XXXXXX XXXX INVESTMENT FUNDS
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of December 9, 1998 between the Xxxxxx Xxxx
Investment Funds, a Massachusetts business trust (the "Trust"), and Unified
Management Corporation, an Indiana corporation (the "Distributor").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust desires to retain the Distributor as the principal
underwriter of the Trust's shares of beneficial interest (the "Shares"); and
WHEREAS, the Distributor is willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties hereto agree as follows:
Section 1. Delivery of Documents. The Trust has delivered to the Distributor
copies of the following documents and will deliver to the Distributor all future
amendments and supplements thereto, if any:
(a) The Trust's Declaration of Trust and all amendments thereto (as currently in
effect and as from time to time amended, hereinafter referred to as the
"Declaration");
(b) The Trust's By-Laws (as currently in effect and as from time to time
amended, hereinafter referred to as the "By-Laws");
(c) Resolutions of the Board of Trustees authorizing the execution and delivery
of this Agreement;
(d) The Trust's Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act on Form N-1A most recently filed with
the Securities and Exchange Commission (the "Commission") and all subsequent
amendments or supplements thereto (the "Registration Statement");
(e) The Trust's Notification of Registration under the 1940 Act on Form N-8A as
filed with the Commission; and
The Trust's current Prospectus and Statement of Additional Information (as
currently in effect and as from time to time amended and supplemented,
hereinafter collectively referred to as the "Prospectus").
Section 2. Distribution.
2.1 Appointment of Distributor. The Trust hereby appoints the Distributor as
principal underwriter of the Shares of each portfolio of the Trust that is set
forth on Exhibit A to this Agreement (each a "Fund") and the Distributor hereby
accepts such appointment and agrees to render the services and duties set forth
in this Agreement.
2.2 Services and Duties.
(a) The Trust agrees to sell through the Distributor, as agent, from
time to time during the term of this Agreement, Shares of each Fund upon the
terms and at the current offering prices as described in the Prospectus. The
Distributor will act only on its own behalf as principal in making agreements
with selected
dealers or others for the sale and redemption of Shares, and shall sell Shares
only at the offering prices as set forth in the Prospectus. The Distributor
shall devote its best efforts to effect the sale of shares, but shall not be
obligated to sell any certain number of Shares.
(b) In all matters relating to the sale and redemption of Shares, the
Distributor and its designated agent(s) will act in conformity with the Trust's
Declaration, By-laws and Prospectus and with the instructions and directions of
the Board of Trustees and will conform and comply with the requirements of the
Securities Exchange Act of 1934, as amended, the 1933 Act, the 1940 Act, the
regulations of the National Association of Securities Dealers, Inc. and all
other applicable federal or state laws or regulations. In connection with the
sale of Shares, the Distributor acknowledges and agrees that it is not
authorized to provide any information or make any representation other than as
contained in the Trust's Registration Statement or Prospectus and any sales
literature approved by the Trust.
(c) The Trust will not bear any costs and expenses incurred with
respect to distribution of shares except to the extent the Trust is permitted to
do so by applicable law. It is understood that the Adviser will bear the costs
and expenses incurred for (i) printing and mailing to prospective investors
copies of the Prospectus (including supplements thereto) and annual and interim
reports of the Trust which are used in connection with the offering of Trust's
Shares; (ii) preparing, printing and mailing any other literature used by the
Distributor in connection with the sale of the Shares and (iii) reimbursement
for NASD advertising compliance expenses advanced by the Distributor.
(d) All Trust Shares offered for sale by the Distributor shall be
offered for sale to the public at a price per Share (the "offering price") equal
to their net asset value (determined in the manner set forth in the Trust's
then-current Prospectus).
2.3 Sales and Redemptions.
(a) The Trust shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the issue and transfer of the Shares and for
supplying information, prices and other data to be furnished by the Trust
hereunder, . and all expenses in connection with preparing, printing and
distributing any Prospectus, except as set forth in Section 2.2(c) hereof.
(b) The Trust shall execute all documents, furnish 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 the Distributor may designate to the Trust and the Trust may
approve, and the Trust shall pay all fees which may be incurred in connection
with such qualification. The Distributor shall pay all expenses connected with
its qualification as a dealer under state or federal laws. It is understood that
certain advertising, marketing, shareholder servicing, administration and/or
distribution expenses to be incurred in connection with the Shares may be paid
as provided in any plan which may be adopted by the Trust in accordance with
Rule 12b-1 under the 1940 Act.
(c) The Trust shall have the right to suspend the sale of Shares at any time in
response to conditions in the securities markets or otherwise, and to suspend
the redemption of Shares at any time permitted by the 1940 Act or the rules of
the Commission
(d) The Trust reserves the right to reject any order for Shares.
(e) No Shares shall be offered by either the Trust or the Distributor under any
provisions of this Agreement and no orders for the purchase or sale of Shares
hereunder shall be accepted by the Trust if and so long as the effectiveness of
the Registration Statement shall be suspended under any of the provisions of the
1933 Act, or if and so long as a Prospectus as required by Section 10 of the
1933 Act is not on file with the Commission; provided, however, that nothing
contained in this subsection shall in any way restrict or have any application
to or bearing upon the Trust's obligation to repurchase any Shares from any
shareholder in accordance with the provisions of the Prospectus.
2.4 Fees and Expenses.
For performing its services under this Agreement, Distributor will
receive from the Trust a minimum fee per year to be paid on a monthly basis. The
Trust shall promptly reimburse Distributor for any expenses which are to be paid
by the Trust in accordance with the following paragraph.
In the performance of its obligations under this Agreement, all other costs in
connection with the offering of the Shares will be paid by the Trust. These
costs include, but are not limited to, licensing fees, filing fees, sales
literature review fees, travel and such other expenses as may be incurred by
Distributor on behalf of the Trust. See Exhibit B for fees.
Section 3. Limitation of Liability. The Distributor 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 willful misfeasance, bad faith or gross negligence on the
Distributor's part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement. Any person, even
though also an officer, director, partner, employee or agent of the Distributor,
who may be or become an officer, trustee, employee or agent of the Trust, shall
be deemed, when rendering services to the Trust, or acting on any business of
the Trust (other than services or business in connection with the Distributors
duties as distributor hereunder), to be rendering such services to or acting
solely for the Trust and not as an officer, director, partner, employee or agent
of, or one under the control or direction of, the Distributor even though paid
by the Distributor.
Section 4. Indemnification.
4.1. Trust Representations. The Trust represents and warrants to the Distributor
that at all times the Registration Statement and Prospectus will in all material
respects conform to the applicable requirements of the 1933 Act and the rules
and regulations thereunder and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation or warranty
is made herein with respect to any statements in the Registration Statement or
Prospectus made in reliance upon and in conformity with written information
furnished to the Trust by, or on behalf of' and with respect to, the Distributor
specifically for use in the Registration Statement or Prospectus.
4.2. Distributor's Representations. The Distributor represents and warrants to
the Trust that it is duly organized and validly existing as an Indiana
corporation and is and at all times will remain duly authorized and licensed to
carry out its services as contemplated herein.
4.3. Trust Indemnification. The Trust will indemnify, defend and hold harmless
the Distributor, its several officers and directors, and any person who controls
the Distributor within the meaning of Section 15 of the 1933 Act, from and
against any losses, claims, damages or liabilities, joint or several, to which
any of them may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or in any application or other document executed by or on behalf of
the Trust, or arise out of, or are based upon, information furnished by or on
behalf of the Trust filed in any state in order to qualify the Shares under the
securities or blue sky laws thereof ("Blue Sky Application"), or arise out of,
or are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Distributor, its several officers and
directors, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, for any legal or other expenses reasonably incurred
by any of them in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that the Trust shall not be
liable in any case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, any untrue statement, alleged untrue statement,
or omission or alleged omission made in the Registration Statement, the
Prospectus, any
Blue Sky Application or any application or other document executed by or on
behalf of the Trust in reliance upon and in conformity with written information
furnished to the Trust by, or on behalf of, and with respect to, the Distributor
specifically for inclusion therein.
The Trust shall not indemnify any person pursuant to this Section 4.3 unless the
court or other body before which the proceeding was brought has rendered a final
decision on the merits that such person was not liable by reason of his willful
misfeasance, bad faith or gross negligence in the performance of his duties, or
his reckless disregard of obligations and duties, under this Agreement
("disabling conduct") or, in the absence of such a decision, a reasonable
determination (based upon a review of the facts) that such person was not liable
by reason of disabling conduct has been made by the vote of a majority of
Trustees who are neither "interested persons" of the Trust (as defined in the
0000 Xxx) nor parties to the proceeding, or by an independent legal counsel in a
written opinion.
The Trust shall advance attorneys' fees and other expenses incurred by any
person in defending any claim, demand, action or suit which is the subject of a
claim for indemnification pursuant to this Section 4.3, so long as such person
shall: (i) undertake to repay all such advances unless it is ultimately
determined that he is entitled to indemnification hereunder; and (ii) provide
security for such undertaking, or the Trust shall be insured against losses
arising by reason of any lawful advances, or a majority of a quorum of
disinterested non-party Trustees of the Trust (or an independent legal counsel
in a written opinion) shall determine based on a review of readily available
facts (as opposed to a full trial-type inquiry) that there is reason to believe
that such person ultimately will be found entitled to indemnification hereunder.
4.4. Distributor's Indemnification. The Distributor will indemnify, defend and
hold harmless the Trust, the Trust's several officers and Trustees and any
person who controls the Trust within the meaning of Section 15 of the 1933 Act,
from and against any losses, claims, damages or liabilities, joint or several,
to which any of them may become subject under the 1933 Act or otherwise, insofar
as such losses, claims, damages, liabilities (or actions or proceedings in
respect hereof) arise out of, or are based upon, any breach of its
representations and warranties in Section 4.2 hereof, or which arise out of, or
are based upon, any true statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, any Blue Sky
Application or any application or other document executed by or on behalf of the
Trust, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which statement or omission was made in reliance upon and in
conformity with written information furnished to the Trust or any of its several
officers and Trustees by, or on behalf of, and with respect to, the Distributor
specifically for inclusion therein, and will reimburse the Trust, the Trust's
several officers and Trustees, and any person who controls the Trust within the
meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by any of them in investigating, defending or preparing to
defend any such action, proceeding or claim.
4.5. General Indemnity Provisions. No indemnifying party shall be liable under
its indemnity agreement contained in Section 4.3 or 4.4 hereof with respect to
any claim made against such indemnifying party unless the indemnified party
shall have notified the indemnifying party 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 indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall not
relieve it from any liability which it may otherwise have to the indemnified
party. The indemnifying party 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, and if the indemnifying party elects to assume the
defense, such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying party
elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by the indemnified party.
Section 5. Duration and Termination. The term of this Agreement shall begin on
the date of this Agreement for each Fund that has executed an Exhibit hereto on
the date of this Agreement and shall continue in effect with respect to each
such Fund (and any subsequent Funds added pursuant to an Exhibit executed during
the
initial term of this Agreement) for two years thereafter, and shall continue in
effect from year to year thereafter, subject to termination as hereinafter
provided, if such continuance is approved at least annually by (a) a majority of
the outstanding voting securities (as defined in the 0000 Xxx) of such Fund or
by vote of the Trust's Board of Trustees, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by 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 party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval. If a Fund
is added pursuant to an Exhibit executed after the date of this Agreement as
described above, this Agreement shall become effective with respect to that Fund
upon execution of the applicable Exhibit and shall continue in effect until the
next annual continuance of this Agreement and from year to year thereafter,
subject to approval as described above. This Agreement may be terminated by the
Trust with respect to any Fund at any time, without the payment of any penalty,
by the Board of Trustees or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of such Fund, on 60 days' written notice
to the Distributor, or by the Distributor at any time, without the payment of
any penalty, on 90 days' written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act).
Section 6. Miscellaneous.
6.1. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
6.2. Construction. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section 5 hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
6.3. Notices. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Trust shall be sufficiently given if
addressed to the Trust and mailed or delivered to it at its principal office set
forth in the Registration Statement, or at such other place as the Trust may
from time to time designate in writing. Any notice or other instrument in
writing, authorized or required by this Agreement to be given to the Distributor
shall be sufficiently given if addressed to the Distributor and mailed or
delivered to it at 000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000,
Attention: President, or at such other place as the Distributor may from time to
time designate in writing.
6.4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit to be executed
by their officers designated below as of the date and year first above written.
XXXXXX XXXX INVESTMENT FUNDS
By Xxxxxxx X. Xxxxx
Title President, Treasurer and Chief Financial Officer
Date: December 18, 1998
UNIFIED MANAGEMENT CORPORATION
By Xxxx Xxxx
Title Director, President and Chief Executive Officer
Date: December 18, 1998
EXHIBIT A
to
Distribution Agreement
List of Portfolios
Xxxxxx Xxxx International Equity Fund
Xxxxxx Xxxx Global Income Fund
EXHIBIT B
to
Distribution Agreement
Fee Schedule
Annual minimum fee: $6,000
Sales literature review and filing: $50 per hour, plus applicable NASD
advertising review fees
All other expenses in Section 2.4 are considered out-of-pocket.
