Exhibit 6(i)
MENTOR FUNDS
DISTRIBUTION AGREEMENT
This Distribution Agreement is entered into as of March 31, 1998 by and
between MENTOR FUNDS (the "Trust") and BISYS FUND SERVICES LIMITED PARTNERSHIP
("BISYS").
WHEREAS, the Trust and BISYS are desirous of entering into an agreement
providing for the distribution by BISYS of shares of beneficial interest
("shares") of each of the series of the Trust (each, a "Portfolio");
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the Trust hereby appoints BISYS as a distributor of shares of each of
the Portfolios, and BISYS hereby accepts such appointment, all as set forth
below:
1. Reservation of Right Not to Sell. The Trust reserves the right to
refuse at any time or times to sell any of its shares hereunder for any reason.
2. Payments to BISYS. In connection with the distribution of shares of
a Portfolio, BISYS will be entitled to receive: (a) payments pursuant to any
Distribution Plan from time to time in effect in respect of such Portfolio or
any particular class of shares of such Portfolio, as determined by the Board of
Trustees of the Trust, (b) any contingent deferred sales charges applicable to
the redemption of shares of such Portfolio or of any particular class of shares
of such Portfolio, determined in the manner set forth in the then current
Prospectus and Statement of Additional Information of such Portfolio, and (c)
subject to the provisions of Section 3 below, any front-end sales charges
applicable to the sale of shares of such Portfolio or of any particular class of
shares of such Portfolio, less any applicable dealer discount.
3. Services to be provided by BISYS; Sales of Shares to BISYS and Sales
by BISYS. BISYS will provide general sales and distribution services in respect
of the shares of the Portfolios, including without limitation reviewing
advertising and sales literature and filing such advertising and sales
literature with appropriate regulatory authorities, monitoring the Trust's
continuing compliance with all applicable state securities and Blue Sky laws,
preparing reports to the officers and Trustees of the Trust in respect of the
distribution of the Portfolios' shares, performing internal audit examinations
related to the distribution function (the scope and timing of such examinations
to be as determined from time to time by the officers of the Trust and BISYS),
and providing such other services as are customarily provided by the principal
underwriter and distributor for an open-end investment company, subject in each
case
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to such instructions or guidelines as may be specified by the Trustees or
officers of the Trust from time to time.
BISYS will have the right, as principal, to purchase shares from a
Portfolio at their net asset value and to sell such shares to investment dealers
or the public against orders therefor (a) at the public offering price
(calculated as described below) less a discount determined by BISYS, which
discount shall not exceed the amount of the maximum sales charge permitted under
applicable law, or (b) at net asset value, in each case as provided in the
current Prospectus and Statement of Additional Information relating to such
shares. Upon receipt of an order in proper form (in accordance with the then
current prospectus) to purchase shares from an investment dealer with whom BISYS
has a sales contract, BISYS will promptly fill such order. The public offering
price of a class of shares of a Portfolio shall be the net asset value of such
shares then in effect, plus any applicable front-end sales charge determined in
the manner set forth in the then current Prospectus and Statement of Additional
Information relating to such shares or as permitted by the Investment Company
Act of 1940, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder. The net asset value of the shares
shall be determined in the manner provided in the Agreement and Declaration of
Trust of the Trust as then amended and when determined shall be applicable to
transactions as provided for in the then current Prospectus and Statement of
Additional Information relating to such shares.
BISYS will also have the right, as principal, to sell shares otherwise
subject to a front-end sales charge or a contingent deferred sales charge not
subject to such a sales charge to such persons as may be approved by the Board
of Trustees of the Trust, all such sales to comply with the provisions of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Upon receipt of registration instructions in proper form and payment
for shares, BISYS will transmit such instructions to the Trust or its agent for
registration of the shares purchased.
On every sale the Trust shall receive the applicable net asset value of
the shares. The net asset value of the shares of any class shall be determined
in the manner provided in the Agreement and Declaration of Trust of the Trust as
then amended and when determined shall be applicable to transactions as provided
for in the then current Prospectus and Statement of Additional Information
relating to such shares.
4. Sales of Shares by the Trust. The Trust reserves the right to issue
shares at any time directly to its shareholders as a stock dividend or stock
split and to sell shares to its shareholders or to other persons at not less
than net asset value.
5. Repurchase of Shares. BISYS will act as agent for the Trust in
connection with the repurchase of shares of the various Portfolios by the Trust
upon the terms and conditions
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set forth in a then current Prospectus and Statement of Additional Information
relating to such shares.
6. Basis of Purchases and Sales of Shares. BISYS will use its best
efforts to place shares sold by it on an investment basis. BISYS does not agree
to sell any specific number of shares. Shares will be sold by BISYS only against
orders therefor. BISYS will not purchase shares from anyone other than the Trust
except in accordance with Section 5, and will not take "long" or "short"
positions in shares contrary to the Agreement and Declaration of Trust of the
Trust.
7. Rules of NASD, etc. BISYS will conform to the Rules of the National
Association of Securities Dealers, Inc. and applicable securities laws of any
jurisdiction in which it sells, directly or indirectly, any shares. BISYS also
agrees to furnish to the Trust sufficient copies of any agreements or plans it
intends to use in connection with any sales of shares in adequate time for the
Trust to file and clear them with the proper authorities before they are put in
use, and not to use them until so filed and cleared.
8. BISYS Independent Contractor. BISYS shall be an independent
contractor, and neither BISYS nor any of its officers or employees, as such, is
or shall be an employee of the Trust. BISYS is responsible for its own conduct
and the employment, control, and conduct of its agents and employees and for
injury to such agents or employees or to others through its agents or employees.
BISYS assumes full responsibility for its agents and employees under applicable
statutes and agrees to pay all employer taxes thereunder.
BISYS will maintain at its own expense insurance against public
liability in such an amount as the Board of Trustees of the Trust may from time
to time reasonably request.
9. Expenses. BISYS will pay all of its own expenses in performing its
obligations hereunder.
10. Indemnification. (a) The Trust agrees to indemnify, defend, and
hold harmless BISYS, its several partners and employees, and any person who
controls BISYS within the meaning of Section 15 of the Securities Act of 1933,
as amended (the "Securities Act"), from and against any and all losses, claims,
demands, liabilities, and reasonable expenses (including the costs of
investigating or defending such losses, claims, demands, or liabilities and
reasonable counsel fees incurred in connection therewith) which BISYS, its
partners and employees, or any such controlling person may incur or to which
they or any of them may become subject under the Securities Act or under common
law or otherwise, arising out of or based upon any untrue statement, or alleged
untrue statement, of a material fact contained in any registration statement or
any prospectus of the Trust for the sale of shares of the Trust or arising out
of or based upon any omission or alleged omission to state a material fact
required to be stated in any such registration statement or prospectus or
necessary to make the statements in either thereof not misleading; provided,
however, that (i) the Trust shall be under
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no obligation to indemnify, defend, or hold harmless BISYS, its partners or
employees, or any such controlling person from or against any such losses,
claims, demands, liabilities, or expenses directly or indirectly arising out of
or based on any such untrue statement or alleged untrue statement or any such
omission or alleged omission made in reliance upon and in conformity with
information furnished to the Trust or its agents by BISYS or persons acting for
it or on its behalf, (ii) the Trust shall not be liable to BISYS under this
paragraph if any such losses, claims, demands, liabilities, or expenses result
from the fact that BISYS sold securities of the Trust to any person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the then current prospectus of the Trust relating to such
securities; and (iii) the Trust shall not be liable to BISYS under this
paragraph in respect of any liability of BISYS or any other person to the Trust
or its shareholders by reason of the willful misconduct, bad faith, or gross
negligence of BISYS or any such other person or the reckless disregard of BISYS
of its obligations under this Agreement.
(b) BISYS agrees to indemnify, defend, and hold harmless the Trust, its
several Trustees and employees, and any person who controls the Trust within the
meaning of Section 15 of the Securities Act, from and against any and all
losses, claims, demands, liabilities, and reasonable expenses (including the
costs of investigating or defending such losses, claims, demands, or liabilities
and reasonable counsel fees incurred in connection therewith) which the Trust,
its Trustees and employees, or any such controlling person may incur or to which
they or any of them may become subject under the Securities Act or under common
law or otherwise, (i) arising out of or based upon any untrue statement, or
alleged untrue statement, of a material fact contained in any registration
statement or any prospectus for the sale of shares of the Trust or arising out
of or based upon any omission or alleged omission to state a material fact
required to be stated in any such registration statement or prospectus or
necessary to make the statements in either thereof not misleading if any such
untrue statement or alleged untrue statement or any such omission or alleged
omission is made by the Trust in reliance upon and in conformity with
information furnished to the Trust or its agents by BISYS or persons acting for
it or on its behalf or (ii) arising out of or based upon any breach or alleged
breach by BISYS of any provision of this Agreement or the gross negligence of
BISYS or the reckless disregard by BISYS of its duties.
11. Assignment Terminates this Agreement; Amendments of this Agreement.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment. This Agreement may be amended only if
such amendment be approved either by action of the Board of Trustees of the
Trust or at a meeting of the shareholders of the affected Portfolio or
Portfolios by the affirmative vote of a majority of the outstanding shares of
such Portfolio or Portfolios, and by a majority of the Trustees of the Trust who
are not interested persons of the Trust or of BISYS by vote cast in person at a
meeting called for the purpose of voting on such approval.
12. Effective Period and Termination of this Agreement. This Agreement
shall take effect upon the date first above written and shall remain in full
force and effect continuously
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(unless terminated automatically as set forth in Section 11) until terminated in
respect of any Portfolio or Portfolios:
(a) Either by the Trust or BISYS by not more than sixty (60)
days nor less than ten (10) days written notice delivered or mailed by
registered mail, postage prepaid, to the other party; or
(b) If the continuance of this Agreement after the date two
years from the date of this Agreement is not specifically approved at
least annually by the Board of Trustees of the Trust or the
shareholders of the affected Portfolio or Portfolios by the affirmative
vote of a majority of the outstanding shares of the affected Portfolio
or Portfolios, and by a majority of the Trustees of the Trust who are
not interested persons of the Trust or of BISYS by vote cast in person
at a meeting called for the purpose of voting on such approval.
Action by the Trust or any Portfolio under (a) above may be taken
either (i) by vote of the Board of Trustees or (ii) by the affirmative vote of a
majority of the outstanding shares of the Trust or the affected Portfolio or
Portfolios. The requirement under (b) above that continuance of this Agreement
be "specifically approved at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and the rules
and regulations thereunder.
Termination of this Agreement pursuant to this Section 12 shall be
without the payment of any penalty.
13. Certain Definitions. For purposes of this Agreement, the
"affirmative vote of a majority of the outstanding shares" of the Trust or a
Portfolio means the affirmative vote, at a duly called and held meeting of
shareholders of the Trust or the Portfolio, as the case may be, (a) of the
holders of 67% or more of the shares of the Trust or the Portfolio present (in
person or by proxy) and entitled to vote at such meeting, if the holders of more
than 50% of the outstanding shares of the Trust or the Portfolio entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Trust or the Portfolio entitled
to vote at such meeting, whichever is less.
For the purposes of the Agreement, the terms "interested person" and
"assignment" shall have the meanings defined in the Investment Company Act of
1940, as amended, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of the
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Trustees, officers, or shareholders individually but are binding only upon the
assets and property of the Trust.
IN WITNESS WHEREOF, each of MENTOR FUNDS and BISYS FUND SERVICES
LIMITED PARTNERSHIP has caused this Distribution Agreement to be signed in
duplicate in its behalf, as of the day and year first above written.
MENTOR FUNDS
By________________________________
BISYS FUND SERVICES
LIMITED PARTNERSHIP
By________________________________
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