SALES AGREEMENT
covering shares of capital stock
and/or shares of beneficial interest of
THE XXXXXXXX MUTUAL FUNDS
Xxxxxxxx Capital Fund, Inc.
Xxxxxxxx Common Stock Fund, Inc.
Xxxxxxxx Communications and Information Fund, Inc.
Xxxxxxxx Frontier Fund, Inc.
Xxxxxxxx Growth Fund, Inc.
Xxxxxxxx Xxxxxxxxx Global Fund Series, Inc.
Xxxxxxxx High Income Fund Series
Xxxxxxxx Income Fund, Inc.
Xxxxxxxx Municipal Fund Series, Inc.
Xxxxxxxx Municipal Series Trust
Xxxxxxxx New Jersey Municipal Fund, Inc.
Xxxxxxxx Pennsylvania Municipal Fund Series
Xxxxxxxx Value Fund Series, Inc.
between
XXXXXXXX ADVISORS, INC.
and
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Dealer/Bank
The Dealer/Bank named above and Xxxxxxxx Advisors, Inc., exclusive agent for
distribution of shares of capital stock of Xxxxxxxx Capital Fund, Inc., Xxxxxxxx
Common Stock Fund, Inc., Xxxxxxxx Communications and Information Fund, Inc.,
Xxxxxxxx Frontier Fund, Inc., Xxxxxxxx Growth Fund, Inc., Xxxxxxxx Xxxxxxxxx
Global Fund Series, Inc., Xxxxxxxx Income Fund, Inc., Xxxxxxxx Municipal Fund
Series, Inc., and Xxxxxxxx New Jersey Municipal Fund, Inc., and shares of
beneficial interest of Xxxxxxxx High Income Fund Series, Xxxxxxxx Municipal
Series Trust, Xxxxxxxx Pennsylvania Municipal Fund Series, and Xxxxxxxx Value
Fund Series, Inc., agree to the terms and conditions set forth in this
agreement.
DEALER SIGNATURE XXXXXXXX ADVISORS, INC. ACCEPTANCE
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Principal Officer Xxxxxxx X. Xxxxxxx, President
XXXXXXXX ADVISORS, INC.
------------------------------------ 000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx Xxx Xxxx, Xxx Xxxx 00000
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Employer Identification No. Date
REV 10/99
The Dealer/Bank and Xxxxxxxx Advisors, Inc. ("SAI"), as exclusive agent
for distribution of Class A shares, Class B shares, Class C shares and Class D
shares (as described in the "Policies and Procedures," as set forth below) of
the Capital Stock and/or Class A shares, Class B shares, Class C shares and
Class D shares of beneficial interest (collectively, the "Shares") of Xxxxxxxx
Capital Fund, Inc., Xxxxxxxx Common Stock Fund, Inc., Xxxxxxxx Communications
and Information Fund, Inc., Xxxxxxxx Frontier Fund, Inc., Xxxxxxxx Growth Fund,
Inc., Xxxxxxxx Xxxxxxxxx Global Fund Series, Inc., Xxxxxxxx High Income Fund
Series, Xxxxxxxx Income Fund, Inc., Xxxxxxxx Municipal Fund Series, Inc.,
Xxxxxxxx Municipal Series Trust, Xxxxxxxx New Jersey Municipal Fund, Inc.,
Xxxxxxxx Pennsylvania Municipal Fund Series, and Xxxxxxxx Value Fund Series,
Inc., and or any other mutual fund for which SAI is exclusive agent for
distribution (herein called the Funds), agree as follows:
1. The Dealer/Bank agrees to comply with the attached "Policies and
Procedures" with respect to sales of Xxxxxxxx Mutual Funds offering four
classes of shares, as set forth below.
2. An order for Shares of one or more of the Funds, placed by the Dealer/Bank
with SAI, will be confirmed at the public offering price as described in
each Fund's current prospectus. Unless otherwise agreed when an order is
placed, the Dealer/Bank shall remit the purchase price to the Fund, or
Funds, with issuing instruction, within the period of time prescribed by
existing regulations. No wire orders under $1,000 may be placed for initial
purchases.
3. Shares of the Funds shall be offered for sale and sold by the Dealer/Bank
only at the applicable public offering price currently in effect,
determined in the manner prescribed in each Fund's prospectus. SAI will
make a reasonable effort to notify the Dealer/Bank of any redetermination
or suspension of the current public offering price, but SAI shall be under
no liability for failure to do so.
4. On each purchase of Shares by the Dealer/Bank, the Dealer/Bank shall be
entitled, based on the Class of Shares purchased and except as provided in
each Fund's current prospectus, to a concession determined as a percentage
of the price to the investor as set forth in each Fund's current
prospectus. On each purchase of Class A Shares, SAI reserves the right to
receive a minimum concession of $.75 per transaction. No concessions will
be paid to the Dealer/Bank for the investment of dividends in additional
shares.
5. Except for sales to and purchases from the Dealer/Bank's retail customers,
all of which shall be made at the applicable current public offering price
or the current price bid by SAI on behalf of the Fund, the Dealer/Bank
agrees to buy Shares only through SAI and not from any other sources and to
sell shares only to SAI, the Fund or its redemption agent and not to any
other purchasers.
6. By signing this Agreement, both SAI and the Dealer/Bank warrant that they
are members of the National Association of Securities Dealers, Inc. (the
"NASD"), and agree that termination of such membership at any time shall
terminate this Agreement forthwith regardless of the provisions of
paragraph 10 hereof. Each party further agrees to comply with all rules and
regulations of the NASD (e.g., the Dealer/Bank will comply in all respects
with Notice to Members 95-80 of the NASD regarding member's obligations and
responsibilities regarding mutual fund sales practices) and specifically to
observe the following provisions:
(a) Neither SAI nor the Dealer/Bank shall withhold placing customers'
orders for Shares so as to profit itself as a result of such
withholding.
(b) SAI shall not purchase Shares from any of the Funds except for the
purpose of covering purchase orders already received, and the
Dealer/Bank shall not purchase Shares of any of the Funds through SAI
other than for investment, except for the purpose of covering purchase
orders already received.
(c) SAI shall not accept a conditional order for Shares on any basis other
than at a specified definite price. The Dealer/Bank shall not, as
principal, purchase Shares of any of the Funds from a recordholder at a
price lower than the bid price, if any, then quoted by or for the Fund,
but the Dealer/Bank shall not be prevented from selling Shares for the
account of a record owner to SAI, the Fund or its redemption agent at
the bid price currently quoted by or for such Fund, and charging the
investor a fair commission for handling the transaction.
(d) If Class A Shares are repurchased by a Fund or by SAI as its agent, or
are tendered for redemption within seven business days after
confirmation by SAI of the original purchase order of the Dealer for
such Shares, (i) the Dealer shall forthwith refund to SAI the full
concession allowed to the Dealer on the original sales and (ii) SAI
shall forthwith pay to the Fund SAI's share of the "sales load" on the
original sale by SAI, and shall also pay to the Fund the refund which
SAI received under (i) above. The Dealer/Bank shall be notified by SAI
of such repurchase or redemption within ten days of the date that such
redemption or repurchase is placed with SAI, the Fund or its authorized
agent. Termination or cancellation of this Agreement shall not relieve
the Dealer/Bank or SAI from the requirements of this clause (d).
7. (a) SAI shall be entitled to a contingent deferred sales load ("CDSL") on
redemptions within six years of purchase on any Class B shares sold,
within eighteen months of purchase on any Class C shares sold and
within one year of purchase on any Class D shares sold. SAI shall also
be entitled to a CDSL on redemptions within eighteen months of purchase
on any Class A shares sold at net asset value due to the size of the
purchase. With respect to omnibus accounts in which Class A shares,
Class B shares, Class C shares or Class D shares are held at Xxxxxxxx
Data Corp. ("SDC") in the Dealer/Bank's name, the Dealer/Bank agrees
that by the tenth day of each month it will furnish to SDC a report of
each redemption in the preceding month to which a CDSL was applicable,
accompanied by a check payable to SAI in payment of the CDSL due.
(b) If, with respect to a redemption of any Class A shares, Class B shares,
Class C shares or Class D shares sold by the Dealer/Bank, the CDSL is
waived because the redemption qualifies for a waiver set forth in the
Fund's prospectus or statement of additional information, the
Dealer/Bank shall remit to SAI promptly upon notice an amount equal to
the payment or a portion of the payment made by SAI to the Dealer/Bank
at the time of sale with respect to such Class A shares, Class B
shares, Class C shares or Class D shares.
8. In all transactions between SAI and the Dealer/Bank under this Agreement,
the Dealer/Bank will act as principal or as agent for the accounts of its
customers in purchasing from or selling to SAI. The Dealer/Bank is not for
any purposes employed or retained as or authorized to act as broker, agent
or employee of any Fund or of SAI and the Dealer/Bank is not authorized in
any manner to act for any Fund or SAI or to make any representations on
behalf of SAI. In purchasing and selling Shares of any Fund under this
Agreement, the Dealer/Bank shall be entitled to rely only upon matters
stated in the current offering prospectus of the applicable Fund and upon
such written representations, if any, as may be made by SAI to the
Dealer/Bank over the signature of SAI.
9. SAI will furnish to the Dealer/Bank, without charge, reasonable quantities
of the current offering prospectus of each Fund and sales material issued
from time to time by SAI.
10. Either Party to this Agreement may cancel this Agreement by written notice
to the other party. Such cancellation shall be effective at the close of
business on the 5th day following the date on which such notice was given.
SAI may modify this Agreement at any time by written notice to the
Dealer/Bank. Such notice shall be deemed to have been given on the date
upon which it was either delivered personally to the other party or any
officer or member thereof, or was mailed postage-paid, or delivered to a
telegraph office for transmission to the other party at his or its address
as shown herein.
11. This Agreement shall be construed in accordance with the laws of the State
of New York and shall be binding upon both parties hereto when signed by
SAI and by the Dealer/Bank in the spaces provided on the cover of this
Agreement. This Agreement shall not be applicable to Shares of a Fund in a
state in which such Fund Shares are not qualified for sale.
POLICIES AND PROCEDURES
In connection with the offering by the Funds of four classes of
shares[1], one subject to a front-end sales load and a service fee ("Class A
Shares"), one subject to a service fee, a distribution fee, no front-end sales
load and a contingent deferred sales load on redemptions within six years of
purchase ("Class B Shares"), one subject to a service fee, a distribution fee, a
front-end sales load and a contingent deferred sales load on redemptions within
eighteen months of purchase ("Class C Shares") and one subject to a service fee,
a distribution fee, no front-end sales load and a contingent deferred sales load
on redemptions within one year of purchase ("Class D Shares")[2], it is
important for an investor to choose the method of purchasing shares which best
suits his or her particular circumstances. To assist investors in these
decisions, SAI has instituted the following policies with respect to orders for
Shares:
1. No purchase order may be placed for Class D Shares unless the investor
meets one of the qualifications provided in Footnote 2 below. The
Dealer/Bank is solely responsible for complying with this restriction.
2. No purchase order may be placed for Class B Shares for amounts of
$250,000 or more, or for Class C Shares for amounts of $1,000,000 or
more.
3. Any other purchase order may be for Class A Shares, Class B Shares,
Class C Shares, or Class D Shares in light of the relevant facts and
circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his Shares; and
c. any other relevant circumstances such as the availability of
purchases under a Letter of Intent, Volume Discount, or Right of
Accumulation.
There are instances when one method of purchasing Shares may be more
appropriate than another. For example, an investor who would qualify for a
significant discount from the maximum sales load on Class A Shares may determine
that payment of such a reduced front-end sales load and service fee is
preferable to payment of a higher ongoing distribution fee. On the other hand,
an investor whose order would not qualify for such a discount may wish to have
all of his or her funds invested in Class B Shares or Class C Shares. An
investor who expects to hold his or her shares for longer than eight years might
prefer Class B Shares over Class C Shares because of the conversion feature;
once the Class B Shares have converted to Class A Shares, the ongoing
distribution fees will be reduced. Class C Shares may remain a more attractive
choice for shorter-term investors (especially those who would qualify for a
discount from the maximum sales load) because the front-end sales load is lower
than on Class A Shares and the contingent deferred sales load on such shares is
only 1%, and it does not apply if the investor owns his or her shares for at
least eighteen months. If an investor anticipates that he or she will redeem his
or her Class B Shares or Class D Shares while still subject to a contingent
deferred sales charge, the investor may, depending on the amount of the
purchase, pay an amount greater than the sales load and service fee attributable
to Class A Shares.
Appropriate supervisory personnel within your organization must ensure
that all employees receiving investor inquiries about the purchase of Shares of
a Fund advise the investor of then available pricing structures offered by the
Fund, and the impact of choosing one method over another. In some instances it
may be appropriate for a supervisory person to discuss a purchase with the
investor.
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[1] Xxxxxxxx Municipal Fund Series, Inc., Xxxxxxxx Municipal Series Trust,
Xxxxxxxx New Jersey Municipal Fund, Inc. and Xxxxxxxx Pennsylvania Municipal
Fund Series only offer three classes of shares; Class B shares are not currently
available from these Funds.
[2] Class D Shares may not be sold to all investors. You may sell Class D Shares
to investors only if (1) the investor already owns Class D Shares of the Fund or
another Xxxxxxxx Mutual Fund (e.g., through a Dealer/Bank to Dealer/Bank account
transfer), (2) if you maintain an omnibus acccount at SDC (i.e., each Fund's
transfer agent), or (3) if the investor is a participant in a 401(k) or other
retirement plan program for which Class D Shares are already available or for
which the sponsor requests Class D Shares because the sales charge structure of
Class D Shares is comparable to the sales charge structure of the other funds
offered under the program.
Questions relating to this policy should be directed to Xxxxxxx X.
Xxxxxxx, President, Xxxxxxxx Advisors, Inc. at (000) 000-0000.
