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EXHIBIT 99.e-3
Distribution Agreement
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 17th day of April, 2001 by and between
Green Century Funds, a Massachusetts business trust (the "Trust"), and Sunstone
Distribution Services, LLC, a Wisconsin limited liability company (the
"Distributor").
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "Act") and is authorized to
issue shares of beneficial interests (the "Shares") in separate series with each
such series representing interests in a separate portfolio of securities and
other assets;
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member of
the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Trust and Distributor desire to enter into an agreement
pursuant to which Distributor shall be the distributor of the Shares of the
Trust representing the investment portfolios listed on Schedule A hereto and any
additional investment portfolios the Trust and Distributor may agree upon and
include on Schedule A as such Schedule may be amended from time to time (such
investment portfolios and any additional investment portfolios are individually
referred to as a "Fund" and collectively the "Funds");
WHEREAS, the Board of Trustees of the Trust has adopted a Distribution
Plan with respect to certain Funds pursuant to Rule 12b-1 under the Act, which
is incorporated herein by reference and pursuant to which the Trust, on behalf
of those Funds, desires to enter into this Distribution Agreement; and
WHEREAS, the Trust, with respect to certain other Funds which have not
adopted a Distribution Plan pursuant to Rule 12b-1 under the Act, desires to
enter into this Distribution Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR.
The Trust hereby appoints the Distributor as agent for the distribution
of the Shares, on the terms and for the period set forth in this Agreement.
Distributor hereby accepts such appointment as agent for the distribution of the
Shares on the terms and for the period set forth in this Agreement.
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2. SERVICES AND DUTIES OF THE DISTRIBUTOR.
2.1 Distributor will act as agent for the distribution of Shares in
accordance with the instructions of the Trust's Board of Trustees and the
registration statement and prospectuses then in effect with respect to the Funds
under the Securities Act of 1933, as amended (the "1933 Act"). The Distributor,
in connection with its duties hereunder, shall (i) register and maintain in full
force and effect the licenses of its agents and representatives under all
applicable laws, rules and regulations, (ii) review all advertising and sales
material of the Trust to ensure that such materials comply with all applicable
rules and regulations made or adopted pursuant to the Act, by the Securities and
Exchange Commission (the "Commission") and the NASD, and (iii) file with the
NASD and the Commission where required on a timely basis all advertising and
sales materials of the Trust which have been approved by the Distributor. The
Trust represents that it will not use any advertising or sales material unless
and until such materials have been approved and authorized for use by the
Distributor.
2.2 Subject to the terms of Section 4, Distributor may finance
appropriate activities which it deems reasonable which are primarily intended to
result in the sale of Shares, including, but not limited to, advertising, the
printing and mailing of prospectuses to other than current shareholders, and the
printing and mailing of sales literature which has been approved by the Trust
prior to its use. Distributor may enter into servicing and/or selling agreements
with qualified broker/dealers and other persons with respect to the offering of
Shares to the public, and if it so chooses Distributor will act only on its own
behalf as principal. The Distributor shall not be obligated to sell any certain
number of Shares of any Fund.
2.3 All Shares of the Funds offered for sale by Distributor shall be
offered for sale to the public at a price per unit (the "offering price") equal
to their net asset value (determined in the manner set forth in the Funds' then
current prospectus).
2.4 Distributor shall act as distributor of the Shares in compliance in
all material respects with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or adopted
pursuant to the Act, by the Commission and the NASD.
3. DUTIES AND REPRESENTATIONS OF THE TRUST.
3.1 The Trust represents that it is registered as an open-end
management investment company under the Act and that it has and will continue to
act in conformity with its Declaration of Trust, By-Laws, its registration
statement as may be amended from time to time and resolutions and other
instructions of its Board of Trustees and has and will continue to comply with
all applicable laws, rules and regulations including without limitation the 1933
Act, the 1934 Act, the Act, the laws of the states in which shares of the Funds
are offered and sold, and the rules and regulations thereunder.
3.2 The Trust shall take all necessary action to register and maintain
the registration of the Shares under the 1933 Act for sale as herein
contemplated and shall pay or cause to be paid all costs and expenses in
connection with the registration of Shares under the 1933 Act, and
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be responsible for all expenses in connection with maintaining facilities for
the issue and transfer of Shares and for supplying information, prices and other
data to be furnished by the Trust hereunder.
3.3 The Trust shall execute any and all documents and furnish any and
all information and otherwise take all actions which may be reasonably necessary
in the discretion of the Trust's officers in connection with the qualification
of the Shares for sale in such states as Distributor and the Trust may approve,
shall maintain the qualification of a sufficient number or amount of shares
thereunder, and shall pay or cause to be paid all expenses which may be incurred
in connection with such qualification.
3.4 The Trust shall, at its expense, keep the Distributor fully
informed with regard to its affairs. In addition, the Trust shall furnish
Distributor from time to time, for use in connection with the sale of Shares,
such information with respect to the Trust and the Shares as Distributor may
reasonably request, and the Trust warrants that the statements contained in any
such information shall be true and correct.
3.5 The Trust represents to Distributor that all registration
statements and prospectuses of the Trust filed or to be filed with the
Commission under the 1933 Act with respect to the Shares have been and will be
prepared in conformity with the requirements of the 1933 Act, the Act, and the
rules and regulations of the Commission thereunder. As used in this Agreement
the terms "registration statement" and "prospectus" shall mean any registration
statement and prospectus (together with the related statement of additional
information) at any time now or hereafter filed with the Commission with respect
to any of the Shares and any amendments and supplements thereto which at any
time shall have been or will be filed with said Commission. The Trust represents
and warrants to Distributor that any registration statement and prospectus, when
such registration statement becomes effective, will contain all statements
required to be stated therein in conformity with the 1933 Act, the Act and the
rules and regulations of the Commission; that all statements of fact contained
in the registration statement and prospectus will be true and correct in all
material respects when such registration statement becomes effective; and that
neither the registration statement nor any prospectus when such registration
statement becomes effective will include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of Shares. The Trust
agrees to file from time to time such amendments, supplements, reports and other
documents as may be necessary in order to comply with the 1933 Act and the Act
and in order that there may be no untrue statement of a material fact in a
registration statement or prospectus, or necessary in order that there may be no
omission to state a material fact in the registration statement or prospectus
which omission would make the statements therein misleading. If the Trust shall
not propose an amendment or amendments and/or supplement or supplements promptly
after receipt by the Trust of a written request from Distributor to do so,
Distributor may, at its option, immediately terminate this Agreement. The Trust
shall not file any amendment to the registration statement or supplement to any
prospectus without giving Distributor reasonable notice thereof in advance;
provided, however, that nothing contained in this Agreement shall in any way
limit the Trust's right to file at any time such amendments to any registration
statement and/or supplements to any prospectus, of whatever
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character, as the Trust may deem advisable, such right being in all respects
absolute and unconditional.
3.6 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by circumstances of any kind, the Trust's
officers may decline to accept any orders for, or make any sales of, any Shares
until such time as they deem it advisable to accept such orders and to make such
sales and the Trust shall advise Distributor promptly of such determination.
3.7 The Trust agrees to advise, or cause its administrator to advise,
the Distributor promptly in writing:
(i) of any correspondence or other communication by the
Commission or its staff relating to the Funds including requests by the
Commission for amendments to the registration statement or prospectuses or
comments thereon;
(ii) in the event of the issuance by the Commission of any
stop order suspending the effectiveness of the registration statement or
prospectuses then in effect or the initiation of any proceeding for that
purpose;
(iii) of the happening of any event which makes untrue any
statement of a material fact made in the registration statement or prospectuses
or which requires the making of a change in such registration statement or
prospectuses in order to make the statements therein not misleading; and
(iv) of all actions taken by the Commission or the staff of
the Commission with respect to any amendments to any registration statement or
prospectus which may from time to time be filed with the Commission.
4. EXPENSES.
Subject to the terms of the Trust's Distribution Plan, the Trust will
pay or cause to be paid the Distributor a distribution fee from each Fund not to
exceed on an annual basis such rate listed on Schedule A as reimbursement for
expenses, approved by the Trust's administrator or required by law, incurred by
the Distributor in connection with the sale of Shares including without
limitation, (i) the Distributor's out-of-pocket expenses incurred in connection
with activities primarily intended to result in the sale of Shares including,
without limitation, (a) printing and distribution of prospectuses, statements of
additional information and shareholder reports to dealers and others (other than
existing shareholders), (b) production, printing, filing and distribution of
sales materials and forms used in connection with the offering of shares to any
dealer or others (other than existing shareholders), (c) placement of media
advertising, (d) engagement of designers, free xxxxx writers and public relation
firms, (e) long distance telephone lines, services and charges, (f) postage and
overnight delivery charges, (g) storage of inventory, (h) regulatory filing fees
and (i) travel, lodging and meals, (ii) amounts paid by Distributor to dealers
or other persons entering into a selling or servicing agreement with
Distributor, and (iii)
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other distribution related expenses whether or not specifically required to be
made by the Distributor under this Agreement. Distributor shall provide to the
Trust's Board of Trustees a quarterly report of the expenses incurred pursuant
to this Agreement.
5. INDEMNIFICATION.
5.1(a) The Trust authorizes Distributor to use any prospectus, in the
form furnished to Distributor from time to time, in connection with the sale of
Shares. The Trust shall indemnify, defend and hold the Distributor, and each of
its present or former directors, members, officers, employees, representatives
and any person who controls or previously controlled the Distributor within the
meaning of Section 15 of the 1933 Act ("Distributor Affiliates"), free and
harmless from and against any and all losses, claims, demands, liabilities,
damages and expenses (including the costs of investigating or defending any
alleged losses, claims, demands, liabilities, damages or expenses and any
counsel fees incurred in connection therewith) which Distributor or Distributor
Affiliates may incur, arising out of or based upon any breach by the Trust of
any representation, warranty or covenant in this Agreement, or any untrue
statement, or alleged untrue statement, of a material fact contained in the
registration statement or any prospectus, as from time to time amended or
supplemented, or an annual or interim report to shareholders, or arising out of
or based upon any omission, or alleged omission, to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Trust's obligation to indemnify
Distributor and/or Distributor Affiliates shall not be deemed to cover any
losses, claims, demands, liabilities, damages or expenses arising out of any
untrue statement or alleged untrue statement or omission or alleged omission
made in the registration statement, prospectus, or annual or interim report in
reliance upon and in conformity with information relating to the Distributor and
furnished to the Trust or its counsel by Distributor for the purpose of, and
used in, the preparation thereof; and provided further that the Trust's
agreement to indemnify Distributor and/or Distributor Affiliates shall not be
deemed to cover any liability to the Trust or its shareholders to which
Distributor would otherwise be subject by reason of its willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties, under this Agreement. The
Trust's agreement to indemnify the Distributor and/or Distributor Affiliates, as
the case may be, with respect to any action, is expressly conditioned upon the
Trust being notified of such action brought against Distributor, or the
Distributor Affiliates, 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 person, such notification to be given
by letter or by telegram addressed to the Trust's President, but the failure so
to notify the Trust of any such action shall not relieve the Trust from any
liability which the Trust may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Trust's indemnity
agreement contained in this Section 5.1.
5.1(b) The Trust 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 such loss, claim, demand, liability, damage or expense, but if the
Trust elects to assume the defense, such defense shall be conducted by counsel
chosen by the Trust and approved by the Distributor, which approval shall not be
unreasonably withheld. In the event the Trust elects to assume the defense of
any such
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suit and retain such counsel, the indemnified defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by
them. If the Trust does not elect to assume the defense of any such suit, or in
case the Distributor does not, in the exercise of reasonable judgment, approve
of counsel chosen by the Trust, the Trust will reimburse the indemnified person
or persons named as defendant or defendants in such suit, for the fees and
expenses of any counsel retained by Distributor and them. The Trust's
indemnification agreement contained in this Section 5.1 and the Trust's
representations, warranties and covenants in this Agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Distributor, and each of the Distributor Affiliates, and
shall survive the delivery of any Shares and the termination of this Agreement.
This Agreement of indemnity will inure exclusively to the Distributor's benefit,
to the benefit of each Distributor Affiliate, and their successors. The Trust
agrees promptly to notify Distributor of the commencement of any litigation or
proceedings against the Trust or any of its officers or directors in connection
with the issue and sale of any of the Shares.
5.2(a) Distributor shall indemnify, defend and hold the Trust, and each
of its present or former trustees, officers, employees, representatives, and any
person who controls or previously controlled the Trust within the meaning of
Section 15 of the 1933 Act ("Trust Affiliates"), free and harmless from and
against any and all losses, claims, demands, liabilities, damages and expenses
(including the costs of investigating or defending any alleged losses, claims,
demands, liabilities, damages or expenses, and any counsel fees incurred in
connection therewith) which the Trust, or the Trust Affiliates, may incur
arising out of or based upon any breach by the Distributor of any
representation, warranty or covenant in this Agreement or any untrue, or alleged
untrue, statement of a material fact contained in the Trust's registration
statement or any prospectus, as from time to time amended or supplemented, or
annual or interim report to shareholders or the omission, or alleged omission,
to state therein a material fact required to be stated therein or necessary to
make the statement not misleading, but only if such statement or omission was
made in reliance upon, and in conformity with, information relating to the
Distributor and furnished to the Trust or its counsel by the Distributor for the
purpose of, and used in, the preparation thereof. Distributor's agreement to
indemnify the Trust and the Trust Affiliates shall not be deemed to cover any
liability to Distributor to which the Trust would otherwise be subject by reason
of its willful misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of its reckless disregard of its obligations and
duties, under this Agreement. The Distributor's Agreement to indemnify the Trust
and the Trust Affiliates, is expressly conditioned upon the Distributor's being
notified of any action brought against the Trust, or the Trust Affiliates, such
notification to be given by letter or telegram addressed to Distributor's
President, 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 Trust or such person, but the failure so to notify Distributor of any
such action shall not relieve Distributor from any liability which Distributor
may have to the person against whom such action is brought by reason of any such
untrue, or alleged untrue, statement or omission, otherwise than on account of
Distributor's indemnity agreement contained in this Section 5.2(a).
5.2(b) In case any action shall be brought against the Trust or Trust
Affiliates in respect of which indemnity may be sought against the Distributor,
the Distributor shall have the rights
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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
Section 5.1(b).
6. OFFERING OF SHARES.
No Shares shall be offered by either Distributor or the Trust under any
of the provisions of this Agreement and no orders for the purchase or sale of
such Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act, or if and so long as the current prospectus as required by Section 10 of
the 1933 Act, as amended, is not on file with the Commission; provided, however,
that nothing contained in this Section 6 shall in any way restrict or have an
application to or bearing upon the Trust's obligation to repurchase Shares from
any shareholder in accordance with the provisions of the prospectus or
Declaration of Trust.
7. TERM.
7.1 This Agreement shall become effective with respect to each Fund
listed on Schedule A hereof as of the date hereof and, with respect to each Fund
not in existence on that date, on the date an amendment to Schedule A to this
Agreement relating to that Fund is executed. Unless sooner terminated as
provided herein, this Agreement shall continue in effect with respect to each
Fund until October 15, 2001. Thereafter, if not terminated, this Agreement shall
continue automatically in effect as to each Fund for successive annual periods,
provided such continuance is specifically approved at least annually by (i) the
Trust's Board of Trustees or (ii) the vote of a majority (as defined in the Act)
of the outstanding voting securities of a Fund, and provided that in either
event the continuance is also approved by a majority of the Trust's Trustees who
are not "interested persons" (as defined in the Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval.
7.2 This Agreement may be terminated without penalty with respect to a
particular Fund (1) through a failure to renew this Agreement at the end of a
term, (2) upon mutual consent of the parties, (3) by the Trust (a) by the vote
of a majority of the Trustees of the Trust who are not "interested persons" of
the Trust or the Distributor, (b) by the vote of the Board of Trustees of the
Trust, or (c) by the vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, or (4) by the Distributor, in any
case without payment of any penalty on not more than 60 days' nor less than 30
days' written notice to the other party (which notice may be waived by the party
entitled to such notice). The terms of this Agreement shall not be waived,
altered, modified, amended or supplemented in any manner whatsoever except by a
written instrument signed by the Distributor and the Trust. This Agreement will
also terminate automatically in the event of its assignment (as defined in the
Act).
7.3 If, at any time during the term of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Trust that any
amendment of this Agreement be made in order to comply with any recommendation
or requirement of the Commission or other
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governmental authority or to obtain any advantage under Massachusetts or federal
tax laws, it shall notify the Distributor of the form of amendment which it
deems necessary or advisable and the reasons therefor. If the Distributor
declines to assent to such amendment (after a reasonable time), the Trust may
terminate this Agreement forthwith by written notice to the Distributor without
payment of any penalty. If, at any time during the term of this Agreement, the
Distributor requests the Trust to make any change in its governing instruments
or in its methods of doing business which are necessary in order to comply with
any requirement of federal law or regulations of the Commission, national
securities association of which the Distributor is or may become a member, or
any other regulator, and the Trust fails (after a reasonable time) to make any
such change as requested, the Distributor may terminate this Agreement forthwith
by written notice to the Trust without payment of any penalty.
8. MISCELLANEOUS.
8.1 The services of the Distributor rendered to the Funds are not
deemed to be exclusive. The Distributor may render such services and any other
services to others, including other investment companies. The Trust recognizes
that from time to time directors, officers, and employees of the Distributor or
its affiliates may serve as directors, trustees, officers and employees of other
entities (including other investment companies), that such other entities may
include the name of the Distributor as part of their name and that the
Distributor or its affiliates may enter into distribution, administration, fund
accounting, transfer agent or other agreements with such other entities.
8.2 Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Funds and prior, present or potential shareholders
of the Funds (and clients of said shareholders), and not to use such records and
information for any purpose other than performance of Distributor's
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld when the Distributor is subject to regulatory
audit or inspection, when Distributor may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Trust.
Records and information which have become known to the public through no
wrongful act of the Distributor or any of its employees, agents or
representatives shall not be subject to this paragraph.
8.3 This Agreement shall be governed by Wisconsin law (except as to
Section 8.4 hereof which shall be construed in accordance with Massachusetts
law). To the extent that the applicable laws of the State of Wisconsin, or any
of the provisions herein, conflict with the applicable provisions of the Act,
the latter shall control, and nothing herein shall be construed in a manner
inconsistent with the Act or any rule or order of the Commission thereunder. Any
provision of this Agreement which may be determined by competent authority to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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8.4 Venue for any action arising hereunder shall be Suffolk County,
Massachusetts until either June 1, 1999 or the combined assets of the Trust are
$50 million, whichever shall occur first. Thereafter, venue shall be determined
in accordance with where the cause of action arises.
8.5 This Agreement is executed by or on behalf of the Trust with
respect to each of the Funds and the obligations hereunder are not binding upon
any of the Trustees, officers or shareholders of the Trust individually but are
binding only upon the Funds to which such obligations pertain and the assets and
property of such Funds. The Trust's Certificate of Trust is on file with the
Secretary of State of Massachusetts.
8.6 Any notice required or to be permitted to be given by either party
to the other shall be in writing and shall be deemed to have been given when
sent by registered or certified mail, postage prepaid, return receipt requested,
as follows (or to such other address as may be designated by the recipient by
notice to the other party in accordance herewith): Notice to the Distributor
shall be sent to Sunstone Distribution Services, LLC, 000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxx X, Xxxxxxxxx, XX, 00000-0000, Attention: Xxxxxx X. Xxxxxxx, and notice to
the Trust shall be sent to 00 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxxxxx Xxxxxx.
8.7 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original agreement but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
GREEN CENTURY FUNDS SUNSTONE DISTRIBUTION SERVICES, LLC
(the "Trust") (the "Distributor")
By: By:
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Xxxxxxxx Xxxxxx Xxxxxx X. Xxxxxxx
Treasurer President
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SCHEDULE A
TO THE
DISTRIBUTION AGREEMENT
BY AND BETWEEN
THE GREEN CENTURY FUNDS
AND
SUNSTONE DISTRIBUTION SERVICES, LLC
NAME OF FUNDS DISTRIBUTION FEE
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Green Century Balanced Fund 0.25%
Green Century Equity Fund 0.00%
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