DISTRIBUTION AGREEMENT
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This Agreement, dated as of October 1, 1993, by and between
Bailard, Xxxxx & Xxxxxx International Fund Group, Inc., a Maryland corporation
(the "Company"), on behalf of its series, the Bailard, Xxxxx & Xxxxxx
International Equity Fund and the Bailard, Xxxxx & Xxxxxx International
Fixed-Income Fund (each a "Fund" and together the "Funds"), and BB&K Fund
Services, Inc., a California corporation (the "Distributor"),
RECITALS
A. The Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act").
B. The Distributor is a broker-dealer licensed to act as a
distributor of securities, is engaged in the business of selling and
distributing securities, including investment company securities, and has the
ability to create appropriate and effective sales literature, advertising and
other sales and promotional aids.
C. The Company desires to retain the Distributor to render
such services to the Funds in the manner and on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual and dependent covenants set forth herein, the Company and the Distributor
agree as follows:
AGREEMENT
1. Appointment of Distributor. The Company hereby appoints the
Distributor as its exclusive agent to act as principal underwriter and
distributor of the shares of common stock, $0.0001 par value, of the Funds (the
"Shares") during the term of this Agreement.
2. Acceptance of Appointment. The Distributor hereby accepts
such appointment and agrees to use its best efforts lawfully and properly to
promote the sale of the Shares; provided, however, that the Distributor may
suspend its efforts when, in its judgment, sales of Shares are not commercially
reasonable. The Distributor agrees that either Fund may withdraw the offering of
the Shares (a) at any time with the consent of the Distributor or (b) without
such consent when so required by the provisions of any statute, rule, regulation
or order of any governmental body or administrative agency or by order of any
court.
3. Term of Agreement. Unless sooner terminated as provided
herein, this Agreement shall be in effect for a period of two years from the
date hereof and shall continue from year to year thereafter, with respect to
each Fund, as long as it is specifically approved at least annually (a) by
either (i) the Board of Directors of the Company or (ii) the vote of a majority
of the outstanding voting securities (as defined in the 0000 Xxx) of that
Fund and (b) by the vote of a majority of the directors of the Company who are
not parties to this Agreement or interested persons (as defined in the 0000 Xxx)
of any such party at a meeting called for the purpose of voting on such
continuance.
4. Duties of the Company.
(a) The Company shall use its best efforts:
(i) to maintain its registration as an open-end
management investment company under the 1940 Act and to comply
with the provisions of the 1940 Act and the rules and
regulations thereunder;
(ii) to keep authorized and registered under the
Securities Act of 1933, as amended (the "1933 Act"),
sufficient Shares to meet the reasonable requirements of the
Distributor; and
(iii) to qualify the Shares for sale and to keep
effective and renew such permits and authorizations as may be
required for the sale thereof in all jurisdictions, as the
Distributor may reasonably request.
(b) The Company shall not arbitrarily or without reasonable
cause refuse to accept or confirm orders for the purchase of Shares obtained by
the Distributor as agent of the Company and submitted by the Distributor to the
Company. The Company shall confirm each order upon receipt of a duly executed
Purchase Application in the form contained in the prospectus of each Fund, as
amended and supplemented from time to time (the "Prospectus").
(c) The Company shall not during the term of this Agreement
offer any Shares for sale through any person (as defined in Sections 2(a)(28)
and 2(a)(8) of the 0000 Xxx) other than the Distributor, although the Company
reserves the right to sell Shares directly. However, in the event the
Distributor is unable to continue to distribute or sell Shares either generally
or in specific jurisdictions, the Company may make arrangements for the offer
and sale of Shares generally or within the jurisdiction or jurisdictions in
which distribution or sale thereof by the Distributor has been prevented;
provided that, if the Distributor has removed all material obstacles to resuming
the offer and sale generally or within such jurisdictions within 90 days from
the date it becomes unable to continue such distribution or sale, then the right
of the Company to distribute Shares through persons other than the Distributor
shall be extinguished, subject only to the provisions of Section 2 hereof.
5. Duties of the Distributor.
(a) The Distributor is, and shall use its best efforts to
continue to be, a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"), a broker-dealer registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934 and
a broker-dealer licensed in the jurisdictions in which its activities on behalf
of the Funds require it to be so licensed.
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(b) The Distributor shall not purchase any Shares except from
or on behalf of the Funds as agent.
(c) The Distributor shall not directly or indirectly withhold
orders for the purchase of Shares, purchase Shares in anticipation of orders or
accept conditional orders.
(d) The Distributor shall, to the extent it deems necessary in
its sole discretion, prepare, print and distribute advertising and sales
literature relating to the Funds and the Shares and shall pay all costs incurred
in connection therewith, including related travel, telephone and overhead
expenses. Any dissemination by the Distributor of such advertising and sales
literature shall be in compliance with applicable Federal and state securities
laws and regulations. The Distributor shall provide copies of such advertising
and sales literature to the Company in order to permit the Company to timely
file such advertising and sales literature with the Securities and Exchange
Commission, the NASD and any other regulatory authorities, as may be required.
The Distributor shall not use any such material to which the Company reasonably
and promptly objects.
(e) Except with respect to sales and repurchases of Shares,
the Distributor shall act as principal in all matters relating to promotion of
the Funds and shall enter into all of its engagements, agreements and contracts
as principal on its own account.
(f) The Distributor shall perform its duties and obligations
hereunder in a manner that complies with the terms of the registration statement
of the Company filed with the Securities and Exchange Commission, as amended or
supplemented from time to time (the "Registration Statement"), the Articles of
Incorporation and the By-Laws of the Company, the requirements of the 1940 Act
and the securities laws and regulations of the United States and of the
jurisdictions in which the Distributor does business or offers Shares on behalf
of the Funds, and shall conduct its affairs in accordance with the Rules of Fair
Practice of the NASD. Unless otherwise expressly provided or authorized, the
Distributor shall have no authority to act for or represent the Company or the
Funds in any way, or otherwise be deemed an agent of the Company or the Funds.
(g) The Distributor shall maintain all books and records with
respect to the Funds required by subparagraph (d) of Rule 3la-1 under the 1940
Act.
(h) The services provided by the Distributor under this
Agreement are not exclusive, and the Distributor is free to engage in any other
business and may render services similar to those provided hereunder to other
issuers, including other investment companies.
6. Public Offering Price of Shares to be Maintained. The
Shares shall be offered and sold only at the public offering price described in
the Prospectus, which shall be the then current net asset value per Share (as
described in the Prospectus). Provisions of the Prospectus and the Purchase
Application contained therein pertaining to the public offering price are
specifically incorporated herein by reference.
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7. Distributor's Compensation. The Distributor shall receive
no distribution fee, sales commission or other payment for its services
hereunder.
8. Indemnification .
(a) The Company shall indemnify and hold harmless the
Distributor (including for purposes of this Section 8(a), each person deemed to
be a controlling person of the Distributor) against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damage or expense and reasonable counsel
fees incurred in connection therewith), based upon the 1933 Act, the 1940 Act or
any state securities statute or at common law, on the ground that the
Registration Statement, or the Prospectus or Statement of Additional Information
contained therein, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, written information furnished to the Company in
connection therewith by or on behalf of the Distributor. However, in no case
shall the Company indemnify the Distributor against any liability to which the
Distributor is subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of the reckless
disregard of its obligations and duties under this Agreement. The Company shall
not be liable to indemnify the Distributor pursuant to this Section 8(a) with
respect to any claim made against the Distributor unless the Distributor has
notified the Company in writing within a reasonable time after service upon it
of first legal process giving information about the nature of the claim, but
failure to notify the Company of any such claim shall not relieve it from any
liability that it may have to the Distributor otherwise than on account of the
indemnity agreement contained herein. The Company 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 liability, but if the
Company elects to assume the defense, such defense shall be conducted by counsel
chosen by it and satisfactory to the Distributor. In the event the Company
elects to assume the defense of any such suit and retain such counsel, the
Distributor shall bear the fees and expenses of any additional counsel retained
by it. If the Company does not elect to assume the defense of any such suit, it
shall reimburse the Distributor for the reasonable fees and expenses of any
counsel retained by it. The Company shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of any of the Shares.
(b) The Distributor shall indemnify and hold harmless the
Company and each Fund (including for purposes of this Section 8(b) each person
deemed to be a controlling person of the Company or either Fund) against any
loss, liability, claim, damage or expense described in Section 8(a) hereof, but
only to the extent that any such loss, liability, claim, damage or expense
relates to material statements or omissions made in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
the Distributor for use in connection with the Registration Statement, the
Prospectus or the Statement of Additional Information as described in Section
8(a).
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9. Termination. This Agreement may be terminated with respect
to each Fund at any time, without payment of any penalty, by the Board of
Directors of the Company or by the vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of such Fund on not more than 60 days'
nor less than 30 days' written notice to the Distributor, or by the Distributor
on like notice to the Company. In the absence of the issuance of an order by the
Securities and Exchange Commission providing an exemption from the provisions of
Section 15(b) of the 1940 Act, this Agreement shall automatically terminate in
the event of its assignment (as defined in the 1940 Act).
10. Other Provisions.
(a) This Agreement shall not be construed as authorizing any
broker-dealer or other person (other than the Distributor) to act as agent of
any of the Company, the Funds or the Distributor.
(b) All records that the Distributor maintains for the Funds
are the property of the Company, and the Distributor shall surrender promptly to
the Company any of such records upon the Company's request. The Distributor will
preserve for the periods prescribed by Rule 3la-2 under the 1940 Act any such
records as are required to be maintained by it pursuant to this Agreement.
(c) The obligations assumed by the Company pursuant to this
Agreement with respect to each Fund shall be limited in all cases to the assets
of such Fund, and neither the Distributor nor any other person shall be entitled
to seek satisfaction of any such obligation from the assets of the other Fund.
(d) This Agreement shall be governed by the laws of the State
of California and the applicable provisions of the 1940 Act.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers duly authorized as of the day and
year first above written.
BAILARD, XXXXX & XXXXXX
INTERNATIONAL FUND GROUP, INC.
By: /s/ P. M. Hill
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Title: Chairman
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BB&K FUND SERVICES, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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