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Exhibit 6
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 8th day of March, 1997 between ARMADA
FUNDS ("the Trust"), a Massachusetts business trust and SEI Financial Services
Company (the "Distributor"), a Pennsylvania corporation.
WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 Act"), and its shares are registered with the SEC
under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and Distributor hereby agree as follows:
ARTICLE 1. SALE OF SHARES. The Trust grants to the Distributor the
right to sell units (the "Shares") of the portfolios (the "Portfolios") of the
Trust at the offering price per Share, in accordance with the current
prospectus, as agent and on behalf of the Trust, during the term of this
Agreement and subject to the registration requirements of the 1933 Act, the
rules and regulations of the SEC and the laws governing the sale of securities
in the various states ("Blue Sky Laws").
ARTICLE 2. SOLICITATION OF SALES. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Trust, and to maintain appropriate facilities to receive
purchase, redemption and exchange orders for Shares. The Distributor
additionally agrees to provide at its own expense the services designated on
Schedule A attached herewith; provided, however, that the Distributor shall not
be prevented from entering into like arrangements with other issuers. Subject to
the prior approval of the Trust the Distributor agrees further, at its own
expense (but subject to reimbursement in accordance with the Service and
Distribution Plan), to 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. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares. The Distributor shall act as Distributor of the
Shares in compliance with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or adopted pursuant to the
1940 Act, by the SEC or any securities association registered under the
Securities Exchange Act of 1934, as amended (the "1934 Act").
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ARTICLE 3. AUTHORIZED REPRESENTATIONS. The Distributor is not
authorized by the Trust to give any information or to make any representations
other than those contained in the current registration statements and
prospectuses of the Trust filed with the SEC or contained in Shareholder reports
or other material that may be prepared by or on behalf of the Trust for the
Distributor's use. The Distributor may prepare or distribute sales literature
and other material as it may deem appropriate, provided that such literature
and materials have been approved by the Trust prior to their use. The
Distributor agrees that it will be liable for all such sales literature and
materials and will file such materials with the appropriate regulatory and
self-regulatory authorities as required. The Distributor agrees to abide by the
rules of any national securities association that is registered with the SEC
pursuant to the 1934 Act and to obtain all required approvals from such
association in connection with the distribution of shares and the dissemination
of the Trust's sales literature.
All activities by the Distributor and its agents and employees as
distributor of the Trust's Shares shall comply with all applicable laws, rules
and regulations, including, without limitation all rules and regulations made or
adopted pursuant to the 1940 Act by the SEC or any securities association
registered under the 1934 Act.
ARTICLE 4. REGISTRATION OF SHARES. The Trust agrees that it will take
all action necessary to register Shares under the federal and state securities
laws so that there will be available for sale the number of Shares the
Distributor may reasonably be expected to sell and to pay all fees associated
with said registration. The Trust shall make available to the Distributor such
number of copies of its currently effective prospectus and statement of
additional information as the Distributor may reasonably request. 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 Shares of the Trust.
ARTICLE 5. COMPENSATION.
(a) For the services provided and expenses assumed
pursuant to this Agreement, the Distributor shall be
entitled to receive from the Trust the following
compensation, payable monthly and computed daily:
(i) an annual base fee of $1,250,000;
(ii) an incentive fee of .02% per annum of
the average daily net assets of the Trust
attributable to assets amounting to $[ ] that were
invested in Federated Money Market Funds or Dreyfus
Money Market Funds or held in the National City
Balanced Collective Investment Fund as of the date of
this agreement ("Conversion Assets"), and
(iii) an incentive fee of .03% per annum of
the average daily net assets of the Trust in excess
of the sum of the (A) total net assets of the Trust
as of the date of this Agreement, (B) Conversion
Assets and (C) $371 million (representing the amount
deemed to be attributable to investments through the
Future Quest program, National
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City corporate sweep programs, retail sweep programs
and initial funding of new portfolios of the Trust).
(b) In addition the Distributor shall receive from
the Trust as compensation for providing services
under this Agreement:
(i) contingent deferred sales charges
("CDSCs"), if any, applied on redemptions of Shares
of each Portfolio of any class that are subject to
CDSCs on the terms and subject to such waivers as are
described in the Trust's Registration Statement and
current prospectuses, as amended from time to time,
or as otherwise required pursuant to applicable law;
and
(ii) front-end sales charges, if any, on
purchases of Shares of each Portfolio sold subject to
such charges as described in the Trust's Registration
Statement and current prospectuses, as amended from
time to time.
(c) The Distributor will act only on its own behalf
as principal if it chooses to enter into selling
agreements with selected dealers or others, including
selling agreements with qualified broker-dealers and
other persons with respect to the offering of Shares
to the public. Concessions by the Distributor to
broker-dealers and other persons shall be set forth
in either such selling agreements or if such
concessions are described in the then current
prospectus, shall be as so set forth. No
broker-dealer or other person that enters into a
selling agreement with the Distributor shall be
authorized to act as agent for the Trust in
connection with the offering or sale of the Shares to
the public or otherwise.
(d) In no event shall the total amount payable by any
Portfolio of the Trust under the Service and
Distribution Plan or the related Distribution
Agreement exceed 10% per annum of the Portfolio's
average net assets.
(e) The Distributor may reallow any or all of the
distribution or service fees, contingent deferred
sales charges and front-end sales charges which it is
paid by the Trust to such brokers, dealers and other
financial institutions and intermediaries as the
Distributor may from time to time determine.
ARTICLE 6. INDEMNIFICATION OF DISTRIBUTOR. The Trust agrees to
indemnify and hold harmless the Distributor and each of its directors and
officers and each person, if any, who controls the Distributor within the
meaning of Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages, or expense and reasonable counsel
fees and disbursements incurred in connection therewith), arising by reason of
any person acquiring any Shares, based upon the ground that the registration
statement, prospectus, Shareholder reports or other information filed or made
public by the Trust (as from time to time amended) included an untrue statement
of a material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements made not misleading.
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However, the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statements or omission was made in reliance
upon, and in conformity with, information furnished to the Trust by or on behalf
of the Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect
the Distributor against any liability to the Trust or its Shareholders to which
the Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Trust of any claim shall not relieve the Trust from any liability
which it may have to the Distributor or any person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph.
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 claims subject to this indemnity provision. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Trust
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Trust does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Trust agrees to notify the Distributor promptly of the commencement
of any litigation or proceedings against it or any of its officers or Trustees
in connection with the issuance or sale of any of its Shares.
ARTICLE 7. INDEMNIFICATION OF TRUST. The Distributor covenants and
agrees that it will indemnify and hold harmless the Trust and each of its
Trustees and officers and each person, if any, who controls the Trust within the
meaning of Section 15 of the Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith) based upon the 1933 Act or any other statute or common
law and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Shareholder reports or other information
filed or made public by the Trust (as from time to time amended) included an
untrue statement of a material fact or or omitted to state a material fact
required to be stated or necessary in order to make the statements not
misleading, insofar as the statement or omission was made in reliance upon and
in conformity with information furnished to the Trust by or on behalf of the
Distributor.
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In no case (i) is the indemnity of the Distributor in favor of the
Trust or any other person indemnified to be deemed to protect the Trust or any
other person against any liability to which the Trust or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Trust or any person
indemnified unless the Trust or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Trust or upon any person (or after the
Trust or such person shall have received notice of service on any designated
agent). However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Trust or any
person against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Trust promptly of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any of the Trust's Shares.
ARTICLE 8. EFFECTIVE DATE. This Agreement shall be effective upon its
execution and unless terminated as provided, shall continue in force for two
year(s) from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Trustees of the Trust, or the vote of a majority of the outstanding voting
securities of the Trust, and (ii) the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or the Trust's Distribution Plan
or interested persons of any such party ("Qualified Trustees"), cast in person
at a meeting called for the purpose of voting on the approval. This Agreement
shall automatically terminate in the event of its assignment, the liquidation of
the Distributor, or as to any portfolio of the Trust, the liquidation of such
portfolio or the Trust. For purposes of this Article 8, the term "liquidation"
shall mean a transaction in which the assets of the Distributor, the Trust or a
portfolio are sold or otherwise disposed of and the proceeds therefrom are
distributed to the shareholders in complete liquidation of the interests of such
shareholders in the entity. As used in this paragraph the terms "vote of a
majority of the outstanding voting securities", assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act. In
addition, this Agreement may at any time be terminated, without penalty, by the
Distributor, by a vote of a majority of Qualified Trustees or by vote of a
majority of the outstanding voting securities of the Trust upon not less than
sixty days prior written notice to the other party.
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ARTICLE 9. ENTIRE AGREEMENT. This Agreement represents the entire
agreement of the parties concerning the distribution of the Trust's Shares. The
Distributor acknowledges and agrees that the Trust has no liability to the
Distributor for the satisfaction of any obligations of its predecessor, The
Inventor Funds, Inc.
ARTICLE 10. NOTICES. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party
giving notice: if to the Trust, at Drinker, Xxxxxx & Xxxxx, 1100 Philadelphia
Xxxxxxxx Xxxx Xxxx., Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attn: X.X. XxXxxxxx
III, and if to the Distributor, I Xxxxxxx Xxxxxx Xxxx, Xxxx, Xxxxxxxxxxxx
00000, Attn. Legal Department.
ARTICLE 11. LIMITATION OF LIABILITY. A copy of the Declaration of Trust
of the Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Trust individually but binding only upon the
assets and property of the Trust. All persons dealing with any class of Shares
of the Trust must look solely to the Trust property belonging to such class for
the enforcement of any claims against the Trust.
ARTICLE 12. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 13. MULTIPLE ORIGINALS. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS, the Trust and Distributor have each duly executed this
Agreement, as of the day and year above written.
ARMADA FUNDS
By: /s/ Xxxxxx X. Xxxxx
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President
Attest: /s/ Xxxxxx X. Xxxxxxxxx
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SEI FINANCIAL SERVICES COMPANY
By: /s/ Xxxxx Xxxxxx, VP
----------------------------
Attest: /s/ Xxxxxx Xxxxxxxxx
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SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
BETWEEN
ARMADA FUNDS AND SEI FINANCIAL SERVICES COMPANY
DISTRIBUTION SERVICES -- THE DISTRIBUTION SERVICES PROVIDED TO THE ARMADA FUNDS
BY SEI FINANCIAL SERVICES COMPANY SHALL INCLUDE THE FOLLOWING:
- An external wholesaler for both institutional and retail distribution
channels.
- A dedicated internal wholesaler working in the SEI Fund
Resources/Dealer Support Unit to support National City brokers and
external distribution channels.
- Full-service broker/dealer support desk with a dedicated toll-free
telephone line for National City Investments' sales staff, including
the use of the ACS Marketing Fulfillment Tracking System.
- An account director to coordinate the relationship between the
Distributor and the Trust and to execute any strategic plan designed to
promote the sale of shares of the Trust, including sales relating to
the conversion of assets held in collective or common trust accounts by
National City Bank and its affiliates, and other asset growth agendas.
- A dedicated marketing account executive to manage any strategic and
tactical marketing plan, and implementation of any such plan for the
sale of shares of the Trust.
- Primary and secondary market research.
- Research information and "white papers" on product and distribution
trends affecting investment companies that are advised by banks or
affiliates of banks.
- Access to mutual fund industry consulting groups, including the Optima
Group, Inc., and the SPECTRUM Group.
- Access to regularly scheduled conferences provided by the Distributor
that relate to investment companies that be advised by banks or
affiliates of banks.
- Access to the Distributor's quarterly wholesaler training meetings and
monthly wholesaler training conference telephone calls.
- Full service Investor Services Support Desk with a dedicated toll-free
telephone line for potential and existing shareholders of the Trust.
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- New and existing product analysis provided by the Distributor's Funds
Product Group, including access to Lipper reporting.
- Preparation of performance materials to be used for meetings of the
Trust's Board of Trustees, including required quarterly reporting,
Lipper fee analysis, and Lipper performance analysis.
- Regular receipt of SEI's Regulatory Update and Regulatory Alert
publications as well as memoranda prepared by the Distributor's legal
department addressing current topics affecting banks and the mutual
fund industry.
- Assistance in delivery and preparation of presentations and training to
the staff of the Trust's investment advisers and their affiliates
encompassing Trust products and programs.
- Support for mailing of the Trust's semi-annual and annual reports.
- Attendance at meetings with the adviser(s) of the Trust, including
bearing all travel and lodging expenses incurred in connection
therewith.
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