DISTRIBUTION AGREEMENT
This Agreement, made as of January 25,
2007, by and among Builders Fixed Income Fund, Inc., a Delaware corporation (the
"Fund"), Capital Mortgage Management, Inc., a Delaware corporation (the
“Adviser”), and Unified Financial Securities, Inc., an Indiana corporation (the
"Distributor").
WHEREAS, the Fund is registered as an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "Act"); and
WHEREAS, the Adviser serves as the
investment adviser to the Fund; and
WHEREAS,
the Distributor is a broker-dealer registered with the Securities and Exchange
Commission (the “SEC”) and a member of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Fund, the Adviser and the
Distributor are desirous of entering into an agreement providing for the
distribution by the Distributor of shares of beneficial interest (the "Shares")
of each series or share class of shares of the Fund (the "Series");
NOW, THEREFORE, in consideration of the
promises and agreements of the parties contained herein, the parties agree as
follows:
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1.
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Appointment.
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The Fund
hereby appoints the Distributor as its exclusive agent for the distribution of
the Shares, and the Distributor hereby accepts such appointment under the terms
of this Agreement. While this Agreement is in force, the Fund shall
not sell any Shares except on the terms set forth in this
Agreement. Notwithstanding any other provision hereof, the Fund may
terminate, suspend or withdraw the offering of Shares whenever, in its sole
discretion, it deems such action to be desirable.
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2.
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Sale and Repurchase of
Shares.
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(a)
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The
Distributor will have the right, as agent for the Fund, to enter into
dealer agreements with responsible investment dealers, and to sell Shares
to such investment dealers against orders therefor at the public offering
price (as defined in subparagraph 2(d) hereof) stated in the Fund's
effective Registration Statement on Form N-1A under the Act and the
Securities Act of 1933, as amended, including the then current prospectus
and statement of additional information (the "Registration
Statement"). Upon receipt of an order to purchase Shares from a
dealer with whom the Distributor has a dealer agreement, the Distributor
will promptly cause such order to be filled by the
Fund.
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(b)
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The
Distributor will also have the right, as agent for the Fund, to sell such
Shares to the public against orders therefor at the public offering
price.
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(c)
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The
Distributor will also have the right to take, as agent for the Fund, all
actions which, in the Distributor's reasonable judgment, are necessary to
carry into effect the distribution of the
Shares.
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(d)
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The
public offering price for the Shares of each Series shall be the
respective net asset value of the Shares of that Series then in effect,
plus any applicable sales charge determined in the manner set forth in the
Registration Statement or as permitted by the Act and the rules and
regulations of the SEC promulgated thereunder. In no event
shall any applicable sales charge exceed the maximum sales charge
permitted by the Rules of the NASD.
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(e)
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The
net asset value of the Shares of each Series shall be determined in the
manner provided in the Registration Statement, and when determined shall
be applicable to transactions as provided for in the Registration
Statement. The net asset value of the Shares of each Series
shall be calculated by the Fund or by another entity on behalf of the
Fund. The Distributor shall have no duty to inquire into or
liability for the accuracy of the net asset value per Share as
calculated.
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Unified Financial Securities,
Inc.
12/15/2006
Builders Fixed Income Fund, Inc. - 1
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(f)
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On
every sale, the Fund shall receive the applicable net asset value of the
Shares promptly, but in no event later than the third business day
following the date on which the Distributor shall have received an order
for the purchase of the Shares.
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(g)
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Upon
receipt of purchase instructions, the Distributor will transmit such
instructions to the Fund or its transfer agent for registration of the
Shares purchased.
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(h)
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Nothing
in this Agreement shall prevent the Distributor or any affiliated person
(as defined in the Act) of the Distributor from acting as the Distributor
or distributor for any other person, firm or corporation (including other
investment companies) or in any way limit or restrict the Distributor or
any such affiliated person from buying, selling or trading any securities
for its or their own account or for the accounts of others from whom it or
they may be acting; provided, however, that the Distributor expressly
represents that it will undertake no activities which, in its reasonable
judgment, will adversely affect the performance of its obligations to the
Fund under this Agreement.
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(i)
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The
Distributor, as agent of and for the account of the Fund, may repurchase
the Shares at such prices and upon such terms and conditions as shall be
specified in the Registration
Statement.
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3.
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Sale of Shares by the
Fund.
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The Fund
reserves the right to issue any Shares at any time directly to the holders of
Shares ("Shareholders"), to sell Shares to its Shareholders or to other persons
at not less than net asset value and to issue Shares in exchange for
substantially all the assets of any corporation or trust or for the shares of
any corporation or trust.
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4.
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Basis of Sale of
Shares.
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The
Distributor does not agree to sell any specific number of Shares. The
Distributor, as agent for the Fund, undertakes to sell Shares on a best efforts
basis only against orders therefor.
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5.
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Rules of NASD,
etc.
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(a)
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The
Distributor will conform to the Rules of the NASD and the securities laws
of any jurisdiction in which it sells, directly or indirectly, any
Shares.
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(b)
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The
Distributor will require each dealer with whom the Distributor has a
dealer agreement to conform to the applicable provisions hereof and the
Registration Statement with respect to the public offering price of the
Shares, and neither the Distributor nor any such dealers shall withhold
the placing of purchase orders so as to make a profit
thereby.
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(c)
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The
Fund agrees to furnish to the Distributor sufficient copies of any
agreements, plans or other materials it intends to use in connection with
any sales of Shares in reasonably adequate time for the Distributor, on
behalf of the Fund, to file and clear them with the proper authorities
before they are put in use, and not to use them until so filed and
cleared.
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(d)
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The
Distributor, at its own expense, will qualify as dealer or broker, or
otherwise, under all applicable state or federal laws required in order
that Shares may be sold in such States as may be mutually agreed upon by
the parties.
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(e)
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The
Distributor shall not make, or permit any representative, broker or dealer
to make, in connection with any sale or solicitation of a sale of the
Shares, any representations concerning the Shares except those contained
in the then current prospectus and statement of additional information
covering the Shares and in printed information approved by the Fund as
information supplemental to such prospectus and statement of additional
information. Copies of the then effective prospectus and
statement of additional information and any such printed supplemental
information will be supplied by the Fund to the Distributor in reasonable
quantities upon request.
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Unified
Financial Securities,
Inc.
12/15/2006
Builders Fixed Income Fund, Inc. - 2
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6.
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Records to be Supplied
by the Fund.
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The Fund
shall furnish to the Distributor copies of all information, financial statements
and other papers which the Distributor may reasonably request for use in
connection with the distribution of the Shares, and this shall include, but
shall not be limited to, one certified copy, upon request by the Distributor, of
all financial statements prepared for the Fund by independent public
accountants.
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7.
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Fees and
Expenses.
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(a)
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The
Fund will not bear any costs or expenses incurred with respect to
distribution of shares except to the extent the Fund is permitted to do so
by applicable law. As compensation for the services rendered to
the Fund pursuant to this Agreement the Adviser shall pay the Distributor
fees determined as set forth on Exhibit A to this
Agreement. Such fees are to be billed monthly and shall be due
and payable upon receipt of the invoice. Upon any termination
of this Agreement and before the end of any month, the fee for the part of
the month before such termination shall be equal to the fee normally due
for the full monthly period and shall be payable upon the date of
termination of this Agreement.
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(b)
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In
the performance of its obligations under this Agreement, the Distributor
will pay only the costs incurred in qualifying as a broker or dealer under
state and federal laws and in establishing and maintaining relationships
with the dealers selling the Shares. All other costs in
connection with the offering of the Shares will be paid by the Adviser
(except to the extent the Fund is permitted to do so by applicable law, in
which case such costs will be paid by the Fund to the extent so permitted)
in accordance with agreements between the Fund and the Distributor as
permitted by applicable laws, including the Act and rules and regulations
promulgated thereunder.
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(c)
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The
Distributor may from time to time employ or associate with such person or
persons as may be appropriate to assist the Distributor in the performance
of this Agreement. Such person or persons may be officers and
employees who are employed or designated as officers by both the
Distributor and the Fund. The Distributor shall pay the
compensation of such person or persons for such employment and no
obligation will be incurred by or on behalf of the Fund in such
respect.
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(d)
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The
Distributor will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such
month payable by the Adviser or the Fund hereunder. Charges
remaining unpaid after thirty (30) days shall bear interest in finance
charges equivalent to, in the aggregate, the Prime Rate (as publicly
announced by U.S. Bank, N.A., from time to time) plus 2.00% per year and
all costs and expenses of effecting collection of any such sums, including
reasonable attorney's fees, shall be paid to the Distributor by the party
responsible for payment of such
charges.
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8.
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Indemnification of the
Fund.
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The
Distributor agrees to indemnify and hold harmless the Fund and each person who
has been, is, or may hereafter be a trustee, director, officer, employee,
shareholder or control person of the Fund against any loss, damage or expense
(including the reasonable costs of investigation) reasonably incurred by any of
them in connection with any claim or in connection with any action, suit or
proceeding to which any of them may be a party, which arises out of or is
alleged to arise out of or is based upon any untrue statement or alleged untrue
statement of a material fact, or the omission or alleged omission to state a
material fact necessary to make the statements not misleading, on the part of
the Distributor or any agent or employee of the Distributor or any other person
for whose acts the Distributor is responsible, unless such statement or omission
was made in reliance upon written information furnished by the
Fund. The Distributor likewise agrees to indemnify and hold harmless
the Fund and each such person in connection with any claim or in connection with
any action, suit or proceeding which arises out of or is alleged to arise out of
the Distributor's failure to exercise reasonable care and diligence with respect
to its services, if any, rendered in connection with investment, reinvestment,
automatic withdrawal and other plans for Shares. The term "expenses" for
purposes of this and the next paragraph includes amounts paid in satisfaction of
judgments or in settlements which are made with the Distributor's
consent. The foregoing rights of indemnification shall be in addition
to any other rights to which the Fund or each such person may be entitled as a
matter of law.
Unified
Financial Securities,
Inc.
12/15/2006
Builders Fixed Income Fund, Inc. - 3
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9.
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Indemnification of the
Distributor.
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The Fund
agrees to indemnify and hold harmless the Distributor and each person who has
been, is, or may hereafter be a director, officer, employee, shareholder or
control person of the Distributor against any loss, damage or expense (including
the reasonable costs of investigation) reasonably incurred by any of them in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or negligence, including clerical
errors and mechanical failures, on the part of any of such persons in the
performance of the Distributor's duties or from the reckless disregard by any of
such persons of the Distributor's obligations and duties under this Agreement,
for all of which exceptions the Distributor shall be liable to the
Fund. The Fund will advance attorneys' fees or other expenses
incurred by any such person in defending a proceeding, upon the undertaking by
or on behalf of such person to repay the advance if it is ultimately determined
that such person is not entitled to indemnification.
In order
that the indemnification provisions contained in this Paragraph 9 shall apply,
it is understood that if in any case the Fund may be asked to indemnify the
Distributor or any other person or hold the Distributor or any other person
harmless, the Fund shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that the
Distributor will use all reasonable care to identify and notify the Fund
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the
Fund. The Fund shall have the option to defend the Distributor and
any such person against any claim which may be the subject of this
indemnification, and in the event that the Fund so elects it will so notify the
Distributor, and thereupon the Fund shall take over complete defense of the
claim, and neither the Distributor nor any such person shall in such situation
initiate further legal or other expenses for which it shall seek indemnification
under this Paragraph 9. The Distributor shall in no case confess any
claim or make any compromise in any case in which the Fund will be asked to
indemnify the Distributor or any such person except with the Fund's written
consent.
Notwithstanding
any other provision of this Agreement, the Distributor shall be entitled to
receive and act upon advice of counsel (who may be counsel for the Fund or its
own counsel) and shall be without liability for any action reasonably taken or
thing reasonably done pursuant to such advice, provided that such action is not
in violation of applicable federal or state laws or regulations.
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10.
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Termination and
Amendment of this Agreement.
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This
Agreement shall automatically terminate, without the payment of any penalty, in
the event of its assignment. This Agreement may be amended only if
such amendment is approved (i) by the Distributor, (ii) by the Adviser, (iii)
either by action of the Board of Trustees of the Fund or at a meeting of the
Shareholders of the Fund by the affirmative vote of a majority of the
outstanding Shares, and (iv) by a majority of the Trustees of the Fund who are
not interested persons of the Fund, of the Adviser or of the Distributor by vote
cast in person at a meeting called for the purpose of voting on such
approval.
Any of
the Fund, the Adviser or the Distributor may at any time terminate this
Agreement on sixty (60) days written notice delivered or mailed by registered
mail, postage prepaid, to the other parties.
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11.
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Effective Period of
this Agreement.
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This
Agreement shall take effect on the date referenced above, and shall remain in
full force and effect for a period of two (2) years from the date of its
effectiveness (unless terminated automatically as set forth in Paragraph 10),
and from year to year thereafter, subject to annual approval (i) by the
Distributor, (ii) by the Adviser, (iii) by the Board of Trustees of the Fund or
a vote of a majority of the outstanding Shares, and (iv) by a majority of the
Trustees of the Fund who are not interested persons of the Fund, of the Adviser,
or of the Distributor by vote cast in person at a meeting called for the purpose
of voting on such approval.
Unified
Financial Securities,
Inc.
12/15/2006
Builders Fixed Income Fund, Inc. - 4
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12.
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New
Series.
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The terms
and provisions of this Agreement shall become automatically applicable to any
additional series of the Fund established during the initial or renewal term of
this Agreement.
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13.
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Successor Investment
Fund.
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Unless
this Agreement has been terminated in accordance with Paragraph 10, the terms
and provisions of this Agreement shall become automatically applicable to any
investment company which is a successor to the Fund as a result of
reorganization, recapitalization or change of domicile.
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14.
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Limitation of
Liability.
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It is
expressly agreed that the obligations of the Fund hereunder shall not be binding
upon any of the Trustees, shareholders, nominees, officers, agents or employees
of the Fund, personally, but bind only the trust property of the
Fund. The execution and delivery of this Agreement have been
authorized by the Trustees of the Fund and signed by an officer of the Fund,
acting as such, and neither such authorization by such 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 any of them personally, but
shall bind only the trust property of the Fund.
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15.
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Severability.
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In the
event any provision of this Agreement is determined to be void or unenforceable,
such determination shall not affect the remainder of this Agreement, which shall
continue to be in force.
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16.
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Questions of
Interpretation.
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(a)
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This
Agreement shall be governed by the laws of the State of
Indiana.
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(b)
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Any
question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of
the Act shall be resolved by reference to such term or provision of the
Act and to interpretation thereof, if any, by the United States courts or
in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC issued pursuant to said
Act. In addition, where the effect of a requirement of the Act,
reflected in any provision of this Agreement is revised by rule,
regulation or order of the SEC, such provision shall be deemed to
incorporate the effect of such rule, regulation or
order.
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17.
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Notices.
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Any
notices under this Agreement shall be in writing, addressed and delivered or
mailed postage paid to the other parties, with a copy to the Fund’s counsel, at
such address as such other parties may designate for the receipt of such
notice. Such notice will be effective upon receipt. Until
further notice to the other parties, it is agreed that the address of each party
for this purpose shall be:
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(a)
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If
to the Fund, to:
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Builders
Fixed Income Fund, Inc.
000 Xxxxx
Xxxx
Xxxxxxxxxx,
XX 00000
Attn: President
Unified
Financial Securities,
Inc.
12/15/2006
Builders Fixed Income Fund, Inc. - 5
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(b)
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If
to the Adviser, to:
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Capital
Mortgage Management, Inc.
000 Xxxxx
Xxxx
Xxxxxxxxxx,
XX 00000
Attn:
President
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(c)
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If
to the Distributor, to:
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Unified
Financial Securities, Inc.
000 Xxxxx
Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Attn: President
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18.
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Execution
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This
Agreement may be executed by one or more counterparts, each of which shall be
deemed an original, but all of which together will constitute one in the same
instrument.
Unified
Financial Securities,
Inc.
12/15/2006
Builders Fixed Income Fund, Inc. - 6
IN
WITNESS WHEREOF, the Fund, the Adviser and the Distributor have each caused this
Agreement to be signed in triplicate on their behalf, all as of the day and year
first above written.
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BUILDERS
FIXED INCOME FUND, INC.
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By:
/s/Xxxx X.
Xxxxxxx
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Date
1/26/2007
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Print
Name: Xxxx X.
Xxxxxxx
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Title: President/Chairman
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Attest:
__________________
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CAPITAL
MORTGAGE MANAGEMENT, INC.
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By:
/s/Xxxx X.
Xxxxxxx
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Date
1/26/2007
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Print
Name: Xxxx X.
Xxxxxxx
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Title:
President
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Attest: ___________________
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UNIFIED
FINANCIAL SECURITIES, INC.
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By:
/s/Xxxxxxx X.
Xxxxxxxxx, Xx.
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Date
1/29/2007
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Print
Name: Xxxxxxx X. Xxxxxxxxx,
Xx.
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Title: Sr. Vice
President
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Attest: ___________________
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Unified
Financial Securities,
Inc.
12/15/2006
Builders Fixed Income Fund, Inc. - 7
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EXHIBIT
A
DISTRIBUTION FEE
SCHEDULE
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The
prices contained herein are effective for twelve months from the execution
date of the Distribution Agreement.
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I Standard
Fees
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$12,000 per year. Fees
are billed on a monthly basis.
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II Additional
Services
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●
Sales literature and document review (including
websites)
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—
$100 per hour, plus NASD filing fees.
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●
NASD and other filing fees
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—
Pass thru
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●
Travel Expenses and Out-of-Pockets
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—
Pass thru
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●
Employee representative
licensing
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—
$200 per month per representative, plus NASD
licensing/registration
fees
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●
Other duties as agreed upon
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—
Negotiable
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Unified Financial
Securities,
Inc.
12/15/2006
Builders Fixed Income Fund, Inc. - 8
