Exhibit 22(e)(2)
DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of October, 2003, between First Focus Funds,
Inc. (the "Company"), a Nebraska corporation having its principal place of
business at 0000 Xxxxx Xxxxxx, Xxxxx, XX 00000 , and BISYS FUND SERVICES LIMITED
PARTNERSHIP ("Distributor"), having its principal place of business at 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Company is an open-end management investment company,
organized as a Nebraska corporation and registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940,
as amended (the "!940 Act") and
WHEREAS, it is intended that Distributor act as the distributor of the
shares ("Shares") of each series of the Company identified in Schedule A hereto
as such Schedule may be amended from time to time (such portfolios being
referred to individually as a "Fund" and collectively as the "Funds").
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, the parties agree as follows:
1. Services as Distributor.
1.1 Distributor will act as agent of the Company on behalf of each Fund
for the distribution of the Shares covered by the registration
statement and prospectus of the Company then in effect under the
Securities Act of 1933, as amended (the "Securities Act"). As used
in this Agreement, the term "registration statement" shall mean the
registration statement 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.
1.2 Distributor agrees to use appropriate efforts to solicit orders for
the sale of the Shares and will undertake such advertising and
promotion as it believes reasonable in connection with such
solicitation. The Company understands that Distributor is now and
may in the future be the distributor of the Shares of many other
investment companies or series (together, "Companies") including
Companies having investment objectives similar
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to those of the Company. The Company further understands the
investors and potential investors in the Company may invest in
Shares of such other Companies. The Company agrees that
Distributor's duties to such Companies shall not be deemed in
conflict with its duties to the Company under this paragraph 1.2.
Distributor shall engage in activities which it deems reasonable,
which are primarily intended to result in the sale of the Shares,
including, but not limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing
of prospectuses to other than current shareholders, and the printing
and mailing of sales literature.
1.3 In its capacity as distributor of the Shares, all activities of the
Distributor and its partners, agents, and employees shall 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, provided Distributor shall not be responsible for the
compliance of any advertising it files regarding the Funds with such
laws, rules and regulations.
1.4 Intentionally Omitted.
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
Funds.
1.6 Whenever in their judgment such action is warranted by unusual
market, economic or political conditions or by abnormal circumstance
of any kind, the Company'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.
1.7 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 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
Distributor may designate.
1.9 The Company 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
Company warrants that the statements contained in any such
information fairly show or represent what they purport to show or
represent. The Company shall also furnish Distributor upon request
with: (a) unaudited semi-annual statements of the Funds' books and
accounts prepared by the Company,
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(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 Company represents and warrants to Distributor that, with
respect to the Shares, all registration statements and prospectuses
filed by the Company with the Commission under the Securities Act
have been carefully prepared in conformity with requirements of said
Act and rules and regulations of the Commission thereunder. The
registration statement and prospectus contain all statements
required to be stated therein in conformity with said Act and the
rules and regulations of said Act and the rules and regulations of
said Commission and all statements of material fact contained in any
such registration statement and prospectus are true and correct.
Furthermore, neither any registration statement nor any prospectus
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares. The
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 Company
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 Company's counsel,
be necessary or advisable. If the Company shall not propose any
amendment or amendments and/or supplement or supplements with in
fifteen days after receipt by the Company 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 the Company for, any liability or loss resulting
from the failure to implement such amendment. The Company 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 Company's right to file at any
time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Company
may deem advisable, such right being in all respects absolute and
unconditional.
1.11 The Company may request Distributor to use an electronic processing
system over the internet in which electronically transmitted orders
are forwarded electronically for processing by a third party known
to the Company under circumstances in which Distributor will not
review the orders. Under such circumstances, the Company
acknowledges and agrees that it will independently determine that
the third party is a satisfactory service provider and that the
Distributor's review will not be necessary.
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1.12 The Company authorizes the Distributor and dealers to use any
prospectus in the form furnished from time to time in connection
with the sale of the Shares. The Distributor shall not be liable for
any error of judgment or mistake of law or for any loss suffered by
the Company in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith
or negligence on the Distributor's part in the performance of its
duties, 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 connection with its distribution of the Shares.
The Company agrees to indemnify, defend and hold the Distributor,
its several partners and employees, and any person who controls the
Distributor within the meaning of Section 15 of the Securities Act,
free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which the Distributor, its
partners and employees or any such controlling person, may incur (a)
in connection with a proceeding brought against the Distributor by a
third party as the result of acting as distributor of the Funds; (b)
under the Securities Act or under common law or otherwise, arising
out of or based upon (i) any untrue statement, or alleged untrue
statement, of a material fact contained in any registration
statement or any prospectus, (ii) any omission, or alleged omission,
to state a material fact required to be stated in any registration
statement or any prospectus or necessary to make the statements in
either of such documents not misleading or (iii) any Company-related
advertisement or sales literature that is not in compliance with
applicable laws, rules or regulations (including, but not limited to
the Conduct Rules of the National Association of Securities Dealers,
Inc.); or (c) arising out of or based upon the electronic processing
of orders over the internet; provided, however, that the Company's
agreement to indemnify the Distributor, its partners or employees,
and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses (x) arising out of any
statements or representations as are contained in any prospectus,
advertisement or sales literature and in such financial and other
statements as are furnished in writing to the Company by the
Distributor for such use and used in the registration statement or
in corresponding statements made in the prospectus, advertisement or
sales literature, or (y) arising out of or based upon any omission
or alleged omission to state a material fact in such information
furnished by the Distributor which is required to be stated or
necessary to make the information not misleading; and further
provided that the Company's agreement to indemnify the Distributor
and the Company's representations and warranties hereinbefore set in
paragraph 1.10 shall not be deemed to cover any liability to the
Company or its shareholders to which the Distributor would otherwise
be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties,
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by reason of the Distributor's reckless disregard of its obligations
and duties under this Agreement, or by the Distributor's failure to
comply with any laws, rules or regulations applicable to it in
connection with its distribution of the Shares.
In the event of a formal legal action, the Company's agreement to
indemnify the Distributor, it partners and employees and any such
controlling person, as aforesaid, is expressly conditioned upon the
Company being provided with written notice of an action brought
against Distributor, its partners and employees, or any such
controlling person, and identifying the person against whom such
action 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. Any failure to promptly notify the
Company will not relieve the Company from any liability which the
Company may have to the person against whom such action is brought,
or to any other person, by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than
on account of the Company's indemnity obligations under this
paragraph 1.12. The Company will be entitled to assume the defense
of any suit brought to enforce any such claim, demand or liability
if such defense shall be conducted by counsel of good standing
chosen by the Company approved by the Distributor, which approval
shall not be unreasonably withheld. In the event the Company elects
to assume the defense of any such suit and retain counsel of good
standing so approved by the 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 any case where the Company
does not elect to assume the defense of any such suit or in case the
Distributor reasonable withholds approval of counsel chosen by the
Company, the Company will reimburse the 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 the Distributor or them. The Company's
indemnification agreement contained in this paragraph 1.12 and the
Company'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 Distributor, its partners
and employees, or any controlling person, and shall survive the
delivery of any Shares.
This indemnity will inure exclusively to the 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 Company agrees promptly to notify the
Distributor of the commencement of any litigation of proceedings
against the Company or any of its officers or Board of Directors
which related, directly or indirectly, the issue and sale of any
Shares or which may otherwise form the basis of an obligation for
the Company to indemnify hereunder.
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1.13 The Distributor agrees to indemnify, defend and hold the Company,
it's several officers and the Board of Directors, and any person who
controls the Company 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 Company, its officers or Directors 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 Company, its officers or Directors or such
controlling person resulting from such claims or demands shall arise
directly out any untrue, statement of a material fact contained in
information furnished in writing by the Distributor to the Company
and used in response to required items of the registration statement
or in the corresponding statements made in the prospectus or any
omission, or alleged omission, to state material fact required to be
stated in such information or necessary to make such information not
misleading.
The Distributor's agreement to indemnify the Company, its officers
and Directors and any such controlling person, as aforesaid, is
expressly conditioned upon the Distributor being provided with
written notice of an action brought against the Company, its
officers and Directors, or any such controlling person, and
identifying the person against whom such action is brought, and sent
to the Distributor identifying the person against whom such action
is brought promptly following the indemnified person's 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, demand or liability to the extent the same is based on
an alleged misstatement or omission on the Distributor's part, if
such defense shall be conducted by counsel of good standing chosen
by the Distributor and approved by the Company, which approval shall
not be unreasonably withheld. In the event any such claim, demand or
liability is not based solely on an alleged misstatement or omission
on the Distributor's part, the Company, it's officers and Directors,
or any controlling person, shall have the right to participate in
the defense, and the Distributor shall have the right of first
control thereof. In the event the Distributor elects to assume the
defense of any such suit and retain counsel of good standing so
approved by the Company, the Company and any other defendant or
defendants 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, the Distributor will reimburse the Company, its officers,
directors, employees and controlling persons or other persons named
as defendant or defendants in such suit for the reasonable fees and
expenses of any counsel retained by the Company or them to the
extent related to a claim, demand, liability or expense covered
under this Section 1.
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1.14 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 the effectiveness of the registration
statement then in effect or any necessary amendments thereto shall
be suspended under any of the provisions of the Securities Act or if
and so long as a current prospectus as required by Section 10(b)(2)
of said Act is not on file with the Commission, provided, however,
that nothing contained in paragraph 1.13 shall in any way restrict
or have an application to or bearing upon the Company's obligation
to repurchase Shares from a shareholder in accordance with the
provisions of the Company's prospectus or Bylaws.
1.15 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 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 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 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 registrations 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.
1.16 The Distributor agrees on behalf of itself and its partners and
employees to treat confidential and as proprietary information of
the Company all records and other information relative to the
Company and its prior, present or potential Shareholders, and not to
use such records and information for any purpose other than
performance of its responsibilities and duties hereunder except
after prior notification to and approval in writing by the Company,
which approval shall not be unreasonably withheld, but such approval
shall not be required where the Distributor may be exposed to civil
or criminal liability for failure to disclose such information, when
requested to divulge such information by duly
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constituted authorities, or when so requested by the Company. The
Distributor will provide prompt notice to the Company in the event
that it becomes aware of a disclosure or any form of release of
information in breach of the confidentiality provisions of this
Agreement.
1.17 This Agreement shall be governed by the laws of the State of Ohio.
1.18 In the event the Distributor purchases the initial Shares of the
Company for purposes of satisfying the minimum net worth
requirements set forth in Section 14(a) of the 1940 Act, and a
notice of termination is subsequently given or this Agreement is
otherwise terminated pursuant to Section 6 herein for any reason
prior to the time that organizational expenses incurred by the
Company have been fully amortized, then the Company shall either (i)
cause the successor distributor of the Shares (the "Successor
Distributor") to pay to the Distributor, within ten (10) days prior
to the termination of this Agreement, an amount of cash that is
sufficient to purchase the initial Shares that are held by the
Distributor or (ii) enable the Distributor to redeem the initial
Shares of the Company that it holds by causing the Successor
Distributor to contribute to the Company, within ten (10) days prior
to the termination of this Agreement, any unamortized organizational
costs in the same provision as the number of initial Shares being
redeemed bears to the number of initial Shares outstanding at the
time of such contribution. In the latter case, the Distributor shall
be entitled to redeem any or all of the initial Shares that it holds
and receive redemption proceeds without any reduction in the amount
of such proceeds, prior to the termination of this Agreement.
2. Fee.
The Distributor shall receive from the Funds identified in the Service and
Distribution Plan attached as Schedule B hereto (the "Distribution Plan Funds")
a distribution fee at the rate and upon the terms and conditions set forth in
such Plan. The distribution fee shall be accrued daily and shall be paid on the
first business day of each month, or at such time(s) as the Distributor shall
reasonably request.
3. 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 Service and
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
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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 purchase Load Shares at
their net asset value and to sell such Load Shares to the public
against orders therefore 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 therefore at the
public offering price less 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.
4. Public Offering Price.
The public offering price of a Load Share shall be the net asset value of
such Load Share, plus any applicable sales charge, all as set forth in the
current prospectus of the Load Fund. The net asset value of Load Shares shall be
determined in accordance with the then-current prospectus of the Load Fund.
5. Issuance of Shares.
The Company reserves the right to issue, transfer or sell Load Shares at
net asset values (a) in connection with the merger or consolidation of the
Company or the Load Fund(s) with any other investment company or the acquisition
by the Company 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
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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 by (a) by the vote
of a majority of those members of the Company's Board of Directors 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 Company's Board of Directors or the vote of a majority of the
outstanding voting securities of such Fund. This Agreement is terminable without
penalty with sixty days' prior written notice, by the Company's Board of
Directors, by vote of a majority 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 used in this Agreement, the terms "majority
of the outstanding voting securities," "interested persons" and "assignments"
shall have the same meaning as ascribed to such terms in the 1940 Act.)
7. Limitation of Liability of the Directors and Shareholders.
It is expressly agreed that the obligations of the Company hereunder shall
not be binding upon any of the Directors, shareholders, nominees, officers,
agents or employees of the Company personally, but shall bind only the property
of the Company. The execution and delivery of this Agreement has been authorized
by the Directors, and this Agreement has been signed and delivered by an
authorized officer of the Company, acting as such, and neither such
authorization by the Directors 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 any of them personally, but shall bind only the Company property.
8. Privacy.
Nonpublic personal financial information relating to consumers or
customers of the Funds provided by, or at the direction of, the Company to the
Distributor, or collected or retained by the Distributor to perform its duties
as distributor, shall be considered confidential information. The Distributor
shall not disclose or otherwise use nonpublic personal financial information
relating to present or former shareholders of the Funds other than for the
purposes for which that information was disclosed to the Distributor, including
use under an exception in Rules 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 of the Funds. The Company
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.
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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 Company, at 0000 Xxxxx Xxxxxx, Xxxxx, XX
00000, Attn: President; and if to BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
00000, Attn: 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.
* * * * * *
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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.
FIRST FOCUS FUNDS, INC
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: President
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
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SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
BETWEEN FIRST FOCUS FUNDS, INC
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
FUNDS
First Focus Short/Intermediate Bond Fund
First Focus Income Fund
First Focus Nebraska Tax-Free Fund
First Focus Colorado Tax Free Fund
First Focus Balanced Fund
First Focus Core Equity Fund
First Focus Growth Opportunities Fund
First Focus Small Company Fund
First Focus International Equity Fund
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SCHEDULE B
TO THE DISTRIBUTION AGREEMENT
BETWEEN FIRST FOCUS FUNDS, INC
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
SERVICE AND DISTRIBUTION PLAN
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