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XXXXXXXX CAPITAL TRUST
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT, made this 18th day of July, 1997, by and
between Xxxxxxxx Capital Trust, a Massachusetts business trust ("Trust"), and
BFP Financial Partners, Inc., a Maryland corporation ("Distributor").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission as an open-end investment company under the Investment Company Act
of 1940, as amended (the "1940 Act"), and currently offers three distinct
series of shares of beneficial interest ("Series"), which correspond to
distinct portfolios designated as the Xxxxxxxx Basic Value Fund, Xxxxxxxx
Europe Fund and Xxxxxxxx Value International Fund, respectively;
WHEREAS, the Trust's Board of Trustees ("Board") has established three
classes of shares of beneficial interest of each of the above-referenced
Series, designated as Class A, Class C and Class Y shares;
WHEREAS, each Series has adopted a Plan of Distribution pursuant to
Rule 12b-1 under the 1940 for its Class A and Class C shares (each a "Plan" and
collectively, the "Plans);
WHEREAS, the Trust wishes to retain the Distributor as the principal
distributor in connection with the offering and sale of the Class A, Class C
and Class Y shares of beneficial interest of each Series, and such other Series
as may hereafter be designated by the Board (the "Shares"), and to furnish
certain other services to the Trust as specified in this Agreement;
WHEREAS, this Agreement has been approved by separate votes of the
Board and of certain disinterested trustees in conformity with Section 15 of,
and paragraph (b)(2) of Rule 12b-1 under, the 1940 Act; and
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WHEREAS, the Distributor is willing and able to act as principal
distributor and to furnish such services on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. Appointment. The Trust hereby appoints the Distributor as
principal distributor in connection with the offering and sale of the Shares on
the terms and for the period set forth in this Agreement. The Distributor
hereby accepts such appointment and agrees to act hereunder. It is understood,
however, that this appointment does not preclude sales of the Shares directly
through the Trust's transfer agent in the manner set forth in the Registration
Statement. As used in this Agreement, the term "Registration Statement" shall
mean the registration statement most recently filed by the Trust with the
Securities and Exchange Commission and effective under the Securities Act of
1933 ("1933 Act") and the 1940 Act, as such Registration Statement is amended
by any amendments thereto at the time in effect, and the terms "Prospectus" and
"Statement of Additional Information" shall mean, respectively, the form of
prospectus and statement of additional information with respect to the Series
filed by the Trust as part of the Registration Statement, or as they may be
amended from time to time.
2. Services and Duties of the Distributor.
(a) The Distributor, subject to applicable federal and state
laws and the Declaration of Trust and By-Laws of the Trust, agrees to sell the
Shares on a best efforts basis from time to time during the term of this
Agreement as agent for the Trust and upon the terms described in the
Registration Statement.
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(b) Upon the later of the date of this Agreement or the
initial offering of the Shares to the public of a Series, the Distributor will
hold itself available to receive purchase orders, satisfactory to the
Distributor, for Shares of that Series and will accept such orders on behalf of
the Trust as of the time of receipt of such orders and promptly transmit such
orders as are accepted to the Trust's transfer agent. Purchase orders shall be
deemed effective at the time and in the manner set forth in the Registration
Statement.
(c) The Distributor in its discretion may enter into
agreements to sell Shares to such registered and qualified retail dealers,
including but not limited to Xxxx Xxxxx Xxxx Xxxxxx, Inc. ("Xxxx Xxxxx"), as it
may select. In making agreements with such dealers, the Distributor shall act
only as principal and not as agent for the Trust.
(d) The offering price of the Shares of each Series shall
be the net asset value per Share as next determined by the Trust following
receipt of an order at the Distributor's principal office plus the applicable
initial sales charge, if any, computed as set forth in the Registration
Statement. The Trust shall promptly furnish the Distributor with a statement
of each computation of net asset value.
(e) The Distributor shall not be obligated to sell any
certain number of Shares.
(f) To facilitate redemption of Shares by shareholders
directly or through dealers, the Distributor is authorized but not required on
behalf of the Trust to repurchase Shares presented to it by shareholders and
dealers at the price determined in accordance with, and in the manner set forth
in, the Registration Statement. Such price shall reflect the subtraction of
the contingent deferred sales charge, if any, computed in accordance with and
in the manner set forth in the Registration Statement. The Distributor will
receive no commission or other remuneration for repurchasing Shares. At the
end of each business day, the Distributor shall notify by electronic means or
in writing, the Trust and Boston Financial Data Services, Inc., the Trust's
transfer agent of the orders for repurchase of Shares received by the
Distributor since the last
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such report, the amount to be paid for such Shares, and the identity of the
shareholders or dealers offering Shares for repurchase. Upon such notice, the
Trust shall pay the Distributor such amounts as are required by the Distributor
for the repurchase of such Shares in cash or in the form of a credit against
monies due the Trust from the Distributor as proceeds from the sale of Shares.
The Trust reserves the right to suspend such repurchase right upon written
notice to the Distributor. The Distributor further agrees to act as agent for
the Trust to receive and transmit promptly to the Trust's transfer agent
shareholder and dealer requests for redemption of Shares.
(g) The Distributor shall provide ongoing shareholder services,
which include responding to shareholder inquiries, providing shareholders with
information on their investments in the Shares and any other services now or
hereafter deemed to be appropriate subjects for the payment of "service fees"
under Section 26(d) of the National Association of Securities Dealers, Inc.
("NASD") Rules of Fair Practice (collectively, "service activities"). "Service
activities" do not include transfer agency-related and other services for which
the Distributor may receive compensation from the Trust.
(h) The Distributor shall have the right to use any list of
shareholders of the Trust or any other list of investors which it obtains in
connection with its provision of services under this Agreement; provided,
however, that the Distributor shall not sell or knowingly provide such list or
lists to any unaffiliated person.
3. Authorization to Enter into Dealer Agreements and to Delegate
Duties as Distributor. With respect to the Shares of any or all Series, the
Distributor may enter into a dealer agreement with Xxxx Xxxxx or any other
registered and qualified dealer with respect to sales of the Shares or the
provision of service activities. In a separate Agreement or as part of any
such dealer agreement, the Distributor also may delegate to Xxxx Xxxxx or
another registered and qualified dealer ("sub-distributor") any or all of its
duties specified in this Agreement, provided that such separate Agreement or
dealer agreement imposes on the sub-distributor bound thereby all applicable
duties and conditions to which the Distributor is
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subject under this Agreement, and further provided that such separate
Agreements or dealer agreements meet all requirements of the 1940 Act and rules
thereunder.
4. Services Not Exclusive. The services furnished by the
Distributor hereunder are not to be deemed exclusive and the Distributor shall
be free to furnish similar services to others so long as its services under
this Agreement are not impaired thereby. Nothing in this Agreement shall limit
or restrict the right of any director, officer or employee of the Distributor,
who may also be a trustee, officer or employee of the Trust, to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar or a
dissimilar nature.
5. Compensation.
(a) As compensation for its service activities under this
Agreement with respect to the Class A and Class C Shares, the Distributor shall
receive from the Trust a service fee at the rate and under the terms and
conditions of the Plan or Plans adopted by the Trust with respect to the Class
A Shares and Class C Shares, respectively, of the Series, as such Plan or Plans
are amended from time to time, and subject to any further limitations on such
fee as the Board may impose.
(b) As compensation for its activities under this Agreement
with respect to the distribution of the Class A Shares, the Distributor shall
retain the initial sales charge, if any, on purchases of Class A Shares as set
forth in the Registration Statement. The Distributor is authorized to collect
the gross proceeds derived from the sale of the Class A Shares, remit the net
asset value thereof to the Trust upon receipt of the proceeds and retain the
initial sales charge, if any.
(c) As additional compensation for its activities under this
Agreement with respect to the distribution of the Class A and Class C Shares,
the Distributor shall receive all contingent deferred sales charges imposed on
redemptions of Class A or Class C Shares, respectively, of each Series, if any.
Whether and at what rate a contingent deferred sales charge will be imposed
with respect to a redemption shall be determined in
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accordance with, and in the manner set forth in, the Registration Statement.
(d) As compensation for its activities under this Agreement
with respect to the distribution of the Class C Shares, the Distributor shall
receive from the Trust a distribution fee at the rate and under the terms and
conditions of the Plan or Plans adopted by the Trust with respect to the Class
C Shares of the Series, as such Plan or Plans are amended from time to time,
and subject to any further limitations on such fee as the Board may impose.
(e) The Distributor may reallow any or all of the initial
sales charges, contingent deferred sales charges, service or distribution fees
which it is paid under this Agreement to such dealers as it may from time to
time determine; provided, however, that the Distributor may not reallow to any
dealer for service activities an amount in excess of .25% of the average
annual net asset value of the Shares with respect to which said dealer provides
service activities.
6. Duties of the Trust.
(a) The Trust reserves the right at any time to withdraw
offering Shares of any or all Series (and of any or all Classes thereof) by
written notice to the Distributor at its principal office.
(b) The Trust shall determine in its sole discretion whether
certificates shall be issued with respect to the Shares, and there is no
current intention that such certificates shall be issued. If the Trust
determines that certificates shall be issued, the Trust will not cause
certificates representing Shares to be issued unless so requested by
shareholders. If such request is transmitted by the Distributor, the Trust
will cause certificates evidencing Shares to be issued in such names and
denominations as the Distributor shall from time to time direct.
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(c) The Trust shall keep the Distributor fully informed
of its affairs and shall make available 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,
including, without limitation, certified copies of any financial statements
prepared for the Trust by its independent public accountants and such
reasonable number of copies of the most current prospectus, statement of
additional information, and annual and interim reports of any Series as the
Distributor may request, and the Trust shall cooperate fully in the efforts of
the Distributor to sell and arrange for the sale of the Shares of the Series
and in the performance of the Distributor under this Agreement.
(d) The Trust shall take, from time to time, all
necessary action, including payment of the related filing fee, as may be
necessary to register the Shares under the 1933 Act to the end that there will
be available for sale such number of Shares as the Distributor may be expected
to sell. The Trust agrees to file, from time to time, such amendments,
reports, and other documents as may be necessary in order that there will be no
untrue statement of a material fact in the Registration Statement, nor any
omission of a material fact which omission would make the statements therein
misleading.
(e) The Trust shall use its best efforts to qualify and
maintain the qualification of an appropriate number of Shares of each Series
for sale under the securities laws of such states or other jurisdictions as the
Distributor and the Trust may approve, and, if necessary or appropriate in
connection therewith, to qualify and maintain the qualification of the Trust as
a broker or dealer in such jurisdictions; provided that the Trust shall not be
required to amend its Declaration of Trust or By-Laws to comply with the laws
of any jurisdiction, to maintain an office in any jurisdiction, to change the
terms of the offering of the Shares in any jurisdiction from the terms set
forth in its Registration Statement, to qualify as a foreign corporation in any
jurisdiction, or to consent to service of process in any jurisdiction other
than with respect to claims arising out of the offering of the Shares. The
Distributor shall furnish such information and other material relating to its
affairs and activ-
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ities as may be required by the Trust in connection with such qualifications.
7. Expenses of the Trust. The Trust shall bear all costs and
expenses of registering the Shares with the Securities and Exchange Commission
and state and other regulatory bodies, and shall assume expenses related to
communications with shareholders of each Series, including (i) fees and
disbursements of its counsel and independent public accountants; (ii) the
preparation, filing and printing of registration statements and/or prospectuses
or statements of additional information required under the federal securities
laws; (iii) the preparation and mailing of annual and interim reports,
prospectuses, statements of additional information and proxy materials to
shareholders; and (iv) the qualifications of Shares for sale and of the Trust
as a broker or dealer under the securities laws of such jurisdictions as shall
be selected by the Trust and the Distributor pursuant to Paragraph 6(e) hereof,
and the costs and expenses payable to each such jurisdiction for continuing
qualification therein.
8. Expenses of the Distributor. The Distributor shall bear all
costs and expenses of (i) preparing, printing and distributing any materials
not prepared by the Trust and other materials used by the Distributor in
connection with the sale of Shares under this Agreement, including the
additional cost of printing copies of prospectuses, statements of additional
information, and annual and interim shareholder reports other than copies
thereof required for distribution to existing shareholders or for filing with
any federal or state securities authorities; (ii) any expenses of advertising
incurred by the Distributor in connection with such offering; (iii) the
expenses of registration or qualification of the Distributor as a broker or
dealer under federal or state laws and the expenses of continuing such
registration or qualification; and (iv) all compensation paid to the
Distributor' employees and others for selling Shares, and all expenses of the
Distributor, its employees and others who engage in or support the sale of
Shares as may be incurred in connection with their sales efforts.
9. Indemnification.
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(a) The Trust agrees to indemnify, defend and hold the
Distributor, its officers and directors, and any person who controls the
Distributor 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 such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its officers, 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 alleged untrue statement of a material fact contained in the
Registration Statement or arising out of or based upon any alleged omission to
state a material fact required to be stated in the Registration Statement or
necessary to make the statements therein not misleading, except insofar as such
claims, demands, liabilities or expenses arise out of or are based upon any
such untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with information furnished in writing by the
Distributor to the Trust for use in the Registration Statement; provided,
however, that this indemnity agreement shall not inure to the benefit of any
person who is also an officer or trustee of the Trust or who controls the Trust
within the meaning of Section 15 of the 1933 Act, unless a court of competent
jurisdiction shall determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy as expressed in
the 1933 Act; and further provided, that in no event shall anything contained
herein be so construed as to protect the Distributor against any liability to
the Trust or to the shareholders of any Series to which the Distributor 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. The Trust shall not be
liable to the Distributor under this indemnity agreement with respect to any
claim made against the Distributor or any person indemnified unless the
Distributor or other such person shall have notified the Trust 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 the Distributor or such other person (or after the Distributor or
the person shall have received notice of service on any designated agent).
However, failure to notify the Trust of any claim shall not
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relieve the Trust from any liability which it may have to the Distributor or
any person against whom such action is brought otherwise than on account of
this indemnity agreement. The Trust 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 indemnity agreement. If the
Trust elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the Trust and satisfactory to indemnified
defendants in the suit whose approval shall not be unreasonably withheld. In
the event that the Trust 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 Trust 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 Trust agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of any of its Shares.
(b) The Distributor agrees to indemnify, defend, and hold
the Trust, its officers and trustees and any person who controls the Trust
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) which the Trust, its
trustees or officers, or any such controlling person may incur under the 1933
Act or under common law or otherwise arising out of or based upon any alleged
untrue statement of a material fact contained in information furnished in
writing by the Distributor to the Trust for use in the Registration Statement,
arising out of or based upon any alleged omission to state a material fact in
connection with such information required to be stated in the Registration
Statement necessary to make such information not misleading, or arising out of
any agreement between the Distributor and any retail dealer, or arising out of
any supplemental sales literature or advertising used by the Distributor in
connection with its duties under this Agreement. The Distributor shall be
entitled to participate, at its own expense, in the defense or, if it so
elects, to assume the
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defense of any suit brought to enforce the claim, but if the Distributor elects
to assume the defense, the defense shall be conducted by counsel chosen by the
Distributor and satisfactory to the indemnified defendants whose approval shall
not be unreasonably withheld. In the event that the Distributor 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 the Distributor does not elect to 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.
10. Limitation of Liability of the Trustees and Shareholders of
the Trust. The obligations of the Trust hereunder shall not be personally
binding upon any of the trustees, nominees, officers, agents or employees of
the Trust, or the shareholders of any Series, but shall bind only the assets of
the Trust or such Series as set forth in the Trust's Declaration of Trust, as
amended. The Distributor agrees that, in asserting any rights or claims under
this Agreement, it shall look only to such assets in settlement of any such
right or claim. Notice is hereby provided that the Trust's Declaration of
Trust is on file with the Secretary of the Commonwealth of Massachusetts. The
execution and delivery of this Agreement by an officer of the Trust has been
authorized by the trustees of the Trust. Such authorization and execution and
delivery shall not be deemed to have been made by any trustee, shareholder or
officer individually or to impose any personal liability upon them.
11. Services Provided to the Trust by Employees of the
Distributor. Any person, even though also an officer, director, employee or
agent of the Distributor, who may be or become an officer, trustee, employee or
agent of the Trust, shall be deemed, when rendering services to the Trust or
acting in any business of the Trust, to be rendering such services to or acting
solely for the Trust and not as an officer, director, employee or agent or one
under the control or direction of the Distributor even though paid by the
Distributor.
12. Quarterly Reports to Board. The Distributor shall prepare
reports for the Board on a quarterly basis showing such
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information concerning expenditures related to this Agreement as from time to
time shall be reasonably requested by the Board.
13. Duration and Termination.
(a) This Agreement shall become effective upon the date
hereabove written, provided that, with respect to any Series, this Agreement
shall not take effect unless such action has first been approved by vote of a
majority of the Board and by vote of a majority of those trustees of the Trust
who are not interested persons of the Trust, and have no direct or indirect
financial interest in the operation of the Plan relating to the Series or in
any agreements related thereto (all such trustees collectively being referred
to herein as the "Independent Trustees") cast in person at a meeting called for
the purpose of voting on such action.
(b) Notwithstanding the foregoing, with respect to any
Series, this Agreement may be terminated 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
Shares of such Series on sixty days' written notice to the Distributor or by
the Distributor at any time, without the payment of any penalty, on sixty days'
written notice to the Trust or such Series. This Agreement will automatically
terminate in the event of its assignment.
(c) Termination of this Agreement with respect to any
given Series shall in no way affect the continued validity of this Agreement or
the performance thereunder with respect to any other Series.
14. 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.
15. Governing Law. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts and the 1940 Act. To the
extent that the applicable laws of the
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Commonwealth of Massachusetts conflict with the applicable provisions of the
l940 Act, the latter shall control.
16. 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.
17. 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 l940 Act.
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IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXXXXXX CAPITAL TRUST
By: By:
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Attest: BFP FINANCIAL PARTNERS, INC.
By: By:
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