Exhibit (e)(2)
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 7th day of September, 1998 between GLOBAL/INTERNATIONAL
FUND, INC., a Maryland corporation (the "Company"), on behalf of Global
Discovery Fund, a series of the Company (the "Fund"), and XXXXXX DISTRIBUTORS,
INC., a Delaware corporation ("KDI").
In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:
1. The Company hereby appoints KDI to act as agent for the distribution of the
Class A shares, Class B shares and Class C shares of the capital stock
(hereinafter called "shares")of the Fund in jurisdictions wherein shares of the
Fund may legally be offered for sale; provided, however, that the Company in its
absolute discretion may (a) issue or sell shares directly to holders of shares
of the Fund upon such terms and conditions and for such consideration, if any,
as it may determine, whether in connection with the distribution of subscription
or purchase rights, the payment or reinvestment of dividends or distributions,
or otherwise; or (b) issue or sell shares at net asset value to the shareholders
of any other investment company for which KDI shall act as exclusive
distributor, who wish to exchange all or a portion of their investment in shares
of such other investment company for shares of the Fund. KDI shall appoint
various financial service firms ("Firms") to provide distribution services to
investors. The Firms shall provide such office space and equipment, telephone
facilities, personnel, literature distribution, advertising and promotion as is
necessary or beneficial for providing information and distribution services to
existing and potential clients of the Firms. KDI may also provide some of the
above services for the Corporation.
KDI accepts such appointment as distributor and principal underwriter and agrees
to render such services and to assume the obligations herein set forth for the
compensation herein provided. KDI shall for all purposes herein provided be
deemed to be an independent contractor and, unless expressly provided herein or
otherwise authorized, shall have no authority to act for or represent the
Company in any way. KDI, by separate agreement with the Company, may also serve
the Company in other capacities. The services of KDI to the Corporation under
this Agreement are not to be deemed exclusive, and KDI shall be free to render
similar services or other services to others so long as its services hereunder
are not impaired thereby.
In carrying out its duties and responsibilities hereunder, KDI will, pursuant to
separate written contracts, appoint various Firms to provide advertising,
promotion and other distribution services contemplated hereunder directly to or
for the benefit of existing and potential shareholders who may be clients of
such Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Company.
KDI shall use its best efforts with reasonable promptness to sell such part of
the authorized shares of the Fund remaining unissued as from time to time shall
be effectively registered under the Securities Act of 1933 ("Securities Act"),
at prices determined as hereinafter provided and on
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terms hereinafter set forth, all subject to applicable federal and state laws
and regulations and to the Charter of the Company.
2. KDI shall sell shares of the Fund to or through qualified Firms in such
manner, not inconsistent with the provisions hereof and the then effective
registration statement (and related prospectus) of the Fund under the Securities
Act, as KDI may determine from time to time, provided that no Firm or other
person shall be appointed or authorized to act as agent of the Fund without the
prior consent of the Company. In addition to sales made by it as agent of the
Fund, KDI may, in its discretion, also sell shares of the Fund as principal to
persons with whom it does not have selling group agreements.
Shares of any class of the Fund offered for sale or sold by KDI shall be so
offered or sold at a price per share determined in accordance with the then
current prospectus. The price the Company shall receive, on behalf of the Fund,
for all Fund shares purchased from it shall be the net asset value used in
determining the public offering price applicable to the sale of such shares. Any
excess of the sales price over the net asset value of the shares of the Fund
sold by KDI as agent shall be retained by KDI as a commission for its services
hereunder. KDI may compensate Firms for sales of shares at the commission levels
provided in the Fund's prospectus from time to time. KDI may pay other
commissions, fees or concessions to Firms, and may pay them to others in its
discretion, in such amounts as KDI shall determine from time to time. KDI shall
be entitled to receive and retain any applicable contingent deferred sales
charge as described in the Fund's prospectus. KDI shall also receive any
distribution services fee payable by the Fund as provided in the Fund's Amended
and Restated Rule 12b-1 Plan, as amended from time to time (the "Plan").
KDI will require each Firm to conform to the provisions hereof and the
Registration Statement (and related prospectus) at the time in effect under the
Securities Act with respect to the public offering price or net asset value, as
applicable, of the Fund's shares, and neither KDI nor any such Firms shall
withhold the placing of purchase orders so as to make a profit thereby.
3. The Company will use its best efforts to keep effectively registered under
the Securities Act for sale as herein contemplated such Fund shares as KDI shall
reasonably request and as the Securities and Exchange Commission shall permit to
be so registered. Notwithstanding any other provision hereof, the Company may
terminate, suspend or withdraw the offering of Fund shares whenever, in its sole
discretion, it deems such action to be desirable.
4. The Company will execute any and all documents and furnish any and all
information that may be reasonably necessary in connection with the
qualification of Fund shares for sale (including the qualification of the
Company or the Fund as a dealer where necessary or advisable) in such states as
KDI may reasonably request (it being understood that the Company shall not be
required without its consent to comply with any requirement which in its opinion
is unduly burdensome). The Company will furnish to KDI from time to time such
information with respect to the Fund and its shares as KDI may reasonably
request for use in connection with the sale of shares of the Fund.
5. KDI shall issue and deliver or shall arrange for various Firms to issue and
deliver on behalf of
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the Fund such confirmations of sales made by it pursuant to this agreement as
may be required. At or prior to the time of issuance of Fund shares, KDI will
pay or cause to be paid to the Fund the amount due the Company, on behalf of the
Fund, for the sale of such Fund shares. Certificates shall be issued or shares
registered on the transfer books of the Fund in such names and denominations as
KDI may specify.
6. KDI shall order shares of the Fund from the Company only to the extent that
it shall have received purchase orders therefor. KDI will not make, or authorize
Firms or others to make (a) any short sales of shares of the Fund; or (b) any
sales of such shares to any Director or officer of the Company or to any officer
or director of KDI or of any corporation or association furnishing investment
advisory, managerial or supervisory services to the Fund, or to any corporation
or association, unless such sales are made in accordance with the then current
prospectus relating to the sale of such shares. KDI, as agent of and for the
account of the Fund, may repurchase the shares of the Fund at such prices and
upon such terms and conditions as shall be specified in the current prospectus
of the Fund. In selling or reacquiring shares of the Fund for the account of the
Fund, KDI will in all respects conform to the requirements of all state and
federal laws and the Conduct Rules of the National Association of Securities
Dealers, Inc., relating to such sale or reacquisition, as the case may be, and
will indemnify and save harmless the Company and its Directors from any damage
or expense on account of any wrongful act or failure to act by KDI or any
employee, representative or agent of KDI. KDI will observe and be bound by all
the provisions of the Charter of the Company (and of any fundamental policies
adopted by the Company pursuant to the Investment Company Act of 1940, notice of
which shall have been given to KDI) which at the time in any way require, limit,
restrict, prohibit or otherwise regulate any action on the part of KDI
hereunder.
7. The Company, on behalf of the Fund, shall assume and pay all charges and
expenses of its operations not specifically assumed or otherwise to be provided
by KDI under this Agreement or the Plan. The Company, on behalf of the Fund,
will pay or cause to be paid expenses (including the fees and disbursements of
its own counsel) of any registration of the Fund and its shares under the United
States securities laws and expenses incident to the issuance of shares of
capital stock, such as the cost of share certificates, issue taxes, and fees of
the transfer agent. KDI will pay all expenses (other than expenses which one or
more Firms may bear pursuant to any agreement with KDI) incident to the sale and
distribution of the shares issued or sold hereunder, including, without limiting
the generality of the foregoing, all (a) expenses of printing and distributing
any prospectus and of preparing, printing and distributing or disseminating any
other literature, advertising and selling aids in connection with the offering
of the shares for sale (except that such expenses need not include expenses
incurred by the Fund in connection with the preparation, typesetting, printing
and distribution of any registration statement or prospectus, report or other
communication to shareholders in their capacity as such), (b) expenses of
advertising in connection with such offering and (c) expenses (other than the
Fund's auditing expenses) of qualifying or continuing the qualification of the
shares for sale and, in connection therewith, of qualifying or continuing the
qualification of the Company as a dealer or broker under the laws of such states
as may be designated by KDI under the conditions herein specified. No transfer
taxes, if any, which may be payable in connection with the issue or delivery of
shares sold as herein contemplated or of the certificates for such shares shall
be borne by the Fund, and KDI will
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indemnify and hold harmless the Company against liability for all such transfer
taxes.
8. The net asset value shall be calculated in accordance with the provisions of
the Fund's current prospectus. On each day when net asset value is not
calculated, the net asset value of a share of any class of any series of the
Fund shall be deemed to be the net asset value of such a share as of the close
of business on the last previous day on which such calculation was made.
9. This Agreement shall become effective on the date hereof and shall continue
until September 30, 1999; and shall continue from year to year thereafter only
so long as such continuance is approved in the manner required by the Investment
Company Act of 1940.
This Agreement shall automatically terminate in the event of its assignment and
may be terminated at any time without the payment of any penalty by the Company,
on behalf of the Fund, or by KDI on sixty (60) days' written notice to the other
party. The Company, on behalf of the Fund, may effect termination with respect
to any class of the Fund by a vote of (i) a majority of the Board of Directors
of the Company, (ii) a majority of the Directors of the Company who are not
interested persons of the Company and who have no direct or indirect financial
interest in the operation of the Plan, this Agreement or in any agreement
related to the Plan or this Agreement, or (iii) a majority of the outstanding
voting securities of such class. Without prejudice to any other remedies of the
Company, the Company may terminate this Agreement at any time immediately upon
KDI's failure to fulfill any of its obligations hereunder.
This Agreement may not be amended to increase the amount to be paid to KDI by
the Company, on behalf of the Fund, for services hereunder with respect to a
class of the Fund without the vote of a majority of the outstanding voting
securities of such class. All material amendments to this Agreement must in any
event be approved by a vote of the Board of Directors of the Company including
the Directors who are not interested persons of the Company and who have no
direct or indirect financial interest in the operation of the Plan, this
Agreement or in any other agreement related to the Plan or this Agreement, cast
in person at a meeting called for such purpose.
The terms "assignment", "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the
Investment Company Act of 1940 and the rules and regulations thereunder.
KDI shall receive such compensation for its distribution services as set forth
in the Plan. Termination of this Agreement shall not affect the right of KDI to
receive payments on any unpaid balance of the compensation earned prior to such
termination, as set forth in the Plan.
10. KDI will not use or distribute, or authorize the use, distribution or
dissemination by Firms or others in connection with the sale of Fund shares any
statements other than those contained in the Fund's current prospectus, except
such supplemental literature or advertising as shall be lawful under federal and
state securities laws and regulations. KDI will furnish the Company with copies
of all such material.
11. If any provision of this Agreement shall be held or made invalid by a court
decision, statute,
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rule or otherwise, the remainder shall not be thereby affected.
12. Any notice under this Agreement shall be in writing, addressed and delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate for the receipt of such notice.
13. All parties hereto are expressly put on notice of the Company's Charter, and
all amendments thereto, all of which are on file with the State Department of
Assessments and Taxation of Maryland. With respect to any claim by KDI for
recovery of any liability arising hereunder allocated to a particular class of
the Fund, whether in accordance with the express terms hereof or otherwise, KDI
shall have recourse solely against the assets of that class to satisfy such
claim and shall have no recourse against the assets of any other series of the
Company or class of the Fund for such purpose.
14. This Agreement shall be construed in accordance with applicable federal law
and with the laws of The Commonwealth of Massachusetts.
15. This Agreement is the entire contract between the parties relating to the
subject matter hereof and supersedes all prior agreements between the parties
relating to the subject matter hereof.
IN WITNESS WHEREOF, the Company and KDI have caused this Agreement to be
executed as of the day and year first above written.
GLOBAL/INTERNATIONAL FUND, INC., on behalf of
Global Discovery Fund
By:/s/Xxxxxx X. XxXxxxxxx
---------------------------------
Title: Vice President
ATTEST:
/s/Xxxxxxxx Xxxxxxx
-------------------------
Title: Assistant Secretary
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XXXXXX DISTRIBUTORS, INC.
By:/s/Xxxxxx Xxxxxx
------------------------
Title: Chairman
ATTEST:
/s/
-------------------------
Title: Vice President
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