INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT is made as of the __ day of
____________, 2000, by and between QUESTAR FUNDS, INC., a Maryland corporation
(the "Company") on behalf of its series the AZZAD/DOW ▇▇▇▇▇ ISLAMIC INDEX FUND
(the "Fund") and AZZAD ASSET MANAGEMENT, INC., a Delaware corporation (the
"Adviser" or "Azzad").
W I T N E S S E T H:
WHEREAS, the Company is an open-end management investment
company, registered as such under the Investment Company Act of 1940 (the
"Investment Company Act");
WHEREAS, the Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940 and is engaged in the business of
providing investment advice to investment companies; and
WHEREAS, the Company, on behalf of the Fund, desires to retain
the Adviser to render advice and services to the Fund pursuant to the terms and
provisions of this Agreement, and the Adviser desires to furnish said advice and
services.
NOW, THEREFORE, in consideration of the covenants and the
mutual promises hereinafter set forth, the parties to this Agreement, intending
to be legally bound hereby, mutually agree as follows:
1. APPOINTMENT OF ADVISER. The Company hereby employs the
Adviser and the Adviser hereby accepts such employment, to render investment
advice and related services with respect to the assets of the Fund for the
period and on the terms set forth in this Agreement, subject to the supervision
and direction of the Board of Directors.
2. DUTIES OF ADVISER.
(a) GENERAL DUTIES. The Adviser shall act as
investment adviser to the Fund and shall supervise investments of the Fund in
accordance with the investment objective, policies and restrictions of the Fund
as set forth in the Fund's governing documents, including, without limitation,
the Company's Articles of Incorporation, as amended, and Bylaws, as amended, the
prospectus and statement of additional information; any limitations or
restrictions imposed by ▇▇▇▇▇`ah law as interpreted by the ▇▇▇▇▇ ▇▇▇▇▇`ah Board,
and such other limitations, policies and procedures as the Directors may impose
from time to time in writing to the Adviser. In providing such services, the
Adviser shall at all times adhere to the provisions and restrictions contained
in the federal securities laws, applicable state securities laws, the Internal
Revenue Code, the Uniform Commercial Code and other applicable law.
Without limiting the generality of the foregoing,
the Adviser shall: (i) furnish the Fund with advice and recommendations with
respect to the investment of the Fund's assets and the purchase and sale of
portfolio securities for the Fund, including the taking of such steps as may be
necessary to implement such advice and recommendations (I.E., placing the
orders); (ii) manage and oversee the investments of the Fund, subject to the
ultimate supervision and direction of the Board of Directors and the ▇▇▇▇▇
▇▇▇▇▇`ah Board; (iii) vote proxies for the Fund, file ownership reports under
Section 13 of the Securities Exchange Act of 1934 for the Fund, and take other
actions on behalf of the Fund; (iv) maintain the books and records required to
be maintained by the Fund except to the extent arrangements have been made for
such books and records to be maintained by the Administrator, Transfer Agent or
another agent of the Fund; (v) furnish reports, statements and other data on
securities, economic conditions and other matters related to the investment of
the Fund's assets which the Board of Directors or the officers of the Fund may
reasonably request; and (vi) render to the Board of Directors such periodic and
special reports with respect to the Fund's investment activities as the Board
may reasonably request, including at least one in-person appearance annually
before the Board of Directors.
(b) BROKERAGE. The Adviser shall be responsible for
decisions to buy and sell securities for the Fund, for broker-dealer selection,
and for negotiation of brokerage commission rates, provided that the Adviser
shall not direct orders to an affiliated person of the Adviser without general
prior authorization to use such affiliated broker or dealer from the Board of
Directors. The Adviser's primary consideration in effecting a securities
transaction will be execution at the most favorable price. In selecting a
broker-dealer to execute each particular transaction, the Adviser may take the
following into consideration: the best net price available; the reliability,
integrity and financial condition of the broker-dealer; the size of and
difficulty in executing the order; and the value of the expected contribution of
the broker-dealer to the investment performance of the Fund on a continuing
basis. The price to the Fund in any transaction may be less favorable than that
available from another broker-dealer if the difference is reasonably justified
by other aspects of the portfolio execution services offered.
Subject to such policies as the Board of Directors
may determine, the Adviser shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused the Fund to pay a broker or dealer that provides (directly
or indirectly) brokerage or research services to the Adviser an amount of
commission for effecting a portfolio transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if the Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect to
the Fund or accounts for which the Adviser has investment discretion. The
Adviser is further authorized to allocate the orders placed by it on behalf of
the Fund to such brokers or dealers who also provide research or statistical
material, or other services, to the Fund, the Adviser, or any affiliate of
either. Such allocation shall be in such amounts and proportions as the Adviser
shall determine, and the Adviser shall report on such allocations regularly to
the Fund, indicating the broker-dealers to whom such allocations have been made,
the amount of such allocation and the basis therefor. The Adviser is also
authorized to consider sales of shares as a factor in the selection of brokers
or dealers to execute portfolio transactions, subject to the requirements of
best price and execution, I.E., that such brokers or dealers are able to execute
the order promptly and at the best obtainable securities price.
On occasions when the Adviser deems the purchase
or sale of a security to be in the best interest of the Fund as well as of other
clients (to the extent that the Adviser may, in the future, have other clients),
the Adviser, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be so purchased or sold in order to obtain the most
favorable price and execution or lower brokerage commissions and the most
efficient execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made by the
Adviser in the manner it considers to be the most equitable and consistent with
its fiduciary obligations to the Fund and to such other clients.
3. REPRESENTATIONS OF THE ADVISER.
(a) The Adviser shall use its best judgment and
efforts in rendering the advice and services to the Fund as contemplated by this
Agreement.
(b) The Adviser shall maintain all licenses and
registrations necessary to perform its duties
hereunder in good order.
(c) The Adviser shall conduct its operations at all
times in conformance with the Investment Advisers
Act of 1940, the Investment Company Act of 1940, and any other applicable state
and/or self-regulatory organization regulations.
4. INDEPENDENT CONTRACTOR. The Adviser shall, for all purposes
herein, be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized to do so, have no authority to act for or
represent the Fund in any way, or in any way be deemed an agent for the Fund. It
is expressly understood and agreed that the services to be rendered by the
Adviser to the Fund under the provisions of this Agreement are not to be deemed
exclusive, and the Adviser shall be free to render similar or different services
to others so long as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
5. ADVISER'S PERSONNEL. The Adviser shall, at its own expense,
maintain such staff and employ or retain such personnel and consult with such
other persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Adviser shall be
deemed to include persons employed or retained by the Adviser to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Adviser or the Board of Directors may desire and reasonably request.
6. EXPENSES. If the Adviser has agreed to limit the
operating expenses of the Fund, the Adviser shall also be responsible on a
monthly basis for any operating expenses that exceed the agreed upon expense
limitation.
(a) With respect to the operation of the Fund, the
Adviser shall be responsible for (i) providing the personnel, office space and
equipment reasonably necessary for the investment management of the Fund, and
(ii) the costs of any special Board of Directors meetings or shareholder
meetings deemed by the Board of Directors at the time any meeting is called to
be convened for the primary benefit of the Adviser.
(b) The Fund is responsible for and has assumed
the obligation for payment of all of its expenses, other than as stated in
Subparagraph 6(a) above, including but not limited to: investment advisory and
administrative fees and expenses payable to the Adviser or Administrator under
the appropriate agreements entered into with the Adviser or the Administrator,
as the case may be; fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses; all
expenses of transfer, receipt, safekeeping, servicing and accounting for the
cash, securities and other property of the Fund including all fees and expenses
of its custodian, shareholder services agent and accounting services agent;
interest charges on any borrowings; costs and expenses of pricing and
calculating its daily net asset value and of maintaining its books of account
required under the Investment Company Act; taxes, if any; a pro rata portion of
expenditures in connection with meetings of the Company's shareholders and Board
of Directors that are properly payable by the Fund; salaries and expenses of
officers and fees and expenses of members of the Board of Directors or members
of any advisory board or committee who are not members of, affiliated with or
interested persons of the Adviser or the Administrator; insurance premiums on
property or personnel of the Fund which inure to its benefit, including
liability and fidelity bond insurance; the cost of preparing and printing
reports, proxy statements, prospectuses and statements of additional information
of the Fund or other communications for distribution to existing shareholders;
legal, auditing and accounting fees; trade association dues; fees and expenses
(including legal fees) of registering and maintaining registration of its shares
for sale under federal and applicable state and foreign securities laws; all
expenses of maintaining and servicing shareholder accounts, including all
charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Fund; and all other charges
and costs of its operation plus any extraordinary and non-recurring expenses,
except as herein otherwise prescribed.
(c) The Adviser may voluntarily absorb certain Fund
expenses or waive the Adviser's own advisory fee.
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(d) To the extent the Adviser incurs any costs by
assuming expenses which are an obligation of the Fund as set forth herein, the
Fund shall promptly reimburse the Adviser for such costs and expenses, except to
the extent the Adviser has otherwise agreed to bear such expenses. To the extent
the services for which the Fund is obligated to pay are performed by the
Adviser, the Adviser shall be entitled to recover from the Fund to the extent of
the Adviser's actual costs for providing such services. In determining the
Adviser's actual costs, the Adviser may take into account an allocated portion
of the salaries and overhead of personnel performing such services.
7. INVESTMENT ADVISORY FEE.
(a) The Fund shall pay to the Adviser, and the
Adviser agrees to accept, as full compensation for all investment and advisory
services furnished or provided to the Fund pursuant to this Agreement, an annual
investment advisory fee at the rate set forth in Schedule A to this Agreement.
(b) The investment advisory fee shall be accrued
daily by the Fund and paid to the Adviser on the
first business day of the succeeding month.
(c) The initial fee under this Agreement shall be
payable on the first business day of the first month
following the effective date of this Agreement and shall be prorated as set
forth below. If this Agreement is terminated prior to the end of any month, the
fee to the Adviser shall be prorated for the portion of any month in which this
Agreement is in effect which is not a complete month according to the proportion
which the number of calendar days in the month during which the Agreement is in
effect bears to the number of calendar days in the month, and shall be payable
within ten (10) days after the date of termination.
(d) The fee payable to the Adviser under this
Agreement will be reduced as required under any expense
limitation applicable to the Fund.
(e) The Adviser voluntarily may reduce any portion of
the compensation or reimbursement of expenses due to it pursuant to this
Agreement and may agree to make payments to limit the expenses which are the
responsibility of the Fund under this Agreement. Any such reduction or payment
shall be applicable only to such specific reduction or payment and shall not
constitute an agreement to reduce any future compensation or reimbursement due
to the Adviser hereunder or to continue future payments. Any such reduction will
be agreed to prior to accrual of the related expense or fee and will be
estimated daily and reconciled and paid on a monthly basis.
(f) Any fee withheld or voluntarily reduced and any
Fund expense absorbed by the Adviser voluntarily or pursuant to an agreed upon
expense cap shall be reimbursed by the Fund to the Adviser, if so requested by
the Adviser, no later THAN THE FIFTH FISCAL YEAR succeeding the fiscal year of
the withholding, reduction or absorption if the aggregate amount actually paid
by the Fund toward the operating expenses for such fiscal year (taking into
account the reimbursement) does not exceed the applicable limitation on Fund
expenses. Such reimbursement may be paid prior to the Fund's payment of current
expenses if so requested by the Adviser even if such practice may require the
Adviser to waive, reduce or absorb current Fund expenses.
(g) The Adviser may agree not to require payment of
any portion of the compensation or reimbursement of expenses otherwise due to it
pursuant to this Agreement. Any such agreement shall be applicable only with
respect to the specific items covered thereby and shall not constitute an
agreement not to require payment of any future compensation or reimbursement due
to the Adviser hereunder.
8. NO SHORTING; NO BORROWING. The Adviser agrees that neither
it nor any of its officers or employees shall take any short position in the
shares of the Fund. This prohibition shall not prevent the purchase of such
shares by any of the officers or employees of the Adviser or any trust, pension,
profit-sharing or other benefit plan for such persons or affiliates thereof, at
a price not less than the net asset value thereof at the time of purchase, as
allowed pursuant to rules promulgated under the Investment Company Act. The
Adviser agrees that neither it nor any of its officers or employees shall borrow
from the Fund or pledge or use the Fund's assets in connection with any
borrowing not directly for the Fund's benefit. For this purpose, failure to pay
any amount due and payable to the Fund for a period of more than thirty (30)
days shall constitute a borrowing.
9. CONFLICTS WITH THE FUND'S GOVERNING DOCUMENTS AND
APPLICABLE LAWS. Nothing herein contained shall be deemed to require the Fund to
take any action contrary to its Articles of Incorporation, as amended, Bylaws,
as amended, the principles of ▇▇▇▇▇`ah law as interpreted by the ▇▇▇▇▇ ▇▇▇▇▇`ah
Board, or any applicable statute or regulation, or to relieve or deprive the
Board of Directors of its responsibility for and control of the conduct of the
affairs of the Fund. In this connection, the Adviser acknowledges that the
Directors retain ultimate plenary authority over the Fund and may take any and
all actions necessary and reasonable to protect the interests of shareholders.
10. REPORTS AND ACCESS. Upon reasonable notice, the Adviser
agrees to supply such information to the Administrator and to permit such
compliance inspections by the Administrator as shall be reasonably necessary to
permit the Administrator to satisfy its obligations and respond to the
reasonable requests of the Directors. Any such information supplied by the
Adviser, and any such compliance inspections conducted by the Administrator,
shall be supplied or conducted, as the case may be, at a mutually agreed upon
time.
11. SHAREHOLDER LIST. The Adviser shall have access to a
current list of shareholders of the Fund at any time to solicit proxies on
behalf of its Fund.
12. ADVISER'S LIABILITIES AND INDEMNIFICATION.
(a) The Adviser shall have responsibility for the
accuracy of the statements in the Fund's offering materials (including the
prospectus, the statement of additional information, advertising and sales
materials) relating to the Adviser's business, and shall have no liability for
information supplied by the Administrator or the Fund or another third party for
inclusion therein. The Adviser shall be given reasonable time to review and
comment upon any such offering materials.
(b) The Adviser shall be liable to the Fund for any
loss (including brokerage charges) incurred by the Fund as a result of any
investment made by the Adviser that is not in accordance with the Fund's
objectives and policies as set forth in the Fund's offering documents or in
violation of any applicable securities laws.
(c) In the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the obligations or duties hereunder
on the part of the Adviser, the Adviser shall not be subject to liability to the
Fund or to any shareholder of the Fund for any act or omission in the course of,
or connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security by the Fund.
(d) Each party to this Agreement shall indemnify and
hold harmless the other party and the shareholders, directors, trustees,
officers and employees of the other party (any such person, an "Indemnified
Party") against any loss, liability, claim, damage or expense (including the
reasonable cost of investigating and defending any alleged loss, liability,
claim, damage or expenses and reasonable counsel fees incurred in connection
therewith) arising out of the Indemnified Party's performance or nonperformance
of any duties under this Agreement provided, however, that nothing herein shall
be deemed to protect any Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties under this Agreement.
(e) No provision of this Agreement shall be construed
to protect any Director of the Company or officer of the Fund, or officer or
director of the Adviser, from liability in violation of Sections 17(h) and (i)
of the Investment Company Act.
13. NON-EXCLUSIVITY; TRADING FOR ADVISER'S OWN ACCOUNT. The
Adviser may act as investment adviser for any other person, and shall not in any
way be limited or restricted from having, selling or trading any securities for
its or their own accounts or the accounts of others for whom it or they may be
acting, provided, however, that the Adviser expressly represents that it will
undertake no activities which will adversely affect the performance of its
obligations to the Fund under this Agreement; and provided further that the
Adviser will adhere to a code of ethics governing employee trading and trading
for proprietary accounts that conforms to the requirements of the Investment
Company Act and the Investment Advisers Act of 1940 and has been approved by the
Company's Board of Directors.
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14. TERM. This Agreement shall become effective on the
effective date of the Fund's prospectus filed with the SEC and shall remain in
effect for a period of two (2) years thereafter, unless sooner terminated as
hereinafter provided. This Agreement shall continue in effect thereafter for
additional periods not exceeding one (1) year so long as such continuation is
approved for the Fund at least annually by (i) the Company's Board of Directors
or by the vote of a majority of the outstanding voting securities of the Fund
and (ii) the vote of a majority of the Directors of the Company who are not
parties to this Agreement nor interested persons thereof, cast in person at a
meeting called for the purpose of voting on such approval. The terms "majority
of the outstanding voting securities" and "interested persons" shall have the
meanings as set forth in the Investment Company Act.
15. TERMINATION; NO ASSIGNMENT.
(a) This Agreement may be terminated by the Fund at
any time without payment of any penalty, by the Board of Directors of the
Company or by vote of a majority of the outstanding voting securities of the
Fund, upon sixty (60) days' written notice to the Adviser, and by the Adviser
upon sixty (60) days' written notice to the Fund. In the event of a termination,
the Adviser shall cooperate in the orderly transfer of the Fund's affairs and,
at the request of the Board of Directors, transfer any and all books and records
of the Fund maintained by the Adviser on behalf of the Fund.
(b) This Agreement shall terminate automatically in
the event of any transfer or assignment thereof,
as defined in the Investment Company Act.
16. OWNERSHIP OF THE NAME OF THE FUND. The parties to this
Agreement hereby acknowledge that the prefix to the name of the Fund, "Azzad",
is the exclusive property of the Adviser and is not the property of the Fund. In
the event that this Agreement is terminated by either party to this Agreement,
the Fund, to the extent that it continues to exist, shall discontinue the use of
the name "Azzad" and change its name within thirty (30) days of such
termination.
17. RIGHTS TO THE USE OF THE DOW ▇▇▇▇▇ ISLAMIC INDEX. The Fund
acknowledges that the Adviser holds a license from the Dow ▇▇▇▇▇ with respect to
the use of the Dow ▇▇▇▇▇ Market Extra Liquid Index, a sub-index of the Dow ▇▇▇▇▇
Islamic Market Index, and that this Agreement does not grant any rights to the
Fund in that License. To the extent this Agreement is terminated, the Fund will
have no further rights to the use of that license and agrees to immediately take
steps to discontinue use thereof.
18. MERGER INTO SERIES OF NEW INVESTMENT COMPANY. The Fund
acknowledges that the Adviser may in the future recommend that the Fund solicit
a proxy of shareholders to approve a merger of the Fund into a newly-created
series of an Azzad registered investment company. The Fund agrees to take
reasonable steps to obtain board aproval of any such solicitation.
19. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.
20. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
21. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to the conflict of laws principles thereof; provided that nothing herein
shall be construed to preempt, or to be inconsistent with, any federal law,
regulation or rule, including the Investment Company Act and the Investment
Advisers Act of 1940 and any rules and regulations promulgated thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers, all on the day
and year first above written.
QUESTAR FUNDS, INC. AZZAD ASSET MANAGEMENT, INC.
on behalf of its series,
Azzad/Dow ▇▇▇▇▇ Islamic Index Fund
By:_______________________ By:__________________________________
Name: Name:
Title: Title:
SCHEDULE A
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ANNUAL FEE RATE
---------------
Azzad/Dow ▇▇▇▇▇ Islamic Index Fund 1.0% of average daily net assets
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DISTRIBUTION PLAN OF
AZZAD/DOW ▇▇▇▇▇ ISLAMIC INDEX FUND
PURSUANT TO RULE 12B-1
Distribution Plan, (the "Plan") of Azzad/Dow ▇▇▇▇▇ Islamic
Index Fund (the "Fund"), a series of Questar Funds, Inc. (the "Corporation"), a
Maryland corporation.
WHEREAS, the Fund and AmeriMutual Funds Distributors, Inc.
(the "Distributor"), a broker-dealer registered under the Securities Exchange
Act of 1934, have entered into a Distribution Agreement pursuant to which the
Distributor will act as principal underwriter of shares of the Fund for sale to
the public;
WHEREAS, the Directors of the Corporation have determined to
adopt this Distribution Plan (the "Plan") on behalf of the Fund, in accordance
with the requirements of the Investment Company Act of 1940, as amended (the
"Act") and have determined that there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
NOW, THEREFORE, the Fund hereby adopts the Plan on the
following terms and conditions:
(1) The Fund shall reimburse the Distributor, at the end of
each month, up to a maximum on an annual basis of 0.25% of the average daily
value of the net assets of the Fund, subject to any applicable restrictions
imposed by rules of the National Association of Securities Dealers, Inc., for
distribution expenditures incurred by the Distributor in connection with the
sale and promotion of the Fund and the furnishing of services to shareholders of
the Fund. Such expenditures shall consist of: (i) commissions to sales personnel
for selling shares of the Fund; (ii) compensation, sales incentives and payments
to sales, marketing and service personnel; (iii) payments to broker-dealers and
other financial institutions which have entered into agreements with the
Distributor in the form of the Dealer Agreement for National Affiliated
Investment Companies for services rendered in connection with the sale and
distribution of shares of the Fund; (iv) payment of expenses incurred in sales
and promotional activities, including advertising expenditures related to the
Fund; (v) the costs of preparing and distributing promotional materials; (vi)
the cost of printing the Fund's Prospectus and Statement of Additional
Information for distribution to potential investors; and (vii) such other
similar services that the Directors of the Corporation determine are reasonably
calculated to result in sales of shares of the Fund; provided, however, that a
portion of such amount paid to the Distributor, which portion shall be equal to
or less than 0.25% annually of the average daily net assets of the Fund shares,
may be paid for reimbursing the costs of providing services to shareholders,
including assistance in connection with inquiries related to shareholder
accounts (the "Service Fee").
Amounts paid or payable by the Fund under this Plan or any agreement with
any person or entity relating to the implementation of this Plan ("related
agreement") shall only be used to pay for, or reimburse payment for, the
distribution expenditures described in the preceding paragraph and shall, given
all surrounding circumstances, represent charges within the range of what would
have been negotiated at arm's-length as payment for the specific sales or
promotional services and activities to be financed hereunder and any related
agreement, as determined by the Directors, in the exercise of reasonable
business judgment, in light of fiduciary duties under state law and Sections
36(a) and (b) of the Act and based upon appropriate business estimated and
projections.
(2) At least quarterly in each year the Plan remains in
effect, the Fund's Principal Financial Officer or Treasurer, or such other
person authorized to direct the disposition of monies paid or payable by the
Fund, shall prepare and furnish to the Directors for their review, and the
Directors shall review a written report complying with the requirements of Rule
12b-1 under the Act regarding the amounts expended under the Plan and the
purposes for which such expenditures were made.
(3) This Plan shall not take effect until it, together with
any related agreements, have been approved by a vote of at least a majority of
the Directors, as well as a vote of at least a majority of the Directors who are
not interested persons (as defined in the Act) of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
related agreements (the "Disinterested Directors"), cast in person at a meeting
called for the purpose of voting on the Plan or any related agreement, and the
Plan shall not take effect with respect to the Fund until it has been approved
by a vote of at least a majority of the outstanding voting securities (as
defined in the Act) of the Fund.
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(4) This Plan shall remain in effect for one year from the
date of its execution and may be continued thereafter if specifically approved
at least annually by a vote of at least a majority of the Directors, as well as
a majority of the Disinterested Directors. This Plan may be amended at any time,
provided that (a) the Plan may not be amended to increase materially the amount
of the distribution expenses provided in Paragraph 1 hereof (including the
Service Fee) without the approval of at least a majority of the outstanding
voting securities (as defined in the Act) of the Fund and (b) all material
amendments to this Plan must be approved by a vote of the Directors and the
Disinterested Directors cast in person at a meeting called for the purpose of
such vote.
(5) While this Plan is in effect, the selection and nomination
of Directors who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the Disinterested Directors then in
office.
(6) Any related agreement shall be in writing and shall
provide that (a) such agreement shall be subject to termination, without
penalty, by vote of a majority of the outstanding voting securities (as defined
in the Act) of the Fund on not more than 60 days' written notice to the other
party to the agreement, and (b) such agreement shall terminate automatically in
the event of its assignment.
(7) This Plan may be terminated at any time by a vote of a
majority of the Disinterested Directors or by a vote of a majority of the
outstanding voting securities (as defined in the Act) of the Fund. In the event
this Plan is terminated or otherwise discontinued, no further payments hereunder
will be made by the Plan.
(8) The Fund shall preserve copies of this Plan and any
related agreements and all reports made pursuant to paragraph 2 hereof, and any
other information, estimates, projections and other materials that serve as a
basis therefor, considered by the Directors, for a period of not less than six
years from the date of this Plan, the agreement or report, as the case may be,
the first two years in an easily accessible place.
Adopted as of the ____
day of _________, 2000.