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DISTRIBUTION AGREEMENT
BETWEEN XXXXXX SERIES TRUST
AND XXXXXX SECURITIES, L.L.C.
Agreement made this ____ day of _________, 199__, by and between Xxxxxx
Series Trust (the "Trust"), on behalf of its portfolio known as Xxxxxx Value
Fund (the "Fund"), and Xxxxxx Securities, L.L.C. (the "Distributor").
W I T N E S S E T H:
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, management investment company and
the Trust has determined to offer shares of the Fund for sale to the public in
a continuous offering; and
WHEREAS, the Trust and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of shares of the Trust
representing interests in the Fund, par value $0.001 per share (the "Shares"),
to commence after the effective date of the Trust's registration statement (the
"Registration Statement") filed with the Securities and Exchange Commission
(the "SEC") pursuant to the Securities Act of 1933, as amended (the "1933
Act");
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Appointment of the Distributor.
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(a) The Trust hereby appoints the Distributor to serve as a distributor of
Shares and to arrange for the sale of Shares to the public on the terms set
forth in this Agreement and the Distributor hereby accepts such appointment and
agrees to act in such capacity hereunder.
(b) The Distributor shall act as agent of and as a distributor for the
Trust in connection with the sale of Shares to investors and dealers, upon the
terms described herein and in the Trust's prospectus (the "Prospectus") and
statement of additional information (the "Statement of Additional Information"
or "SAI") included in the Trust's Registration Statement filed with the SEC, as
said Prospectus and Statement of Additional Information and Registration
Statement may be amended and supplemented from time to time. No sales of
Shares shall be made by the Distributor pursuant to this Agreement unless the
Registration Statement under the 1933 Act is effective at the time of such
sales.
SECTION 2. Exclusive Nature of Duties.
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(a) If the Trust has also appointed another broker-dealer to serve as a
distributor, the Distributor and such other broker-dealer shall be
co-distributors of Shares.
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(b) The Trust may, upon written notice to the Distributor, from time to
time designate other distributors of Shares with respect to areas other than
the United States as to which the Distributor may have expressly waived in
writing its right to act as such. If such designation is deemed exclusive, the
right of the Distributor under this Agreement to serve as distributor in the
areas so designated shall terminate, but this Agreement shall remain otherwise
in full effect until terminated in accordance with the other provisions hereof.
(c) The rights granted to the Distributor to act as agent in connection
with the sale of Shares shall not apply to Shares issued by the Trust: (i) in
connection with the merger or consolidation of any other investment company or
personal holding company with the Trust or the acquisition by purchase or
otherwise of all (or substantially all) the assets or the outstanding shares of
any such company by the Trust; or (ii) pursuant to reinvestment of dividends,
capital gains or other distributions; or (iii) pursuant to any reinstatement
privilege afforded redeeming shareholders.
SECTION 3. Purchase of Shares from the Trust and Compensation of
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Distributor.
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(a) Upon the initial effective date of the Registration Statement, the
Trust will commence a continuous offering of Shares. During the continuous
offering, the Distributor shall offer and solicit offers to subscribe to the
purchase of Shares from investors.
(b) The Distributor shall not be paid any compensation by the Trust
pursuant to this Agreement, however, the Trust may pay such compensation and
make other payments to the Distributor as may be permitted by a separate Plan
of Distribution and Related Agreement adopted by the Trust pursuant to Rule
12b-1 under the 1940 Act. The Distributor may pay such concessions or
reallowances to dealers as the Distributor, in its discretion, may from time to
time determine. The Trust and the Distributor agree, however, that no
concessions or reallowances shall be paid except in compliance with applicable
laws and regulations, including the rules of the National Association of
Securities Dealers, Inc. (the "NASD").
(c) The public offering price of Shares, i.e., the price per share at
which the Distributor or Dealers (as hereinafter defined) may sell Shares to
the public, shall be the net asset value of the Shares. If the public offering
price does not equal an even cent, the public offering price may be adjusted to
the nearest cent. All payments to the Trust hereunder shall be made in the
manner set forth in Section 3(g).
(d) The net asset value of Shares shall be determined by the Trust or an
agent appointed by the Trust, on such days, and at such times and in such
manner, as is set forth in the Prospectus and the SAI and in guidelines that
may be established by the Board of Trustees of the Trust.
(e) The Trust shall have the right to suspend the sale of Shares at times
when redemption is suspended pursuant to the conditions set forth in Section
4(c) hereof. The Trust shall also have the right to suspend the sale of Shares
if trading on the New York Stock Exchange shall have been suspended, if a
banking moratorium shall have been declared by
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Federal or New York authorities, or if there shall have been some other
extraordinary event or if conditions exist, which, in the sole judgment of the
Trust, makes it impracticable or inadvisable to sell Shares.
(f) The Trust, or any agent of the Trust designated in writing by the
Trust, shall be promptly advised of all purchase orders for Shares received by
the Distributor. Any order may be rejected by the Trust; provided, however,
that the Trust will not arbitrarily or without reasonable cause refuse to
accept orders for the purchase of Shares. The Distributor will confirm orders
upon their receipt, and the Trust (or its agent), upon receipt of payment
therefor and instructions, will deliver a statement confirming the issuance of
such Shares. The Distributor agrees to cause such instructions and any
payments that it may receive to be delivered promptly to the Trust (or its
agent).
SECTION 4. Redemption of Shares.
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(a) Any of the outstanding Shares may be tendered for redemption at any
time, and the Trust agrees to redeem Shares so tendered in accordance with
their terms and the procedures and requirements set forth in the Prospectus and
the SAI. The price to be paid upon the redemption of Shares shall be equal to
the net asset value calculated in accordance with the provisions of Section
3(e) hereof. All payments by the Trust hereunder shall be made in the manner
set forth below.
Subject to Section 4(b) hereof, the Trust shall pay the total amount of
the redemption price in accordance with applicable provisions of the Prospectus
and the SAI on or before the seventh day subsequent to receipt by the Trust (or
its agent) of a request for the redemption in proper form.
(b) Redemption of Shares may be suspended or payment by the Trust upon the
redemption of Shares may be postponed for more than seven days at times: (i)
when the New York Stock Exchange is closed for other than customary weekend or
holiday closings; (ii) when trading on said Exchange is restricted, or when an
emergency exists as a result of which disposal by the Trust of securities owned
by it is not reasonably practicable or it is not reasonably practicable for the
Trust fairly to determine the value of its net assets, as provided by SEC
rules; or (iii) during any other period when the SEC by order so permits.
SECTION 5. Duties of the Trust.
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(a) The Trust 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, including
one certified copy, upon request by the Distributor, of all financial
statements prepared by the Trust, in respect of the Fund, and examined by
independent accountants. The Trust shall, at the expense of the Distributor,
make available to the Distributor such number of copies of the Prospectus and
the SAI as the Distributor shall reasonably request.
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(b) The Trust shall take, from time to time, but subject to the necessary
approval of its shareholders, all necessary action to fix the number of its
authorized Shares and to register Shares under the 1933 Act, to the end that
there will be available for sale such number of the Shares as investors may
reasonably be expected to purchase.
(c) The Trust shall use its best efforts to qualify and maintain the
qualification of an appropriate number of the Shares for sale under the
securities laws of such states as the Distributor and the Trust may approve.
Any such qualification may be withheld, terminated or withdrawn by the Trust at
any time in its discretion. As provided in Section 8(b) hereof, the expense of
qualification and maintenance of qualification shall be borne by the Trust.
The Distributor shall furnish such information and other material relating to
its affairs and activities as may be required by the Trust in connection with
such qualification.
(d) The Trust shall, at the expense of the Distributor, furnish, in
reasonable quantities upon request by the Distributor, copies of annual and
interim reports of the Trust.
(e) The Trust shall promptly notify the Distributor if the effectiveness
of the Registration Statement is suspended or lapses and shall promptly notify
of the termination or withdrawal of qualification under the laws of any state.
SECTION 6. Duties of the Distributor.
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(a) The Distributor shall devote reasonable time and effort to effect
sales of the Shares, but shall not be obligated to sell any specific number of
Shares. The services of the Distributor hereunder are not to be deemed
exclusive and nothing herein contained shall prevent the Distributor from
entering into distribution or dealer arrangements with other investment
companies so long as the performance of its obligations hereunder is not
impaired thereby.
(b) Neither the Distributor nor any Dealer nor any other person is
authorized by the Trust to give any information or to make any representations,
other than those contained in the Registration Statement or the Prospectus and
SAI. Any advertising or sales literature relating to the Trust shall be
approved by the Distributor and the contents and use thereof shall comply with
all applicable laws and regulations, including rules and interpretations of the
NASD.
(c) The Distributor shall perform its responsibilities hereunder in
accordance with applicable laws and regulations, including rules and
interpretations of the NASD.
SECTION 7. Selected Dealer and Agency Agreements.
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(a) The Distributor shall have the right to enter into selected dealer
agreements with securities dealers (and with such other financial institutions
as may be authorized under applicable laws and regulations to act as agent in
the sale of Shares) of its choice ("Dealers") for the offering and sale of
Shares by such Dealers and agents. The Distributor may pay such other
compensation and concessions to Dealers as it determines,
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consistent with applicable law and the rules of the NASD. Shares offered for
sale by Dealers shall be offered on the same terms as would apply to the
Distributor as set forth herein.
(b) Within the United States, the Distributor shall enter into selected
dealer agreements only with organizations that are either members in good
standing of the NASD or financial institutions that are not required to be NASD
members.
(c) The Distributor shall adopt and follow procedures for the confirmation
of sales of Shares to investors and Dealers, the collection of amounts payable
by investors and Dealers on such sales, and the cancellation of unsettled
transactions, as may be necessary to comply with applicable laws and
regulations and the requirements of the NASD, as they may from time to time
exist.
SECTION 8. Payment of Expenses.
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(a) The Trust shall bear all of its costs and expenses, including fees and
disbursements of its counsel and auditors, in connection with: (i) the
preparation and filing of the Registration Statement, the Prospectus and the
SAI, and supplements to the foregoing; and (ii) the expense of preparing,
printing, mailing and otherwise distributing Prospectuses and SAIs (including
supplements), annual and interim reports and proxy materials for use by
shareholders.
(b) The Trust shall bear the cost and expenses of qualification of Shares
for sale, and, if necessary or advisable in connection therewith, of qualifying
the Trust as a broker or dealer, in such states of the United States or other
jurisdictions as shall be selected by the Trust and the Distributor pursuant to
Section 5(c) hereof, and the cost and expenses payable to each such state for
continuing qualification therein until the Trust decides to discontinue such
qualification pursuant to Section 5(c) hereof.
SECTION 9. Indemnification.
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(a) The Trust shall indemnify and hold harmless the Distributor and each
person, if any, who controls the Distributor against any loss, liability,
claim, damage or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damage or expense and reasonable
counsel fees incurred in connection therewith) arising by reason of any person
acquiring any Shares, which may be based upon the 1933 Act, or on any other
statute or at common law, on the ground that the Registration Statement, the
Prospectus or the SAI, or any annual or interim report to shareholders,
includes an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Trust in connection
therewith by or on behalf of the Distributor; provided, however, that in no
case (i) is the indemnity of the Trust in favor of the Distributor and any such
controlling persons to be deemed to protect such Distributor or any such
controlling persons thereof against any liability to the Trust or its
shareholders to which the Distributor or any such controlling persons would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement; or (ii) is the
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Trust to be liable under its indemnity agreement contained in this paragraph
with respect to any claim made against the Distributor or any such controlling
persons, unless the Distributor or such controlling persons as the case may be,
shall have notified the Trust in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Distributor or such controlling persons
(or after the Distributor or such controlling persons shall have received
notice of such service on any designated agent), but failure to notify the
Trust of any such claim shall not relieve it from any liability which it may
have to the person against whom such action is brought otherwise than on
account of its indemnity agreement contained in this paragraph. The Trust will
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 such
liability, but if the Trust elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or such
controlling person or persons, defendant or defendants in the suit. In the
event the Trust elects to assume the defense of any such suit and retain such
counsel, the Distributor or such controlling person or persons, defendant or
defendants in the suit, shall bear the fees and the expenses of any additional
counsel retained by them, but, in case the Trust does not elect to assume the
defense of any such suit, it will reimburse the Distributor or such controlling
person or persons, defendant or defendants in the suit, for the reasonable fees
and expenses of any counsel retained by them. The Trust shall promptly notify
the Distributor of the commencement of any litigation or proceedings against it
or any of its officers or directors in connection with the issuance or sale of
the Shares.
(b) The Distributor shall indemnify and hold harmless the Trust and each
of its trustees and officers and each person, if any, who controls the Trust
against any loss, liability, claim, damage, or expense described in the
foregoing indemnity contained in subsection (a) of this Section, but only with
respect to statements or omissions made in reliance upon, and in conformity
with, information furnished to the Trust in writing by or on behalf of the
Distributor for use in connection with the Registration Statement, the
Prospectus or the SAI, or the annual or interim reports to shareholders. In
case any action shall be brought against the Trust or any person so
indemnified, in respect of which indemnity may be sought against the
Distributor, the Distributor shall have the rights and duties given to the
Trust, and the Trust and each person so indemnified shall have the rights and
duties given to the Distributor by the provisions of subsection (a) of this
Section 9.
SECTION 10. Duration and Termination of This Agreement.
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This Agreement shall remain in effect for an initial term of two years
from the date hereof and from year to year thereafter provided such continuance
is approved at least annually by the vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act and the rules
thereunder) or by the Board of Trustees of the Trust; provided, that in either
event such continuance is also approved annually by the vote of a majority of
the trustees of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of any such party, which vote must be
cast in person at a meeting called for the purpose of voting on such approval;
and provided, however, that: (a) the Trust may, at any time and without the
payment of any penalty, terminate this Agreement upon sixty days' written
notice to the
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Distributor; (b) this Agreement shall immediately terminate in the event of its
assignment (to the extent required by the 1940 Act and the rules thereunder)
unless such automatic termination shall be prevented by an exemptive order of
the SEC; and (c) the Distributor may terminate this Agreement without payment
of any penalty on sixty days' written notice to the Trust.
SECTION 11. Notices.
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Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed post-paid, to the other party at the principal office of
such party, which addresses are as follows (or such other address as a party
may hereafter specify that notices hereunder be sent):
Xxxxxx Series Trust Xxxxxx Securities, L.L.C.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
SECTION 11. Amendments of this Agreement.
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This Agreement may be amended only by the written agreement of the
parties; provided that any amendment hereof must be approved by the Board of
Trustees of the Trust, including a majority of the directors of the Trust who
are not parties to this Agreement or "interested persons" (as defined by the
0000 Xxx) of any such party, by vote cast in person at a meeting called for the
purpose of voting on such approval.
SECTION 12. Governing Law.
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This Agreement shall be construed in accordance with the laws of the State
of New York and the applicable provisions of the 1940 Act. To the extent the
applicable laws of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
SECTION 13. Liability of the Trust.
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The Declaration of Trust states and notice is hereby given that this
Agreement is not executed on behalf of the Trustees of the Trust as
individuals, and that the obligations of this Agreement are not binding upon
any of the Trustees, officers or shareholders or partners of the Trust
individually, but are binding only upon the assets and property of the Trust.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
XXXXXX SERIES TRUST
By: _____________________________
Name: ______________________
Title: ______________________
XXXXXX SECURITIES, L.L.C.
By: ______________________________
Name: _______________________
Title: ______________________
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