(e)(2)
FORM OF DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of January,
2008, by and between XXXXXXX, XXXXXXX FUNDS, INC., a Maryland Corporation (the
"Company") on behalf of its separate series listed on Exhibit A (each a "Fund"
and collectively, the "Funds") and QUASAR DISTRIBUTORS, LLC, a Delaware limited
liability company (the "Distributor"). XXXXXXX, LOEVNER MANAGEMENT, L.P., a
limited partnership organized under the laws of New Jersey, and the investment
advisor to the Company (the "Advisor"), is a party hereto with respect to
Section 5 only.
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment
company, and is authorized to issue shares of beneficial interest ("Shares") in
separate series, with each such series representing interests in a separate
portfolio of securities and other assets;
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member
of the Financial Industry Regulatory Authority ("FINRA");
WHEREAS, the Company desires to retain the Distributor as principal
underwriter in connection with the offer and sale of the Shares of each Fund
listed on Exhibit A hereto (as amended from time to time); and
WHEREAS, this Agreement has been approved by a vote of the Company's
board of directors ("Board of Directors" or the "Board"), including a majority
of the members of the Board who are not "interested person" of the Company (as
that term is defined in Section 2(a)(19) 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 Company 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 Company 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 Company filed under
the Securities Act of 1933, as amended (the "1933 Act") and the
1940 Act. The Company 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 Company. 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 Company'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 Company.
E. The Distributor agrees to cooperate with the Company 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 promptly to the Company 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 Company 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 Company
reserves the right to suspend such repurchase right upon written
notice to the Distributor. The Distributor further agrees to act as
agent for the Company to receive and transmit promptly to the
Company's transfer agent, shareholder requests for redemption of
Shares.
G. The Distributor may, in its discretion, enter into agreements with
such qualified and 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 Company. 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.
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 Rule 12b-1 payments received by the Distributor.
J. The Distributor agrees to advise the Company promptly in writing of
the initiation of any proceedings against it by the SEC or its
staff, FINRA or any other federal and/or state legal or regulatory
authority.
K. The Distributor shall monitor amounts paid under Rule 12b-1 plans
and pursuant to sales loads to ensure compliance with applicable
SEC or FINRA rules.
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY
A. The Company 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 Company in accordance with all requisite action and
constitutes a valid and legally binding obligation of the
Company, 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 paid for as
contemplated in the Registration Statement, will be legally and
validly issued, fully paid and non-assessable;
(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
(6) The Registration Statement (at the time of its effectiveness)
and any advertisements and sales literature prepared by the
Company 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 Company, 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 Company 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 Company 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 Company 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 Company 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.
E. The Company 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 Company 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 Company 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 Company 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
Company shall forward a copy of any SEC filings, including the
Registration Statement, to the Distributor promptly following any
such filings. The Company 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 Company has reviewed and is familiar with the provisions of
FINRA Rule 2830(k) prohibiting directed brokerage. In addition, the
Company agrees not to enter into any agreement (whether orally or
in writing) under which the Company 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 Company fails to comply with
the provisions of FINRA Rule 2830(k), the Company shall promptly
notify the Distributor.
4. ADDITIONAL REPRESENTATIONS AND COVENANTS OF THE DISTRIBUTOR
The Distributor hereby represents, warrants and covenants to the
Company, 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;
(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 FINRA;
(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 Company
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 FINRA and all other applicable
federal or state laws and regulations.
5. COMPENSATION
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 Company
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 Company shall notify the Distributor in writing
within 30 calendar days following receipt of each invoice if the Company is
disputing any amounts in good faith. The Company 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 Company is
disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of 1 1/2% per month after the due date. Notwithstanding anything
to the contrary, amounts owed by the Company 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 Company 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. EXPENSES
A. The Company 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 Company 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.
7. INDEMNIFICATION
A. The Company 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 (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 Company, 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 Company's refusal or failure to comply with the
terms of this Agreement or from its bad faith, gross negligence, or
willful misconduct in the performance of its duties under this
Agreement. In no case: (i) is the Company's obligation to indemnify
the Distributor Indemnitees 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 Company or its
authorized representatives by the Distributor for the purpose of,
and used in, the preparation thereof, or (ii) is the Company's
indemnity in favor of the Distributor Indemnitees be deemed to
protect the Distributor Indemnitees against any liability to which
the Distributor Indemnitees would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the
performance of such person's duties or by reason of reckless
disregard of such person's obligations and duties under this
Agreement. The Company'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 Company; provided,
that the failure so to notify the Company of any such action shall
not relieve the Company from any liability which the Company 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 Company's
indemnity agreement contained in this Section 7(A).
B. 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 Losses, but if the Company elects to
assume the defense, such defense shall be conducted by counsel
chosen by the Company and approved by the Distributor, which
approval shall not be unreasonably withheld. In the event the
Company 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 Company 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 Company, or
if under prevailing law or legal codes of ethics, the same counsel
cannot effectively represent the interests of both the Company and
the Distributor Indemnitees, the Company will reimburse the
Distributor Indemnitees for the reasonable fees and expenses of any
counsel retained by them. The Company'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 Company
agrees promptly to notify the Distributor of the commencement of
any litigation or proceedings against the Company or any of its
officers or Directors in connection with the offer and sale of any
of the Shares.
C. The Company shall advance reasonable attorneys' fees and other
reasonable 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.
D. The Distributor shall indemnify, defend and hold the Company and
each of its trustees, officers, employees, representatives and any
person who controls the Company within the meaning of Section 15 of
the 1933 Act (collectively, the "Company Indemnitees"), free and
harmless from and against any and all Losses that the Company
Indemnitees may sustain or incur or that may be asserted against a
Company 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, gross 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. In no case is the Distributor's indemnity in favor of the
Company, or any person indemnified to be deemed to protect the
Company against any liability to which the Company would otherwise
be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Company's duties or by reason
of reckless disregard of the Company's obligations and duties under
this Agreement. The Distributor's agreement to indemnify the
Company Indemnitees is expressly conditioned upon the Distributor
being notified of any action or claim of loss brought against the
Company 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 Company 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).
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 Company,
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 Company 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 Company 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
Company Indemnitees and the Distributor, the Distributor will
reimburse the Company 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 Company
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 Company Indemnitees and
their successors. The Distributor agrees promptly to notify the
Company 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.
F. The Distributor shall advance reasonable attorneys' fees and other
reasonable expenses incurred by any Company 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.
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.
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 FINRA;
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,
employees, representatives and agents to treat confidentially and as
proprietary information of the Company, all records and other information
relative to the Company and prior, present or potential shareholders of the
Company (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 Company, 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
Company. 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 Company or its agent, shall not
be subject to this paragraph.
Further, the Distributor will adhere to the privacy policies adopted
by the Company 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
Company and its shareholders.
9. RECORDS
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 Company, 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 Company
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 Company or its designee on and in accordance with its request.
10. COMPLIANCE WITH LAWS
The Company 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 Company of its responsibilities for assuring such compliance or
the Board of Director's oversight responsibility with respect thereto. The
Distributor agrees to comply with all applicable terms and provisions of the
1940 Act, the 1933 Act and the 1934 Act.
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 Company'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 Company'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.
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 Company upon the
vote of a majority of the members of its Board who are not
"interested persons" of the Company 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 Company. If required under the 1940 Act, any such amendment
must be approved by the Company's Board, including a majority of
the Company'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
Company by written notice to the Distributor, the Distributor will promptly,
upon such termination and at the expense of the Company, 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 Company (if such form differs from the form in
which the Distributor has maintained the same, the Company 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
Company.
13. EARLY TERMINATION
In the absence of any material breach of this Agreement, should the
Company elect to terminate this Agreement prior to the end of the term, the
Company agrees to pay the following fees:
a. all monthly fees through the life of the contract, including the
rebate of any negotiated discounts;
b. all fees associated with converting services to successor service
provider;
c. all fees associated with any record retention and/or tax reporting
obligations that may not be eliminated due to the conversion to a
successor service provider;
d. all out-of-pocket costs associated with a-c above.
14. GOVERNING LAW
This Agreement shall be governed and construed in accordance with the
laws of the State of New York, without regard to conflicts of law principles.
To the extent that the applicable laws of the State of New York, 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.
15. 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.
16. 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.
17. INVALIDITY
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.
18. NOTICES
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:
Notice to the Distributor shall be sent to:
Quasar Distributors, LLC
Attn: President
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Fax No.:_________________
notice to the Company shall be sent to:
________________________
________________________
________________________
________________________
________________________
and notice to the Advisor shall be sent to:
________________________
________________________
________________________
________________________
19. MULTIPLE ORIGINALS
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.
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.
XXXXXXX, LOEVNER FUNDS, INC. QUASAR DISTRIBUTORS, LLC
ON BEHALF OF ITS SEPARATE SERIES LISTED ON EXHIBIT A
By: By:
-------------------------------- ------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxxxx
-------------------------------- ------------------------------
Title: President Title: President
-------------------------------- ------------------------------
XXXXXXX, XXXXXXX MANAGEMENT, L.P.
BY ITS GENERAL PARTNER, HLM HOLDINGS, INC.
(WITH RESPECT TO SECTION 5 ONLY)
By:
--------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: President
--------------------------------
EXHIBIT A
TO THE
DISTRIBUTION AGREEMENT
FUND NAMES
Separate Series of Xxxxxxx, Xxxxxxx Funds, Inc.
Name of Series Date Added
-------------- ----------
International Equity Portfolio January 1, 2008
Global Equity Portfolio January 1, 2008
Emerging Markets Portfolio January 1, 2008
Institutional Emerging Markets Portfolio January 1, 2008
International Small Companies Portfolio January 1, 2008
EXHIBIT B
TO THE
DISTRIBUTION AGREEMENT
FEE SCHEDULE
AS OF JANUARY 1, 2008
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QUASAR DISTRIBUTORS, LLC
REGULATORY DISTRIBUTION SERVICES
FEE SCHEDULE
REGULATORY DISTRIBUTION ANNUAL SERVICES PER FUND*
o Annual Fee
o $7,000 per fund
ADVERTISING COMPLIANCE REVIEW/NASD FILINGS
o $175 per job for the first 10 pages (minutes if tape or video); $20 per page
(minute if tape or video) thereafter (includes NASD filing fee)
o Non-NASD filed materials, e.g. Internal Use Only Materials
$75 per job for the first 10 pages (minutes if audio or video)
o NASD Expedited Service for 3 Day Turnaround
$1,000 for the first 10 pages (minutes if audio or video); $25 per page
(minutes if audio or video) thereafter. (Comments are faxed. NASD may not
accept expedited request.)
Licensing of Investment Adviser's Staff (if required)
o $1,500 per year per registered representative
o Quasar is limited to these licenses for sponsorship: Series 6, 7, 24, 26, 27,
63, 66
o Plus any NASD and State fees for registered representatives, including
license and renewal fees.
FUND FACT SHEETS
o Design - $1,000 per fact sheet, includes first production
o Production - $500.00 per fact sheet per production period
o All printing costs are out-of-pocket expenses, and in addition to the design
fee and production fee.
PLUS OUT-OF-POCKET EXPENSES -- Including but not limited to typesetting,
printing and distribution of prospectuses and shareholder reports, production,
printing, distribution and placement of advertising and sales literature and
materials, engagement of designers, free-xxxxx writers and public relations
firms, long-distance telephone lines, services and charges, postage, overnight
delivery charges, NASD registration fees, record retention, travel, lodging and
meals and all other out-of-pocket expenses.
Fees are billed monthly
* Subject to annual CPI increase, Milwaukee MSA.
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