Exhibit (e)
THE XXXXXX TRUST
DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of November, 1999, between The Xxxxxx Trust
(the "Trust"), a business trust organized under the laws of the State of
Delaware with its principal place of business at Two Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxx 00000, and Forum Fund Services, LLC (the "Distributor"), a Delaware
limited liability company with its principal place of business at Xxx Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx 00000.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end management investment company and
may issue its shares of beneficial interest, no par value (the "Shares") in
separate series and classes; and
WHEREAS, the Trust desires that the Distributor offer the Shares of the
Trust representing interests in each of the separate investment portfolios of
the Trust as listed on Schedule A hereto (each a "Fund" and, collectively, the
"Funds") as the Trust's principal underwriter, and Distributor is willing to act
as principal underwriter on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the Trust and Distributor agree as follows:
SECTION 1. APPOINTMENT. The Trust hereby appoints Distributor, and
Distributor hereby agrees, to act as distributor of the Shares for the period
and on the terms set forth in this Agreement. In connection therewith, the Trust
has delivered to the Distributor copies of its Trust Instrument and Bylaws, the
Trust's Registration Statement and all amendments thereto filed pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), or the Act (the
"Registration Statement") and the current Prospectus and Statement of Additional
Information of each Fund (collectively, as currently in effect and as amended or
supplemented, the "Prospectus") and, shall promptly furnish the Distributor with
all amendments of or supplements to the foregoing.
SECTION 2. DISTRIBUTION SERVICES. Subject to the direction and control
of the Trust's Board of Trustees (the "Board"), the Distributor shall serve as
distributor of the Shares.
(a) As agent of and sole distributor for the Trust, Distributor shall offer, and
solicit offers to subscribe to, the unsold balance of Shares as shall then be
effectively registered under the Securities Act and applicable state securities
laws. All subscriptions for Shares obtained by Distributor shall be directed to
the Trust for acceptance and shall not be binding on the Trust until accepted by
it. Distributor shall have no authority to make binding subscriptions on behalf
of the Trust. The Trust reserves the right to sell Shares directly to investors
through subscriptions received by the Trust. Distributor's rights hereunder
shall not apply to Shares issued in connection with (a) the merger or
consolidation of the Trust or its series or classes with any other investment
company or series or class thereof, (b) the Trust's acquisition by purchase or
otherwise of all or substantially all of the assets or stock of any other
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investment company, or (c) the reinvestment in Shares by the Trust's
shareholders of dividends or other distributions or any other offering by the
Trust of securities to its shareholders.
(b) Distributor shall use its best efforts to obtain subscriptions to Shares
upon the terms and conditions contained herein and in the Prospectus, including
the offering price. Distributor shall send to the Trust promptly all
subscriptions placed with Distributor. The Trust shall advise Distributor in its
capacity as distributor of the approximate net asset value per Share at any time
requested by Distributor that is a net asset value determination time as
disclosed in the Prospectus and at such other times as it shall have been
determined. The Trust shall furnish Distributor from time to time, for use in
connection with the offering of Shares, such other information with respect to
the Trust and Shares as Distributor may reasonably request. The Trust shall
supply Distributor with such copies of the Prospectus as Distributor may
reasonably request. Distributor may use its employees, agents and other persons
who need not be its employees, at its cost and expense, to assist it in carrying
out its obligations hereunder, but no such employee, agent or other person shall
be deemed to be an agent of the Trust or have any rights under this Agreement.
(c) The Trust reserves the right to suspend the offering of Shares at any time,
in the absolute discretion of the Board, and upon notice of such suspension
Distributor shall cease to offer shares of stock.
(d) The Trust and Distributor will cooperate with each other in taking such
action as may be necessary to qualify Shares for sale under the securities laws
of such states as the Trust may designate, provided, that Distributor shall not
be required to register as a broker-dealer or file a consent to service of
process in any such state. Subject to any agreement by the Trust's investment
adviser to reimburse expenses of the Trust that relate to the Funds, the Trust
shall be responsible for payment of all fees and expenses of registering Shares
under the Securities Act and of registering or qualifying Shares and the Trust's
qualification under applicable state securities laws. Distributor shall pay all
expenses relating to its broker-dealer qualification.
(e) The Trust represents that its Registration Statement and Prospectus under
the Securities Act 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 of the Securities and Exchange Commission (the "Commission")
thereunder. The Trust represents and warrants that its Registration Statement
and Prospectus contain or will contain all statements required to be stated
therein in accordance with the Securities Act and the rules and regulations of
the Commission thereunder, and that all statements of fact contained or to be
contained therein are or will be true and correct at the time indicated or on
the effective date as the case may be; that the Trust's Registration Statement
and Prospectus, when they shall become effective or be authorized for use, will
not 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. The Trust will from time to time file
such amendment or amendments to its Registration Statement and Prospectus as, in
the light of future developments, shall, in the opinion of the Trust's counsel,
be necessary in order to have such Registration Statement and Prospectus 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, but, if the
Trust shall not file such amendment or amendments within fifteen days after
receipt of a written request from Distributor to do so, Distributor may, at its
option, terminate this Agreement immediately. The Trust shall not file any
amendment to its Registration Statement and Prospectus without giving
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Distributor reasonable notice thereof in advance; 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 its Registration Statement and Prospectus,
of whatever character, as it deems advisable, such right being in all respects
absolute and unconditional. The Trust represents and warrants that any amendment
to its Registration Statement and Prospectus hereafter filed will, when it
becomes effective, contain all statements required to be stated therein in
accordance with the Securities Act and the rules and regulations of the
Commission thereunder, that all statements of fact contained therein will, when
the same shall become effective, be true and correct and that 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 Shares.
(f) The Trust will indemnify, defend and hold Distributor, its several officers
and directors, and any person who controls Distributor within the meaning of
Section 15 of the Securities Act (collectively, the "Distributor Indemnitees"),
free and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims, demands
or liabilities and any counsel fees incurred in connection therewith) that any
Distributor 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 Trust's Registration Statement and Prospectus
under the Securities Act or arising out of or based upon any alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that in no event shall
anything contained in this paragraph (f) be so construed as to protect
Distributor against any liability to the Trust or its security holders to which
Distributor would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties under this Section 2. This
agreement to indemnify Distributor Indemnitees is expressly conditioned upon the
Trust being notified of any action brought against any Distributor Indemnitee,
such notification to be given by letter, facsimile transmission or telegram to
the Trust and referring to the person against whom such action is brought within
ten days after the summons or other first legal process shall have been served
on such person. The failure so to notify the Trust of any such action shall not
relieve the Trust from any liability which it may have to any Distributor
Indemnitee otherwise than on account of the indemnification provided for in this
paragraph (f). The Trust will be entitled to assume the defense of any suit
brought to enforce any such claim, and to retain counsel of good standing chosen
by it and approved by Distributor. In the event the Trust elects to assume the
defense of any such suit and retain counsel of good standing approved by
Distributor, the defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them. In the event the Trust does not
elect to assume the defense of any such suit, or in case Distributor does not
approve of counsel chosen by the Trust or has been advised that it may have
available defenses or claims which are not available to or conflict with those
available to the Trust, the Trust will reimburse any Distributor Indemnitee
named as defendant in such suit for the fees and expenses of any counsel
retained by any such person. The indemnification provisions contained in this
paragraph (f) and the Trust's 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 Distributor Indemnitee and shall
survive the sale of any Shares made pursuant to subscriptions obtained by
Distributor. The indemnification provisions of this paragraph (f) will inure
exclusively to the benefit of the Distributor Indemnitees and their respective
successors and assigns. The Trust agrees promptly to notify Distributor of the
commencement of any litigation or proceeding against the Trust or any of its
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trustees or officers in connection with the issue or sale of Shares.
(g) Distributor agrees to indemnify, defend and hold the Trust, its several
officers and directors, and any person who controls the Trust within the meaning
of Section 15 of the Securities Act (collectively, the "Trust Indemnitees"),
free and harmless from and against any and all claims, demands, liabilities, and
expenses (including the cost of investigating or defending such claims, demands
or liabilities and any reasonable counsel fees incurred in connection therewith)
which any Trust Indemnitee may incur under the Act, or under common law or
otherwise, but only to the extent that such liability, or expense incurred by
the Trust Indemnitees resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by Distributor in its capacity as distributor
to the Trust for use in the Trust's Registration Statement or Prospectus under
the Securities Act, or shall arise out of or be based upon any alleged omission
to state a material fact in connection with such information required to be
stated in the Registration Statement or Prospectus or necessary to make such
information not misleading. Distributor's agreement to indemnify the Trust
Indemnitees is expressly conditioned upon Distributor being notified of any
action brought against a Trust Indemnitee, such notification to be given by
letter, facsimile transmission or telegram addressed and referring to the person
against whom such action is brought within ten days after the summons or other
first legal process shall have been served on such person. Distributor shall
have a right to control the defense of such action, with counsel of its own
choosing, satisfactory to the Trust, if such action is based solely upon such
alleged misstatement or omission on Distributor's part, and in any other event
Distributor and the Trust Indemnitees named shall each have the right to
participate in the defense or preparation of the defense of any such action. The
failure so to notify Distributor of any such action shall not relieve
Distributor from any liability which it may have to any Trust Indemnitee
otherwise than on account of the indemnification provisions in this paragraph
(g).
(h) The Trust shall advise Distributor immediately: (I) of any request by the
Commission for amendments to the Trust's Registration Statement or Prospectus or
for additional information; (ii) in the event of the issuance by the Commission
of any stop order suspending the effectiveness of the Trust's Registration
Statement or 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 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 Commission with respect to any
amendments to the Trust's Registration Statement or Prospectus which may from
time to time be filed with Commission under the Act or the Securities Act.
SECTION 3. STANDARD OF CARE. The Distributor shall give the Trust the
benefit of its best judgment and efforts in rendering its services to the Trust
and shall not be liable for error of judgment or mistake of law, or in any event
whatsoever, provided that nothing herein shall be deemed to protect, or purports
to protect, the Distributor against any liability to the Trust or to the
security holders of the Trust to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of reckless disregard of its obligations and
duties hereunder.
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SECTION 4. EXPENSES; COMPENSATION.
(a) Subject to any agreement by the Trust's investment adviser to reimburse or
pay expenses of the Trust, the Trust shall be responsible and assumes the
obligation for payment of all its expenses.
(b) The Distributor shall be entitled to no compensation or reimbursement of
expenses for the distribution services provided by the Distributor pursuant to
this Agreement.
(c) Notwithstanding anything in this Agreement to the contrary, the Distributor
and its affiliated persons may receive compensation or reimbursement from the
Trust with respect to (I) the provision of shareholder support or other
services, (ii) the provision of management services or (iii) service as a
Trustee or officer of the Trust.
SECTION 5. EFFECTIVENESS, DURATION AND TERMINATION.
(a) This Agreement shall become effective on the date on which the Trust's
Registration Statement relating to the shares of the Xxxxxx Equity Income Fund
and the Xxxxxx Value Fund becomes effective and shall relate to every other Fund
as of the date on which the Trust's Registration Statement relating to the
shares of such Fund becomes effective. Upon the effectiveness of this Agreement,
it shall supersede all previous agreements between the Trust and the Distributor
covering the subject matter hereof.
(b) Unless otherwise terminated pursuant to its terms, this Agreement shall
continue in effect for twelve months and, thereafter, shall continue in effect
for successive twelve month periods, provided that such 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 Trust and (ii) by a vote of
a majority of Trustees of the Trust 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. If the continuation of this Agreement is not
approved, the Distributor may continue to render the services described herein
in the manner and to the extent permitted by the Act.
(c) This Agreement may be terminated at any time, without the payment of any
penalty, (I) by the Board or by a vote of a majority of the outstanding voting
securities of the Trust on 60 days' written notice to the Distributor or (ii) by
the Distributor on 60 days' written notice to the Trust. This Agreement shall
automatically terminate in the event of its assignment.
SECTION 6. ACTIVITIES OF DISTRIBUTOR. Except to the extent necessary to
perform its obligations under this Agreement, nothing herein shall be deemed to
limit or restrict the Distributor's right, or the right of any of its officers,
directors or employees (whether or not they are a director, officer, employee or
other affiliated person 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 7. 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 the
Distributor 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
the Distributor'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.
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SECTION 8. MISCELLANEOUS.
(a) Except for Schedule A, no provision of this Agreement may be amended or
modified in any manner except by a written agreement properly authorized and
executed by both parties hereto and, if required by the Act, by a vote of a
majority of the outstanding voting securities of the Trust.
(b) 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 no contain the particular part, term or provision held to be illegal or
invalid.
(c) Section headings in this Agreement are included for convenience only and are
not to be used to construe or interpret this Agreement.
(d) Notices, requests, instructions and communications received by the parties
at their respective principal places of business, or at such other address as a
party may have designated in writing, shall be deemed to have been properly
given.
(e) This Agreement shall be governed by and shall be construed in accordance
with the laws of the State of New York.
(f) 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 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of November 1, 1999.
THE XXXXXX TRUST
By:/s/ Xxxxxxx X. Xxxxxx
Name:Xxxxxxx X. Xxxxxx
Office:Chairman & Vice President
FORUM FUND SERVICES, LLC
By:/s/ Xxxx X. Xxxxxx
Name:Xxxx X. Xxxxxx
Office:President
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THE XXXXXX TRUST
DISTRIBUTION AGREEMENT
Schedule A
Funds of the Trust
Xxxxxx Equity Income Fund
Xxxxxx Value Fund
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