DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT made , 2000, by and between The
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Rightime Fund, Inc., a Maryland corporation (the "Corporation") for The
Rightime OTC Fund Series (the "Fund"), and Lincoln Investment Planning,
Inc., a Pennsylvania corporation (the "Distributor").
WITNESSETH:
In consideration of the mutual covenants and agreements of the parties
hereto, the parties intending to be bound, mutually covenant and agree
with each other as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Distributor as agent of the Fund to effect the sale and public
distribution of shares of the capital stock of the Fund. This
appointment is made by the Corporation for the Fund and accepted by the
Distributor upon the understanding that the distribution of shares of
the Fund to the public be effected by the Distributor or through various
securities dealers, either individuals or organizations, but that it
shall be done it such manner that the Fund shall be under no
responsibility or liability to any person whatsoever on account of the
acts and statements of any such individual or organization. The
Distributor shall have the sole right to select the security dealers to
whom shares will be offered by it and, subject to express provisions of
this Agreement, applicable securities laws, the Corporation's Articles
of Incorporation, the By-Laws and the then current Prospectus of the
Fund, to determine the terms and prices in any contract for the sale of
shares to any dealer made by it as such agent for the Fund.
2. The Distributor shall be the exclusive agent for the Fund for the
sale of its shares and the Fund agrees that it will not sell any shares
to any person except to fill orders for the shares received though the
Distributor; provided, however, that the foregoing exclusive right shall
not apply: (a) to shares issued or sold in connection with the merger or
consolidation of any other investment company with the Fund or the
acquisition by purchase or otherwise of all or substantially all the
assets of any investment company or substantially all the outstanding
shares of any such company by the Fund; (b) to shares which may be
offered by the Fund to its stockholders for reinvestment of cash
distributed from capital gains or net investment income of the Fund; or
(c) to shares which may be issued to shareholders of other Funds who
exercise any exchange privilege set forth in the Fund's Prospectus.
3. The Distributor shall have the right to sell the shares of the Fund's
capital stock to dealers, as needed (making reasonable allowance for
clerical errors and errors of transmission), but not more than the
shares needed to fill unconditional orders for shares place with the
Distributor by dealers. In every case the Distributor shall charge the
public offering price and the Fund shall receive the net asset value for
the shares sold, determined as provided in Paragraph 4 hereof. The
Distributor shall notify the Fund at the close of each trading day on
the New York Stock Exchange ("NYSE"), of the number of shares sold
during that day. Notwithstanding the foregoing, the Fund may sell its
shares to certain affiliated person at net asset value, as described in
the prospectus.
4. The public offering price consists of the net asset value per share
plus a maximum sales charge of: 4.75% for purchases under $50,000; 3.75%
for purchases of $50,000 but less than $100,000; 2.75% for purchases of
$100,000 but less than$500,000; 1.75% for purchases of $500,000 but less
than $1,000,000; .75% for purchases of $1,000,000 but less than
$2,000,000; and no sales charges for purchases of $2,000,000 or more;
unless otherwise stated in the Fund's currently effective Prospectus.
The net asset value of share of the Fund shall be determined by the Fund
or the Fund's custodian, or such officer or officers or other persons as
the Board of Directors of the Corporation may designate. The
determination shall be made as of the close of regular trading on the
NYSE each day that the NYSE is open for trading and in accordance with
the method set out in the By-Laws of the Corporation and the current
Prospectus of the Fund.
5. The Distributor agrees that it will not sell any shares of the Fund
to any officer, director, or partner of either the Distributor or of the
Corporation or any firm or corporation which may be employed by the Fund
or by the Distributor except for investment purposes only and where the
purchaser agrees not to resell the securities to anyone except the Fund.
The Distributor further agrees that it will promptly advise the
Secretary of the Corporation of all sales of shares of the Fund to, or
purchase of shares of the Fund from, any such person.
6. The Distributor agrees that it will not for its own account purchase
any shares of the Fund except for investment purposes and that it will
not for its own account sell any such shares excepting only those shares
which it may own at the time of executing this Agreement and any shares
resulting from the reinvestment of dividends paid on those share, and
the Distributor will not sell other shares except by redemption of such
shares by the Fund.
7. (a) On behalf of the Fund, the Corporation appoints and designates
the Distributor as agent of the Fund and the Distributor accepts such
appointment as such agent, to repurchase shares of the Fund in
accordance with the provisions of the Articles of Incorporation and
By-Laws of the Corporation.
(b) In connection with such redemptions or repurchases the Corporation
authorizes and designates the Distributor to take any action, to make
any adjustments in net asset value, and to make any arrangements for the
payment of the redemption or repurchase price authorized or permitted to
be taken or made in accordance with the Investment Company Act of 1940
and as set forth in the Corporation's By-Laws and then current
Prospectus of the Fund.
(c) The authority of the Distributor under this Paragraph 7 may, with
the consent of the Corporation, be re-delegated in whole or in part to
another person or firm.
(d) The authority granted in this Paragraph 7 may be suspended by the
Corporation at any time or from time to time pursuant to the provisions
of its Articles of Incorporation until further notice to the
Distributor. The President or any Vice President of the Corporation
shall have the power granted by said provisions. After any such
suspension the authority granted to the Distributor by this Paragraph 7
shall be reinstated only by a written instrument executed on behalf of
the Fund by the Corporation's President or any Vice President.
8. The Fund agrees that it will cooperate with the Distributor to
prepare, execute and file applications for registration and
qualification of its shares for sale under the laws of the United States
and the provisions and regulations of the U.S. Securities and Exchange
Commission and under the Securities Acts of such States and in such
amounts as the Fund may determine, and shall pay registration fees in
connection therewith. The Distributor shall bear all expenses incident
to the sale of shares of the Fund, including without limitation, the
cost of any sales material or literature, the cost of copies of the
prospectus used as sale material (except those being sent to existing
shareholders) and the cost of any reports or proxy material prepared for
the Fund's stockholders to the extent that such material is used in
connection with the sale of shares of the Fund except to the extent that
the Fund is obligated to bear such costs under a distribution plan
adopted by the Fund.
9. For its services under this Agreement, the Distributor shall be
entitled to receive the maximum amount of the payment called for under
the Fund's Distribution Plan (the "Plan") adopted pursuant to the
Investment Company Act of 1940 Rule 12b-1 (the "Rule"), which payment
shall be payable by the Fund twice per month according to such schedule
as is set forth from time to time by the parties to this Agreement, such
approval to be made on behalf of the Fund by the Board of Directors of
the Corporation. The Distributor may make payments to others from such
amounts in accordance with the Plan or any agreement in effect under
such Plan. The Distributor agrees to comply with the Rule and the Plan
in connection with receipt and disbursement of funds under the Plan.
10. Notwithstanding anything contained herein to the contrary, shares of
the Fund may be offered for sale at a price other than their current net
asset value or regular public offering price, if such reduction or
elimination is authorized by an order of the Securities and Exchange
Commission, or the Investment Company Act of 1940 or the rules and
regulations promulgated thereunder provide for such variation.
Furthermore, such shares may be offered and sold directly by the Fund
rather than by the Distributor as otherwise provided in the Agreement.
11. This Agreement shall become effective , 2000 and shall
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continue in effect for a period of more then one year from its effective
date only as long as such continuance is approved, at least annually, by
the Board of Directors of the Corporation, including a majority of those
Directors who are not "interested persons" of any party to this
Agreement voting in person at a meeting called for the purpose of voting
on such approval. If payments hereunder are made pursuant to provisions
of a plan adopted by the Fund pursuant to investment Company Act of 1940
Rule12b-1, then renewals hereof shall also be make in accordance with
the requirements of such rule. This Agreement may be terminated by
either party hereto upon thirty (30) days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment by the Distributor (as the term "assignment" is defined by
the Investment Company Act of 1940, as amended) unless the United States
Securities and Exchange Commission has issued an order exempting the
Fund and the Distributor from the provisions of the Investment Company
Act of 1940, as amended, which would otherwise have effected the
termination of this Agreement.
12. No amendment to this Agreement shall be executed or become effective
unless its terms have been approved (a) by a majority of the directors
of the Corporation or by the vote of a majority of the outstanding
voting securities of the Fund, and (b) by a majority of those directors
who are not interested persons of the Fund or of any party to this
Agreement.
13. The Corporation, on behalf of the Fund, and the Distributor hereby
each agree that all literature and publicity issued by either of them
referring directly or indirectly to the Fund or to the Distributor shall
be submitted to and receive the approval of the Fund and the Distributor
before the same may be used by either party.
14. (a) The Distributor agrees to use its best efforts in effecting the
sale and public distribution of the shares of the Fund through dealers
and to perform its duties in redeeming and repurchasing the share of the
Fund, but nothing contained in this Agreement shall make the Distributor
or any of its officers and directors or shareholders liable for any loss
sustained by the Fund or any of the Corporation's officers, directors or
shareholders, 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 to any of its shareholders to which the
Distributor would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of its duties as
Distributor or by reason of its reckless disregard of its obligations or
duties as Distributor under the Agreement. Nothing in the Agreement
shall protect the Distributor from any liabilities, which it may have
under the Securities Act of 1933 or the Investment Company Act of 1940.
(b) The Distributor may, from time to time enter into agreements with
security dealers and other qualified entities selected by it and may
make assistance payments to such dealers in such amount as is deems
appropriate, provided that such payments are permitted by the then
current distribution plan adopted by the Fund in accordance with Rule
12b-1 of the Investment Company Act of 1940, as amended.
15. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect.
IN WITNESS WHEREOF, The Rightime Fund, Inc., for the Rightime OTC Fund
Series, and Lincoln Investment Planning, Inc. have caused this Agreement
to be signed by their duly authorized officers and their corporate seals
to be hereunto duly affixed all on the day and year above written.
Attest: THE RIGHTIME FUND, INC.
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Xxxxxx X. Xxxxx, Xx. Xxxxx X. Rights
Secretary President
Attest: LINCOLN INVESTMENT PLANNING, INC.
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Xxxxxx Xxxxx Xxxxxx Xxxxx, Xx.
Vice President President
