Exhibit (e)
▇▇▇▇▇▇▇▇▇ GLOBAL FUNDS
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 31st day of August, 2001, amended as of
September 30,2003, and as amended and restated as of the "Effective Date"
defined below, by and between ▇▇▇▇▇▇▇▇▇ Global Funds, a Delaware business trust,
with its principal office and place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Trust"), and Forum Fund Services, LLC, a
Delaware limited liability company with its principal office and place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Forum").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company and
may issue its shares of beneficial interest, no par value ("Shares") in separate
series and classes;
WHEREAS, Forum is registered under the Securities Exchange Act of 1934,
as amended ("1934 Act"), as a broker-dealer and is engaged in the business of
selling shares of registered investment companies either directly to purchasers
or through other financial intermediaries;
WHEREAS, the Trust intends to offer shares in various series as listed
in Appendix A hereto (each such series, together with all other series
subsequently established by the Trust and made subject to this Agreement being
herein referred to as a "Fund," and collectively as the "Funds") and the Trust
intends to offer shares of various classes of each Fund as listed in Appendix A
hereto (each such class together with all other classes subsequently established
by the Trust in a Fund being herein referred to as a "Class," and collectively
as the "Classes");
WHEREAS, the Trust desires that Forum offer, as principal underwriter,
the Shares of each Fund and Class thereof to the public and Forum is willing to
provide those services on the terms and conditions set forth in this Agreement
in order to promote the growth of the Funds and facilitate the distribution of
the Shares;
WHEREAS, on or about October 1, 2004, the ownership of Forum will
change such that an "assignment," as defined in the 1940 Act, will occur;
WHEREAS, such assignment will require that this Agreement be
re-executed in the same form as previously approved; and
WHEREAS, this amended and restated Agreement will take effect
immediately after such change in control occurs (the "Effective Date").
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and Forum hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Trust hereby appoints Forum, and Forum hereby agrees, to act as
distributor of the Shares for the period and on the terms set forth in this
Agreement.
(b) In connection therewith, the Trust has delivered to Forum or will
deliver to Forum as they become available, copies of: (i) the Trust's
Declaration of Trust and Bylaws (collectively, as amended from time to time,
"Organic Documents"): (ii) the Trust's Registration Statement and all amendments
thereto filed with the U.S. Securities and Exchange Commission ("SEC") pursuant
to the Securities Act of 1933, as amended ("Securities Act"), or the 1940 Act
("Registration Statement"): (iii) the current prospectuses and statements of
additional information of each Fund and Class thereof (collectively, as
currently in effect and as amended or supplemented, the "Prospectus"): (iv) each
current plan of distribution or similar document adopted by the Trust under Rule
12b-1 under the 1940 Act ("Plan") and each current shareholder service plan or
similar document adopted by the Trust ("Service Plan"); and (v) all procedures
adopted by the Board of Trustees of the Trust (the "Board") with respect to the
Funds (e.g., repurchase agreement procedures), and shall promptly furnish Forum
with all amendments of or supplements to the foregoing, as requested. The Trust
shall deliver to Forum: (x) a certified copy of the resolution of the Board
appointing Forum and authorizing the execution and delivery of this Agreement;
(y) a copy of all proxy statements and related materials relating to the Funds;
and (z) any other documents, materials or information that Forum shall
reasonably request to enable it to perform its duties pursuant to this
Agreement.
SECTION 2. EXCLUSIVE NATURE OF DUTIES
Forum shall be the exclusive representative of the Trust to act as
distributor of the Funds except that the rights given under this Agreement to
Forum shall not apply to: (i) Shares issued in connection with the merger,
consolidation or reorganization of any other investment company or series or
class thereof with a Fund or Class thereof; (ii) a Fund's acquisition by
purchase or otherwise of all or substantially all of the assets or stock of any
other investment company or series or class thereof; (iii) the reinvestment in
Shares by a Fund's shareholders of dividends or other distributions; or (iv) any
other offering by the Trust of securities to its shareholders (collectively
"exempt transactions"). Such exclusive rights shall not apply to purchases made
directly through the Fund's transfer agent and dividend disbursing agent in a
manner set forth in the currently effective Prospectus of the Fund.
SECTION 3. OFFERING OF SHARES
(a) Forum shall have the right to buy from the Trust the Shares needed
to fill unconditional orders for unsold Shares of the Funds as shall then be
effectively registered under the Securities Act placed with Forum by investors
or selected dealers or selected agents (each as defined in Section 11 hereof)
acting as agent for their customers or on their own behalf. Alternatively, Forum
may act as the Trust's agent, to offer, and to solicit offers to subscribe to,
unsold Shares of the Funds as shall then be effectively registered under the
Securities Act.
2
Forum will promptly forward all orders and subscriptions to the Trust. The price
that Forum shall pay for Shares purchased from the Trust shall be the net asset
value per Share, determined as set forth in Section 3(c) hereof, used in
determining the public offering price on which the orders are based. Shares
purchased by Forum are to be resold by Forum to investors at the public offering
price, as set forth in Section 3(b) hereof, or to selected dealers or selected
agents acting as agent for their customers that have entered into agreements
with Forum pursuant to Section 11 hereof or acting on their own behalf. The
Trust reserves the right to sell Shares directly to investors through
subscriptions received by the Trust, but no such direct sales shall affect the
sales charges due to Forum hereunder.
(b) The public offering price of the Shares of a Fund, i.e., the price
per Share at which Forum or selected dealers or selected agents may sell Shares
to the public or to those persons eligible to invest in Shares as described in
the applicable Prospectus, shall be the public offering price determined in
accordance with the then currently effective Prospectus of the Fund or Class
thereof under the Securities Act relating to such Shares. The public offering
price shall not exceed the net asset value at which Forum, when acting as
principal, is to purchase such Shares, plus, in the case of Shares for which an
initial sales charge is assessed, an initial charge equal to a specified
percentage or percentages of the public offering price of the Shares as set
forth in the current Prospectus relating to the Shares. In the case of Shares
for which an initial sales charge may be assessed, Shares may be sold to certain
classes of persons at reduced sales charges or without any sales charge as from
time to time set forth in the current Prospectus relating to the Shares. The
Trust will advise Forum of the net asset value per Share at each time as the net
asset value per Share shall have been determined by the Trust and at such other
times as Forum may reasonably request.
(c) The net asset value per Share of each Fund or Class thereof shall
be determined by the Trust, or its designated agent, in accordance with and at
the times indicated in the applicable Prospectus on each Fund business day in
accordance with the method set forth in the Prospectus and guidelines
established by the Trust's Board.
(d) The Trust reserves the right to suspend the offering of Shares of a
Fund or of any Class thereof at any time in the absolute discretion of the
Board, and upon notice of such suspension Forum shall cease to offer Shares of
the Funds or Classes thereof specified in the notice.
(e) The Trust, or any agent of the Trust designated in writing to Forum
by the Trust, shall be promptly advised by Forum of all purchase orders for
Shares received by Forum and all subscriptions for Shares obtained by Forum as
agent shall be directed to the Trust for acceptance and shall not be binding
until accepted by the Trust. Any order or subscription may be rejected by the
Trust; provided, however, that the Trust will not arbitrarily or without
reasonable cause refuse to accept or confirm orders or subscriptions for the
purchase of Shares. The Trust or its designated agent will confirm orders and
subscriptions upon their receipt, will make appropriate book entries and, upon
receipt by the Trust or its designated agent of payment thereof, will issue such
Shares. Forum agrees to cause such payment and such instructions to be delivered
promptly to the Trust or its designated agent.
3
SECTION 4. REPURCHASE OR REDEMPTION OF SHARES BY THE TRUST
(a) Any of the outstanding Shares of a Fund or Class thereof may be
tendered for redemption at any time, and the Trust agrees to redeem or
repurchase the Shares so tendered in accordance with its obligations as set
forth in the Organic Documents and the Prospectus relating to the Shares. The
price to be paid to redeem or repurchase the Shares of a Fund of Class thereof
shall be equal to the net asset value calculated in accordance with the
provisions of Section 3(b) hereof less, in the case of Shares for which a
deferred sales charge is assessed, a deferred sales charge equal to a specified
percentage or percentages of the net asset value of those Shares as from time to
time set forth in the Prospectus relating to those Shares and less, in the case
of Shares for which a redemption fee is assessed, a redemption fee equal to the
charges as from time to time set forth in the Prospectus relating to those
Shares. Shares of a Fund or Class thereof for which a deferred sales charge or
redemption fee may be assessed and that have been outstanding for a specified
period of time may be redeemed without payment of a deferred sales charge or
redemption fee as from time to time set forth in the Prospectus relating to
those Shares.
(b) The Trust or its designated agent shall pay (i) the total amount of
the redemption price consisting of the redemption price (after applicable
redemption or other fees) less any applicable deferred sales charge to the
redeeming shareholder or its agent and (ii) except as may be otherwise required
by the Rules of Fair Practice (the "Rules") of the National Association of
Securities Dealers Regulation, Inc. (the "NASD") and any interpretations
thereof, any applicable deferred sales charges to Forum in accordance with
Forum's instructions on or before the fifth business day (or such other earlier
business day as is customary in the investment company industry) subsequent to
the Trust or its agent having received the notice of redemption in proper form.
(c) Redemption of Shares or payment therefor may be suspended at times
when the New York Stock Exchange is closed for any reason other than its
customary weekend or holiday closings, when trading thereon is restricted, when
an emergency exists as a result of which disposal by the Trust of securities
owned by a Fund is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of a Fund's net assets,
or during any other period when the SEC so requires or permits.
SECTION 5. DUTIES AND REPRESENTATIONS OF FORUM
(a) Forum shall use reasonable efforts to sell Shares of the Funds upon
the terms and conditions contained herein and in the then current Prospectus.
Forum shall devote reasonable time and effort to effect sales of Shares but
shall not be obligated to sell any specific number of Shares. The services of
Forum to the Trust hereunder are not to be deemed exclusive, and nothing herein
contained shall prevent Forum from entering into like arrangements with other
investment companies so long as the performance of its obligations hereunder is
not impaired thereby.
4
(b) In selling Shares of the Funds, Forum shall use its best efforts in
all material respects duly to conform with the requirements of all federal and
state laws relating to the sale of the Shares None of Forum, any selected
dealer, any selected agent or any other person is authorized by the Trust to
give any information or to make any representations other than as is contained
in a Fund's Prospectus or any advertising materials or sales literature
specifically approved in writing by the Trust or its agents.
(c) Forum shall adopt and follow procedures for the confirmation of
sales to investors and selected dealers or selected agents, the collection of
amounts payable by investors and selected dealers or selected agents on such
sales, and the cancellation of unsettled transactions, as may be necessary to
comply with the requirements of the NASD.
(d) Forum shall attempt to maintain active sub-distribution agreements,
shareholder servicing agreements and other agreements related to the
distribution or servicing of the Funds with broker-dealers and other financial
intermediaries ("Dealers") who, prior to Forum entering into the Distribution
Agreement, acted in similar capacities for a Fund, and assist Adviser in
obtaining additional agreements with broker-dealers and other financial
intermediaries.
(e) Forum shall maintain membership with the National Securities
Clearing Corporation ("NSCC") with respect to the Funds so as to enable the
Shares to be traded through FundSERV and negotiate and execute appropriate
agreements related thereto with NSCC.
(f) Forum shall pay to Dealers or direct the Funds' transfer agent to
pay to Dealers front-end commissions (if not deducted from the offering price by
a Dealer), other up-front payments with respect to the sale of Shares (for
instance, payments with respect to the sale of Shares that have back-end
commissions), distribution, service payments and other payments as may be
properly disclosed in a Fund's prospectus (as defined in the Distribution
Agreement) (collectively, "Dealer Distribution Payments").
(g) Forum shall track and maintain appropriate information with respect
to payments made by each Fund under Rule 12b-1 under the 1940 Act and other
payments as required to ensure compliance with the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD").
(h) Forum shall maintain appropriate records with respect to Dealer
Distribution Payments, including records with respect to the financing of
up-front payments to Dealers with respect to the sale of Shares that have
back-end commissions and prepare pro-forma financial statements, expense and
profit/loss projections and fee waiver/expense reimbursement projections related
to Dealer Distribution Payments on a periodic basis.
(i) Forum represents and warrants to the Trust that:
(i) It is a limited liability company duly organized and existing and
in good standing under the laws of the State of Delaware;
5
(ii) It is duly qualified to carry on its business in the State of
Maine;
(iii) It is empowered under applicable laws and by its Operating
Agreement to enter into this Agreement and perform its duties under
this Agreement;
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
(v) It has access to the necessary facilities, equipment and personnel
to perform its duties and obligations under this Agreement;
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of Forum, enforceable against Forum
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; and
(vii) It is registered under the 1934 Act with the SEC as a
broker-dealer, it is a member in good standing of the NASD, it will
abide by the rules and regulations of the NASD, and it will notify the
Trust if its membership in the NASD is terminated or suspended.
(j) Notwithstanding anything in this Agreement, including the
Appendices, to the contrary, Forum makes no warranty or representation as to the
number of selected dealers or selected agents with which it has entered into
agreements in accordance with Section 11 hereof, as to the availability of any
Shares to be sold through any selected dealer, selected agent or other
intermediary or as to any other matter not specifically set forth herein.
SECTION 6. DUTIES AND REPRESENTATIONS OF THE TRUST
(a) The Trust shall furnish to Forum copies of all financial statements
and other documents to be delivered to shareholders or investors at least two
Fund business days prior to such delivery and shall furnish Forum copies of all
other financial statements, documents and other papers or information which
Forum may reasonably request for use in connection with the distribution of
Shares. The Trust shall make available to Forum the number of copies of the
Funds' Prospectuses as Forum shall reasonably request.
(b) The Trust shall take, from time to time, subject to the approval of
the Board and any required approval of the shareholders of the Trust, all action
necessary to fix the number of authorized Shares (if such number is not limited)
and to register the Shares under the Securities Act, to the end that there will
be available for sale the number of Shares as reasonably may be expected to be
sold pursuant to this Agreement.
(c) The Trust (and not Forum) shall execute any and all documents and
use its best efforts to take all actions reasonably necessary to register or
qualify Shares for sale under the securities laws of the various states of the
United States and other jurisdictions ("States"). The Trust or its agents (and
not Forum) shall maintain, and pay all costs of obtaining and
6
maintaining, these registrations and qualifications. Any registration or
qualification may be withheld, terminated or withdrawn by the Trust at any time
in its discretion. Forum shall furnish such information and other material
relating to its affairs and activities as may be required by the Trust in
connection with such registration or qualification. The Trust shall inform Forum
from time to time and as requested of the various States in which each class of
Shares is registered and the amounts so registered.
(d) The Trust represents and warrants to Forum that:
(i) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware;
(ii) It is empowered under applicable laws and by its Organic
Documents to enter into and perform this Agreement;
(iii) All proceedings required by the Organic Documents have been taken
to authorize it to enter into and perform its duties under this
Agreement;
(iv) It is an open-end management investment company registered with
the SEC under the 1940 Act;
(v) All Shares, when issued, shall be validly issued, fully paid and
non-assessable;
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Trust, enforceable against
the Trust 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;
(vii) The Registration statement will be effective and will remain
effective with respect to all Shares of the Funds and Classes thereof
being offered for sale;
(viii) The Registration Statement and Prospectuses conform or will
conform, as the case may be, in all material respects with the
requirements of the Securities Act and the rules and regulations
thereunder;
(ix) Neither the Registration Statement nor any Prospectus, when they
shall become effective or be authorized for use, 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 Shares;
(x) It will from time to time file such amendment or amendments to the
Registration Statement and Prospectuses as, in the light of
then-current and then-prospective developments, shall, in the opinion
of its counsel, be necessary in order to have the Registration
Statement and Prospectuses at all times contain all material facts
required to
7
be stated therein or necessary to make any statements therein not
misleading to a purchaser of Shares ("Required Amendments");
(xi) It shall not file any amendment to the Registration Statement or
Prospectuses without giving Forum reasonable advance notice thereof, if
practicable; provided, however, that nothing contained in this
Agreement shall in any way limit the Trust's right to file at any time
such amendments to the Registration Statement or Prospectuses, of
whatever character, as the Trust may deem advisable, such right being
in all respects absolute and unconditional; and
(xii) Any amendment to the Registration Statement or Prospectuses
hereafter filed will, when it becomes effective, conform in all
material respects with the 1940 Act and the rules and regulations
thereunder; and no such amendment, when it becomes effective, will
include an untrue statement of a material fact or will 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.
SECTION 7. STANDARD OF CARE
(a) Forum shall use its best judgment and reasonable efforts in
rendering services to the Trust under this Agreement but shall be under no duty
to take any action except as specifically set forth herein or as may be
specifically agreed to by Forum in writing. Forum shall not be liable to the
Trust or any of the Trust's shareholders for any error of judgment or mistake of
law, for any loss arising out of any investment, or for any action or inaction
of Forum in the absence of bad faith, willful misfeasance or negligence in the
performance of Forum's duties or obligations under this Agreement or by reason
or Forum's reckless disregard of its duties and obligations under this Agreement
(b) Forum Indemnitees (as defined in Section 8) shall not be liable for
any action taken or failure to act in good faith reliance upon:
(i) the reasonable advice of the Trust or of counsel approved by the
Trust, who may be counsel to the Trust or counsel to Forum;
(ii) any oral instruction which it receives and which it reasonably
believes in good faith was transmitted by the person or persons
authorized by the Board to give such oral instruction (Forum shall have
no duty or obligation to make any inquiry or effort of certification of
such oral instruction);
(iii) any written instruction or certified copy of any resolution of
the Board, and Forum may rely upon the genuineness of any such document
or copy thereof reasonably believed in good faith by Forum to have been
validly executed; or
(iv) any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument, report, notice,
consent, order, or other document
8
reasonably believed in good faith by Forum to be genuine and to have
been signed or presented by the Trust or other proper party or parties;
and Forum shall not be under any duty or obligation to inquire into the validity
or invalidity or authority or lack thereof of any statement, oral or written
instruction, resolution, signature, request, letter of transmittal, certificate,
opinion of counsel, instrument, report, notice, consent, order, or any other
document or instrument which Forum reasonably believes in good faith to be
genuine.
(c) Forum shall not be responsible or liable for any failure or delay
in performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdowns, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply. In addition, to the extent
Forum's obligations hereunder are to oversee or monitor the activities of third
parties, Forum shall not be liable for any failure or delay in the performance
of Forum's duties caused, directly or indirectly, by the failure or delay of
such third parties in performing their respective duties or cooperating
reasonably and in a timely manner with Forum.
SECTION 8. INDEMNIFICATION
(a) The Trust will indemnify, defend and hold Forum, its employees,
agents, directors and officers and any person who controls Forum within the
meaning of section 15 of the Securities Act or section 20 of the 1934 Act
("Forum Indemnitees") free and harmless from and against any and all claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses of every nature and
character (including the cost of investigating or defending such claims,
demands, actions, suits or liabilities and any reasonable counsel fees incurred
in connection therewith) which any Forum Indemnitee may incur, under the
Securities Act, or under common law or otherwise, arising out of or based upon
any alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectuses or arising out of or based upon any alleged
omission to state a material fact required to be stated in any one thereof or
necessary to make the statements in any one thereof not misleading, unless such
statement or omission was made in reliance upon, and in conformity with,
information furnished in writing to the Trust in connection with the preparation
of the Registration Statement or exhibits to the Registration Statement by or on
behalf of Forum ("Forum Claims").
After receipt of Forum's notice of termination under Section 13(e), the
Trust shall indemnify and hold each Forum Indemnitee free and harmless from and
against any Forum Claim; provided, that the term Forum Claim for purposes of
this sentence shall mean any Forum Claim related to the matters for which Forum
has requested amendment to the Registration Statement and for which the Trust
has not filed a Required Amendment, regardless of whether any statement in or
omission from the Registration Statement was made in reliance upon, or in
conformity with, information furnished to the Trust by or on behalf of Forum.
9
(b) The Trust may assume the defense of any suit brought to enforce any
Forum Claim and may retain counsel of good standing chosen by the Trust and
approved by Forum, which approval shall not be withheld unreasonably. The Trust
shall advise Forum that it will assume the defense of the suit and retain
counsel within ten (10) days of receipt of the notice of the claim. If the Trust
assumes the defense of any such suit and retains counsel, the defendants shall
bear the fees and expenses of any additional counsel that they retain. If the
Trust does not assume the defense of any such suit, or if Forum does not approve
of counsel chosen by the Trust or has been advised that it may have available
defenses or claims that are not available to or conflict with those available to
the Trust, the Trust will reimburse any Forum Indemnitee named as defendant in
such suit for the reasonable fees and expenses of any counsel that person
retains. A Forum Indemnitee shall not settle or confess any claim without the
prior written consent of the Trust, which consent shall not be unreasonably
withheld or delayed.
(c) Forum will indemnify, defend and hold the Trust and its several
officers and Trustees and any person who controls the Trust within the meaning
of Section 15 of the Securities Act (collectively, the "Trust Indemnitees"),
free and harmless from and against any and all claims, demands, actions, suits,
judgments, liabilities, losses, damages, costs, charges, reasonable counsel fees
and other expenses of every nature and character (including the cost of
investigating or defending such claims, demands, actions, suits or liabilities
and any reasonable counsel fees incurred in connection therewith), but only to
the extent that such claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses
result from, arise out of or are based upon:
(i) any alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or any alleged omission of a
material fact required to be stated or necessary to make the statements
therein not misleading, if such statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust in writing in connection with the preparation of the Registration
Statement or Prospectus by or on behalf of Forum; or
(ii) any act of, or omission by, Forum or its sales representatives
that does not conform to the standard of care set forth in Section 7 of
this Agreement ("Trust Claims").
(d) Forum may assume the defense of any suit brought to enforce any
Trust Claim and may retain counsel of good standing chosen by Forum and approved
by the Trust, which approval shall not be withheld unreasonably. Forum shall
advise the Trust that it will assume the defense of the suit and retain counsel
within ten (10) days of receipt of the notice of the claim. If Forum assumes the
defense of any such suit and retains counsel, the defendants shall bear the fees
and expenses of any additional counsel that they retain. If Forum does not
assume the defense of any such suit, or if Trust does not approve of counsel
chosen by Forum or has been advised that it may have available defenses or
claims that are not available to or conflict with those available to Forum,
Forum will reimburse any Trust Indemnitee named as defendant in such suit for
the reasonable fees and expenses of any counsel that person retains. A Trust
10
Indemnitee shall not settle or confess any claim without the prior written
consent of Forum, which consent shall not be unreasonably withheld or delayed.
(e) The Trust's and Forum's obligations to provide indemnification
under this Section is conditioned upon the Trust or Forum receiving notice of
any action brought against a Forum Indemnitee or Trust Indemnitee, respectively,
by the person against whom such action is brought within twenty (20) days after
the summons or other first legal process is served. Such notice shall refer to
the person or persons against whom the action is brought. The failure to provide
such notice shall not relieve the party entitled to such notice of any liability
that it may have to any Forum Indemnitee or Trust Indemnitee except to the
extent that the ability of the party entitled to such notice to defend such
action has been materially adversely affected by the failure to provide notice.
(f) The provisions of this Section and the parties' 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 any Forum Indemnitee or
Trust Indemnitee and shall survive the sale and redemption of any Shares made
pursuant to subscriptions obtained by Forum. The indemnification provisions of
this Section will inure exclusively to the benefit of each person that may be a
Forum Indemnitee or Trust Indemnitee at any time and their respective successors
and assigns (it being intended that such persons be deemed to be third party
beneficiaries under this Agreement).
(g) Each party agrees promptly to notify the other party of the
commencement of any litigation or proceeding of which it becomes aware arising
out of or in any way connected with the issuance or sale of Shares.
(h) Nothing contained herein shall require the Trust to take any action
contrary to any provision of its Organic Documents or any applicable statute or
regulation or shall require Forum to take any action contrary to any provision
of its Organic Documents or any applicable statute or regulation; provided,
however, that neither the Trust nor Forum may amend their Organic Documents in
any manner that would result in a violation of a representation or warranty made
in this Agreement.
(i) Nothing contained in this section shall be construed to protect
Forum against any liability to the Trust or its security holders to which Forum
would otherwise be subject by reason of its failure to satisfy the standard of
care set forth in Section 7 of this Agreement.
SECTION 9. NOTIFICATION BY THE TRUST
The Trust shall advise Forum immediately: (i) of any request by the SEC
for amendments to the Trust's Registration Statement or Prospectus or for
additional information; (ii) in the event of the issuance by the SEC of any stop
order suspending the effectiveness of the Trust's Registration Statement or any
Prospectus or the initiation of any proceedings for that purpose; (iii) of the
happening of any material event which makes untrue any statement made in the
Trust's then current Registration Statement or Prospectus or which requires the
making of a
11
change in either thereof in order to make the statements therein not misleading;
and (iv) of all action of the SEC with respect to any amendments to the Trust's
Registration Statement or Prospectus which may from time to time be filed with
the Commission under the 1940 Act or the Securities Act.
SECTION 10. COMPENSATION AND EXPENSES
(a) In consideration of Forum's services in connection with the
distribution of Shares of each Fund and Class thereof, Forum shall receive: (i)
any applicable sales charge assessed upon investors in connection with the
purchase of Shares; (ii) from the Trust, any applicable contingent deferred
sales charge ("CDSC") assessed upon investors in connection with the redemption
of Shares; (iii) from the Trust, the distribution and / or service fees with
respect to the Shares of those Classes as designated in Appendix A for which a
Plan is effective (the "Distribution Fee"); and (iv) from the Trust, the
shareholder service fees with respect to the Shares of those Classes as
designated in Appendix A for which a Service Plan is effective (the "Shareholder
Service Fee"). The Distribution Fee and Shareholder Service Fee shall be accrued
daily by each applicable Fund or Class thereof and shall be paid monthly as
promptly as possible after the last day of each calendar month but in any event
on or before the fifth (5th) Fund business day after month-end, at the rate or
in the amounts set forth in Appendix A and, as applicable, the Plan(s).
(b) In order for Forum to perform its duties hereunder, the Trust shall
cause its transfer agent (the "Transfer Agent") (i) to withhold from redemption
proceeds payable to holders of Shares of the Funds and the Classes thereof, all
CDSCs properly payable by the shareholders in accordance with the terms of the
applicable Prospectus and pay such amounts to Forum as promptly as practicable,
(ii) to pay to Forum all initial sales charges (net of dealer reallowances) and,
(iii) to report to Forum any information that may be necessary for Forum to
perform its duties under this Agreement.
(c) Except as specified in Sections 8 and 10(a), Forum shall be
entitled to no compensation or reimbursement of expenses for the services
provided by Forum pursuant to this Agreement. Forum may receive compensation
from ▇▇▇▇▇▇▇▇▇ Global Investors (North America) Inc. ("Adviser") related to its
services hereunder or for additional services all as may be agreed to between
the Adviser and Forum.
(d) The Trust shall be responsible and assumes the obligation for
payment of all the expenses of the Funds, including fees and disbursements of
its counsel and auditors, in connection with the preparation and filing of the
Registration Statement and Prospectuses (including but not limited to the
expense of setting in type the Registration Statement and Prospectuses and
printing sufficient quantities for internal compliance, regulatory purposes and
for distribution to current shareholders).
(e) The Trust shall bear the cost and expenses: (i) of the registration
of the Shares for sale under the Securities Act; (ii) of the registration or
qualification of the Shares for sale under the securities laws of the various
States; (iii) if necessary or advisable in connection therewith, of
12
qualifying the Trust, the Funds or the Classes thereof (but not Forum) as an
issuer or as a broker or dealer, in such States as shall be selected by the
Trust and Forum pursuant to Section 6(c) hereof; and (iv) payable to each State
for continuing registration or qualification therein until the Trust decides to
discontinue registration or qualification pursuant to Section 6(c) hereof. Forum
shall pay all expenses relating to Forum's broker-dealer qualification.
SECTION 11. SELECTED DEALER AND SELECTED AGENT AGREEMENTS
Forum shall have the right to enter into selected dealer agreements
with securities dealers of its choice ("selected dealers") and selected agent
agreements with depository institutions and other financial intermediaries of
its choice ("selected agents") for the sale of Shares and to fix therein the
portion of the sales charge, if any, that may be allocated to the selected
dealers or selected agents; provided, that the Trust shall approve the forms of
agreements with selected dealers or selected agents and shall review the
compensation set forth therein. Shares of each Fund or Class thereof shall be
resold by selected dealers or selected agents only at the public offering
price(s) set forth in the Prospectus relating to the Shares. Within the United
States, Forum shall offer and sell Shares of the Funds only to such selected
dealers as are members in good standing of the NASD.
SECTION 12. CONFIDENTIALITY
Forum agrees to treat all records and other information related to the
Trust as proprietary information of the Trust and, on behalf of itself and its
employees, to keep confidential all such information, except that Forum may:
(a) prepare or assist in the preparation of periodic reports to
shareholders and regulatory bodies such as the SEC;
(b) upon notice to the Trust, but not if the Trust objects, provide
information typically supplied in the investment company industry to companies
that track or report price, performance or other information regarding
investment companies; and
(c) release such other information as approved by the Trust, which
approval shall not be unreasonably withheld and may not be withheld where Forum
is advised by counsel that it may be exposed to civil or criminal contempt
proceedings for failure to release the information (provided, however, that
Forum shall seek the approval of the Trust as promptly as possible so as to
enable the Trust to pursue such legal or other action as it may desire to
prevent the release of such information) or when so requested by the Trust.
Both parties acknowledge that they are required by Regulation S-P (17
CFR 248.1-248.30) to keep nonpublic personal information about their customers
("Shareholder Information") confidential. Both parties further acknowledge that
all information that they receive pursuant to this Agreement with respect to
shareholders of the Trust and their transactions is deemed nonpublic personal
information for the purposes of Regulation S-P.
13
Notwithstanding that fund shareholders may be deemed "customers" of
Forum under Regulation S-P, Forum expressly acknowledges and agrees that the
identity of and all information and records relating to shareholders of the
Trust is the sole property of the Trust. Forum agrees that it shall not use or
disclose Shareholder Information other than to carry out the purposes of
providing services under this Agreement. Forum may, upon the consent of the
Trust (which consent shall not be unreasonably withheld), include its privacy
notice in the fulfillment kits or other scheduled mailings of the Trust.
Forum may disclose Shareholder Information to its affiliates as long as
such affiliates shall be restricted in use and disclosure of the Customer
Information to the same extent as Forum. The Trust may use Shareholder
Information in any manner permitted under its then current privacy policy.
Both parties shall establish data security policies and procedures that
are reasonably designed to ensure the security and confidentiality of Customer
Information, protect against anticipated threats or hazards to the security and
integrity of Customer Information and protect against unauthorized access to or
use of Customer Information that could result in substantial harm or
inconvenience to a customer of either party. For purposes of this paragraph, the
term "affiliate" shall have the meaning set forth in Section 248.3(a) of the
Regulation S-P. The restrictions set forth in this paragraph shall apply during
the term of and after the termination of this Agreement. To the extent any
provisions of this paragraph conflict with other terms of this Agreement, this
paragraph shall control.
SECTION 13. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Fund on
the later of (i) the date first above written or (ii) the date on which the
Trust's Registration Statement relating to Shares of the Fund becomes effective.
Upon effectiveness of this Agreement, it shall supersede all previous agreements
between the parties hereto covering the subject matter hereof insofar as such
Agreement may have been deemed to relate to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund for
a period of one year from its effectiveness and thereafter shall continue in
effect with respect to a Fund until terminated; provided, that continuance is
specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Fund and (ii) by a vote of
a majority of Trustees of the Trust (x) who are not parties to this Agreement or
interested persons of any such party (other than as Trustees of the Trust) and
(y) with respect to each class of a Fund for which there is an effective Plan,
who do not have any direct or indirect financial interest in any such Plan
applicable to the class or in any agreements related to the Plan, cast in person
at a meeting called for the purpose of voting on such approval.
(c) This Agreement may be terminated at any time with respect to a
Fund, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Fund or, with respect to
each class of a Fund for which there is an effective Plan, a majority of
Trustees of the Trust who do not have any direct or indirect financial interest
in any
14
such Plan or in any agreements related to the Plan, on sixty (60) days' written
notice to Forum or (ii) by Forum on sixty (60) days' written notice to the
Trust.
(d) This Agreement shall automatically terminate upon its assignment
and upon the termination of Forum's membership in the NASD.
(e) If the Trust shall not file a Required Amendment within fifteen
days following receipt of a written request from Forum to do so, Forum may, at
its option, terminate this Agreement immediately.
(f) The obligations of Sections 5(d), 6(d), 8, 9 and 10 shall survive
any termination of this Agreement.
SECTION 14. ACTIVITIES OF FORUM
Except to the extent necessary to perform Forum's obligations
hereunder, nothing herein shall be deemed to limit or restrict Forum's right, or
the right of any of Forum's employees, agents, officers or directors who may
also be a trustee, officer or employee of the Trust, or affiliated persons of
the Trust to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
SECTION 15. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the shareholders of each Fund shall not
be liable for any obligations of the Trust or of the Funds under this Agreement,
and Forum agrees that, in asserting any rights or claims under this Agreement,
it shall look only to the assets and property of the Trust or the Fund to which
Forum's rights or claims relate in settlement of such rights or claims, and not
to the Trustees of the Trust or the shareholders of the Funds.
SECTION 16. MISCELLANEOUS
(a) Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement.
(b) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
15
(e) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid. This Agreement shall be construed as if drafted jointly by both Forum
and Trust and no presumptions shall arise favoring any party by virtue of
authorship of any provision of this Agreement.
(g) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(h) Notices, requests, instructions and communications received by the
parties at their respective principal addresses, or at such other address as a
party may have designated in writing, shall be deemed to have been properly
given.
(i) Nothing contained in this Agreement is intended to or shall require
Forum, in any capacity hereunder, to perform any functions or duties on any day
other than a Fund business day. Functions or duties normally scheduled to be
performed on any day which is not a Fund business day shall be performed on, and
as of, the next Fund business day, unless otherwise required by law.
(j) Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Fund are separate and distinct
from the assets and liabilities of each other Fund and that no Fund shall be
liable or shall be charged for any debt, obligation or liability of any other
Fund, whether arising under this Agreement or otherwise.
(k) No affiliated person, employee, agent, officer or director of Forum
shall be liable at law or in equity for Forum's obligations under this
Agreement.
(l) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof and each
party hereto warrants and represents that this Agreement, when executed and
delivered, will constitute a legal, valid and binding obligation of the party,
enforceable against the party 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.
(m) The terms "vote of a majority of the outstanding voting
securities," "interested person," "affiliated person" and "assignment" shall
have the meanings ascribed thereto in the 1940 Act.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
▇▇▇▇▇▇▇▇▇ GLOBAL FUNDS
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President
FORUM FUND SERVICES, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
President
17
▇▇▇▇▇▇▇▇▇ GLOBAL FUNDS
DISTRIBUTION AGREEMENT
APPENDIX A
AS OF MARCH 31, 2004
------------------------------------- ---------------------- ---------------------------- ----------------------------
DISTRIBUTION FEES PAYABLE SHAREHOLDER SERVICE FEES
FUNDS OF THE TRUST CLASSES OF THE TRUST TO FORUM* PAYABLE TO FORUM*
------------------------------------- ---------------------- ---------------------------- ----------------------------
▇▇▇▇▇▇▇▇▇ European Focus Fund A 0.25% None
B 0.75% 0.25%
C 0.75% 0.25%
------------------------------------- ---------------------- ---------------------------- ----------------------------
▇▇▇▇▇▇▇▇▇ Global Technology Fund A 0.25% None
B 0.75% 0.25%
C 0.75% 0.25%
------------------------------------- ---------------------- ---------------------------- ----------------------------
▇▇▇▇▇▇▇▇▇ International A 0.25% None
Opportunities Fund B 0.75% 0.25%
C 0.75% 0.25%
------------------------------------- ---------------------- ---------------------------- ----------------------------
▇▇▇▇▇▇▇▇▇ Income Advantage Fund A 0.25% None
B 0.75% 0.25%
C 0.75% 0.25%
------------------------------------- ---------------------- ---------------------------- ----------------------------
Henderson US Core Growth Fund A 0.25% None
B 0.75% 0.25%
C 0.75% 0.25%
------------------------------------- ---------------------- ---------------------------- ----------------------------
* Fee as a % of the annual average daily net assets of the Fund
A-1