DISTRIBUTION AGREEMENT
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This Agreement made as of October 29, 1999 by and between The Westport
Funds, a Delaware business trust (the "Trust"), and CW Fund Distributors, Inc.,
an Ohio corporation ("Distributor").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Distributor is a broker-dealer registered with the Securities and
Exchange Commission and a member of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Distributor are desirous of entering into an
agreement providing for the distribution by Distributor of shares of beneficial
interest ("Shares") of each series of shares of the Trust (the "Series");
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment.
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The Trust hereby appoints Distributor as its agent for the distribution of
Shares, and Distributor hereby accepts such appointment under the terms of this
Agreement. While this Agreement is in force, the Trust shall not sell any Shares
except on the terms set forth in this Agreement. Notwithstanding any other
provision hereof, the Trust may terminate, suspend or withdraw the offering of
Shares whenever, in its sole discretion, it deems such action to be desirable.
Upon notice of such termination, suspension or withdrawal, the Distributor shall
cease to offer Shares.
2. Sale of Shares.
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(a) Distributor will have the right, as agent for the Trust, to offer, and
to solicit offers to subscribe to, the unsold balance of Shares of the Trust as
shall then be effectively registered under the Securities Act of 1933 at the
then current public offering price for the Shares.
(b) All subscriptions for Shares obtained by the Distributor shall be
directed to the Trust for acceptance and shall not be binding on the Trust until
accepted by the Trust. The Distributor shall have no authority to make binding
subscriptions on the Trust's behalf. The Distributor will send to the Trust
promptly all subscriptions placed with the Distributor.
(c) The public offering price for Shares of each Series shall be the
respective net asset value of Shares of that Series then in effect.
(d) The net asset value of Shares of each Series shall be determined in the
manner provided in the then current prospectus and statement of additional
information (the "Registration Statement"), and when determined shall be
applicable to transactions as provided for in the Registration Statement. The
net asset value of Shares of each Series shall be calculated by the Trust or by
another entity on behalf of the Trust. Distributor shall have no duty to inquire
into or liability for the accuracy of the net asset value per Share as
calculated.
(e) On every sale, the Trust shall receive the applicable net asset value
of Shares promptly, but in no event later than the third business day following
the date on which Distributor shall have received an order for the purchase of
Shares.
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(f) Upon receipt of purchase instructions, Distributor will transmit such
instructions to the Trust or its transfer agent for registration of Shares
purchased.
(g) Nothing in this Agreement shall prevent Distributor or any affiliated
person (as defined in the Act) of Distributor from acting as underwriter or
distributor for any other person, firm or corporation (including other
investment companies) or in any way limit or restrict 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 for whom it or they may be
acting; provided, however, that Distributor expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
3. Sale of Shares by the Trust.
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The Trust reserves the right to sell Shares through other distributors or
directly to investors through subscriptions received by the Trust or the Trust's
transfer agent. The right given to the Distributor under this Agreement shall
not apply to Shares issued in connection with (a) the merger or consolidation of
any other investment company with the Trust, (b) the Trust's acquisition, by
purchase or otherwise, of all or substantially all of the assets or stock of any
other investment company, or (c) the reinvestment in Shares by shareholders of
the Trust of dividends or other distributions or any other offering by the Trust
of securities to Trust shareholders.
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4. Basis of Sale of Shares.
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Distributor does not agree to sell any specific number of Shares.
Distributor, as agent for the Trust, undertakes to sell Shares on a best efforts
basis only against orders therefor.
5. Rules of NASD, etc.
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(a) Distributor will conform to the Conduct Rules of the NASD and the
securities laws of any jurisdiction in which it sells, directly or indirectly,
any Shares.
(b) Distributor will require each dealer with whom Distributor has a dealer
agreement to conform to the applicable provisions hereof and the Registration
Statement with respect to the public offering price of Shares, and neither
Distributor nor any such dealers shall withhold the placing of purchase orders
so as to make a profit thereby.
(c) Distributor agrees to furnish to the Trust sufficient copies of any
agreements, plans or other materials it intends to use in connection with any
sales of Shares in adequate time for the Trust 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.
(d) 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.
(e) Distributor shall not make, or permit any representative to make, in
connection with any sale or solicitation of a sale of Shares, any
representations concerning
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Shares except those contained in the then current prospectus and statement of
additional information covering the Shares and in printed information approved
by the Trust 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 Trust to Distributor in reasonable quantities upon request.
6. Records to be Supplied by Trust.
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The Trust shall furnish to Distributor copies of all information, financial
statements and other papers which 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 Distributor, of all
financial statements prepared for the Trust by independent public accountants.
7. Expenses.
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In the performance of its obligations under this Agreement, Distributor
will pay only the costs incurred in qualifying as a broker or dealer under state
and federal laws and in establishing and maintaining its relationships with the
dealers selling Shares. All other costs in connection with the offering of
Shares will be paid by the Trust or the Trust's investment adviser (the
"Adviser") in accordance with agreements between them as permitted by applicable
law, including the Act and rules and regulations promulgated thereunder.
8. Indemnification of Trust.
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Distributor agrees to indemnify and hold harmless the Trust, the Adviser
and each person who has been, is, or may hereafter be a trustee, director,
officer, employee, partner,
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shareholder or control person of the Trust or the Adviser, 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 Distributor or any agent or employee of Distributor or any other person
for whose acts Distributor is responsible, unless such statement or omission was
made in reliance upon written information furnished by the Trust or the Adviser.
Distributor likewise agrees to indemnify and hold harmless the Trust, the
Adviser 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
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 Distributor's consent. The
foregoing rights of indemnification shall be in addition to any other rights to
which the Trust, the Adviser or each such person may be entitled as a matter of
law.
9. Indemnification of Distributor.
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Distributor, its directors, officers, employees, shareholders and control
persons 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
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willful misfeasance, bad faith or negligence on the part of any of such persons
in the performance of Distributor's duties or from the disregard by any of such
persons of Distributor's obligations and duties under this Agreement. The Trust
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. Any person employed by Distributor who may also be
or become an officer or employee of the Trust shall be deemed, when acting
within the scope of his employment by the Trust, to be acting in such employment
solely for the Trust and not as an employee or agent of Distributor.
10. Compensation of Distributor
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For services rendered under this Agreement, the Distributor will receive a
fee of $1.00 per year.
11. 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 Distributor, (ii) either by action of the
Board of Trustees of the Trust or at a meeting of the Shareholders of the Trust
by the affirmative vote of a majority of the outstanding Shares, and (iii) by a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of Distributor by vote cast in person at a meeting called for the
purpose of voting on such approval.
Either the Trust or 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 party.
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12. Effective Period of this Agreement.
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This Agreement shall take effect upon its execution and shall remain in
full force and effect for a period of two (2) years from the date of its
execution (unless terminated automatically as set forth in Section 11), and from
year to year thereafter, subject to annual approval (i) by Distributor, (ii) by
the Board of Trustees of the Trust or a vote of a majority of the outstanding
Shares, and (iii) by a majority of the Trustees of the Trust who are not
interested persons of the Trust or of Distributor by vote cast in person at a
meeting called for the purpose of voting on such approval.
13. Limitation of Liability.
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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 bind only the trust property
of the Trust, as provided in the Declaration of Trust. The execution and
delivery of this Agreement have been authorized by the Trustees and Shareholders
of the Trust and signed by an officer of the Trust, acting as such, and neither
such authorization by such Trustees and Shareholders 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 Trust as provided in its Declaration of
Trust.
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14. New Series.
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The terms and provisions of this Agreement shall become automatically
applicable to any additional series of the Trust established during the initial
or renewal term of this Agreement.
15. Successor Investment Company.
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Unless this Agreement has been terminated in accordance with Paragraph 11,
the terms and provisions of this Agreement shall become automatically applicable
to any investment company which is a successor to the Trust as a result of
reorganization, recapitalization or change of domicile.
16. 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.
17. Questions of Interpretation.
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(a) This Agreement shall be governed by the laws of the State of Ohio.
(b) 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 Securities and Exchange Commission issued pursuant to said Act. In
addition, where the effect of a requirement of the Act, reflected in any
provision of this
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Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
18. Notices.
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Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust for this purpose
shall be 000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 and that the address
of Distributor for this purpose shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxx, Xxxx 00000.
IN WITNESS WHEREOF, the Trust and Distributor have each caused this
Agreement to be signed in duplicate on their behalf, all as of the day and year
first above written.
ATTEST: THE WESTPORT FUNDS
/s/ Xxxxx Xxxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Its: President
ATTEST: CW FUND DISTRIBUTORS, INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Its: President
