SUB-DISTRIBUTION AGREEMENT
THIS
AGREEMENT is made and entered into as of the 1st day of
May, 2008, by and among AssetMark Funds, a Delaware statutory trust (the
“Trust”), Capital Brokerage Corporation, a Washington corporation (the
“Distributor”), and Quasar Distributors, LLC, a Delaware limited liability
company (the “Sub-Distributor”).
WHEREAS,
the Trust 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 Financial Industry Regulatory Authority (“FINRA”);
WHEREAS,
the Distributor and the Trust have entered into an effective Distribution
Agreement (the “Distribution Agreement”), under the terms of which the
Distributor is the principal underwriter of the Trust;
WHEREAS,
the Trust and the Distributor each desires to retain the Sub-Distributor as
sub-distributor in connection with the offering and sale of certain of the
Shares of each series listed on Schedule A (as amended from time to time) (the
“Funds”) to this Agreement;
WHEREAS,
the Sub-Distributor is registered as a broker-dealer under the 1934 Act, and is
a member of FINRA; and
WHEREAS,
the Sub-Distributor is willing to act as sub-distributor for the Distributor and
the Trust on the terms and conditions hereinafter set forth.
WHEREAS,
this Agreement replaces and supersedes the prior Sub-Distribution Agreement
between AssetMark Capital Corporation and Quasar Distributors, LLC, dated
September 27, 2006, and any associated amendments.
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 the Sub-Distributor.
The
Distributor and the Trust each hereby appoints the Sub-Distributor as the agent
for the sale and distribution of certain Shares of the Funds, subject to the
terms and for the period set forth in this Agreement. The
Sub-Distributor hereby accepts such appointment and agrees to act
hereunder.
2. Services
and Duties of the Sub-Distributor.
(a) The
Sub-Distributor agrees to sell Shares of the Funds on a best efforts basis as
agent (solely for the purpose of accepting orders for the purchase and
redemption of Fund Shares, and for no other purpose) for the Distributor and the
Trust during the term of this Agreement, 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(es), including the statement of additional
information, as amended or supplemented, relating to the Funds and included in
the currently effective registration statement or post-effective amendment
thereto (the “Registration Statement”) of the Trust under the Securities Act of
1933 (the “1933 Act”) and the 1940 Act.
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(b) During
the continuous public offering of Shares of the Funds, the Sub-Distributor will
hold itself available to receive orders, in such form as required by the Trust
and the Distributor, and satisfactory to the Sub-Distributor, for the purchase
of Shares of the Funds and will accept such orders on behalf of the
Trust. Such purchase orders shall be deemed effective at the time and
in the manner set forth in the Prospectus.
(c) The
Sub-Distributor, with the operational assistance of the Trust’s transfer agent,
shall make Shares available for sale and redemption through the National
Securities Clearing Corporation’s Fund/SERV System.
(d) In
connection with all matters relating to this Agreement, the Sub-Distributor
agrees to act in conformity with the Trust’s Agreement and Declaration of Trust
and By-Laws and with the instructions of the Funds’ Board of Trustees (“the
“Board” or the “Trustees”) and to comply with the requirements of the 1933 Act,
the 1934 Act, the 1940 Act, the regulations of FINRA and all other applicable
federal or state laws and regulations. The Sub-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 Trust and the
Sub-Distributor.
(e) The
Sub-Distributor agrees to act as agent for the Distributor and the Trust to
receive and transmit promptly to the Funds’ transfer agent shareholder requests
for redemption of Shares.
(f) The
Sub-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.
(g) The
Sub-Distributor shall prepare reports for the Distributor to be provided to the
Board regarding its activities under this Agreement as from time to time shall
be reasonably requested by the Distributor or the Board, including regarding use
of 12b-1 payments received by the Sub-Distributor, if any.
(h) The
services furnished by the Sub-Distributor hereunder are not to be deemed
exclusive and the Sub-Distributor shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired
thereby. Each of the Distributor and the Trust recognizes that from
time to time, officers and employees of the Sub-Distributor may serve as
directors, trustees, officers and employees of other entities (including
investment companies), that such other entities may include the name of the
Sub-Distributor as part of their name and that the Sub-Distributor or its
affiliates may enter into distribution, administration, fund accounting,
transfer agent or other agreements with such other entities. The
Trust and the Distributor reserve the right to (1) issue Shares in
connection with a merger, consolidation, or recapitalization of the Trust or any
Fund(s); (2) issue additional Shares to holders of Shares or (3) issue Shares in
connection with any offer of exchange permitted by Section 11 of the 1940
Act.
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(i) The
Sub-Distributor shall at all times during the term of this Agreement remain
registered as a broker-dealer under the 1934 Act and with all 50 states, and
shall also remain a member in good standing of FINRA. The Sub-Distributor shall
immediately notify the Trust in writing if it receives written notification that
such registrations or membership have been temporarily or permanently suspended,
limited or terminated.
3. Duties
and Representations of the Trust.
(a) The
Trust represents that it is duly organized and in good standing under the law of
its jurisdiction of organization and registered as an open-end management
investment company under the 1940 Act. The Trust agrees that it will
act in material conformity with its Agreement and Declaration of Trust, By-Laws,
Registration Statement as may be amended from time to time and resolutions and
other instructions of its Board. The Trust agrees to comply in all
material respects with the 1933 Act, the 1940 Act and all other applicable
federal and state laws and regulations. The Trust represents and
warrants that this Agreement has been duly authorized by all necessary action by
the Trust under the 1940 Act, state law and the Trust’s Agreement and
Declaration of Trust and By-Laws.
(b) The
Trust, or its agent, shall take or cause to be taken all necessary action to
register Shares of the Funds under the 1933 Act and to maintain an effective
Registration Statement for such Shares in order to permit the sale of Shares as
herein contemplated. The Trust authorizes the Sub-Distributor to use
the Prospectus, in the form furnished to the Sub-Distributor from time to time,
in connection with the sale of Shares.
(c) The
Trust represents and agrees that 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. The Trust further agrees that it shall have the right
to suspend the sale of Shares of any Fund at any time in response to conditions
in the securities markets or otherwise, and to suspend the redemption of Shares
of any Fund at any time permitted by the 1940 Act or the rules of the Securities
and Exchange Commission (“SEC”). The Trust shall advise the
Sub-Distributor promptly of any such determination.
(d) The
Trust agrees to advise the Sub-Distributor promptly in writing:
(i) of
any material correspondence or other communication by the SEC or its staff
relating to continued availability for sale of the Shares of the
Funds;
(ii) 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;
(iii) of
the happening of any event which makes untrue any statement of a material fact
made in the Prospectus or which requires the making of a change in such
Prospectus in order to make the statements therein not misleading;
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(iv) of
all actions which may relate to the continued availability of the shares for
sale, by the Funds, 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
(v) of
assignment or termination of the Distribution Agreement.
(e) The
Trust shall file such reports and other documents as may be required under
applicable federal and state laws and regulations. The Trust shall,
upon request of the Sub-Distributor notify the Sub-Distributor in writing of the
states in which the Shares may be sold and shall notify the Sub-Distributor in
writing of any changes to such information.
(f) The
Trust 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.
(g) The
Trust shall fully cooperate in the efforts of the Sub-Distributor to sell and
arrange for the sale of Shares and shall make available to the Sub-Distributor a
statement of each computation of net asset value. In addition, the
Trust shall provide to the Sub-Distributor from time to time copies of all
information, financial statements, and other papers that the Sub-Distributor may
reasonably request for use in connection with the distribution of Shares,
including, without limitation, copies of any audited financial statements
prepared for the Trust by its independent public accountants and such reasonable
number of copies of the most current Prospectus, statement of additional
information and annual and interim reports to shareholders as the
Sub-Distributor may request. The Trust shall forward a copy of any
SEC filings, including the Registration Statement, to the Sub-Distributor within
one business day of any such filings. The Trust, the Distributor and
the Sub-Distributor each 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 each other party.
(h) The
Trust represents and warrants that its Registration Statement and any
advertisements and sales literature of the Trust (excluding statements relating
to the Sub-Distributor and the services it provides that are based upon written
information furnished by the Sub-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
Sub-Distributor pursuant to this Agreement shall be true and correct in all
material respects.
4. Duties
and Representations of the Distributor.
(a) The
Distributor represents and warrants that this Agreement has been duly authorized
by all necessary action by the Distributor under the 1934 Act and any other
applicable federal or state laws or regulations.
(b) The
Distributor shall at all times during the term of this Agreement remain
registered as a broker-dealer under the 1934 Act and shall also remain a member
in good standing of FINRA. The Distributor shall immediately notify
the Sub-Distributor in writing if it receives written notification that such
registrations or membership has been temporarily or permanently suspended,
limited or terminated.
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(c) In
connection with all matters relating to this Agreement, the Distributor agrees
to act in conformity with the Trust’s Agreement and Declaration of Trust and
By-Laws and with the instructions of the Board and to comply with the
requirements of the 1933 Act, the 1934 Act, the 1940 Act, the regulations of
FINRA and all other applicable federal or state laws and
regulations.
(d) The
Distributor represents that, pursuant to the terms of the Distribution
Agreement, it is the principal underwriter for the Trust, and shall notify the
Sub-Distributor in writing immediately upon termination of its role as
underwriter, or upon assignment or termination of the Distribution
Agreement.
5. Compensation.
As
compensation for the services performed and the expenses assumed by the
Sub-Distributor under this Agreement including, but not limited to, any
commissions paid for sales of Shares, the Sub-Distributor shall be entitled to
the fees and expenses set forth in Schedule B to this Agreement which are
payable promptly after the last day of each month. Such fees shall be
paid to the Sub-Distributor by the Distributor.
6. Expenses.
(a) The
Distributor, or the Trust, but not the Sub-Distributor, shall bear all costs and
expenses in connection with registration of the Shares with the SEC and 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
of its Funds, including but not limited to (i) fees and disbursements of its
counsel and independent public accountants; (ii) costs and expenses of the
preparation, filing, printing and mailing of Registration Statements and
Prospectuses and amendments thereto, as well as related advertising and sales
literature; (iii) costs and expenses of the preparation, printing and mailing of
annual and interim reports, proxy materials and other communications to
shareholders of the Funds; and (iv) fees required in connection with the offer
and sale of Shares in such jurisdictions as shall be selected by the Trust
pursuant to Section 3(e) hereof.
(b) The
Sub-Distributor shall bear the expenses of registration or qualification of the
Sub-Distributor as a dealer or broker under federal or state laws and the
expenses of continuing such registration or qualification. The
Sub-Distributor does not assume responsibility for any expenses not expressly
assumed hereunder.
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7. Indemnification.
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(a) The Trust shall indemnify, defend and hold the Sub-Distributor,
and each of its present or former members, directors/trustees, officers,
employees, representatives and any person who controls or previously controlled
the Sub-Distributor within the meaning of Section 15 of the 1933 Act, free and
harmless from and against any and all losses, claims, demands, liabilities,
damages and expenses (including the costs of investigating or defending any
alleged losses, claims, demands, liabilities, damages or expenses and any
reasonable counsel fee incurred in connection therewith) which the
Sub-Distributor, each of its present and former members, directors, trustees,
officers, employees or representatives or any such controlling person, may incur
under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, based upon
the Trust’s failure to adhere to its obligations hereunder, or, in connection
with the Trust’s performance of its duties hereunder, based upon the Trust’s
violation or alleged violation of any rule of FINRA or the SEC or any other
jurisdiction wherein Shares of the Funds are sold, or 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 shareholder, or
in any advertisement or sales literature, or 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;
provided, however, that the Trust’s obligation to indemnify the Sub-Distributor
and any of the foregoing indemnities shall not be deemed to cover any losses,
claims, demands, liabilities, damages or expenses 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 such
advertisement or sales literature in reliance upon and in conformity with
information furnished to the Trust or its counsel by the Sub-Distributor in
writing and acknowledging the purpose of its use for the purpose of, and used
in, the preparation thereof. In no event shall anything contained
herein be so construed as to protect Sub-Distributor against any liability to
the Trust or its shareholders to which Sub-Distributor would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties under this Agreement or by reason of its reckless
disregard of its obligations under this Agreement.
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The
Trust’s agreement to indemnify the Sub-Distributor, and any of the foregoing
indemnitees, as the case may be, with respect to any action, is expressly
conditioned upon the Trust being notified of such action brought against the
Sub-Distributor, or any of the foregoing 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 Sub-Distributor, or such person,
unless the failure to give notice does not prejudice the Trust. Such
notification shall be given by letter or by telegram addressed to the Trust’s
President, but, unless the failure to notify the Trust serves to prejudice the
Trust, such failure so to notify the Trust of any such action shall not relieve
the Trust from any liability which the Trust 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
Trust’s indemnity agreement contained in this Section 7(a).
(b) The
Trust 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
loss, claim, demand, liability, damage or expense subject to this
Agreement. If the Trust elects to assume the defense of any such
claim, such defense shall be conducted by counsel chosen by the Trust and
approved by the Sub-Distributor, which approval shall not be unreasonably
withheld. In the event the Trust elects to assume the defense of any
such suit and retain such counsel, the indemnified defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel retained by
them. If the Trust does not elect to assume the defense of any such
suit, or in case the Sub-Distributor does not, in the exercise of reasonable
judgment, approve of counsel chosen by the Trust or, if under prevailing law or
legal codes of ethics, the same counsel cannot effectively represent the
interests of both the Trust and the Sub-Distributor, and each of its present or
former members, directors/trustees, officers, employees, representatives or any
controlling person, the Trust will reimburse the indemnified person or persons
named as defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by Sub-Distributor and the indemnified
defendants. The Trust’s indemnification agreement contained in
Section 7 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Sub-Distributor, and each of its
present or former members, directors/trustees, officers, employees,
representatives or any controlling person, and shall survive the delivery of any
Shares and the termination of this Agreement. This agreement of
indemnity will inure exclusively to the Sub-Distributor’s benefit, to the
benefit of each of its present or former members, directors/trustees, officers,
employees or representatives or to the benefit of any controlling persons and
their successors. The Trust agrees promptly to notify the
Sub-Distributor of the commencement of any litigation or proceedings against the
Trust or any of its officers or directors/trustees, in connection with the issue
and sale of any of the Shares.
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(c) The Trust, the Distributor, or the Sub-Distributor, when acting
as an indemnifying party, shall advance attorney’s fees and other expenses
incurred by any person in defending any claim, demand, action or suit which is
the subject of a claim for indemnification pursuant to this Section 7 to the
maximum extent permissible under applicable law.
(d) The Sub-Distributor shall indemnify, defend and hold each of the
Trust and the Distributor, and each of its present or former directors/trustees,
officers, employees, representatives and any person who controls or previously
controlled each of the Trust and the Distributor within the meaning of Section
15 of the 1933 Act, free and harmless from and against any and all losses,
claims, demands, liabilities, damages and expenses (including the costs of
investigating or defending any alleged losses, claims, demands, liabilities,
damages or expenses, and any reasonable counsel fee incurred in connection
therewith) which each of the Trust and the Distributor, and each of its present
or former directors/trustees, officers, employees, representatives or any such
controlling person, may incur under the 1933 Act, the 1934 Act, any other
statute (including Blue Sky laws) or any rule or regulation thereunder, or under
common law or otherwise, based upon the Sub-Distributor’s failure to adhere to
its obligations hereunder, or, in connection with the Sub-Distributor’s
performance of its duties hereunder, based upon the Sub-Distributor’s violation
or alleged violation of any rule of FINRA or the SEC or any other jurisdiction
wherein Shares of the Funds are sold, or arising out of or based upon any untrue
statement, or alleged untrue statement of a material fact contained in the
Trust’s 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
advertisement or sales literature, or arising out of or based upon the omission,
or alleged omission, to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Sub-Distributor’s obligation to indemnify the Trust, the
Distributor or any of the foregoing indemnitees shall not be deemed to cover any
losses, claims, demands, liabilities, damages or expenses 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
such advertisement or sales literature in reliance upon and in conformity with
written information furnished to the Sub-Distributor or its counsel by the Trust
or the Distributor in writing and acknowledging the purpose of its use for the
purpose of, and used in, the preparation thereof. In no event shall
anything contained herein be so construed as to protect the Trust or the
Distributor against any liability to the Sub-Distributor to which the Trust or
the Distributor would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of their respective duties under
this Agreement or by reason of their reckless disregard of their respective
obligations under this Agreement.
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The
Sub-Distributor’s agreement to indemnify each of the Trust and the Distributor,
and any of the foregoing indemnitees, as the case may be, with respect to any
action, is expressly conditioned upon the Sub-Distributor’s being notified of
any action brought against the Trust or the Distributor, or any of the foregoing
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 Trust or the Distributor, or such person, unless the failure to give
notice does not prejudice the Sub-Distributor. Such notification
shall be given by letter or by telegram addressed to the Sub-Distributor’s
President, but, unless the failure to notify the Sub-Distributor serves to
prejudice the Sub-Distributor, such failure so to notify the Sub-Distributor of
any such action shall not relieve the Sub-Distributor from any liability which
the Sub-Distributor 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 Sub-Distributor’s indemnity
agreement contained in this Section 7(d).
(e) The Sub-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 loss, claim, demand, liability, damage or expense
subject to this Agreement. If the Sub-Distributor elects to assume
the defense of any such claim, such defense shall be conducted by counsel chosen
by the Sub-Distributor and approved by each of the Trust and the Distributor,
which approval shall not be unreasonably withheld. In the event the
Sub-Distributor elects to assume the defense of any such suit and retain such
counsel, the indemnified defendant or defendants in such suit shall bear the
fees and expenses of any additional counsel retained by them. If the
Sub-Distributor does not elect to assume the defense of any such suit, or in
case the Trust or the Distributor does not, in the exercise of reasonable
judgment, approve of counsel chosen by the Sub-Distributor or, if under
prevailing law or legal codes of ethics, the same counsel cannot effectively
represent the interests of both the Trust or the Distributor and the
Sub-Distributor, and each of its present or former members, directors/trustees,
officers, employees, representatives or any controlling person, the
Sub-Distributor will reimburse the indemnified person or persons named as
defendant or defendants in such suit, for the reasonable fees and expenses of
any counsel retained by the Trust or the Distributor and the indemnified
defendants. The Sub-Distributor’s indemnification agreement contained
in Section 7 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Trust or the Distributor, and each
of its present or former directors/trustees, officers, employees,
representatives or any controlling person, 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 each of the Trust and the
Distributor, to the benefit of each of its present or former directors/trustees,
officers, employees or representatives or to the benefit of any controlling
persons and their successors. The Sub-Distributor agrees promptly to
notify the Trust and the Distributor of the commencement of any litigation or
proceedings against the Sub-Distributor or any of its officers or
directors/trustees, in connection with the issue and sale of any of the
Shares.
(f) The Distributor shall indemnify, defend and hold the
Sub-Distributor, and each of its present or former members, directors/trustees,
officers, employees, representatives and any person who controls or previously
controlled the Sub-Distributor within the meaning of Section 15 of the 1933 Act,
free and harmless from and against any and all losses, claims, demands,
liabilities, damages and expenses (including the costs of investigating or
defending any alleged losses, claims, demands, liabilities, damages or expenses
and any reasonable counsel fee incurred in connection therewith) which the
Sub-Distributor, and each of its present or former members, directors/trustees,
officers, employees, representatives or any such controlling person, may incur
under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, based upon
the Distributor’s failure to adhere to its obligations hereunder, or, in
connection with the Distributor’s performance of its duties hereunder, based
upon Distributor’s violation or alleged violation of any rule of FINRA or the
SEC or any other jurisdiction wherein Shares of the Funds are sold, or arising
out of or based upon any untrue statement, or alleged untrue statement of a
material fact contained in the Trust’s 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 advertisement or sales literature, or arising out of
or based upon the omission, or alleged omission, to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Distributor’s obligation to
indemnify the Sub-Distributor and any of the foregoing indemnitees shall not be
deemed to cover any losses, claims, demands, liabilities, damages or expenses
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 such advertisement or sales literature in reliance upon
and in conformity with written information furnished to the Distributor or its
counsel by the Sub-Distributor in writing and acknowledge the purpose of its use
for the purpose of, and used in, the preparation thereof. In no event
shall anything contained herein be so construed as to protect the
Sub-Distributor against any liability to the Distributor to which the
Sub-Distributor would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties under this Agreement
or by reason of its reckless disregard of its obligations under this
Agreement.
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The Distributor’s agreement to indemnify the Sub-Distributor, and any of the
foregoing indemnities, as the case may be, with respect to any action, is
expressly conditioned upon the Distributor being notified of such action brought
against the Sub-Distributor, or any of the foregoing indemnities, 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
Sub-Distributor, or such person, unless the failure to give notice does not
prejudice the Distributor. Such notification shall be given by letter or
by telegram addressed to the Distributor’s President, but, unless the failure to
notify the Distributor serves to prejudice the Distributor, such 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, or alleged omission, otherwise than on account of the distributor’s
indemnity agreement contained in Section 7(f).
(g) 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 loss, claim, demand, liability, damage or expense
subject to this Agreement. If the Distributor elects to assume the
defense of any such claim, such defense shall be conducted by counsel chosen by
the Distributor and approved by the Sub-Distributor, 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 indemnified defendant
or defendants 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 Sub-Distributor 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 Sub-Distributor and the
Distributor, and each of its present or former members, directors/trustees,
officers, employees, representatives or any controlling person, the Distributor
will reimburse the indemnified person or persons named as defendant or
defendants in such suit, for the reasonable fees and expenses of any counsel
retained by the Sub-Distributor and the indemnified defendants. The
Distributor’s indemnification agreement contained in Section 7 shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Sub-Distributor, and its present or former members,
directors/trustees, officers, employees, representatives or any controlling
person, 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 Sub-Distributor, to the benefit of its present or former members,
directors/trustees, officers, employees or representatives or to the benefit of
any controlling persons and their successors. The Distributor agrees
promptly to notify the Sub-Distributor of the commencement of any litigation or
proceedings against the Distributor or any of its officers or
directors/trustees, in connection with the issue and sale of any of the
Shares.
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(h) No person shall be obligated to provide indemnification under
this Section 7 if such indemnification would be impermissible under the 1940
Act, the 1993 Act, the 1934 Act or the rules of FINRA; provided, however, in such
event indemnification shall be provided under this Section 7 to the maximum
extent so permissible.
8. Obligations
of Trust.
This
Agreement is executed by and on behalf of the Trust and the obligations of the
Trust hereunder are not binding upon any of the trustees, officers or
shareholders of the Trust individually but are binding only upon the Trust and
with respect to the Funds to which such obligations pertain.
9. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original agreement but all of which counterparts shall together
constitute but one and the same instrument.
10. 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. Any dispute arising between the parties to this Agreement
shall be resolved by binding arbitration conducted in accordance with the Rules
of FINRA. Such arbitration shall take place in the jurisdiction of
the respondent.
10
|
|
11. Duration
and Termination.
|
(a) This
Agreement shall become effective with respect to each Fund listed on Schedule 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 Schedule A to this Agreement relating to
that Fund is executed. Unless sooner terminated as provided herein,
this Agreement shall continue in effect for one year from the date
hereof. Thereafter, if not terminated, this Agreement shall continue
automatically in effect as to each Fund for successive one-year periods,
provided such continuance is specifically approved at least annually by (i) the
Trust’s Board or (ii) the vote of a “majority of the outstanding voting
securities” of a Fund, and provided that in either event the continuance is also
approved by a majority of the Trust’s Board who are not “interested persons” of
any party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval.
(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 no less than 60 days’ written notice, by either the Trust through a vote of
a majority of the members of the Board who are not “interested persons” of the
Trust 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 Sub-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 Sub-Distributor, the
Distributor and the Trust. If required under the 1940 Act, any such
amendment must be approved by the Trust’s Board, including a majority of the
Trust’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. This Agreement will automatically terminate in the event
of its assignment.
12. Confidentiality.
The
Sub-Distributor agrees on behalf of its employees to treat all records relative
to the Trust and prior, present or potential shareholders of the Trust as
confidential, and not to use such records for any purpose other than performance
of the Sub-Distributor’s responsibilities and duties under this Agreement,
except after notification and prior approval by the Trust, which approval shall
not be unreasonably withheld, and may not be withheld where the Sub-Distributor
may be exposed to civil or criminal proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, when
subject to governmental or regulatory audit or investigation, or when so
requested by the Trust. Records and information which have become
known to the public through no wrongful act of the Sub-Distributor or any of its
employees, agents or representatives shall not be subject to this
paragraph. In accordance with Section 248.11 of Regulation S-P (17
CFR 248.1-248.30), the Sub-Distributor will not directly or indirectly through
an affiliate, disclose any non-public personal information, as defined in Reg.
S-P, received from the Trust or any Fund(s) regarding any shareholder, to any
person that is not affiliated with the Trust or any Fund(s) or with the
Sub-Distributor and provided that, any such information disclosed to an
affiliate of the Sub-Distributor shall be under the same limitations on
non-disclosure.
13. Withdrawal of
Offering.
The Trust
reserves the right at any time to withdraw all offerings of any or all Shares by
written notice to the Sub-Distributor at its principal office. No
Shares shall be offered by either the Sub-Distributor or the Trust under any
provisions of this Agreement and no orders for the purchase of Shares hereunder
shall be accepted by a Fund if and so long as the effectiveness of the
Registration Statement then in effect or any necessary amendments thereto shall
be suspended under any of the provisions of the 1933 Act, or if and so long as a
current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file
with the SEC.
11
14. Miscellaneous.
The
captions in this Agreement are included for convenience of reference only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect. Any provision of this Agreement which may be
determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors. As
used in this Agreement, 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.
15. Notice.
Any
notice required or permitted to be given by any party to the others shall be in
writing and shall be deemed to have been given on the date delivered personally
or by courier service or 3 days after sent by registered or certified mail,
postage prepaid, return receipt requested or on the date sent and confirmed
received by facsimile transmission to the other parties’ respective addresses as
set forth below:
Notice to
the Sub-Distributor shall be sent to:
Quasar
Distributors, LLC
Attn: President
000 Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Notice to
the Trust shall be sent to:
Attn: Xxxxxx
Xxxxxx
0000
Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx
Xxxx, XX 00000-0000
Notice to
the Distributor shall be sent to:
Capital Brokerage
Corporation
Attn: /s/ Xxxxx
Xxxxx
0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx
0
Xxxxxxxx, XX 00000
12
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their officers designated as of the dates indicated below.
| AssetMark Funds | Quasar Distributors, LLC |
| By: /s/ Xxxxxx X. Xxxxxx | By: /s/Xxxxx X. Xxxxxxxxx |
| Title: President, Principal Executive Officer | Title: President |
| Date: May 5, 2008 | Date: May 2, 2008 |
Capital
Brokerage Corporation
By: /s/ Xxxxx Xxxxx
Title: SVP,
CCO
Date: May 6,
2008
13
SCHEDULE
A
to
the
Fund
Names
Separate Series of AssetMark
Funds
AssetMark
Large Cap Growth Fund
AssetMark
Large Cap Value Fund
AssetMark
Small/Mid Cap Growth Fund
AssetMark
Small/Mid Cap Value Fund
AssetMark
International Equity Fund
AssetMark
Real Estate Securities Fund
AssetMark
Tax-Exempt Fixed Income Fund
AssetMark
Core Plus Fixed Income Fund
AssetMark
Enhanced Fundamental IndexTM Large
Company Growth Fund
AssetMark
Enhanced Fundamental IndexTM Large
Company Value Fund
AssetMark
Enhanced Fundamental IndexTM Small
Company Growth Fund
AssetMark
Enhanced Fundamental IndexTM Small
Company Value Fund
AssetMark
Enhanced Fundamental IndexTM
International Equity Fund
SCHEDULE
B
to
the
Fees
NSCC
Sponsorship Only
|
●
|
$[
] per month
|
|
●
|
Advertising
Compliance Review/FINRA
Filings: N/A
|
|
●
|
Licensing
of Investment Advisor's Staff (if
desired): N/A
|
|
●
|
Out-of-Pocket
Expenses: Reasonable out-of-pocket expenses incurred by the
Sub-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
|
|
●
|
FINRA
filing fees
|
|
●
|
record
retention
|
|
●
|
travel,
lodging and meals required in connection with the performance of
Sub-Distributor's required
activities
|
Fees are
billed monthly
