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EXHIBIT-99.B5
(DISTRIBUTION AGREEMENT)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 7th day of July, 1997, by and between
Green Century Funds, a Massachusetts business trust (the "Trust"), and
Sunstone Distribution Services, LLC, a Wisconsin limited liability company (the
"Distributor").
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "Act") and is authorized to
issue shares of beneficial interests (the "Shares") in separate series with
each such series representing interests in a separate portfolio of securities
and other assets;
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member
of the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Trust and Distributor desire to enter into an agreement
pursuant to which Distributor shall be the distributor of the Shares of the
Trust representing the investment portfolios listed on Schedule A hereto and
any additional investment portfolios the Trust and Distributor may agree upon
and include on Schedule A as such Schedule may be amended from time to time
(such investment portfolios and any additional investment portfolios are
individually referred to as a "Fund" and collectively the "Funds");
WHEREAS, the Board of Trustees of the Trust has adopted a Distribution
Plan with respect to certain Funds pursuant to Rule 12b-1 under the Act, which
is incorporated herein by reference and pursuant to which the Trust, on behalf
of those Funds, desires to enter into this Distribution Agreement; and
WHEREAS, the Trust, with respect to certain other Funds which have not
adopted a Distribution Plan pursuant to Rule 12b-1 under the Act, desires to
enter into this Distribution Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR.
The Trust hereby appoints the Distributor as agent for the distribution of
the Shares, on the terms and for the period set forth in this Agreement.
Distributor hereby accepts such appointment as agent for the distribution of
the Shares on the terms and for the period set forth in this Agreement.
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2. SERVICES AND DUTIES OF THE DISTRIBUTOR.
2.1 Distributor will act as agent for the distribution of Shares in
accordance with the instructions of the Trust's Board of Trustees and the
registration statement and prospectuses then in effect with respect to the
Funds under the Securities Act of 1933, as amended (the "1933 Act"). The
Distributor, in connection with its duties hereunder, shall (i) register and
maintain in full force and effect the licenses of its agents and
representatives under all applicable laws, rules and regulations, (ii) review
all advertising and sales material of the Trust to ensure that such materials
comply with all applicable rules and regulations made or adopted pursuant to
the Act, by the Securities and Exchange Commission (the "Commission")
and the NASD, and (iii) file with the NASD and the Commission where required on
a timely basis all advertising and sales materials of the Trust which have been
approved by the Distributor. The Trust represents that it will not use any
advertising or sales material unless and until such materials have been
approved and authorized for use by the Distributor.
2.2 Subject to the terms of Section 4, Distributor may finance appropriate
activities which it deems reasonable which are primarily intended to result in
the sale of Shares, including, but not limited to, advertising, the printing
and mailing of prospectuses to other than current shareholders, and the
printing and mailing of sales literature which has been approved by the
Trust prior to its use. Distributor may enter into servicing and/or selling
agreements with qualified broker/dealers and other persons with respect to the
offering of Shares to the public, and if it so chooses Distributor will act
only on its own behalf as principal. The Distributor shall not be obligated to
sell any certain number of Shares of any Fund.
2.3 All Shares of the Funds offered for sale by Distributor shall be
offered for sale to the public at a price per unit (the "offering price") equal
to their net asset value (determined in the manner set forth in the Funds' then
current prospectus).
2.4 Distributor shall act as distributor of the Shares in compliance in
all material respects with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or adopted
pursuant to the Act, by the Commission and the NASD.
3. DUTIES AND REPRESENTATIONS OF THE TRUST.
3.1 The Trust represents that it is registered as an open-end management
investment company under the Act and that it has and will continue to act in
conformity with its Declaration of Trust, By-Laws, its registration statement
as may be amended from time to time and resolutions and other instructions of
its Board of Trustees and has and will continue to comply with all applicable
laws, rules and regulations including without limitation the 1933 Act, the 1934
Act, the Act, the laws of the states in which shares of the Funds are offered
and sold, and the rules and regulations thereunder.
3.2 The Trust shall take all necessary action to register and maintain the
registration of the Shares under the 1933 Act for sale as herein contemplated
and shall pay or cause to be paid all costs and expenses in connection with the
registration of Shares under the 1933 Act, and be responsible for all expenses
in connection with maintaining facilities for the issue and transfer of Shares
and for supplying information, prices and other data to be furnished by the
Trust hereunder.
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3.3 The Trust shall execute any and all documents and furnish any and all
information and otherwise take all actions which may be reasonably necessary in
the discretion of the Trust's officers in connection with the qualification of
the Shares for sale in such states as Distributor and the Trust may approve,
shall maintain the qualification of a sufficient number or amount of shares
thereunder, and shall pay or cause to be paid all expenses which may be
incurred in connection with such qualification.
3.4 The Trust shall, at its expense, keep the Distributor fully informed
with regard to its affairs. In addition, the Trust shall furnish Distributor
from time to time, for use in connection with the sale of Shares, such
information with respect to the Trust and the Shares as Distributor may
reasonably request, and the Trust warrants that the statements contained in any
such information shall be true and correct.
3.5 The Trust represents to Distributor that all registration statements and
prospectuses of the Trust filed or to be filed with the Commission under the
1933 Act with respect to the Shares have been and will be prepared in
conformity with the requirements of the 1933 Act, the Act, and the rules and
regulations of the Commission thereunder. As used in this Agreement the terms
"registration statement" and "prospectus" shall mean any registration statement
and prospectus (together with the related statement of additional information)
at any time now or hereafter filed with the Commission with respect to any of
the Shares and any amendments and supplements thereto which at any time shall
have been or will be filed with said Commission. The Trust represents and
warrants to Distributor that any registration statement and prospectus, when
such registration statement becomes effective, will contain all statements
required to be stated therein in conformity with the 1933 Act, the Act and the
rules and regulations of the Commission; that all statements of fact contained
in the registration statement and prospectus will be true and correct in all
material respects when such registration statement becomes effective; and that
neither the registration statement nor any prospectus when such registration
statement becomes effective will include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of Shares. The Trust
agrees to file from time to time such amendments, supplements, reports and
other documents as may be necessary in order to comply with the 1933 Act and
the Act and in order that there may be no untrue statement of a material fact
in a registration statement or prospectus, or necessary in order that there may
be no omission to state a material fact in the registration statement or
prospectus which omission would make the statements therein misleading. If the
Trust shall not propose an amendment or amendments and/or supplement or
supplements promptly after receipt by the Trust of a written request from
Distributor to do so, Distributor may, at its option, immediately terminate
this Agreement. The Trust shall not file any amendment to the 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.
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3.6 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by circumstances of any kind, the Trust's
officers may decline to accept any orders for, or make any sales of, any Shares
until such time as they deem it advisable to accept such orders and to make
such sales and the Trust shall advise Distributor promptly of such
determination.
3.7 The Trust agrees to advise, or cause its administrator to advise, the
Distributor promptly in writing:
(i) of any correspondence or other communication by the Commission or its
staff relating to the Funds including requests by the Commission for amendments
to the registration statement or prospectuses or comments thereon;
(ii) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or prospectuses then
in effect or the initiation of any proceeding for that purpose;
(iii) of the happening of any event which makes untrue any statement of a
material fact made in the registration statement or prospectuses or which
requires the making of a change in such registration statement or prospectuses
in order to make the statements therein not misleading; and
(iv) of all actions taken by the Commission or the staff of the Commission
with respect to any amendments to any registration statement or prospectus
which may from time to time be filed with the Commission.
4. EXPENSES.
Subject to the terms of the Trust's Distribution Plan, the Trust will
pay or cause to be paid the Distributor a distribution fee from each Fund not
to exceed on an annual basis such rate listed on Schedule A as reimbursement
for expenses, approved by the Trust's administrator or required by law,
incurred by the Distributor in connection with the sale of shares including
without limitation, (i) the Distributor's out-of-pocket expenses incurred
in connection with activities primarily intended to result in the sale of
Shares including, without limitation, (a) printing and distribution of
prospectuses, statements of additional information and shareholder reports to
dealers and others (other than existing shareholders), (b) production,
printing, filing and distribution of sales materials and forms used in
connection with the offering of shares to any dealer or others (other than
existing shareholders), (c) placement of media advertising, (d) engagement of
designers, free xxxxx writers and public relation firms, (e) long distance
telephone lines, services and charges, (f) postage and, overnight delivery
charges, (g) storage of inventory, (h) regulatory filing fees and (i) travel,
lodging and meals, (ii) amounts paid by Distributor to dealers or other persons
entering into a selling or servicing agreement with Distributor, and (iii)
other distribution related expenses whether or not specifically required to be
made by the Distributor under this Agreement. Distributor shall provide to the
Trust's Board of Trustees a quarterly report of its expenses incurred pursuant
to this Agreement.
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5. INDEMNIFICATION.
5.1(a) The Trust authorizes Distributor to use any prospectus, in the form
furnished to Distributor from time to time, in connection with the sale of
Shares. The Trust shall indemnify, defend and hold the Distributor, and each
of its present or former directors, members, officers, employees,
representatives and any person who controls or previously controlled the
Distributor within the meaning of Section 15 of the 1933 Act ("Distributor
Affiliates"), free and harmless from and against any and all losses, claims,
demands, liabilities, damages and expenses (including the costs of
investigating or defending any alleged losses, claims, demands, liabilities,
damages or expenses and any counsel fees incurred in connection therewith)
which Distributor or Distributor Affiliates may incur, arising out of or based
upon any breach by the Trust of any representation, warranty or covenant in
this Agreement, or any untrue statement, or alleged untrue statement, of a
material fact contained in the registration statement or any prospectus, as
from time to time amended or supplemented, or an annual or interim report to
shareholders, or arising out of or based upon any omission, or alleged
omission, to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the Trust's obligation to indemnify Distributor and/or Distributor
Affiliates shall not be deemed to cover any losses, claims, demands,
liabilities, damages or expenses arising out of any untrue statement or alleged
untrue statement or omission or alleged omission made in the registration
statement, prospectus, or annual or interim report in reliance upon and in
conformity with information relating to the Distributor and furnished to the
Trust or its counsel by Distributor for the purpose of, and used in, the
preparation thereof; and provided further that the Trust's agreement to
indemnify Distributor and/or Distributor Affiliates shall not be deemed to
cover any liability to the Trust or its shareholders to which Distributor would
otherwise be subject by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties, under this Agreement. The Trust's
agreement to indemnify the Distributor and/or Distributor Affiliates, as the
case may be, with respect to any action, is expressly conditioned upon the
Trust being notified of such action brought against Distributor, or the
Distributor Affiliates, within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon the Distributor, or such person, such notification to be given
by letter or by telegram addressed to the Trust's President, but the failure so
to notify the Trust of any such action shall not relieve the Trust from any
liability which the Trust may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Trust's indemnity
agreement contained in this Section 5.1.
5.1(b) 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 such loss, claim, demand, liability, damage or expense, but if the
Trust elects to assume the defense, such defense shall be conducted by counsel
chosen by the Trust and approved by the Distributor, which approval shall not
be unreasonably withheld. In the event the Trust elects to assume the defense
of any such suit and retain such counsel, the indemnified defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by them. If the Trust does not elect to assume the defense of
any such suit, or in case the Distributor does not, in the exercise of
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reasonable judgment, approve of counsel chosen by the Trust, the Trust will
reimburse the indemnified person or persons named as defendant or defendants in
such suit, for the fees and expenses of any counsel retained by Distributor and
them. The Trust's indemnification agreement contained in this Section 5.1 and
the Trust's representations, warranties and covenants in this Agreement shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Distributor, and each of the Distributor
Affiliates, and shall survive the delivery of any Shares and the termination of
this Agreement. This Agreement of indemnity will inure exclusively to the
Distributor's benefit, to the benefit of each Distributor Affiliate, and their
successors. The Trust agrees promptly to notify Distributor of the
commencement of any litigation or proceedings against the Trust or any of its
officers or directors in connection with the issue and sale of any of the
Shares.
5.2(a) Distributor shall indemnify, defend and hold the Trust, and each of
its present or former trustees, officers, employees, representatives, and any
person who controls or previously controlled the Trust within the meaning of
Section 15 of the 1933 Act ("Trust Affiliates"), free and harmless from and
against any and all losses, claims, demands, liabilities, damages and expenses
(including the costs of investigating or defending any alleged losses, claims,
demands, liabilities, damages or expenses, and any counsel fees incurred in
connection therewith) which the Trust, or the Trust Affiliates, may incur
arising out of or based upon any breach by the Distributor of any
representation, warranty or covenant in this Agreement or any untrue, or
alleged untrue, statement of a material fact contained in the Trust's
registration statement or any prospectus, as from time to time amended or
supplemented, or annual or interim report to shareholders or the omission, or
alleged omission, to state therein a material fact required to be stated
therein or necessary to make the statement not misleading, but only if such
statement or omission was made in reliance upon, and in conformity with,
information relating to the Distributor and furnished to the Trust or its
counsel by the Distributor for the purpose of, and used in, the preparation
thereof. Distributor's agreement to indemnify the Trust and the Trust
Affiliates shall not be deemed to cover any liability to Distributor to which
the Trust would otherwise be subject by reason of its willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties, under this Agreement. The
Distributor's Agreement to indemnify the Trust and the Trust Affiliates, is
expressly conditioned upon the Distributor's being notified of any action
brought against the Trust, or the Trust Affiliates, such notification to be
given by letter or telegram addressed to Distributor's President, within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Trust or
such person, but the failure so to notify Distributor of any such action shall
not relieve Distributor from any liability which Distributor may have to the
person against whom such action is brought by reason of any such untrue, or
alleged untrue, statement or omission, otherwise than on account of
Distributor's indemnity agreement contained in this Section 5.2(a).
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5.2(b) In case any action shall be brought against the Trust or Trust
Affiliates in respect of which indemnity may be sought against the Distributor,
the Distributor shall have the rights and duties given to the Trust, and the
Trust and each person so indemnified shall have the rights and duties given to
the Distributor, by the provisions of Section 5.1(b).
6. OFFERING OF SHARES.
No Shares shall be offered by either Distributor or the Trust under any of
the provisions of this Agreement and no orders for the purchase or sale of such
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 1933
Act, or if and so long as the current prospectus as required by Section 10 of
the 1933 Act, as amended, is not on file with the Commission; provided,
however, that nothing contained in this Section 6 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 prospectus
or Declaration of Trust.
7. TERM.
7.1 This Agreement shall become effective with respect to each Fund listed
on Schedule A hereof as of the date hereof and, with respect to each Fund not
in existence on that date, on the date an amendment to Schedule A to this
Agreement relating to that Fund is executed. Unless sooner terminated as
provided herein, this Agreement shall continue in effect with respect to each
Fund until July 7, 1998. Thereafter, if not terminated, this Agreement
shall continue automatically in effect as to each Fund for successive annual
periods, provided such continuance is specifically approved at least annually
by (i) the Trust's Board of Trustees or (ii) the vote of a majority (as defined
in the Act) of the outstanding voting securities of a Fund, and provided that
in either event the continuance is also approved by the Distributor and a
majority of the Trust's Trustees who are not "interested persons" (as defined
in the Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval.
7.2 This Agreement may be terminated without penalty with respect to a
particular Fund (1) through a failure to renew this Agreement at the end of a
term, (2) upon mutual consent of the parties, (3) by the Trust (a) by the vote
of a majority of the Trustees of the Trust who are not "interested persons" of
the Trust or the Distributor, (b) by the vote of the Board of Trustees of the
Trust, or (c) by the vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, or (4) by the Distributor, in any
case without payment of any penalty on not more than 60 days' nor less than 30
days' written notice to the other party (which notice may be waived by the
party entitled to such notice). The terms of this Agreement shall not be
waived, altered, modified, amended or supplemented in any manner whatsoever
except by a written instrument signed by the Distributor and the Trust. This
Agreement will also terminate automatically in the event of its assignment (as
defined in the Act).
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7.3 If, at any time during the term of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Trust that any
amendment of this Agreement be made in order to comply with any recommendation
or requirement of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, it shall notify the
Distributor of the form of amendment which it deems necessary or advisable and
the reasons therefor. If the Distributor declines to assent to such amendment
(after a reasonable time), the Trust may terminate this Agreement forthwith by
written notice to the Distributor without payment of any penalty. If, at any
time during the term of this Agreement, the Distributor requests the Trust to
make any change in its governing instruments or in its methods of doing
business which are necessary in order to comply with any requirement of federal
law or regulations of the Commission, national securities association of which
the Distributor is or may become a member, or any other regulator, and the
Trust fails (after a reasonable time) to make any such change as requested, the
Distributor may terminate this Agreement forthwith by written notice to the
Trust without payment of any penalty.
8. MISCELLANEOUS.
8.1 The services of the Distributor rendered to the Funds are not deemed
to be exclusive. The Distributor may render such services and any other
services to others, including other investment companies. The Trust recognizes
that from time to time directors, officers, and employees of the Distributor or
its affiliates may serve as directors, trustees, officers and employees of
other entities (including other investment companies), that such other entities
may include the name of the Distributor as part of their name and that the
Distributor or its affiliates may enter into distribution, administration, fund
accounting, transfer agent or other agreements with such other entities.
8.2 Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and
other information relative to the Funds and prior, present or potential
shareholders of the Funds (and clients of said shareholders), and not to use
such records and information for any purpose other than performance of
Distributor's responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which approval shall not
be unreasonably withheld and may not be withheld when the Distributor is
subject to regulatory audit or inspection, when Distributor may be exposed to
civil or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Trust. Records and information which have become known to the public
through no wrongful act of the Distributor or any of its employees, agents or
representatives shall not be subject to this paragraph.
8.3 This Agreement shall be governed by Wisconsin law (except as to
Section 8.4 hereof which shall be construed in accordance with Massachusetts
law). To the extent that the applicable laws of the State of Wisconsin, or any
of the provisions herein, conflict with the applicable provisions of the Act,
the latter shall control, and nothing herein shall be construed in a manner
inconsistent with the Act or any rule or order of the Commission thereunder.
Any
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provision of this Agreement which may be determined by competent authority to
be prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
8.4 Venue for any action arising hereunder shall be Suffolk County,
Massachusetts until either June 1, 1999 or the combined assets of the Trust are
$50 million, whichever shall occur first. Thereafter, venue shall be
determined in accordance with where the cause of action arises.
8.5 This Agreement is executed by or on behalf of the Trust with respect
to each of the Funds and the obligations hereunder are not binding upon any of
the Trustees, officers or shareholders of the Trust individually but are
binding only upon the Funds to which such obligations pertain and the assets
and property of such Funds. The Trust's Certificate of Trust is on file with
the Secretary of State of Massachusetts.
8.6 Any notice required or to be permitted to be given by either party to
the other shall be in writing and shall be deemed to have been given when sent
by registered or certified mail, postage prepaid, return receipt requested, as
follows (or to such other address as may be designated by the recipient by
notice to the other party in accordance herewith): Notice to the Distributor
shall be sent to Sunstone Distribution Services, LLC, 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, XX, 00000, Attention: Xxxxxx X. Xxxxxxx, and notice to
the Trust shall be sent to 00 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxxxxx Xxxxxx.
8.7 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original agreement but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
GREEN CENTURY FUNDS
(the "Trust")
By: /s/ Xxxxxxxx Xxxxxx
SUNSTONE DISTRIBUTION SERVICES, LLC
(the "Distributor")
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President
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SCHEDULE A
TO THE
DISTRIBUTION AGREEMENT
BY AND BETWEEN
THE GREEN CENTURY FUNDS
AND
SUNSTONE DISTRIBUTION SERVICES, LLC
NAME OF FUNDS
Green Century Balanced Fund
Green Century Equity Fund
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