Exhibit e-2
XXXX XXXXX & COMPANY, INCORPORATED
SELECTED DEALER AGREEMENT
Xxxx Xxxxx & Company, Incorporated (the "Distributor") acts as the principal
distributor of the shares of beneficial interest of the open-end investment
company set forth on Schedule A attached hereto (the "Fund") pursuant to
distribution agreements between the Distributor and the Fund (the "Distribution
Agreements"). The Fund is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Distributor
invites you (the "Selected Dealer") to participate in the distribution of shares
of the Fund (the "Shares") and/or provide shareholder services to the
shareholders of the Fund upon the following terms and conditions:
SECTION 1. SALE AND REDEMPTION OF FUND SHARES
(a) All sales and redemptions of Shares for the account of the Selected Dealer's
clients shall be conducted by the Selected Dealer in compliance with the terms
and conditions of the prospectuses and statements of additional information of
the Fund, as then amended or supplemented (the "Prospectus and Statement") in
effect at the time of such sales and redemptions, including any amendments or
supplements thereto.
(b) Orders for the purchase of Shares will be accepted by the Distributor
through Xxxxx Shareholder Services, Inc. ("Transfer Agent"), on the
Distributor's behalf, at the then public offering price per share, as set forth
in the current Prospectus and Statement. Orders for the redemption of Shares
shall be executed at the net asset value per share less the applicable deferred
sales charge, redemption fee or similar charge or fee, if any. Orders shall be
handled in accordance with instructions which the Distributor, the Fund or the
Transfer Agent shall forward from time to time to the Selected Dealer or receive
through the National Securities Clearing Corporation ("NSCC") and forward from
time to time to the Selected Dealer. All orders are subject to acceptance or
rejection by the Distributor or the Fund in the sole discretion of either.
(c) The Selected Dealer agrees to purchase Shares only in transactions
contemplating the simultaneous resale of such Shares to its clients and in no
event shall the Selected Dealer place orders for Shares unless the Selected
Dealer has already received purchase orders for such Shares at the applicable
public offering prices and subject to the terms hereof. The Selected Dealer
shall not withhold placing orders for the Shares received from the Selected
Dealer's customers so as to profit as a result of such withholding (e.g., by a
change in the net asset value from that used in determining the offering price
to the Selected Dealer's clients.). Nothing in this Section 1(c) shall prevent
the purchase of Shares by the Selected Dealer for its own bona fide investment.
SECTION 2. FUND INFORMATION
(a) In connection with sales and offers to sell Shares, the Selected Dealer will
furnish to each of its clients to whom any such sale or offer is made, a copy of
the Prospectus of the Fund and, if requested, the Statement of the Fund, and
will not furnish to any client any information relating to the Fund that is
inconsistent in any respect with the information contained in the Prospectus and
Statement or cause any written materials to be used in connection with offers or
sales of Shares, or any advertisement to be published in any newspaper, magazine
or other publication, broadcast by television, radio or other means or posted in
any public place without the Distributor's prior written consent. The
Distributor shall supply the Selected Dealer with additional copies of the
Prospectus and Statement upon the Selected Dealer's request.
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(b) The Selected Dealer is not authorized to make any representations concerning
the Shares except those contained in the Prospectus and Statement and in such
supplemental information as is issued by the Distributor or the Fund and
furnished in writing to the Selected Dealer from time to time. In placing orders
for the purchase of Shares, the Selected Dealer shall rely solely on the
representations contained in the Prospectus and Statement and the supplemental
information. Any printed information that the Distributor furnishes to the
Selected Dealer other than the Prospectus, Statement, information supplemental
to the Prospectus and Statement issued by the Fund, periodic reports, and proxy
solicitation materials is the Distributor's sole responsibility and not the
responsibility of the Fund, and the Selected Dealer agrees that the Fund shall
have no liability or responsibility to the Selected Dealer in these respects,
unless expressly assumed by an instrument in writing in connection therewith.
SECTION 3. COMPENSATION
The Distributor will compensate the Selected Dealer for sales of Shares and
services provided to shareholders of the Fund as set forth on Schedule B
attached hereto.
SECTION 4. AUTHORITY
In all sales of Shares to the public the Selected Dealer shall act as dealer for
the Selected Dealer's own account. In no transaction shall the Selected Dealer
have any authority to act as an agent, employee or representative of the
Distributor or the Fund or to make any representation on behalf of the
Distributor or the Fund.
SECTION 5. COMPLIANCE
(a) The Distributor and the Selected Dealer shall comply with all applicable
federal and state laws, rules, and regulations, in conducting their activities
under this Agreement, including but not limited to: federal and state securities
laws; all rules, regulations and interpretations by governmental and regulatory
bodies and self-regulatory organizations having jurisdiction over the
Distributor and the Selected Dealer, including but not limited to the U.S.
Securities and Exchange Commission (the "SEC") and the National Association of
Securities Dealers, Inc. ("NASD"); all rules, regulations, and procedures of the
NSCC; and all federal and state banking laws, as applicable.
(b) Upon application to the Distributor, the Distributor will inform the
Selected Dealer as to the states and jurisdictions under the laws of which, to
the best information and belief of the Distributor, the Shares have been
qualified for sale or are exempt from such qualifications, but the Distributor
assumes no responsibility or obligation as to the Selected Dealer's right to
sell Shares in any state or jurisdiction.
(c) The Distributor and the Selected Dealer shall not disclose customer
"non-public personal information," as defined by Regulation S-P under the
Xxxxx-Xxxxx-Xxxxxx Act of 1999, as amended ("Regulation S-P"), that is obtained
in the course of performance of their duties and obligations under this
Agreement to any third party, for any purpose except as necessary to effect the
terms and conditions of this Agreement or as permitted or required by law. The
Distributor and the Selected Dealer shall maintain and ensure the security and
confidentiality of customer "non-public personal information," in accordance
with the mandates of Regulation S-P. The obligations provided by this Section
5(c) shall survive termination of this Agreement.
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(d) The Distributor and the Selected Dealer shall comply with Title III of the
United and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, as amended ("USA
Patriot Act"), and the rules promulgated thereunder, and all related federal,
state, self-regulatory organization and SEC anti-money laundering laws, rules,
and regulations.
(e) The Selected Dealer shall be responsible for insuring its compliance with
all applicable federal and state laws, rules, and regulations. The Distributor
shall have full authority to take such action as the Distributor may deem
advisable with respect to all matters pertaining to the continuous offering,
distribution, and redemption of Shares and this Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES
(a) The Selected Dealer represents and warrants that it is:
(i) a duly registered broker-dealer under the Securities Exchange
Act of 1934, as amended ("Exchange Act") and member in good
standing of the NASD, and licensed and authorized to conduct
the transactions contemplated by this Agreement; or
(ii) a non-U.S. broker-dealer not eligible for membership in the
NASD which agrees to make no sales within the U.S., its
territories or its possessions or to persons who are citizens
thereof or residents therein, licensed and authorized to carry
on investment business in the Selected Dealer's home
jurisdiction, including the transactions contemplated by this
Agreement, subject to the supervision and regulation of an
investment regulatory authority or organization in the
Selected Dealer's home jurisdiction; or
(iii) a U.S. bank, as defined by Section 3(a)(6) of the Exchange
Act, or financial institution licensed and authorized to carry
on investment business in the U.S., including the transactions
contemplated by this Agreement, subject to the supervision and
regulation of relevant U.S. banking regulatory authorities; or
(iv) a non-U.S. bank or financial institution, not eligible for
membership in the NASD which agrees to make no sales within
the U.S., its territories or its possessions or to persons who
are citizens thereof or residents therein, licensed and
authorized to carry on investment business in the Selected
Dealer's home jurisdiction, including the transactions
contemplated by this Agreement, subject to the supervision and
regulation of a relevant banking regulatory authority or
organization in the Selected Dealer's home jurisdiction.
(b) The Distributor represents and warrants that:
(i) the Fund has been duly registered under the 1940 Act;
(ii) the Shares are registered under the Securities Act of 1933, as
amended (the "1933 Act"); and
(iii) the Prospectus and Statement comply in all material respects
with applicable regulatory and disclosure requirements.
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SECTION 7. INDEMNIFICATION
(a) The Selected Dealer shall indemnify the Distributor and its directors,
officers, trustees, employees, and agents (collectively the "Distributor
Indemnified Parties"), from and against all losses suffered, claims, damages,
obligations, penalties, actions, judgments, suits, costs, disbursements,
liabilities or expenses whatsoever (including reasonable legal fees and
expenses), other than those resulting from the bad faith or gross negligence on
the part of the Distributor Indemnified Parties or any associated person of the
Distributor, as defined by Article I of the By-Laws of the NASD, which may be
imposed on, incurred by or asserted against the Distributor, resulting from the
Selected Dealer's or any associated person of the Selected Dealer's:
(i) violation of or noncompliance with any applicable law, rule or
regulation, related to the services provided for under this
Agreement;
(ii) making of any unauthorized representations in violation of
Section 2(b) of this Agreement; or
(iii) breach of any representation, warranty, covenant or provision
contained in this Agreement.
(b) The obligations provided by this Section 7 shall survive termination of this
Agreement.
(c) The Selected Dealer agrees to indemnify the Distributor for any loss,
including losses resulting from changes in Share prices, in connection with
checks that are tendered to the Distributor for the purchase of Shares and that
are not paid when presented fro payment to the appropriate bank.
SECTION 8. TERM AND TERMINATION
(a) This Agreement shall become effective upon the date of execution by the
Distributor and the Selected Dealer (the "Commencement Date"). The provisions of
the Distribution Agreements, the China-U.S. Growth Fund Plan as defined under
Section I(B) of Schedule B attached hereto are incorporated herein by reference
and this Agreement shall continue in effect with respect to the Fund only so
long as the continuation of the Distribution Agreement relating the Fund and the
China-U.S. Growth Fund Plan are approved at least annually by the Board of
Trustees of the Fund in the manner contemplated by the Fund's Distribution
Agreement and by applicable law.
(b) This Agreement shall be terminable by either party without penalty upon
thirty (30) days' written notice to the other party; provided, however, that
notwithstanding any termination, the Selected Dealer shall continue to pay the
Selected Dealer the Distribution Fee contemplated under Section I(B) of Schedule
B hereof as to Shares sold to the Selected Dealer's customers in accordance with
this Agreement and held by such customers as of the date of termination
("Pre-Termination Shares"), for so long as the Selected Dealer continues to
provide the services contemplated under Section I(B) of Schedule B hereof with
respect to such Pre-Termination Shares. Provided, however, the Selected Dealer
will make no such payment upon the happening of any event that terminates the
Fund's China-U.S. Growth Fund Plan or Distribution Agreement with the
Distributor. Further, so long as the Selected Dealer continues to perform the
services contemplated under Section I(B) as to any Pre-Termination Shares, this
Agreement will otherwise
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remain in full force and effect as to such Pre-Termination Shares. The Selected
Dealer agrees, in the event of termination, to provide the Distributor will such
reports as reasonably requested by the Distributor to determine that the
continued payment of the Distribution Fee has been calculated in accordance with
this Agreement. The Distributor reserves the right in its discretion, without
notice, to suspend sales or withdraw the offering of Shares entirely.
(c) This Agreement shall terminate automatically in the event that the Selected
Dealer ceases to be a member in good standing of NASD; upon the occurrence of
any event affecting the Selected Dealer's registration as a broker-dealer under
the Exchange Act; upon the occurrence of any event affecting the Selected
Dealer's authorization and license to carry on investment business in the U.S.;
or upon the occurrence of any event affecting the Selected Dealer's
authorization and license to carry on investment business in the Selected
Dealer's home jurisdiction. The Selected Dealer agrees to promptly notify the
Distributor upon the occurrence of any event affecting the Selected Dealer's
registration as a broker-dealer under the Exchange Act or of any event
terminating or suspending the Selected Dealer's registration, authorization or
license to carry on investment business in the U.S. or the Selected Dealer's
home jurisdiction, including the transactions contemplated by this Agreement.
SECTION 9. AMENDMENT AND WAIVER
(a) This Agreement may be amended by the Distributor at any time upon ten (10)
days' written notice to the Selected Dealer. The Selected Dealer's placing any
order after the effective date of notice of any such amendment shall constitute
acceptance thereof by the Selected Dealer. The Distributor may amend the
Schedules to this Agreement at any time by ten (10) days' written notice
transmitting the amended Schedule to the Selected Dealer.
(b) Any of the terms of this Agreement may be waived in whole or in part. No
term of this Agreement shall be deemed to have been waived unless such waiver is
expressed in an instrument in writing signed by the party waiving the term and
transmitted to the other party. No failure of either party to insist upon strict
performance of any provision of this Agreement shall constitute a waiver.
Nothing contained in this Section 9 is intended to operate as and shall not in
any way whatsoever constitute, a waiver by the Selected Dealer or the
Distributor of compliance with any applicable federal or state law, rule or
regulation, as described under Section 5(a) of this Agreement.
SECTION 10. ASSIGNMENT
This Agreement shall not be assignable by the Selected Dealer. The Distributor
may assign its rights and obligations under this Agreement to any affiliate of
the Distributor upon written notice to the Selected Dealer.
SECTION 11. NOTICES
(a) To be effective, all notices, consents, and other communications under this
Agreement must be in writing and given by:
(i) personal delivery;
(ii) registered or certified United States first class mail return
receipt requested; or
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(iii) by facsimile telecopier, telex, telegraph or similar means of
same day delivery followed by a confirming hard copy by mail
as provided for under Section 11(a)(ii).
(b) Unless otherwise agreed to by the Distributor and the Selected Dealer, all
notices, consents, and other communications shall be given as follows:
If to the Distributor: Xxxx Xxxxx & Company, Incorporated;
00 Xxxxxxxxxx Xxxxxx; Xxxxxx Xxxx, XX 00000;
Attn.: Xx. Xxxxx X. Xxxxxxxx, Xx.
If to the Selected Dealer: ____________________________________________
____________________________________________
____________________________________________
SECTION 12. GOVERNING LAW
This Agreement and the rights of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to conflicts of laws principles.
SECTION 13. SCHEDULES
All Schedules to this Agreement are by this reference incorporated into and made
part of this Agreement. The Distributor may amend the Schedules from time to
time in accordance with the provisions set forth in Section 9(a) of this
Agreement.
SECTION 14. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, the validity, legality, and enforceability of
the remaining provisions of this Agreement shall not be affected thereby.
SECTION 15. CAPTIONS
Captions contained in this Agreement are inserted for convenience of reference
only and shall not be deemed to define, limit or extend or otherwise affect the
meaning or interpretation of this Agreement or any provision hereof.
SECTION 16. ENTIRE AGREEMENT
This Agreement, together with its Schedules, constitutes the entire Agreement
between the Distributor and the Selected Dealer regarding Shares and shall
supersede any prior agreements or understandings between the parties hereto.
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XXXX XXXXX & COMPANY, INCORPORATED
By:
----------------------------
Xxxxx X. Xxxxxxxx, Xx.
Executive Vice President
Date:
----------------------------
Please indicate your acceptance of this Agreement by returning two original
signed and dated copies to the Distributor. The undersigned hereby accepts the
offer set forth above.
Accepted
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Firm Name
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
Date:
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SCHEDULE A
The China-U.S. Growth Fund
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SCHEDULE B
Compensation
The Selected Dealer shall receive the following compensation in connection with
sales of Shares: [verify terms of compensation]
I. PURCHASE OF SHARES
(A) The Selected Dealer shall receive compensation in the form of dealer
concessions based on the aggregate purchase price of Shares purchased by the
Selected Dealer during a particular calendar month, computed in the manner set
forth in the Prospectus and Statement. Such compensation shall be payable as
follows: (i) on the settlement date for those orders received through NSCC or
(ii) semi-monthly for all other orders. No compensation shall be payable in
respect of Shares purchased through reinvestment of dividends or distributions,
or in respect of Shares purchased in exchange for Shares that, either originally
or through one or more exchange transactions, had been the subject of payments
under this Section 3 of this Agreement. In addition, no compensation shall be
payable in connection with Shares the redemption of which is subject to a waiver
of the sales charge as set forth in the Prospectus and Statement.
(B) The Distributor will pay the Selected Dealer a fee ("Distribution Fee") at
an annual rate of up to .75% of the average daily net assets of The China-U.S.
Growth Fund attributable to Shares, pursuant to a Rule 12b-1 Plan of
Distribution (the "China-U.S. Growth Fund Plan"). Such Distribution Fee is
payable quarterly after the first year until such time as those Shares are
redeemed or exchanged for shares of the Xxxxx Money Market Portfolio. The
Distributor receives compensation from The China-U.S. Growth Fund for the
Distributor's distribution activities with respect to Shares pursuant to The
China-U.S. Growth Fund. The Distributor reserves the right to terminate payment
of the Distribution Fee to the Selected Dealer with respect to Shares in the
event that The China-U.S. Growth Fund is terminated or not renewed in accordance
with its terms or to reduce the payment of such fees to the Selected Dealer in
the event that payments to the Distributor under the China-U.S. Growth Fund Plan
are reduced.
II. SHAREHOLDER SERVICING FEES
(A) The Distributor will pay the Selected Dealer a fee (the "China-U.S. Growth
Fund Shareholder Servicing Fee") computed daily at an annual rate equal to .25%
of the aggregate net asset value on that day of all Shares of The China-U.S.
Growth Fund, other than Shares of Xxxxx Money Market Portfolio, purchased by the
Selected Dealer, including such Shares purchased through reinvestment of
dividends and distributions, which Shareholder Servicing Fee shall be payable
quarterly. Such China-U.S. Growth Fund Shareholder Servicing Fee shall be
payable with respect to Shares of the Fund only so long as and to the extent
that the Fund reimburses the Distributor for payment of the China-U.S. Growth
Fund Shareholder Servicing Fee to the Selected Dealer. The Distributor reserves
the right to terminate or reduce payment of the China-U.S. Growth Fund
Shareholder Servicing Fee in the event that The China-U.S. Growth Fund
terminates or reduces such reimbursement payments to the Distributor. The fees
described in Paragraph 3 shall cease to accrue in connection with Shares that
are redeemed or exchanged for Shares in the Xxxxx Money Market Portfolio.
(B) In return for the China-U.S. Growth Fund Shareholder Servicing Fee, as the
case may be, the Selected Dealer agrees to provide the following services to
shareholders of the respective Funds: (i) responding to shareholder inquiries
and providing information concerning their investments in the Fund; and (ii)
providing such other similar services as the Distributor may reasonably request
to the extent permitted under applicable laws, rules, and regulations.
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III. OVERPAYMENT
Any overpayment of compensation and fees pursuant to this Schedule B shall
reduce amounts payable to the Selected Dealer in subsequent months. If such
overpayment is the final amount of compensation due and payable to the Selected
Dealer, in such case the Selected Dealer shall pay forthwith to the Distributor
the full amount of the overpayment. The Distributor reserves the right at any
time to impose minimum fee payment requirements prior to tendering any payment
which the Selected Dealer is entitled to under this Agreement.
IV. CHARGEBACK
Notwithstanding the provisions set forth in Section I above, if any Shares sold
to the Selected Dealer under the terms of this Agreement are tendered for
redemption or repurchase within seven (7) business days after the date of the
Distributor's confirmation of the original purchase by the Selected Dealer, the
Selected Dealer shall forfeit its right to compensation with respect to such
Shares. The Distributor shall notify the Selected Dealer of any such redemption
or repurchase within ten (10) business days from the date on which the request
for redemption or repurchase is delivered to the Distributor or to the Fund, and
the Selected Dealer shall immediately refund to the Distributor any compensation
allowed or paid in connection with such sale.
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