DISTRIBUTION AGREEMENT
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AGREEMENT made as of the 1st day of October, 1994 between OBERWEIS EMERGING
GROWTH FUND, a Massachusetts business trust (the "Fund"), and The Chicago
Corporation, a Delaware corporation ("TCC").
WHEREAS, the Fund is an open-end, diversified management investment company
registered under the Investment Company Act of 1940 (the "1940 Act"), the units
of beneficial interest ("Units") of which are registered under the Securities
Act of 1933, as amended; and
WHEREAS, the Fund is authorized to issue Units in separate series with each
such series representing the interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund has adopted a plan ("Plan") pursuant to Rule 12b-1 of the
1940 Act in order to provide for the payment of certain distribution costs by
the Fund; and
WHEREAS, the Fund, in accordance with the Plan, desires to retain TCC as
the principal distributor for Units of the Fund and TCC is willing to act in
such capacity;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Distributor. The Fund hereby appoints TCC as the
principal distributor of the Units of the Fund of such series of the Fund having
approved this Agreement (the "Shares") upon the terms and for the periods set
forth in this Agreement. TCC hereby accepts such appointment and agrees to
render the services and perform the duties of distributor as set forth herein.
2. Duties of Distributor. The following provisions shall apply to the
obligations of TCC as distributor under this Agreement:
(a) The Fund agrees to sell Shares through TCC, as agent, from time to
time during the term of this Agreement upon the terms and at the current
offering price described in the Fund's prospectus. Such sales may,
however, be suspended whenever in the judgment of the Fund it is in its
best interests to do so.
(b) TCC will hold itself available to receive or will arrange for the
receipt of orders for the purchase of Shares and will (and shall have the
authority to) receive and accept or reject or arrange for the receipt and
acceptance or rejection of such orders on behalf of the Fund in accordance
with the provisions of the Fund's prospectus.
(c) TCC shall not be obligated to sell any certain number of Shares.
(d) In performing its duties hereunder, TCC shall act in conformity
with the Fund's Agreement and Declaration of Trust, By-Laws, Registration
Statement and
prospectus, and with the instructions and directions of the officers and
Trustees of the Fund, and shall comply with and conform to the requirements
of the 1940 Act, the Securities Act of 1933, the Securities Exchange Act of
1934, and all other applicable federal and state laws, regulations and
rulings and Rules of Fair Practice of the National Association of
Securities Dealers, Inc.
(e) TCC shall be free to render to others services different from or
similar to those rendered to the Fund hereunder so long as the services
hereunder are not impaired thereby. It further is understood and agreed
that by separate agreement with the Fund, TCC may also serve the Fund in
other capacities; that officers or employees of TCC may serve as officers
or Trustees of the Fund to the extent permitted by law; and that TCC or its
officers or employees are not prohibited from engaging in any other
business activity or from rendering services to any other entity, or from
serving as officers, directors or trustees of any other organizations,
including investment companies.
3. Unreimbursable Distribution Costs. During the term of this Agreement,
TCC will pay from the fees provided under Section 7 of this Agreement without
further reimbursement by the Fund the following costs related to the
distribution of the Fund's Shares.
(a) Costs of all sales presentations, mailing, advertising and any
other distribution efforts which may be undertaken by TCC in its sole
discretion with respect to the Shares. Such costs shall not be deemed to
include the costs of preparing and setting in type prospectuses, statements
of additional information, proxy materials, reports and notices or the
costs of printing and distributing the same to existing shareholders and
regulatory authorities.
(b) Compensation of any personnel of TCC for activities in connection
with the distribution or sale of the Shares.
4. Representations. Neither TCC nor any other person is authorized by
the Fund to give any information or to make any representation relative to the
Shares other than those contained in the Fund's Registration Statement,
prospectus or statement of additional information filed with the Securities and
Exchange Commission as either may be amended from time to time, or in any
supplemental information to said prospectus or statement of additional
information approved by the Fund. TCC agrees that any other information or
representations other than those specified above which it or any dealer or other
person who distributes Shares through TCC may make in connection with the offer
or sale of Shares shall be made entirely without liability on the part of the
Fund. TCC agrees that in offering or selling Shares as agent of the Fund, it
will submit to the Fund's legal counsel or other representative, as may be
designated by the Fund's Board of Trustees, copies of all sales literature and
other similar materials before using the same, and will not use such sales
literature if disapproved by the Fund.
5. Appointment of Firms. It is understood and agreed that TCC may in its
discretion appoint broker-dealer and other firms (collectively "Firms") to
assist TCC in providing distribution services to the Fund, including literature
distribution, advertising and promotion. The agreements between TCC and such
Firms shall be substantially in the form of the agreement
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attached hereto as Exhibit A (broker-dealer) or in a form otherwise approved by
the Board of Trustees of the Fund.
6. Records Retention and Confidentiality. TCC shall keep and maintain on
behalf of the Fund all records which are required to be maintained pursuant to
Rules 12b-1, 31a-1(d) and 31a-2(a)(3) under the 1940 Act as such rules pertain
to the activities of TCC under this Agreement, and to preserve such records as
required under the 1940 Act; provided, however, TCC shall not be required to
maintain those records which would duplicate records required to be maintained
pursuant to any other agreement entered into by the Fund. Notwithstanding the
foregoing, TCC shall maintain, for a period of at least six (6) years, all
records and documents which may be needed or required to support or document the
entries made by TCC in its performance of services hereunder. TCC agrees that
all records required to be maintained under this paragraph shall be the property
of the Fund, shall be maintained in such fashion as to preserve the
confidentiality thereof, and to comply with applicable rules and regulations of
federal and/or state securities laws, and shall, in whole or any specified part,
be available for inspection by or surrender to the Fund at any reasonable time
after receipt of an appropriate written request.
7. Annual Fee. For all of the other services to be provided by TCC
hereunder, the Fund shall pay TCC compensation (the "Distribution Fee") at an
annual rate that may range from .25 to .45 of 1% of the Fund's average daily net
assets, as the Fund's Board of Trustees (the "Board") and TCC shall mutually
agree from time to time, computed and accrued daily and payable monthly,
provided that the total of the Distribution Fee and Service Fee (as defined in
the Shareholder Service Agreement, of even date herewith, between the Fund and
Oberweis Management, Inc.) does not exceed .50 of 1% of the Fund's average daily
net assets as provided in this Agreement and the said Shareholder Service
Agreement. The initial Distribution Fee shall be at the annual rate of .35 of
1% of the Fund's average daily net assets. In the event that there is more than
one series of Shares, the Distribution Fee shall be allocated to the various
series in proportion to the relative average daily net assets of such series.
8. Fees to Firms. From the foregoing annual fee, TCC may pay
compensation to the Firms, if any, who shall be assisting TCC in providing
distribution services to the Fund.
9. Expenses. The Fund shall assume and pay all charges and expenses of
its operations not specifically assumed or otherwise to be provided by TCC under
this Agreement.
10. Reports. TCC shall prepare reports for the Trustees of the Fund on a
quarterly basis showing amounts expended by TCC under this Agreement and the
purposes for such expenditures, including amounts paid to the various Firms, if
any, and such other information as from time to time shall be reasonably
requested by the Trustees of the Fund.
11. Limitation of Liability. Neither TCC nor any of its agents or
employees shall be liable for any error of judgment or mistake of law or for any
loss suffered by the Fund in connection with the matters to which this Agreement
relates, except liability to the Fund or its Shareholders to which TCC would
otherwise be subject by reason of TCC's 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. Any person, even
though also an
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officer, employee or agent of TCC who may be or become an officer, Trustee,
employee or agent of the Fund shall be deemed, when rendering services to the
Fund or to any series, or acting on any business of the Fund or of any series
(other than services or business in connection with TCC's duties as hereunder)
to be rendering such services to or acting solely for the Fund or series and not
as an officer, director, employee or agent or one under the control or direction
of TCC even though paid by TCC.
12. Indemnification.
(a) Subject to the conditions set forth below, the Fund agrees to
indemnify and hold harmless TCC, its officers and employees, and each person, if
any, who controls TCC within the meaning of Section 15 of the Securities Act of
1933 and Section 20 of the Securities Exchange Act of 1934 against any and all
loss, liability, claim, damage and expense whatsoever, jointly and severally, or
otherwise (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever), arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Fund's Registration Statement, the prospectus, or statement of
additional information or any amendment or supplement thereof, or any
advertisement or sales literature authorized by the Fund, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such statement
or omission was made in reliance upon and in conformity with written information
with respect to TCC furnished to the Fund by or on behalf of TCC expressly for
use in the Fund's Registration Statement, prospectus, statement of additional
information or any amendment or supplement thereof or any advertisement or sales
literature. If any action is brought against TCC or any controlling person
thereof in respect of which indemnity may be sought against the Fund pursuant to
the foregoing, TCC shall promptly notify the Fund in writing of the institution
of such action and the Fund shall assume the defense of such action, including
the employment of counsel selected by the Fund and payment of expenses. TCC, or
any such controlling person thereof, shall have the right to employ separate
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of TCC or such controlling person unless the employment of such
counsel shall have been authorized in writing by the Fund in connection with the
defense of such action or the Fund shall not have employed counsel to have
charge of the defense of such action, in which event such fees and expenses
shall be borne by the Fund. Anything in this subparagraph to the contrary
notwithstanding, the Fund shall not be liable for any settlement of any such
claim or action effected without its written consent. The Fund agrees promptly
to notify TCC of the commencement of any litigation or proceedings against the
Fund or any of its officers or directors or controlling persons in connection
with the issue and sale of shares or in connection with the Fund's Registration
Statement, prospectus or statement of additional information, or any
advertisement or sales literature.
(b) TCC agrees to indemnify and hold harmless the Fund, each of its
Trustees, each of its officers and each other person, if any, who controls the
Fund within the meaning of Section 15 of the Securities Act of 1933, with
respect to statements or omissions, if any, made in the Fund's Registration
Statement, prospectus or statement of additional information or any amendment or
supplement thereof or any advertisement or sales literature in reliance upon and
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in conformity with information with respect to TCC furnished in writing to the
Fund by or on behalf of TCC expressly for use in the Fund's Registration
Statement, prospectus or statement of additional information or any amendment or
supplement thereof or any advertisement or sales literature. In case any action
shall be brought against the Fund or any other person so indemnified based on
the Fund's Registration Statement, prospectus or statement of additional
information or any amendment or supplement thereof and in respect of which
indemnity may be sought against TCC, TCC shall have the rights and duties given
to the Fund and the Fund and each other person so indemnified shall have the
rights and duties given to TCC by the provisions of subparagraph (a) above.
(c) Nothing herein contained shall be deemed to protect any person against
liability to the Fund or its shareholders to which such person would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of the duties of such person or by reason of the reckless
disregard by such person of the obligations and duties of such person under this
Agreement.
13. Duration and Termination. This Agreement shall continue, unless
sooner terminated as provided herein, until September 30, 1995, and shall
thereafter continue in force from year to year so long as each such continuance
is approved at least annually by the vote of the Board of Trustees of the Fund,
including a majority of the Trustees of the Fund who are not interested persons
(as defined in the 0000 Xxx) of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or any agreement related
thereto. This Agreement may be terminated by the Fund at any time, without the
payment of any penalty, upon the vote of a majority of the Trustees of the Fund
who are not interested persons (as defined in the 0000 Xxx) of the Fund and who
have no direct or indirect financial interest in the operation of the Plan or
any agreement related thereto or by the vote of a majority of the outstanding
voting securities of the Fund (as defined in the 0000 Xxx) on 60 days written
notice to TCC. This Agreement may be terminated by TCC at any time, without the
payment of any penalty, on 60 days written notice to the Fund. This Agreement
will automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act).
14. Authority of TCC. TCC hereby represents and warrants to the Fund that
no consent or approval of, or other action by, any United States federal or
state regulatory authority or other person or entity, which has not been
obtained or taken, is required for the execution, delivery or performance by TCC
of this Agreement.
15. Amendment of Agreement. This Agreement may be amended by mutual
consent of the parties hereto, but the consent of the Fund must be by the vote
of the Board of Trustees of the Fund, including a majority of the Trustees who
are not interested persons (as defined in the 0000 Xxx) of the Fund and who have
no direct or indirect financial interest in the operation of the Plan or any
agreement related thereto.
16. Miscellaneous. 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
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thereby. This Agreement shall be construed in accordance with applicable
federal law and (except as to Section 17 below which shall be construed in
accordance with the laws of the Commonwealth of Massachusetts) the laws of the
State of Illinois, and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, subject to Section 13 above.
17. Limitation of Shareholder and Trustee Liability. All parties hereto
are expressly put on notice of the Oberweis Emerging Growth Fund Agreement and
Declaration of Trust dated July 7, 1986 and all amendments thereto, all of which
are on file with the Secretary of the Commonwealth of Massachusetts, and the
limitation of shareholder and trustee liability contained therein. This
Agreement has been executed by and on behalf of the Fund by its representative
as such representative and not individually, and the obligations of the Fund
hereunder are not binding upon any of the trustees, officers or shareholders of
the Fund individually, but are binding upon only the assets and property of the
Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
OBERWEIS EMERGING GROWTH FUND
By: /s/ Xxxxx X. Xxxxxxxx
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Its: President
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Attest:
/s/ Xxxxxxx X. Xxxxx
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Its: Executive Vice President
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THE CHICAGO CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Its: Exec. V.P., Director
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Attest:
/s/ Xxxxx X. Xxxxxx, Xx.
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Its: Exec. V.P., Gen. Counsel,
Secretary & Director
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EXHIBIT A TO DISTRIBUTION AGREEMENT
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DISTRIBUTION SERVICES AGREEMENT
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(Broker-Dealer)
THIS AGREEMENT, made as of the ______ day of ____________, 1994, between
The Chicago Corporation, a Delaware corporation ("TCC"), as principal
distributor for the sole series of the Oberweis Emerging Growth Fund, a
Massachusetts business trust (the "Fund"), pursuant to a Distribution Agreement
("Distribution Agreement"), dated October 1, 1994, and __________________ (the
"Firm");
WHEREAS, simultaneously herewith, the Firm is entering into a certain
Services Agreement (the "Services Agreement") with Oberweis Asset Management,
Inc., an Illinois corporation ("OAM"), as primary shareholder service agent for
the sole series of the Fund;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree as follows:
1. TCC hereby appoints the Firm to assist TCC in providing distribution
services to the Fund. The Firm shall provide such office space and equipment,
telephone facilities, personnel, literature distribution, advertising and
promotion as is necessary or beneficial for providing information and services
related to the distribution of Fund shares. Such services and assistance may
include, but not be limited to, processing purchase and redemption transactions,
automatic investment in Fund shares of client account cash balances, answering
routine client inquiries regarding the Fund, and such other distribution
services as TCC may reasonably request.
The Firm shall provide such security as is necessary to prevent unauthorized
use of any on-line computer facilities. The Firm agrees to release, indemnify
and hold harmless the Fund, TCC, OAM, and the Fund's investment adviser,
custodian and transfer agent from any and all direct or indirect liabilities or
losses resulting from requests, directions, actions or inactions of or by the
Firm, its officers, employees or agents regarding the purchase, redemption,
transfer or registration of Fund shares for accounts of the Firm, its clients
and other shareholders of the Fund. Principals of the Firm will be available to
consult from time to time with TCC concerning administration and performance of
the services contemplated by this Agreement.
The Firm accepts such appointment and agrees during such period to render
such services and to assume the obligations herein set forth for the
compensation herein provided. The Firm shall, for purposes herein provided, be
deemed to be an independent contractor, and unless otherwise expressly provided
or authorized, shall have no authority to act for or represent the Fund or TCC
in any way or otherwise be deemed an agent of the Fund or TCC.
2. For the services and facilities described in Section 1, TCC will pay a
fee (the "Distribution Fee") to the Firm after the end of each quarter at the
annual rate of ______ of 1% of the average aggregate net asset value of the Fund
shares in those accounts for which the Firm provides distribution services at a
level deemed by TCC to be satisfactory; provided that the aggregate Distribution
Fee paid hereunder and Services Fee as defined in and paid under the
Shareholder Services Agreement shall not exceed the total annual rate of ______
of 1% of the average aggregate net asset value of the Fund shares in those
accounts for which
the Firm provides such distribution services at such satisfactory level of
performance. TCC may in its sole discretion pay such additional amounts to the
Firm as shall be deemed appropriate by TCC. For the quarter and year in which
this Agreement becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement is in effect
during the quarter and year, respectively.
3. No person is authorized to make any representations concerning the Fund
or shares of the Fund except in accordance with the terms of this Agreement.
Neither the Firm nor its agents will use or distribute, or authorize the use or
distribution of, any statements other than those contained in the Fund's current
prospectus, statement of additional information or in such supplemental
literature or advertising as may be authorized by the Fund or TCC.
4. The Firm shall prepare such quarterly reports for TCC as shall reasonably
be requested by TCC.
5. This Agreement shall become effective on the date hereof and shall
continue in effect until terminated. This Agreement shall automatically
terminate in the event of its assignment, as defined in the Investment Company
Act of 1940, and upon any termination of the Distribution Agreement. It may also
be terminated at any time by the Firm or TCC on thirty (30) days' written
notice.
6. The Firm acknowledges that TCC may enter into similar agreements with
others without the consent of the Firm.
7. If any provision of this Agreement shall be held or made invalid by a
court decision, rule, or otherwise, the remainder shall not be affected thereby.
8. All communications to TCC shall be mailed to 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxx X. Xxxxxxx, Executive
Vice President. Any notice to the Firm shall be duly given if mailed or
telegraphed to the address specified below. This Agreement shall be construed in
accordance with applicable federal law and the laws of Illinois.
THE CHICAGO CORPORATION The "FIRM"
Firm Name:
_________________________________
By_____________________________ By_______________________________
Its____________________________ Its______________________________
Address__________________________
_________________________________
_________________________________
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