DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 20th day of September, 1997 (the
"Agreement") by and between First Choice Funds Trust, a Delaware
business trust (the "Company") and First Data Distributors, Inc. (the
"Distributor"), a Massachusetts corporation.
WHEREAS, the Company is registered as a diversified, open-end
management investment company under the Investment Company Act of 1940,
as amended (the "1940 Act"); and is currently offering units of
beneficial interest (such units of all series are hereinafter called the
"Shares"), representing interests in investment portfolios of the
Company identified on Schedule A hereto (the "Funds") which are
registered with the Securities and Exchange Commission (the "SEC")
pursuant to the Company's Registration Statement on Form N-1A (the
"Registration Statement"); and
WHEREAS, the Company desires to retain the Distributor as
distributor for the Funds to provide for the sale and distribution of
the Shares of the Funds identified on Schedule A and for such additional
classes or series as the Company may issue, and the Distributor is
prepared to provide such services commencing on the date first written
above.
NOW THEREFORE, in consideration of the premises and mutual
covenants set forth herein and intending to be legally bound hereby the
parties hereto agree as follows:
1. Service as Distributor
1.1 The Distributor will act on behalf of the Company for the
distribution of the Shares covered by the Registration Statement under
the Securities Act of 1933, as amended (the "1933 Act"). The
Distributor will have no liability for payment for the purchase of
Shares sold pursuant to this Agreement or with respect to redemptions or
repurchases of Shares.
1.2 The Distributor agrees to use efforts deemed appropriate by the
Distributor 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. To the extent that the Distributor
receives shareholder services fees under any shareholder services plan
adopted by the Company, the Distributor agrees to furnish, and/or enter
into arrangements with others for the furnishing of, personal and/or
account maintenance services with respect to the relevant shareholders
of the Company as may be required pursuant to such plan. It is
contemplated that the Distributor will enter into sales or servicing
agreements with securities dealers, financial institutions and other
industry professionals, such as investment advisers, accountants and
estate planning firms.
1.3 The Company understands that the Distributor is now, and may in
the future be, the distributor of the shares of several investment
companies or series (collectively, the "Investment Entities"), including
Investment Entities having investment objectives similar to those of the
Company. The Company further understands that investors and potential
investors in the Company may invest in shares of such other Investment
Entities. The Company agrees that the Distributor's duties to such
Investment Entities shall not be deemed in conflict with its duties to
the Company under this Section 1.3.
1.4 The Distributor shall not utilize any materials in connection with
the sale or offering of Shares except the Company's prospectus and
statement of additional information and such other materials as the
Company shall provide or approve.
1.5 All activities by the Distributor and its employees, as
distributor of the Shares, shall comply with all applicable laws, rules
and regulations, including, without limitation, all rules and
regulations made or adopted by the SEC or the National Association of
Securities Dealers.
1.6 The Distributor will transmit any orders received by it for
purchase or redemption of the Shares to the transfer agent for the
Company.
1.7 Whenever in its judgment such action is warranted by unusual
market, economic or political conditions or abnormal circumstances of
any kind, the Company may decline to accept any orders for, or make any
sales of, the Shares until such time as the Company deems it advisable
to accept such orders and to make such sales, and the Company advises
the Distributor promptly of such determination.
1.8 The Company agrees to pay all reasonable costs and expenses in
connection with the registration of Shares under the Securities Act of
1933, as amended, and all reasonable expenses in connection with
maintaining facilities for the issue and transfer of Shares and for
supplying information, prices and other data to be furnished by the Fund
hereunder, and all reasonable expenses in connection with the
preparation and printing of the Fund's prospectuses and statements of
additional information for regulatory purposes and for distribution to
shareholders.
1.9 The Company 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. The Company shall notify the Distributor in writing of
the states in which the Shares may be sold and shall notify the
Distributor in writing of any changes to the information contained in
the previous notification.
1.10 The Company shall furnish from time to time, for use in connection
with the sale of the Shares, such information with respect to the
Company and the Shares as the Company may reasonably request; and the
Company warrants that the statements contained in any such information
shall fairly show or represent what they purport to show or represent.
The Company shall also furnish the Distributor upon request with: (a)
audited annual statements and unaudited semi-annual statements of a
Fund's books and accounts prepared by the Company, (b) quarterly
earnings statements prepared by the Company, (c) a monthly itemized list
of the securities in the Funds, and (d) monthly balance sheets as soon
as practicable after the end of each month.
1.11 The Company represents to the Distributor that all Registration
Statements and prospectuses filed by the Company with the SEC under the
1933 Act with respect to the Shares have been prepared in conformity
with the requirements of the 1933 Act and the rules and regulations of
the SEC thereunder. As used in this Agreement, the term "Registration
Statement" shall mean any Registration Statement and any prospectus and
any statement of additional information relating to the Company filed
with the SEC and any amendments or supplements thereto at any time filed
with the SEC. Except as to information included in the Registration
Statement in reliance upon information provided to the Company by the
Distributor or any affiliate of the Distributor expressly for use in the
Registration Statement, the Company represents and warrants to the
Distributor that any Registration Statement, when such Registration
Statement becomes effective, will contain statements required to be
stated therein in conformity with the 1933 Act and the rules and
regulations of the SEC; that all statements of fact contained in any
such Registration Statement will be true and correct when such
Registration Statement becomes effective; and that no Registration
Statement when such Registration Statement becomes effective will
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares. The
Distributor 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 Distributor's counsel, be
necessary or advisable. The Company shall promptly notify the
Distributor of any advice given to it by its counsel regarding the
necessity or advisability of amending or supplementing such Registration
Statement. If the Company shall not propose such amendment or
amendments and/or supplement or supplements within fifteen days after
receipt by the Company of a reasonable written request from the
Distributor to do so, the Distributor may, at its option, terminate this
Agreement. The Company shall not file any amendment to any Registration
Statement or supplement to any prospectus without giving the Distributor
reasonable notice thereof in advance; provided, however, that nothing
contained in this Agreement shall in any way limit the Company's right
to file at any time such amendments to any Registration Statements
and/or supplements to any prospectus, of whatever character, as the
Company may deem advisable, such right being in all respects absolute
and unconditional.
1.12 The Company authorizes the Distributor to use in connection with
the sale of the Shares any prospectus or statement of additional
information in the form furnished from time to time. The Company agrees
to indemnify and hold harmless the Distributor, its officers, directors,
and employees, and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless (a) from and
against any and all claims, costs, expenses (including reasonable
attorneys' fees) losses, damages, charges, payments and liabilities of
any sort or kind which the Distributor, its officers, directors,
employees or any such controlling person may incur under the 1933 Act,
under any other statute, at common law or otherwise, arising out of or
based upon: (i) any untrue statement, or alleged untrue statement, of a
material fact contained in the Company's Registration Statement,
prospectus, statement of additional information, or sales literature
(including amendments and supplements thereto), or (ii) any omission, or
alleged omission, to state a material fact required to be stated in the
Company's Registration Statement, prospectus, statement of additional
information or sales literature (including amendments or supplements
thereto), necessary to make the statements therein not misleading,
provided, however, that insofar as losses, claims, damages, liabilities
or expenses arise out of or are based upon any such untrue statement or
omission or alleged untrue statement or omission made in reliance on and
in conformity with information furnished to the Company by the
Distributor or its affiliated persons for use in the Company's
Registration Statement, prospectus, or statement of additional
information or sales literature (including amendments or supplements
thereto), such indemnification is not applicable; and (b) from and
against any and all such claims, demands, liabilities and expenses
(including such costs and counsel fees) which you, your officers and
directors, or such controlling person, may incur in connection with this
Agreement or the Distributor's performance hereunder (but excluding such
claims, demands, liabilities and expenses (including such costs and
counsel fees) 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 or
necessary to make the statements in either thereof not misleading),
unless such claims, demands, liabilities and expenses (including such
costs and counsel fees) arise by reason of the Distributor's willful
misfeasance, bad faith or negligence in the performance of the
Distributor's duties hereunder. The Company acknowledges and agrees
that in the event that the Distributor, at the request of the Company,
is required to give indemnification comparable to that set forth in
clause (a) of this Section 1.12 to any broker-dealer selling Shares of
the Company and such broker-dealer shall make a claim for
indemnification against the Distributor, the Distributor shall make a
similar claim for indemnification against the Company.
1.13 The Distributor agrees to indemnify and hold harmless the Company,
its several officers and Trustees and each person, if any, who controls
a Fund within the meaning of Section 15 of the 1933 Act against any and
all claims, costs, expenses (including reasonable attorneys' fees),
losses, damages, charges, payments and liabilities of any sort or kind
which the Company, its officers, Trustees or any such controlling person
may incur under the 1933 Act, under any other statute, at common law or
otherwise, but only to the extent that such liability or expense
incurred by the Company, its officers or Trustees, or any controlling
person resulting from such claims or demands arise out of the
acquisition of any Shares by any person which may be based upon any
untrue statement, or alleged untrue statement, of a material fact
contained in the Company's Registration Statement, prospectus or
statement of additional information (including amendments and
supplements thereto), 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 or confirmed in writing to
the Company by the Distributor or its affiliated persons (as defined in
the 0000 Xxx) or in connection with the Distributor's willful
misfeasance, bad faith or negligence.
1.14 In any case in which one party hereto (the "Indemnifying Party")
may be asked to indemnify or hold the other party hereto (the
"Indemnified Party") harmless, the Indemnified Party will notify the
Indemnifying Party promptly after identifying any situation which it
believes presents or appears likely to present a claim for
indemnification (an "Indemnification Claim") against the Indemnifying
Party, although the failure to do so shall not prevent recovery by the
Indemnified Party, and shall keep the Indemnifying Party advised with
respect to all developments concerning such situation. The Indemnifying
Party shall have the option to defend the Indemnified Party against any
Indemnification Claim which may be the subject of this indemnification,
and, in the event that the Indemnifying Party so elects, such defense
shall be conducted by counsel chosen by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party, and thereupon the
Indemnifying Party shall take over complete defense of the
Indemnification Claim and the Indemnified Party shall sustain no further
legal or other expenses in respect of such Indemnification Claim. The
Indemnified Party will not confess any Indemnification Claim or make any
compromise in any case in which the Indemnifying Party will be asked to
provide indemnification, except with the Indemnifying Party's prior
written consent. The obligations of the parties hereto under this
Section 1.14 and Section 3.1 shall survive the termination of this
Agreement.
In the event that the Indemnifying Party does not elect to assume
the defense of any such suit, or in case the Indemnified Party
reasonably does not approve of counsel chosen by the Indemnifying Party,
or in case there is a conflict of interest between the Indemnifying
Party or the Indemnified Party, the Indemnifying Party will reimburse
the Indemnified Party, its officers, directors and employees, or the
controlling person or persons named as defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel retained by
the Indemnified Party or them. The Indemnifying Party's indemnification
agreement contained in this Section 1.14 and Section 3.1 and the
Indemnifying Party'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 the Indemnified Party, its
officers, directors and employees, or any controlling person, and shall
survive the delivery of any Shares. This agreement of indemnity will
inure exclusively to the Indemnified Party's benefit, to the benefit of
its several officers, directors and employees, and their respective
estates and to the benefit of the controlling persons and their
successors. The Indemnifying Party agrees promptly to notify the
Indemnified Party of the commencement of any litigation or proceedings
against the Indemnifying Party or any of its officers or directors in
connection with the issue and sale of any Shares.
1.15 No Shares shall be offered by either the Distributor or the
Company under any of the provisions of this Agreement and no orders for
the purchase or sale of Shares hereunder shall be accepted by the
Company if and so long as effectiveness of the Registration Statement
then in effect or any necessary amendments thereto shall be suspended
under any of the provisions of the 1933 Act, or if and so long as a
current prospectus as required by Section 5(b)(2) of the 1933 Act is not
on file with the SEC; provided, however, that nothing contained in this
Section 1.15 shall in any way restrict or have any application to or
bearing upon the Company's obligation to redeem Shares tendered for
redemption by any shareholder in accordance with the provisions of the
Company's Registration Statement, Declaration of Company, or bylaws.
1.16 The Company 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 SEC for amendments to the Registration
Statement, prospectus or statement of additional information then in
effect or for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement, prospectus
or statement of additional information then in effect or the initiation
by service of process on the Company 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, prospectus or
statement of additional information then in effect or that requires the
making of a change in such Registration Statement, prospectus or
statement of additional information in order to make the statements
therein not misleading; and
(d) of all actions of the SEC with respect to any amendments to any
Registration Statement, prospectus or statement of additional
information which may from time to time be filed with the SEC.
For purposes of this section, informal requests by or acts of the
Staff of the SEC shall not be deemed actions of or requests by the SEC.
2. Term
2.1 This Agreement shall become effective on the date first written
above and, unless sooner terminated as provided herein, shall continue
for an initial two-year term and thereafter shall be renewed for
successive one-year terms, provided such continuance is specifically
approved at least annually by (i) the Company's Board of Trustees or
(ii) by a vote of a majority (as defined in the 1940 Act and Rule 18f-2
thereunder) of the outstanding voting securities of the Company,
provided that in either event the continuance is also approved by a
majority of the Trustees who are not parties to this Agreement and who
are not interested persons (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable
without penalty, on at least sixty days' written notice, by the
Company's Board of Trustees, by vote of a majority (as defined in the
1940 Act and Rule 18f-2 thereunder) of the outstanding voting securities
of the Company, or by the Distributor. This Agreement will also
terminate automatically in the event of its assignment (as defined in
the 1940 Act and the rules thereunder).
2.2 In the event a termination notice is given by the Company, all
reasonable expenses associated with movement of records and materials
and conversion thereof will be borne by the Company.
3. Limitation of Liability
3.1 Each party to this Agreement shall not be liable to the other
party for any error of judgment or mistake of law or for any loss
suffered by the other party in connection with the performance of its
obligations and duties under this Agreement, except a loss resulting
from the such party's willful misfeasance, bad faith or negligence in
the performance of such obligations and duties, or by reason of its
reckless disregard thereof. Each party (the "Indemnifying Party") will
indemnify the other party (the "Indemnified Party") against and hold it
harmless from any and all claims, costs, expenses (including reasonable
attorneys' fees), losses, damages, charges, payments and liabilities of
any sort or kind which may be asserted against the Indemnified Party for
which the Indemnified Party may be held to be liable in connection with
this Agreement or the Indemnified Party's performance hereunder (a
"Section 3.1 Claim"), unless such Section 3.1 Claim resulted from a
negligent act or omission to act or bad faith by the Indemnified Party
in the performance of its duties hereunder. The provisions of Section
1.14 shall apply to any indemnification provided by the Indemnifying
Party pursuant to this Section 3.1. The obligations of the parties
hereto under this Section 3.1 shall survive termination of this
Agreement.
3.2 Each party shall have the duty to mitigate damages for which the
other party may become responsible.
3.5 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR
CONSEQUENTIAL DAMAGES.
4. Modifications and Waivers
No change, termination, modification, or waiver of any term or condition
of the Agreement shall be valid unless in writing signed by each party.
A party's waiver of a breach of any term or condition in the Agreement
shall not be deemed a waiver of any subsequent breach of the same or
another term or condition.
5. No Presumption Against Drafter
The Distributor and the Company have jointly participated in the
negotiation and drafting of this Agreement. The Agreement shall be
construed as if drafted jointly by the Company and the Distributor, and
no presumptions arise favoring any party by virtue of the authorship of
any provision of this Agreement.
6. Publicity
Neither the Distributor nor the Company shall release or publish
news releases, public announcements, advertising or other publicity
relating to this Agreement or to the transactions contemplated by it
without prior review and written approval of the other party; provided,
however, that either party may make such disclosures as are required by
legal, accounting or regulatory requirements after making reasonable
efforts in the circumstances to consult in advance with the other party.
7. Severability
The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any
term or provision is illegal or invalid for any reason, the illegality
or invalidity shall not affect the validity of the remainder of this
Agreement. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the
parties. Without limiting the generality of this paragraph, if a court
determines that any remedy stated in this Agreement has failed of its
essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall
remain fully effective.
8. Force Majeure
No party shall be liable for any default or delay in the
performance of its obligations under this Agreement if and to the extent
such default or delay is caused, directly or indirectly, by (i) fire,
flood, elements of nature or other acts of God; (ii) any outbreak or
escalation of hostilities, war, riots or civil disorders in any country,
(iii) any act or omission of the other party or any governmental
authority; (iv) any labor disputes (whether or not the employees'
demands are reasonable or within the party's power to satisfy); or (v)
nonperformance by a third party or any similar cause beyond the
reasonable control of such party, including without limitation, failures
or fluctuations in telecommunications or other equipment. In any such
event, the non-performing party shall be excused from any further
performance and observance of the obligations so affected only for so
long as such circumstances prevail and such party continues to use
commercially reasonable efforts to recommence performance or observance
as soon as practicable.
9. Miscellaneous
9.1 Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Company or the Distributor shall
be sufficiently given if addressed to the party and received by it at
its office set forth below or at such other place as it may from time to
time designate in writing.
To the Company:
First Choice Funds Trust
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to:
Xxxxx & XxXxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
To the Distributor:
First Data Distributors, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to the Distributor's Chief Legal Officer
9.2 The laws of the Commonwealth of Massachusetts, excluding the laws
on conflicts of laws, and the applicable provisions of the 1940 Act
shall govern the interpretation, validity, and enforcement of this
Agreement. To the extent the provisions of Massachusetts law or the
provisions hereof conflict with the 1940 Act, the 1940 Act shall
control. All actions arising from or related to this Agreement shall be
brought in the state and federal courts sitting in the City of Boston,
and the Distributor and the Company hereby submit themselves to the
exclusive jurisdiction of those courts.
9.3 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and which collectively shall
be deemed to constitute only one instrument.
9.4 The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
9.5 This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and is not
intended to confer upon any other person any rights or remedies
hereunder.
10. Confidentiality
10.1 The parties agree that the Proprietary Information (defined below)
and the contents of this Agreement (collectively "Confidential
Information") are confidential information of the parties and their
respective licensers. The Company and the Distributor shall exercise
reasonable care to safeguard the confidentiality of the Confidential
Information of the other. The Company and the Distributor may each use
the Confidential Information only to exercise its rights or perform its
duties under this Agreement. The Company and the Distributor shall not
duplicate, sell or disclose to others the Confidential Information of
the other, in whole or in part, without the prior written permission of
the other party. The Company and the Distributor may, however, disclose
Confidential Information to its employees who have a need to know the
Confidential Information to perform work for the other, provided that
each shall use reasonable efforts to ensure that the Confidential
Information is not duplicated or disclosed by its employees in breach of
this Agreement. The Company and the Distributor may also disclose the
Confidential Information to independent contractors, auditors and
professional advisors and as required by law or regulatory authorities.
Notwithstanding the previous sentence, in no event shall either the
Company or the Distributor disclose the Confidential Information to any
competitor of the other without specific, prior written consent.
10.2 Proprietary Information means:
(a) any data or information that is completely sensitive material, and
not generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finance,
operations, customer relationships, customer profiles, sales estimates,
business plans, and internal performance results relating to the past,
present or future business activities of the Company or the Distributor,
their respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of them;
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and
secret in the sense that its confidentiality affords the Company or the
Distributor a competitive advantage over its competitors: and
(c) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
10.3 Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment,
prototypes and models, and any other tangible manifestation of the
foregoing of either party which now exist or come into the control or
possession of the other.
10.4 Each party acknowledges that breach of the restrictions on use,
dissemination or disclosure of any Confidential Information of the other
party would result in immediate and irreparable harm, and money damages
would be inadequate to compensate the other party for that harm. Each
Party shall be entitled to equitable relief, in addition to all other
available remedies, to redress any such breach.
11. The Company and the Distributor agree that the obligations of the
Company under the Agreement shall not be binding upon any of the
Trustees, shareholders, nominees, officers, employees or agents, whether
past, present or future, of the Company individually, but are binding
only upon the assets and property of the Company, as provided in the
Declaration of Trust. The execution and delivery of this Agreement have
been authorized by the Trustees of the Company, and signed by an
authorized officer of the Company, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them or any
shareholder of the Company individually or to impose any liability on
any of them or any shareholder of the Company personally, but shall bind
only the assets and property of the Company as provided in the
Declaration of Trust.
12. Entire Agreement
This Agreement, including all Schedules hereto, constitutes the entire
agreement between the parties with respect to the subject matter hereof
and supersedes all prior and contemporaneous proposals, agreements,
contracts, representations, and understandings, whether written or oral,
between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed all as of the day and year first above written.
FIRST CHOICE FUNDS TRUST
By:XXXX X. XXXXXXX
Name:Xxxx X. Xxxxxxx
Title:Trustee
FIRST DATA DISTRIBUTORS, INC.
By:XXXXX X. XXXXXX
Name:Xxxxx X. Xxxxxx
Title:Vice President and Treasurer
SCHEDULE A
Name of Funds
U.S. Treasury Reserve Fund
Cash Reserve Fund
A-1
