FORM OF DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into
as of this ___ day of ____________ 2009, by and among Investment Managers Series
Trust, a Delaware Statutory Trust (the “Client”), Liberty Street Advisors, Inc.,
a New York corporation (the “Adviser”) and Foreside Fund Services, LLC, a
Delaware limited liability company (the “Distributor”).
WHEREAS,
the Client is registered under the Investment Company Act of 1940, as amended
(the “1940 Act”), as an open-end management investment company, and is
authorized to issue shares of beneficial interest (“Shares”) in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS,
the Client desires to retain the Distributor as principal underwriter in
connection with the offering and sale of the Shares of each series listed on
Exhibit A hereto (as amended from time to time) (each a “Fund” and collectively
the “Funds”);
WHEREAS,
the Distributor is registered as a broker-dealer under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and is a member of the Financial
Industry Regulatory Authority (“FINRA”);
WHEREAS,
this Agreement has been approved by a vote of the Client’s Board of Trustees
(the “Board”) and its disinterested Trustees in conformity with Section 15(c) of
the 1940 Act; and
WHEREAS,
Adviser serves as investment adviser to the Funds pursuant to management
agreements approved by the Board; and
WHEREAS,
the Distributor is willing to act as principal underwriter for the Client on the
terms and conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the promises and mutual covenants herein
contained, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Appointment of
Distributor. The Client hereby appoints the Distributor as its
exclusive agent for the sale and distribution of Shares of the Funds, on the
terms and conditions set forth in this Agreement, and the Distributor hereby
accepts such exclusive appointment and agrees to perform the services and duties
set forth in this Agreement.
2. Services
and Duties of the Distributor.
A. The
Distributor agrees to act as agent of the Client for distribution of the Shares
of the Funds, upon the terms and at the current offering price (plus sales
charge, if any) described in the Prospectus. As used in this
Agreement, the term “Prospectus” shall mean each currently effective prospectus,
including the statement of additional information, as amended or supplemented,
relating to any of the Funds and included in the currently effective
registration statement(s) or post-effective amendment(s) thereto (the
“Registration Statement”) of the Client under the Securities Act of 1933 (the
“1933 Act”) and the 1940 Act.
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B. During
the continuous public offering of Shares of the Funds, the Distributor will hold
itself available to receive orders, satisfactory to the Distributor, for the
purchase of Shares of the Funds and will promptly forward all orders to the
Client, or its designated agent. Such purchase orders shall be deemed
effective at the time and in the manner set forth in the
Prospectus. The Client or its designated agent will confirm orders
and subscriptions upon receipt, will make appropriate book entries and, upon
receipt of payment therefor, will issue the appropriate number of Shares in
uncertificated form.
C. The
Distributor shall maintain membership with the NSCC and any other similar
successor organization to sponsor a participant number for the Funds so as to
enable the Shares to be traded through FundSERV. The Distributor
shall not be responsible for any operational matters associated with FundSERV or
Networking transactions. The Client acknowledges that Foreside, as the
Distributor of the Client, will be authorized to offer and redeem shares on
behalf of the Client and that the Client will honor any instruction that
Foreside enters into Fund/SERV on its behalf.
D. The
Distributor acknowledges and agrees that it is not authorized to provide any
information or make any representations regarding the Funds other than as
contained in the Prospectus and any sales literature and advertising materials
specifically approved by the Client.
E. The
Distributor agrees to review all proposed sales material for compliance with
applicable laws and regulations, and, if applicable, shall file such sales
material with appropriate regulators. For most sales material, the
Distributor agrees to complete its review within three business days after
receipt from Client, however, for pieces of greater complexity and length, the
Distributor may take up to five business days to complete its
review. The Distributor agrees to furnish to the Client any comments
provided by regulators with respect to such materials.
F. The
Client agrees to redeem or repurchase Shares tendered by shareholders of the
Funds in accordance with the Client’s obligations in the Prospectus and the
Registration Statement. The Client reserves the right to suspend such
repurchase right upon written notice to the Distributor.
G. The
Distributor may, in its discretion, and shall, at the request of the Client,
enter into agreements with such qualified broker-dealers and other financial
intermediaries as it may select, in order that such broker-dealers and other
intermediaries also may sell Shares of the Funds. The form of any
dealer agreement shall be approved by the Client. The Distributor
shall not be obligated to make any payments to any broker-dealers, other
financial intermediaries or other third parties, unless (i) Foreside has
received a corresponding payment either from the Adviser, or from the applicable
Fund under a plan of distribution adopted pursuant to Rule 12b-1 under the 1940
Act (“Plan”) and (ii) such corresponding payment is pursuant to an arrangement
approved by the Client’s Board. The Distributor shall include
in the forms of agreement with selling broker-dealers a provision for the
forfeiture by them of any sales charge or discount with respect to Shares sold
by them and redeemed, repurchased or tendered for redemption within seven
business days after the date of confirmation of such purchases.
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H. The
Distributor shall devote its best efforts to effect sales of Shares of the Funds
but shall not be obligated to sell any certain number of Shares.
I. The
Distributor shall prepare reports for the Board regarding its activities under
this Agreement as from time to time shall be reasonably requested by the Board,
including reports regarding the use of 12b-1 payments received by the
Distributor, if any.
J. The
Distributor may enter into agreements (“Subcontracts”) with qualified third
parties to carry out some or all of the Distributor’s obligations under this
Agreement, with the prior written consent of the Client, such consent not to be
unreasonably withheld; provided that execution of a Subcontract shall not
relieve the Distributor of any of its responsibilities hereunder.
K. The
services furnished by the Distributor hereunder are not to be deemed exclusive
and the Distributor shall be free to furnish similar services to others so long
as its services under this Agreement are not impaired thereby.
L. The
Distributor has disclosed in writing to Client a list of jurisdictions in which
Distributor is registered as of the date of this
Agreement. Notwithstanding anything herein to the contrary, the
Distributor shall not be required to register as a broker or dealer in any
specific jurisdiction or to maintain its registration in any jurisdiction in
which it is now registered; provided, however, that the Distributor shall notify
the Client in advance of terminating and/or not renewing its registration or
qualification as a broker or dealer in any such jurisdiction.
3. Representations,
Warranties and Covenants of the Client.
A. The
Client hereby represents and warrants to the Distributor, which representations
and warranties shall be deemed to be continuing throughout the term of this
Agreement, that:
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(i)
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it
is duly organized and in good standing under the laws of its jurisdiction
of incorporation/organization and is registered as an open-end management
investment company under the 1940
Act;
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(ii)
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this
Agreement has been duly authorized, executed and delivered by the Client
and, when executed and delivered, will constitute a valid and legally
binding obligation of the Client, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting the rights and remedies of
creditors and secured parties;
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(iii)
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the
Funds have obtained all regulatory approvals necessary to carry on its
business as now conducted; there is no statute, rule, regulation, order or
judgment binding on the Funds and no provision of Client’s Agreement and
Declaration of Trust or by-laws, or any contract binding the Funds or
affecting their property which would prohibit Client’s execution or
performance of this Agreement;
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(iv)
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the
Shares are validly authorized and, when issued in accordance with the
description in the Prospectus, will be fully paid and
nonassessable;
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(v)
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the
Registration Statement as it relates to the Funds, and the Funds’
Prospectuses included therein, have been prepared in conformity with the
requirements of the 1933 Act and the 1940 Act and the rules and
regulations thereunder; and
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(vi)
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the
Registration Statement as it relates to the Funds and the Funds’
Prospectuses and any advertising materials and sales literature prepared
for the Funds do not and shall not contain any untrue statement of
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that all statements or information furnished to the Distributor pursuant
to this Agreement shall be true and correct in all material
respects.
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B. The
Client shall take, or cause to be taken, all necessary action to register the
Shares under the federal and all applicable state securities laws and to
maintain an effective Registration Statement for such Shares in order to permit
the sale of Shares as herein contemplated. The Client authorizes the
Distributor to use the Prospectus, in the form furnished to the Distributor from
time to time, in connection with the sale of Shares.
C. The
Client agrees to advise the Distributor, or cause the Distributor to be advised,
promptly in writing:
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(i)
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of
any material correspondence or other communication by the Securities and
Exchange Commission (“SEC”) or its staff relating to the Funds, including
requests by the SEC for amendments to the Registration Statement or
Prospectus;
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(ii)
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in
the event of the issuance by the SEC of any stop-order suspending the
effectiveness of the Registration Statement then in effect or the
initiation of any proceeding for that
purpose;
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(iii)
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of
the happening of any event which makes untrue any statement of a material
fact made in the Prospectus or which requires the making of a change in
such Prospectus in order to make the statements therein not
misleading;
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(iv)
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of
all actions taken by the SEC with respect to any amendments to any
Registration Statement or Prospectus which may from time to time be filed
with the SEC;
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(v)
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in
the event that it determines to suspend the sale of Shares at any time in
response to conditions in the securities markets or otherwise or to
suspend the redemption of Shares of any Fund at any time as permitted by
the 1940 Act or the rules of the SEC;
and
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(vi)
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of
the commencement of any litigation or proceedings against the Adviser, the
Client or any of its officers or Trustees in connection with the issue and
sale of any of the Shares.
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D. The
Client shall file such reports and other documents as may be required under
applicable federal and state laws and regulations, including state blue sky
laws, and shall notify the Distributor in writing of the states in which the
Shares may be sold and of any changes to such information.
E. The
Client agrees to file from time to time such amendments to its Registration
Statement as it relates to the Funds and Prospectus as may be necessary in order
that its Registration Statement and the Funds’ currently effective Prospectus
will not contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
F. The
Client shall fully cooperate in the efforts of the Distributor to sell and
arrange for the sale of Shares. In addition, the Client shall keep
the Distributor fully informed of its affairs and shall provide to the
Distributor from time to time copies of all information, financial statements,
and other papers that the Distributor may reasonably request for use in
connection with the distribution of Shares, including, without limitation,
certified copies of any financial statements prepared for the Client by its
independent public accountants and such reasonable number of copies of the most
current Prospectus, statement of additional information and annual and interim
reports to shareholders as the Distributor may request. The Client
shall forward a copy of any SEC filings, including the Registration Statement,
to the Distributor within one business day of any such filings. The
Client and the Adviser each represents that it will not use or authorize the use
of any advertising or sales material with respect to the Funds unless and until
such materials have been approved and authorized for use by the
Distributor.
G. The
Client shall provide, and cause each other agent or service provider to the
Client, including the Client’s transfer agent and investment adviser, to
provide, to Distributor in a timely and accurate manner all such information
(and in such reasonable medium) that the Distributor may reasonably request that
may be necessary for the Distributor to perform its duties under this
Agreement.
H. The
Client shall not file any amendment to the Registration Statement or Prospectus
that amends any provision therein which pertains to Distributor, the
distribution of the Shares or the applicable sales loads or public offering
price without giving Distributor reasonable advance notice thereof; provided,
however, that nothing contained in this Agreement shall in any way limit the
Client’s right to file at any time such amendments to the Registration Statement
or Prospectus, of whatever character, as the Client may deem advisable, such
right being in all respects absolute and unconditional.
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I. The
Client has adopted policies and procedures pursuant to Title V of the
Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from time to time. In this
regard, the Client (and relevant agents) shall have in place and maintain
physical, electronic and procedural safeguards reasonably designed to protect
the security, confidentiality and integrity of, and to prevent the unauthorized
access to or use of, records and information relating to the Client and the
owners of the Shares.
4. Representations,
Warranties and Covenants of the Adviser.
A. The
Adviser hereby represents and warrants to the Distributor that:
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(i)
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this
Agreement has been duly authorized by the Adviser and, when executed and
delivered, will constitute a legal, valid and binding obligation of the
Adviser, enforceable against it in accordance with its terms subject to
bankruptcy, insolvency, reorganizations, moratorium and other laws of
general application affecting the rights and remedies of creditors and
secured parties; and
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(ii)
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the
contractual advisory fees that the Adviser charges the Client do not
contain any component for the purpose of paying for fund
distribution.
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5. Representations,
Warranties and Covenants of the Distributor.
A. The
Distributor hereby represents and warrants to the Client, which representations
and warranties shall be deemed to be continuing throughout the term of this
Agreement, that:
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(i)
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it
is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
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(ii)
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this
Agreement has been duly authorized, executed and delivered by the
Distributor and, when executed and delivered, will constitute a valid and
legally binding obligation of the Distributor, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured
parties;
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(iii)
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it
is conducting its business in compliance in all material respects with all
applicable laws and regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, operating agreement or any
contract binding it or affecting its property which would prohibit its
execution or performance of this Agreement;
and
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(iv)
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it
is registered as a broker-dealer under the 1934 Act and is a member in
good standing of FINRA.
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B. In
connection with all matters relating to this Agreement, the Distributor will
comply with the applicable requirements of the 1933 Act, the 1934 Act, the 1940
Act, the regulations of FINRA and all other applicable federal or state laws and
regulations.
C. The
Distributor shall promptly notify the Client of the commencement of any
litigation or proceedings against the Distributor (including, without
limitation, the submission by the Distributor of a “Xxxxx” statement to the SEC
or the commencement of an enforcement proceeding against the Distributor by the
SEC) or any of its managers, officers or directors, which litigation or
proceedings could have a material impact on the Client, or could have a
substantial impact on the Distributor such that it would affect the viability of
its continuing its business as it is currently conducted or such that it would
affect its ability to serve as Distributor pursuant to this
Agreement.
6. Compensation. As
compensation for the services performed and the expenses assumed by Distributor
under this Agreement, Adviser shall pay to Distributor the fees and expenses set
forth in Exhibit B hereto (as amended from time to time).
7. Expenses.
A. The
Client shall bear all costs and expenses in connection with registration of the
Shares with the SEC and the applicable states, as well as all costs and expenses
in connection with the offering of the Shares and communications with
shareholders of its Funds, including but not limited to (i) fees and
disbursements of its counsel and independent public accountants; (ii) costs and
expenses of the preparation, filing, printing and mailing of Registration
Statements and Prospectuses and amendments thereto, as well as related
advertising and sales literature, (iii) costs and expenses of the preparation,
printing and mailing of annual and interim reports, proxy materials and other
communications to shareholders of the Funds; and (iv) fees required in
connection with the offer and sale of Shares in such jurisdictions as shall be
selected by the Client pursuant to Section 3(D) hereof.
B. The
Distributor shall bear the expenses of registration or qualification of the
Distributor as a dealer or broker under federal or state laws and the expenses
of continuing such registration or qualification. The Distributor
does not assume responsibility for any expenses not expressly assumed
hereunder.
8. Indemnification.
A. Solely
out of the assets of the applicable Fund (each, an “Indemnifying Fund”) Client
shall indemnify, defend and hold the Distributor, its affiliates and each of
their respective members, managers, directors, officers, employees,
representatives and any person who controls or previously controlled the
Distributor within the meaning of Section 15 of the 1933 Act (collectively, the
“Distributor Indemnitees”), free and harmless from and against any and all
losses, claims, demands, liabilities, damages and expenses (including the costs
of investigating or defending any alleged losses, claims, demands, liabilities,
damages or expenses and any reasonable counsel fees incurred in connection
therewith) (collectively, “Losses”) that any Distributor Indemnitee may incur
under the 1933 Act, the 1934 Act, the 1940 Act any other statute (including Blue
Sky laws) or any rule or regulation thereunder, or under common law or
otherwise, arising out of or relating to (i) the Distributor serving as
distributor of the Indemnifying Fund pursuant to this Agreement; (ii) the
Client’s breach of any of its obligations, representations, warranties or
covenants contained in this Agreement; (iii) an Indemnifying Fund’s failure to
comply with any applicable securities laws or regulations; or (iv) any claim
that the Registration Statement, as it relates to an Indemnifying Fund, an
Indemnifying Fund’s Prospectus, shareholder reports, sales literature and
advertising materials or other information filed or made public by the
Indemnifying Fund (as from time to time amended) include or included an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading under the 1933 Act, or any other statute or the common law any violation of any rule
of FINRA or of the SEC or any other jurisdiction wherein Shares of the
Indemnifying Fund are sold, provided, however, that the Client’s obligation to
indemnify any of the Distributor Indemnitees shall not be deemed to cover any
Losses arising out of any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, as it relates
to any Indemnifying Fund, the Fund’s Prospectus, annual or interim report, or
any such advertising materials or sales literature in reliance upon and in
conformity with information relating to the Distributor and furnished to the
Client or its counsel by the Distributor in writing and acknowledging the
purpose of its use. In no event shall anything contained herein be so
construed as to protect the Distributor against any liability to the Client 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 under this Agreement or by reason of its material breach of this
Agreement. Distributor acknowledges and agrees that, for purposes of
this Agreement, each Indemnifying Fund’s obligations are separate and distinct
from each other series of Client, and shall not be binding upon any other series
of the Client, including the other Funds, or upon any shareholder, trustee,
officer, employee or agent of the Indemnifying Fund individually, but shall be
binding only upon the assets and property of the applicable Indemnifying
Fund. A copy of the Client’s Agreement and Declaration of Trust is on
file with the Secretary of State of Ohio and has been provided to
Distributor.
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The
Client’s agreement to indemnify the Distributor Indemnitees is expressly
conditioned upon the Client being notified of the applicable action or claim of
loss brought against any Distributor Indemnitee, within a reasonable time after
the summons or other first legal process giving information of the nature of the
claim shall have been served upon such Distributor Indemnitee, unless the
failure to give notice does not prejudice the Client. Such
notification shall be given by letter or by telegram addressed to the Client’s
President, but the failure so to notify the Client of any such action shall not
relieve the Client from any liability which the Client may have to the person
against whom such action is brought by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
the Client’s indemnity agreement contained in this Section 7(A).
B. The
Client shall be entitled to participate at its own expense in the defense or, if
it so elects, to assume the defense of any suit brought to enforce any such
Losses, but if the Client elects to assume the defense, such defense shall be
conducted by counsel chosen by the Client and approved by the Distributor, which
approval shall not be unreasonably withheld. In the event the Client
elects to assume the defense of any such suit and retain such counsel, the
Distributor Indemnitee(s) in such suit shall bear the fees and expenses of any
additional counsel retained by them. If the Client does not elect to
assume the defense of any such suit, or in case the Distributor does not, in the
exercise of reasonable judgment, approve of counsel chosen by the Client or, if
under prevailing law or legal codes of ethics, the same counsel cannot
effectively represent the interests of both the Client and the Distributor
Indemnitee(s), the Client will reimburse the Distributor Indemnitee(s) in such
suit, for the fees and expenses of any counsel retained by Distributor and
them. The Client’s indemnification agreement contained in Sections
7(A) and 7(B) shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Distributor Indemnitee(s), and
shall survive the delivery of any Shares and the termination of this
Agreement. This agreement of indemnity will inure exclusively to the
Distributor’s benefit and to the benefit of each Distributor
Indemnitee.
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C. The
Client shall advance attorney’s fees and other expenses incurred by a
Distributor Indemnitee in defending any claim, demand, action or suit which is
the subject of a claim for indemnification pursuant to this Section 7 to the
maximum extent permissible under applicable law.
D. The
Adviser shall indemnify, defend and hold the Distributor Indemnitees free and
harmless from and against any and all Losses that any Distributor Indemnitee may
incur arising out of or relating to (i) the Distributor serving as distributor
pursuant to this Agreement; or (ii) the Adviser’s breach of any of its
obligations, representations, warranties or covenants contained in this
Agreement, except to the extent that Losses result from the Distributor’s bad
faith, willful misfeasance, or gross negligence or its reckless disregard of its
express obligations and duties hereunder.
E. The
Distributor shall indemnify, defend and hold the Client, its affiliates, and
each of their respective directors, officers, employees, representatives, and
any person who controls or previously controlled the Client within the meaning
of Section 15 of the 1933 Act (collectively, the “Client Indemnitees”), free and
harmless from and against any and all Losses that any Client Indemnitee may
incur under the 1933 Act, the 1934 Act, the 1940 Act, any other statute
(including Blue Sky laws) or any rule or regulation thereunder, or under common
law or otherwise, arising out of or based upon (i) the Distributor’s breach of
any of its obligations, representations, warranties or covenants contained in
this Agreement; (ii) the Distributor’s failure to comply with any applicable
securities laws or regulations; or (iii) any claim that the Registration
Statement, Prospectus, sales literature and advertising materials or other
information filed or made public by the Client (as from time to time amended)
include or included an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements not misleading, insofar as such statement or omission was made in
reliance upon, and in conformity with, information furnished to the Client by
the Distributor in writing. In no event shall anything contained
herein be so construed as to protect the Client against any liability to the
Distributor to which the Client would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its duties
under this Agreement or by reason of its material breach of this
Agreement.
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The
Distributor’s agreement to indemnify the Client Indemnitees is expressly
conditioned upon the Distributor’s being notified of any action or claim of loss
brought against a Client Indemnitee, such notification to be given by letter or
telegram addressed to the Distributor’s President, within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the Client Indemnitee, unless the
failure to give notice does not prejudice the Distributor. The
failure so to notify the Distributor of any such action shall not relieve the
Distributor from any liability which the Distributor may have to the person
against whom such action is brought by reason of any such untrue, or alleged
untrue, statement or omission, otherwise than on account of the Distributor’s
indemnity agreement contained in this Section 7(D).
F. The
Distributor shall be entitled to participate at its own expense in the defense
or, if it so elects, to assume the defense of any suit brought to enforce any
such Losses, but if the Distributor elects to assume the defense, such defense
shall be conducted by counsel chosen by the Distributor and approved by the
Client Indemnitee, which approval shall not be unreasonably
withheld. In the event the Distributor elects to assume the defense
of any such suit and retain such counsel, the Client Indemnitee(s) in such suit
shall bear the fees and expenses of any additional counsel retained by
them. If the Distributor does not elect to assume the defense of any
such suit, or in case the Client does not, in the exercise of reasonable
judgment, approve of counsel chosen by the Distributor or, if under prevailing
law or legal codes of ethics, the same counsel cannot effectively represent the
interests of both the Distributor and the Client Indemnitee(s), the Distributor
will reimburse the Client Indemnitee(s) in such suit, for the fees and expenses
of any counsel retained by the Client and them. The Distributor’s
indemnification agreement contained in Sections 7(D) and (E) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Client Indemnitee(s), and shall survive the delivery of any
Shares and the termination of this Agreement. This Agreement of
indemnity will inure exclusively to the Client’s benefit, to the benefit of each
Client Indemnitee.
G. No
person shall be obligated to provide indemnification under this Section 7 if
such indemnification would be impermissible under the 1940 Act, the 1933 Act,
the 1934 Act or the rules of the FINRA; provided, however, in such event
indemnification shall be provided under this Section 7 to the maximum extent so
permissible.
9. Dealer Agreement
Indemnification.
A. Distributor
acknowledges and agrees that certain large and significant broker-dealers, such
as (without limitation) Xxxxxxx Xxxxx, UBS and Xxxxxx Xxxxxxx (all such brokers
referred to herein as the “Brokers”), require that Distributor enter into dealer
agreements (the “Non-Standard Dealer Agreements”) that contain certain
representations, undertakings and indemnification that are not included in the
Standard Dealer Agreement.
B. To
the extent that Distributor is requested or required by the Client or Adviser to
enter into any Non-Standard Dealer Agreement, the Adviser shall indemnify,
defend and hold the Distributor Indemnitees free and harmless from and against
any and all Losses that any Distributor Indemnitee may incur arising out of or
relating to (a) Foreside’s actions or failures to act pursuant to any
Non-Standard Dealer Agreement to the extent that Foreside is not obligated to
take or omit to take such actions in the Standard Dealer Agreement; (b) any
representations made by Foreside in any Non-Standard Dealer Agreement to the
extent that Foreside is not required to make such representations in the
Standard Dealer Agreement; or (c) any indemnification provided by Foreside under
a Non-Standard Dealer Agreement to the extent that such indemnification is
beyond the indemnification Foreside provides to intermediaries in the Standard
Dealer Agreement. In no event shall anything contained herein be so
construed as to protect the Distributor Indemnitees against any liability to the
Client or its shareholders to which the Distributor Indemnitees would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of Distributor’s obligations or duties under the Non-Standard
Dealer Agreement or by reason of Distributor’s reckless disregard of its
obligations or duties under the Non-Standard Dealer Agreement.
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10. Limitations on
Damages. Neither Party shall be liable for any consequential,
special or indirect losses or damages suffered by the other Party, whether or
not the likelihood of such losses or damages was known by the
Party.
11. Force
Majeure. Neither Party shall be liable for losses, delays,
failure, errors, interruption or loss of data occurring directly or indirectly
by reason of circumstances beyond its reasonable control, including, without
limitation, Acts of Nature (including fire, flood, earthquake, storm, hurricane
or other natural disaster); action or inaction of civil or military authority;
acts of foreign enemies; war; terrorism; riot; insurrection; sabotage;
epidemics; labor disputes; civil commotion; or interruption, loss or malfunction
of utilities, transportation, computer or communications capabilities, and the
other Party shall have no right to terminate this Agreement in such
circumstances.
12. Duration
and Termination.
A. This
Agreement shall become effective with respect to each Fund listed on Exhibit A
hereof as of the date hereof and, with respect to each Fund not in existence on
that date, on the date an amendment to Exhibit A to this Agreement relating to
that Fund is executed. Unless sooner terminated as provided herein,
this Agreement shall continue in effect for two years from the date
hereof. Thereafter, if not terminated, this Agreement shall continue
automatically in effect as to each Fund for successive one-year periods,
provided such continuance is specifically approved at least annually by (i) the
vote of a majority of the members of the Client’s Board who are not interested
persons, as that term is defined in the 1940 Act, of the Client or the
Distributor, and (ii) either the vote of a majority of the Board or the vote of
a majority of the outstanding voting securities of the Fund, in accordance with
Section 15 of the 1940 Act.
B. Notwithstanding
the foregoing, this Agreement may be terminated, without the payment of any
penalty, with respect to a particular Fund (i) through a failure to renew this
Agreement at the end of a term or (ii) upon mutual consent of the
parties.
Further,
this Agreement may be terminated with respect to a specific Fund upon no less
than 60 days’ written notice (i) by either the Client through a vote of a
majority of the members of the Board who are not interested persons, as that
term is defined in the 1940 Act, and who have no direct or indirect financial
interest in the operation of this Agreement or by vote of a majority of the
outstanding voting securities of the Fund, or (ii) by the
Distributor.
11
C. This
Agreement will automatically terminate in the event of its
assignment.
13. Anti-Money
Laundering Compliance.
A. Each
of Distributor and Client 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.
B. The
Distributor shall include specific contractual provisions regarding anti-money
laundering compliance obligations in agreements entered into by the Distributor
with any broker-dealer or other financial intermediary that is authorized to
effect transactions in Shares of the Funds.
C. Each
of Distributor and Client 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
Client, the Client’s anti-money laundering compliance officer and appropriate
regulatory agencies, reasonable access to copies of Distributor’s AML
Operations, and related books and records to the extent they pertain to the
Distributor’s services hereunder. It is expressly understood and
agreed that the Client and the Client’s compliance officer shall have no access
to any of Distributor’s AML Operations, books or records pertaining to other
clients or services of Distributor.
14. Privacy. In
accordance with Regulation S-P, the Distributor will not disclose any non-public
personal information, as defined in Regulation S-P, received from the Client or
any Fund regarding any Fund shareholder; provided, however, that the Distributor
may disclose such information to any party as necessary in the ordinary course
of business to carry out the purposes for which such information was disclosed
to the Distributor. 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
Client represents to the Distributor that it has adopted a statement of its
privacy policies and practices as required by SEC Regulation S-P which statement
shall be set forth in the Funds’ currently effective prospectus. The
Distributor agrees to use reasonable precautions to protect, and prevent the
unintentional disclosure of, such non-public personal information.
15. Confidentiality. During
the term of this Agreement, the parties 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, the Client or the Adviser 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 does not include: (i)
information that was known to the receiving Party before receipt thereof from or
on behalf of the Disclosing Party; (ii) information that is disclosed to the
Receiving Party by a third person who has a right to make such disclosure
without any obligation of confidentiality to the Party seeking to enforce its
rights under this Section; (iii) information that is or becomes generally known
in the trade without violation of this Agreement by the Receiving Party; or (iv)
information that is independently developed by the Receiving Party or its
employees or affiliates without reference to the Disclosing Party’s
information.
12
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 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 practicable and cooperate with the other
party (at such other party’s expense) in any efforts to prevent such
disclosure.
16. Notices. Any notice
required or permitted to be given by any party to the others shall be in writing
and shall be deemed to have been given on the date delivered personally or by
courier service or 3 days after sent by registered or certified mail, postage
prepaid, return receipt requested or on the date sent and confirmed received by
facsimile transmission to the other party’s address as set forth
below:
Notices
to the Distributor shall be sent to:
Foreside
Fund Services, LLC
Attn:
Legal/Compliance
Three
Xxxxx Xxxxx
Xxxxx
000
Xxxxxxxx,
XX 00000
Phone:
000-000-0000
Fax:
000-000-0000
Notices
to the Client shall be sent to:
000 Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Attention:
President
With a
copy
to:
Xxxxxxx
Xxxxxx
Paul,
Hastings, Xxxxxxxx & Xxxxxx, LLP
000 Xxxxx
Xxxxxx Xxxxxx
Xxx
Xxxxxxx, XX 00000
00
Xxx
Xxxxxxx
Xxxxxx Advisors, Inc.
000
Xxxxxx Xxxx
0xx
Xxxxx
Xxx Xxxx,
XX 00000
Phone:
000-000-0000
Fax:
000-000-0000
17. Modifications. The
terms of this Agreement shall not be waived, altered, modified, amended or
supplemented in any manner whatsoever except by a written instrument signed by
the Distributor and the Client. If required under the 1940 Act, any
such amendment must be approved by the Client’s Board, including a majority of
the Client’s Board who are not interested persons, as such term is defined in
the 1940 Act, of any party to this Agreement, by vote cast in person at a
meeting for the purpose of voting on such amendment.
18. Governing Law. This
Agreement shall be construed in accordance with the laws of the State of
Delaware, without regard to the conflicts of law principles
thereof.
19. Entire
Agreement. This Agreement constitutes the entire agreement
between the Parties hereto and supersedes all prior communications,
understandings and agreements relating to the subject matter hereof, whether
oral or written.
20. Survival. The
provisions of Sections 5, 6, 7, 8, 12 and 13 of this Agreement shall survive any
termination of this Agreement.
21. Miscellaneous. The
captions in 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. Any provision of this Agreement which may be
determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors.
22. Counterparts. This
Agreement may be executed by the Parties hereto in any number of counterparts,
and all of the counterparts taken together shall be deemed to constitute one and
the same document.
14
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
a duly authorized officer on one or more counterparts as of the date first above
written.
Distributor:
FORESIDE
FUND SERVICES, LLC
By:
__________________________
Xxxx X.
Xxxxxx
Client:
INVESTMENT
MANAGERS SERIES TRUST, on behalf of its series listed on Exhibit A attached
hereto
By:
________________________
Adviser:
LIBERTY
STREET ADVISORS, INC.
By:_____________________________
15
EXHIBIT
A
Liberty
Street Horizon Fund
16
Exhibit
B
Compensation
SALES
LOADS:
1. With
respect to Class A Shares (i) that part of the sales charge which is retained by
the Distributor after reallowance of discounts to dealers as set forth, if
required, in the Registration Statement, including the Prospectus, filed with
the SEC and in effect at the time of the offering, as amended.
2. With
respect to Class C Shares (i) that part of any front-end sales charge which is
retained by the Distributor after allowance of discounts to dealers as set
forth, if required, in the Registration Statement, including the Prospectus,
filed with the SEC and in effect at the time of the offering, as amended, and
(ii) the contingent deferred sales charge payable with respect to Class C Shares
sold through the Distributor as set forth in the Registration Statement,
including the Prospectus, filed with the SEC and in effect at the time of sale
of such Class C Shares.
3. With
respect to Class I Shares, if any, the Distributor shall not be entitled to any
compensation.
4. With
respect to any future Class of Shares, the Distributor shall be entitled to such
consideration as the Fund and the Distributor shall agree at the time such Class
of Shares is established.
DISTRIBUTION SERVICES
FEES
Recurring
Fees
|
Rate
|
Asset-based
fee.
|
0.75 (0.0075%) basis points, based on total average assets in
the Fund calculated and billed monthly, subject to a minimum annual fee
payable of $10,000 ($833.33 per month) in year one; after year one,
subject to a minimum annual fee payable of $15,000 ($1250.00 per
month).
|
17
OUT-OF-POCKET
EXPENSES
Reasonable out-of-pocket expenses
incurred by the Distributor in connection with activities primarily intended to
result in the sale of Shares, including, without limitation: typesetting,
printing and distribution of Prospectuses and shareholder reports; production,
printing, distribution and placement of advertising and sales literature and
materials; engagement of designers, free-xxxxx writers and public relations
firms; long-distance telephone charges; postage; overnight delivery charges;
record retention; travel, lodging and meals.
12b-1
PAYMENTS:
Attached to this Exhibit B are all
plans of distribution under Rule 12b-1 under the 1940 Act approved by the Funds
and in effect (collectively, the “Distribution Plan”). If the Funds
have a Board approved Distribution Plan that authorizes them to compensate and
reimburse the Distributor for distribution services, then the Funds shall be
responsible for all compensation and reimbursements pursuant to this Agreement,
or such portions thereof as are authorized under the Distribution
Plan.
INVESTMENT ADVISER
PAYMENTS
The Adviser shall compensate and
reimburse the Distributor for its provision to the Funds of any services for
which the Funds are not authorized to compensate and reimburse the
Distributor.
Notes:
|
Ø
|
Fees
will be calculated and payable
monthly.
|
|
Ø
|
All fees are subject to a CPI
adjustment based on each contract
anniversary.
|
18