DISTRIBUTION AGREEMENT
BETWEEN
PHILADELPHIA FUND, INC.
AND
XXXXXX FINANCIAL CORPORATION
THIS AGREEMENT entered into the 1st day of April 1991, by and
between PHILADELPHIA FUND, INC., a Maryland corporation with its
principal office located at 0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000,
Xxxx Xxxxx, Xxxxxxx 00000 (hereinafter called the "Fund"), and
XXXXXX FINANCIAL CORPORATION, a Florida corporation with its
principal office located at 0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000,
Xxxx Xxxxx, Xxxxxxx 00000 (hereinafter called the "Distributor").
W I T N E S S E T H:
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In consideration of the mutual covenants contained herein the
parties, intending to be legally bound, hereby agree as follows:
1. The Fund hereby appoints the Distributor as agent of the
Fund to offer and sell the shares of the capital stock of the Fund
("Shares") in accordance with the Fund's registration statement, as
amended from time to time, on a "best efforts" basis. The
Distributor may offer and sell the Shares directly and, in its
discretion, through securities dealers selected by the Distributor,
provided that any such dealer shall have entered into a sales
and/or service agreement with the Distributor the form of which has
been approved by the Fund as provided in section 9 herein.
2. The Fund shall not sell the Shares except: (a) to fill
orders for Shares received from the Distributor or (b) in
connection with a merger or consolidation with another investment
company, or the acquisition of all, or substantially all, of the
assets of another investment company, or (c) to fill orders for
Shares received by the Fund's custodian directly from investors, or
(d) to the custodian of Philadelphia Fund Investing Programs, and
(e) to Philadelphia Fund International, Ltd.
3. Orders for the purchase of Shares placed by the
Distributor shall be subject to the provisions of paragraphs (f)
and (g) of section 26 of the Rules of Fair Practice of the NASD,
the provisions of which are hereby incorporated by reference.
4. The purchase price of the Shares shall be equal to the
current net asset value thereof as described in the registration
statement of the Fund, as amended from time to time. Purchase
orders received by the Distributor not later than the close of the
New York Stock Exchange ("Exchange") shall be priced at the net
asset value next calculated after receipt by the Distributor
provided that the Fund receives the order from the Distributor
prior to the close of business of the Fund on such day. It shall
be the responsibility of the Distributor to transmit orders which
it receives prior to the close of said Exchange to the Fund prior
to the close of business of the Fund on such day. Purchase orders
received by the Distributor after the close of the Exchange shall
be priced at the net asset value next calculated.
5. At its own expense, the Fund shall register the Shares
under the applicable laws of such jurisdictions, and in such
amounts, as the Distributor shall recommend, and shall cooperate
with the Distributor in the preparation and filing of applications
for registration and qualification of the Shares under applicable
law.
6. The Distributor shall use its best efforts to promote
the sale of Shares and, to that end, in its discretion, the
Distributor may:
(a) prepare and disseminate advertising and promotional
material through the public media and otherwise;
(b) arrange for the sale of Shares through dealers and other
financial intermediaries and pay compensation in connection
therewith;
(c) arrange for, and convene, sales seminars;
(d) maintain an office and facilities for the offer and sale
of Shares;
(e) employ a Marketing Director and support personnel; and
(f) take such other actions as may be reasonably necessary or
desirable to xxxxxx the sale of Shares.
7. At its own expense, the Fund shall print and provide the
Distributor with such quantities of its current prospectus,
statements of additional information and reports to stockholders as
the Distributor may reasonably request in connection with its
responsibilities hereunder, and the Fund shall pay or reimburse the
Distributor for the costs incurred pursuant to section 6 herein,
including related costs of postage, mailing, communications and
other office expenses incurred in connection with the offer and
sale of Shares provided, however, that any expenses incurred
pursuant to section 6(f) herein shall be subject to approval as
provided in section 4(a) of the Plan for Payment of Certain
Distribution Expenses of the Fund (Distribution Plan) and, further
provided, that in no event shall the Fund be required hereunder to
expend during any month amounts which exceed 1/24th of 1% of the
net asset value of the Fund, based on the net asset value
calculated on the last business day of such month.
8. At least quarterly the Distributor shall report to the
Board of Directors of the Fund on the progress of the Distributor's
activities hereunder, and shall prepare and furnish to the Board of
Directors with a written report, setting forth the amounts expended
and the purposes for which such expenditures were made, under the
Distribution Plan. The Distributor shall keep and maintain
adequate records in respect of such expenditures, including the
purposes for which such expenditures were made.
9. This Agreement shall become effective as provided in
section 13 herein provided that this Agreement is first approved by
the Board of Directors of the Fund, including a majority of those
Directors who are not parties to this Agreement, or interested
persons of any such party, and have no direct or indirect financial
interest in the operation of the Plan or in any agreements related
to the Distribution Plan (Disinterested Directors) by a vote cast
in person at a meeting called for the purpose of voting on such
approval, and shall continue in effect until March 31, 1992.
Thereafter, this Agreement may be continued in effect for
successive periods of not more than one year, provided that any
such continuance is approved by the Fund as provided herein above.
This Agreement may be terminated at any time, on not more than 60
days written notice, without penalty, by (a) a vote of a majority
of the Disinterested Directors or (b) by a vote of a majority of
the outstanding voting shares of the Fund, and shall automatically
terminate in the event of its assignment, unless the Securities and
Exchange Commission has issued an Order exempting the Fund and the
Distributor from the provisions of the 1940 Act, which otherwise
would have caused the termination of this Agreement. The
Distributor may terminate this Agreement, without penalty, upon 60
days written notice to the Fund.
10. No amendment to this Agreement shall become effective
unless its terms have been approved by a majority of the directors
of the Fund, including a majority of the Disinterested Directors.
11. Nothing contained in this Agreement shall make the
Distributor, its officers, directors, or shareholders, liable for
any loss sustained by the Fund or by any other person on account of
any act done or omitted to be done by the Distributor under this
Agreement, provided that nothing herein contained shall protect the
Distributor against any liability to the Fund or its shareholders
to which the Distributor would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless
disregard of its duties hereunder.
12. As used in this Agreement, the term "1940 Act" means the
Investment Company Act of 1940, as amended, and terms "interested
persons," "assignment," and "majority of the outstanding voting
securities" shall have the respective meanings specified in such
Act. The term "NASD" shall mean the National Association of
Securities Dealers, Inc.
13. This Agreement shall be construed in accordance with the
laws of the State of Florida, except to the extent such laws are
preempted by the 1940 Act, and shall become effective on April 1,
1991.
14. Any notice required to be given hereunder shall be sent
via first class mail to the address of the party as set forth
above.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers on the day and year
above written.
Attest: PHILADELPHIA FUND, INC.
/s/Xxxxx X. Xxxxxxx /s/Xxxxxx X. Xxxx
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Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxx, Vice President
Assistant Secretary
Attest: XXXXXX FINANCIAL CORPORATION
/s/Xxxxxx X. Xxxxxxxx /s/Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx, President
Secretary
