Exhibit e(5)
DISTRIBUTION AGREEMENT
BETWEEN
BRAZOS MUTUAL FUNDS
AND
SUNAMERICA CAPITAL SERVICES, INC.
This DISTRIBUTION AGREEMENT is dated as of February 23, 2001 by and
between BRAZOS MUTUAL FUNDS, a Delaware business trust (the "Trust") and
SUNAMERICA CAPITAL SERVICES, INC., a Delaware corporation ("the Distributor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial
interest, par value $.001 per share (the "Shares"), in separately designated
series representing separate funds with their own investment objectives,
policies and restrictions (the "Funds") and has registered the Shares of the
Funds under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a registration statement on Form N-1A (the "Registration
Statement"), including a prospectus (the "Prospectus") and a statement of
additional information (the "Statement of Additional Information"); and
WHEREAS, the Trust has adopted Plans of Distribution pursuant to Rule
12b-1 under the Investment Company Act on behalf of each Fund (the "Distribution
Plans") and may enter into related agreements providing for the distribution of
the Shares of the Funds; and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
WHEREAS, the Trust wishes to engage the services of the Distributor as
distributor of the Shares of the Funds and the Distributor is willing to serve
in that capacity;
NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:
1. EXCLUSIVE DISTRIBUTOR. The Funds hereby agree that the Distributor
shall and for the period of this Agreement be exclusive agent for distribution
within the United States and its territories, and the Distributor agrees to use
its best efforts during such period to effect such distribution of the Shares;
PROVIDED, HOWEVER, that nothing herein shall prevent a Fund, if it so elects,
from selling or otherwise distributing its Shares directly to any persons other
than dealers. In connection therewith, it is contemplated that the Distributor
will enter into agreements
with selected securities dealers. The Funds understand that the Distributor also
acts as agent for distribution of shares of capital stock or beneficial
interest, as the case may be, of other open-end investment companies which have
entered into management and advisory agreements with affiliated companies of the
Funds' current investment adviser.
2. SALE OF THE SHARES. The Distributor is authorized as agent for the
Funds and not as principal, to sell the Shares to other purchasers on such terms
as may be provided in the then current Prospectus of the Funds; PROVIDED,
HOWEVER, that no sales shall be confirmed by the Distributor at any time when,
according to advice received by the Distributor from a Fund, the officers of the
Trust have any reason sufficient to them to temporarily or permanently suspend
or discontinue the sale and issuance of such Fund's Shares. Each sale shall be
effected by the Distributor only at the applicable price, plus the applicable
sales charge, if any, determined by a Fund in the manner prescribed in its then
current Prospectus. The Distributor shall, insofar as they concern it, comply
with all applicable laws, rules and regulations including, without limiting the
generality of the foregoing, all rules or regulations made or adopted pursuant
to Section 22 of the Act by the Securities and Exchange Commission or any
securities association registered under the Exchange Act.
The Funds agree, as long as the Shares may legally be issued,
to fill all orders confirmed by the Distributor in accordance with the
provisions of this Agreement.
3. EXPENSES; COMPENSATION. The Distributor agrees promptly to pay or
reimburse the Funds for all expenses (except expenses incurred by the Funds in
connection with the preparation, printing and distribution of any prospectus or
report or other communication to shareholders, to the extent that such expenses
are incurred to effect compliance with the Federal or state laws or to enable
such distribution to shareholders) (a) of printing and distributing copies of
any prospectus and of preparing, printing and distributing any other material
used by the Distributor in connection with offering the Shares for sale, and (b)
of advertising in connection with such offering. The Funds agree to pay all
expenses in connection with the registration of the Shares under the Securities
Act, all fees and related expenses which may be incurred in connection with the
qualification of the Shares for sale in such states (as well as the District of
Columbia, Puerto Rico and other territories) as the Distributor may designate,
and all expenses in connection with maintaining facilities for the issue and
transfer of the Shares, of supplying information, prices and other data to be
furnished by it hereunder and through its agents of all data processing and
related services related to the share distribution activity contemplated hereby.
As compensation for its services hereunder, the Funds agree to pay
to the Distributor all amounts received as sales charges as described in the
Funds' most current Prospectus. Out of such sales charges, the Distributor may
allow such concessions or reallowances to dealers as it may from time to time
determine.
The Trust agrees to execute such documents and to furnish such
information as may be reasonably necessary, in the discretion of the Board of
Trustees ("Trustees") of the Trust, in connection with the qualification of the
Shares for sale in such states (as well as the District of Columbia, Puerto Rico
and other territories) as the Distributor may designate. The Distributor also
agrees to pay all fees and related expenses connected with its own qualification
as a broker
- 2 -
or dealer under Federal or state laws and, except as otherwise specifically
provided in this Agreement or agreed to by the Trust, all other expenses
incurred by the Distributor in connection with the sale of the Shares as
contemplated in this Agreement (including the expenses of qualifying the Trust
as a dealer or broker under the laws of such states as may be designated by the
Distributor, if deemed necessary or advisable by the Trust).
4. PROSPECTUS AND OTHER INFORMATION. The Trust represents and warrants
to and agrees with the Distributor that:
(a) The Registration Statement, including the Prospectus and
Statement of Additional Information, relating to the Shares has been filed under
both the Act and the Securities Act and has become effective.
(b) At all times during the term of this Agreement, except when the
officers of the Trust have suspended or discontinued the sale and issuance of
the Shares of a Fund as contemplated by Section 2 hereof, the Registration
Statement, Prospectus and Statement of Additional Information will conform in
all material respects to the requirements of the Act and the rules and
regulations of the Securities and Exchange Commission, and none of such
documents will include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not apply to
any statements or omissions in any of such documents based upon written
information furnished to the Trust by the Distributor specifically for use
therein.
(c) The Trust agrees to prepare and furnish to the Distributor from
time to time, a copy of the Prospectus, and authorizes the Distributor to use
such Prospectus, in the form furnished to the Distributor from time to time, in
connection with the sale of the Shares. The Trust also agrees to furnish the
Distributor from time to time, for use in connection with the sale of such
Shares, such information (including the Statement of Additional Information)
with respect to the Funds and the Shares as the Distributor may reasonably
request.
5. INDEMNIFICATION.
(a) The Trust will indemnify and hold harmless the Distributor and
each person, if any, who controls the Distributor within the meaning of the Act
against any losses, claims, damages or liabilities to which the Distributor or
such controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of material fact contained in the Registration Statement, Prospectus or
Statement of Additional Information or any other written sales material prepared
by the Trust or the Funds which is utilized by the Distributor in connection
with the sale of Shares of the Fund or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or (in the case of the Registration Statement, Prospectus and
Statement of Additional Information) necessary to make the statement therein not
misleading or (in the case of such other sales material) necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made; and will reimburse the Distributor and each such controlling
person for any legal or other expenses reasonably incurred by the Distributor or
such
- 3 -
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Trust or the
Funds will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
Registration Statement, Prospectus or Statement of Additional Information in
conformity with written information furnished to the Trust by the Distributor
specifically for use therein; and PROVIDED, FURTHER, that nothing herein shall
be so construed as to protect the Distributor against any liability to the Trust
or the Funds, or the security holders of the Funds to which the Distributor
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence, in the performance of its duties, or by reason of the reckless
disregard by the Distributor of its obligations and duties under this Agreement.
This indemnity provision will be in addition to any liability which the Trust
may otherwise have.
(b) The Distributor will indemnify and hold harmless the Trust,
each of its Trustees and officers and each person, if any, who controls the
Trust within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Trust or any such Trustee, officer or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, Prospectus or Statement of
Additional Information or any sales material not prepared by the Trust or the
Funds which is utilized in connection with the sale of the Shares or arise out
of or are based upon the omissions or the alleged omission to state therein a
material fact required to be stated therein or (in the case of the Registration
Statement, Prospectus and Statement of Additional Information) necessary to make
the statements therein not misleading or (in the case of such other sales
material) necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, in the case of the Registration
Statement, Prospectus and Statement of Additional Information to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in conformity with written information
furnished to the Trust by the Distributor specifically for use therein; and the
Distributor will reimburse any legal or other expenses reasonably incurred by
the Trust or any such Trustee, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity provision will be in addition to any liability which the
Distributor may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
liability which it may have to any indemnified party otherwise than under this
Section. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
section for any legal or other expenses subsequently incurred by
- 4 -
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
6. TERM OF AGREEMENT. This Agreement shall continue in full force and
effect for two years from the date hereof, and shall continue in full force and
effect from year to year thereafter if such continuance is approved in the
manner required by the Act, and the Distributor has not notified the Trust in
writing at least 60 days prior to the anniversary date of the previous
continuance that it does not desire such continuance. This Agreement may be
terminated at any time, without payment of penalty by the Trust on 60 days'
written notice to the Distributor by vote of the Trustees of the Trust or by a
vote of a majority of the outstanding voting securities of the Trust (as defined
by the Act.) This Agreement shall automatically terminate in the event of its
assignment (as defined by the Act).
7. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require or to
impose any duty upon either of the parties to do anything in violation of any
applicable laws or regulations.
IN WITNESS WHEREOF, the Trust and the Distributor have caused this
Agreement to be executed by their duly authorized officers as of the date above
written.
BRAZOS MUTUAL FUNDS
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President
SUNAMERICA CAPITAL SERVICES, INC.
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Director and President
- 5 -