DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of February 28, 1997 between
THIRD AVENUE TRUST, a Delaware trust (the "Trust") on behalf of the Third Avenue
Value Fund series of the Trust (the "Fund"), and X.X. XXXXXXX, INC., a New York
corporation (the "Distributor").
RECITALS
1. The Trust is registered under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), as an open-end management investment company and
it is affirmatively in the interest of the Fund to offer its shares for sales
continuously.
2. The Distributor is a broker-dealer registered under the Securities Exchange
Act of 1934, as amended.
3. The Fund and the Distributor wish to enter into an agreement with each other
with respect to the continuous offering of the Fund's Common Stock $.001 par
value (the "shares") in order to assist in the sale and distribution of shares
of the Fund.
In consideration of the promises and the covenants hereinafter contained, the
Fund and the Distributor hereby agree as follows:
1. Appointment of the Distributor. The Fund hereby appoints the Distributor as
agent for the Fund, to assist in the sale and distribution of shares of the Fund
to the public, upon the terms and conditions and during the term of this
Agreement, and the Distributor hereby accepts such appointment and agrees to act
hereunder.
2. Nature of Duties. The Distributor shall (i) assist in the sale and
distribution of the Fund's shares and (ii) qualify and maintain the
qualification as a broker-dealer in such states where shares of the Fund are
registered for sale.
3. Sale of Shares of the Fund.
3.1. The Distributor will have the right to sell on behalf of the Fund, as its
agent, any shares needed but not more than the shares needed (except for
clerical errors in transmission) to fill unconditional orders for shares of the
Fund placed with the Distributor by investors. The Distributor agrees that the
Fund shall receive 100% of the net asset value, determined as set forth in the
Prospectus, for all shares sold by the Distributor.
3.2. The shares are to be sold by or through the Distributor to investors at a
price per share ("offering price") equal to the sum of the net asset value per
share determined as set forth in the Prospectus.
3.3. The Fund shall have the right to suspend the sale of shares at times when
redemption is suspended pursuant to the conditions set forth in subsection 4.2.
The Fund shall also have the right to suspend the sale of shares if a banking
moratorium shall have been declared by federal or New York authorities, if there
shall have been some other event, that, in the judgment of the Trustees of the
Fund makes it impracticable or inadvisable to sell shares, or if in the judgment
of the Trustees, the suspension of the sale of shares is in the best interests
of the Fund.
3.4. The Fund, or any agent of the Fund designated in writing by the Fund, shall
be promptly advised of all purchase orders for shares received by the
Distributor. Any order may be rejected by the Fund for any reason whatsoever.
The Fund (or its agent) will confirm orders upon their receipt, will make
appropriate book entries and upon receipt by the Fund (or its agent) of payment
therefore, will deliver deposit receipts or certificates for such shares
pursuant to the instructions of the Distributor. Payment shall be made to the
Fund in New York Clearing House funds, or by federal funds wire, cashiers check
or certified check. The Distributor agrees to cause such payment and such
instructions to be delivered promptly to the Fund (or its agent).
4. Repurchase or Redemption of Shares of the Fund.
4.1. Any of the outstanding shares may be tendered for redemption at any time,
and the Fund agrees to repurchase or redeem the shares so tendered in accordance
with its obligations set forth in Article IX of the Trust Instrument of the
Trust, as amended from time to time, and the applicable provision set forth in
the Prospectus.
4.2. Redemption of shares or payment may be suspended: 1) at times when the New
York Stock Exchange is closed other than customary weekend closings and holiday
closings, 2) when pursuant to rules and regulations of the Securities and
Exchange Commission (the "SEC"), trading on said Exchange is restricted or an
emergency exists as a result of which disposal by the Fund of securities owned
by it is not reasonably practicable or it is not reasonably practicable for the
Fund fairly to determine the value of its net assets, or 3) during any other
period when the SEC, by order, so permits.
5. Duties of the Fund.
5.1. The Fund shall make available to the Distributor, at the Fund's expense,
such number of copies of its Prospectus, quarterly reports and annual financial
statements as the Distributor shall reasonably request.
5.2. The Fund will qualify and maintain the qualifications, at the Fund's
expense, of an appropriate number of its shares for sale under the securities
laws of such state as selected by the Fund.
6. Duties of the Distributor.
6.1. The Distributor shall devote reasonable time and effort to effect sales of
shares of the Fund, but shall not be obligated to sell any specific number of
shares. The Distributor will qualify and maintain the qualifications, at the
Distributor's expense, of its registration as a broker-dealer in such states
where shares of the Fund are qualified for sale.
The services of the Distributor to the Fund hereunder are not to be deemed
exclusive and nothing contained herein shall prevent the Distributor from
entering into like arrangements with other investment companies so long as the
performance of its obligations hereunder is not impaired thereby.
6.2. In selling the shares of the Fund, the Distributor shall use all reasonable
efforts to conform in all respects with the requirements of all federal and
state laws relating to the sale of such securities. Neither the Distributor nor
any other person is authorized by the Fund to give any information or to make
any representations other than those contained in the Registration Statement or
related Prospectus or in any sales literature
specifically approved in writing by the Fund.
6.3. The Distributor shall adopt and follow procedures, as approved by the
officers of the Fund, for the confirmation of sales to investors, the collection
of amounts payable by investors on such sales, and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of the
National Association of Securities Dealers, Inc. (the "NASD"), as such
requirements may from time to time exist.
6.4. The Distributor warrants and represents that it is, and agrees to use all
commercially reasonable efforts to remain at all times, a member in good
standing of the NASD with authority to act as the Distributor.
7. Allocation of Expenses.
7.1. The Distributor shall bear all expenses incurred by it in connection with
its duties and activities under this Agreement, including the costs and expenses
of qualifying and maintaining the qualifications of its registration as a
broker-dealer in such states where shares of the Fund are qualified for sale,
preparing, printing and distributing any sales literature, advertising and other
materials which it creates for its use as Distributor.
7.2. Except as provided in subsection 7.1 hereof, nothing contained in this
Agreement shall be deemed or construed to impose upon the Distributor any
obligation to incur, pay, or reimburse the Fund for any other costs and
expenses.
7.3. The Fund shall bear the following costs and expenses related to the
continuous offering of its shares, including fees and disbursements of its
counsel and auditors, in connection with the preparation and filing of any
required registration statements and Prospectuses under the Investment Company
Act, the Securities Act, and all amendments and supplements thereto, and
preparing and mailing annual and interim reports and proxy materials to
shareholders (including but not limited to the expense of setting in type any
such registration statements, Prospectuses, annual or interim reports or proxy
materials).
7.4. Except as provided in subsection 7.3 hereof, nothing contained in this
Agreement shall be deemed or construed to impose upon the Fund any obligation to
incur, pay, or reimburse the Distributor for any other costs and expenses.
8. Indemnification.
8.1. The Fund agrees to indemnify, defend and hold harmless the Distributor, its
officers, directors, employees, agents, and any person who controls the
Distributor, if any, within the meaning of Section 15 of the Securities Act
(each, an "Indemnified Distributor Party" and collectively, the "Indemnified
Distributor Parties"), from and against any and all claims, demands, actions,
liabilities, losses, costs and expenses (including the cost of investigating or
defending same, and any reasonable attorneys' fees and expenses incurred in
connection therewith) (collectively, "Liabilities") which the Indemnified
Distributor Parties may incur which arise out of or are based upon (a) any
untrue statement of a material fact contained in the Registration Statement,
Prospectus or annual or interim report or (b) any omission to state a material
fact required to be stated in any thereof or necessary to make the statements in
any thereof not misleading, except insofar as such Liabilities arise out of or
are based upon any such untrue statement or omission or untrue statement or
omission made in reliance upon and in conformity with information furnished to
the Fund in writing in connection therewith by or on behalf of the Distributor;
provided, however, that the indemnity agreement in this Section 8.1 shall not
inure to the benefit of any Indemnified Distributor Party unless (i) a court of
competent jurisdiction shall have determined, in a final unappealable decision
on the merits, that such Indemnified Distributor Party was not liable, by reason
of willful misfeasance, bad faith, or gross negligence in the performance of its
or his duties, or by reason of its or his reckless disregard of its or his
obligations under this Agreement (collectively, "disabling conduct"), or (ii) in
the absence of such a judicial decision, a reasonable determination, based upon
a review of the facts, that the indemnified person was not liable by reason of
disabling conduct, evidenced by either (A) the vote of a majority of trustees
who are neither "interested persons" of the Fund as defined in Section 2(a) (19)
of the Securities Act nor parties to the proceeding or matter in question, or
(B) the written opinion of independent legal counsel. The Fund's indemnification
obligation as aforesaid is expressly conditioned upon the Fund's being promptly
notified, by letter or telegram addressed to the Fund at its principal business
office, of any Liability of or against any Indemnified Distributor Person. The
Fund agrees promptly to notify the Distributor of the commencement of any
litigation or proceeding against the Fund or any Indemnified Fund Parties (as
defined below) in connection with the issue and sale of any Fund shares.
8.2. The Distributor agrees to indemnify, defend and hold harmless the Fund, its
officers, directors, employees, agents and any person who controls the Fund, if
any, within the meaning of Section 15 of the Securities Act (each, an
"Indemnified Fund Party" and collectively, the "Indemnified Fund Parties"), from
and against any and all Liabilities which the Indemnified Fund Parties may incur
which arise out of or are based upon (a) any untrue statement of a material fact
contained in information furnished to the Fund in writing by or on behalf of the
Distributor for use in the Registration Statement or Prospectus or any omission
to state a material fact in connection with such information required to be
stated in the Registration Statement, Prospectus or annual or interim report or
necessary to make such information not misleading; or (b) any acts or omissions
by the Indemnified Distributor Parties in connection with the performance of the
Distributor's obligations hereunder. The Distributor's indemnification agreement
as aforesaid is expressly conditioned upon the Distributor's being promptly
notified, by letter or telegram addressed to the Distributor at its principal
business office, of any Liability of or against any Indemnified Distributor
Party.
9. Duration and Termination of the Agreement.
9.1. This Agreement shall become effective as of the date first written above
and shall remain in force from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by (i) the Fund's Board
of Trustees or by the vote of a majority of the outstanding voting securities
of the Fund, and (ii) by the vote of a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting or meetings called for the purpose of voting on such
approval.
9.2. This Agreement may be terminated at any time, without the payment of any
penalty, by the Fund's Board of Trustees or by vote of a vote of a majority of
the outstanding voting securities of the Fund, or by the Distributor, on sixty
days written notice to the other party. This Agreement shall automatically
terminate in the event of its assignment.
10. Definition of Certain Terms. The terms "vote of a majority of the
outstanding voting securities," "assignment," "affiliated person," and
"interested person," when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act and the rules and regulations
of the Commission thereunder.
11. Amendments of This Agreement. This Agreement may be amended by the parties
only if such amendment is specifically approved by (i) the Fund's Board of
Trustees or by the vote of a majority of outstanding voting securities of the
Fund and (ii) by the vote of a majority of those trustees of the Fund who are
not interested persons of either party to this Agreement, cast in person at a
meeting or meetings called for the purpose of voting on such approval.
12. Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York, and the
applicable provisions of the Investment Company Act. To the extent that the
applicable laws of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act or the
rules and regulations thereunder, the latter shall control.
The parties hereto have executed this Agreement as of the day and year first
above written.
THIRD AVENUE TRUST, for the Third Avenue Value Fund series
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
X. X. XXXXXXX, INC
By:
Name: Xxxxx Xxxxx
Title: President
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of February 28, 1997 between
THIRD AVENUE TRUST, a Delaware trust (the "Trust") on behalf of the Third Avenue
Small-Cap Value Fund series of the Trust (the "Fund"), and X.X. XXXXXXX, INC., a
New York corporation (the "Distributor").
RECITALS
1. The Trust is registered under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), as an open-end management investment company and
it is affirmatively in the interest of the Fund to offer its shares for sales
continuously.
2. The Distributor is a broker-dealer registered under the Securities Exchange
Act of 1934, as amended.
3. The Fund and the Distributor wish to enter into an agreement with each other
with respect to the continuous offering of the Fund's Common Stock $.001 par
value (the "shares") in order to assist in the sale and distribution of shares
of the Fund.
In consideration of the promises and the covenants hereinafter contained, the
Fund and the Distributor hereby agree as follows:
1. Appointment of the Distributor. The Fund hereby appoints the Distributor as
agent for the Fund, to assist in the sale and distribution of shares of the Fund
to the public, upon the terms and conditions and during the term of this
Agreement, and the Distributor hereby accepts such appointment and agrees to act
hereunder.
2. Nature of Duties. The Distributor shall (i) assist in the sale and
distribution of the Fund's shares and (ii) qualify and maintain the
qualification as a broker-dealer in such states where shares of the Fund are
registered for sale.
3. Sale of Shares of the Fund.
3.1. The Distributor will have the right to sell on behalf of the Fund, as its
agent, any shares needed but not more than the shares needed (except for
clerical errors in transmission) to fill unconditional orders for shares of the
Fund placed with the Distributor by investors. The Distributor agrees that the
Fund shall receive 100% of the net asset value, determined as set forth in the
Prospectus, for all shares sold by the Distributor.
3.2. The shares are to be sold by or through the Distributor to investors at a
price per share ("offering price") equal to the sum of the net asset value per
share determined as set forth in the Prospectus.
3.3. The Fund shall have the right to suspend the sale of shares at times when
redemption is suspended pursuant to the conditions set forth in subsection 4.2.
The Fund shall also have the right to suspend the sale of shares if a banking
moratorium shall have been declared by federal or New York authorities, if there
shall have been some other event, that, in the judgment of the Trustees of the
Fund makes it impracticable or inadvisable to sell shares, or if in the judgment
of the Trustees, the suspension of the sale of shares is in the best interests
of the Fund.
3.4. The Fund, or any agent of the Fund designated in writing by the Fund, shall
be promptly advised of all purchase orders for shares received by the
Distributor. Any order may be rejected by the Fund for any reason whatsoever.
The Fund (or its agent) will confirm orders upon their receipt, will make
appropriate book entries and upon receipt by the Fund (or its agent) of payment
therefore, will deliver deposit receipts or certificates for such shares
pursuant to the instructions of the Distributor. Payment shall be made to the
Fund in New York Clearing House funds, or by federal funds wire, cashiers check
or certified check. The Distributor agrees to cause such payment and such
instructions to be delivered promptly to the Fund (or its agent).
4. Repurchase or Redemption of Shares of the Fund.
4.1. Any of the outstanding shares may be tendered for redemption at any time,
and the Fund agrees to repurchase or redeem the shares so tendered in accordance
with its obligations set forth in Article IX of the Trust Instrument of the
Trust, as amended from time to time, and the applicable provision set forth in
the Prospectus.
4.2. Redemption of shares or payment may be suspended: 1) at times when the New
York Stock Exchange is closed other than customary weekend closings and holiday
closings, 2) when pursuant to rules and regulations of the Securities and
Exchange Commission (the "SEC"), trading on said Exchange is restricted or an
emergency exists as a result of which disposal by the Fund of securities owned
by it is not reasonably practicable or it is not reasonably practicable for the
Fund fairly to determine the value of its net assets, or 3) during any other
period when the SEC, by order, so permits.
5. Duties of the Fund.
5.1. The Fund shall make available to the Distributor, at the Fund's expense,
such number of copies of its Prospectus, quarterly reports and annual financial
statements as the Distributor shall reasonably request.
5.2. The Fund will qualify and maintain the qualifications, at the Fund's
expense, of an appropriate number of its shares for sale under the securities
laws of such state as selected by the Fund.
6. Duties of the Distributor.
6.1. The Distributor shall devote reasonable time and effort to effect sales of
shares of the Fund, but shall not be obligated to sell any specific number of
shares. The Distributor will qualify and maintain the qualifications, at the
Distributor's expense, of its registration as a broker-dealer in such states
where shares of the Fund are qualified for sale.
The services of the Distributor to the Fund hereunder are not to be deemed
exclusive and nothing contained herein shall prevent the Distributor from
entering into like arrangements with other investment companies so long as the
performance of its obligations hereunder is not impaired thereby.
6.2. In selling the shares of the Fund, the Distributor shall use all reasonable
efforts to conform in all respects with the requirements of all federal and
state laws relating to the sale of such securities. Neither the Distributor nor
any other person is authorized by the Fund to give any information or to make
any representations other than those contained in the Registration Statement or
related Prospectus or in any sales literature
specifically approved in writing by the Fund.
6.3. The Distributor shall adopt and follow procedures, as approved by the
officers of the Fund, for the confirmation of sales to investors, the collection
of amounts payable by investors on such sales, and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of the
National Association of Securities Dealers, Inc. (the "NASD"), as such
requirements may from time to time exist.
6.4. The Distributor warrants and represents that it is, and agrees to use all
commercially reasonable efforts to remain at all times, a member in good
standing of the NASD with authority to act as the Distributor.
7. Allocation of Expenses.
7.1. The Distributor shall bear all expenses incurred by it in connection with
its duties and activities under this Agreement, including the costs and expenses
of qualifying and maintaining the qualifications of its registration as a
broker-dealer in such states where shares of the Fund are qualified for sale,
preparing, printing and distributing any sales literature, advertising and other
materials which it creates for its use as Distributor.
7.2. Except as provided in subsection 7.1 hereof, nothing contained in this
Agreement shall be deemed or construed to impose upon the Distributor any
obligation to incur, pay, or reimburse the Fund for any other costs and
expenses.
7.3. The Fund shall bear the following costs and expenses related to the
continuous offering of its shares, including fees and disbursements of its
counsel and auditors, in connection with the preparation and filing of any
required registration statements and Prospectuses under the Investment Company
Act, the Securities Act, and all amendments and supplements thereto, and
preparing and mailing annual and interim reports and proxy materials to
shareholders (including but not limited to the expense of setting in type any
such registration statements, Prospectuses, annual or interim reports or proxy
materials).
7.4. Except as provided in subsection 7.3 hereof, nothing contained in this
Agreement shall be deemed or construed to impose upon the Fund any obligation to
incur, pay, or reimburse the Distributor for any other costs and expenses.
8. Indemnification.
8.1. The Fund agrees to indemnify, defend and hold harmless the Distributor, its
officers, directors, employees, agents, and any person who controls the
Distributor, if any, within the meaning of Section 15 of the Securities Act
(each, an "Indemnified Distributor Party" and collectively, the "Indemnified
Distributor Parties"), from and against any and all claims, demands, actions,
liabilities, losses, costs and expenses (including the cost of investigating or
defending same, and any reasonable attorneys' fees and expenses incurred in
connection therewith) (collectively, "Liabilities") which the Indemnified
Distributor Parties may incur which arise out of or are based upon (a) any
untrue statement of a material fact contained in the Registration Statement,
Prospectus or annual or interim report or (b) any omission to state a material
fact required to be stated in any thereof or necessary to make the statements in
any thereof not misleading, except insofar as such Liabilities arise out of or
are based upon any such untrue statement or omission or untrue statement or
omission made in reliance upon and in conformity with information furnished to
the Fund in writing in connection therewith by or on behalf of the Distributor;
provided, however, that the indemnity agreement in this Section 8.1 shall not
inure to the benefit of any Indemnified Distributor Party unless (i) a court of
competent jurisdiction shall have determined, in a final unappealable decision
on the merits, that such Indemnified Distributor Party was not liable, by reason
of willful misfeasance, bad faith, or gross negligence in the performance of its
or his duties, or by reason of its or his reckless disregard of its or his
obligations under this Agreement (collectively, "disabling conduct"), or (ii) in
the absence of such a judicial decision, a reasonable determination, based upon
a review of the facts, that the indemnified person was not liable by reason of
disabling conduct, evidenced by either (A) the vote of a majority of trustees
who are neither "interested persons" of the Fund as defined in Section 2(a) (19)
of the Securities Act nor parties to the proceeding or matter in question, or
(B) the written opinion of independent legal counsel. The Fund's indemnification
obligation as aforesaid is expressly conditioned upon the Fund's being promptly
notified, by letter or telegram addressed to the Fund at its principal business
office, of any Liability of or against any Indemnified Distributor Person. The
Fund agrees promptly to notify the Distributor of the commencement of any
litigation or proceeding against the Fund or any Indemnified Fund Parties (as
defined below) in connection with the issue and sale of any Fund shares.
8.2. The Distributor agrees to indemnify, defend and hold harmless the Fund, its
officers, directors, employees, agents and any person who controls the Fund, if
any, within the meaning of Section 15 of the Securities Act (each, an
"Indemnified Fund Party" and collectively, the "Indemnified Fund Parties"), from
and against any and all Liabilities which the Indemnified Fund Parties may incur
which arise out of or are based upon (a) any untrue statement of a material fact
contained in information furnished to the Fund in writing by or on behalf of the
Distributor for use in the Registration Statement or Prospectus or any omission
to state a material fact in connection with such information required to be
stated in the Registration Statement, Prospectus or annual or interim report or
necessary to make such information not misleading; or (b) any acts or omissions
by the Indemnified Distributor Parties in connection with the performance of the
Distributor's obligations hereunder. The Distributor's indemnification agreement
as aforesaid is expressly conditioned upon the Distributor's being promptly
notified, by letter or telegram addressed to the Distributor at its principal
business office, of any Liability of or against any Indemnified Distributor
Party.
9. Duration and Termination of the Agreement.
9.1. This Agreement shall become effective as of the date first written above
and shall remain in force from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by (i) the Fund's Board
of Trustees or by the vote of a majority of the outstanding voting securities
of the Fund, and (ii) by the vote of a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting or meetings called for the purpose of voting on such
approval.
9.2. This Agreement may be terminated at any time, without the payment of any
penalty, by the Fund's Board of Trustees or by vote of a vote of a majority of
the outstanding voting securities of the Fund, or by the Distributor, on sixty
days written notice to the other party. This Agreement shall automatically
terminate in the event of its assignment.
10. Definition of Certain Terms. The terms "vote of a majority of the
outstanding voting securities," "assignment," "affiliated person," and
"interested person," when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act and the rules and regulations
of the Commission thereunder.
11. Amendments of This Agreement. This Agreement may be amended by the parties
only if such amendment is specifically approved by (i) the Fund's Board of
Trustees or by the vote of a majority of outstanding voting securities of the
Fund and (ii) by the vote of a majority of those trustees of the Fund who are
not interested persons of either party to this Agreement, cast in person at a
meeting or meetings called for the purpose of voting on such approval.
12. Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York, and the
applicable provisions of the Investment Company Act. To the extent that the
applicable laws of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act or the
rules and regulations thereunder, the latter shall control.
The parties hereto have executed this Agreement as of the day and year first
above written.
THIRD AVENUE TRUST, for the Third Avenue
Small-Cap Value Fund series
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
X. X. XXXXXXX, INC
By:
Name: Xxxxx Xxxxx
Title: President
