Exhibit (m)(2)
THIS
AGREEMENT is made and entered into as of this 1st day of July, 2005, by and
between The Xxxxxxxx Funds, Inc., a Maryland business company (the
“Trust”) and QUASAR DISTRIBUTORS, LLC, a Delaware limited liability
company (the “Distributor”) and Xxxxxxxx Advisors, Inc., a California
business company and the investment advisor to the Trust (the “Advisor”), is a
party hereto with respect to Section 5 only.
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 National Association
of Securities Dealers, Inc. (the “NASD”);
WHEREAS,
the Trust desires to retain the Distributor as principal underwriter in connection with
the offer and sale of the Shares of each series of the Trust listed on Exhibit A
hereto (as amended from time to time) (each a “Fund” and collectively, the
“Funds”); and
WHEREAS,
this Agreement has been approved by a vote of the Trust’s board of trustees
(“Board of Trustees” or the “Board”), including its disinterested
trustees voting separately, in conformity with Section 15(c) of the 1940 Act.
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 |
The
Trust hereby appoints the Distributor as its agent for the sale and distribution of Shares
of the Fund 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
Trust 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 Fund and
included in the currently effective registration statement (the “Registration
Statement”) of the Trust filed under the Securities Act of 1933,
as amended (the “1933 Act”) and the 1940 Act. The Trust
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 Trust. 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 Trust’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
Trust. |
| |
E. |
The
Distributor agrees to cooperate with the Trust or its agent in the
development of all proposed advertisements and sales literature
relating to the Fund. 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 Trust 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 Fund. 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 Trust 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 Trust reserves the right to suspend such repurchase
right upon written notice to the Distributor. The Distributor further
agrees to act as agent for the Trust to receive and transmit promptly
to the Trust’s transfer agent, shareholder requests for
redemption of Shares. |
| |
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 Fund. The form of any
dealer agreement shall be approved by the Trust. 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. |
2
| |
H. |
The
Distributor shall devote its best efforts to effect sales of Shares of the
Fund 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 Trust promptly in writing of the initiation
of any proceedings against it by 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 Trust |
| |
A. |
The
Trust 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; |
| |
(2) |
This
Agreement has been duly authorized, executed and delivered by the Trust in
accordance with all requisite action and constitutes a valid and
legally binding obligation of the Trust, 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 |
3
| |
(6) |
The
Registration Statement (at the time of its effectiveness) and any
advertisements and sales literature prepared by the Trust 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
Trust, or its agent, shall take or cause to be taken, all necessary action
to register Shares of the Fund under the 1933 Act, qualify such
shares for sale in such states as the Trust 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 Trust 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
Trust agrees to advise the Distributor promptly in writing: |
| |
(i)
of any material correspondence or other communication by the
Securities and Exchange Commission (the “SEC”) or its staff
relating to the Fund, including requests by the SEC for amendments to
the Registration Statement or Prospectus;
|
| |
(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;
|
| |
(iv)
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
|
| |
(v)
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
Trust 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. |
4
| |
E. |
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. |
| |
F. |
The
Trust 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 Trust 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 Trust 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 Trust shall forward a copy of any
SEC filings, including the Registration Statement, to the Distributor
within one business day of any such filings. The Trust 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. |
| |
G. |
The
Trust has reviewed and is familiar with the provisions of NASD Rule
2830(k) prohibiting directed brokerage. In addition, the Trust
agrees not to enter into any agreement (whether orally or in writing)
under which the Trust 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
Trust fails to comply with the provisions of NASD Rule 2830(k), the
Trust shall promptly notify the Distributor. |
| 4. |
Additional
Representations and Covenants of the Distributor |
| |
The
Distributor hereby represents, warrants and covenants to the Trust, 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; |
5
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(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) |
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 Trust 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. |
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
Trust 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 Trust shall notify the Distributor in writing within 30 calendar days
following receipt of each invoice if the Trust is disputing any amounts in good faith. The
Trust 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 Trust
is disputing in good faith as set forth above, unpaid invoices shall accrue a finance
charge of 1½% per month after the due date. Notwithstanding anything to the
contrary, amounts owed by the Trust 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 Trust 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
| |
A. |
The
Trust 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 Trust pursuant to Section 3(D) hereof. |
| |
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. |
| |
A. |
The
Trust shall indemnify, defend and hold the Distributor and each of its
managers, officers, employees, representatives and any person who
controls 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 of any and every nature (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, or in any annual or interim report to shareholders, or in
any advertisements or sales literature prepared by the Trust 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 Trust’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 Trust’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 Trust or
its counsel by the Distributor for the purpose of, and used in, the
preparation thereof. The Trust’s agreement to indemnify the
Distributor Indemnitees is expressly conditioned upon the Trust 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 Trust; provided,
that the 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). |
7
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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 Losses, but if the Trust elects to assume the defense, such
defense shall be conducted by counsel chosen by the Trust and
approved by the 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 Distributor Indemnitees 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 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
Distributor Indemnitees, the Trust will reimburse the Distributor
Indemnitees for the reasonable fees and expenses of any counsel
retained by them. The Trust’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 Trust agrees
promptly to notify the Distributor of the commencement of any
litigation or proceedings against the Trust or any of its officers or
trustees in connection with the offer and sale of any of the Shares. |
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C. |
The
Trust 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 Trust and each of its
trustees, officers, employees, representatives and any person who
controls the Trust within the meaning of Section 15 of the 1933 Act
(collectively, the “Trust Indemnitees”), free and harmless
from and against any and all Losses that the Trust Indemnitees may
sustain or incur or that may be asserted against a Trust 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, 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 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 Trust 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 Trust or its counsel by the
Distributor for the purpose of, and used in, the preparation thereof.
The Distributor’s agreement to indemnify the Trust Indemnitees is
expressly conditioned upon the Distributor being notified of any
action or claim of loss brought against the Trust 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 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 Trust, 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
Trust 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 Trust
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 Trust Indemnitees and the Distributor, the
Distributor will reimburse the Trust 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 Trust 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 Trust Indemnitees and their successors. The
Distributor agrees promptly to notify the Trust 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. |
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F. |
The
Distributor shall advance attorneys’ fees and other expenses incurred
by any Trust 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. |
9
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G. |
No
party to this Agreement shall be liable to the other parties for
consequential, special or punitive damages under any provision of
this Agreement. |
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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
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 Trust, all records and other
information relative to the Trust and prior, present or potential shareholders of the
Trust (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 Trust, 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 Trust. 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, and information that was already in the possession of the Distributor
prior to receipt thereof from the Trust or its agent, shall not be subject to this
paragraph.
Further,
the Distributor will adhere to the privacy policies adopted by the Trust 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
Trust and its shareholders.
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
Trust, 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 Trust 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
Trust or its designee on and in accordance with its request.
The
Trust has and retains primary responsibility for all compliance matters relating to the
Fund, 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 Fund 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 Trust of its responsibilities for assuring such compliance
or the Board of Trustee’s oversight responsibility with respect thereto.
10
| 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 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 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 Trust upon the vote of a majority of the
members of its 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 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 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. 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
7 and 8 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 Trust by
written notice to the Distributor, the Distributor will promptly, upon such termination
and at the expense of the Trust, 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 Trust (if such form differs from the form
in which the Distributor has maintained the same, the Trust 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 Trust.
11
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.
| 14. |
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.
| 15. |
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.
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.
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:
12
Notice to the Distributor shall be
sent to:
| |
Quasar
Distributors, LLC
Attn: President
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000 |
notice to the Trust shall be sent to:
| |
The
Xxxxxxxx Funds, Inc.
The Courtyard Square
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 000000
Fax No.: (000) 000-0000 |
and notice to the Advisor shall be sent
to:
| |
Xxxxxxxx
Advisors, Inc.
The Courtyard Square
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 000000
Fax No.: (000) 000-0000 |
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.
13
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.
|
|
| THE XXXXXXXX FUNDS, INC. |
QUASAR DISTRIBUTORS, LLC |
By: /s/ Xxxx X. Xxxxxxxx |
By: /s/ Xxxxx X. Xxxxxxxxx |
Title: President |
Title: President |
XXXXXXXX ADVISORS, INC |
| (with respect to Section 5 only) |
By: /s/ Xxxx X. Xxxxxxxx |
| Title: President |
14
Fund Names
Separate Series of The
Xxxxxxxx Funds, Inc.
|
|
| Name of Series |
Date Added |
Xxxxxxxx Balanced Fund |
3/8/96 |
Xxxxxxxx Total Return Fund |
7/29/98 |
A-1
Fee Schedule
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
$100 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 desired)
| • |
$1,500
per year per registered representative |
| • |
Quasar
is limited to these licenses for sponsorship: Series, 6, 7, 24, 26, 27, 63, 66, 63/65 |
| • |
Plus
all associated NASD and State fees for Registered Representatives, including license and
renewal fees. |
Fund Fact Sheets
| • |
Design
- $1,000 per fact sheet, includes first production |
| • |
Production
- $500.00 per fact sheet per production period |
| • |
All
printing costs are out-of-pocket expenses, and in addition to the design fee and
production fee. |
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 |
| • |
overnight
delivery charges |
| • |
NASD
registration fees
(NASD advertising filing fees are included in Advertising Compliance
Review section above) |
| • |
travel,
lodging and meals |
Fees are billed monthly.
* Subject to CPI increase, Milwaukee
MSA.
B-1
