EXHIBIT (E)
TRUECROSSING FUNDS
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 8th day of December, 1999, by and between
TrueCrossing Funds, a Delaware business trust, with its principal office and
place of business at Two Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 (the "Trust"),
and Forum Fund Services, LLC, a Delaware limited liability company with its
principal office and place of business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
00000 ("Forum").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company and
may issue its shares of beneficial interest, no par value ("Shares") in separate
series and classes; and
WHEREAS, Forum is registered under the Securities Exchange Act of 1934,
as amended ("1934 Act"), as a broker-dealer and is engaged in the business of
selling shares of registered investment companies either directly to purchasers
or through other financial intermediaries;
WHEREAS, the Trust offers shares in various series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement being herein
referred to as a "Fund," and collectively as the "Funds") and the Trust may in
the future offer shares of various classes of each Fund as listed in Appendix A
hereto (each such class subsequently established by the Trust in a Fund being
herein referred to as a "Class," and collectively as the "Classes"); and
WHEREAS, the Trust desires that Forum offer, as principal underwriter,
the Shares of each Fund and Class thereof to the public and Forum is willing to
provide those services on the terms and conditions set forth in this Agreement
in order to promote the growth of the Funds and facilitate the distribution of
the Shares;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and Forum do hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Trust hereby appoints Forum, and Forum hereby agrees, to act as
distributor of the Shares for the period and on the terms set forth in this
Agreement.
(b) In connection therewith, the Trust has delivered to Forum copies of (I) the
Trust's Trust Instrument, (ii) the Trust's Registration Statement and all
amendments thereto filed with the U.S. Securities and Exchange Commission
("SEC") pursuant to the Securities Act of 1933, as amended ("Securities Act"),
or the 1940 Act ("Registration Statement"), (iii) the current prospectuses and
statements of additional information of each Fund and Class thereof
(collectively, as currently in effect and as amended or supplemented, the
"Prospectus"), (iv) each current plan of distribution or similar document
adopted by the Trust under Rule 12b-1 under the 1940 Act ("Plan") and each
current shareholder service plan or similar document adopted by the Trust
("Service Plan"); and (iv) all procedures adopted by the Trust with respect to
the Funds (e.g., repurchase agreement procedures), and shall promptly furnish
Forum with all amendments of or supplements to the foregoing. The Trust shall
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deliver to Forum a certified copy of the resolution of the Board of Trustees of
the Trust (the "Board") appointing Forum and authorizing the execution and
delivery of this Agreement.
SECTION 2. EXCLUSIVE NATURE OF DUTIES
Forum shall be the exclusive representative of the Trust to act as
distributor of the Funds except that the rights given under this Agreement to
Forum shall not apply to: (i) Shares issued in connection with the merger,
consolidation or reorganization of any other investment company or series or
class thereof with a Fund or Class thereof; (ii) a Fund's acquisition by
purchase or otherwise of all or substantially all of the assets or stock of any
other investment company or series or class thereof; (iii) the reinvestment in
Shares by a Fund's shareholders of dividends or other distributions; or (iv) any
other offering by the Trust of securities to its shareholders (collectively
"exempt transactions").
SECTION 3. OFFERING OF SHARES
(a) Forum shall have the right to buy from the Trust the Shares needed to fill
unconditional orders for unsold Shares of the Funds as shall then be effectively
registered under the Securities Act placed with Forum by investors or selected
dealers or selected agents (each as defined in Section 11 hereof) acting as
agent for their customers or on their own behalf. Alternatively, Forum may act
as the Trust's agent, to offer, and to solicit offers to subscribe to, unsold
Shares of the Funds as shall then be effectively registered under the Securities
Act. Forum will promptly forward all orders and subscriptions to the Trust. The
price that Forum shall pay for Shares purchased from the Trust shall be the net
asset value per Share, determined as set forth in Section 3(c) hereof, used in
determining the public offering price on which the orders are based. Shares
purchased by Forum are to be resold by Forum to investors at the public offering
price, as set forth in Section 3(b) hereof, or to selected dealers or selected
agents acting as agent for their customers that have entered into agreements
with Forum pursuant to Section 11 hereof or acting on their own behalf. The
Trust reserves the right to sell Shares directly to investors through
subscriptions received by the Trust, but no such direct sales shall affect the
sales charges due to Forum hereunder.
(b) The public offering price of the Shares of a Fund, i.e., the price per Share
at which Forum or selected dealers or selected agents may sell Shares to the
public or to those persons eligible to invest in Shares as described in the
applicable Prospectus, shall be the public offering price determined in
accordance with the then currently effective Prospectus of the Fund or Class
thereof under the Securities Act relating to such Shares. The public offering
price shall not exceed the net asset value at which Forum, when acting as
principal, is to purchase such Shares, plus, in the case of Shares for which an
initial sales charge is assessed, an initial charge equal to a specified
percentage or percentages of the public offering price of the Shares as set
forth in the current Prospectus relating to the Shares. In the case of Shares
for which an initial sales charge may be assessed, Shares may be sold to certain
classes of persons at reduced sales charges or without any sales charge as from
time to time set forth in the current Prospectus relating to the Shares. The
Trust will advise Forum of the net asset value per Share at each time as the net
asset value per Share shall have been determined by the Trust and at such other
times as Forum may reasonably request.
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(c) The net asset value per Share of each Fund or Class thereof shall be
determined by the Trust, or its designated agent, in accordance with and at the
times indicated in the applicable Prospectus on each Fund business day in
accordance with the method set forth in the Prospectus and guidelines
established by the Trust's Board.
(d) The Trust reserves the right to suspend the offering of Shares of a Fund or
of any Class thereof at any time in the absolute discretion of the Board, and
upon notice of such suspension Forum shall cease to offer Shares of the Funds or
Classes thereof specified in the notice.
(e) The Trust, or any agent of the Trust designated in writing to Forum by the
Trust, shall be promptly advised by Forum of all purchase orders for Shares
received by Forum and all subscriptions for Shares obtained by Forum as agent
shall be directed to the Trust for acceptance and shall not be binding until
accepted by the Trust. Any order or subscription may be rejected by the Trust;
provided, however, that the Trust will not arbitrarily or without reasonable
cause refuse to accept or confirm orders or subscriptions for the purchase of
Shares. The Trust or its designated agent will confirm orders and subscriptions
upon their receipt, will make appropriate book entries and, upon receipt by the
Trust or its designated agent of payment thereof, will issue such Shares in
certificated or uncertificated form pursuant to the instructions of Forum. Forum
agrees to cause such payment and such instructions to be delivered promptly to
the Trust or its designated agent.
SECTION 4. REPURCHASE OR REDEMPTION OF SHARES BY THE TRUST
(a) Any of the outstanding Shares of a Fund or Class thereof may be tendered for
redemption at any time, and the Trust agrees to redeem or repurchase the Shares
so tendered in accordance with its obligations as set forth in the Trust
Instrument and the Prospectus relating to the Shares. The price to be paid to
redeem or repurchase the Shares of a Fund of Class thereof shall be equal to the
net asset value calculated in accordance with the provisions of Section 3(b)
hereof less, in the case of Shares for which a deferred sales charge is
assessed, a deferred sales charge equal to a specified percentage or percentages
of the net asset value of those Shares as from time to time set forth in the
Prospectus relating to those Shares or their cost, whichever is less. Shares of
a Fund or Class thereof for which a deferred sales charge may be assessed and
that have been outstanding for a specified period of time may be redeemed
without payment of a deferred sales charge as from time to time set forth in the
Prospectus relating to those Shares.
(b) The Trust or its designated agent shall pay (i) the total amount of the
redemption price consisting of the redemption price less any applicable deferred
sales charge to the redeeming shareholder or its agent and (ii) except as may be
otherwise required by the Rules of Fair Practice (the "Rules") of the National
Association of Securities Dealers Regulation, Inc. (the "NASD") and any
interpretations thereof, any applicable deferred sales charges to Forum in
accordance with Forum's instructions on or before the fifth business day (or
such other earlier business day as is customary in the investment company
industry) subsequent to the Trust or its agent having received the notice of
redemption in proper form.
(c) Redemption of Shares or payment therefor may be suspended at times when the
New York Stock Exchange is closed for any reason other than its customary
weekend or holiday closings, when trading thereon is restricted, when an
emergency exists as a result of which disposal by the Trust of securities owned
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by a Fund is not reasonably practicable or it is not reasonably practicable for
the Trust fairly to determine the value of a Fund's net assets, or during any
other period when the SEC so requires or permits.
SECTION 5. DUTIES AND REPRESENTATIONS OF FORUM
(a) Forum shall use reasonable efforts to sell Shares of the Funds upon the
terms and conditions contained herein and in the then current Prospectus. Forum
shall devote reasonable time and effort to effect sales of Shares but shall not
be obligated to sell any specific number of Shares. The services of Forum to the
Trust hereunder are not to be deemed exclusive, and nothing herein contained
shall prevent Forum from entering into like arrangements with other investment
companies so long as the performance of its obligations hereunder is not
impaired thereby.
(b) In selling Shares of the Funds, Forum shall use its best efforts in all
material respects duly to conform with the requirements of all federal and state
laws relating to the sale of the Shares. None of Forum, any selected dealer, any
selected agent or any other person is authorized by the Trust to give any
information or to make any representations other than as is contained in a
Fund's Prospectus or any advertising materials or sales literature specifically
approved in writing by the Trust or its agents.
(c) Forum shall adopt and follow procedures for the confirmation of sales to
investors and selected dealers or selected agents, the collection of amounts
payable by investors and selected dealers or selected agents on such sales, and
the cancellation of unsettled transactions, as may be necessary to comply with
the requirements of the NASD.
(d) Forum represents and warrants to the Trust that:
(i) It is a limited liability company duly organized and existing and in
good standing under the laws of the State of Delaware and it is duly
qualified to carry on its business in the State of Maine;
(ii) It is empowered under applicable laws and by its Operating Agreement to
enter into and perform this Agreement;
(iii) All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement;
(iv) It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement;
(v) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of Forum, enforceable against Forum in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties;
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(vi) It is registered under the 1934 Act with the SEC as a broker-dealer, it
is a member in good standing of the NASD, it will abide by the rules
and regulations of the NASD, and it will notify the Trust if its
membership in the NASD is terminated or suspended; and
(vii) The performance by Forum of its obligations hereunder does not and will
not contravene any provision of its Articles of Incorporation.
(e) Notwithstanding anything in this Agreement, including the Appendices, to the
contrary, Forum makes no warranty or representation as to the number of selected
dealers or selected agents with which it has entered into agreements in
accordance with Section 11 hereof, as to the availability of any Shares to be
sold through any selected dealer, selected agent or other intermediary or as to
any other matter not specifically set forth herein.
SECTION 6. DUTIES AND REPRESENTATIONS OF THE TRUST
(a) The Trust shall furnish to Forum copies of all financial statements and
other documents to be delivered to shareholders or investors at least two Fund
business days prior to such delivery and shall furnish Forum copies of all other
financial statements, documents and other papers or information which Forum may
reasonably request for use in connection with the distribution of Shares. The
Trust shall make available to Forum the number of copies of the Funds'
Prospectuses as Forum shall reasonably request.
(b) The Trust shall take, from time to time, subject to the approval of the
Board and any required approval of the shareholders of the Trust, all action
necessary to fix the number of authorized Shares (if such number is not limited)
and to register the Shares under the Securities Act, to the end that there will
be available for sale the number of Shares as reasonably may be expected to be
sold pursuant to this Agreement.
(c) The Trust shall execute any and all documents, furnish to Forum any and all
information, otherwise use its best efforts to take all actions that may be
reasonably necessary and cooperate with Forum in taking any action as may be
necessary to register or qualify Shares for sale under the securities laws of
the various states of the United States and other jurisdictions ("States") as
Forum shall designate (subject to approval by the Trust); provided that Forum
shall not be required to register as a broker-dealer or file a consent to
service of process in any State and neither the Trust nor any Fund or Class
thereof shall be required to qualify as a foreign corporation, trust or
association in any State. Any registration or qualification may be withheld,
terminated or withdrawn by the Trust at any time in its discretion. Forum shall
furnish such information and other material relating to its affairs and
activities as may be required by the Trust in connection with such registration
or qualification.
(d) The Trust represents and warrants to Forum that:
(i) It is a business trust duly organized and existing and in good standing
under the laws of the State of Delaware;
(ii) It is empowered under applicable laws and by its Trust Instrument to enter
into and perform this Agreement;
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(iii)All proceedings required by the Trust Instrument have been taken to
authorize it to enter into and perform its duties under this Agreement;
(iv) It is an open-end management investment company registered with the SEC
under the 1940 Act;
(v) All Shares, when issued, shall be validly issued, fully paid and
non-assessable;
(vi) This Agreement, when executed and delivered, will constitute a legal, valid
and binding obligation of the Trust, enforceable against the Trust in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured parties;
(vii)The performance by Forum of its obligations hereunder does not and will
not contravene any provision of its Operating Agreement.
(viii) The Registration statement will be effective and will remain effective
with respect to all Shares of the Funds and Classes thereof being offered
for sale;
(ix) The Registration Statement and Prospectuses have been or will be, as the
case may be, carefully prepared in conformity with the requirements of the
Securities Act and the rules and regulations thereunder;
(x) The Registration Statement and Prospectuses contain or will contain all
statements required to be stated therein in accordance with the Securities
Act and the rules and regulations thereunder; all statements of fact
contained or to be contained in the Registration Statement or Prospectuses
are or will be true and correct at the time indicated or on the effective
date as the case may be; and neither the Registration Statement nor any
Prospectus, when they shall become effective or be authorized for use, 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;
(xi) It will from time to time file such amendment or amendments to the
Registration Statement and Prospectuses as, in the light of then-current
and then-prospective developments, shall, in the opinion of its counsel, be
necessary in order to have the Registration Statement and Prospectuses at
all times contain all material facts required to be stated therein or
necessary to make any statements therein not misleading to a purchaser of
Shares ("Required Amendments");
(xii)It shall not file any amendment to the Registration Statement or
Prospectuses without giving Forum reasonable advance notice thereof;
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 the
Registration Statement or Prospectuses, of whatever character, as the Trust
may deem advisable, such right being in all respects absolute and
unconditional; and
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(xiii) Any amendment to the Registration Statement or Prospectuses hereafter
filed will, when it becomes effective, contain all statements required to
be stated therein in accordance with the 1940 Act and the rules and
regulations thereunder; all statements of fact contained in the
Registration Statement or Prospectuses will, when such amendment becomes
effective, be true and correct at the time indicated or on the effective
date as the case may be; and no such amendment, when it becomes effective,
will include an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares.
SECTION 7. STANDARD OF CARE
(a) Forum shall use its best judgment and reasonable efforts in rendering
services to the Trust under this Agreement but shall be under no duty to take
any action except as specifically set forth herein or as may be specifically
agreed to by Forum in writing. Forum shall not be liable to the Trust or any of
the Trust's shareholders for any error of judgment or mistake of law, for any
loss arising out of any investment, or for any action or inaction of Forum in
the absence of bad faith, willful misfeasance or gross negligence in the
performance of Forum's duties or obligations under this Agreement or by reason
or Forum's reckless disregard of its duties and obligations under this Agreement
(b) Forum shall not be liable for any action taken or failure to act in good
faith reliance upon:
(i) the advice of the Trust or of counsel, who may be counsel to the
Trust or counsel to Forum;
(ii) any oral instruction which it receives and which it reasonably believes
in good faith was transmitted by the person or persons authorized by
the Board to give such oral instruction (Forum shall have no duty or
obligation to make any inquiry or effort of certification of such oral
instruction);
(iii) any written instruction or certified copy of any resolution of the
Board, and Forum may rely upon the genuineness of any such document or
copy thereof reasonably believed in good faith by Forum to have been
validly executed; or
(iv) as to genuineness, any signature, instruction, request, letter of
transmittal, certificate, opinion of counsel, statement, instrument,
report, notice, consent, order, or other document reasonably believed
in good faith by Forum to be genuine and to have been signed or
presented by the Trust or other proper party or parties;
and Forum shall not be under any duty or obligation to inquire into the validity
or invalidity or authority or lack thereof of any statement, oral or written
instruction, resolution, signature, request, letter of transmittal, certificate,
opinion of counsel, instrument, report, notice, consent, order, or any other
document or instrument which Forum reasonably believes in good faith to be
genuine.
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(c) Forum shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdowns, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply. In addition, to the extent
Forum's obligations hereunder are to oversee or monitor the activities of third
parties, Forum shall not be liable for any failure or delay in the performance
of Forum's duties caused, directly or indirectly, by the failure or delay of
such third parties in performing their respective duties or cooperating
reasonably and in a timely manner with Forum.
SECTION 8. INDEMNIFICATION
(a) The Trust will indemnify, defend and hold Forum, its employees, agents,
directors and officers and any person who controls Forum within the meaning of
section 15 of the Securities Act or section 20 of the 1934 Act ("Forum
Indemnitees") free and harmless from and against any and all claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character
(including the cost of investigating or defending such claims, demands, actions,
suits or liabilities and any reasonable counsel fees incurred in connection
therewith) which any Forum Indemnitee may incur, under the Securities Act, or
under common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectuses or arising out of or based upon any alleged omission to state a
material fact required to be stated in any one thereof or necessary to make the
statements in any one thereof not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, information furnished in
writing to the Trust in connection with the preparation of the Registration
Statement or exhibits to the Registration Statement by or on behalf of Forum
("Forum Claims").
After receipt of Forum's notice of termination under Section 13(e), the
Trust shall indemnify and hold each Forum Indemnitee free and harmless from and
against any Forum Claim; provided, that the term Forum Claim for purposes of
this sentence shall mean any Forum Claim related to the matters for which Forum
has requested amendment to the Registration Statement and for which the Trust
has not filed a Required Amendment, regardless of whether any statement in or
omission from the Registration Statement was made in reliance upon, or in
conformity with, information furnished to the Trust by or on behalf of Forum.
(b) The Trust may assume the defense of any suit brought to enforce any Forum
Claim and may retain counsel ("counsel" shall be interpreted to include either
an individual attorney or his or her law firm) of good standing chosen by the
Trust and approved by Forum, which approval shall not be withheld unreasonably.
The Trust shall only be required to pay for the fees and expenses of one
counsel; the costs of any additional counsel shall be borne by the retaining
party. The Trust shall advise Forum that it will assume the defense of the suit
and retain counsel within ten (10) days of receipt of the notice of the claim.
If the Trust assumes the defense of any such suit and retains counsel, the
defendants shall bear the fees and expenses of any additional counsel that they
retain. If the Trust does not assume the defense of any such suit, or if Forum
does not approve of counsel chosen by the Trust or has been advised that it may
have available defenses or claims that are not available to or conflict with
those available to the Trust, the Trust will reimburse any Forum Indemnitee
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named as defendant in such suit for the reasonable fees and expenses of any
counsel that person retains. A Forum Indemnitee shall not settle or confess any
claim without the prior written consent of the Trust, which consent shall not be
unreasonably withheld or delayed.
(c) Forum will indemnify, defend and hold the Trust and its several officers and
trustees (collectively, the "Trust Indemnitees"), free and harmless from and
against any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character (including the cost of investigating or defending
such claims, demands, actions, suits or liabilities and any reasonable counsel
fees incurred in connection therewith), but only to the extent that such claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses result from, arise out of or
are based upon:
(i) any alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any alleged omission of a
material fact required to be stated or necessary to make the statements
therein not misleading, if such statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust in writing in connection with the preparation of the Registration
Statement or Prospectus by or on behalf of Forum; or
(ii) any act of, or omission by, Forum or its sales representatives that
does not conform to the standard of care set forth in Section 7 of this
Agreement ("Trust Claims").
(d) Forum may assume the defense of any suit brought to enforce any Trust Claim
and may retain counsel of good standing chosen by Forum and approved by the
Trust, which approval shall not be withheld unreasonably. Forum shall advise the
Trust that it will assume the defense of the suit and retain counsel within ten
(10) days of receipt of the notice of the claim. If Forum assumes the defense of
any such suit and retains counsel, the defendants shall bear the fees and
expenses of any additional counsel that they retain. If Forum does not assume
the defense of any such suit, or if Trust does not approve of counsel chosen by
Forum or has been advised that it may have available defenses or claims that are
not available to or conflict with those available to Forum, Forum will reimburse
any Trust Indemnitee named as defendant in such suit for the reasonable fees and
expenses of any counsel that person retains. A Trust Indemnitee shall not settle
or confess any claim without the prior written consent of Forum, which consent
shall not be unreasonably withheld or delayed.
(e) The Trust's and Forum's obligations to provide indemnification under this
Section is conditioned upon the Trust or Forum receiving notice of any action
brought against a Forum Indemnitee or Trust Indemnitee, respectively, by the
person against whom such action is brought within twenty (20) days after the
summons or other first legal process is served. Such notice shall refer to the
person or persons against whom the action is brought. The failure to provide
such notice shall not relieve the party entitled to such notice of any liability
that it may have to any Forum Indemnitee or Trust Indemnitee except to the
extent that the ability of the party entitled to such notice to defend such
action has been materially adversely affected by the failure to provide notice.
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(f) The provisions of this Section and the parties' representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Forum Indemnitee or
Trust Indemnitee and shall survive the sale and redemption of any Shares made
pursuant to subscriptions obtained by Forum. The indemnification provisions of
this Section will inure exclusively to the benefit of each person that may be a
Forum Indemnitee or Trust Indemnitee at any time and their respective successors
and assigns (it being intended that such persons be deemed to be third party
beneficiaries under this Agreement).
(g) Each party agrees promptly to notify the other party of the commencement of
any litigation or proceeding of which it becomes aware arising out of or in any
way connected with the issuance or sale of Shares.
(h) Nothing contained herein shall require the Trust to take any action contrary
to any provision of its Trust Instrument or any applicable statute or regulation
or shall require Forum to take any action contrary to any provision of its
Articles of Incorporation or Bylaws or any applicable statute or regulation;
provided, however, that neither the Trust nor Forum may amend their Trust
Instrument or Operating Agreement, respectively, in any manner that would result
in a violation of a representation or warranty made in this Agreement.
(i) Nothing contained in this section shall be construed to protect Forum
against any liability to the Trust or its security holders to which Forum would
otherwise be subject by reason of its failure to satisfy the standard of care
set forth in Section 7 of this Agreement.
SECTION 9. NOTIFICATION BY THE TRUST
The Trust shall advise Forum immediately: (i) of any request by the SEC
for amendments to the Trust's Registration Statement or Prospectus or for
additional information; (ii) in the event of the issuance by the SEC of any stop
order suspending the effectiveness of the Trust's Registration Statement or any
Prospectus or the initiation of any proceedings for that purpose; (iii) of the
happening of any material event which makes untrue any statement made in the
Trust's then current Registration Statement or Prospectus or which requires the
making of a change in either thereof in order to make the statements therein not
misleading; and (iv) of all action of the SEC with respect to any amendments to
the Trust's Registration Statement or Prospectus which may from time to time be
filed with the Commission under the 1940 Act or the Securities Act.
SECTION 10. COMPENSATION; EXPENSES
(a) In consideration of Forum's services in connection with the distribution of
Shares of each Fund and Class thereof, Forum shall receive: (i) any applicable
sales charge assessed upon investors in connection with the purchase of Shares;
(ii) from the Trust, any applicable contingent deferred sales charge ("CDSC")
assessed upon investors in connection with the redemption of Shares; (iii) from
the Trust, the distribution service fees with respect to the Shares of those
Classes as designated in Appendix A for which a Plan is effective (the
"Distribution Fee"); and (iv) from the Trust, the shareholder service fees with
respect to the Shares of those Classes as designated in Appendix A for which a
Service Plan is effective (the "Shareholder Service Fee"). The Distribution Fee
and Shareholder Service Fee shall be accrued daily by each applicable Fund or
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Class thereof and shall be paid monthly as promptly as possible after the last
day of each calendar month but in any event on or before the fifth (5th) Fund
business day after month-end, at the rate or in the amounts set forth in
Appendix A and, as applicable, the Plan(s). The Trust grants and transfers to
Forum a general lien and security interest in any and all securities and other
assets of a Fund now or hereafter maintained in an account at the Fund's
custodian on behalf of the Fund to secure any Distribution Fees and Shareholder
Service Fees owed Forum by the Trust under this Agreement.
(b) The Trust shall cause its transfer agent (the "Transfer Agent") to withhold,
from redemption proceeds payable to holders of Shares of the Funds and the
Classes thereof, all CDSCs properly payable by the shareholders in accordance
with the terms of the applicable Prospectus and shall cause the Transfer Agent
to pay such amounts over to Forum as promptly as possible after the settlement
date for each redemption of Shares.
(c) Except as specified in Sections 8 and 10(a), Forum shall be entitled to no
compensation or reimbursement of expenses for the services provided by Forum
pursuant to this Agreement. Forum may receive compensation from NewBridge
Partners, LLC ("Adviser") for its services hereunder or for additional services
all as may be agreed to between the Adviser and Forum. Notwithstanding anything
in this Agreement to the contrary, to the extent Forum receives compensation
from the Adviser that is disclosed to the Board, the Trust will indemnify,
defend and hold each Forum Indemnitees free and harmless from and against any
and all claims, demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, reasonable counsel fees and other expenses of every
nature and character (including the cost of investigating or defending such
claims, demands, actions, suits or liabilities and any reasonable counsel fees
incurred in connection therewith) related in any way to such payment.
(d) The Trust shall be responsible and assumes the obligation for payment of all
the expenses of the Funds, including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of the Registration
Statement and Prospectuses (including but not limited to the expense of setting
in type the Registration Statement and Prospectuses and printing sufficient
quantities for internal compliance, regulatory purposes and for distribution to
current shareholders).
(e) The Trust shall bear the cost and expenses (i) of the registration of the
Shares for sale under the Securities Act; (ii) of the registration or
qualification of the Shares for sale under the securities laws of the various
States; (iii) if necessary or advisable in connection therewith, of qualifying
the Trust, the Funds or the Classes thereof (but not Forum) as an issuer or as a
broker or dealer, in such States as shall be selected by the Trust and Forum
pursuant to Section 6(C) hereof; and (iv) payable to each State for continuing
registration or qualification therein until the Trust decides to discontinue
registration or qualification pursuant to Section 6(c) hereof. Forum shall pay
all expenses relating to Forum's broker-dealer qualification.
SECTION 11. SELECTED DEALER AND SELECTED AGENT AGREEMENTS
Forum shall have the right to enter into selected dealer agreements
with securities dealers of its choice ("selected dealers") and selected agent
agreements with depository institutions and other financial intermediaries of
its choice ("selected agents") for the sale of Shares and to fix therein the
portion of the sales charge, if any, that may be allocated to the selected
dealers or selected agents; provided, that the Trust shall approve the forms of
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agreements with selected dealers or selected agents and shall review the
compensation set forth therein. Shares of each Fund or Class thereof shall be
resold by selected dealers or selected agents only at the public offering
price(s) set forth in the Prospectus relating to the Shares. Within the United
States, Forum shall offer and sell Shares of the Funds only to such selected
dealers as are members in good standing of the NASD.
SECTION 12. CONFIDENTIALITY
Forum agrees to treat all records and other information related to the
Trust as proprietary information of the Trust and, on behalf of itself and its
employees, to keep confidential all such information, except that Forum may:
(i) prepare or assist in the preparation of periodic reports to shareholders
and regulatory bodies such as the SEC;
(ii) provide information typically supplied in the investment company industry
to companies that track or report price, performance or other information
regarding investment companies; and
(iii)release such other information as approved in writing by the Trust, which
approval shall not be unreasonably withheld;
provided, however, that Forum may release any information regarding the Trust
without the consent of the Trust if Forum reasonably believes that it may be
exposed to civil or criminal legal proceedings for failure to comply, when
requested to release any information by duly constituted authorities or when so
requested by the Trust.
SECTION 13. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Fund on the later
of (i) the date first above written or (ii) the date on which the Trust's
Registration Statement relating to Shares of the Fund becomes effective. Upon
effectiveness of this Agreement, it shall supersede all previous agreements
between the parties hereto covering the subject matter hereof insofar as such
Agreement may have been deemed to relate to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund for a period
of one year from its effectiveness and thereafter shall continue in effect with
respect to a Fund until terminated; provided, that continuance is specifically
approved at least annually (i) by the Board or by a vote of a majority of the
outstanding voting securities of the Fund and (ii) by a vote of a majority of
Trustees of the Trust (I) who are not parties to this Agreement or interested
persons of any such party (other than as Trustees of the Trust) and (II) with
respect to each class of a Fund for which there is an effective Plan, who do not
have any direct or indirect financial interest in any such Plan applicable to
the class or in any agreements related to the Plan, cast in person at a meeting
called for the purpose of voting on such approval.
(c) This Agreement may be terminated at any time with respect to a Fund, without
the payment of any penalty, (i) by the Board or by a vote of a majority of the
outstanding voting securities of the Fund or, with respect to each class of a
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Fund for which there is an effective Plan, a majority of Trustees of the Trust
who do not have any direct or indirect financial interest in any such Plan or in
any agreements related to the Plan, on 60 days' written notice to Forum or (ii)
by Forum on 60 days' written notice to the Trust.
(d) This Agreement shall automatically terminate upon its assignment and upon
the termination of Forum's membership in the NASD.
(e) If the Trust shall not file a Required Amendment within fifteen days
following receipt of a written request from Forum to do so, Forum may, at its
option, terminate this Agreement immediately.
(f) The obligations of Sections 5(d), 6(d), 8, 9 and 10 shall survive any
termination of this Agreement.
SECTION 14. NOTICES
Any notice required or permitted to be given hereunder by either party
to the other shall be deemed sufficiently given if personally delivered or sent
by telegram, facsimile or registered, certified or overnight mail, postage
prepaid, addressed by the party giving such notice to the other party at the
last address furnished by the other party to the party giving such notice, and
unless and until changed pursuant to the foregoing provisions hereof each such
notice shall be addressed to the Trust or Forum, as the case may be, at their
respective principal places of business.
SECTION 15. ACTIVITIES OF FORUM
Except to the extent necessary to perform Forum's obligations
hereunder, nothing herein shall be deemed to limit or restrict Forum's right, or
the right of any of Forum's employees, agents, officers or directors who may
also be a trustee, officer or employee of the Trust, or affiliated persons of
the Trust to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
SECTION 16. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the shareholders of each Fund shall not
be liable for any obligations of the Trust or of the Funds under this Agreement,
and Forum agrees that, in asserting any rights or claims under this Agreement,
it shall look only to the assets and property of the Trust or the Fund to which
Forum's rights or claims relate in settlement of such rights or claims, and not
to the trustees of the Trust or the shareholders of the Funds.
SECTION 17. MISCELLANEOUS
(a) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
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(b) No provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by both parties
hereto.
(c) This Agreement shall be governed by, and the provisions of this Agreement
shall be construed and interpreted under and in accordance with, the laws of the
State of Delaware.
(d) This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof,
whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be illegal, in
conflict with any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(g) Section headings in this Agreement are included for convenience only and are
not to be used to construe or interpret this Agreement.
(h) Notwithstanding any other provision of this Agreement, the parties agree
that the assets and liabilities of each Fund are separate and distinct from the
assets and liabilities of each other Fund and that no Fund shall be liable or
shall be charged for any debt, obligation or liability of any other Fund,
whether arising under this Agreement or otherwise.
(i) No affiliated person, employee, agent, officer or director of Forum shall be
liable at law or in equity for Forum's obligations under this Agreement.
(j) Each of the undersigned warrants and represents that they have full power
and authority to sign this Agreement on behalf of the party indicated and that
their signature will bind the party indicated to the terms hereof.
(k) The terms "vote of a majority of the outstanding voting securities,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the 1940 Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
TRUECROSSING FUNDS
By:/s/ Xxxxx X. Xxxxxxxxxxxx
Xxxxx X. Xxxxxxxxxxxx
Chairman
FORUM FUND SERVICES, LLC
By:/s/ Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
Secretary
TRUECROSSING FUNDS
DISTRIBUTION AGREEMENT
APPENDIX A
FUNDS AND CLASSES OF THE TRUST
AS OF DECEMBER 8, 1999
TrueCrossing Growth Fund
