental information with respect to the Funds and the Shares as Distributor may
reasonably request; and the Trust warrants that the statements contained in any such supplemental
information will fairly show or represent what they purport to show or represent. The Trust shall
also furnish Distributor upon request with: (a) unaudited semi-annual statements of the Funds’
books and accounts prepared by the Trust, (b) a monthly itemized list of the securities in the
Funds, (c) monthly balance sheets as soon as practicable after the end of each month, and (d) from
time to time such additional information regarding the financial condition of the Funds as the Distributor may
reasonably request.
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1.8 The Trust represents and warrants to Distributor that all registration statements, and
each Prospectus, filed by the Trust with the Commission under the Securities Act and the 1940 Act
shall be prepared in conformity with requirements of said Acts and rules and regulations of the
Commission thereunder. The registration statement and Prospectus shall contain all statements
required to be stated therein in conformity with said Acts and the rules and regulations of the
Commission thereunder, and all statements of fact contained in any such registration statement and
Prospectus are true and correct in all material respects. Furthermore, neither any registration
statement nor any Prospectus includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading to a purchaser of the Shares. The foregoing representations and warranties shall
continue throughout the term of this Agreement and be deemed to be of a continuing nature,
applicable to all Shares distributed hereunder. The Trust may, but shall not be obligated to,
propose from time to time such amendment or amendments to any registration statement and such
supplement or supplements to any Prospectus as, in the light of future developments, may, in the
opinion of the Trust’s counsel, be necessary or advisable. If the Trust shall not propose any
amendment or amendments and/or supplement or supplements within 15 days after receipt by the Trust
of a written request from Distributor to do so, Distributor may, at its option, terminate this
Agreement. In such case, the Distributor will be held harmless from, and indemnified by Trust for,
any liability or loss resulting from the failure to implement such amendment. The Trust shall not
file any amendment to any registration statement or supplement to any Prospectus without giving
Distributor reasonable notice thereof in advance; provided, however, that nothing contained in this
Agreement shall in any way limit the Trust’s right to file at any time such amendments to any
registration statement and/or supplements to any Prospectus, of whatever character, as the Trust
may deem advisable, such right being in all respects absolute and unconditional.
1.9 The Trust authorizes the Distributor and dealers to use any Prospectus in the form
furnished by the Trust from time to time in connection with the sale of the Shares.
1.10 The Distributor may utilize agents in its performance of its services and, with prior
notice to the Trust, appoint in writing other parties qualified to perform specific administration
services reasonably acceptable to the Trust (individually, a “Sub-Agent”) to carry out some or all
of its responsibilities under this Agreement; provided, however, that a Sub-Agent shall be the
agent of the Distributor and not the agent of the Trust, and that the Distributor shall be fully
responsible for the acts of such Sub-Agent and shall not be relieved of any of its responsibilities
hereunder by the appointment of a Sub-Agent.
1.11 The Distributor shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust in connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross
negligence on the Distributor’s part in the performance of its duties, from reckless disregard
by the Distributor of its obligations and duties under this Agreement, or from
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the Distributor’s failure to comply with laws, rules and regulations applicable to it in connection
with its activities hereunder. The Trust agrees to indemnify, defend and hold harmless the
Distributor, its officers, directors, employees, and any person who controls the Distributor within
the meaning of Section 15 of the Securities Act (collectively, “Distributor Indemnitees”), from and
against any and all claims, demands, liabilities and expenses (including the reasonable cost of
investigating or defending such claims, demands or liabilities and any reasonable counsel fees
incurred in connection therewith) (collectively, “Claims”) which the Distributor Indemnitees may
incur under the Securities Act or under common law or otherwise (a) as the result of the
Distributor acting as distributor of the Funds and entering into selling agreements, participation
agreements, shareholder servicing agreements or similar agreements with financial intermediaries on
behalf of the Trust; (b) arising out of or based upon (i) any untrue statement, or alleged untrue
statement, of a material fact contained in any registration statement or any Prospectus, (ii) any
omission, or alleged omission, to state a material fact required to be stated in any registration
statement or any Prospectus or necessary to make the statements therein not misleading, or (iii)
any untrue statement, or alleged untrue statement, of a material fact in any Trust-related
advertisement or sales literature, or any omission, or alleged omission, to state a material fact
required to be stated therein to make the statements therein not misleading, in either case
notwithstanding the exercise of reasonable care in the preparation or review thereof by the
Distributor; or (c) arising out of or based upon the electronic processing of orders over the
internet at the Trust’s request; provided, however, that the Trust’s agreement to indemnify the
Distributor Indemnitees pursuant to this Section 1.11 shall not be construed to cover any Claims
(A) pursuant to subsection (b) above to the extent such untrue statement, alleged untrue statement,
omission, or alleged omission, was furnished in writing, or omitted from the relevant writing
furnished, as the case may be, to the Trust by the Distributor for use in the registration
statement or in corresponding statements made in the Prospectus, advertisement or sales literature;
(B) arising out of or based upon the willful misfeasance, bad faith or gross negligence of the
Distributor in the performance of its duties or the Distributor’s reckless disregard of its
obligations and duties under this Agreement; or (C) arising out of or based upon the Distributor’s
failure to comply with laws, rules and regulations applicable to it in connection with its
activities hereunder.
In the event of a Claim for which the Distributor Indemnitees may be entitled to
indemnification hereunder, the Distributor shall provide the Trust with written notice of the
Claim, identifying the persons against whom such Claim is brought, promptly following receipt of
service of the summons or other first legal process, and in any event within 10 days of such
receipt. The Trust will be entitled to assume the defense of any suit brought to enforce any such
Claim if such defense shall be conducted by counsel of good standing chosen by the Trust and
approved by the Distributor, which approval shall not be unreasonably withheld. In the event any
such suit is not based solely on an alleged untrue statement, omission, or wrongful act on the
Trust’s part, the Distributor shall have the right to participate in the defense. In the event the
Trust elects to assume the defense of any such suit and retain counsel of good standing so approved
by the Distributor, the Distributor Indemnitees in such suit shall bear the fees and expenses of
any additional
counsel retained by any of them, but in any case where the Trust does not elect to assume the
defense of any such suit or in case the Distributor reasonably withholds approval of
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counsel chosen by the Trust, the Trust will reimburse the Distributor Indemnitees named as
defendants in such suit, for the reasonable fees and expenses of any counsel retained by them to
the extent related to a Claim covered under this Section 1.11. The Trust’s indemnification
agreement contained in this Section 1.11 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Distributor Indemnitees, and shall
survive the delivery of any Shares.
1.12 The Distributor agrees to indemnify, defend and hold harmless the Trust, its officers,
Trustees, employees, and any person who controls the Trust within the meaning of Section 15 of the
Securities Act (collectively, “Trust Indemnitees”), from and against any and all Claims which the
Trust Indemnitees may incur under the Securities Act or under common law or otherwise, arising out
of or based upon (a) any untrue statement, or alleged untrue statement, of a material fact
contained in any registration statement, Prospectus, or Trust-related advertisement or sales
literature, or upon any omission, or alleged omission, to state a material fact in such materials
that would be necessary to make the information therein not misleading, which untrue statement,
alleged untrue statement, omission, or alleged omission, was furnished in writing, or omitted from
the relevant writing furnished, as the case may be, to the Trust by the Distributor for use in the
registration statement or in corresponding statements made in the Prospectus, or advertisement or
sales literature; (b) the willful misfeasance, bad faith or gross negligence of the Distributor in
the performance of its duties, or the Distributor’s reckless disregard of its obligations and
duties under this Agreement, or (c) the Distributor’s failure to comply with laws, rules and
regulations applicable to it in connection with its activities hereunder (other than in respect of
Trust-related advertisements or sales literature that fails to comply with applicable laws
notwithstanding the exercise of reasonable care in the preparation and review thereof by the
Distributor).
In the event of a Claim for which the Trust Indemnitees may be entitled to indemnification
hereunder, the Trust shall provide the Distributor with written notice of the Claim, identifying
the persons against whom such Claim is brought, promptly following receipt of service of the
summons or other first legal process, and in any event within ten (10) days of such receipt. The
Distributor will be entitled to assume the defense of any suit brought to enforce any such Claim if
such defense shall be conducted by counsel of good standing chosen by the Distributor and approved
by the Trust, which approval shall not be unreasonably withheld. In the event any such suit is not
based solely on an alleged untrue statement, omission, or wrongful act on the Distributor’s part,
the Trust shall have the right to participate in the defense. In the event the Distributor elects
to assume the defense of any such suit and retain counsel of good standing so approved by the
Trust, the Trust Indemnitees in such suit shall bear the fees and expenses of any additional
counsel retained by any of them, but in any case where the Distributor does not elect to assume the
defense of any such suit or in case the Trust reasonably withholds approval of counsel chosen by
the Distributor, the Distributor will reimburse the Trust Indemnitees named as defendants in such
suit, for the reasonable fees and expenses of any counsel retained by them to the extent related to
a Claim covered under this Section 1.12. The Distributor’s indemnification agreement contained in
this Section
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1.12 shall remain operative and in full force and effect regardless of any investigation made
by or on behalf of the Trust Indemnitees, and shall survive the delivery of any Shares.
1.13 No Shares shall be offered by either the Distributor or the Trust under any of the
provisions of this Agreement and no orders for the purchase or sale of Shares hereunder shall be
accepted by the Trust 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
Securities Act or if and so long as a current Prospectus as required by Section 10(b)(2) of said
Securities Act is not on file with the Commission; provided, however, that: (a) the Distributor
will not be obligated to cease offering shares until it has received from the Trust written notice
of such events, and (b) nothing contained in this Section 1.13 shall in any way restrict or have an
application to or bearing upon the Trust’s obligation to repurchase Shares from any shareholder in
accordance with the provisions of the Trust’s Prospectus, Agreement and Trust Instrument, or
By-laws.
1.14 The Trust agrees to advise the Distributor as soon as reasonably practical by a notice in
writing delivered to the Distributor:
(a) | of any request by the Commission for amendments to the registration statement or Prospectus then in effect or for additional information; | ||
(b) | in the event of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or Prospectus then in effect or the initiation by service of process on the Trust of any proceeding for that purpose; | ||
(c) | of the happening of any event that makes untrue any statement of a material fact made in the registration statement or Prospectus then in effect or which requires the making of a change in such registration statement or Prospectus in order to make the statements therein not misleading; and | ||
(d) | of any action of the Commission with respect to any amendment to any registration statement or Prospectus which may from time to time be filed with the Commission, which could reasonably be expected to have a material negative impact upon the offering of Shares. |
For purposes of this section, informal requests by or acts of the Staff of the Commission
shall not be deemed actions of or requests by the Commission unless they would reasonably be
expected to have a material negative impact upon the offering of Shares.
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2. | Fees. |
2.1 Attached as Schedule B to this Agreement are all plans of distribution under Rule 12b-1
under the 1940 Act approved by the Funds and in effect (collectively, the “Distribution Plan”).
The Funds will deliver to Distributor promptly after any changes thereto updated copies of the
Distribution Plan. For its services under this Agreement, the Distributor shall be compensated and
reimbursed for its expenses as set forth on Schedules C and D to this Agreement. If the Funds have
a Distribution Plan that permits and authorizes them to compensate and reimburse the Distributor
and required Board approvals have been given, then the Funds shall be responsible for all such
compensation and reimbursements or such portions of it as have been permitted and authorized under
the Distribution Plan. It is contemplated by the Distributor that the Adviser shall compensate and
reimburse the Distributor for its provision to the Funds of any distribution services for which the
Funds are not authorized to compensate and reimburse the Distributor. The fees set forth on
Schedules C and D are subject to change by Distributor upon 30 days advance notice.
2.2 If: (i) the Distributor properly receives fees from the Funds under the Distribution Plan,
other than for services rendered or expenses incurred, that the Distributor is not obligated to pay
to third party broker-dealers, plan administrators or others (“Retained Fees”), and (ii) the Funds
have authority under the Distribution Plan to pay for some or all of the Distributor’s services
under this Agreement (“Permitted Services”), then all of the Retained Fees will either be (a)
returned to the Funds and/or (b) credited against the compensation payable by the Funds to the
Distributor for Permitted Services.
3. | Sale and Payment. |
3.1 Shares of a Fund may be subject to a sales load and may be subject to the imposition of a
distribution fee pursuant to the Distribution Plan referred to above. To the extent that Shares of
a Fund are sold at an offering price which includes a sales load or subject to a contingent
deferred sales load with respect to certain redemptions (either within a single class of Shares or
pursuant to two or more classes of Shares), such Shares shall hereinafter be referred to
collectively as “Load Shares” (and in the case of Shares that are sold with a front-end sales load,
“Front-end Load Shares”, or Shares that are sold subject to a contingent deferred sales load, “CDSL
Shares”). Funds that issue Front-End Load Shares shall hereinafter be referred to collectively as
“Front-End Load Funds.” Funds that issue CDSL Shares shall hereinafter be referred to collectively
as “CDSL Funds.” Front-end Load Funds and CDSL Funds may individually or collectively be referred
as “Load Funds.” Under this Agreement, the following provisions shall apply with respect to the
sale of, and payment for, Load Shares.
3.2 The Distributor shall have the right to offer Load Shares at their net asset value and to
sell such Load Shares to the public against orders therefor at the applicable public offering
price, as defined in Section 4 hereof. The Distributor shall also have the right to sell Load
Shares to dealers against orders therefor at the public offering price less
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a concession determined by the Distributor, which concession shall not exceed the amount of
the sales charge or underwriting discount, if any, referred to in Section 4 below.
3.3 Prior to the time of delivery of any Load Shares by a Load Fund to, or on the order of,
the Distributor, the Distributor shall pay or cause to be paid to the Load Fund or to its order an
amount in New York cleared funds equal to the applicable net asset value of such Shares. The
Distributor may retain so much of any sales charge or underwriting discount as is not allowed by
the Distributor as a concession to dealers.
3.4 With respect to CDSL Funds, the following provisions shall be applicable:
(a) The Distributor shall be entitled to receive all contingent deferred sales load
charges, 12b-1 payments and all distribution and service fees set forth in the Distribution
Plan adopted by a CDSL Fund (collectively, the “CDSL Payments”) with respect to CDSL
Shares. The Distributor may assign or sell to a third party (a “CDSL Financing Entity”)
all or a part of the CDSL Payments on CDSL Shares that the Distributor is entitled to
receive under this Agreement. The Distributor’s right to the CDSL Payments on such CDSL
Shares, if assigned or sold to a CDSL Financing Entity, shall continue after termination of
this Agreement.
(b) The Distributor may assign or sell to a CDSL Financing Entity all or part of the
CDSL Payments the Distributor is entitled to receive. The Distributor’s right to payment
of CDSL Payments, if assigned or sold to a CDSL Financing Entity, shall continue after
termination of this Agreement. Otherwise, (unless the Distributor is legally entitled to
receive such fees as the financing entity) the right to receive all CDSL Payments in
respect of periods subsequent to the termination of this Agreement shall terminate upon
termination of this Agreement. In the event Distributor assigns or sells all or a part of
the CDSL Payments to a CDSL Financing Entity and this Agreement is subsequently terminated,
Distributor shall have no obligation to assist the CDSL Financing Entity in connection with
such CDSL Financing Entity’s right to receive such CDSL Payments subsequent to such
termination.
(c) The Distributor shall not be required to offer or sell CDSL Shares of a CDSL Fund
unless and until it has received a binding commitment from a CDSL Financing Entity (a
“Commitment”) satisfactory to the Distributor which Commitment shall cover all expenses and
fees related to the offer and sale of such CDSL Shares including, but not limited to,
dealer reallowances, financing commitment fees, and legal fees. If at any time during the
term of this Agreement the then-current CDSL financing is terminated through no fault of
the Distributor, the Distributor shall have the right to immediately cease offering or
selling CDSL Shares until substitute financing becomes effective.
(d) The Distributor and the Trust hereby agree that the terms and conditions set
forth herein regarding the offer and sale of CDSL Shares may be
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amended upon approval of both parties in order to comply with the terms and conditions
of any agreement with a CDSL Financing Entity to finance the costs for the offer and sale
of CDSL Shares so long as such terms and conditions are in compliance with the Distribution
Plan.
4. | Public Offering Price. |
The public offering price of a Load Share shall be the net asset value of such Load Share next
determined, plus any applicable sales charge, all as set forth in the current Prospectus of the
Load Fund. The net asset value of Load Shares shall be determined in accordance with the
then-current Prospectus of the Load Fund.
5. | Issuance of Shares. |
The Trust reserves the right to issue, transfer or sell Load Shares at net asset values (a) in
connection with the merger or consolidation of the Trust or the Load Fund(s) with any other
investment company or the acquisition by the Trust or the Load Fund(s) of all or substantially all
of the assets or of the outstanding Shares of any other investment company; (b) in connection with
a pro rata distribution directly to the holders of Shares in the nature of a stock dividend or
split; (c) upon the exercise of subscription rights granted to the holders of Shares on a pro rata
basis; (d) in connection with the issuance of Load Shares pursuant to any exchange and reinvestment
privileges described in any then-current Prospectus of the Load Fund; and (e) otherwise in
accordance with any then-current Prospectus of the Load Fund.
6. | Term, Duration and Termination. |
This Agreement shall become effective with respect to each Fund as of the date first written
above (the “Effective Date”) (or, if a particular Fund is not in existence on such date, on the
earlier of the date an amendment to Schedule A to this Agreement relating to that Fund is executed
or the Distributor begins providing services under this Agreement with respect to such Fund) and,
unless sooner terminated as provided herein, shall continue through November 30, 2009. Thereafter,
if not terminated, this Agreement shall continue with respect to a particular Fund automatically
for successive one-year terms, provided that such continuance is specifically approved at least
annually (a) by the vote of a majority of those members of the Trust’s Board of Trustees who are
not parties to this Agreement or interested persons of any such party, cast in person at a meeting
for the purpose of voting on such approval and (b) by the vote of the Trust’s Board of Trustees or
the vote of a majority of the outstanding voting securities of such Fund. This Agreement is
terminable without penalty with 60 days’ prior written notice, by the Trust’s Board of Trustees, by
vote of a majority of the outstanding voting securities of the Trust, or by the Distributor. This
Agreement will also terminate automatically 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 meaning as ascribed to such terms in the 1940 Act.)
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7. | Privacy. |
Nonpublic personal financial information relating to consumers or customers of the Funds
provided by, or at the direction of, the Trust to the Distributor, or collected or retained by the
Distributor to perform its duties as distributor, shall be considered confidential information.
The Distributor shall not disclose or otherwise use any nonpublic personal financial information
relating to present or former shareholders of the Funds other than for the purposes for which that
information was disclosed to the Distributor, including use under an exception in Rules 13, 14 or
15 of Securities and Exchange Commission Regulation S-P in the ordinary course of business to carry
out those purposes. The Distributor shall have in place and maintain physical, electronic and
procedural safeguards reasonably designed to protect the security, confidentiality and integrity
of, and to prevent unauthorized access to or use of, records and information relating to consumers
and customers of the Funds. The Trust represents to the Distributor that it has adopted a
Statement of its privacy policies and practices as required by Securities and Exchange Commission
Regulation S-P and agrees to provide the Distributor with a copy of that statement annually.
8. | Anti-Money Laundering Compliance. |
8.1 Each of Distributor and the Trust acknowledges that it is a financial institution subject
to the USA Patriot Act of 2001 and the Bank Secrecy Act (collectively, the “AML Acts”), which
require, among other things, that financial institutions adopt compliance programs to guard against
money laundering. Each represents and warrants to the other that it is in compliance with and will
continue to comply with the AML Acts and applicable regulations in all relevant respects. The
Distributor shall also provide written notice to each person or entity with which it entered an
agreement prior to the date hereof with respect to sale of the Trust’s Shares, such notice
informing such person of anti-money laundering compliance obligations applicable to financial
institutions under applicable laws and, consequently, under applicable contractual provisions
requiring compliance with laws.
8.2 The Distributor shall include specific contractual provisions regarding anti-money
laundering compliance obligations in agreements entered into by the Distributor with any dealer
that is authorized to effect transactions in Shares of the Trust.
8.3 Each of Distributor and the Trust agrees that it will take such further steps, and
cooperate with the other as may be reasonably necessary, to facilitate compliance with the AML
Acts, including but not limited to the provision of copies of its written procedures, policies and
controls related thereto (“AML Operations”). Distributor undertakes that it will grant to the
Trust, the Trust’s anti-money laundering compliance officer and regulatory agencies, reasonable
access to copies of Distributor’s AML Operations, books and records pertaining to the Trust only.
It is expressly understood and agreed that the Trust and the Trust’s compliance officer shall have
no access to any of Distributor’s AML Operations, books or records pertaining to other clients of
Distributor.
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9. | Notices. |
Any notice provided hereunder shall be sufficiently given when sent by registered or certified
mail to the party required to be served with such notice at the following address: if to the
Trust, to it at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention: President; and if to
Distributor, to it at 00 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attention: Broker Dealer Chief
Compliance Officer, or at such other address as such party may from time to time specify in writing
to the other party pursuant to this Section.
10. | Confidentiality. |
During the term of this Agreement, the Distributor and the Trust may have access to
confidential information relating to such matters as either party’s business, trade secrets,
systems, procedures, manuals, products, contracts, personnel, and clients. As used in this
Agreement, “Confidential Information” means information belonging to the Distributor or the Trust
which is of value to such party and the disclosure of which could result in a competitive or other
disadvantage to either party, including, without limitation, financial information, business
practices and policies, know-how, trade secrets, market or sales information or plans, customer
lists, business plans, and all provisions of this Agreement. Confidential Information includes
information developed by either party in the course of engaging in the activities provided for in
this Agreement, unless: (i) the information is or becomes publicly known without breach of this
Agreement, (ii) the information is disclosed to the other party by a third party not under an
obligation confidentiality to the party whose Confidential Information is at issue of which the
party receiving the information should reasonably be aware, or (iii) the information is
independently developed by a party without reference to the other’s Confidential Information. Each
party will protect the other’s Confidential Information with at least the same degree of care it
uses with respect to its own Confidential Information, and will not use the other party’s
Confidential Information other than in connection with its duties and obligations hereunder.
Notwithstanding the foregoing, a party may disclose the other’s Confidential Information if (i)
required by law, regulation or legal process or if requested by any regulatory agency; (ii) it is
advised by counsel that it may incur liability for failure to make such disclosure; or (iii)
requested to by the other party; provided that in the event of (i) or (ii) the disclosing party
shall give the other party reasonable prior notice of such disclosure to the extent reasonably
practicably and cooperate with the other party (at such other party’s expense) in any efforts to
prevent such disclosure.
10. | Governing Law. |
This Agreement shall be construed in accordance with the laws of the State of New York and the
applicable provisions of the 1940 Act.
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11. | Prior Agreements. |
This Agreement constitutes the complete agreement of the parties as to the subject matter
covered by this Agreement, and supersedes all prior negotiations, understandings and agreements
bearing upon the subject matter covered by this Agreement. Without limiting the foregoing, this
Agreement supersedes and replaces that certain Distribution Agreement dated as of August 16, 2005
between the parties, which agreement is hereby terminated.
12. | Amendments. |
No amendment to this Agreement shall be valid unless made in writing and executed by both
parties hereto.
13. | Matters Relating to the Trust as a Delaware Business Trust. |
It is expressly agreed that the obligations of the Trust hereunder shall not be binding upon
any of the Trustees, shareholders, nominees, officers, agents or employees of the Trust personally,
but shall bind only the trust property of the Trust. The execution and delivery of this Agreement
have been authorized by the Trustees, and this Agreement has been signed and delivered by an
authorized officer of the Trust, acting as such, and neither such authorization by the Trustees nor
such execution and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on them personally, but shall bind only the trust property
of the Trust as provided in the Trust’s Trust 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 written above.
PERFORMANCE FUNDS TRUST | ||||||
By: Name: |
/s/ Xxxxxx X. Xxxxxxxxx
|
|||||
Title: | President | |||||
PERFORMANCE FUNDS DISTRIBUTOR, INC. | ||||||
By: | /s/ Xxxxxxx X. Xxxxxx
|
|||||
Name: | Xxxxxxx X. Xxxxxx | |||||
Title: | Vice President |
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SCHEDULE A
FUNDS
THE MONEY MARKET FUND
THE SHORT TERM GOVERNMENT INCOME FUND
THE INTERMEDIATE TERM INCOME FUND
THE STRATEGIC DIVIDEND FUND
THE LARGE CAP EQUITY FUND
THE MID CAP EQUITY FUND
THE LEADERS EQUITY FUND
THE ADVISOR GROWTH PORTFOLIO
THE ADVISOR MODERATE PORTFOLIO
THE ADVISOR CONSERVATIVE PORTFOLIO
THE U.S. TREASURY MONEY MARKET FUND
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SCHEDULE B
DISTRIBUTION PLAN
[Trust to insert copies]
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SCHEDULE C
COMPENSATION OF THE DISTRIBUTOR
1. BASIC DISTRIBUTION SERVICES. For providing the distribution entity and related
infrastructure and platform, including requisite registrations and qualifications, premises,
personnel, compliance, ordinary fund board meeting preparation, maintenance of selling agreements,
clearance of advertising and sales literature with regulators, filing appropriate documentation for
advisory representatives to qualify as registered representatives of the Distributor (provided that
the Adviser is solely responsible for its representatives’ meeting examination requirements) and
their related registrations and fees, ordinary supervisory services and overhead, the Distributor
shall receive an annual fee of $75,000, billed monthly.
2. SPECIAL DISTRIBUTION SERVICES. For special distribution services, including those set
forth on Schedule D to this Agreement, such as additional personnel, registrations, printing and
fulfillment, website services, proprietary distribution expertise for particular circumstances, and
any other services in addition to the basic distribution services covered by Paragraph 1 above, the
Distributor shall be reimbursed promptly upon invoicing its expenses for such services, including:
(a) all costs to support additional personnel; (b) regulatory fees including FINRA CRD costs
associated with marketing materials; and (c) printing, postage and fulfillment costs, and (d)
amounts payable under additional agreements to which Distributor is a party.
3. SPECIAL CONDUIT SITUATIONS. If the Distribution Plan, or any other Fund plans of
distribution under Rule 12b-1 that contemplate up front and/or recurring commission and/or service
payments to broker dealers, retirement plan administrators or others by the Distributor with
respect to back-end loads, level loads, or otherwise, unless expressly agreed otherwise in writing
between the parties, all such payments shall be made to the Distributor, which shall act as a
conduit for making such payments to such broker-dealers, retirement plan administrators or others.
4. OTHER PAYMENTS BY THE DISTRIBUTOR. If the Distributor is required to make any payments
to third parties in respect of distribution, which payments are contemplated by the parties to the
distribution agreement or otherwise arise in the ordinary course of business, the Distributor shall
be promptly reimbursed for such payments upon invoicing them.
5. FEE ADJUSTMENTS. The fixed fees and other fees expressed as stated dollar amounts in
this Schedule C and in this Agreement are subject to annual increases, commencing on the one-year
anniversary date of the date of this Agreement, in an amount equal to the percentage increase in
consumer prices for services as measured by the United States Consumer Price Index entitled “All
Services Less Rent of Shelter,” or a similar index should such index no longer be published, since
such one-year anniversary or since the date of the last fee increase, as applicable.
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SCHEDULE D
SPECIAL DISTRIBUTION SERVICES AND FEES
Services | Fees | |
1. Wholesaling Personnel Services
|
Wholesaling Personnel Services Fees | |
Wholesaling Personnel may be
external wholesalers and/or
internal wholesalers. Services include soliciting support of the Funds with selling broker dealers; participating in promotional meetings, presentations, conferences and other forums; identifying high potential personnel of the Adviser and selling broker dealers; and assisting with mail solicitations and literature fulfillment. |
For each individual constituting the
Wholesaling Personnel employed by the
Distributor pursuant to this Agreement,
the Distributor shall receive annually
an amount equal to the sum of: (i) all compensation paid annually by the Distributor to the employee; plus (ii) a management oversight fee equal to: (a) if one to four Wholesaling Personnel
are employed, 30% of the salary
compensation and 5% of the bonus or
commission compensation, or (b) if five or more Wholesaling
Personnel are employed, 25% of the
salary compensation and 5% of the bonus
or commission compensation;
plus(iii) 18% of the total compensation (covering costs of the Distributor’s employee benefits that are provided by the Distributor). In addition, the Distributor shall be reimbursed for all related costs to support, educate and train and maintain compliance oversight of Wholesaling Personnel and other personnel such as sales management, marketing and performance reporting personnel (including time and expenses, continuing education, seminars, rent, supplies, phone, computers, firm element, license, registration) Upon any termination of Wholesaling Personnel at the request of the Funds or upon termination of this Agreement by the Funds for any reason other than cause, the Distributor will be reimbursed its severance costs with respect to such terminated Wholesaling Personnel. |
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Expenses Applicable to Special Distribution Services
Except as expressly set forth above, out-of-pocket expenses incurred by Distributor in the
performance of its services under this Agreement are not included in the above fees. Such
out-of-pocket expenses may include, without limitation:
• | reasonable travel and entertainment costs; | |
• | expenses incurred by the Distributor in qualifying, registering and maintaining the registration of the Distributor and each individual comprising Wholesaling Personnel as a registered representative of the Distributor under applicable federal and state laws and rules of the FINRA, e.g., CRD fees and state fees; | |
• | Sponsorships, Promotions, Sales Incentives; | |
• | any and all compensation to be paid to a third party as paying agent for distribution activities (platform fees, finders fees, sub-TA fees, 12b-1 pass thru, commissions, etc.); | |
• | costs and expenses incurred for telephone service, photocopying and office supplies; | |
• | advertising costs; | |
• | costs for printing, paper stock and costs of other materials, electronic transmission, courier, talent utilized in sales materials (e.g. models), design output, photostats, photography, and illustrations; | |
• | packaging, shipping, postage, and photocopies; and | |
• | taxes that are paid or payable by the Distributor or its affiliates in connection with its services hereunder, other than taxes customarily and actually imposed upon the income that the Distributor receives hereunder. |
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