DISTRIBUTION AGREEMENT Exhibit e
THIS AGREEMENT dated as of the 17th day of June, 1999 by and between
MERLIN FUNDS GROUP (the "Trust"), a business trust established and existing
under the laws of the State of Delaware, and XXXXXXX XXXXXXXXX, INC. (the
"Distributor"), a corporation organized and existing under the laws of the State
of Ohio.
W I T N E S S E T H:
In consideration of the mutual covenants hereinafter contained, the
parties hereto agree as follows:
Section 1. Appointment of the Distributor. The Trust hereby appoints the
Distributor as its agent to arrange for the sale of shares of the Trust on the
terms and for the period set forth in this Agreement, and the Distributor hereby
accepts such appointment and agrees to act hereunder. It is acknowledged that
the Trust is authorized to issue shares in one or more series, with each series
representing shares of a separate investment portfolio of the Trust (a "Fund").
The term "Shares" as used herein shall refer to shares of each class of each
Fund of the Trust.
Section 2. Services and Duties of the Distributor.
(a) The Distributor agrees to arrange to sell, as agent for the
Trust, from time to time during the term of this Agreement, Shares upon
the terms described in the Prospectus. As used in this Agreement, the
term "Prospectus" shall mean the prospectus included in the Trust's
Registration Statement most recently filed by the Trust with the
Securities and Exchange Commission and effective under the Securities Act
of 1933, as amended (the "1933 Act"), and the Investment Company Act of
1940, as amended (the "1940 Act"), as such Registration Statement is
amended by any amendments thereto at the time in effect.
(b) Upon commencement of the continuous public offering of the
Shares of the Trust, the Distributor will hold itself available to
receive orders, satisfactory to the Distributor, for the purchase of
Shares and will accept such orders on behalf of the Trust as of the time
of receipt of such orders and will transmit such orders as are so
accepted to the Trust's Dividend and Transfer Agent as promptly as
practicable. Purchase orders shall be deemed effective at the time and in
the manner set forth in the Prospectus.
(c) The Distributor, as agent for the Trust and in its discretion,
may enter into agreements with such registered and qualified retail
broker-dealers as it may select pursuant to which such broker-dealers may
also arrange for the sale of Shares.
(d) The Distributor shall not be obligated to sell any certain
number of Shares, and nothing herein contained shall prevent the
Distributor from entering into like distribution agreements with other
investment companies so long as the performance of its obligations
hereunder is not impaired thereby.
Section 3. Duties of the Trust.
(a) The Trust agrees to sell its Shares so long as it has Shares
available for sale. No certificates certifying ownership of shares shall
be issued.
(b) The Trust shall keep the Distributor fully informed with regard
to its affairs and shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor
may reasonably request for use in connection with the distribution of
Shares of the Trust. This shall include, without limitation, one
certified copy of all financial statements of the Trust prepared by
independent accountants and such reasonable number of copies of its most
current Prospectus and annual and interim reports as the Distributor may
request. The Trust shall cooperate fully in the efforts of the
Distributor to arrange for the sale of the Shares and in the performance
of the Distributor under this Agreement.
(c) The Trust agrees to file from time to time such amendments,
reports and other documents as may be necessary 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, in light of the circumstances
under which they were made, misleading.
(d) The Trust shall use its best efforts to qualify and maintain the
qualification of an appropriate number of its Shares for sale under the
securities laws of such states 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 states; provided that the Trust shall not be required to amend
the Declaration of Trust or its By-Laws to comply with the laws of any
state, to maintain an office in any state, to change the terms of the
offering of its Shares in any state from the terms set forth in its
Registration Statement and Prospectus, to qualify as a foreign
corporation, business trust or similar entity in any state or to consent
to service of process in any state other than with respect to claims
arising out of the offering of its Shares. The Distributor shall furnish
such information and other material relating to its affairs and
activities as may be required by the Trust in connection with such
qualifications.
Section 4. Compensation and Expenses.
(a) Except as set forth in this Section, (i) the Distributor shall
not receive any compensation for its services under this Agreement and
(ii) the Distributor shall not be required to bear any costs in
connection with the offering of Shares for sale to the public.
(b) All shares sold by the Distributor as agent for the Fund shall
be sold at the public offering price as determined in the manner set
forth in the Fund's Prospectus or the Statement of Additional
Information, as amended. Any sales charge included in the public offering
price shall be retained by the Distributor. The Distributor may re-allow
a portion of such sales charge to any retail broker-dealers selected
pursuant to Section 2(c) of this Agreement.
Section 5. Indemnification. 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 or Section 20 of
the Securities Exchange Act of 1934, as amended (the "1934 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 and expenses incurred in connection therewith)
which the Distributor, its officers, directors or any such controlling persons
may incur under the 1933 Act, the 1934 Act, or under common law or otherwise,
arising out of or based upon any untrue statement of a material fact contained
in the Registration Statement or Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading,
except insofar as such claims, demands, liabilities, fees 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 or Prospectus; provided, however, that this indemnity
agreement, to the extent that it might require indemnity 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 or Section 20 of the 1934 Act, shall not
inure to the benefit of such officer, trustee or controlling person 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 its security holders 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's agreement to indemnify the Distributor, its officers and directors and
any such controlling person as aforesaid is expressly conditioned upon the Trust
being promptly notified of any action brought against the Distributor, its
officers or directors, or any such controlling person, such notification to be
given by letter or telegram addressed to the Trust at its principal business
office. The Trust agrees promptly to notify the Distributor of the commencement
of any litigation or proceedings against it or any of its officers or directors
in connection with the issue and sale of any of its Shares.
The Distributor agrees to indemnify, defend and hold the Trust, its
trustees and officers and any person who controls the Trust, if any, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 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
Trust, its trustees or officers or any such controlling person may incur under
the 1933 Act, the 1934 Act, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Trust, its trustees or
officers or such controlling person resulting from such claims or demands shall
arise out of or be based upon (i) 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 or Prospectus; (ii) any failure of
the Distributor or any investor purchasing Shares of the Trust through the
Distributor to timely transmit good payment for the purchase of Trust Shares; or
(iii) any breach of the obligations of the Distributor under Section 6 of this
Agreement. The Distributor's agreement to indemnify the Trust, its trustees and
officers and any such controlling person as aforesaid, is expressly conditioned
upon the Distributor being promptly notified of any event giving rise to rights
of indemnification hereunder, including any action brought against the Trust,
its trustees or officers or any such controlling person, such notification being
given to the Distributor at its principal business office.
Section 6. Compliance with Securities Laws. The Trust represents that it
will register as a diversified, open-end management investment company under the
1940 Act before the Trust publicly offers its Shares, and agrees that it will
comply with all of the provisions of the 1940 Act and of the rules and
regulations thereunder. The Trust and the Distributor each agree to comply with
all of the applicable terms and provisions of the 1940 Act, the 1933 Act and,
subject to the provisions of Section 3(d), all applicable state "Blue Sky" laws.
The Distributor agrees to comply with all of the applicable terms and provisions
of the 1934 Act.
Section 7. Terms of Agreement; Termination. This Agreement shall commence
on the date first set forth above. This Agreement shall continue in effect for a
period more than two years from the date hereof only so long as such continuance
is specifically approved at least annually in conformity with the requirements
of the 1940 Act, including Rule 12b-1 thereunder.
This Agreement shall terminate automatically in the event of its
assignment (as defined by the 1940 Act). In addition, this Agreement may be
terminated by either party at any time, without penalty, on not more than sixty
days' nor less than thirty days' written notice to the other party.
Section 8. Notices. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (i) to the Distributor at Xxxxxxx Xxxxxxxxx, Inc., 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 or (2) to the Trust at Merlin Funds Group,
0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
Section 9. Governing Law. The validity, terms, performance and
enforcement of this Agreement will be governed by the laws of the State of Ohio
that are applicable to agreements negotiated, executed, delivered and performed
solely in the State of Ohio.
Section 10. Non-Liability of Shareholders, Trustees, Officers, Employees,
Representatives and Agents. It is expressly agreed that the obligation of the
Trust hereunder shall not be binding upon nor resort be had to the private
property of any of the trustees, Shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the Trust property, as
provided in the Declaration of Trust. The execution and delivery of this
Agreement have been authorized by the trustees of the Trust and signed by the
officers of the Trust, acting as such, and neither such authorization by such
trustees nor such execution and delivery by such officers shall be deemed to
have been made by any of them individually, or to impose any liability on any of
them personally, but shall bind only the Trust property as provided in the
Declaration of Trust.
Section 11. Use of Name. The Trust recognizes that directors, officers
and employees of the Distributor may from time to time serve as directors,
officers and employees of other corporations (including other investment
companies) and that such other corporations may include the name "Xxxxxx" as
part of their name, and that the Distributor or its affiliates may enter into
distribution or other agreements with such other corporations. If the
Distributor ceases to act as the Trust's investment adviser, the Trust agrees
that, at the Distributor's request, the Trust's license to use the word "Merlin"
will terminate and the Trust will take all necessary action to change the name
of all Funds of the Trust to a name not including the word "Merlin".
Section 12. Complete Agreement. This Agreement contains the complete
agreement with respect to the subject matter hereof and supersedes any prior
understandings, agreements or representations by or between the parties related
to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
MERLIN FUNDS GROUP
By: /s/ Xxxxxx X. XxXxxxx
Xxxxxx X. XxXxxxx, President
XXXXXXX XXXXXXXXX, INC.
By: /s/ Xxxxxx X. XxXxxxx
Xxxxxx X. XxXxxxx, Vice President
