DISTRIBUTION AGREEMENT
AGREEMENT made this 17th day of November, 1992, between XXXXXX XXXXXXX
FUND, INC. a Corporation organized under the laws of the State of Maryland (the
"Fund"), and XXXXXX XXXXXXX & CO. INCORPORATED, a Delaware corporation (the
"Distributor").
W I T N E S S E T H :
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company
and it is in the interest of the Fund to offer its shares for sale continuously
and to appoint a principal underwriter for the purpose of facilitating such
offers and sales;
WHEREAS, the Fund and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of the Fund's common
stock, par value $.001 per share ("Shares"), to commence after the effectiveness
of its initial registration statement filed pursuant to the Securities Act of
1933, as amended (the "1933 Act"), and the 1940 Act.
NOW, THEREFORE, the parties agree as follows:
Section 1. APPOINTMENT OF THE DISTRIBUTOR.
The Fund hereby appoints the Distributor its exclusive underwriter in connection
with the offering and sale of the Shares on the terms set forth in this
Agreement and the Distributor hereby accepts such appointment and agrees to act
hereunder.
Section 2. SERVICES AND DUTIES OF THE DISTRIBUTOR.
(a) The Distributor agrees to sell, as agent for the Fund, from time
to time during the term of this Agreement, Shares upon the terms described in
the Prospectus. As used in this Agreement, the term "Prospectus" shall mean the
prospectus included as part of the Fund's Registration Statement, as such
prospectus may be amended or supplemented from time to time, and
the term "Registration Statement" shall mean the Registration Statement most
recently filed from time to time by the Fund with the Securities and Exchange
Commission and effective under the 1933 Act and the 1940 Act, as such
Registration Statement is amended by any amendments thereto at the time in
effect.
(b) Upon commencement of the Fund's operations, the Distributor will
hold itself available to receive orders, satisfactory to the Distributor, for
the purchase of Shares and will accept such orders on behalf of the Fund and
will transmit such orders as are so accepted to the Fund's transfer and
shareholder servicing agent as promptly as practicable. The Distributor shall
promptly forward to the Fund's Custodian funds received in respect of purchases
of shares in accordance with the instructions of the Fund's Administrator.
Purchase orders shall be deemed effective at the time and in the manner set
forth in the Prospectus.
(c) The offering price of the Shares shall be as defined in the
Articles of Incorporation of the Fund and determined as set forth in the
Prospectus. The Fund shall furnish the Distributor, with all possible
promptness, an advice of each computation of net asset value.
(d) The Distributor shall not be obligated to sell any certain number
of Shares and nothing herein contained shall prevent the Distributor from
entering into like distribution arrangements with other investment companies.
Section 3. DUTIES OF THE FUND.
(a) The Fund agrees to sell its Shares so long as it has Shares
available for sale and to cause the Fund's transfer and shareholder servicing
agent to record on its books the ownership of (or deliver certificates, if any,
for) such Shares registered in such names and amounts as the Distributor has
requested in writing or other means of data transmission, as promptly as
practicable after receipt by the Fund of the net asset value thereof and written
request of the Distributor therefor.
(b) The Fund shall keep the Distributor fully informed with regard to
its affairs and shall furnish to the Distributor
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copies of all information, financial statements and other papers which the
Distributor may reasonably request for use in connection with the distribution
of Shares of the Fund, and this shall include one certified copy, upon request
by the Distributor, of all financial statements prepared for the Fund by
independent accountants and such reasonable number of copies of its most current
Prospectus and annual and interim reports as the Distributor may request and
shall cooperate fully in the efforts of the Distributor to sell and arrange for
the sale of the Shares and in the performance of the Distributor under this
Agreement.
(c) The Fund shall take, from time to time, such steps, including
payment of the related filing fee, as may be necessary to register its Shares
under the 1933 Act to the end that there will be available for sale such number
of Shares as the Distributor may be expected to sell. The Fund agrees to file
from time to time such amendments, reports and other documents as may be
necessary in order that there may be no untrue statement of a material fact in a
Registration Statement of Prospectus, or necessary in order that there may be no
omission to state a material fact in the Registration Statement or Prospectus
which omission would make the statements therein misleading.
(d) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of its Shares for sale under the
securities laws of such states as the Distributor and the Fund may approve, and,
if necessary or appropriate in connection therewith, to qualify and maintain the
qualification of the Fund as a broker or dealer in such states; provided that
the Fund shall not be required to amend its Articles of Incorporation or By-Laws
to comply with the laws of any state, to maintain an office in any state, to
change the terms of the offering of the Shares in any state from the terms set
forth in its Registration Statement and Prospectus, to qualify as a foreign
corporation in any state or to consent to service of process in any state other
than with respect to claims arising out of the offering of the Shares. The
Distributor shall furnish such information and other material relating to its
affairs and activities as may be required by the Fund in connection with such
qualifications.
Section 4. EXPENSES.
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(a) The Fund shall bear all costs and expenses of the continuous
offering of the Shares in connection with:
(i) fees and disbursements of its counsel and independent accountants, (ii) the
preparation, filing and printing of any registration statements and/or
prospectuses required to be filed by and under the federal and state securities
laws, (iii) the preparation and mailing of annual and interim reports,
prospectuses and proxy materials to shareholders and (iv) the qualifications of
Shares for sale and of the Fund as a broker or dealer under the securities laws
of such states or other jurisdictions as shall be selected by the Fund and the
Distributor pursuant to Section 3(d) hereof and the cost and expenses payable to
each such state for continuing qualification therein.
(b) The Distributor shall bear (i) the costs and expenses of
preparing, printing and distributing any materials not prepared by the Fund and
other materials used by the Distributor in connection with its offering of the
Shares for sale to the public, including the additional cost of printing copies,
at printer's over-run cost, of the Prospectus and of annual and interim reports
to shareholders other than copies thereof required for distribution to
shareholders or for filing with any federal and state securities authorities,
(ii) any expenses of advertising incurred by the Distributor in connection with
such offering and (iii) the expenses of registration or qualification of the
Distributor as a dealer or broker under federal or state laws and the expenses
of continuing such registration or qualification.
Section 5. INDEMNIFICATION. The Fund agrees to indemnify, defend and
hold the Distributor, its officers and directors and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its officers, directors or any such controlling person may incur
under the 1933 Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact contained in the Registration
Statement or Prospectus or arising out of or based
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upon any alleged omission to state a material fact required to be stated in
either thereof or necessary to make the statements in either thereof not
misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Fund for use in the
Registration Statement or Prospectus; provided, however, that this indemnity
agreement, to the extent that it might require indemnification of any person who
is also an officer or director of the Fund or who controls the Fund within the
meaning of Section 15 of the 1933 Act, shall not inure to the benefit of such
officer, director or controlling person unless a court of competent jurisdiction
shall determine, or it shall have been determined by controlling precedent, that
such result would not be against public policy as expressed in the 1933 Act; and
further provided, that in no event shall anything contained herein be so
construed as to protect the Distributor against any liability to the Fund or to
its security holders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties, or by reason of it reckless disregard of its obligations under
this Agreement. The Fund's agreement to indemnify the Distributor, its officers
and directors and any such controlling person as aforesaid is expressly
conditioned upon the Fund's being promptly notified of any action brought
against the Distributor, its officers or directors, or any such controlling
person, such notification to be given to the Fund at its principal business
office. The Fund agrees promptly to notify the Distributor of the commencement
of any litigation or proceedings against it or any of its officers or directors
in connection with the issue and sale of any Shares.
The Distributor agrees to indemnify, defend and hold the Fund, its
directors and officers and any person who controls the Fund, if any, within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Fund, its directors or
officers or any such controlling person may incur under the 1933 Act or under
common law or otherwise, but only to the extent that such liability or
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expense incurred by the Fund, its directors or officers or such controlling
person resulting from such claims or demands shall arise out of or be based upon
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Fund for use in the preparation
of the Registration Statement or Prospectus or shall arise out of or be based
upon any alleged omission to state a material fact in such information or a fact
necessary to make such information not misleading, it being understood that the
Fund will rely upon the information provided by the Distributor for use in the
preparation of the Registration Statement and Prospectus. The Distributor's
agreement to indemnify the Fund, its directors and officers, and any such
controlling person as aforesaid is expressly conditioned upon the Distributor's
being promptly notified of any action brought against the Fund, its directors or
officers or any such controlling person, such notification to be given to the
Distributor at its principal business office.
Section 6. COMPLIANCE WITH SECURITIES LAWS. The Fund represents
that it is registered as an open-end management investment company under the
1940 Act, and agrees that it will comply with the provisions of the 1940 Act and
of the rules and regulations thereunder. The Fund and the Distributor each
agree to comply with the applicable terms and provisions of the 1940 Act, the
1933 Act and, subject to the provisions of Section 3(d), applicable state "Blue
Sky" laws. The Distributor agrees to comply with the applicable terms and
provisions of the Securities Exchange Act of 1934 as amended.
Section 7. TERM OF AGREEMENT; TERMINATION. This Agreement shall
commence on the date first set forth above. This Agreement shall continue in
effect for a period more than two years from the date hereof only so long as
such continuance is specifically approved at least annually in conformity with
the requirements of the 1940 Act.
This Agreement shall terminate automatically in the event of its
assignment (as defined by the 1940 Act). In addition, this Agreement may be
terminated by either party at any time, without penalty, on not more than sixty
days' nor less than thirty days' written notice to the other party.
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Section 8. NOTICES. Any notice required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid, (1) to the Distributor at Xxxxxx Xxxxxxx & Co.
Incorporated, 1221 Avenue of the Americas, 00xx Xxxxx, Xxx Xxxx, X.X. 00000,
Xxxxxxxxx: Xxxxxx X. Xxxxx, or (2) to the Fund at Xxxxxx Xxxxxxx Fund, Inc.,
1221 Avenue of the Americas, 00xx Xxxxx, Xxx Xxxx, X.X. 00000, Xxxxxxxxx:
Xxxxxx X. Xxxxx.
Section 9. The directors have authorized the execution of this
Agreement in their capacity as directors and not individually and the
Distributor agrees that neither the shareholders nor the directors nor any
officers, employee, representative or agent of the Fund shall be personally
liable upon, nor shall resort be had to their private property for the
satisfaction of, obligations given, executed or delivered on behalf of or by the
Fund, that the shareholders, directors, officers, employees, representatives and
agents of the Fund shall not be personally liable hereunder, and that it shall
look solely to the property of the Fund for the satisfaction of any claim
hereunder.
Section 10. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
XXXXXX XXXXXXX & CO. INCORPORATED
By/s/ Xxxxxx X. Xxxxx
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XXXXXX XXXXXXX FUND, INC.
By/s/ Xxxxxx X. Xxxxx
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