Exhibit (e.1)
DISTRIBUTION AGREEMENT
iShares MSCI Russia Capped Index Fund, Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
June 16, 2010
SEI Investments Distribution Company
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxx, Xxxxxxxxxxxx 00000
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the above-named investment company (the "Fund") has agreed that you
shall be, for the period of this agreement, the distributor of shares of each
Index Series of the Fund set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, an "Index Series"). For purposes of this
agreement the term "Shares" shall mean the authorized shares of the relevant
Index Series.
1. Services as Distributor
1.1 You will act as the sole agent of the Fund for the distribution of
Shares in Creation Units (as defined herein) covered by, and in accordance with,
the registration statement and prospectus then in effect under the Securities
Act of 1933, as amended (the "1933 Act") and will transmit promptly any orders
received by you for purchase or redemption of Shares in Creation Units to the
Transfer Agent for the Fund of which the Fund has notified you in writing. You
shall deliver or cause the delivery of a prospectus to persons purchasing Shares
in Creation Units and shall maintain records of both orders placed with you and
confirmations of acceptance furnished by you. You represent and warrant that you
are a broker-dealer registered under the Securities Exchange Act of 1934 (the
"1934 Act") and a member of the National Association of Securities Dealers, Inc.
You agree to comply with all of the applicable terms and provisions of the 1934
Act.
1.2 You agree to use your best efforts to perform the services
contemplated herein on a continuous basis. It is contemplated that you may enter
into "Authorized Participant Agreements" with broker-dealers who agree to
solicit orders for Shares. In addition, you may enter into sales or servicing
agreements with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms. In entering into sales or servicing agreements, you will act only on your
own behalf as principal.
1.3 You shall act as distributor of Shares in Creation Units in
compliance in all material respects with all applicable laws, rules and
regulations, including, without limitations, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940, as amended, (the "1940
Act") by the Securities and Exchange Commission or any securities association
registered under the Securities Exchange Act of 1934, as amended (the "1934
Act").
1.4 Whenever the parties hereto, in their collective judgment, mutually
agree that such action is warranted by unusual market, economic or political
conditions, or by abnormal circumstances of any kind deemed by them to render
sales of a Fund's Shares in Creation Units not in the best interest of the Fund,
the parties hereto may agree to decline to accept any orders for, or make any
sales of, any Shares in Creation Units until such time as the parties deem it
advisable to accept such orders and to make such sales.
1.5 The Fund agrees to pay all appropriate costs and expenses, including
but not limited to, all expenses in connection with the registration of Shares
under the 1933 Act and all expenses in connection with maintaining facilities
for the issue and transfer of Shares in Creation Units and for supplying
information, prices and other data to be furnished by the Fund hereunder, and
all expenses in connection with the preparation and printing of the Fund's
prospectuses and statements of additional information for regulatory purposes
and for distribution to shareholders; provided however, that the Fund shall not
pay any of the costs of advertising or promotion for the sale of Shares, except
as such payments may be made pursuant to Rule 12b-1 of the 0000 Xxx.
1.6 The Fund agrees to execute any and all documents and to furnish any
and all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Fund's officers in connection with the
qualification of Shares for sale in Creation Units in such states as you may
designate to the Fund and the Fund may approve, and the Fund agrees to pay all
expenses which may be incurred in connection with such qualification. You shall
pay all expenses connected with your own qualification as a dealer under state
or Federal laws and, except as otherwise specifically provided in this
agreement, all other expenses incurred by you in connection with the sale of
Shares in Creation Units as contemplated in this agreement.
1.7 The Fund shall furnish you from time to time, for use in connection
with the sale of Shares in Creation Units, such information with respect to the
Fund or any relevant Index Series and the Shares as you may reasonably request,
all of which shall be signed by one or more of the Fund's duly authorized
officers; and the Fund warrants that the statements contained in any such
information, when so signed by the Fund's officers, shall be true and correct.
The Fund also shall furnish you upon request with: (a) semi-annual reports and
annual audited reports of the Fund's books and accounts made by independent
public accountants regularly retained by the Fund, (b) quarterly earnings
statements prepared by the Fund, (c) a monthly itemized list of the securities
in the Fund's or, if applicable, each Index Series' portfolio, (d) monthly
balance sheets as soon as practicable after the end of each month, and (e) from
time to time such additional information regarding the Fund's financial
condition as you may reasonably request.
1.8 The Fund represents to you that all registration statements and
prospectuses filed by the Fund with the Securities and Exchange Commission under
the 1933 Act, and under the 1940 Act, with respect to the Shares have been
prepared in conformity with the requirements of said
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Acts and rules and regulations of the Securities and Exchange Commission
thereunder. As used in this agreement the terms "registration statement" and
"prospectus" shall mean any registration statement and prospectus, including the
statement of additional information incorporated by reference therein, filed
with the Securities and Exchange Commission and any amendments and supplements
thereto which at any time shall have been filed with said Commission. The Fund
represents and warrants to you that any registration statement and prospectus,
when such registration statement becomes effective, will contain all statements
required to be stated therein in conformity with said Acts and the rules and
regulations of said Commission; that all statements of fact contained in any
such registration statement and prospectus will be true and correct when such
registration statement becomes effective; and that neither any registration
statement nor any prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Fund will give you reasonable notice in advance of its
filing of any amendment to any registration statement or supplement to any
prospectus; provided, however, that nothing contained in this agreement shall in
any way limit the Fund's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus, of whatever
character, as the Fund may deem advisable, such right being in all respects
absolute and unconditional.
1.9 The Fund authorizes you and any dealers with whom you have entered
into sales and investor services agreements to use any prospectus in the form
most recently furnished by the Fund in connection with the sale of Shares in
Creation Units. The Fund agrees to indemnify, defend and hold you, your several
officers and directors, and any person who controls you within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of investigating
or defending such claims, demands or liabilities and any reasonable counsel fees
incurred in connection therewith) which you, your officers and directors, or any
such controlling persons, may incur under the 1933 Act, the 1940 Act or common
law or otherwise, (a) arising out of or on the basis of any untrue statement, or
alleged untrue statement, of a material fact required to be stated in either any
registration statement or any prospectus or any statement of additional
information, or (b) arising out of or based upon any omission, or alleged
omission, to state a material fact required to be stated in any registration
statement, any prospectus or any statement of additional information or
necessary to make the statements in any of them not misleading, (c) arising out
of breach of any obligation, representation or warranty pursuant to this
Agreement by the Fund, or (d) the Fund's failure to comply with applicable
securities laws, except that the Fund's agreement to indemnify you, your
officers or directors, and any such controlling person will not be deemed to
cover any such claim, demand, liability or expense to the extent that it arises
out of or is based upon any such untrue statement, alleged untrue statement,
omission or alleged omission made in any registration statement, any prospectus
or any statement of additional information in reliance upon information
furnished by you, your officers, directors or any such controlling person to the
Fund or its representatives for use in the preparation thereof, and except that
the Fund's agreement to indemnify you and the Fund's representations and
warranties set out in paragraph 1.8 of this Agreement will not be deemed to
cover any liability to the Funds or their shareholders to which you would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties, or by reason of your reckless
disregard of your obligations and
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duties under this Agreement ("Disqualifying Conduct"). The Fund's agreement to
indemnify you, your officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's being notified of any action
brought against you, your officers or directors, or any such controlling person,
such notification to be given by letter, by facsimile or by telegram addressed
to the Fund at its address set forth above within a reasonable period of time
after the summons or other first legal process shall have been served. The
failure so to notify the Fund of any such action shall not relieve the Fund from
any liability which the Fund 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 Fund's indemnity agreement
contained in this paragraph 1.9. The Fund will be entitled to assume the defense
of any suit brought to enforce any such claim, demand or liability, but, in such
case, such defense shall be conducted by counsel of good standing chosen by the
Fund and approved by you. In the event the Fund elects to assume the defense of
any such suit and retain counsel of good standing approved by you, the defendant
or defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not elect to assume
the defense of any such suit, the Fund will reimburse you, your officers and
directors, or the controlling person or persons named as defendant or defendants
in such suit, for the reasonable fees and expenses of any counsel retained by
you or them. The Fund's indemnification agreement contained in this paragraph
1.9 and the Fund's representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of you, your officers and directors, or any controlling person, and
shall survive the delivery of any Shares. This agreement of indemnity will inure
exclusively to your benefit, to the benefit of your several officers and
directors, and their respective estates, and to the benefit of any controlling
persons or other affiliates, and their successors. The Fund agrees promptly to
notify you of the commencement of any litigation or proceedings against the Fund
or any of its officers or Board members in connection with the issue and sale of
Shares.
1.10 You agree to indemnify, defend and hold the Fund, its several
officers and Board members, and any person who controls the Fund within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Fund, its officers or Board
members, or any such controlling person, may incur under the 1933 Act, the 1940
Act, or under common law or otherwise, but only to the extent that such
liability or expense incurred by the Fund, its officers or Board members, or
such controlling person resulting from such claims or demands, (a) shall arise
out of or be based upon any information, statements or representations made or
provided by you in any sales literature or advertisements, or any Disqualifying
Conduct by you in connection with the offering and sale of any Shares, (b) shall
arise out of or be based upon any untrue, or alleged untrue, statement of a
material fact contained in information furnished in writing by you to the Fund
specifically for use in the Fund's registration statement and used in the
answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission, or alleged
omission, to state a material fact in connection with such information furnished
in writing by you to the Fund and required to be stated in such answers or
necessary to make such information not misleading, (c) arising out of your
breach of any obligation,
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representation or warranty pursuant to this Agreement, or (d) your failure to
comply in any material respect with applicable securities laws. Your agreement
to indemnify the Fund, its officers and Board members, and any such controlling
person, as aforesaid, is expressly conditioned upon your being notified of any
action brought against the Fund, its officers or Board members, or any such
controlling person, such notification to be given by letter, by facsimile or by
telegram addressed to you at your address set forth above within a reasonable
period of time after the summons or other first legal process shall have been
served. The failure so to notify you of any such action shall not relieve you
from any liability which you may have to the Fund, its officers or Board
members, or to such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
your indemnity agreement contained in this paragraph. You will be entitled to
assume the defense of such action, but, in such case, such defense shall be
conducted by counsel of good standing chosen by you and approved by an executive
officer of the Fund, if such action is based solely upon such alleged
misstatement or omission on your part, and in any other event Fund, its officers
or Board members, or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action.
This agreement of indemnity will inure exclusively to the Fund's benefit, to the
benefit of the Fund's officers and Board members, and their respective estates,
and to the benefit of any controlling persons and their successors. You agree
promptly to notify the Fund of the commencement of any litigation or proceedings
against you or any of your officers or directors in connection with the issue
and sale of Shares.
1.11 No Shares shall be offered by either you or the Fund under any of
the provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the 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 10 of said
Act is not on file with the Securities and Exchange Commission; provided,
however, that nothing contained in this paragraph 1.11 shall in any way restrict
or have any application to or bearing upon the Fund's obligation to redeem or
repurchase any Shares from any shareholder in accordance with the provisions of
the Fund's prospectus or charter documents.
1.12. The Fund agrees to advise you immediately in writing of the
occurrence of any of the following events, as soon as any such event comes to
the attention of the Fund:
(a) any request by the Securities and Exchange Commission for
material amendments to the registration statement or prospectus then in
effect or for additional information;
(b) the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of the
registration statement or prospectus then in effect or the initiation of
any proceeding for that purpose;
(c) the happening of any event which makes untrue any statement of a
material fact made in the registration statement or prospectus then in
effect or which requires the making of a change in such registration
statement or prospectus in order to make the statements therein not
misleading; and
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(d) all material actions of the Securities and Exchange Commission
with respect to any amendments to any registration statement or prospectus
which may from time to time be filed with the Securities and Exchange
Commission.
2. Offering Creation Units
Shares in Creation Units of each Index Series will be offered for
sale by you at a price per Creation Unit in the manner set forth in the
then-current prospectus, based on a net asset value determined in accordance
with the Fund's prospectus and charter documents. Any payments to dealers shall
be governed by a separate agreement between you and such dealer and the Fund's
then-current prospectus.
You will accept as compensation for the performance of your
obligations hereunder such compensation, if any, as may be provided for in any
plan of distribution adopted by the Fund with respect to the Fund or any Index
Series pursuant to Rule 12b-1 under the 1940 Act.
3. Term
This Agreement shall become effective with respect to each Index
Series of the Fund as of the date hereof and will continue through December 31,
2011 and is renewable annually thereafter so long as such continuance is
specifically approved (i) by the Fund's Board on behalf of each Index Series or
(ii) by a vote of a majority (as defined in the 0000 Xxx) of the Shares of the
Fund or the relevant Index Series, as the case may be, provided that in either
event its continuance also is approved by a majority of the Board members who
are not "interested persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This agreement may be terminated in respect of an Index Series
at any time, without the payment of any penalty, (i) by vote of a majority of
the Directors who are not interested persons of the Fund (as defined under the
0000 Xxx) or (ii) by vote of a majority (as defined under the 0000 Xxx) of the
outstanding voting securities of the relevant Index Series, on at least 60 days'
written notice to you. This agreement may also be terminated at any time by you,
without the payment of any penalty, upon 60 days' notice by you and will
terminate automatically in the event of its assignment (as defined under the
1940 Act).
4. Miscellaneous
4.1 The Fund recognizes that your directors, officers and employees may
from time to time serve as directors, trustees, officers and employees of
corporations and business trusts (including other investment companies), and
that you or your affiliates may enter into distribution or other agreements with
such other corporations and trusts.
4.2 No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
4.3 This Agreement shall be governed by the laws of the State of New
York, without
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regard to principles of conflicts of laws.
4.4 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
Please confirm that the foregoing is in accordance with your
understanding and indicate your acceptance hereof by signing below, whereupon it
shall become a binding agreement between us.
Very truly yours,
iSHARES MSCI RUSSIA CAPPED INDEX
FUND, INC.
By: /s/ Xxxx Xxx
-------------------------------------
Xxxx Xxx
Treasurer and Chief Financial Officer
Accepted:
SEI INVESTMENTS DISTRIBUTION COMPANY
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Xxxxxx X. Xxxx
Approved by the Board of Directors of iShares MSCI Russia Capped Index Fund,
Inc. on June 16, 2010.
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