DISTRIBUTION AGREEMENT
between
The Grand Prix Fund
and
T.O. Xxxxxxxxxx Securities, Inc.
THIS AGREEMENT is made effective as of the 15th
day of June, 1999, by and between The Grand Prix Fund,
a Maryland Corporation (the "Fund") and T.O. Xxxxxxxxxx
Securities, a corporation organized and existing under
the laws of the State of Connecticut ("TORS").
WHEREAS the Fund is registered under the
Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company,
and will register one or more distinct series of shares
of beneficial interest ("Shares") for sale to the
public under the Securities Act of 1933, as amended
(the "1933 Act"), and will qualify its shares for sale
to the public under various state securities laws; and
WHEREAS, TORS is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended
(the "1934 Act") and under each state's securities
laws, and is also a member of the National Association
of Securities Dealers, Inc. (the "NASD"); and
WHEREAS the Fund desires to retain TORS as
principal underwriter and national distributor in
connection with the offering and sale of the Shares of
each series listed on Schedule A (as amended from time
to time) to this Agreement and TORS is willing to act
as principal underwriter and national distributor for
the Fund on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the promises
and mutual covenants herein contained, it is agreed
between the parties hereto as follows:
1. Appointment. The Fund hereby appoints TORS as
its agent to be the principal underwriter and national
distributor of its Shares and to hold itself out as
available to receive and accept orders for the purchase
and redemption of the Shares on behalf of the Fund,
subject to the terms and for the period set forth in
this Agreement. TORS hereby accepts such appointment
and agrees to act hereunder. The Fund understands that
any solicitation activities conducted on behalf of the
Fund will be conducted primarily by employees of the
Fund's sponsor who shall become registered
representatives of TORS.
2. Services and Duties of TORS
(a) TORS agrees to distribute Shares on a best
efforts basis from time to time during the term of this
Agreement as agent for the Fund and upon the terms
described in the Registration Statement. As used in
this Agreement, the term "Registration Statement" shall
mean the currently effective registration statement of
the Fund, and any supplements thereto, under the 1933
Act and the 1940 Act.
(b) TORS, with the operational assistance of the
Fund's transfer agent, will hold itself available to
receive purchase and redemption orders satisfactory to
T.O.R. for shares and will accept such orders on behalf
of the Fund. Such purchase orders shall be deemed
effective at the time and in the manner set forth in
the Registration Statement.
(c) TORS, with the operational assistance of the
Fund's transfer agent, shall make Shares available
through the National Securities Clearing Corporation's
Fund/SERV System.
(d) TORS and its registered personnel shall
provide to investors and potential investors only such
information regarding the Fund as the Fund shall
provide or approve. TORS shall review and file all
proposed advertisements and sales literature with
regulators, as appropriate, and consult with the Fund
regarding any comments provided by regulators with
respect to such materials.
(e) The offering price of the Shares shall be the
price determined in accordance with, and in the manner
set forth in, the most-current Prospectus. The Fund
shall make available to TORS a statement of each
computation of net asset value and the details of
entering into such computation.
(f) TORS in its sole discretion may repurchase
Shares offered for sale by the shareholders.
Repurchase of Shares by TORS shall be at the price
determined in accordance with, and in the manner set
forth in, the most current Prospectus. At the end of
each business day, T.O.R shall notify, by any
appropriate means, the Fund and its transfer agent of
the orders for repurchase of Shares received by TORS
since the last such report, the amount to be paid for
such Shares, and the identity of the shareholders
offering Shares for repurchase. The Fund reserves the
right to suspend such repurchase right upon written
notice to TORS. TORS further agrees to act as agent
for the Fund to receive and transmit promptly to the
Fund's transfer agent shareholder requests for
redemption of Shares.
(g) TORS shall not be obligated to sell any
certain number of Shares.
(h) TORS shall prepare reports for the Board
regarding its activities under this Agreement as from
time to time shall be reasonably requested by the
Board.
(i) TORS shall at all times during the term of
this Agreement remain registered as a broker-dealer
under the 1934 Act and with all 50 states, and shall
also remain a member in good standing of the NASD.
TORS shall immediately notify the Fund in writing if it
receives written notification that such registrations
or membership have been temporarily or permanently
suspended, limited or terminated.
(j) TORS will serve as licensing/regulatory agent
for employees and other personnel of the Fund's
sponsor, Target Investors, Inc., who will be registered
as TORS broker-dealer representatives.
3. Duties of the Fund.
(a) The Fund shall keep TORS fully informed of
its affairs and shall provide to TORS from time to time
copies of all information, financial statements, and
other papers that TORS
may reasonably request for use
in connection with the distribution of Shares,
including, without limitation, certified copies of any
financial statements prepared for the Fund by its
independent public accountant and such reasonable
number of copies of the most current Prospectus,
Statement of Additional Information ("SAI"), and annual
and interim reports as TORS may request, and the fund
shall fully cooperate in the efforts of TORS to
distribute and arrange for the distribution of Shares.
(b) The Fund shall maintain a currently effective
Registration Statement on Form N-1A with the Securities
and Exchange Commission (the "SEC"), satisfy proper
notice filing and fee payment provisions of applicable
states and file such reports and other documents as may
be required under applicable federal and state laws.
The Fund shall notify TORS in writing of the states in
which the Shares may be sold and shall notify TORS in
writing of any changes to such information. The Fund
shall bear all expenses related to preparing and
typesetting such Prospectuses, SAI and other materials
required by law and such other expenses, including
printing and mailing expenses, related to the Fund's
communication with persons who are shareholders.
(c) The Fund shall not use any advertisements or
other sales materials that have not been (i) submitted
to TORS for its review and approval, and (ii) if
required, filed with the appropriate regulators.
(d) The Fund represents and warrants that its
Registration Statement and any advertisements and sales
literature (excluding statements relating to TORS and
the services it provides that are based upon written
information furnished by TORS expressly for inclusion
therein) of the Fund shall not contain any untrue
statement of material fact or omit to state any
material fact required to be stated therein or
necessary to make the statements therein not
misleading, and that all statements or information
furnished to TORS pursuant to Section 3(a) hereof,
shall be true and correct in all material respects.
4. Other Fund Operating Agreements. The Fund and
TORS further agree that the Fund has entered into the
Fund Administrative Servicing Agreement, Fund
Accounting Servicing Agreement, Transfer Agent
Servicing Agreement, Custodian Servicing Agreement and
Fulfillment Services Agreement with Firstar Mutual Fund
Services, LLC of Milwaukee, Wisconsin ("FMFS"), copies
of which are in the hands of the parties hereto and to
which reference may be had (which agreements are herein
collectively referred to as the "Fund Operating
Agreements.") The Fund agrees to maintain the Fund
Operating Agreements in effect during the term of this
Agreement. The parties hereto agree that TORS is a
third party beneficiary to the Fund Operating
Agreements and that portions of the duties and services
to be provided by TORS hereunder can be performed by
FMFS for TORS' and the Fund's benefit. The Fund shall
be responsible for all amounts due under the Fund
Operating Agreements and TORS shall not be responsible
for duplication of duties or services provided for in
the Fund Operating Agreements or any fees or expenses
thereunder.
5. Other Broker-Dealers. TORS in its discretion
shall enter into agreements to sell Shares to such
registered and qualified retail dealers, as reasonably
requested by the Fund. In making agreements with such
dealers, TORS shall act only as principal and not as
agent for the
Fund. The form of any such dealer
agreement shall be mutually agreed upon and approved by
the Fund and TORS.
6. Withdrawal of Offering. The Fund reserves the
right at any time to withdraw all offerings of any or
all Shares by written notice to TORS at its principal
office. No Shares shall be offered by either TORS or
the Fund under any provisions of this Agreement and no
orders for the purchase of Shares hereunder shall be
accepted by the Fund if and so long as effectiveness of
the Registration Statement then in effect or any
necessary amendments thereto shall be suspended under
any of the provisions of the 1933 Act, or if and so
long as a current prospectus as required by Section
5(b)(2) of the 1933 Act is not on file with the SEC.
7. Services Not Exclusive. The services
furnished by TORS hereunder are not to be deemed
exclusive. TORS shall be free to furnish similar
services to others so long as its services under this
Agreement are not impaired thereby. The Fund reserves
the right to (i) sell Shares to investors on
applications received and accepted by the Fund; (ii)
issue Shares in connection with a merger,
consolidation, or recapitalization of the Fund; (iii)
issue additional Shares to holders of Shares; or (iv)
issue Shares in connection with any offer of exchange
permitted by Section 11 of the 1940 Act.
8. Expenses of the Fund. The Fund shall bear all
costs and expenses of registering the Shares with the
SEC and state and other regulatory bodies, and shall
assume expenses related to communications with
shareholders of the Fund including, but not limited to,
(i) fees and disbursements of its counsel and
independent public accountant; (ii) the preparation,
filing, and printing of Registration Statements and/or
Prospectuses or SAIs; (iii) the preparation and mailing
of annual and interim reports, Prospectuses, SAIs, and
proxy materials to shareholders; (iv) such other
expenses related to the communications with persons who
are shareholders of the Fund; and (v) the
qualifications of Shares for sale under the securities
laws of such jurisdictions as shall be selected by the
Fund pursuant to the Paragraph 3(b) hereof, and the
costs and expenses, payable to each jurisdiction for
continuing qualification therein. In addition, the
Fund shall, bear all costs of preparing, printing,
mailing, and filing any advertisements and sales
literature. TORS does not assume responsibility for
any expenses not assumed hereunder.
9. Compensation. As compensation for the
services performed and the expenses assumed by TORS
under this Agreement including, but not limited to, any
commissions paid for sales of Shares, TORS shall be
entitled to the fees and expenses set forth in Schedule
B to this Agreement which are payable promptly after
the last day of each month. Such fees shall be paid to
TORS by the Fund pursuant to its Rule 12b-1 plan or, if
Rule 12b-1 payments are not sufficient to pay such fees
and expenses, or if the Rule 12b-1 plan is
discontinued, or if the Fund's sponsor, Target
Investors, Inc. otherwise determines that Rule 12b-1
fees shall not, in whole or in part, be used to pay
TORS, Target Investors, Inc. shall be responsible for
the payment of the amount of such fees not covered by
Rule 12b-1 payments. Target Investors, Inc. will
arrange for the monthly payment to be paid directly
from their advisory fee by Firstar's Fund
Administration and Compliance department or the fund's
12b-1 plan.
10. Status of TORS. TORS is an independent
contractor and shall be agent of the Fund only with
respect to the sale and redemption of Shares.
11. Indemnification.
(a) The Fund agrees to indemnify, defend, and
hold TORS, its officers, and directors, and any person
who controls TORS within the meaning of Section 15 of
the 1933 Act, free and harmless from and against any
and all claims, demands, or liabilities, and expenses
(including the cost of investigating or defending such
claims, demands, liabilities, and any counsel fees
incurred in connection therewith) that TORS, its
officers and directors, or any such controlling person
may incur under the 1933 Act, or under common law or
otherwise, arising out of or based upon any (i) alleged
untrue statement of a material fact contained in the
Registration Statement, Prospectus, SAI, or sales
literature; (ii) alleged omission to state a material
fact required to be stated in the Fund's registration
statement or necessary to make the statements therein
not misleading; or (iii) failure by the Fund to comply
with the terms of the Agreement; provided, that in no
event shall anything contained herein be so construed
as to protect TORS against any liability to the Fund or
its shareholders to which TORS 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.
(b) The Fund shall not be liable to TORS under
this Agreement with respect to any claim made against
TORS or any person indemnified unless TORS or other
such person shall have notified the Fund in writing of
the claim within a reasonable time after the summons or
other first written notification giving information of
the nature of the claim shall have been served upon
TORS or such other person (or after TORS or other
person shall have received notice of service on any
designated agent). However, failure to notify the Fund
of any claim shall not relieve the Fund from any
liability that it may have to TORS or any person
against whom such action is brought otherwise than on
account of this Agreement.
(c) The Fund shall be entitled to participate at
its own expense in the defense or, if it so elects, to
assume the defense of any suit brought to enforce any
claims subject to this Agreement. If the Fund elects
to assume the defense of any such claim, the defense
shall be conducted by counsel chosen by the Fund and
satisfactory indemnified defendants in the suit whose
consent shall not be unreasonably withheld. In the
event that the Fund elects to assume the defense of any
suit and retain counsel, the indemnified defendants
shall bear the fees and expenses of any additional
counsel retained by them. If the Fund does not elect
to assume the defense of a suit, it will reimburse the
indemnified defendants for the reasonable fees and
expenses of any counsel retained by the indemnified
defendants. The Fund agrees to promptly notify TORS of
the commencement of any litigation or proceedings
against it or any of its officers and directors in
connection with the issuance or sale of any of its
Shares.
(d) TORS agrees to indemnify, defend, and hold
the Fund, its officers and directors, and any person
who controls the Fund within the meaning of Section 15
of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities, and expenses
(including the cost of investigating or defending
against such claims, demands or liabilities, and any
counsel fees incurred in connection therewith) that the
Fund, its directors and officers, or any such
controlling person may incur under the 1933 Act, or
under common law or otherwise, resulting from TORS'
willful misfeasance, bad faith, or gross negligence in
the performance of its obligations and duties under
this Agreement, or arising out of or based upon any
alleged untrue statement of a material fact contained
in information furnished in writing by TORS to the Fund
for use in the Registration Statement, Prospectus, or
SAI arising out of or based upon any alleged omission
to state a material fact in connection with such
information required to be stated in any such document
or necessary to make such information not misleading.
(e) TORS shall be entitled to participate, at its
own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the
claim, but if TORS elects to assume the defense, the
defense shall be conducted by counsel chosen by TORS
and satisfactory to the indemnified defendants whose
approval shall not be unreasonably withheld. In the
event that TORS elects to assume the defense of any
suit and retain counsel, the defendants in the suit
shall bear the fees and expenses of any additional
counsel retained by them. If TORS does not elect to
assume the defense of any suit, it will reimburse the
indemnified defendants in the suit for the reasonable
fees and expenses of any counsel retained by them.
12. Duration and Termination.
(a) This Agreement shall become effective on the
date first written above or such later date as
indicated in Schedule A and, will continue in effect
for a minimum of one year from the above written date.
Thereafter, if not terminated, this Agreement shall
continue in effect for successive annual periods,
provided that such continuance is specifically approved
at least annually (i) by a vote of a majority of the
Fund's Board who are neither interested persons (as
defined in the 0000 Xxx) of the Fund ("Independent
Trustees") or TORS cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by
the Board or by vote of a majority of the outstanding
voting securities of the Fund.
(b) Notwithstanding the foregoing, this Agreement
may be terminated in its entirety at any time, without
the, payment of any penalty, by vote of the Board, by
vote of a majority of the Independent Trustees, or by
vote of a majority of the outstanding voting securities
of the Fund on sixty days' written notice to TORS or by
TORS at any time, without the payment of any penalty,
on sixty days' written notice to the Fund. This
Agreement will automatically terminate in the event of
its assignment.
13. Amendment of this Agreement. No provision of
this Agreement may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought.
This Agreement may be amended with the approval of the
Board or of a majority of the outstanding voting
securities of the Fund; provided, that in either case,
such amendment also shall be approved by a majority of
the Independent trustees/directors.
14. Limitation of Liability. The Board and
shareholders of the Fund shall not be personally liable
for obligations of the Fund in connection with any
matter arising from or in connection with this
Agreement. This Agreement is not binding upon any
trustee, officer, or shareholder of the Fund
individually, and no such person shall be individually
liable with respect to any action or inaction resulting
from this Agreement.
15. Notice. Any notice required or permitted to
be given by either party to the other shall be deemed
sufficient upon receipt in writing at the other party's
principal offices.
16. Miscellaneous. The captions in this
Agreement are included for convenience of reference
only and in no way define or delimit any of the
provisions hereof or otherwise affect their
construction or effect. If any provision of this
Agreement shall be held or made invalid by a court
decision, statute, rule, or otherwise, the remainder of
this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective
successors. As used in this Agreement, the terms
"majority of the outstanding voting securities,"
"interested person," and "assignment" shall have the
same meaning as such terms have in the 1940 Act.
17. Governing Law. This Agreement shall be
construed in accordance with the laws of the State of
Connecticut and the 1940 Act (without regard, however,
to the conflicts of law principles). To the extent
that the applicable laws of the state of Connecticut
conflict with the applicable provisions of the 1940
Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their officers
designated as of the day and year first above written.
Target Investors, Inc./Grand Prix Fund T.O. Xxxxxxxxxx Securities, Inc.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxx, Jr.
-------------------- -----------------------
Print: Xxxxxx Xxxxxxx Print: Xxxxxx Xxxxxx, Jr.
------------------ ----------------------
Title: President Title: President
------------------ ----------------------
Date: June 15, 1999 Date: June 15,1999
------------------ ----------------------
Attest: Xxxx Xxxx Xxxxx Attest: Xxxxxxxx X. Xxxxx
----------------- --------------------
SCHEDULE A
to the
DISTRIBUTION AGREEMENT
between
The Grand Prix Fund
and
T.O. Xxxxxxxxxx Securities, Inc.
Pursuant to Section 1 of the Distribution
Agreement between The Grand Prix Fund ("Fund") and T.O.
Xxxxxxxxxx Securities (`TORS"), the Fund hereby
appoints TORS as its agent to be the principal
underwriter of Fund with respect to its following series;
The Grand Prix Fund
Dated: June 15, 1999
AMENDMENT A
The Grand Prix Fund (the "Trust") and T.O.
Xxxxxxxxxx Securities, Inc. (TORS) further agree that
the Trust has entered into the Fund Administration
Services Agreement, Fund Accounting Services Agreement,
Transfer Agent Agreement, Custodian Agreement and
Fulfillment Services Agreement with Firstar Mutual Fund
Service, LLC of Milwaukee, Wisconsin (FMFS) or an
affiliate, copies of which are in the hands of the
parties hereto and to which reference may be had (which
agreements are herein collectively referred to as the
"Trust Operating Agreements.") The Trust agrees to
maintain the Trust Operating Agreements in effect
during the term of this Agreement. The parties hereto
agree that TORS is a third party beneficiary to the
Trust Operating Agreements and that substantial
portions of the duties and services to be provided by
TORS, hereunder are to be performed by FMFS for TORS's
and the Trust's benefit. The Trust shall be
responsible for all amounts due under the Trust
Operating Agreements and TORS shall not be responsible
for duplication of duties or services provided for in
the Trust Operating Agreements or any fees or expenses
thereunder. Furthermore, TORS has entered into an
exclusive servicing agreement with FMFS. The minimum
term for the distribution services with TORS is a one
year period.
The Grand Prix Fund/Target Investors, Inc. T.O. Xxxxxxxxxx Securities, Inc.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxx, Jr.
---------------------- ---------------------------
Print: Xxxxxx Xxxxxxx Print: Xxxxxx Xxxxxx, Jr.
------------------- ------------------------
Title: President Title: President
------------------- ------------------------
Date: June 15, 1999 Date: June 15, 1999
------------------- ------------------------
Attest: /s/ Xxxx Xxxx Xxxxx Attest: /s/ Xxxxxxxx X. Xxxxx
--------------------- -----------------------
SCHEDULE B
to the
DISTRIBUTION AGREEMENT
between
The Grand Prix Fund
and
T.O. Xxxxxxxxxx Securities, Inc.
As compensation pursuant to Section 9 of the
Distribution Agreement between The Grand Prix Fund
("Fund") and T.O. Xxxxxxxxxx Securities, Inc. ("TORS"),
the Fund shall pay to TORS the sum of:
1. an annual fee of $15,000 for the first series
of the Fund and $7,500 for each series or
class thereafter or .01% (1 basis point) of
the average daily net assets of each series,
computed daily and paid monthly, whichever is
greater;
2. an annual compliance fee of $500 for each
employee of the Fund's investment adviser who
is designated by the Fund to become a series
6 or series 7 registered representative of
TORS (compliance costs for other types of
licenses may vary), as well as the ongoing
license fees and incidental costs associated
with such registrations;
3. the compensation paid by TORS to such
registered representatives in accordance with
compensation schedules, as agreed upon by
TORS and the Fund from time to time;
4. the reasonable fees associated with listing
and maintaining shares on the National
Securities Clearing Corporation's Fund/SERV
System, on a "pass through" basis, as agreed
upon by TORS and the Fund and as reflected in
the attached NSCC fee schedule, which may
change without notice; and
5. incidental expenses associated with printing
and distribution advertising and sales
literature;
6. fees for legal review of advertisements and
sales literature at the rate of $150 per job
for the first ten pages of an advertisement
and $20 per page thereafter, plus NASD filing
fees which are billed on an out of pocket
basis;
7. plus out of pocket expenses including, but
not limited to travel expenses and retention
of records.
Dated: June 15, 1999
