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Exhibit 6
DISTRIBUTION AGREEMENT
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This Distribution Agreement is made as of this 5th day of
September, 1995 between TIME HORIZON FUNDS, a Delaware business trust (herein
called the "Company), and CONCORD FINANCIAL GROUP, INC., a Delaware corporation
(herein called "CFG").
WHEREAS, the Company is an open-end, management investment
company and is so registered under the Investment Company Act of 1940; and
WHEREAS, the Company will offer and maintain the following
investment portfolios: Time Horizon Portfolio 1, Time Horizon Portfolio 2 and
Time Horizon Portfolio 3 (individually a "Fund" and collectively the "Funds");
and
WHEREAS, pursuant to a Management Agreement of even date
herewith between the Company and Bank of America National Trust and Savings
Association (the "Manager"), the Company has retained the Manager to provide
management services to the Funds; and
WHEREAS, the Company desires to retain CFG as Distributor for
the Funds to provide for the sale and distribution of shares of beneficial
interest of the Funds (herein collectively called "Shares"), and CFG 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:
I. DELIVERY OF DOCUMENTS
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The Company has delivered to CFG copies of each of the
following documents and shall deliver to it all future amendments and
supplements thereto, if any:
(a) The Company's Declaration of Trust and all
amendments thereto (such Declaration of Trust, as presently in effect and as it
shall from time to time be amended, herein called the "Company's Declaration");
(b) Bylaws of the Company (such Bylaws, as
presently in effect and as they shall from time to time be amended, herein
called the "Bylaws");
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(c) Resolutions of the Board of Trustees of the
Company authorizing the execution and delivery of this Agreement;
(d) The Company's registration statement under
the Securities Act of 1933, as amended (the "1933 Act"), and the Investment
Company Act of 1940, as amended (the "1940 Act"), on Form N-1A as filed with
the Securities and Exchange Commission (the "Commission") relating to the
Shares, and all subsequent amendments thereto (said registration statement, as
presently in effect and as amended or supplemented from time to time, is herein
called the "Registration Statement");
(e) Notification of Registration of the Company
under the 1940 Act on Form N-8A as filed with the Commission; and
(f) Prospectuses and statements of additional
information of the Company and of the Funds (such prospectuses and statements
of additional information, as presently in effect and as they shall from time
to time be amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").
II. DISTRIBUTION
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1. APPOINTMENT OF DISTRIBUTOR. The Company hereby
appoints CFG as Distributor of the Funds' Shares and CFG hereby accepts such
appointment and agrees to render the services and duties set forth in this
Section II. The Distributor shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Board of Trustees of the Company from time to time, have no
authority to act for or represent the Company in any way or otherwise be deemed
its agent. The services furnished by the Distributor hereunder are not deemed
exclusive, and the Distributor shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
2. SERVICES AND DUTIES.
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(a) The Company agrees to sell through
CFG, as agent, from time to time during the term of this Agreement, Shares of
the Funds upon the terms and at the current offering price as described in the
applicable
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Prospectus. CFG shall 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 price thereof as set forth
in the applicable Prospectus. CFG shall devote its best efforts to effect
sales of Shares of each of the Funds, but shall not be obligated to sell any
certain number of Shares.
(b) In all matters relating to the sale
and redemption of Shares, CFG shall act in conformity with the Company's
Declaration, Bylaws and Prospectuses and with the instructions and directions
of the Board of Trustees of the Company, and shall conform to and comply with
the requirements of the 1933 Act, the 1940 Act, the regulations of the National
Association of Securities Dealers, Inc. and all other applicable federal or
state laws and regulations. In connection with such sales, CFG acknowledges
and agrees that it is not authorized to provide any information or make any
representations other than as contained in the Company's Registration Statement
and Prospectuses and any sales literature specifically approved by the Company.
The Company shall furnish from time to time, for use in connection with the
sale of the Shares, such information with respect to the Funds and the Shares
as CFG may reasonably request. The Company shall also furnish CFG upon request
with: (a) unaudited semi-annual statements of the Funds' books and accounts
prepared by the Company, (b) a monthly itemized list of the securities in the
Funds, (c) monthly balance sheets as soon as practicable after the end of each
month, and (d) from time to time such additional information regarding the
financial condition of the Funds as CFG may reasonably request.
(c) CFG shall bear the cost of (i)
printing and distributing any Prospectus (including any supplement thereto),
and (ii) preparing, printing and distributing any literature, advertisement or
material which is primarily intended to result in the sale of the Shares;
provided, however, that CFG shall not be obligated to bear the expenses
incurred by the Company in connection with (1) the preparation and printing of
any supplement or amendment to any Registration Statement or Prospectus
necessary for the continued effective registration of the Shares under the 1933
Act or any state securities laws; and (2) the printing and distribution of any
Prospectus, supplement or amendment thereto for existing shareholders of the
Fund described therein.
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(d) All Shares of the Funds offered for
sale by CFG shall be offered for sale to the public at a price per Share (the
"offering price") equal to (i) their net asset value (determined in the manner
set forth in the Company's Declaration and then current Prospectuses) plus,
except with respect to those classes of persons or transactions set forth in
the then current Prospectuses, (ii) an initial sales charge or a contingent
deferred sales charge as set forth in the Company's then current Prospectuses.
The offering price, if not an exact multiple of one cent, shall be adjusted to
the nearest cent. Concessions by CFG to broker-dealers and other persons shall
be set forth in either the selling agreements between CFG and such
broker-dealers and persons or, if such concessions are described in the then
current Prospectuses, shall be as so set forth. No broker-dealer or other
person who enters into a selling agreement with CFG shall be authorized to act
as agent for the Company in connection with the offering or sale of its Shares
to the public or otherwise.
(e) The Company, or any agent of the
Company designated in writing by the Company, shall be promptly advised of all
purchase orders for Shares received by the Distributor or selected dealers.
CFG agrees, and shall cause any selected dealers to agree, to cause payment for
such Shares to be delivered promptly to the Company or its agent.
(f) If any Shares sold by CFG under the
terms of this Agreement are redeemed or repurchased by the Company or by CFG as
agent or are tendered for redemption within seven business days after the date
of confirmation of the original purchase of such Shares, CFG shall forfeit the
amount above the net asset value received by it in respect of such Shares,
provided that the portion, if any, of such amount re-allowed by CFG to
broker-dealers or other persons shall be repayable to the Company only to the
extent recovered by CFG from the broker-dealer or other person concerned. CFG
shall include in the forms of agreement with such broker-dealers and other
persons a corresponding provision for the forfeiture by them of their
concession with respect to Shares sold by them or their principals and redeemed
or repurchased by the Company or by CFG as agent (or tendered for redemption)
within seven business days after the date of confirmation of such initial
purchases.
(g) The Distributor shall provide the
services of certain persons who may be appointed as officers of the Company by
the Company's Board of Trustees.
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3. SALES AND REDEMPTIONS.
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(a) The Company 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 Company hereunder, and all expenses in connection with
preparing, printing and distributing the Prospectuses except as set forth in
subsection 2(c) of Section II hereof or in any other agreement entered into by
the Company.
(b) The Company shall execute all
documents, furnish all information and otherwise take all actions which may be
reasonably necessary in the discretion of the Company's officers in connection
with the qualification of the Shares for sale in such states as CFG may
designate to the Company and the Company may approve, and the Company shall pay
all filing fees which may be incurred in connection with such qualification.
CFG shall pay all expenses connected with its qualification as a dealer under
state or federal laws and, except as otherwise specifically provided in this
Agreement, all other expenses incurred by CFG in connection with the sale of
the Shares as contemplated in this Agreement.
(c) The Company shall have the right to
suspend the sale of Shares of any Fund at any time in response to conditions in
the securities markets or otherwise, and to suspend the redemption of Shares of
any Fund at any time as permitted by the 1940 Act or the rules of the
Commission ("Rules").
(d) The Company reserves the right to
reject any order for Shares, but shall not do so arbitrarily or without
reasonable cause.
III. PAYMENTS TO CFG
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CFG shall receive and may retain any portion of any front-end
or contingent deferred sales charge which is imposed on sales and redemptions
of Shares, as set forth in the Prospectuses and not reallowed to others. Upon
termination of this Agreement for any reason, the obligation to pay any such
contingent deferred sales charge on Shares sold prior to the date of
termination shall survive the termina-
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tion, and the Company or its agent shall collect and pay any such charges
thereafter imposed on such Shares to CFG.
It is understood that certain shareholder servicing expenses
to be incurred in connection with the Shares may be paid as provided in a
Shareholder Service Plan adopted by the Company, as the same may be amended by
the Company from time to time. CFG agrees to be responsible for the operation
of such Plan in accordance with the terms thereof.
The Company has adopted a Distribution Plan pursuant to Rule
12b-1 under the 1940 Act, pursuant to which CFG shall be entitled to receive
certain payments as set forth in such Plan, as the same may be amended from
time to time. CFG agrees to be responsible for the operation of such Plan in
accordance with the terms thereof.
IV. LIMITATIONS OF LIABILITY
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CFG shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Company or any Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations and duties under
this Agreement.
V. CONFIDENTIALITY
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CFG shall treat confidentially and as proprietary information
of the Company all records and other information relative to the Company and
the Funds and prior or present shareholders or those persons or entities who
respond to CFG'S inquiries concerning investment in the Company, and shall not
use such records and information for any purpose other than the performance of
its responsibilities and duties hereunder or under any other agreement with the
Company, except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where CFG may be exposed to civil or criminal contempt proceedings for
failure to comply, when CFG is requested to divulge such information by duly
constituted authorities, or when CFG is so requested by the Company.
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VI. INDEMNIFICATION
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1. COMPANY REPRESENTATIONS. The Company represents and
warrants to CFG that (a) it is duly organized as a Delaware business trust and
is and at all times will remain duly authorized to enter into and perform this
Agreement, and (b) at all times the Registration Statement and Prospectuses
will in all material respects conform to the applicable requirements of the
1933 Act and the Rules 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
in this subsection shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of and with respect to CFG expressly for use in the Registration
Statement or Prospectuses.
2. CFG REPRESENTATIONS. CFG represents and warrants to
the Company that (a) it is duly organized as a Delaware corporation and is and
at all times will remain duly authorized and licensed to carry out its services
as contemplated herein and (b) at all times any written information furnished
to the Company by or on behalf of CFG expressly for use in the Registration
Statement or Prospectuses 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.
3. COMPANY INDEMNIFICATION. The Company shall
indemnify, defend and hold harmless CFG, its several officers and directors,
and any person who controls CFG 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 Prospectuses or any application or other document
executed by or on behalf of the Company, or arise out of, or are based upon,
information furnished by or on behalf of the Company filed in any state in
order to qualify the Shares under the securities or blue sky laws thereof
("Blue Sky Application"), or arise out
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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 shall reimburse CFG, its several officers and
directors, and any person who controls CFG 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 Company 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
Prospectuses, any Blue Sky Application or any application or other document
executed by or on behalf of the Company in reliance upon and in conformity with
written information furnished to the Company by or on behalf of and with
respect to CFG specifically for inclusion therein.
The Company shall not indemnify any person pursuant to this
subsection 3 of Section VI hereof 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
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 a quorum of trustees of the Company who
are neither "interested persons" of the Company (as defined in the 0000 Xxx)
nor parties to the proceeding, or by an independent legal counsel in a written
opinion.
Each Fund 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 subsection 3 of
Section VI hereof, so long as: (a) such person shall undertake to repay all
such advances unless it is ultimately determined that he is entitled to
indemnification hereunder; and (b) such person shall provide security for such
undertaking, or the Fund shall be insured against losses arising by reason of
any lawful advances, or a majority of a quorum of the disinterested, non-party
trustees of the Company (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
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to believe that such person ultimately will be found entitled to
indemnification hereunder.
4. CFG INDEMNIFICATION. CFG shall indemnify, defend and
hold harmless the Company, each Fund, the Company's several officers and
trustees and any person who controls the Company or any Fund 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 breach of its representations and warranties in subsection 2 of
Section VI or its agreements in subsection 2 of Section II hereof, or which
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectuses, any Blue Sky Application or any application or other document
executed by or on behalf of the Company, 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 information furnished in writing
to the Company or any of its several officers and trustees by or on behalf of
and with respect to CFG specifically for inclusion therein, and shall reimburse
the Company, each Fund, the Company's several officers and trustees, and any
person who controls the Company or any Fund 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.
5. GENERAL INDEMNITY PROVISIONS. No indemnifying party
shall be liable under its indemnity agreement contained in subsection 3 or 4 of
Section VI 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
shall be entitled to participate at its own expense in the defense or, if it so
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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.
6. NAMES. The name "Time Horizon Funds" refers
to the trust created and the trustees, as trustees but not individually or
personally, acting from time to time under a Declaration of Trust dated April
12, 1995, as amended, which is hereby referred to and a copy of which is on
file at the principal office of the Company. The trustees, officers, employees
and agents of the Company shall not personally be bound by or liable under any
written obligation, contract, instrument, certificate or other interest or
undertaking of the Company made by the trustees or by an officer, employee or
agent of the Company, in his or her capacity as such, nor shall resort be had
to their private property for the satisfaction of any obligation or claim
thereunder. All persons dealing with any series or class of shares of the
Company may enforce claims against the Company only against the assets
belonging to such series or class.
VII. DURATION AND TERMINATION
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This Agreement shall become effective as of the date hereof
and, unless sooner terminated as provided herein, shall continue in effect with
respect to each Fund until October 31, 1996. Thereafter, if not terminated,
this Agreement shall continue automatically for successive terms of one year,
provided that such continuance is specifically approved at least annually (a)
by a vote of a majority of those members of the Board of Trustees of the
Company who are not parties to this Agreement or "interested persons" of any
such party, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Board of Trustees of the Company or by vote of a
"majority of the outstanding voting securities" of the Funds as to which the
Agreement is effective; provided, however, that this Agreement may be
terminated by the Company at any time, without the payment of any penalty, by
vote of a majority of the entire Board of Trustees of the Company or by a vote
of a "majority of the outstanding voting securities" of such Funds on sixty
(60) days' prior written notice to CFG, or by
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CFG at any time, without the payment of any penalty, on sixty (60) days' prior
written notice to the Company. This Agreement shall automatically and
immediately terminate in the event of its "assignment." As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meanings as such terms
have in the 1940 Act.
VIII. AMENDMENT OF THIS AGREEMENT
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No provision of this Agreement may be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against whom an enforcement of the change, waiver, discharge or termination is
sought.
IX. NOTICES
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Notices of any kind to be given to the Company hereunder by
CFG shall be in writing and shall be duly given if mailed or delivered to the
Company before September 18, 1995 at: 0000 Xxxxxx-Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000 Attention: Xxxxxxx X. Xxxxxx; after September 18, 1995 at: 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx; with a copy
to Xxxxx X. X'Xxxxx, Esq., Vedder, Price, Xxxxxxx & Kammholz, 000 X. XxXxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other address or to such
individual as shall be so specified by the Company to CFG. Notices of any kind
to be given to CFG hereunder by the Company shall be in writing and shall be
duly given if mailed or delivered to CFG at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxx, XX 00000, Attention: Xxxx Xxxxxxxx, or at such other address or to
such individual as shall be so specified by CFG to the Company.
X. MISCELLANEOUS
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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 VII hereof, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by New York law (without regard to
principles of conflicts of law);
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PROVIDED, HOWEVER, that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation of the Commission
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
TIME HORIZON FUNDS
By:/s/J. Xxxxx Xxxxx
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J. Xxxxx Xxxxx
President
Attest:/s/W. Xxxxxx Spurbuck
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(name) W. Xxxxxx Spurbuck
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Secretary
CONCORD FINANCIAL GROUP, INC.
By:/s/Xxxxxx X. Xxxxxxxx
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(name) Xxxxxx X. Xxxxxxxx
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Chief Executive Officer
Attest:/s/Xxxxxx X. Xxxx
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(name) Xxxxxx X. Xxxx
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Assistant Secretary
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