Exhibit (e)(i)
DISTRIBUTION AGREEMENT
AGREEMENT made October 29, 2001 between Fifth Third Funds (the "Trust"),
having its principal place of business at 00 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx,
Xxxx 00000, and Fifth Third Funds Distributor, Inc. ("Distributor"), having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust is an open-end management investment company, organized
as a Massachusetts business trust and registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, it is intended that Distributor act as the distributor of the
units of beneficial interest ("Shares") of each of the investment portfolios of
the Trust identified in Schedule A hereto as such Schedule may be amended from
time to time (such portfolios being referred to individually as a "Fund" and
collectively as the "Funds").
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Distributor
1.1 Distributor will act as agent for the distribution of the Shares
covered by the registration statement and prospectus of the Trust then in effect
under the Securities Act of 1933, as amended (the "Securities Act"). As used in
this Agreement, the term "registration statement" shall mean Parts A (the
prospectus), B (the Statement of Additional Information) and C of each
registration statement that is filed on Form N-1A, or any successor thereto,
with the Commission, together with any amendments thereto. The term "prospectus"
shall mean each form of prospectus and Statement of Additional Information used
by the Funds for delivery to shareholders and prospective shareholders after the
effective dates of the above-referenced registration statements, together with
any amendments and supplements thereto.
1.2 Distributor agrees to use appropriate efforts to solicit orders for
the sale of the Shares and will undertake such advertising and promotion as it
believes reasonable in connection with such solicitation. The Trust understands
that Distributor is now and may in the future be the distributor of the shares
of several investment companies or series (together, "Companies") including
Companies having investment objectives similar to those of the Trust. The Trust
further understands that investors and potential investors in the Trust may
invest in shares of such other Companies. The Trust agrees that Distributor's
duties to such Companies shall not be deemed in conflict with its duties to the
Trust under this paragraph 1.2.
Distributor shall, at its own expense, finance appropriate activities which
it deems reasonable which are primarily intended to result in the sale of the
Shares, including, but not limited to, advertising, compensation of
underwriters, dealers and sales personnel, the
printing and mailing of prospectuses to other than current Shareholders, and the
printing and mailing of sales literature.
1.3 In its capacity as distributor of the Shares, all activities of
Distributor and its partners, agents, and employees shall comply with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, each state as required, all rules and regulations promulgated by the
Commission thereunder and all rules and regulations adopted by any securities
association registered under the Securities Exchange Act of 1934.
1.4 Distributor will provide one or more persons, during normal business
hours, to respond to telephone questions with respect to the Trust.
1.5 Distributor will transmit any orders when received by it for purchase
or redemption of the Shares to the transfer agent and custodian for the Funds.
1.6 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind, the
Trust's officers may decline to accept any orders for, or make any sales of, the
Shares until such time as those officers deem it advisable to accept such orders
and to make such sales.
1.7 Distributor will act only on its own behalf as principal if it chooses
to enter into selling agreements with selected dealers or others.
1.8 The Trust agrees at its own expense to execute any and all documents
and to furnish any and all information and otherwise to take all actions that
may be reasonably necessary in connection with the qualification of the Shares
for sale in such states as Distributor may designate.
1.9 The Trust 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 Distributor may reasonably request; and the Trust warrants that the
statements contained in any such information shall fairly show or represent what
they purport to show or represent. The Trust shall also furnish Distributor upon
request with: (a) unaudited semi-annual financial statements prepared by the
Trust, (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 Distributor may reasonably request.
1.10 The Trust represents to Distributor that, with respect to the Shares,
all current and existing registration statements and prospectuses filed by the
Trust with the Commission under the Securities Act have been carefully prepared
in conformity with requirements of said Act and rules and regulations of the
Commission thereunder. The registration statement and prospectus contain all
statements required to be stated therein in conformity with said Act and the
rules and regulations of said Commission and all statements of fact contained in
any such registration statement and prospectus are true
and correct. Furthermore, neither any registration statement nor any prospectus
includes an untrue statement of a material fact or omits 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. The Trust may, but shall not be
obligated to, propose from time to time such amendment or amendments to any
registration statement and such supplement or supplements to any prospectus as,
in the light of future developments, may, in the opinion of the Trust's counsel,
be necessary or advisable. If the Trust shall not provide such amendment or
amendments and/or supplement or supplements within fifteen days after receipt by
the Trust following a written request from Distributor to do so, Distributor
may, at its option, terminate this Agreement. The Trust shall not file any
amendment to any registration statement or supplement to any prospectus without
giving 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 any registration statement and/or
supplements to any prospectus, of whatever character, as the Trust may deem
advisable, such right being in all respects absolute and unconditional.
1.11 The Trust authorizes Distributor and dealers to use any prospectus in
the form furnished from time to time in connection with the sale of the Shares.
The Distributor shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or negligence on the Distributor's part in the performance of its duties
or from reckless disregard by it of its obligations and duties under this
Agreement. In the absence of willful misfeasance, bad faith or negligence or
reckless disregard of obligations or duties hereunder on the part of Distributor
or any of its officers, directors or employees, the Trust agrees to indemnify,
defend and hold Distributor, its officers, directors and employees, and any
person who controls Distributor within the meaning of Section 15 of the
Securities Act free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which Distributor, its officers, directors and employees, or any such
controlling person, (a) based on any representations made herein by the Trust;
(b) based on any act or omission of any prior distributor, Administrator or
Adviser to the Trust (other than a prior distributor or Administrator affiliated
with the Distributor), including the registration or failure to register any
shares of the Trust in accordance with state or federal laws or resulting from
or relating to any books or records delivered to the Distributor in connection
with its responsibilities under this Agreement and occurring prior to the date
of this Agreement; or (c) under the Securities Act or under common law or
otherwise, arising out of or based upon (i) any untrue statement, or alleged
untrue statement, of a material fact contained in any registration statement or
any prospectus, (ii) any omission, or alleged omission, to state a material fact
required to be stated in any registration statement or any prospectus or
necessary to make the statements in either thereof not misleading or (iii) any
Trust advertisement or sales literature that was not approved by the Distributor
prior to use (as evidenced by the Distributor's filing of such advertisement or
sales literature with the NASD (as defined below)) and that is not in compliance
with applicable laws, rules or
regulations (including, but not limited to the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD")); provided, however, that the
Trust's agreement to indemnify Distributor, its officers, directors or
employees, and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of any statements or
representations as are contained in any prospectus, advertisement or sales
literature and in such financial and other statements as are furnished in
writing to the Trust by Distributor and used in the answers to the registration
statement or in the corresponding statements made in the prospectus,
advertisement or sales literature, or arising out of or based upon any omission
or alleged omission to state a material fact in connection with the giving of
such information required to be stated in such answers or necessary to make the
answers not misleading; and further provided that the Trust's agreement to
indemnify Distributor and the Trust's representations and warranties
hereinbefore set forth in paragraph 1.10 shall not be deemed to cover any
liability to the Trust or its Shareholders to which Distributor would otherwise
be subject by reason of willful misfeasance, bad faith or negligence in the
performance of its duties, or by reason of Distributor's reckless disregard of
its obligations and duties under this Agreement. The Trust's agreement to
indemnify Distributor, its partners and employees and any such controlling
person, as aforesaid, is expressly conditioned upon the Trust being notified of
any action brought against Distributor, its partners or employees, or any such
controlling person, such notification to be given by letter or by telegram
addressed to the Trust at its principal office in Columbus, Ohio and sent to the
Trust by the person against whom such action is brought, within 10 days after
the summons or other first legal process shall have been served. The failure to
so notify the Trust of any such action shall not relieve the Trust from any
liability which the Trust may have to the person against whom such action is
brought by reason of any such untrue, or allegedly untrue, statement or
omission, or alleged omission, otherwise than on account of the Trust's
indemnity agreement contained in this paragraph 1.11. The Trust will be entitled
to assume the defense of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be conducted by counsel of good
standing chosen by the Trust and approved by Distributor, which approval shall
not be unreasonably withheld. In the event the Trust elects to assume the
defense of any such suit and retain counsel of good standing approved by
Distributor, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case the
Trust does not elect to assume the defense of any such suit, or in case
Distributor reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse Distributor, its partners and employees, or the controlling
person or persons named as defendant or defendants in such suit, for the fees
and expenses of any counsel retained by Distributor or them. The Trust's
indemnification agreement contained in this paragraph 1.11 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
Distributor, its partners and employees, of any controlling person, and shall
survive the delivery of any Shares.
This Agreement of indemnity will inure exclusively to Distributor's
benefit, to the benefit of its several partners and employees, and their
respective estates, and to the benefit of the controlling persons and their
successors. The Trust agrees promptly to
notify Distributor of the commencement of any litigation or proceedings against
the Trust or any of its officers or Trustees in connection with the issue and
sale of any Shares.
1.12 Distributor agrees to indemnify, defend and hold the Trust, its
several officers and Trustees and any person who controls the Trust within the
meaning of Section 15 of the Securities Act free and harmless from and against
any and all claims, demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Trust, its officers or Trustees
or any such controlling person may incur under the Securities Act or under
common law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or Trustees or such controlling person
resulting from such claims or demands, shall arise out of or be based upon any
untrue, or alleged untrue, statement of a material fact contained in information
furnished in writing by Distributor to the Trust and used in the answers to any
of the items of the registration statement or in the corresponding statements
made in the prospectus, or shall arise out of or be based upon any omission, or
alleged omission, to state a material fact in connection with such information
furnished in writing by Distributor to the Trust required to be stated in such
answers or necessary to make such information not misleading. Distributor's
agreement to indemnify the Trust, its officers and Trustees, and any such
controlling person, as aforesaid, is expressly conditioned upon Distributor
being notified of any action brought against the Trust, its officers or
Trustees, or any such controlling person, such notification to be given by
letter or telegram addressed to Distributor at its principal office in Columbus,
Ohio, and sent to Distributor by the person against whom such action is brought,
within 10 days after the summons or other first legal process shall have been
served. Distributor shall have the right of first control of 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 the Trust, its officers or Trustees
or such controlling person shall each have the right to participate in the
defense or preparation of the defense of any such action. The failure to so
notify Distributor of any such action shall not relieve Distributor from any
liability which Distributor may have to the Trust, its officers or Trustees, or
to such controlling person by reason of any such untrue or alleged untrue
statement, or omission or alleged omission, otherwise than on account of
Distributor's indemnity agreement contained in this paragraph 1.12.
1.13 No Shares shall be offered by either Distributor or the Trust under
any of the provisions of this Agreement and no orders for the purchase or sale
of Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act or if and so long as a current prospectus as required by Section
10(b)(2) of said Act is not on file with the Commission; provided, however, that
nothing contained in this paragraph 1.13 shall in any way restrict or have an
application to or bearing upon the Trust's obligation to repurchase Shares from
any Shareholder in accordance with the provisions of the Trust's prospectus,
Agreement and Declaration of Trust, or Bylaws.
1.14 The Trust agrees to advise Distributor as soon as reasonably practical
by a notice in writing delivered to Distributor or its counsel:
(a) of any request by the Commission for amendments to the registration
statement or prospectus then in effect or for additional information;
(b) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or prospectus then in
effect or the initiation by service of process on the Trust of any proceeding
for that purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement or prospectus then in effect or
which requires the making of a change in such registration statement or
prospectus in order to make the statements therein not misleading; and
(d) of all action of the Commission with respect to any amendment to any
registration statement or prospectus which may from time to time be filed with
the Commission.
For purposes of this section, informal requests by or acts of the Staff of
the Commission shall not be deemed actions of or requests by the Commission.
1.15 Distributor agrees on behalf of itself and its partners and employees
to treat confidentially and as proprietary information of the Trust all records
and other information relative to the Trust and its prior, present or potential
Shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except, after
prior notification to and approval in writing by the Trust, which approval shall
not be unreasonably withheld and may not be withheld where Distributor may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Trust.
1.16 This Agreement shall be governed by the laws of the State of Ohio.
1.17 In the event Distributor purchases the initial shares of the Trust for
purposes of satisfying the minimum net worth requirements set forth in Section
14 (a) of the 1940 Act, and a notice of termination is subsequently given or
this Agreement is otherwise terminated pursuant to Section 7 herein for any
reason prior to the time that organizational expenses incurred by the Trust have
been fully amortized, then the Trust shall cause the successor distributor of
the shares to pay to Distributor, within ten (10)
days prior to the termination of this Agreement, an amount of cash that is
sufficient to purchase the initial shares that are held by Distributor.
2. Representations
2.1 The Distributor hereby represents that it is a member in good standing
of the National Association of Securities Dealers, Inc. and that it is a
broker-dealer properly registered and qualified under all applicable federal,
state and local laws to engage in the business and transactions described in
this Agreement. The Distributor further represents that, neither it nor any of
its partners, officers or employees is ineligible to serve as a principal
underwriter, trustee, officer or employee of a registered investment company by
virtue of his or her status as a person described in Section 9 of the 1940 Act.
3. Fee
3.1 The Distributor shall receive from the Funds identified on Schedule B
hereto (the "Distribution Plan Funds") a distribution fee at the rate and upon
the terms and conditions set forth in the Trust's Rule 12b-1 Plan(s) as amended
from time to time (the "Distribution Payment"). The distribution fee shall be
accrued daily and shall be paid on the first business day of each month, or at
such time(s) as the Distributor shall reasonably request.
3.2 The Distributor shall receive from a Distribution Plan Fund all
contingent deferred sales charge payments ("CDSC Payments") specified in a
multiple class plan adopted by the Trust under Rule 18f-3 under the 1940 Act.
3.3 The Distributor may assign or sell to a third party (a "CDSC Financing
Entity") all or a part of the CDSC Payments and the Distribution Payments that
the Distributor is entitled to receive under Sections 3.1 and 3.2 of this
Agreement. The Distributor's right to such payment, if assigned or sold to a
CDSC Financing Entity, shall continue after termination of this Agreement.
4. Sale and Payment
Pursuant to the Agreement and Declaration of Trust dated September 15,
1988, each Fund may be divided into separate classes of Shares in which case the
Shares of one or more classes may be subject to a sales load and may be subject
to the imposition of a distribution fee pursuant to the Rule 12b-1 Plan referred
to above. To the extent that Shares of a Fund are sold at an offering price
which includes a sales load or that Shares of one or more classes of a Fund are
sold at such an offering price, such Shares shall hereinafter be referred to
collectively as "Load Shares" and individually as a "Load Share." A Fund that
contains Load Shares shall hereinafter be referred to collectively as "Load
Funds" and individually as a "Load Fund." Under this Agreement, the following
provisions shall apply with respect to the sale of, and payment for, Load Shares
of the Load Funds identified in Schedule C attached hereto.
4.1 Distributor shall have the right to purchase Load Shares at their net
asset value and to sell such Load Shares to the public against orders therefor
at the applicable public offering price, as defined in Section 5 hereof.
Distributor shall also have the right to sell Load Shares to dealers against
orders therefor at the public offering price less a concession determined by
Distributor, which concession shall not exceed the amount of the sales charge or
underwriting discount, if any, referred to in Section 5 below.
4.2 Prior to the time of delivery of any Load Shares by a Load Fund to, or
on the order of, the Distributor, the Distributor shall pay or cause to be paid
to the Load Fund or to its order an amount in Boston or New York clearing house
funds, (or in federal funds in those instances in which the Distributor has
received federal funds) equal to the applicable net asset value of such Shares.
The Distributor may retain so much of any sales charge or underwriting discount
as is not allowed by the Distributor as a concession to dealers.
5. Public Offering Price
The public offering price of a Load Share, shall be the net asset value of
such Load Share plus any applicable sales charge, all as set forth in the
current prospectus of the Load Fund. The net asset value of Shares shall be
determined in accordance with the provisions of the Agreement and Declaration of
Trust and Bylaws of the Trust and the then current prospectus of the Load Fund.
6. Issuance of Shares
The Trust reserves the right to issue, transfer or sell Load Shares at net
asset value (a) in connection with the merger or consolidation of the Trust or
the Load Fund(s) with any other investment company or the acquisition by the
Trust or the Load Fund(s) of all or substantially all of the assets or of the
outstanding Shares of any other investment company; (b) in connection with a pro
rata distribution directly to the holders of Shares in the nature of a stock
dividend or split; (c) upon the exercise of subscription rights granted to the
holders of Shares on a pro rata basis; (d) in connection with the issuance of
Load Shares pursuant to any exchange and reinvestment privileges described in
any then current prospectus of the Load Fund; and (e) otherwise in accordance
with any then current prospectus of the Load Fund.
7. Term, Duration and Termination
This Agreement shall become effective with respect to each Fund listed on
Schedule A hereof as of the date first written above (or, if a particular Fund
is not in existence on such date, on the date an amendment to Schedule A to this
Agreement relating to that Fund is executed) and, unless sooner terminated as
provided herein, shall continue until December 1, 1997. Thereafter, if not
terminated, this Agreement shall continue with respect to a particular Fund
automatically for successive one-year terms, provided that such continuance is
specifically approved at least annually (a) by the vote
of a majority of those members of the Trust's Board of Trustees who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting for the purpose of voting on such approval and (b) by the
vote of the Trust's Board of Trustees or the vote of the majority of the
outstanding voting securities of such Fund. This Agreement is terminable without
penalty, on not more than sixty-days prior written notice, by the Trust's Board
of Trustees, by vote of a majority of the outstanding voting securities of the
Trust or by the Distributor. This Agreement will also terminate automatically in
the event of its assignment. (As used in this Agreement, the terms "majority of
the outstanding voting securities", "interested persons" and "assignment" shall
have the same meanings as ascribed to such terms in the 1940 Act.)
8. Limitation of Liability of the Trustees and Shareholders
The names "Fifth Third Funds" and "Trustees of "Fifth Third Funds" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Agreement and
Declaration of Trust dated September 15, 1988 to which reference is hereby made
and a copy of which is on file at the office of the Secretary of State of the
Commonwealth of Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or hereafter filed. The obligations of "Fifth
Third Funds" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with any series of Shares of the Trust must look solely
to the assets of the Trust belonging to such series for the enforcement of any
claims against the Trust.
9. Privacy
Nonpublic personal financial information relating consumers or customers of
the Funds provided by, or at the direction of the Funds to the Distributor, or
collected or retained by the Distributor to perform its duties as distributor
shall be considered confidential information. The Distributor shall not disclose
or otherwise use nonpublic personal financial information relating to present or
former shareholders of the Funds other than for the purposes for which that
information was disclosed to the Distributor, including use under an exception
in sections 248.14 or 248.15 of Securities and Exchange Commission Regulation
S-P in the ordinary course of business to carry out those purposes. The
Distributor shall have in place and maintain physical, electronic and procedural
safeguards reasonably designed to protect the security, confidentiality and
integrity of, and to prevent unauthorized access to or use of records and
information relating to consumers of the Funds. The Trust represents to the
Distributor that it has adopted a Statement of its privacy policies and
practices as required by Securities and Exchange Commission Regulation S-P and
agrees to provide BISYS with a copy of that statement annually.
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 written
above.
FIFTH THIRD FUNDS FIFTH THIRD FUNDS
DISTRIBUTOR, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: Fifth Third Distributors, Inc.
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Title: President By: /s/ Xxxxxx X. Xxxxx
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Title: President
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Date: October 29, 2001 Date: October 29, 2001
