EXHIBIT (e)
Distribution Agreement
Dated October 1, 2003
Exhibit 99.(e)
DISTRIBUTION AGREEMENT
AGREEMENT, made the 1ST day of OCTOBER, 2003, between THE XXXXX FUNDS, a
Delaware statutory trust (hereinafter called the "Trust"), and XXXXX SECURITIES,
INC., a Nebraska corporation (hereinafter called the "Distributor"):
WITNESSETH:
In consideration of the mutual covenants herein contained it is agreed as
follows:
1. APPOINTMENT OF TRUST DISTRIBUTOR. The Trust hereby appoints the
Distributor as its exclusive agent to sell shares of common stock of the Trust
("Shares") during the term of this Agreement. The Distributor hereby accepts the
appointment and agrees to use its best efforts to find investors to purchase
Shares through the Distributor. The Distributor does not undertake to sell any
specific number of Shares.
2. SALE OF SHARES THROUGH DISTRIBUTOR. The Trust hereby agrees to offer and
sell through the Distributor as its agent, Shares of the Trust at the applicable
public offering price consisting of the net asset value per share. The Trust
reserves the right to reject any offer to purchase its Shares.
3. TRUST TO SUPPLY NET ASSET VALUE. The Trust shall determine in the manner
provided in its Declaration of Trust and promptly furnish to the Distributor, a
statement of the net asset value per Share as often and at such times as the
Trust shall determine, but not less than daily as of the close of business of
the New York Stock Exchange on any business day on which the New York Stock
Exchange is open for unrestricted trading. The net asset value shall become
effective at such time and shall remain in effect during such period as may be
stated in a statement thereof furnished to the Distributor by the Trust.
4. DELIVERY OF SHARES. Upon receipt by the Trust at its principal place of
business of a written order or confirmation from the Distributor, the Trust
will, if it elects to accept such order, as promptly as practicable, cause an
entry to be made in the records maintained by or on behalf of the Trust
crediting such Shares to the account of the purchaser thereof, in either event
against payment therefor in such manner as may be acceptable to the Trust.
5. DISTRIBUTOR NOT AGENT OF TRUST IN CERTAIN CIRCUMSTANCES. In making
agreements with its salesmen or with dealers, the Distributor shall act only in
its own behalf as principal and not as agent for the Trust. Distributor shall be
agent for the trust only in respect of sales of the Trust's Shares.
6. ISSUE OF SHARES BY TRUST TO SHAREHOLDERS AS DIVIDEND. Nothing herein
shall prevent the Trust from issuing, distributing, or transferring Shares,
whether treasury or newly issued
shares, at any time to its stockholders as stock dividends, for not less than
the net asset value of such Shares.
7. INFORMATION FURNISHED BY TRUST TO DISTRIBUTOR. The Trust shall furnish
the Distributor from time to time for use under Federal and state laws in the
filing of registration statements, copies of Trust documents, agreements and any
other related documents; provided that the Trustee shall pay all legal,
accounting, registration and filing fees incident to such registrations and
filings.
8. SALES LITERATURE. The Distributor shall pay the initial and continuing
expenses of preparing, printing and distributing all advertising and sales
literature.
9. INDEMNITIES.
(a) The Trust agrees to indemnify, defend and hold Distributor, its
officers and directors and any person who controls Distributor within the
meaning of Section 15 of the Securities Act of 1933, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which Distributor, its officers
and directors or any such controlling person may incur under the Securities Act
of 1933, or under the common law or otherwise, arising out of or based upon any
alleged untrue statement of a material fact contained in the Trust's
Registration Statement or Prospectus or arising out of or based upon any alleged
omission to state a material fact required to be stated in either thereof or
necessary to make the statements in either thereof not misleading; providing,
however, that this indemnity, to the extent that it might require indemnity of
any person who is an officer or director or controlling person of Distributor
and who is also a director or officer of the Trust, shall not inure to the
benefit of such officer or director or controlling person unless a court of
competent jurisdiction shall determine, or it shall have been determined by
controlling precedent, that such result would not be against public policy as
expressed in the Securities Act of 1933; and further provided, that in no event
shall anything herein contained be so construed as to protect Distributor (or
its officers and directors or any controlling persons) against any liability to
the Trust or its security holders to which Distributor 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. The Trust's agreement to indemnify
Distributor, it officers and directors and any such controlling person as
aforesaid is expressly conditioned upon its being notified of any action brought
against Distributor, its officers and directors or any such controlling person,
such notification to be given by letter or telegram addressed to the Trust at
its principal office in Omaha, Nebraska, and sent to it by the person against
whom such action is brought, within ten (10) days after the summons or other
legal process shall have been served. The failure to so notify the Trust of any
such action shall not relieve it from any liability which it may have to the
person against whom such action is brought by reason of any such alleged untrue
statement or omission otherwise than on account of the indemnity contained in
this paragraph. The Trust will be entitled, at its election, to assume the
defense of any suit brought to enforce any such claim, demand or liability, but,
in such case, such defense shall be conducted by counsel of good standing chosen
by the Trust and approved by Distributor. In the event the Trust does elect
to assume the defense of any such suit and retain counsel of good standing
approved by the Distributor, the defendant or defendants in such suit shall bear
the fees and expenses of any additional counsel retained by any of them; but in
case the Trust does not elect to assume the defense of any such suit, or in case
Distributor does not approve of counsel chosen by the Trust, the Trust will
reimburse Distributor, its officers and directors, or the controlling person
named as defendant or defendants in such suit, for reasonable fees and expenses
of any counsel retained by distributor or them. This indemnity will inure
exclusively to Distributor's benefit, to the benefit of its successors, to the
benefit of its officers and trustees and their respective estates, and to the
benefit of any controlling person and its successors. The Trust agrees to notify
the Distributor promptly of the commencement of any litigation or proceeding
against it or any of its officers or trustees in connection with the issue and
sale of any of its Shares.
(b) Distributor agrees to indemnify, defend and hold the Trust, its several
officers and directors, and any person who controls the Trust within the meaning
of Section 15 of the Securities Act of 1933, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Trust, its officers or
trustees, or any such controlling person may incur under the Securities Act of
1933 or under the common law or otherwise: but only to the extent that such
liability or expense incurred by the Trust, its officers or trustees, or such
controlling person resulting from such claims or demands shall arise out of or
be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by Distributor to the Trust for use in the
Trust's Registration Statement or Prospectus or shall arise out of or be based
upon any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or Prospectus or
necessary to make such information not misleading. Distributor's agreement to
indemnify the Trust, its officers and trustees, and any such controlling person
is expressly conditioned upon its being notified of any action brought against
the Trust, its officers and trustees and any such controlling person, such
notification to be given by letter or telegram addressed to Distributor at its
principal office in Omaha, Nebraska, and sent to it by the person against whom
such action is brought, with ten (10) days after the summons or other first
legal process shall have been served. Distributor shall have a right to control
the defense of such action, with counsel of its own choosing, satisfactory to
the Trust, if such action is based solely upon such alleged misstatement or
omission on its part, and in any other event Distributor or such controlling
person shall each have the right to participate in the defense or preparation of
the defense of any such action. The failure to so notify Distributor of any such
action shall not relieve Distributor from any liability which Distributor may
have to the Trust, it officers or trustees, or to such controlling person by
reason of any such untrue statement or omission on Distributor's part otherwise
than on account of its indemnity contained in the paragraph.
10. REGISTRATION AND QUALIFICATION OF DISTRIBUTOR AND SALESMEN.
(a) Distributor shall be registered and qualified to act as a broker-dealer
with the U.S. Securities and Exchange Commission, the National Association of
Securities Dealers, Inc. and the securities commissions of the states where the
Shares of the Trust will be offered. Distributor
will comply with all Federal and state securities laws applicable to the offer
and sale of securities and to the operation and conduct of the business of a
broker-dealer.
(b) Distributor, as its sole expense, shall employ, train, register and
qualify such securities salesmen in such states as shall be agreed upon by the
Distributor and the Trust. Thereafter, Distributor shall supervise the
activities of such salesmen to assure their continuing compliance with the
applicable securities laws.
11. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENT OF THIS AGREEMENT. This
Agreement shall automatically terminate in the event of its assignment; and this
Agreement may be amended only if the terms of the amendment are approved either
(a) by action of a majority of the Trust's trustees and by a majority of those
trustees of the Trust who are not interested or affiliated persons of the
Distributor or officers or employees of the Trust or (b) by affirmative vote of
the holders of a majority of the outstanding voting securities of the Trust.
12. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
(a) This Agreement shall become effective as of the date first set forth
above and shall continue in force for an indefinite period, subject to prior
termination as provided herein, but only so long as its continuance shall be
specifically approved at least annually by a vote of a majority of the Board of
Trustees of the Trust or by a vote of the majority of the outstanding voting
securities of the Trust. In any event, this Agreement shall not be renewed or
performed unless it has been approved annually by a majority vote of those
trustees of the Trust who are not parties to such agreement or interested or
affiliated persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(b) This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund, or by vote of a majority of the
outstanding voting securities of the Fund, in either case upon sixty (60) days'
written notice to the Underwriter, and it may be terminated by the Underwriter
upon sixty (60) days' written notice to the Fund.
13. DEFINITIONS. For the purpose of this Agreement, the terms "vote of a
majority of the outstanding securities", "assignment", "affiliated person" and
"interested person" shall have the respective meanings specified in the
Investment Company Act of 1940 as now or hereafter in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
THE XXXXX FUNDS
By /s/ Xxxxxxx X. Xxxxx
-------------------------------------
President
Attest:
/s/ Xxxx X. Xxxxxxxx
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Secretary
XXXXX SECURITES, INC.
By /s/ Xxxxxxx X. Xxxxx
-------------------------------------
President
Attest:
/s/ Xxxx X. Xxxxxxxx
-------------------------------
Secretary
