Exhibit (e)(3)
DISTRIBUTION AGREEMENT
AGREEMENT made as of August 16, 2005 between Performance Funds Trust
(the "Trust"), having an office at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and
Performance Funds Distributor, Inc. ("Distributor"), having an office at 000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
WHEREAS, the Trust is an open-end management investment company,
organized as a Delaware 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
shares of beneficial interest ("Shares") of each series of the Trust, as listed
on Schedule A, and such series as are hereafter created (all of the foregoing
series individually referred to herein 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 of Trust on behalf of each Fund for
the distribution of the Shares covered by the registration statement of Trust
then in effect under the Securities Act of 1933, as amended (the "Securities
Act") and the 1940 Act. As used in this Agreement, the term "registration
statement" shall mean the registration statement of the Trust and any amendments
thereto, then in effect, including Parts A (the Prospectus), B (the Statement of
Additional Information) and C of each registration statement, as filed on Form
N-1A, or any successor thereto, with the Commission, together with any
amendments thereto. The term "Prospectus" shall mean the then-current form of
Prospectus and Statement of Additional Information used by the Funds, in
accordance with the rules of the Commission, for delivery to shareholders and
prospective shareholders after the effective dates of the above-referenced
registration statements, together with any amendments and supplements thereto.
The Trust will notify Distributor in advance of any proposed changes to Schedule
A to this Agreement.
1.2 Consistent with the understanding between the Funds and the
Distributor, Distributor may solicit orders for the sale of the Shares and may
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 many other investment companies
or series, including investment companies having investment objectives similar
to those of the Trust. The Trust further understands that shareholders and
potential shareholders in the Trust may invest in shares of such other
investment companies. The Trust agrees that Distributor's duties to other
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investment companies shall not be deemed in conflict with its duties to the
Trust under this Section 1.2.
1.3 Consistent with the understanding between the Funds and the
Distributor, and subject to the last sentence of this Section 1.3, Distributor
may engage in such activities as it deems appropriate in connection with the
promotion and sale of the Shares, which may include advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
Prospectuses to prospective shareholders other than current shareholders, and
the printing and mailing of sales literature. Distributor may enter into dealer
agreements and other selling agreements with broker-dealers and other
intermediaries; provided, however, that Distributor shall have no obligation to
make any payments to any third parties, whether as finder's fees, compensation
or otherwise, unless (i) Distributor has received a corresponding payment from
the applicable Fund's Distribution Plan (as defined in Section 2 of this
Agreement), the Fund's investment adviser (the "Adviser") or from another source
as may be permitted by applicable law, and (ii) such corresponding payment has
been approved by the Trust's Board of Trustees.
1.4 In its capacity as distributor of the Shares, all activities of
the Distributor and its partners, agents, and employees shall comply with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, all applicable rules and regulations promulgated by the Commission
thereunder, and all applicable rules and regulations adopted by any securities
association registered under the Securities Exchange Act of 1934.
1.5 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 upon reasonable notice instruct the Distributor
to 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.
1.6 The Trust agrees to inform the Distributor from time to time of
the states in which the Fund or its administrator has registered or otherwise
qualified shares for sale, and 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 the Distributor may
designate.
1.7 The Trust shall furnish from time to time, for use in connection
with the sale of the Shares, such supplemental 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 supplemental information will
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 the
Distributor may reasonably request.
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1.8 The Trust represents and warrants to Distributor that all
registration statements, and each Prospectus, filed by the Trust with the
Commission under the Securities Act and the 1940 Act shall be prepared in
conformity with requirements of said Acts and rules and regulations of the
Commission thereunder. The registration statement and Prospectus shall contain
all statements required to be stated therein in conformity with said Acts and
the rules and regulations of the Commission thereunder, and all statements of
fact contained in any such registration statement and Prospectus are true and
correct in all material respects. 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
foregoing representations and warranties shall continue throughout the term of
this Agreement and be deemed to be of a continuing nature, applicable to all
Shares distributed hereunder. 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 any amendment or amendments and/or
supplement or supplements within 15 days after receipt by the Trust of a written
request from Distributor to do so, Distributor may, at its option, terminate
this Agreement. In such case, the Distributor will be held harmless from, and
indemnified by Trust for, any liability or loss resulting from the failure to
implement such amendment. 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.
1.9 The Trust authorizes the Distributor and dealers to use any
Prospectus in the form furnished by the Trust from time to time in connection
with the sale of the Shares.
1.10 The Distributor may utilize agents in its performance of its
services and, with prior notice to the Trust, appoint in writing other parties
qualified to perform specific administration services reasonably acceptable to
the Trust (individually, a "Sub-Agent") to carry out some or all of its
responsibilities under this Agreement; provided, however, that a Sub-Agent shall
be the agent of the Distributor and not the agent of the Trust, and that the
Distributor shall be fully responsible for the acts of such Sub-Agent and shall
not be relieved of any of its responsibilities hereunder by the appointment of a
Sub-Agent.
1.11 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 gross negligence on the Distributor's part in the
performance of its duties, from reckless disregard by the Distributor of its
obligations and duties under this Agreement, or from the Distributor's failure
to comply with laws, rules and regulations applicable to it in
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connection with its activities hereunder. The Trust agrees to indemnify, defend
and hold harmless the Distributor, its officers, partners, employees, and any
person who controls the Distributor within the meaning of Section 15 of the
Securities Act (collectively, "Distributor Indemnitees"), from and against any
and all claims, demands, liabilities and expenses (including the reasonable cost
of investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) (collectively,
"Claims") which the Distributor Indemnitees may incur under the Securities Act
or under common law or otherwise (a) as the result of the Distributor acting as
distributor of the Funds and entering into selling agreements, participation
agreements, shareholder servicing agreements or similar agreements with
financial intermediaries on behalf of the Trust; (b) 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
therein not misleading, or (iii) any untrue statement, or alleged untrue
statement, of a material fact in any Trust-related advertisement or sales
literature, or any omission, or alleged omission, to state a material fact
required to be stated therein to make the statements therein not misleading, in
either case notwithstanding the exercise of reasonable care in the preparation
or review thereof by the Distributor; or (c) arising out of or based upon the
electronic processing of orders over the internet at the Trust's request;
provided, however, that the Trust's agreement to indemnify the Distributor
Indemnitees pursuant to this Section 1.11 shall not be construed to cover any
Claims (A) pursuant to subsection (b) above to the extent such untrue statement,
alleged untrue statement, omission, or alleged omission, was furnished in
writing, or omitted from the relevant writing furnished, as the case may be, to
the Trust by the Distributor for use in the registration statement or in
corresponding statements made in the Prospectus, advertisement or sales
literature; (B) arising out of or based upon the willful misfeasance, bad faith
or gross negligence of the Distributor in the performance of its duties or the
Distributor's reckless disregard of its obligations and duties under this
Agreement; or (C) arising out of or based upon the Distributor's failure to
comply with laws, rules and regulations applicable to it in connection with its
activities hereunder.
In the event of a Claim for which the Distributor Indemnitees may be
entitled to indemnification hereunder, the Distributor shall provide the Trust
with written notice of the Claim, identifying the persons against whom such
Claim is brought, promptly following receipt of service of the summons or other
first legal process, and in any event within 10 days of such receipt. The Trust
will be entitled to assume the defense of any suit brought to enforce any such
Claim if such defense shall be conducted by counsel of good standing chosen by
the Trust and approved by the Distributor, which approval shall not be
unreasonably withheld. In the event any such suit is not based solely on an
alleged untrue statement, omission, or wrongful act on the Trust's part, the
Distributor shall have the right to participate in the defense. In the event the
Trust elects to assume the defense of any such suit and retain counsel of good
standing so approved by the Distributor, the Distributor Indemnitees in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them, but in any case where the Trust does not elect to assume the defense of
any such suit or in case the Distributor reasonably withholds approval of
counsel chosen by the Trust, the Trust will reimburse the Distributor
Indemnitees named
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as defendants in such suit, for the reasonable fees and expenses of any counsel
retained by them to the extent related to a Claim covered under this Section
1.11. The Trust's indemnification agreement contained in this Section 1.11 shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Distributor Indemnitees, and shall survive the
delivery of any Shares.
1.12 The Distributor agrees to indemnify, defend and hold harmless the
Trust, its officers, Trustees, employees, and any person who controls the Trust
within the meaning of Section 15 of the Securities Act (collectively, "Trust
Indemnitees"), from and against any and all Claims which the Trust Indemnitees
may incur under the Securities Act or under common law or otherwise, arising out
of or based upon (a) any untrue statement, or alleged untrue statement, of a
material fact contained in any registration statement, Prospectus, or
Trust-related advertisement or sales literature, or upon any omission, or
alleged omission, to state a material fact in such materials that would be
necessary to make the information therein not misleading, which untrue
statement, alleged untrue statement, omission, or alleged omission, was
furnished in writing, or omitted from the relevant writing furnished, as the
case may be, to the Trust by the Distributor for use in the registration
statement or in corresponding statements made in the Prospectus, or
advertisement or sales literature; (b) the willful misfeasance, bad faith or
gross negligence of the Distributor in the performance of its duties, or the
Distributor's reckless disregard of its obligations and duties under this
Agreement, or (c) the Distributor's failure to comply with laws, rules and
regulations applicable to it in connection with its activities hereunder (other
than in respect of Trust-related advertisements or sales literature that fails
to comply with applicable laws notwithstanding the exercise of reasonable care
in the preparation and review thereof by the Distributor).
In the event of a Claim for which the Trust Indemnitees may be
entitled to indemnification hereunder, the Trust shall provide the Distributor
with written notice of the Claim, identifying the persons against whom such
Claim is brought, promptly following receipt of service of the summons or other
first legal process, and in any event within ten (10) days of such receipt. The
Distributor will be entitled to assume the defense of any suit brought to
enforce any such Claim if such defense shall be conducted by counsel of good
standing chosen by the Distributor and approved by the Trust, which approval
shall not be unreasonably withheld. In the event any such suit is not based
solely on an alleged untrue statement, omission, or wrongful act on the
Distributor's part, the Trust shall have the right to participate in the
defense. In the event the Distributor elects to assume the defense of any such
suit and retain counsel of good standing so approved by the Trust, the Trust
Indemnitees in such suit shall bear the fees and expenses of any additional
counsel retained by any of them, but in any case where the Distributor does not
elect to assume the defense of any such suit or in case the Trust reasonably
withholds approval of counsel chosen by the Distributor, the Distributor will
reimburse the Trust Indemnitees named as defendants in such suit, for the
reasonable fees and expenses of any counsel retained by them to the extent
related to a Claim covered under this Section 1.12. The Distributor's
indemnification agreement contained in this Section 1.12 shall remain operative
and in full force and effect regardless of any investigation
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made by or on behalf of the Trust Indemnitees, and shall survive the delivery of
any Shares.
1.13 No Shares shall be offered by either the 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 Securities Act is not on file with the Commission; provided,
however, that: (a) the Distributor will not be obligated to cease offering
shares until it has received from the Trust written notice of such events, and
(b) nothing contained in this Section 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 the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor:
(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 any 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, which
could reasonably be expected to have a material negative
impact upon the offering of Shares.
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
unless they would reasonably be expected to have a material negative impact upon
the offering of Shares.
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2. Fees.
2.1 Attached as Schedule B to this Agreement are all plans of
distribution under Rule 12b-1 under the 1940 Act approved by the Funds and in
effect (collectively, the "Distribution Plan"). The Funds will deliver to
Distributor promptly after any changes thereto updated copies of the
Distribution Plan. For its services under this Agreement, the Distributor shall
be compensated and reimbursed for its expenses as set forth on Schedules C and D
to this Agreement. If the Funds have a Distribution Plan that permits and
authorizes them to compensate and reimburse the Distributor and required board
approvals have been given, then the Funds shall be responsible for all such
compensation and reimbursements or such portions of it as have been permitted
and authorized under the Distribution Plan. It is contemplated by the
Distributor that the Adviser shall compensate and reimburse the Distributor for
its provision to the Funds of any distribution services for which the Funds are
not authorized to compensate and reimburse the Distributor. The fees set forth
on Schedules C and D are subject to change by Distributor upon 30 days advance
notice.
2.2 If: (i) the Distributor properly receives fees from the Funds
under the Distribution Plan, other than for services rendered or expenses
incurred, that the Distributor is not obligated to pay to third party
broker-dealers, plan administrators or others ("Retained Fees"), and (ii) the
Funds have authority under the Distribution Plan to pay for some or all of the
Distributor's services under this Agreement ("Permitted Services"), then all of
the Retained Fees will either be (a) returned to the funds and/or (b) credited
against the compensation payable by the funds to the Distributor for Permitted
Services.
3. Sale and Payment.
3.1 Shares of a Fund may be subject to a sales load and may be
subject to the imposition of a distribution fee pursuant to the Distribution
Plan referred to above. To the extent that Shares of a Fund are sold at an
offering price which includes a sales load or subject to a contingent deferred
sales load with respect to certain redemptions (either within a single class of
Shares or pursuant to two or more classes of Shares), such Shares shall
hereinafter be referred to collectively as "Load Shares" (and in the case of
Shares that are sold with a front-end sales load, "Front-end Load Shares", or
Shares that are sold subject to a contingent deferred sales load, "CDSL
Shares"). Funds that issue Front-End Load Shares shall hereinafter be referred
to collectively as "Front-End Load Funds." Funds that issue CDSL Shares shall
hereinafter be referred to collectively as "CDSL Funds." Front-end Load Funds
and CDSL Funds may individually or collectively be referred as "Load Funds."
Under this Agreement, the following provisions shall apply with respect to the
sale of, and payment for, Load Shares.
3.2 The Distributor shall have the right to offer 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 4
hereof. The Distributor shall also have the right to sell Load Shares to dealers
against orders therefor at the public offering price less
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a concession determined by the Distributor, which concession shall not exceed
the amount of the sales charge or underwriting discount, if any, referred to in
Section 4 below.
3.3 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 New York cleared 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.
3.4 With respect to CDSL Funds, the following provisions shall be
applicable:
(a) The Distributor shall be entitled to receive all contingent
deferred sales load charges, 12b-1 payments and all distribution and
service fees set forth in the Distribution Plan adopted by a CDSL Fund
(collectively, the "CDSL Payments") with respect to CDSL Shares. The
Distributor may assign or sell to a third party (a "CDSL Financing
Entity") all or a part of the CDSL Payments on CDSL Shares that the
Distributor is entitled to receive under this Agreement. The
Distributor's right to the CDSL Payments on such CDSL Shares, if
assigned or sold to a CDSL Financing Entity, shall continue after
termination of this Agreement.
(b) The Distributor may assign or sell to a CDSL Financing Entity
all or part of the CDSL Payments the Distributor is entitled to
receive. The Distributor's right to payment of CDSL Payments, if
assigned or sold to a CDSL Financing Entity, shall continue after
termination of this Agreement. Otherwise, (unless the Distributor is
legally entitled to receive such fees as the financing entity) the
right to receive all CDSL Payments in respect of periods subsequent to
the termination of this Agreement shall terminate upon termination of
this Agreement. In the event Distributor assigns or sells all or a part
of the CDSL Payments to a CDSL Financing Entity and this Agreement is
subsequently terminated, Distributor shall have no obligation to assist
the CDSL Financing Entity in connection with such CDSL Financing
Entity's right to receive such CDSL Payments subsequent to such
termination.
(c) The Distributor shall not be required to offer or sell CDSL
Shares of a CDSL Fund unless and until it has received a binding
commitment from a CDSL Financing Entity (a "Commitment") satisfactory
to the Distributor which Commitment shall cover all expenses and fees
related to the offer and sale of such CDSL Shares including, but not
limited to, dealer reallowances, financing commitment fees, and legal
fees. If at any time during the term of this Agreement the then-current
CDSL financing is terminated through no fault of the Distributor, the
Distributor shall have the right to immediately cease offering or
selling CDSL Shares until substitute financing becomes effective.
(d) The Distributor and the Trust hereby agree that the terms and
conditions set forth herein regarding the offer and sale of CDSL Shares
may be
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amended upon approval of both parties in order to comply with the
terms and conditions of any agreement with a CDSL Financing Entity to
finance the costs for the offer and sale of CDSL Shares so long as such
terms and conditions are in compliance with the Distribution Plan.
4. Public Offering Price.
The public offering price of a Load Share shall be the net asset value
of such Load Share next determined, plus any applicable sales charge, all as set
forth in the current Prospectus of the Load Fund. The net asset value of Load
Shares shall be determined in accordance with the then-current Prospectus of the
Load Fund.
5. Issuance of Shares.
The Trust reserves the right to issue, transfer or sell Load Shares at
net asset values (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.
6. Term, Duration and Termination.
This Agreement shall become effective with respect to each Fund as of
the date first written above (the "Effective Date") (or, if a particular Fund is
not in existence on such date, on the earlier of the date an amendment to
Schedule A to this Agreement relating to that Fund is executed or the
Distributor begins providing services under this Agreement with respect to such
Fund) and, unless sooner terminated as provided herein, shall continue for a two
year period following the Effective Date. 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 a majority of the outstanding voting securities of such Fund. This
Agreement is terminable without penalty with 60 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 meaning as ascribed to
such terms in the 1940 Act.)
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7. Privacy.
Nonpublic personal financial information relating to consumers or
customers of the Funds provided by, or at the direction of, the Trust 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 any 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 Rules 13, 14 or 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 and customers 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 the Distributor with a copy of that
statement annually.
8. Anti-Money Laundering Compliance.
8.1 Each of Distributor and the Trust acknowledges that it is a
financial institution subject to the USA Patriot Act of 2001 and the Bank
Secrecy Act (collectively, the "AML Acts"), which require, among other things,
that financial institutions adopt compliance programs to guard against money
laundering. Each represents and warrants to the other that it is in compliance
with and will continue to comply with the AML Acts and applicable regulations in
all relevant respects. The Distributor shall also provide written notice to each
person or entity with which it entered an agreement prior to the date hereof
with respect to sale of the Trust's Shares, such notice informing such person of
anti-money laundering compliance obligations applicable to financial
institutions under applicable laws and, consequently, under applicable
contractual provisions requiring compliance with laws.
8.2 The Distributor shall include specific contractual provisions
regarding anti-money laundering compliance obligations in agreements entered
into by the Distributor with any dealer that is authorized to effect
transactions in Shares of the Trust.
8.3 Each of Distributor and the Trust agrees that it will take such
further steps, and cooperate with the other as may be reasonably necessary, to
facilitate compliance with the AML Acts, including but not limited to the
provision of copies of its written procedures, policies and controls related
thereto ("AML Operations"). Distributor undertakes that it will grant to the
Trust, the Trust's anti-money laundering compliance officer and regulatory
agencies, reasonable access to copies of Distributor's AML Operations, books and
records pertaining to the Trust only. It is expressly understood and agreed that
the Trust and the Trust's compliance officer shall have no access to any of
Distributor's AML Operations, books or records pertaining to other clients of
Distributor.
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9. Notices.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Trust, to it at 0000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000, Attention: ___________; and if to Distributor, to it at 000 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Broker Dealer Chief Compliance
Officer, with a copy to BISYS Distribution Services, 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000, Attention: President, or at such other address as such
party may from time to time specify in writing to the other party pursuant to
this Section.
10. Confidentiality.
During the term of this Agreement, the Distributor and the Trust may
have access to confidential information relating to such matters as either
party's business, trade secrets, systems, procedures, manuals, products,
contracts, personnel, and clients. As used in this Agreement, "Confidential
Information" means information belonging to the Distributor or the Trust which
is of value to such party and the disclosure of which could result in a
competitive or other disadvantage to either party, including, without
limitation, financial information, business practices and policies, know-how,
trade secrets, market or sales information or plans, customer lists, business
plans, and all provisions of this Agreement. Confidential Information includes
information developed by either party in the course of engaging in the
activities provided for in this Agreement, unless: (i) the information is or
becomes publicly known without breach of this Agreement, (ii) the information is
disclosed to the other party by a third party not under an obligation
confidentiality to the party whose Confidential Information is at issue of which
the party receiving the information should reasonably be aware, or (iii) the
information is independently developed by a party without reference to the
other's Confidential Information. Each party will protect the other's
Confidential Information with at least the same degree of care it uses with
respect to its own Confidential Information, and will not use the other party's
Confidential Information other than in connection with its duties and
obligations hereunder. Notwithstanding the foregoing, a party may disclose the
other's Confidential Information if (i) required by law, regulation or legal
process or if requested by any Agency; (ii) it is advised by counsel that it may
incur liability for failure to make such disclosure; (iii) requested to by the
other party; provided that in the event of (i) or (ii) the disclosing party
shall give the other party reasonable prior notice of such disclosure to the
extent reasonably practicably and cooperate with the other party (at such other
party's expense) in any efforts to prevent such disclosure.
10. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the 0000 Xxx.
11. Prior Agreements.
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This Agreement constitutes the complete agreement of the parties as to
the subject matter covered by this Agreement, and supersedes all prior
negotiations, understandings and agreements bearing upon the subject matter
covered by this Agreement.
12. Amendments.
No amendment to this Agreement shall be valid unless made in writing
and executed by both parties hereto.
13. Matters Relating to the Trust as a Delaware Business Trust.
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees, and this Agreement has been signed and delivered by
an authorized officer of the Trust, acting as such, and neither such
authorization by the Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on them personally, but shall bind only the trust property of the
Trust as provided in the Trust's Declaration of 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.
PERFORMANCE FUNDS TRUST
By:
--------------------------------------
Name:
Title:
PERFORMANCE FUNDS DISTRIBUTOR, INC.
By:
--------------------------------------
Name:
Title:
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SCHEDULE A
FUNDS
THE MONEY MARKET FUND
THE SHORT TERM GOVERNMENT INCOME FUND
THE INTERMEDIATE TERM INCOME FUND
THE STRATEGIC DIVIDEND FUND
THE LARGE CAP EQUITY FUND
THE MID CAP EQUITY FUND
THE LEADERS EQUITY FUND
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SCHEDULE B
DISTRIBUTION PLAN
[TRUST TO INSERT COPIES]
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SCHEDULE C
COMPENSATION OF THE DISTRIBUTOR
1. BASIC DISTRIBUTION SERVICES. For providing the distribution entity and
related infrastructure and platform, including requisite registrations and
qualifications, premises, personnel, compliance, ordinary fund board meeting
preparation, maintenance of selling agreements, clearance of advertising and
sales literature with regulators, filing appropriate documentation for advisory
representatives to qualify as registered representatives of the Distributor
(provided that the Adviser is solely responsible for its representatives'
meeting examination requirements) and their related registrations and fees,
ordinary supervisory services, overhead, Financial Research Corporation's Mutual
Fund Views on the News and Monitor publications, and return on investment, the
Distributor shall receive an annual fee of $75,000, billed monthly.
2. SPECIAL DISTRIBUTION SERVICES. For special distribution services, including
those set forth on Schedule D to this Agreement, such as additional personnel,
registrations, marketing services, printing and fulfillment, website services,
proprietary distribution expertise for particular circumstances, and any other
services in addition to the basic distribution services covered by Paragraph 1
above, the Distributor shall be reimbursed promptly upon invoicing its expenses
for such services, including: (a) all costs to support additional personnel; (b)
regulatory fees including NASD CRD costs associated with marketing materials;
and (c) printing, postage and fulfillment costs, and (d) amounts payable under
additional agreements to which Distributor is a party.
3. SPECIAL CONDUIT SITUATIONS. If the Distribution Plan, or any other Fund plans
of distribution under Rule 12b-1 that contemplate up front and/or recurring
commission and/or service payments to broker dealers, retirement plan
administrators or others by the Distributor with respect to back-end loads,
level loads, or otherwise, unless expressly agreed otherwise in writing between
the parties, all such payments shall be made to the Distributor, which shall act
as a conduit for making such payments to such broker-dealers, retirement plan
administrators or others.
4. OTHER PAYMENTS BY THE DISTRIBUTOR. If the Distributor is required to make any
payments to third parties in respect of distribution, which payments are
contemplated by the parties to the distribution agreement or otherwise arise in
the ordinary course of business, the Distributor shall be promptly reimbursed
for such payments upon invoicing them.
5. FEE ADJUSTMENTS. The fixed fees and other fees expressed as stated dollar
amounts in this Schedule C and in this Agreement are subject to annual
increases, commencing on the one-year anniversary date of the date of this
Agreement, in an amount equal to the percentage increase in consumer prices for
services as measured by the United States Consumer Price Index entitled "All
Services Less Rent of Shelter," or a similar index should such index no longer
be published, since such one-year anniversary or since the date of the last fee
increase, as applicable.
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SCHEDULE D
SPECIAL DISTRIBUTION SERVICES AND FEES
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SERVICES FEES
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1. WHOLESALING PERSONNEL SERVICES WHOLESALING PERSONNEL SERVICES FEES
Wholesaling Personnel may be external wholesalers and/or internal For each individual constituting the Wholesaling Personnel
wholesalers. employed by the Distributor pursuant to this Agreement, the
Distributor shall receive annually an amount equal to the sum
Services include soliciting support of the Funds with selling of:
broker dealers; participating in promotional meetings,
presentations, conferences and other and forums; identifying high (i) all compensation paid annually by the Distributor to the
potential personnel of the Adviser and selling broker dealers; employee; plus
and assisting with mail solicitations and literature fulfillment.
(ii) a management oversight fee equal to:
(a) if one to four Wholesaling Personnel are employed,
30% of the salary compensation and 5% of the bonus
or commission compensation, or
(b) if five or more Wholesaling Personnel are employed,
25% of the salary compensation and 5% of the bonus
or commission compensation;
plus
(iii) 18% of the total compensation (covering costs of the
Distributor's employee benefits that are provided by the
Distributor).
In addition, the Distributor shall be reimbursed for all related
costs to support, educate and train and maintain compliance
oversight of Wholesaling Personnel and other personnel such as
sales management, marketing and performance reporting personnel
(including time and expenses, continuing education, seminars,
rent, supplies, phone, computers, firm element, license,
registration)
Upon any termination of Wholesaling Personnel at the request of
the Funds or upon termination of this Agreement by the Funds for
any reason other than cause, the Distributor will be reimbursed
its severance costs with respect to such terminated Wholesaling
Personnel.
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2. MARKETING AND RELATED SERVICES MARKETING AND RELATED SERVICES FEES
Marketing Execution: services include identification and Marketing Execution: Quote available upon request.
development of appropriate marketing and communications programs,
projects and other initiatives; collaboration on initiating, Performance Reporting
researching, developing, and delivering appropriate sales and
marketing materials; and management of marketing and advertising Monthly Reports
projects.
Monthly Updating and Typesetting -- $850 - $1,000 per
Performance Reporting: services include creation of templates for sheet per month (for an All-in-One style report)
monthly fact sheets and quarterly fact sheets; populating
templates with performance data obtained from third parties; and Initial Design and Setup (1-time charge) -- $500 per
coordinating steps needed for final printing and distribution. sheet
Creative Communication and Editorial Services: services include Quarterly Reports
preparing drafts of textual commentary and management discussion
and analysis for annual; and semi-annual reports, including Quarterly Updating and Typesetting -- $300 - $350 per
portfolio manager interviews; providing creative design and Fund sheet per Share Class per quarter
direction; and coordinating production, including typesetting
(initial composition and changes to composition), charts and Initial Design and Setup per Fund sheet (1-time
ancillary items. charge) -- $500 per Fund sheet
Production Timing: Annual & Semi-Annual Reports
- No timing guarantees can be made for completion of Coordination:
monthly and quarterly fact sheets where any of the
information needed to produce the reports is generated by - $3,000 Initial Fee (includes Chairman's Letter and
service providers other than the Distributor. However, a 1st Fund)
basic estimate of turnaround time may be given based upon
when the unit receives all necessary data in good order. - $500 for each additional Fund
Under normal conditions, the Performance Reporting unit
expects to make proofs ready for review (either printed or NOTE: The above charges do not include the typesetting,
electronic PDF format) by the 4th business day after the printing, shipping, fulfillment, Xxxxx filing or
final piece of data is received. If compliance review is quick-turnaround charges that may be incurred from the
necessary (e.g., when Morningstar ratings data is used) an financial printer. The above fees are for coordinating
additional 2 days may be required for review. the project only.
- Printing turnaround (once the factsheets are signed-off Creative Communication and Editorial Services
by the client) is usually approximately 4-5 calendar days
with most jobs shipping by the 5th day. Quote available upon request.
- If requested, final electronic PDF files may be generated
and e-mailed on the day the job is signed-off on by the
client. These PDFs may be distributed and printed as
necessary until the final printed pieces arrive.
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3. FRC SERVICES FRC SERVICES FEES
FRC's program components include: Market Analytics Publications: Quote available upon request.
-Market Analytics Publications Advanced Research Publications:
-Advanced Research Publications
-Analyst Support - Topic Briefs
-SME Direct Access
- FRC Focus (typical cost is approximately $1,500)
The Trust acknowledges that certain FRC publications may be
provided only to parties that have entered into a written White Papers - FRC Vision (typical cost is approximately
agreement or addendum that sets forth the terms of use of such $2,500)
publications and the associated fee. The Trust will notify the
Distributor whether the Trust or the Adviser or both will enter - Research Studies (costs vary, however typically
into such an agreement or addendum. The Trust acknowledges that range between $3,500 and $12,500)
if only one of the Trust or the Adviser enters into such
agreement or addendum, the other party will be prohibited from Analyst Support: Quote available upon request
receiving or using such publications.
SME Direct Access: Quote available upon request
Other FRC Fees:
- Client participation in funding FRC Franchise Level
program: $12,500
- All subsequent content and support hours may be purchased
at a 20% discount from standard pricing.
Expenses Applicable to Special Distribution Services
Except as expressly set forth above, out-of-pocket expenses incurred by
Distributor in the performance of its services under this Agreement are not
included in the above fees. Such out-of-pocket expenses may include,
without limitation:
- reasonable travel and entertainment costs;
- expenses incurred by the Distributor in qualifying, registering and
maintaining the registration of the Distributor and each individual
comprising Wholesaling Personnel as a registered representative of the
Distributor under applicable federal and state laws and rules of the
NASD, e.g., CRD fees and state fees;
- Sponsorships, Promotions, Sales Incentives;
- any and all compensation to be paid to a third party as paying agent
for distribution activities (platform fees, finders fees, sub-TA fees,
12b-1 pass thru, commissions, etc.);
- costs and expenses incurred for telephone service, photocopying and
office supplies;
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- advertising costs;
- costs for printing, paper stock and costs of other materials,
electronic transmission, courier, talent utilized in sales materials
(e.g. models), design output, photostats, photography, and
illustrations;
- packaging, shipping, postage, and photocopies; and
- taxes that are paid or payable by the Distributor or its affiliates in
connection with its services hereunder, other than taxes customarily
and actually imposed upon the income that the Distributor receives
hereunder.
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