SUB-DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 11th day of May, 2001,
by and among AssetMark Funds, a Delaware business trust (the "Trust"), AssetMark
Capital Corporation, a California corporation (the "Distributor") and Quasar
Distributors, LLC, a Delaware limited liability company (the "Sub-Distributor").
WHEREAS, the Trust 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 National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Distributor and the Trust have entered into an effective
Distribution Agreement (the "Distribution Agreement"), under the terms of which
the Distributor is the principal underwriter for the Trust.
WHEREAS, the Trust and the Distributor each desires to retain the
Sub-Distributor as sub-distributor in connection with the offering and sale of
certain of the Shares of each series listed on Schedule A (as amended from time
to time) (the "Funds") to this Agreement;
WHEREAS, the Sub-Distributor is registered as a broker-dealer under the
1934 Act, and is a member of the NASD; and
WHEREAS, the Sub-Distributor is willing to act as sub-distributor for the
Distributor and the Trust on the terms and conditions hereinafter set forth.
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 the Sub-Distributor.
The Distributor and the Trust each hereby appoints the Sub-Distributor as
its agent for the sale and distribution of certain Shares of the Funds, subject
to the terms and for the period set forth in this Agreement. The Sub-Distributor
hereby accepts such appointment and agrees to act hereunder.
2. Services and Duties of the Sub-Distributor.
(a) The Sub-Distributor agrees to sell Shares of the Funds on a best
efforts basis as agent (solely for the purpose of accepting orders for the
purchase and redemption of Fund Shares, and for no other purpose) for the
Distributor and the Trust during the term of this Agreement, 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
amended or supplemented, relating to the Funds and included in the currently
effective registration statement or post-effective amendment thereto (the
"Registration Statement") of the Trust under the Securities Act of 1933 (the
"1933 Act") and the ▇▇▇▇ ▇▇▇.
(b) During the continuous public offering of Shares of the Funds, the
Sub-Distributor will hold itself available to receive orders, in such form as
required by the Trust and the Distributor, and satisfactory to the
Sub-Distributor, for the purchase of Shares of the Funds and will accept such
orders on behalf of the Trust. Such purchase orders shall be deemed effective at
the time and in the manner set forth in the Prospectus.
(c) The Sub-Distributor, with the operational assistance of the Trust's
transfer agent, shall make Shares available for sale and redemption through the
National Securities Clearing Corporation's Fund/SERV System.
(d) In connection with all matters relating to this Agreement, the
Sub-Distributor agrees to act in conformity with the Trust's Agreement and
Declaration of Trust and By-Laws and with the instructions of the Board and to
comply with the requirements of the 1933 Act, the 1934 Act, the 1940 Act, the
regulations of the NASD and all other applicable federal or state laws and
regulations. The Sub-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 Trust and the Distributor.
(e) The Sub-Distributor agrees to act as agent for the Distributor and the
Trust to receive and transmit promptly to the Funds' transfer agent shareholder
requests for redemption of Shares.
(f) The Sub-Distributor shall devote its best efforts to effect sales of
Shares of the Funds but shall not be obligated to sell any certain number of
Shares.
(g) The Sub-Distributor shall prepare reports for the Distributor to be
provided to the Board regarding its activities under this Agreement as from time
to time shall be reasonably requested by the Distributor or the Board, including
those regarding the use of 12b-1 payments received by the Sub-Distributor, if
any.
(h) The services furnished by the Sub-Distributor hereunder are not to be
deemed exclusive and the Sub-Distributor shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby. Each of the Distributor and the Trust recognizes that from time to time
officers and employees of the Sub-Distributor may serve as directors, trustees,
officers and employees of other entities (including investment companies), that
such other entities may include the name of the Sub-Distributor as part of their
name and that the Sub-Distributor or its affiliates may enter into distribution,
administration, fund accounting, transfer agent or other agreements with such
other entities. The Trust and the Distributor reserve the right to (1) issue
Shares in connection with a merger, consolidation, or recapitalization of the
Trust or any Fund(s); (2) issue additional Shares to holders of Shares; or (3)
issue Shares in connection with any offer of exchange permitted by Section 11 of
the 1940 Act.
(i) The Sub-Distributor shall at all times during the term of this
Agreement remain registered as a broker-dealer under the 1934 Act and with all
50 states, and shall also remain a member in good standing of the NASD. The
Sub-Distributor shall immediately notify the Fund in writing if it receives
written notification that such registrations or membership has been temporarily
or permanently suspended, limited or terminated.
3. Duties and Representations of the Trust.
(a) The Trust represents that it is duly organized and in good standing
under the law of its jurisdiction of organization and registered as an open-end
management investment company under the 1940 Act. The Trust agrees that it will
act in material conformity with its Agreement and Declaration of Trust, By-Laws,
its Registration Statement as may be amended from time to time and resolutions
and other instructions of its Board. The Trust agrees to comply in all material
respects with the 1933 Act, the 1940 Act, and all other applicable federal and
state laws and regulations. The Trust represents and warrants that this
Agreement has been duly authorized by all necessary action by the Trust under
the 1940 Act, state law and the Trust's Agreement and Declaration of Trust and
By-Laws.
(b) The Trust, or its agent, shall take or cause to be taken all necessary
action to register Shares of the Funds under the 1933 Act and to maintain an
effective Registration Statement for such Shares in order to permit the sale of
Shares as herein contemplated. The Trust authorizes the Sub-Distributor to use
the Prospectus, in the form furnished to the Sub-Distributor from time to time,
in connection with the sale of Shares.
(c) The Trust represents and agrees that all Shares to be sold by it,
including those offered under this Agreement, are validly authorized and, when
issued in accordance with the description in the Prospectus, will be fully paid
and nonassessable. The Trust further agrees that it shall have the right to
suspend the sale of Shares of any Fund at any time in response to conditions in
the securities markets or otherwise, and to suspend the redemption of Shares of
any Fund at any time permitted by the 1940 Act or the rules of the Securities
and Exchange Commission ("SEC"). The Trust shall advise the Sub-Distributor
promptly of any such determination.
(d) The Trust agrees to advise the Sub-Distributor promptly in writing:
(i) of any material correspondence or other communication by the SEC
or its staff relating to continued availability of the Shares for sale by
the Funds;
(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 which may relate to the continued availability of
the Shares for sale by the Funds, 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) of assignment or termination of the Distribution Agreement.
(e) The Trust shall file such reports and other documents as may be
required under applicable federal and state laws and regulations. The Trust
shall, upon request of the Sub-Distributor, notify the Sub-Distributor in
writing of the states in which the Shares may be sold and shall notify the
Sub-Distributor in writing of any changes to such information.
(f) The Trust 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.
(g) The Trust shall fully cooperate in the efforts of the Sub-Distributor
to sell and arrange for the sale of Shares and shall make available to the
Sub-Distributor a statement of each computation of net asset value. In addition,
the Trust shall provide to the Sub-Distributor from time to time copies of all
information, financial statements, and other papers that the Sub-Distributor may
reasonably request for use in connection with the distribution of Shares,
including, without limitation, copies of any audited financial statements
prepared for the Trust by its independent public accountants and such reasonable
number of copies of the most current Prospectus, statement of additional
information and annual and interim reports to shareholders as the
Sub-Distributor may request. The Trust shall forward a copy of any SEC filings,
including the Registration Statement, to the Sub-Distributor within one business
day of any such filings. The Trust, the Distributor and the Sub-Distributor each
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 each other party.
(h) The Trust represents and warrants that its Registration Statement and
any advertisements and sales literature of the Trust (excluding statements
relating to the Sub-Distributor and the services it provides that are based upon
written information furnished by the Sub-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 Sub-Distributor pursuant to this Agreement shall be true and
correct in all material respects.
4. Duties and Representations of the Distributor.
(a) The Distributor represents and warrants that this Agreement has
been duly authorized by all necessary action by the Distributor under the
1934 Act and any other applicable federal or state laws or regulations.
(b) The Distributor shall at all times during the term of this
Agreement remain registered as a broker-dealer under the 1934 Act and shall
also remain a member in good standing of the NASD. The Distributor shall
immediately notify the Sub-Distributor in writing if it receives written
notification that such registrations or membership has been temporarily or
permanently suspended, limited or terminated.
(c) In connection with all matters relating to this Agreement, the
Distributor agrees to act in conformity with the Trust's Agreement and
Declaration of Trust and By-Laws and with the instructions of the Board and
to comply with the requirements of the 1933 Act, the 1934 Act, the 1940
Act, the regulations of the NASD and all other applicable federal or state
laws and regulations.
(d) The Distributor represents that, pursuant to the terms of the
Distribution Agreement, it is the principal underwriter for the Trust, and
shall notify the Sub-Distributor in writing immediately upon termination of
its role as underwriter, or upon assignment or termination of the
Distribution Agreement.
5. Compensation.
As compensation for the services performed and the expenses assumed by
Sub-Distributor under this Agreement including, but not limited to, any
commissions paid for sales of Shares, Sub-Distributor shall be entitled to the
fees and expenses set forth in Schedule B to this Agreement which are payable
promptly after the last day of each month. Such fees shall be paid to
Sub-Distributor by the Distributor.
6. Expenses.
(a) The Distributor, or the Trust, but not the Sub-Distributor, shall bear
all costs and expenses in connection with registration of the Shares with the
SEC and 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 of its Funds, 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 and amendments thereto, 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 of the Funds; and (iv) fees required in
connection with the offer and sale of Shares in such jurisdictions as shall be
selected by the Trust pursuant to Section 3(e) hereof.
(b) The Sub-Distributor shall bear the expenses of registration or
qualification of the Sub-Distributor as a dealer or broker under federal or
state laws and the expenses of continuing such registration or qualification.
The Sub-Distributor does not assume responsibility for any expenses not
expressly assumed hereunder.
7. Indemnification.
(a) The Trust shall indemnify, defend and hold the Sub-Distributor,
and each of its present or former members, directors/trustees, officers,
employees, representatives and any person who controls or previously
controlled the Sub-Distributor within the meaning of Section 15 of the 1933
Act, free and harmless from and against any and all losses, claims,
demands, liabilities, damages and expenses (including the costs of
investigating or defending any alleged losses, claims, demands,
liabilities, damages or expenses and any reasonable counsel fee incurred in
connection therewith) which the Sub-Distributor, each of its present and
former members, directors/trustees, officers, employees or representatives
or any such controlling person, may incur under the 1933 Act, the 1934 Act,
any other statute (including Blue Sky laws) or any rule or regulation
thereunder, or under common law or otherwise, based upon the Trust's
failure to adhere to its obligations hereunder, or, in connection with the
Trust's performance of its duties hereunder, based upon the Trust's
violation or alleged violation of any rule of the NASD or of the SEC or any
other jurisdiction wherein Shares of the Funds are sold, or 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, as
from time to time amended or supplemented, or in any annual or interim
report to shareholders, or in any advertisement or sales literature, or
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; provided, however, that the Trust's
obligation to indemnify the Sub-Distributor and any of the foregoing
indemnitees shall not be deemed to cover any losses, claims, demands,
liabilities, damages or expenses 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 such
advertisement or sales literature in reliance upon and in conformity with
information furnished to the Trust or its counsel by the Sub-Distributor in
writing and acknowledging the purpose of its use for the purpose of, and
used in, the preparation thereof. In no event shall anything contained
herein be so construed as to protect Sub-Distributor against any liability
to the Trust or its shareholders to which Sub-Distributor would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of its duties under this Agreement or by reason of its
reckless disregard of its obligations under this Agreement.
The Trust's agreement to indemnify the Sub-Distributor, and any of the
foregoing indemnitees, as the case may be, with respect to any action, is
expressly conditioned upon the Trust being notified of such action brought
against the Sub-Distributor, or any of the foregoing 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
Sub-Distributor, or such person, unless the failure to give notice does not
prejudice the Trust. Such notification shall be given by letter or by
telegram addressed to the Trust's President, but, unless the failure to
notify the Trust serves to prejudice the Trust, such failure so to notify
the Trust of any such action shall not relieve the Trust from any liability
which the Trust 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 Trust's indemnity
agreement contained in this Section 7(a).
(b) The Trust 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 loss, claim, demand, liability, damage or expense
subject to this Agreement. If the Trust elects to assume the defense of any
such claim, such defense shall be conducted by counsel chosen by the Trust
and approved by the Sub-Distributor, which approval shall not be
unreasonably withheld. In the event the Trust elects to assume the defense
of any such suit and retain such counsel, the indemnified defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by them. If the Trust does not elect to assume the defense
of any such suit, or in case the Sub-Distributor does not, in the exercise
of reasonable judgment, approve of counsel chosen by the Trust or, if under
prevailing law or legal codes of ethics, the same counsel cannot
effectively represent the interests of both the Trust and the
Sub-Distributor, and each of its present or former members,
directors/trustees, officers, employees, representatives or any controlling
person, the Trust will reimburse the indemnified person or persons named as
defendant or defendants in such suit, for the reasonable fees and expenses
of any counsel retained by Sub-Distributor and the indemnified defendants.
The Trust's indemnification agreement contained in Section 7 shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of the Sub-Distributor, and each of its present or former
members, directors/trustees, officers, employees, representatives or any
controlling person, and shall survive the delivery of any Shares and the
termination of this Agreement. This agreement of indemnity will inure
exclusively to the Sub-Distributor's benefit, to the benefit of each of its
present or former members, directors/trustees, officers, employees or
representatives or to the benefit of any controlling persons and their
successors. The Trust agrees promptly to notify the Sub-Distributor of the
commencement of any litigation or proceedings against the Trust or any of
its officers or directors/trustees, in connection with the issue and sale
of any of the Shares.
(c) The Trust, the Distributor, or the Sub-Distributor, when acting as
an indemnifying party, shall advance attorney's fees and other expenses
incurred by any person 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 Sub-Distributor shall indemnify, defend and hold each of the
Trust and the Distributor, and each of its present or former
directors/trustees, officers, employees, representatives, and any person
who controls or previously controlled each of the Trust and the Distributor
within the meaning of Section 15 of the 1933 Act, free and harmless from
and against any and all losses, claims, demands, liabilities, damages and
expenses (including the costs of investigating or defending any alleged
losses, claims, demands, liabilities, damages or expenses, and any
reasonable counsel fee incurred in connection therewith) which each of the
Trust and the Distributor, and each of its present or former
directors/trustees, officers, employees, representatives, or any such
controlling person, may incur under the 1933 Act, the 1934 Act, any other
statute (including Blue Sky laws) or any rule or regulation thereunder, or
under common law or otherwise, based upon Sub-Distributor's failure to
adhere to its obligations hereunder, or, in connection with the
Sub-Distributor's performance of its duties hereunder, based upon
Sub-Distributor's violation or alleged violation of any rule of the NASD or
of the SEC or any other jurisdiction wherein Shares of the Funds are sold,
or arising out of or based upon any untrue statement, or alleged untrue
statement of a material fact contained in the Trust's Registration
Statement or any Prospectus, as from time to time amended or supplemented,
or in any annual or interim report to shareholders, or in any advertisement
or sales literature, or arising out of or based upon the omission, or
alleged omission, to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Sub-Distributor's obligation to indemnify the
Trust, the Distributor, or any of the foregoing indemnitees shall not be
deemed to cover any losses, claims, demands, liabilities, damages or
expenses 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 such advertisement or sales
literature in reliance upon and in conformity with written information
furnished to the Sub-Distributor or its counsel by the Trust or the
Distributor in writing and acknowledging the purpose of its use for the
purpose of, and used in, the preparation thereof. In no event shall
anything contained herein be so construed as to protect the Trust or the
Distributor against any liability to the Sub-Distributor to which the Trust
or the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of their
respective duties under this Agreement or by reason of their reckless
disregard of their respective obligations under this Agreement.
The Sub-Distributor's agreement to indemnify each of the Trust and the
Distributor, and any of the foregoing indemnitees, as the case may be, with
respect to any action, is expressly conditioned upon the Sub-Distributor
being notified of such action brought against the Trust or the Distributor,
or any of the foregoing 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 Trust or the Distributor, or such
person, unless the failure to give notice does not prejudice the
Sub-Distributor. Such notification shall be given by letter or by telegram
addressed to the Sub-Distributor's President, but, unless the failure to
notify the Sub-Distributor serves to prejudice the Sub-Distributor, such
failure so to notify the Sub-Distributor of any such action shall not
relieve the Sub-Distributor from any liability which the Sub-Distributor
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 Sub-Distributor's indemnity agreement
contained in this Section 7(d).
(e) The Sub-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 loss, claim, demand, liability, damage or
expense subject to this Agreement. If the Sub-Distributor elects to assume
the defense of any such claim, such defense shall be conducted by counsel
chosen by the Sub-Distributor and approved by each of the Trust and the
Distributor, which approval shall not be unreasonably withheld. In the
event the Sub-Distributor elects to assume the defense of any such suit and
retain such counsel, the indemnified defendant or defendants in such suit
shall bear the fees and expenses of any additional counsel retained by
them. If the Sub-Distributor does not elect to assume the defense of any
such suit, or in case the Trust or the Distributor does not, in the
exercise of reasonable judgment, approve of counsel chosen by the
Sub-Distributor or, if under prevailing law or legal codes of ethics, the
same counsel cannot effectively represent the interests of both the Trust
or the Distributor and the Sub-Distributor, and each of its present or
former members, directors/trustees, officers, employees, representatives or
any controlling person, the Sub-Distributor will reimburse the indemnified
person or persons named as defendant or defendants in such suit, for the
reasonable fees and expenses of any counsel retained by the Trust or the
Distributor and the indemnified defendants. The Sub-Distributor's
indemnification agreement contained in Section 7 shall remain operative and
in full force and effect regardless of any investigation made by or on
behalf of the Trust or the Distributor, and each of its present or former
directors/trustees, officers, employees, representatives or any controlling
person, 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 each of the Trust and the Distributor, to the benefit of each of
its present or former directors/trustees, officers, employees or
representatives or to the benefit of any controlling persons and their
successors. The Sub-Distributor agrees promptly to notify the Trust and the
Distributor of the commencement of any litigation or proceedings against
the Sub-Distributor or any of its officers or directors/trustees, in
connection with the issue and sale of any of the Shares.
(f) The Distributor shall indemnify, defend and hold the
Sub-Distributor, and each of its present or former members,
directors/trustees, officers, employees, representatives, and any person
who controls or previously controlled the Sub-Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all losses, claims, demands, liabilities, damages and expenses
(including the costs of investigating or defending any alleged losses,
claims, demands, liabilities, damages or expenses, and any reasonable
counsel fee incurred in connection therewith) which the Sub-Distributor,
and each of its present or former members, directors/trustees, officers,
employees, representatives, or any such controlling person, may incur under
the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, based
upon Distributor's failure to adhere to its obligations hereunder, or, in
connection with the Distributor's performance of its duties hereunder,
based upon Distributor's violation or alleged violation of any rule of the
NASD or of the SEC or any other jurisdiction wherein Shares of the Funds
are sold, or arising out of or based upon any untrue statement, or alleged
untrue statement of a material fact contained in the Trust's Registration
Statement or any Prospectus, as from time to time amended or supplemented,
or in any annual or interim report to shareholders, or in any advertisement
or sales literature, or arising out of or based upon the omission, or
alleged omission, to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Distributor's obligation to indemnify the
Sub-Distributor and any of the foregoing indemnitees shall not be deemed to
cover any losses, claims, demands, liabilities, damages or expenses 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 such advertisement or sales literature in reliance
upon and in conformity with written information furnished to the
Distributor or its counsel by the Sub-Distributor in writing and
acknowledging the purpose of its use for the purpose of, and used in, the
preparation thereof. In no event shall anything contained herein be so
construed as to protect the Sub-Distributor against any liability to the
Distributor to which the Sub-Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties under this Agreement or by reason of its reckless
disregard of its obligations under this Agreement.
The Distributor's agreement to indemnify the Sub-Distributor, and any
of the foregoing indemnitees, as the case may be, with respect to any
action, is expressly conditioned upon the Distributor being notified of
such action brought against the Sub-Distributor, or any of the foregoing
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 Sub-Distributor, or such person, unless the failure to give
notice does not prejudice the Distributor. Such notification shall be given
by letter or by telegram addressed to the Distributor's President, but,
unless the failure to notify the Distributor serves to prejudice the
Distributor, such 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, or alleged omission,
otherwise than on account of the Distributor's indemnity agreement
contained in this Section 7(f).
(g) 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 loss, claim, demand, liability, damage or
expense subject to this Agreement. If the Distributor elects to assume the
defense of any such claim, such defense shall be conducted by counsel
chosen by the Distributor and approved by the Sub-Distributor, 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
indemnified defendant or defendants 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
Sub-Distributor 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 Sub-Distributor and the Distributor, and each of its
present or former members, directors/trustees, officers, employees,
representatives or any controlling person, the Distributor will reimburse
the indemnified person or persons named as defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel retained by the
Sub-Distributor and the indemnified defendants. The Distributor's
indemnification agreement contained in Section 7 shall remain operative and
in full force and effect regardless of any investigation made by or on
behalf of the Sub-Distributor, and its present or former members,
directors/trustees, officers, employees, representatives or any controlling
person, 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 Sub-Distributor, to the benefit of its present or former
members, directors/trustees, officers, employees or representatives or to
the benefit of any controlling persons and their successors. The
Distributor agrees promptly to notify the Sub-Distributor of the
commencement of any litigation or proceedings against the Distributor or
any of its officers or directors/trustees, in connection with the issue and
sale of any of the Shares.
(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 the NASD; provided,
however, in such event indemnification shall be provided under this Section
7 to the maximum extent so permissible.
8. Obligations of the Trust.
This Agreement is executed by and on behalf of the Trust and the
obligations of the Trust hereunder are not binding upon any of the trustees,
officers or shareholders of the Trust individually but are binding only upon the
Trust and with respect to the Funds to which such obligations pertain.
9. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original agreement but all of which counterparts shall
together constitute but one and the same instrument.
10. Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. To the extent that
the applicable laws of the State of Wisconsin, 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. Any dispute arising between
the parties to this Agreement shall be resolved by binding arbitration conducted
in accordance with the Rules of the NASD. Such arbitration shall take place in
the jurisdiction of the respondent.
11. Duration and Termination.
(a) This Agreement shall become effective with respect to each Fund listed
on Schedule 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 Schedule A to this Agreement
relating to that Fund is executed. Unless sooner terminated as provided herein,
this Agreement shall continue in effect for one year from the date hereof.
Thereafter, if not terminated, this Agreement shall continue automatically in
effect as to each Fund for successive one-year periods, provided such
continuance is specifically approved at least annually by (i) the Trust'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 Trust's Board who are not "interested persons" of any party to this
Agreement, by 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 no less than 60 days' written notice, by
either the Trust through a vote of a majority of the members of the Board who
are not "interested persons" of the Trust 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 Sub-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 Sub-Distributor, the Distributor and the Trust. If required under the 1940
Act, any such amendment must be approved by the Trust's Board, including a
majority of the Trust's Board who are not "interested persons" of any party to
this Agreement, by vote cast in person at a meeting for the purpose of voting on
such amendment. This Agreement will automatically terminate in the event of its
assignment.
12. Confidentiality.
The Sub-Distributor agrees on behalf of its employees to treat all records
relative to the Trust and prior, present or potential shareholders of the Trust
as confidential, and not to use such records for any purpose other than
performance of the Sub-Distributor's responsibilities and duties under this
Agreement, except after notification and prior approval by the Trust, which
approval shall not be unreasonably withheld, and may not be withheld where the
Sub-Distributor may be exposed to civil or criminal proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, when subject to governmental or regulatory audit or investigation,
or when so requested by the Trust. Records and information which have become
known to the public through no wrongful act of the Sub-Distributor or any of its
employees, agents or representatives shall not be subject to this paragraph. In
accordance with Section 248.11 of Regulation S-P ( 17 CFR 248.1-248.30), the
Sub-Distributor will not directly or indirectly through an affiliate, disclose
any non-public personal information, as defined in Reg. S-P, received from the
Trust or any Fund(s) regarding any shareholder, to any person that is not
affiliated with the Trust or any Fund(s) or with the Sub-Distributor and,
provided that, any such information disclosed to an affiliate of the
Sub-Distributor shall be under the same limitations on non-disclosure.
13. Withdrawal of Offering.
The Trust reserves the right at any time to withdraw all offerings of any
or all Shares by written notice to Sub-Distributor at its principal office. No
Shares shall be offered by either Sub-Distributor or the Trust under any
provisions of this Agreement and no orders for the purchase of Shares hereunder
shall be accepted by the Fund if and so long as effectiveness of the
Registration Statement then in effect or any necessary amendments thereto shall
be suspended under any of the provisions of the 1933 Act, or if and so long as a
current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file
with the SEC.
14. Miscellaneous.
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. 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. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, 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.
15. Notice.
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 3 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 set forth below:
Notice to the Sub-Distributor shall be sent to:
Quasar Distributors, LLC
Attn: President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notice to the Trust shall be sent to:
AssetMark Funds
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Notice to the Distributor shall be sent to:
AssetMark Capital Corporation
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first above
written.
AssetMark Funds Quasar Distributors, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Sign: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------- ------------------------------
Title: President and CEO Title: President
------------------------------- -----------------------------
AsseMark Capital Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: President and CEO
-------------------------------
Schedule A
to the
Sub-Distribution Agreement
Names of Funds
Large Cap Value Fund
Large Cap Growth Fund
Small/Mid Cap Value Fund
Small/Mid Cap Growth Fund
International Equity Fund
Real Estate Securities Fund
Tax-Exempt Fixed Income Fund
Core Plus Fixed Income Fund
Schedule B
to the
Sub-Distribution Agreement
Fees
NSCC Sponsorship Only
o $6,000 one-time fee payable at SEC effectiveness - covers NSCC
sponsorship through 12/31/01
o $1,000 per month after 12/31/01
Advertising Compliance Review/NASD Filings
N/A
Licensing of Investment Advisor's Staff (if desired)
N/A
Out-of-Pocket Expenses
Reasonable out-of-pocket expenses incurred by the Sub-Distributor in connection
with activities primarily intended to result in the sale of Shares, including,
without limitation:
o typesetting, printing and distribution of Prospectuses and shareholder
reports
o production, printing, distribution and placement of advertising and
sales literature and materials
o engagement of designers, free-▇▇▇▇▇ writers and public relations firms
o long-distance telephone lines, services and charges
o postage
o overnight delivery charges
o NASD filing fees
o record retention
o travel, lodging and meals required in connection with the performance
of Sub-Distributor's required activities
Fees are billed monthly