DISTRIBUTION AGREEMENT
Exhibit 23 (e)(1)
AGREEMENT made this 1st day of August, 2007, between First Funds (f/k/a
Legacy Funds Group) (the “Trust”), having an office at 0000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000, and Foreside Distribution Services, L.P. (“Distributor”), having an
office at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
WHEREAS,
the Trust is an open-end management investment company, organized as a Massachusetts business trust and registered with the Securities and
“Exchange Commission (the “Commission”) under the Investment Company Act of 1940, as
amended (the “1940 Act”); and
WHEREAS, it is intended that Distributor act as the distributor of the shares
of beneficial interest (“Shares”) of each series of the Trust, as listed on
Schedule A, and such series as are hereafter created (all of the foregoing series
individually referred to herein as a “Fund” and collectively as the “Funds”).
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. | Services as Distributor. |
1.1 Distributor will act as agent of Trust on behalf of each Fund for the
distribution of the Shares covered by the registration statement of Trust then in
effect under the Securities Act of 1933, as amended (the “Securities Act”) and the
1940 Act. As used in this Agreement, the term “registration statement” shall mean
the registration statement of the Trust and any amendments thereto, then in effect,
including Parts A (the Prospectus), B (the Statement of Additional Information) and
C of each registration statement, as filed on Form N-IA, or any successor thereto,
with the Commission, together with any amendments thereto. The term “Prospectus”
shall mean the then current form of Prospectus and Statement of Additional
Information used by the Funds, in accordance with the rules of the Commission, for
delivery to shareholders and prospective shareholders after the effective dates of
the above-referenced registration statements, together with any amendments and
supplements thereto.
1.2 Consistent with the understanding between the Funds and the Distributor,
Distributor may solicit orders for the sale of the Shares and may undertake such
advertising and promotion as it believes reasonable in connection with such
solicitation. The Trust understands that Distributor is now and may in the future
be the distributor of the shares of many other investment companies or series, including investment
companies having investment objectives similar to those of the Trust. The Trust
further understands that shareholders and potential shareholders in the Trust may
invest in shares of such other investment companies. The Trust agrees that
Distributor’s duties to other investment companies shall not be deemed in conflict
with its duties to the Trust under this Section 1.2.
Exhibit 23 (e)(1)
1.3 Consistent with the understanding between the Funds and the
Distributor, and subject to the last sentence of this Section 1.3,
Distributor may engage in such activities as it deems appropriate in
connection with the promotion and sale of the Shares, which may include
advertising, compensation of underwriters, dealers and sales personnel,
the printing and mailing of Prospectuses to prospective shareholders
other than current shareholders, and the printing and mailing of sales
literature. Distributor may enter into dealer agreements and other
selling agreements with broker-dealers and other intermediaries;
provided, however, that Distributor shall have no obligation to make
any payments to any third parties, whether as finder’s fees,
compensation or otherwise, unless (i) Distributor has received a
corresponding payment from the applicable Fund’s Distribution Plan (as
defined in Section 2 of this Agreement), the Fund’s investment adviser
(the “Adviser”) or from another source as may be permitted by
applicable law, and (ii) such corresponding payment has been approved
by the Trust’s Board of Trustees.
1.4 In its capacity as distributor of the Shares, all activities
of the Distributor and its partners, agents, and employees shall comply
with all applicable laws, rules and regulations, including, without
limitation, the 1940 Act, all applicable rules and regulations
promulgated by the Commission thereunder, and all applicable rules and
regulations adopted by any securities association registered under the
Securities Exchange Act of 1934.
1.5 Whenever in their judgment such action is warranted by unusual
market, economic or political conditions or by abnormal circumstances
of any kind, the Trust’s officers may upon reasonable notice instruct
the Distributor to decline to accept any orders for or make any sales
of the Shares until such time as those officers deem it advisable to
accept such orders and to make such sales.
1.6 The Trust agrees to inform the Distributor from time to time
of the states in which the Fund or its administrator has registered or
otherwise qualified shares for sale, and the Trust agrees at its own
expense to execute any and all documents and to
furnish any and all information and otherwise to take all actions that
may be reasonably necessary in connection with the qualification of the
Shares for sale in such states as the Distributor may designate.
1.7 The Trust shall furnish from time to time, for use in
connection with the sale of the Shares, such supplemental information
with respect to the Funds and the Shares as Distributor may reasonably
request; and the Trust warrants that the statements contained in any
such supplemental information will fairly show or represent what they
purport to show or represent. The Trust shall also furnish Distributor
upon request with: (a) unaudited semi-annual statements of the Funds’
books and accounts prepared by the Trust, (b) a monthly itemized list of
the securities in the Funds, (c) monthly balance sheets as soon as
practicable after the end of each month, and (d) from time to time such
additional information regarding the financial condition of the Funds as
the Distributor may reasonably request.
1.8 The Trust represents and warrants to Distributor that all
registration statements, and each Prospectus, filed by the Trust with
the Commission under the Securities Act and the 1940 Act shall be
prepared in conformity with requirements of said Acts and rules and
regulations of the Commission thereunder. The registration statement
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Exhibit 23 (e)(1)
and Prospectus shall contain all statements required to be stated
therein in conformity with said Acts and the rules and regulations of
the Commission thereunder, and all statements of fact contained in any
such registration statement and Prospectus are true and correct in all
material respects. Furthermore, neither any registration statement nor
any Prospectus includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of the
Shares. The foregoing representations and warranties shall continue
throughout the term of this Agreement and be deemed to be of a
continuing nature, applicable to all Shares distributed hereunder. The
Trust may, but shall not be obligated to, propose from time to time
such amendment or amendments to any registration statement and such
supplement or supplements to any Prospectus as, in the light of future
developments, may, in the opinion of the Trust’s counsel, be necessary
or advisable. If the Trust shall not propose any amendment or
amendments and/or supplement or supplements within 15 days after
receipt by the Trust of a written request from Distributor to do so,
Distributor may, at its option, terminate this Agreement. In such case,
the Distributor will be held harmless from, and indemnified by Trust
for, any liability or loss resulting from the failure to implement such
amendment. The Trust shall not file any amendment to any registration
statement or supplement to any Prospectus without giving Distributor
reasonable notice thereof in advance; provided, however, that nothing
contained in this Agreement shall in any way limit the Trust’s right to
file at any time such amendments to any registration statement and/or
supplements to any Prospectus, of whatever character, as the Trust may
deem advisable, such right being in all respects absolute and
unconditional.
1.9 The Trust authorizes the Distributor and dealers to use any
Prospectus in the form furnished by the Trust from time to time in
connection with the sale of the Shares.
1.10 The Distributor may utilize agents in its performance of its
services and, with prior notice to the Trust, appoint in writing other
parties qualified to perform specific administration services
reasonably acceptable to the Trust (individually, a “SubAgent”) to
carry out some or all of its responsibilities under this Agreement;
provided, however, that a Sub-Agent shall be the agent of the
Distributor and not the agent of the Trust, and that the Distributor
shall be fully responsible for the acts of such Sub-Agent and shall not
be relieved of any of its responsibilities hereunder by the appointment
of a Sub-Agent.
1.11 The Distributor shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust in connection
with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
the Distributor’s part in the performance of its duties, from reckless
disregard by the Distributor of its obligations and duties under this
Agreement, or from the Distributor’s failure to comply with laws, rules
and regulations applicable to it in connection with its activities
hereunder. The Trust agrees to indemnify, defend and hold harmless the
Distributor, its officers, partners, employees, and any person who
controls the Distributor within the meaning of Section 15 of the
Securities Act (collectively, “Distributor Indemnitees”), from and
against any and all claims, demands, liabilities and expenses
(including the reasonable cost of investigating or defending such
claims,
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Exhibit 23 (e)(1)
demands or liabilities and any reasonable counsel fees incurred in
connection therewith) (collectively, “Claims”) which the Distributor
Indemnitees may incur under the Securities Act or under common law or
otherwise (a) as the result of the Distributor acting as distributor of
the Funds and entering into selling agreements, participation
agreements, shareholder servicing agreements or similar agreements with
financial intermediaries on behalf of the Trust; (b) arising out of or
based upon (i) any untrue statement, or alleged untrue statement, of a
material fact contained in any registration statement or any Prospectus,
(ii) any omission, or alleged omission, to state a material fact
required to be stated in any registration statement or any Prospectus or
necessary to make the statements therein not misleading, or (iii) any
untrue statement, or alleged untrue statement, of a material fact in any
Trust-related advertisement or sales literature, or any omission, or
alleged omission, to state a material fact required to be stated therein
to make the statements therein not misleading, in either case
notwithstanding the exercise of reasonable care in the preparation or
review thereof by the Distributor; or (c) arising out of or based upon
the electronic processing of orders over the internet at the Trust’s
request; provided, however, that the Trust’s agreement to indemnify the
Distributor Indemnitees pursuant to this Section 1.11 shall not be
construed to cover any Claims (A) pursuant to subsection (b) above to
the extent such untrue statement, alleged untrue statement, omission, or
alleged omission, was furnished in writing, or omitted from the relevant
writing furnished, as the case may be, to the Trust by the Distributor
for use in the registration statement or in corresponding statements
made in the Prospectus, advertisement or sales literature; (B) arising
out of or based upon the willful misfeasance, bad faith or gross
negligence of the Distributor in the performance of its duties or the
Distributor’s reckless disregard of its obligations and duties under
this Agreement; or (C) arising out of or based upon the Distributor’s
failure to comply with laws, rules and regulations applicable to it in
connection with its activities hereunder.
In the event of a Claim for which the Distributor Indemnitees may
be entitled to
indemnification hereunder, the Distributor shall provide the Trust
with written notice of the Claim, identifying the persons against whom
such Claim is brought, promptly following receipt of service of the
summons or other first legal process, and in any event within ten (to)
days of such receipt. The Trust will be entitled to assume the defense
of any suit brought to enforce any such Claim if such defense shall be
conducted by counsel of good standing chosen by the Trust and approved
by the Distributor, which approval shall not be unreasonably withheld.
In the event any such suit is not based solely on an alleged untrue
statement, omission, or wrongful act on the Trust’s part, the
Distributor shall have the right to participate in the defense. In the
event the Trust elects to assume the defense of any such suit and
retain counsel of good standing so approved by the Distributor, the
Distributor Indemnitees in such suit shall bear the fees and expenses
of any additional counsel retained by any of them, but in any case
where the Trust does not elect to assume the defense of any such suit
or in case the Distributor reasonably withholds approval of counsel
chosen by the Trust, the Trust will reimburse the Distributor
Indemnitees named as defendants in such suit, for the reasonable fees
and expenses of any counsel retained by them to the extent related to a
Claim covered under this Section 1.11. The Trust’s indemnification
agreement contained in this Section 1.11 shall remain operative and in
full force and effect regardless of any investigation made by or on
behalf of the Distributor Indemnitees, and shall survive the delivery
of any Shares.
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Exhibit 23 (e)(1)
1.12 The Distributor agrees to indemnify, defend and hold harmless the Trust,
its officers, Trustees, employees, and any person who controls the Trust within the
meaning of Section 15 of the Securities Act (collectively, “Trust Indemnitees”),
from and against any and all Claims which the Trust Indemnitees may incur under the
Securities Act or under common law or otherwise, arising out of or based upon (a)
any untrue statement, or alleged untrue statement, of a material fact contained in
any registration statement, Prospectus, or Trust-related advertisement or sales
literature, or upon any omission, or alleged omission, to state a material fact in
such materials that would be necessary to make the information therein not
misleading, which untrue statement, alleged untrue statement, omission, or alleged
omission, was furnished in writing, or omitted from the relevant writing furnished,
as the case may be, to the Trust by the Distributor for use in the registration
statement or in corresponding statements made in the Prospectus, or advertisement
or sales literature; (b) the willful misfeasance, bad faith or gross negligence of
the Distributor in the performance of its duties, or the Distributor’s reckless
disregard of its obligations and duties under this Agreement, or (c) the
Distributor’s failure to comply with laws, rules and regulations applicable to it
in connection with its activities hereunder (other than in respect of Trust-related
advertisements or sales literature that fails to comply with applicable laws
notwithstanding the exercise of reasonable care in the preparation and review
thereof by the Distributor).
In the event of a Claim for which the Trust Indemnitees may be entitled to
indemnification hereunder, the Trust shall provide the Distributor with written
notice of the Claim, identifying the persons against whom such Claim is brought,
promptly following receipt of service of the summons or other first legal process,
and in any event within ten (10) days of such receipt. The Distributor will be
entitled to assume the defense of any suit brought to enforce any such Claim if
such defense shall be conducted by counsel of good standing chosen by the
Distributor and approved by the Trust, which approval shall not be unreasonably
withheld. In the event any such suit is not based solely on an alleged untrue
statement, omission, or wrongful act on the Distributor’s part, the Trust shall
have the right to participate in the defense. In the event the Distributor elects
to assume the defense of any such suit and retain counsel of good standing so
approved by the Trust, the Trust Indemnitees in such suit shall bear the fees and
expenses of any additional counsel retained by any of them, but in any case where
the Distributor does not elect to assume the defense of any such suit or in case
the Trust reasonably withholds approval of counsel chosen by the Distributor, the
Distributor will reimburse the Trust Indemnitees named as defendants in such suit,
for the reasonable fees and expenses of any counsel retained by them to the extent
related to a Claim covered under this Section 1.12. The Distributor’s
indemnification agreement contained in this Section 1.12 shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
the Trust Indemnitees, and shall survive the delivery of any Shares.
1.13 No Shares shall be offered by either the Distributor or the Trust under
any of the provisions of this Agreement and no orders for the purchase or sale of
Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be
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Exhibit 23 (e)(1)
suspended under any of the provisions of the Securities Act or if and so long
as a current Prospectus as required by Section 1 O(b )(2) of said Securities
Act is not on file with the Commission; provided, however, that: (a) the
Distributor will not be obligated to cease offering shares until it has
received from the Trust written notice of such events, and (b) nothing
contained in this Section 1.13 shall in any way restrict or have an
application to or bearing upon the Trust’s obligation to repurchase Shares
from any shareholder in accordance with the provisions of the Trust’s
Prospectus, Agreement and Declaration of Trust, or Bylaws.
1.14 The Trust agrees to advise the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor:
(a) | of any request by the Commission for amendments to the registration statement or Prospectus then in effect or for additional information; | ||
(b) | in the event of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or Prospectus then in effect or the initiation by service of process on the Trust of any proceeding for that purpose; | ||
(c) | of the happening of any event that makes untrue any statement of a material fact made in the registration statement or Prospectus then in effect or which requires the making of a change in such registration statement or Prospectus in order to make the statements therein not misleading; and | ||
(d) | of any action of the Commission with respect to any amendment to any registration statement or Prospectus which may from time to time be filed with the Commission, which could reasonably be expected to have a material negative impact upon the offering of Shares. |
For purposes of this section, informal requests by or acts of the Staff of the Commission shall not
be deemed actions of or requests by the Commission unless they would reasonably be expected to have
a material negative impact upon the offering of Shares.
2. | Fees. |
2.1 Attached as Schedule B to this Agreement are all plans of
distribution under Rule 12b-l under the 1940 Act approved by the Funds and in
effect (collectively, the “Distribution Plan”). The Funds will deliver to
Distributor promptly after any changes thereto updated copies of the
Distribution Plan. For its services under this Agreement, the Distributor
shall be compensated as set forth on Schedules C and D to this Agreement. If
the Funds have a Distribution Plan that permits and authorizes them to
compensate the Distributor and required board approvals have been given, then
the Funds shall be responsible for all such compensation or such portions of
it as have been permitted and authorized under the Distribution Plan. The
Trust and the Distributor acknowledge that any compensation payable to the
Distributor by the Funds pursuant to this Agreement is limited to the amount
specified under the Distribution Plan, and that
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Exhibit 23 (e)(1)
any amounts payable to the Distributor pursuant to this Agreement
which are not permitted and authorized under the Distribution Plan may
be paid by the Adviser pursuant to a separate arrangement between the Adviser and the Distributor.
The fees set forth on Schedules C and D are subject to change by Distributor
upon 30 days advance notice.
2.2 If: (i) the Distributor properly receives fees from the Funds under
the Distribution Plan, other than for services rendered or expenses incurred,
that the Distributor is not obligated to pay to third party broker-dealers,
plan administrators or others (“Retained Fees”), and (ii) the Funds have
authority under the Distribution Plan to pay for some or all of the
Distributor’s services under this Agreement (“Permitted Services”), then all
of the Retained Fees will either be (a) returned to the funds and/or (b)
credited against the compensation payable by the funds to the Distributor for
Permitted Services; provided, however, that in no event shall any Retained
Fees be applied in a manner that results in a reduction of any obligation of
the Adviser to compensate the Distributor for services under this
Distribution Agreement.
3. | Sale and Payment. |
3.1 Shares of a Fund may be subject to a sales load and may be subject to
the imposition of a distribution fee pursuant to the Distribution Plan
referred to above. To the extent that Shares of a Fund are sold at an offering
price which includes a sales load or subject to a contingent deferred sales
load with respect to certain redemptions (either within a single class of
Shares or pursuant to two or more classes of Shares), such Shares shall
hereinafter be referred to collectively as “Load Shares” (and in the case of
Shares that are sold with a front-end sales load, “Front-end Load Shares”, or
Shares that are sold subject to a contingent deferred sales load, “CDSL
Shares”). Funds that issue Front-End Load Shares shall hereinafter be referred
to collectively as “Front-End Load Funds.” Funds that issue CDSL Shares shall
hereinafter be referred to collectively as “CDSL Funds.” Front-end Load Funds
and CDSL Funds may individually or collectively be referred as “Load Funds.”
Under this Agreement, the following provisions shall apply with respect to the
sale of, and payment for, Load Shares.
3.2 The Distributor shall have the right to offer Load Shares at their
net asset value and to sell such Load Shares to the public against orders
therefor at the applicable public offering price, as defined in Section 4
hereof. The Distributor shall also have the right to sell Load Shares to dealers against orders therefor at the public
offering price less a concession determined by the Distributor, which
concession shall not exceed the amount of the sales charge or underwriting
discount, if any, referred to in Section 4 below.
3.3 Prior to the time of delivery of any Load Shares by a Load Fund to,
or on the order of, the Distributor, the Distributor shall payor cause to be
paid to the Load Fund or to its order an amount in New York cleared funds
equal to the applicable net asset value of such Shares. The Distributor may
retain so much of any sales charge or underwriting discount as is not allowed
by the Distributor as a concession to dealers.
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Exhibit 23 (e)(1)
4. | Public Offering Price. |
The public offering price of a Load Share shall be the net asset value of such
Load Share next determined, plus any applicable sales charge, all as set forth in
the current Prospectus of the Load Fund. The net asset value of Load Shares shall be
determined in accordance with the then-current Prospectus of the Load Fund.
5. | Issuance of Shares. |
The Trust reserves the right to issue, transfer or sell Load Shares at net
asset values (a) in connection with the merger or consolidation of the Trust or the
Load Fund(s) with any other investment company or the acquisition by the Trust or
the Load Fund(s) of all or substantially all of the assets or of the outstanding
Shares of any other investment company; (b) in connection with a pro rata
distribution directly to the holders of Shares in the nature of a stock dividend or
split; (c) upon the exercise of subscription rights granted to the holders of
Shares on a pro rata basis; (d) in connection with the issuance of Load Shares
pursuant to any exchange and reinvestment privileges described in any then-current
Prospectus of the Load Fund; and (e) otherwise in accordance with any then-current
Prospectus of the Load Fund.
6. | Term, Duration and Termination. |
This Agreement shall become effective with respect to each Fund as of the
date first written above (the “Effective Date”) (or, if a particular Fund is not
in existence on such date, on the earlier of the date an amendment to Schedule A
to this Agreement relating to that Fund is executed or the Distributor begins providing services
under this Agreement with respect to such Fund) and, unless sooner terminated as
provided herein, shall continue through February 29, 2008. Thereafter, if not
terminated, this Agreement shall continue with respect to a particular Fund
automatically for successive one-year terms, provided that such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Trust’s Board of Trustees who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting for the purpose
of voting on such approval and (b) by the vote of the Trust’s Board of Trustees or
the vote of a majority of the outstanding voting securities of such Fund. This
Agreement is terminable without penalty with 60 days’ prior written notice, by the
Trust’s Board of Trustees, by vote of a majority of the outstanding voting
securities of the Trust, or by the Distributor. This Agreement will also terminate
automatically in the event of its assignment. (As used in this Agreement, the terms
“majority of the outstanding voting securities,” “interested persons” and
“assignment” shall have the same meaning as ascribed to such terms in the 1940
Act.)
7. | Privacy. |
Nonpublic personal financial information relating to consumers or customers
of the Funds provided by, or at the direction of, the Trust to the Distributor,
or collected or retained by the Distributor to perform its duties as distributor,
shall be considered confidential information. The Distributor shall not disclose
or otherwise use any
8
Exhibit 23 (e)(1)
nonpublic personal financial information relating to present or former shareholders
of the Funds other than for the purposes for which that information was disclosed to
the Distributor, including use under an exception in Rules 13, 14 or 15 of
Securities and Exchange Commission Regulation S-P in the ordinary course of business
to carry out those purposes. The Distributor shall have in place and maintain
physical, electronic and procedural safeguards reasonably designed to protect the
security, confidentiality and integrity of, and to prevent unauthorized access to or
use of, records and information relating to consumers and customers of the Funds.
The Trust represents to the Distributor that it has adopted a Statement of its
privacy policies and practices as required by Securities and Exchange Commission
Regulation S-P and agrees to provide the Distributor with a copy of that statement
annually.
8. Anti-Money Laundering Compliance. |
8.1 Each of Distributor and the Trust acknowledges that it is a financial
institution subject to the USA Patriot Act of2001 and the Bank Secrecy Act
(collectively, the “AML Acts”), which require, among other things, that financial
institutions adopt compliance programs to guard against money laundering. Each
represents and warrants to the other that it is in compliance with and will continue
to comply with the AML Acts and applicable regulations in all relevant respects. The
Distributor shall also provide written notice to each person or entity with which it
entered an agreement prior to the date hereof with respect to sale of the Trust’s
Shares, such notice informing such person of anti-money laundering compliance
obligations applicable to financial institutions under applicable laws and,
consequently, under applicable contractual provisions requiring compliance with
laws.
8.2 The Distributor shall include specific contractual provisions regarding
anti-money laundering compliance obligations in agreements entered into by the
Distributor with any dealer that is authorized to effect transactions in Shares of
the Trust.
8.3 Each of Distributor and the Trust agrees that it will take such further
steps, and cooperate with the other as may be reasonably necessary, to facilitate
compliance with the AML Acts, including but not limited to the provision of copies
of its written procedures, policies and controls related thereto (“AML Operations”).
Distributor undertakes that it will grant to the Trust, the Trust’s anti-money
laundering compliance officer and regulatory agencies, reasonable access to copies
of Distributor’s AML Operations, books and records pertaining to the Trust only. It
is expressly understood and agreed that the Trust and the Trust’s compliance officer
shall have no access to any of Distributor’s AML Operations, books or records
pertaining to other clients of Distributor.
9. | Notices. |
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice at
the following address: if to the Trust, to it at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
00000, Attention: President, with copy to First Financial Capital Advisors LLC, 000
Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000 Attention: Xxxxxx Xxxxx; and if to Distributor,
to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Broker Dealer Chief
Compliance Officer,
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Exhibit 23 (e)(1)
or at such other address as such party may from time to time specify in
writing to the other party pursuant to this Section.
10. | Confidentiality. |
During the term of this Agreement, the Distributor and the Trust
may have access to confidential information relating to such matters as
either party’s business, trade secrets, systems, procedures, manuals,
products, contracts, personnel, and clients. As used in this Agreement,
“Confidential Information” means information belonging to the
Distributor or the Trust which is of value to such party and the
disclosure of which could result in a competitive or other disadvantage
to either party, including, without limitation, financial information,
business practices and policies, know-how, trade secrets, market or
sales information or plans, customer lists, business plans, and all
provisions of this Agreement. Confidential Information includes
information developed by either party in the course of engaging in the
activities provided for in this Agreement, unless: (i) the information
is or becomes publicly known without breach of this Agreement, (ii) the
information is disclosed to the other party by a third party not under
an obligation confidentiality to the party whose Confidential
Information is at issue of which the party receiving the information
should reasonably be aware, or (iii) the information is independently
developed by a party without reference to the other’s Confidential
Information. Each party will protect the other’s Confidential
Information with at least the same degree of care it uses with respect
to its own Confidential Information, and will not use the other party’s
Confidential Information other than in connection with its duties and
obligations hereunder. Notwithstanding the foregoing, a party may
disclose the other’s Confidential Information if (i) required by law,
regulation or legal process or if requested by any Agency; (ii) it is
advised by counsel that it may incur liability for failure to make such
disclosure; (iii) requested to by the other party; provided that in the
event of (i) or (ii) the disclosing party shall give the other party
reasonable prior notice of such disclosure to the extent reasonably
practicably and cooperate with the other party (at such other party’s
expense) in any efforts to prevent such disclosure.
10. | Governing Law. |
This Agreement shall be construed in accordance with the laws
of the State of New York and the applicable provisions of the 1940
Act.
11. | Prior Agreements. |
This Agreement constitutes the complete agreement of the parties
as to the subject matter covered by this Agreement, and supersedes all
prior negotiations, understandings and agreements bearing upon the
subject matter covered by this Agreement. Without limiting the
foregoing, this Agreement supersedes and replaces that certain
Distribution Agreement dated as of August 26, 2005 between the parties,
which agreement is hereby terminated.
12. | Amendments. |
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Exhibit 23 (e)(1)
No amendment to this Agreement shall be valid unless made in writing and
executed by both parties hereto.
13. | Matters Relating to the Trust as a Massachusetts Business Trust |
It is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but shall bind only the trust property of the
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees, and this Agreement has been signed and delivered by an authorized officer
of the Trust, acting as such, and neither such authorization by the Trustees nor
such execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on them personally, but shall bind
only the trust property of the Trust as provided in the Trust’s Declaration of
Trust.
* * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.
First Funds | ||||
By: | ||||
Name: | ||||
Title: | ||||
Foreside Distribution Services, L.P. | ||||
By: | ||||
Name: | ||||
Title: |
11
Exhibit 23 (e)(1)
SCHEDULE A
FUNDS
First Caliber Equity Fund
First Sterling Income Fund
First Elite Money Market Fund
First Sterling Income Fund
First Elite Money Market Fund
12
Exhibit 23 (e)(1)
SCHEDULE B DISTRIBUTION PLAN
LEGACY FUNDS GROUP PLAN OF
DISTRIBUTION PURSUANT TO RULE
12B-1 Under the Investment Company Act of
1940 (Class A Shares)
LEGACY FUNDS GROUP PLAN OF
DISTRIBUTION PURSUANT TO RULE
12B-1 Under the Investment Company Act of
1940 (Class A Shares)
Plan of Distribution adopted as of April 1, 2002 by Legacy Funds Group, a
Massachusetts business trust (the “Trust”), on behalf of the Class A shares of
its separately designated series (the “Funds”).
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the “1940 Act”), as an open-end management investment company;
WHEREAS, each Fund is a separately designated investment series of the Trust
with its own investment objective, and policies offering separate
classes of shares of beneficial interest, par value $.001 per share, of the Trust (the
“Shares”);
WHEREAS, the Trust has entered into a Distribution Agreement with BISYS Fund
Services Limited Partnership (the “Distributor”), pursuant to which the
Distributor acts as the exclusive distributor and representative of the Trust in
the offer and sale of the Shares to the public;
WHEREAS, the Trust desires to adopt this Plan of Distribution (the “Plan”) in
accordance with Rule 12b-1 under the 1940 Act, pursuant to which each Fund may pay
an account maintenance fee and a distribution and servicing fee to the Distributor
with respect to Class A shares of the Fund; and
WHEREAS, the Board of Trustees of the Trust (the “Trustees”) as a whole and
the Trustees who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
entered into in connection with this Plan (the “Independent Trustees”), in
considering whether the Funds should implement a written plan, have requested and
evaluated such information as they deemed necessary to an informed determination
as to whether a written plan should be implemented and have considered such
pertinent factors as they deemed necessary to form the basis for a decision to use
assets attributable to Class A shares for such purposes; and
WHEREAS, the Trustees as a whole and the Independent Trustees, in voting to
approve such a plan, have concluded, in the exercise of reasonable business
judgment and in light of their respective fiduciary duties that there is a
reasonable likelihood that this Plan will benefit each Fund and its Class A
shareholders.
13
Exhibit 23 (e)(1)
NOW THEREFORE, the Trust on behalf of the Funds hereby adopts this
Plan on the following terms:
1. Distribution and Servicing Activities. Each Fund shall
pay the Distributor a distribution and servicing fee under the Plan at the end of each month
at the annual rate of up to 0.25% of average daily net assets
attributable to Class A shares of the Fund to compensate the Distributor
and broker-dealers for providing sales and promotional activities and
services and for the provision of personal services to holders of Class
A shares and/or the maintenance of such shareholder accounts. Such
activities will relate to the sale, promotion and marketing of each
Fund’s Class A shares and servicing Class A shareholder accounts.
Payments may be made for sales commissions to financial consultants for
selling Class A shares, compensation, sales incentives and payments to
sales and marketing personnel, and on expenses incurred in connection
with sales and promotional activities, including advertising
expenditures related to the Class A shares and the costs of preparing
and distributing promotional materials with respect to such
Class A shares. Payment of the distribution and servicing fee described in this
Section 1 shall be subject to any limitations set forth in applicable
regulations of the National Association of Securities Dealers, Inc.
Nothing herein shall prohibit the Distributor from collecting
distribution and servicing fees in any given year, as provided
hereunder, in excess of expenditures made in such year for sales and
promotional activities with respect to the Funds.
2. Payments to Other Parties. The Funds hereby authorize
the Distributor to enter into agreements with broker-dealers to provide compensation to
such broker-dealers for activities and services of the type referred to
in Section 1 hereof. The Distributor may reallocate all or a portion of
its distribution and servicing fee for distribution activities to such
broker-dealers as compensation for the above-mentioned activities and
services. Such agreements shall provide that the broker-dealers deliver
to the Distributor such information as is reasonably necessary to
permit the Distributor to comply with the reporting requirements set
forth in Section 5 hereof.
3. Related Agreements. All agreements with any person
relating to implementation of this Plan shall be in writing, and any agreement
related to this Plan shall provide, as to each Fund:
(a) that such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the Independent
Trustees or, by vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of Class A shares of the Fund, on not more
than 60 days’ written notice to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the
event of its assignment.
4. Quarterly Reports. The Trustees shall be provided, at
least quarterly, a written report of all amounts expended pursuant to
this Plan and any related agreement and the purposes for which such
expenditures were made.
14
Exhibit 23 (e)(1)
5. Term and Termination.
(a) As to each Fund, this Plan shall become effective as of the
date hereof, and unless terminated as herein provided, shall continue
from year to year thereafter, so long as such continuance is
specifically approved at least annually by votes, cast in person at a
meeting called for the purpose of voting on such approval, of a
majority of both (i) the Trustees and (ii) the Independent Trustees of
the Trust.
(b) As to each Fund, this Plan may be terminated without penalty
at any time by vote of a majority of the Independent Trustees or by
vote of a majority of the outstanding voting securities (as defined
in the 0000 Xxx) of Class A shares of the Fund.
6. Amendments. As to each Fund, this Plan may not be
amended to increase materially the maximum expenditures permitted by Section 1
hereof unless such amendment is approved by a vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of Class A
shares of the Fund, and no material amendment to this Plan shall be made
unless approved in the manner provided for the annual renewal of this
Plan in Section 5(a) hereof.
7. Recordkeeping. The Trust shall preserve copies of this
Plan and any related agreement and all reports made pursuant to Section
4 hereof for a period of not less than six years from the date of this
Plan, the first two years in an easily accessible place.
8. Definition of Certain Terms. For purposes of this Plan,
the terms “assignment”, “interested person”, “majority of the
outstanding voting securities”, and “principal underwriter” shall have
their respective meanings defined in the 1940 Act, subject, however, to
such exemptions as may be granted to either the Trust or the principal
underwriter of the Shares by the Securities and Exchange Commission or
its staff.
9. Separate Series. Pursuant to the provisions of the
Declaration of Trust, each Fund is a separate series of the Trust, and
all debts, liabilities and expenses of Class A shares of the relevant Fund shall be enforceable only against the assets
of Class A shares of such Fund and not against the assets of any other Fund
or class of shares or of the Trust as a whole or any Trustee, officer or
shareholder of the Trust individually.
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Exhibit 23 (e)(1)
SCHEDULE C
COMPENSATION OF THE DISTRIBUTOR
1. BASIC DISTRIBUTION SERVICES. For providing the distribution entity and
related infrastructure and platform, including requisite registrations and
qualifications, premises, personnel, compliance, ordinary fund board meeting
preparation, maintenance of selling agreements, clearance of advertising and sales
literature with regulators, filing appropriate documentation for advisory
representatives to qualify as registered representatives of the Distributor
(provided that the Adviser is solely responsible for its representatives’ meeting
examination requirements) and their related registrations and fees, ordinary
supervisory services, overhead, Financial Research Corporation’s Mutual Fund Views
on the News and Monitor publications, and return on investment, the Distributor
shall receive an annual fee of $75,000, billed monthly.
2. SPECIAL DISTRIBUTION SERVICES. For special distribution services,
including those set forth on Schedule D to this Agreement, such as additional
personnel, registrations, marketing services, printing and fulfillment, website
services, proprietary distribution expertise for particular circumstances, and any
other services in addition to the basic distribution services covered by Paragraph
1 above, the Distributor shall be reimbursed promptly upon invoicing its expenses
for such services, including: (a) all costs to support additional personnel; (b)
regulatory fees including NASD CRD costs associated with marketing materials; and
(c) printing, postage and fulfillment costs, and (d) amounts payable under
additional agreements to which Distributor is a party.
3. SPECIAL CONDUIT SITUATIONS. If the Distribution Plan, or any other Fund
plans of distribution under Rule 12b-l that contemplate up front and/or recurring
commission and/or service payments to broker dealers, retirement plan administrators
or others by the Distributor with respect to back-end loads, level loads, or
otherwise, unless expressly agreed otherwise in writing between the parties, all
such payments shall be made to the Distributor, which shall act as a conduit for
making such payments to such brokerdealers, retirement plan administrators or
others.
4. OTHER PAYMENTS BY THE DISTRIBUTOR. If the Distributor is required
to make any payments to third parties in respect of distribution, which
payments are contemplated by the parties to the distribution agreement or
otherwise arise in the ordinary course of business, the Distributor shall be
promptly reimbursed for such payments upon invoicing them.
5. FEE ADJUSTMENTS. The fixed fees and other fees expressed as stated
dollar amounts in this Schedule C and in this Agreement are subject to annual
increases, commencing on the one-year anniversary date oft he date oft his
Agreement, in an amount equal to the percentage increase in consumer prices for
services as measured by the United States Consumer Price Index entitled “All
Services Less Rent of Shelter,” or a similar index should such index no longer be
published, since such one-year anniversary or since the date of the last fee
increase, as applicable.
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Exhibit 23 (e)(1)
SCHEDULE D
SPECIAL DISTRIBUTION SERVICES AND FEES
SPECIAL DISTRIBUTION SERVICES AND FEES
Services
|
Fees | |
[TO BE UPDATED]
|
[TO BE UPDATED] |
Expenses Applicable to Special Distribution Services | ||
Except as expressly set forth above, out-of-pocket expenses incurred by Distributor in the performance of its services under this Agreement are not included in the above fees. Such out-of-pocket expenses may include, without limitation: |
• | reasonable travel and entertainment costs; | ||
• | expenses incurred by the Distributor in qualifying, registering and maintaining the registration of the Distributor and each individual comprising Wholesaling Personnel as a registered representative of the Distributor under applicable federal and state laws and rules of the NASD, e.g., CRD fees and state fees; | ||
• | Sponsorships, Promotions, Sales Incentives; | ||
• | any and all compensation to be paid to a third party as paying agent for distribution activities (platform fees, finders fees, sub-TA fees, 12b-1 pass thru, commissions, etc.); | ||
• | costs and expenses incurred for telephone service, photocopying and office supplies; | ||
• | advertising costs; | ||
• | costs for printing, paper stock and costs of other materials, electronic transmission, courier, talent utilized in sales materials (e.g. models), design output, photostats, photography, and illustrations; | ||
• | packaging, shipping, postage, and photocopies; | ||
• | taxes that are paid or payable by the Distributor or its affiliates in connection with its services hereunder, other than taxes customarily and actually imposed upon the income that the Distributor receives hereunder. |