EXHIBIT (E)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 26th day of January,
2006, by and between XXXXXXXX XXXXX FUNDS, INC., a Wisconsin corporation (the
"Corporation") and QUASAR DISTRIBUTORS, LLC, a Delaware limited liability
company (the "Distributor"). XXXXXXXX INVESTMENT MANAGEMENT LLC, a Delaware
limited liability company and the investment advisor to the Corporation (the
"Advisor"), is a party hereto with respect to Sections 4(5); 5; 11(B) and 17 and
Exhibit B only.
WHEREAS, the Corporation 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 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 National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Corporation desires to retain the Distributor as principal
underwriter in connection with the offer and sale of the Shares of each series
of the Corporation listed on Exhibit A hereto (as amended from time to time)
(each a "Fund" and collectively, the "Funds");
WHEREAS, this Agreement has been approved by a vote of the Corporation's
board of directors ("Board of Directors" or the "Board"), including its
disinterested directors voting separately, in conformity with Section 15(c) of
the 1940 Act; and
WHEREAS, the Distributor is willing to act as principal underwriter for
the Corporation 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 Quasar as Distributor
A. The Corporation hereby appoints the Distributor as its agent for the
sale and distribution of Shares of the Funds in jurisdictions
wherein the Shares may be legally offered for sale, on the terms and
conditions set forth in this Agreement, and the Distributor hereby
accepts such appointment and agrees to perform the services and
duties set forth in this Agreement. The services and duties of the
Distributor shall be confined to those matters expressly set forth
herein, and no implied duties are assumed by or may be asserted
against the Distributor hereunder.
2. Services and Duties of the Distributor
A. The Distributor agrees to sell Shares on a best efforts basis as
agent for the Corporation 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 the current
prospectus, including the statement of additional information, as
both may be amended or supplemented, relating to the Funds and
included in the currently effective registration statement (the
"Registration Statement") of the Corporation filed under the
Securities Act of 1933, as amended (the "1933 Act") and the 1940
Act. The Corporation shall in all cases receive the net asset value
per Share on all sales. If a sales charge is in effect, the
Distributor shall remit the sales charge (or portion thereof) to
broker-dealers who have sold Shares, as described in Section 2(G),
below. In no event shall the Distributor be entitled to all or any
portion of such sales charge.
B. During the continuous public offering of Shares, the Distributor
will hold itself available to receive orders, satisfactory to the
Distributor, for the purchase of Shares and will accept such orders
on behalf of the Corporation. Such purchase orders shall be deemed
effective at the time and in the manner set forth in the Prospectus.
C. The Distributor, with the operational assistance of the
Corporation's transfer agent, shall make Shares available for sale
and redemption through the National Securities Clearing
Corporation's Fund/SERV System.
D. The Distributor acknowledges and agrees that it is not authorized to
provide any information or make any representations other than as
contained in the Prospectus and any sales literature specifically
approved by the Corporation.
E. The Distributor agrees to cooperate with the Corporation or its
agent in the development of all proposed advertisements and sales
literature relating to the Funds. The Distributor agrees to review
all proposed advertisements and sales literature for compliance with
applicable laws and regulations, and shall file with appropriate
regulators those advertisements and sales literature it believes are
in compliance with such laws and regulations. The Distributor agrees
to furnish to the Corporation any comments provided by regulators
with respect to such materials and to use its best efforts to obtain
the approval of the regulators to such materials.
F. The Distributor, at its sole discretion, may repurchase Shares
offered for sale by shareholders of the Funds. Repurchase of Shares
by the Distributor shall be at the price determined in accordance
with, and in the manner set forth in, the Prospectus. At the end of
each business day, the Distributor shall notify the Corporation and
its transfer agent, by any appropriate means, of the orders for
repurchase of Shares received by the Distributor since the last
report, the amount to be paid for such Shares and the identity of
the shareholders offering Shares for repurchase. The Corporation
reserves the right to suspend such repurchase right upon written
notice to the Distributor. The Distributor further agrees to act as
agent for the Corporation to receive and transmit promptly to the
Corporation's transfer agent, shareholder requests for redemption of
Shares.
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G. The Distributor may, in its discretion, enter into agreements with
such qualified broker-dealers as it may select, in order that such
broker-dealers also may sell Shares of the Funds. The form of any
dealer agreement shall be approved by the Corporation. To the extent
there is a sales charge in effect, the Distributor shall pay the
applicable sales charge (or portion thereof), or allow a discount,
to the selling broker-dealer, as described in the Prospectus. The
Distributor shall include in the forms of the agreement with selling
broker-dealers a provision for the forfeiture by them of their 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.
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 any 12b-1 payments received by the Distributor.
J. The Distributor agrees to advise the Corporation promptly in writing
of the initiation of any proceedings against it by the Securities
and Exchange Commission (the "SEC") or its staff, the NASD or any
state regulatory authority.
K. The Distributor shall monitor amounts paid under Rule 12b-1 plans
and pursuant to sales loads to ensure compliance with applicable
NASD rules.
3. Representations and Covenants of the Corporation
A. The Corporation hereby represents and warrants to the Distributor,
which representations and warranties shall be deemed to be
continuing throughout the term of this Agreement, that:
(1) 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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(2) This Agreement has been duly authorized, executed and
delivered by the Corporation in accordance with all requisite
action and constitutes a valid and legally binding obligation
of the Corporation, 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;
(3) 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, bylaws or any contract
binding it or affecting its property which would prohibit its
execution or performance of this Agreement;
(4) All Shares to be sold by it, including those offered under
this Agreement, are validly authorized and, when issued in
accordance with the description in the Prospectus, will be
fully paid and nonassessable;
(5) The Registration Statement, and Prospectus 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
(6) The Registration Statement (at the time of its effectiveness)
and any advertisements and sales literature prepared by the
Corporation or its agent (excluding statements relating to the
Distributor and the services it provides that are based upon
written information furnished by the Distributor expressly for
inclusion therein) 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.
B. The Corporation, or its agent, shall take or cause to be taken, all
necessary action to register Shares of the Funds under the 1933 Act,
qualify such shares for sale in such states as the Corporation and
the Distributor shall approve, and maintain an effective
Registration Statement for such Shares in order to permit the sale
of Shares as herein contemplated. The Corporation 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 Corporation agrees to advise the Distributor promptly in
writing:
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(1) of any material correspondence or other communication by the
SEC or its staff relating to the Funds, including requests by
the SEC for amendments to the Registration Statement or
Prospectus;
(2) 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;
(3) 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;
(4) 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; and
(5) 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 in the event that it determines to
suspend the redemption of Shares at any time as permitted by
the 1940 Act or the rules of the SEC, including any and all
applicable interpretations of such by the staff of the SEC.
D. The Corporation shall notify the Distributor in writing of the
states in which the Shares may be sold and shall notify the
Distributor in writing of any changes to such information.
E. The Corporation agrees to file from time to time such amendments to
its Registration Statement and Prospectus as may be necessary in
order that its Registration Statement and 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 Corporation shall fully cooperate in the efforts of the
Distributor to sell and arrange for the sale of Shares and shall
make available to the Distributor a statement of each computation of
net asset value. In addition, the Corporation 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 Corporation by its independent public
accountants and such reasonable number of copies of the Prospectus
and annual and interim reports to shareholders as the Distributor
may request. The Corporation shall forward a copy of any SEC
filings, including the Registration Statement, to the Distributor
within one business day of any such filings. The Corporation
represents that it will not use or authorize the use of any
advertising or sales material unless and until such materials have
been approved and authorized for use by the Distributor. Nothing in
this Agreement shall require the sharing or provision of materials
protected by privilege or limitation of disclosure, including any
applicable attorney-client privilege or trade secret materials.
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G. The Corporation has reviewed and is familiar with the provisions of
NASD Rule 2830(k) prohibiting directed brokerage. In addition, the
Corporation agrees not to enter into any agreement (whether orally
or in writing) under which the Corporation directs or is expected to
direct its brokerage transactions (or any commission, markup or
other payment from such transactions) to a broker or dealer for the
promotion or sale of Fund Shares or the shares of any other
investment company. In the event the Corporation fails to comply
with the provisions of NASD Rule 2830(k), the Corporation shall
promptly notify the Distributor.
4. Additional Representations and Covenants of the Distributor
The Distributor hereby represents, warrants and covenants to the
Corporation, which representations, warranties and covenants shall be deemed to
be continuing throughout the term of this Agreement, that:
(1) 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;
(2) This Agreement has been duly authorized, executed and
delivered by the Distributor in accordance with all requisite
action and constitutes 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;
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and in material conformity with its Articles of
Organization and its By-Laws as may be amended from time to
time, 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, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement;
(4) It is registered as a broker-dealer under the 1934 Act and is
a member in good standing of the NASD;
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(5) It: (i) has adopted an anti-money laundering compliance
program ("AML Program") that satisfies the requirements of all
applicable laws and regulations; (ii) undertakes to carry out
its AML Program to the best of its ability; (iii) will
promptly notify the Corporation and the Advisor if an
inspection by the appropriate regulatory authorities of its
AML Program identifies any material deficiency; and (vi) will
promptly remedy any material deficiency of which it learns;
and
(6) In connection with all matters relating to this Agreement, it
will comply with the requirements of the 1933 Act, the 1934
Act, the 1940 Act, the regulations of the NASD and all other
applicable federal or state laws and regulations.
5. Compensation
The Distributor shall be compensated for providing the services set forth
in this Agreement in accordance with the fee schedule set forth on Exhibit B
hereto (as amended from time to time). The Distributor shall also be compensated
for such out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by the
Distributor in performing its duties hereunder. The Corporation shall pay all
such fees and reimbursable expenses within 30 calendar days following receipt of
the billing notice, except for any fee or expense subject to a good faith
dispute. The Corporation shall notify the Distributor in writing within 30
calendar days following receipt of each invoice if the Corporation is disputing
any amounts in good faith. The Corporation shall pay such disputed amounts
within 10 calendar days of the day on which the parties agree to the amount to
be paid. With the exception of any fee or expense the Corporation is disputing
in good faith as set forth above, unpaid invoices shall accrue a finance charge
of 1 1/2% per month after the due date. Notwithstanding anything to the
contrary, amounts owed by the Corporation to the Distributor shall only be paid
out of the assets and property of the particular Fund involved. Such fees and
expenses shall be paid to Distributor by the Corporation from Rule 12b-1 fees
payable by the appropriate Fund or, if the Fund does not have a Rule 12b-1 plan,
or if Rule 12b-1 fees are not sufficient to pay such fees and expenses, or if
the Rule 12b-1 plan is discontinued, or if the Advisor otherwise determines that
Rule 12b-1 fees shall not, in whole or in part, be used to pay Distributor, the
Advisor shall be responsible for the payment of the amount of such fees and
expenses not covered by Rule 12b-1 payments.
6. Expenses
A. The Corporation shall bear all costs and expenses in connection with
the registration of its Shares with the SEC and its related
compliance with state securities laws, as well as all costs and
expenses in connection with the offering of the Shares and
communications with shareholders, 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, 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; and (iv) fees required in connection with the offer
and sale of Shares in such jurisdictions as shall be selected by the
Corporation pursuant to Section 3(D) hereof.
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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.
7. Indemnification
A. The Corporation shall indemnify, defend and hold the Distributor and
each of its present or former managers, 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 claims, demands, losses, expenses and
liabilities (including reasonable attorneys' fees) (collectively,
"Losses") that the Distributor Indemnitees may sustain or incur or
that may be asserted against a Distributor Indemnitee by any person
(i) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or any Prospectus, as from time to time amended or
supplemented, or in any annual or interim report to shareholders, or
in any advertisements or sales literature prepared by the
Corporation or its agent, or (ii) arising out of or based upon any
omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (iii) based upon the Corporation's
refusal or failure to comply with the terms of this Agreement or
from its bad faith, negligence, or willful misconduct in the
performance of its duties under this Agreement; provided, however,
that the Corporation's obligation to indemnify 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, Prospectus,
annual or interim report, or any advertisement or sales literature
in reliance upon and in conformity with written information relating
to the Distributor and furnished to the Corporation or its counsel
by the Distributor for the purpose of, and used in, the preparation
thereof. The Corporation's agreement to indemnify the Distributor
Indemnitees is expressly conditioned upon the Corporation being
notified of such action or claim of loss brought against the
Distributor Indemnitees 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 Distributor Indemnitees,
unless the failure to give notice does not prejudice the
Corporation; provided, that the failure so to notify the Corporation
of any such action shall not relieve the Corporation from any
liability which the Corporation 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 Corporation's indemnity agreement contained in
this Section 7(A).
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B. The Corporation 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 Corporation
elects to assume the defense, such defense shall be conducted by
counsel chosen by the Corporation and approved by the Distributor,
which approval shall not be unreasonably withheld. In the event the
Corporation elects to assume the defense of any such suit and retain
such counsel, the Distributor Indemnitees in such suit shall bear
the fees and expenses of any additional counsel retained by them. If
the Corporation 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 Corporation,
or if under prevailing law or legal codes of ethics, the same
counsel cannot effectively represent the interests of both the
Corporation and the Distributor Indemnitees, the Corporation will
reimburse the Distributor Indemnitees for the reasonable fees and
expenses of any counsel retained by them. The Corporation's
indemnification agreement contained in Sections 7(A) and 7(B) herein
shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Distributor
Indemnitees and shall survive the delivery of any Shares and the
termination of this Agreement. This agreement of indemnity will
inure exclusively to the benefit of the Distributor Indemnitees and
their successors. The Corporation agrees promptly to notify the
Distributor of the commencement of any litigation or proceedings
against the Corporation or any of its officers in connection with
the offer and sale of any of the Shares.
C. The Corporation shall advance attorneys' fees and other expenses
incurred by any 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.
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D. The Distributor shall indemnify, defend and hold the Corporation and
each of its present or former directors, officers, employees,
representatives and any person who controls or previously controlled
the Corporation within the meaning of Section 15 of the 1933 Act
(collectively, the "Corporation Indemnitees"), free and harmless
from and against any and all Losses that the Corporation Indemnitees
may sustain or incur or that may be asserted against a Corporation
Indemnitee by any person (i) arising out of or based upon any untrue
or alleged untrue statement of a material fact contained in the
Registration Statement or any Prospectus, as from time to time
amended or supplemented, or in any annual or interim report to
shareholders, or in any advertisements or sales literature prepared
by the Distributor, or (ii) arising out of or based upon any
omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statement not
misleading, or (iii) based upon the Distributor's refusal or failure
to comply with the terms of this Agreement or applicable law or from
its bad faith, negligence, or willful misconduct in the performance
of its duties under this Agreement; provided, however, that with
respect to clauses (i) and (ii), above, the Distributor's obligation
to indemnify the Corporation Indemnitees shall only be deemed to
cover Losses arising out of any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, Prospectus, annual or interim report, or any
advertisement or sales literature in reliance upon and in conformity
with written information relating to the Distributor and furnished
to the Corporation or its counsel by the Distributor for the purpose
of, and used in, the preparation thereof. The Distributor's
agreement to indemnify the Corporation Indemnitees is expressly
conditioned upon the Distributor being notified of any action or
claim of loss brought against the Corporation Indemnitees 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 Corporation Indemnitees, unless the failure to give notice
does not prejudice the Distributor; provided, that 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).
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E. 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 Corporation,
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 Corporation Indemnitees 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 Corporation 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
Corporation Indemnitees and the Distributor, the Distributor will
reimburse the Corporation Indemnitees for the reasonable fees and
expenses of any counsel retained by them. The Distributor's
indemnification agreement contained in Sections 7(D) and 7(E) herein
shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Corporation
Indemnitees and shall survive the delivery of any Shares and the
termination of this Agreement. This agreement of indemnity will
inure exclusively to the benefit of the Corporation Indemnitees and
their successors. The Distributor agrees promptly to notify the
Corporation of the commencement of any litigation or proceedings
against the Distributor or any of its officers or directors in
connection with the offer and sale of any of the Shares.
F. The Distributor shall advance attorneys' fees and other expenses
incurred by any Corporation 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.
G. No party to this Agreement shall be liable to the other parties for
special or punitive damages under any provision of this Agreement.
H. 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 NASD;
provided, however, in such event indemnification shall be provided
under this Section 7 to the maximum extent so permissible.
8. Proprietary and Confidential Information
The Distributor agrees on behalf of itself and its managers, officers,
and employees to treat confidentially and as proprietary information of the
Corporation, all records and other information relative to the Corporation and
prior, present or potential shareholders of the Corporation (and clients of said
shareholders), and not to use such records and information for any purpose other
than the performance of its responsibilities and duties hereunder, except (i)
after prior notification to and approval in writing by the Corporation, which
approval shall not be unreasonably withheld and may not be withheld where the
Distributor may be exposed to civil or criminal contempt proceedings for failure
to comply, (ii) when requested to divulge such information by duly constituted
authorities, or (iii) when so requested by the Corporation. Records and other
information which have become known to the public through no wrongful act of the
Distributor or any of its employees, agents or representatives, shall not be
subject to this paragraph.
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Further, the Distributor will adhere to the privacy policies adopted by
the Corporation pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be
modified from time to time. In this regard, 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 the
Corporation and its shareholders.
9. Records
The Distributor shall keep records relating to the services to be
performed hereunder in the form and manner, and for such period, as it may deem
advisable and is agreeable to the Corporation, but not inconsistent with the
rules and regulations of appropriate government authorities, in particular,
Section 31 of the 1940 Act and the rules thereunder. The Distributor agrees that
all such records prepared or maintained by the Distributor relating to the
services to be performed by the Distributor hereunder are the property of the
Corporation and will be preserved, maintained, and made available in accordance
with such applicable sections and rules of the 1940 Act and will be promptly
surrendered to the Corporation or its designee on and in accordance with its
request.
10. Compliance with Laws
The Corporation has and retains primary responsibility for all compliance
matters relating to the Funds, including but not limited to compliance with the
1940 Act, the Internal Revenue Code of 1986, the Xxxxxxxx-Xxxxx Act of 2002, the
USA Patriot Act of 2002 and the policies and limitations of the Funds relating
to its portfolio investments as set forth in its Prospectus and statement of
additional information. The Distributor's services hereunder shall not relieve
the Corporation of its responsibilities for assuring such compliance or the
Board of Director's oversight responsibility with respect thereto.
11. Term of Agreement; Amendment; Assignment
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 in effect
automatically as to each Fund for successive one-year periods,
provided such continuance is specifically approved at least annually
by: (i) the Corporation's Board, or (ii) the vote of a "majority of
the outstanding voting securities" of a Funds, and provided that in
either event, the continuance is also approved by a majority of the
Corporation's Board who are not "interested persons" of any party to
this Agreement, by a vote cast in person at a meeting called for the
purpose of voting on such approval.
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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, (ii) upon mutual consent of the parties, or (iii) upon not
less than 60 days' written notice, by either the Corporation upon
the vote of a majority of the members of its Board who are not
"interested persons" of the Corporation and 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 a
Fund, or by the Distributor. 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 Corporation. If required under the 1940 Act, any such
amendment must be approved by the Corporation's Board, including a
majority of the Corporation's Board who are not "interested persons"
of any party to this Agreement, by a vote cast in person at a
meeting for the purpose of voting on such amendment. In the event
that such amendment affects the Advisor, the written instrument
shall also be signed by the Advisor. This Agreement will
automatically terminate in the event of its "assignment."
C. As used in this Section, the terms "majority of the outstanding
voting securities," "interested person," and "assignment" shall have
the same meaning as such terms have in the 1940 Act.
D. Sections 4(5); 7; 8; and 14 shall survive termination of this
Agreement.
12. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
the Distributor's duties or responsibilities hereunder is designated by the
Corporation by written notice to the Distributor, the Distributor will promptly,
upon such termination and at the expense of the Corporation, transfer to such
successor all relevant books, records, correspondence, and other data
established or maintained by the Distributor under this Agreement in a form
reasonably acceptable to the Corporation (if such form differs from the form in
which the Distributor has maintained the same, the Corporation shall pay any
expenses associated with transferring the data to such form), and will cooperate
in the transfer of such duties and responsibilities, including provision for
assistance from the Distributor's personnel in the establishment of books,
records, and other data by such successor. If no such successor is designated,
then such books, records and other data shall be returned to the Corporation.
13
13. Obligations of the Corporation
This Agreement is executed by and on behalf of the Corporation and the
obligations of the Corporation hereunder are not binding upon any officers,
directors or shareholders of the Corporation individually, but are binding only
upon the Corporation and with respect to the Funds to which such obligations
pertain.
14. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. To the extent that
the applicable laws of the State of Wisconsin, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control, and nothing herein shall be construed in a manner inconsistent with the
1940 Act or any rule or order of the SEC thereunder.
15. No Agency Relationship
Nothing herein contained shall be deemed to authorize or empower either
party to act as agent for the other party to this Agreement, or to conduct
business in the name, or for the account, of the other party to this Agreement.
16. Services Not Exclusive
Nothing in this Agreement shall limit or restrict the Distributor from
providing services to other parties that are similar or identical to some or all
of the services provided hereunder so long as the Distributor's services under
this Agreement are not impaired thereby.
17. Invalidity
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. In such case, the
parties shall in good faith modify or substitute such provision consistent with
the original intent of the parties.
18. Captions
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.
19. 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 three 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 parties'
respective addresses as set forth below:
14
Notice to the Distributor shall be sent to:
Quasar Distributors, LLC
Attn: President
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
notice to the Corporation shall be sent to:
Xxxxxxxx Plumb Funds, Inc.
1200 Xxxx X. Xxxxxxx Xxxxx, 0xx xxxxx
Xxxxxxx, XX 00000
and notice to the Advisor shall be sent to:
Xxxxxxxx Investment Management LLC
1200 Xxxx X. Xxxxxxx Xxxxx, 0xx xxxxx
Xxxxxxx, XX 00000
20. Multiple Originals
This Agreement may be executed on two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
15
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.
XXXXXXXX PLUMB FUNDS, INC. QUASAR DISTRIBUTORS, LLC
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
Title: Chief Executive Officer Title: President
XXXXXXXX INVESTMENT MANAGEMENT, INC.
(with respect to Sections 4(5); 5; 11(B) and 17
and Exhibit B only)
By: /s/ Xxxx X. Xxxxxxxx
Title: President
16
Exhibit A
to the
Distribution Agreement
Fund Names
Separate Series of Xxxxxxxx Xxxxx Funds, Inc.
Name of Series Date Added
-------------- ----------
Xxxxxxxx Plumb Growth Fund 2/10/92
Xxxxxxxx Xxxxx Bond Fund 2/10/92
A-1
Exhibit B
to the
Distribution Agreement - Xxxxxxxx Plumb Funds, Inc.
--------------------------------------------------------------------------------
QUASAR DISTRIBUTORS, LLC
REGULATORY DISTRIBUTION SERVICES
FEE SCHEDULE
--------------------------------------------------------------------------------
Basic Distribution Services
Minimum annual fee - $45,000, payable monthly in arrears
Market Value Fee at the annual rate of .0025 of 1% (one quarter of one basis
point) of the Funds' (effective for assets over $750 million, cumulative for all
series of Xxxxxxxx Xxxxx Funds, Inc. subject to this Agreement), average daily
net assets, payable monthly in arrears CCO support services- $1,200 per year
Advertising Compliance Review/NASD Filings
$175 per job for the first 10 pages (minutes if tape or video); $20 per page
(minute if tape or video) thereafter
Non-NASD filed materials, e.g. Internal Use Only Materials
$75 per job for the first 10 pages (minutes if tape or video); $20 per page
(minutes if tape or video) thereafter
NASD Expedited Service for 3 Day Turnaround
$1,000 for the first 10 pages (minutes if audio or video); $25 per page
(minute if audio or video) thereafter. (Comments are faxed. NASD may not
accept expedited request.)
Licensing of Investment Advisor's Staff (if required)
$900 per year per registered representative
Quasar is limited to these licenses for sponsorship: Series, 6, 7, 24, 26, 27,
63, 66
Plus any NASD and state fees for registered representatives, including license
and renewal fees.
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 lines, services and charges
-- postage
-- overnight delivery charges
-- NASD registration fees
(NASD advertising filing fees are included in Advertising Compliance Review
section above)
-- record retention
-- travel, lodging and meals
Fees are billed monthly.
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B-1
