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EXHIBIT 99.23(e)
DISTRIBUTION AGREEMENT
AGREEMENT made as of this 1st day of July, 1999, between THE KENT FUNDS
(the "Trust"), a Massachusetts business trust having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and KENT FUNDS
DISTRIBUTORS, 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, as amended (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 (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 in
effect from time to time 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 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 Funds. The Trust further understands that investors and
potential investors in the Funds 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 receive a fee pursuant to Section 2
of this Agreement in accordance with the Trust's Amended and Restated Master
Distribution Plan (the "Plan"). Distributor shall make payments to the persons
described in Section 2 for services that are more particularly described in the
Plan.
1.3 In its capacity as distributor of the Shares, all
activities of Distributor and its
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partners, agents, and employees shall conform with the Trust's Declaration of
Trust, Bylaws, registration statement and prospectuses as in effect from time to
time and shall conform to and comply with all applicable laws, rules and
regulations, including, without limitation, the 1940 Act, 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. Distributor agrees to perform the following
compliance-related functions in its capacity as distributor of the Shares:
ADVERTISING AND SALES LITERATURE
1. Review and approve all Fund advertisements and sales literature
for compliance with applicable laws and regulations.
2. File with NASD all Fund advertisements and sales literature, as
required.
3. Maintain and update files for all Fund advertisements and sales
literature.
4. Respond to comments from the NASD with respect to advertising and
sales literature filings.
REGISTRATION/QUALIFICATION ACTIVITIES (FOR BISYS REPRESENTATIVES
DISTRIBUTING CLIENT'S FUNDS)
1. Ensure that Distributor's representatives are licensed in
appropriate jurisdiction(s).
2. Satisfy all registration requirements for Distributor's
representatives.
3. Maintain and update SEC, NASD and state registrations for
Distributor's representatives.
4. Satisfy NASD continuing education requirements for all
Distributor's licensed representatives.
BROKER/DEALER COMPLIANCE ACTIVITIES
1. Execute service agreements, as Distributor, with broker-dealer
firms and other service organizations.
2. If appropriate, provide assistance to the Trust's investment
adviser and its affiliates concerning obligations to bank
customers pursuant to the Bank Inter-Agency Statement.
3. Maintain compliance calendar.
4. Coordinate NASD audits of Distributor's books and records.
5. File audited financial statements for Distributor's operations.
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 received by it for
purchase or redemption of the Shares to the transfer agent and custodian for the
Trust.
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
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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 statements of
the Funds' books and accounts 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 registration statements and prospectuses filed by the Trust with
the Commission under the Securities Act have been prepared in conformity with
requirements of said Act and rules and regulations of the Commission thereunder.
As of their effective date, the Trust's registration statement and prospectus
contained all statements required to be stated therein in conformity with said
Act and the rules and regulations of the Commission and all statements of fact
contained in any such registration statement and prospectus were true and
correct. Furthermore, as of their effective date, neither any registration
statement nor any prospectus included 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 propose such amendment or amendments and/or supplement or supplements
within fifteen days after receipt by the Trust of 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 Trust agrees to
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indemnify, defend and hold Distributor, its several partners 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 reasonable counsel fees incurred in
connection therewith) which Distributor, its partners and employees, or any such
controlling person, may incur under the Securities Act or under common law or
otherwise, arising out of or based upon any untrue statement, or alleged untrue
statement, of a material fact contained in any registration statement or any
prospectus or arising out of or based upon any omission, or alleged omission, to
state a material fact required to be stated in either any registration statement
or any prospectus necessary to make the statements in either thereof not
misleading; provided, however, that the Trust's agreement to indemnify
Distributor, its partners or employees, and any such controlling person shall
not be deemed to cover any claims, demands, liabilities or expenses arising out
of any untrue statement or omission or alleged untrue statement or omission made
in reliance and in conformity with information furnished to the Trust by the
Distributor or its affiliated persons 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 in good faith 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, or any controlling person, and shall
survive the delivery of any Shares.
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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
reasonable 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 statement or alleged untrue statement of a
material fact contained in the Trust's registration statement or any prospectus
or any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon information furnished to
the Trust by the Distributor or its affiliated persons. 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. The
failure in good faith 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. 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 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.
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 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
registration statement, Declaration of Trust, or Bylaws.
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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 shall review, provide advice with respect
to, and file with the federal and state agencies or other organization as
required by federal, state, and other applicable laws and regulations, all sales
literature for each Fund and any classes of Shares thereof.
1.16 This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts.
2. Fee.
During the term of this Agreement, Distributor shall receive
from the Funds identified in the Plan attached as Schedule A hereto (the "Rule
12b-1 Plan Funds") fees at the rate and upon the terms and conditions set forth
in the Trust's registration statement from time to time. The fees shall be
accrued daily and shall be paid on the first business day of each month, or at
such time(s) as Distributor shall reasonably request. Distributor may reallow
all or a portion of the fees paid by the Rule 12b-1 Plan Funds to such brokers,
dealers or other persons as Distributor may determine.
3. Sale and Payment.
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3.1 Sales of Shares by Distributor shall be at the
applicable public offering price determined in the manner set forth in the
registration statement current at the time of the Trust's acceptance of the
order for Shares; provided that Distributor also shall have the right to sell
shares at net asset value, if such sale is permissible under and consistent with
applicable statutes, rules, regulations and orders. All orders shall be subject
to acceptance by the Trust and the Trust reserves the right in its sole
discretion to reject any order received. The Trust shall not be liable to anyone
for failure to accept any order. Shares of a Fund that are subject to a sales
load are hereinafter referred to as "Load Shares."
3.2 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. 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 set forth in the Trust's then current
prospectuses.
3.3 Prior to the time of delivery of any Shares by a Fund
to, or on the order of, Distributor, Distributor shall pay or cause to be paid
to the Fund or to its order an amount in Boston or New York clearing house funds
equal to the applicable net asset value of such Shares. Distributor may retain
so much of any sales charge or underwriting discount as is not allowed by
Distributor as a concession to brokers, dealers or other persons.
4. Issuance of Shares.
The Trust reserves the right to issue, transfer or sell Shares
otherwise subject to a sales load at net asset value (a) in connection with the
merger or consolidation of the Trust or a Fund with any other investment company
or the acquisition by the Trust or a Fund 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 Shares pursuant to any exchange and reinvestment privileges
described in any then-current prospectus of a Fund; and (e) otherwise in
accordance with any then-current prospectus of a Fund.
5. Term, Duration and Termination.
This Agreement shall become effective with respect to each
Fund as of the date first written above and, unless sooner terminated as
provided herein, shall continue for an initial one-year term and thereafter
shall be renewed for successive one-year terms, provided that such continuance
is specifically approved at least annually by (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 a majority of the outstanding voting securities
of such Fund. This Agreement is terminable without penalty, on not less than
sixty days' prior written
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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.)
6. Confidentiality.
The Distributor agrees on behalf of itself and its partners
and employees to treat confidentially and as the proprietary information of the
Trust, all records and other information relative to the Trust and 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 the 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.
7. Notices.
Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by facsimile or registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the following address: 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000,
facsimile number: 000-000-0000, or at such other address or facsimile number as
such party may from time to time specify in writing to the other party pursuant
to this Section. Notice sent by registered or certified mail shall be deemed to
have been given three days after it is sent. Notice sent by facsimile shall be
deemed to have been given immediately.
8. Amendments.
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.
9. Multiple Originals.
This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
10. Matters Relating to the Trust as a Massachusetts Business
Trust.
The names "The Kent Funds" and "Trustees of The Kent Funds"
refer respectively
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to the business trust created and the Trustees, as trustees but not individually
or personally, acting from time to time under a Declaration of Trust dated as of
May 9, 1986 to which reference is hereby made and a copy of which is on file at
the office of the Secretary 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 "The Kent 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 Fund must look solely
to the assets of the Trust belonging to such Fund for the enforcement of any
claims against the Trust.
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.
THE KENT FUNDS KENT FUNDS DISTRIBUTORS, INC.
By: /s/ By: /s/
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Title: Title:
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Date: Date:
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Dated: July 1, 1999
SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
BETWEEN
THE KENT FUNDS
AND
KENT FUNDS DISTRIBUTORS, INC.
DISTRIBUTION PLANS
A-1
