SELLING AND SERVICE AGREEMENT
for the sale of shares
of
THE XXXXXXX FUND INC.
1. hereby agrees to effect transactions in shares of The
Xxxxxxx Fund Inc. (the "Fund"), in accordance with the terms of this Agreement.
In all transactions covered by this Agreement you shall act only as agent solely
upon the order and for the account of your customers and in no transaction shall
you have authority to act as agent for the Fund, or any representative or agent
thereof.
2. Orders received from you will be accepted by State Street
Bank and Trust Company (the "Transfer Agent") or us only at the public offering
price applicable to each order, as established by the then-current prospectus of
the Fund. Upon receipt from you of any order to purchase shares of the Fund, we
or the Transfer Agent shall confirm the terms thereof to you by phone, wire, or
via computer facilities. You or your agent will assume responsibility for
providing confirmations and prospectuses to your customers. All orders are
subject to acceptance or rejection by us in our sole discretion. We will not
accept from you any conditional orders for shares. It is agreed and understood
that, except where you are purchasing shares for your own bona Ode investment,
the customer will have full beneficial ownership of the Fund share, whether
shares are registered in the purchaser's name, in your name or in the name of
your nominee.
3. When accepted, a purchase order will be confirmed at the
public offering price, as determined in accordance with the Fund's then-current
prospectus. For your services hereunder in connection with the sale of shares of
the Fund to your customers, you will be entitled to receive the concessions
and/or fees set forth under paragraph 4 below. Distribution fees are paid in
accordance with the respective distribution plans for the Class A, Class B and
Class C Shares of the Fund adopted by the Board of Directors of the Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"Rule 12b-1 Plans").
4. Subject to the terms of this agreement:
(i) For your services hereunder in connection with the sale of Class A
Shares to your customers, you are entitled to receive a sales concession based
on the applicable percentage of the public offering price set forth in the fee
schedule attached hereto as Exhibit A, in the Fund's thencurrent prospectus and
statement of additional information. In addition, you will receive a Rule 12b-1
distribution fee with respect to Class A Shares, as set forth in the Fee
schedule attached hereto as Exhibit A and in the Fund's then-current prospectus
and statement of additional inforrnation,paid quarterly commencing with the
beginning of the next calendar quarter following the sale.
(ii) For your services hereunder in connection with each sale
of Class B Shares to your customers, you are entitled to receive a fee for sales
related activities, a Rule 12b- 1 distribution fee, and a service fee as set
forth in the Fee schedule attached hereto as Exhibit A and in the Fund's
then-current prospectus and statement of additional information.
Service fees shall be paid to compensate you for
providing continuous personal service to Class B shareholders, such as
responding to shareholder inquiries, quoting net asset values and attending to
other shareholder, administrative and record keeping matters.
(iii) For your services hereunder in connection with each
sale ofClass _ Shares to your customers, you are entitled to receive a fee for
sales related activities, a Rule 12b-1 distribution fee and a service fee as set
forth in the fee schedule attached hereto as Exhibit A AND in the Fund's
then-current prospectus and statement of additional information, and the
Compliance Standards set forth in Exhibit B.
Service fees shall be paid TO COMPENSATE YOU FOR
PROVIDING continuous personal services to Class C shareholders such as
responding to shareholder inquiries and attending to other shareholder,
administrative and record keeping matters.
5. (a) You understand that the Class A, Class B and Class C
Rule 12b-1 fees, and all other fees and concessions set forth above relating to
the Class A, Class B and Class C Shares, shall be payable to you only if and to
the extent actually received by us from the Fund, and with respect to the fee
set forth in subparagraph 4 (ii) above, such fee shall be payable only upon the
Fund's receipt of the full public offering price of the related purchase of
shares, and we shall have no obligation to make any disbursement thereof to you
until after receipt of funds from the Fund. We reserve the right at any time
without notice to modify, suspend, or terminate such payments hereunder. All
such payments shall be subject to our continued authority to distribute the
Fund's shares and its authority to terminate or modify its distribution
arrangements with us.
(b) All payments due to you hereunder are contingent upon
your compliance with the terms hereof, including the annexed Compliance
Standards. In particular, your right to receive service fees pursuant to
subparagraph 4 (ii) above is contingent upon your provision of the ongoing
services described therein to Class B shareholders.
(c) The Compliance Standards attached hereto as Exhibit B
are applicable to all sales of Class A and Class B Shares of the Fund and are
incorporated herein by reference.
6. By accepting this Agreement you hereby agree that:
(a) You will order shares of the Fund for your customers only from us or our
designated agents, and solely upon the order and for the account of your
customers.
(b) You will order shares of the Fund from us or our designated agent only to
cover purchase order already received from your customers or for your bona
fide investment.
(c) You will not withhold placing orders received from your customers so as to
profit yourself as a result of such withholding, and you will place
orders for purchases and redemptions promptly upon receipt from your
customers.
(d) You will not sell shares of the Fund pursuant to this Agreement unless the
then-current prospectus is furnished to the purchaser in connection with
the offer and consistent with applicable legal and regulatory requirements.
(e) You will comply with the Compliance Standards applicable to the sale of the
Fund's shares, as the same may be amended unilaterally by the Fund from time to
time, the present version of which is attached hereto as Exhibit B.
7. By accepting this Agreement, you represent that you
(i) are registered as a broker-dealer under the Securities Exchange Act of 1934,
as amended; (ii) are qualified to act as a dealer in each jurisdiction in which
you will offer shares of the Fund; (iii) are a member in good standing of the
National Association of Securities Dealers, Inc.; and (iv) will maintain such
registrations, qualifications and memberships throughout the term of this
Agreement. You shall comply with all applicable federal laws, the laws of each
jurisdiction in which you will offer shares of the Fund and the rules and
regulations of the National Association of Securities Dealers, Inc. and any
self-regulatory organization to which you, the Fund or we are subject. You shall
not be entitled to any compensation during any period in which you have been
suspended or expelled from membership in the National Association of Securities
Dealers, Inc. You further agree that you will not make available shares of the
Fund in any state or other jurisdiction in which such shares may not be
lawfully offered for sale.
8. By accepting this Agreement, you shall assume full
responsibility for thorough and prior training of your representatives
concerning the selling methods to be used in connection with the offer and sale
of shares of the Fund, giving special emphasis to the principles of full and
fair disclosure to prospective investors and the terms and principles set forth
in the Compliance Standards.
9. Payment of the public offering price for shares
ordered by you shall be remitted to us (as to Class A shares, net of any
applicable sales commissions, as set forth in subparagraph 4 (i) hereof), and
shall be in New York clearing house funds received by the Fund's Transfer Agent,
State Street Bank and Trust Company, not later than five business days after our
acceptance of your order with proper transfer instructions. If such payment is
not received, we reserve the right, without notice, forthwith to cancel the
sale, in which case you agree to be responsible for any loss, including loss of
profit, suffered by the Fund or us as a result of your failure to make such
payment.
10. Shares of the Fund sold through you hereunder shall
be made available as described in the Fund's then-current prospectus.
11. If any shares confirmed to you and your customer
under the terms of this Agreement are repurchased by the Fund or by us or are
tendered to the Fund for redemption or repurchase within seven (7) business
days after the date of the condonation of the original purchase order, you shall
forthwith refund to us any monies paid or allowed to you with respect to such
shares under this Agreement. We will notify you of any such repurchase within
ten (lO) business days of such repurchase.
12. No person is authorized to make any representations
concerning shares of the Fund except those contained in the then-current
prospectus of the Fund and in printed information subsequently issued by the
Fund or by us as information supplemental to such prospectus. We will furnish
additional copies of the Fund's prospectus and any sales literature and other
information issued by us or the Fund, in reasonable quantities upon request.
If you wish to use your own advertising material such as mailers, brochures,
prospecting letters, etc. with respect to the Fund, all such advertising must be
submitted to us for review and approval prior to use. You shall be responsible
for filing and obtaining any approvals of such advertising as may be required by
applicable law or regulation.
13. We reserve the right, in our discretion, without
notice, to suspend sales or withdraw the offering of shares entirely or to
change the sales charges or fees payable hereunder. In addition, we reserve the
right, upon prior notice, to modify, cancel or change any other terms of this
Agreement.
14. You shall make available for your customers such
administrative services as are necessary or appropriate for providing
information and services to your customers. Such information services and
assistance may
include, but shall not be limited to, establishment and maintenance of
accounts and records, processing purchase and redemption transactions, answering
routine inquiries, and such other services as may be agreed upon from time to
time and as may be permitted by applicable statute, rule or regulation. You
shall promptly answer all written complaints received by you relating to Fund
accounts and forward such complaints to Xxxxxxx Securities Inc., 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Office of the President.
15. YOU AGREE TO INDEMNIFY, DEFEND AND HOLD US AND OUR
SEVERAL OFFICERS and directors, and the Fund and its several officers and
directors, and any person who controls us and/or the Fund within the meaning of
Section 15 of the Securities Act of 1933, as amended, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims and any counsel fees incurred in
connection therewith) which we or our several officers and directors, and any
such controlling person, as aforesaid, may incur arising out of or based upon
(i) any breach of any representation, warranty or covenant made by you herein,
(ii) any failure by you to perform your obligations as set forth herein, or
(iii) any violation of any law, rule or regulation, which violation may result
in liability to us or to the Fund. In the event that we or the Fund determine to
refund any amounts paid by an investor by reason of your breach, failure or
violation, you shall return to us or the Fund any concession or fee previously
paid to you by us with respect to the transaction or transactions for which the
refund is being made. This section shall survive termination of this Agreement.
16. In soliciting purchases of shares of the Fund, you
shall act as an independent contractor and not as our agent. Neither party
hereto shall be deemed to be the agent of the other.
17. (a) Any notice or other instrument in writing,
authorized or required by THIS AGREEMENT TO BE GIVEN TO US SHALL BE SUFFICIENTLY
GIVEN IF ADDRESSED TO US AND MAILED OR DELIVERED TO US AT OUR ADDRESS SET FORTH
ON THE FIRST PAGE HEREOF, TO THE ATTENTION OF THE PRESIDENT, OR AS MAY OTHERWISE
FROM TIME TO TIME BE DESIGNATED IN WRITING TO YOU. ANY NOTICE OR OTHER
INSTRUMENT IN WRITING, AUTHORIZED OR REQUIRED BY THIS AGREEMENT TO BE GIVEN TO
YOU, SHALL BE sufficiently given if addressed to you and mailed or delivered to
you at your offices at:
Address
City, State, Zip
Phone#:
Contact:
Fax#:
or at such other place as you may from time to time designate in writing to us.
(b) Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Fund shall be
sufficiently given if addressed to the Fund and mailed or delivered to it at its
offices at 1325 Avenue of the Americas, Xxx Xxxx Xxx Xxxx 00000 or at such other
place as the Fund may from time to time designate in writing.
(c) Any notice or other instrument in writing
authorized or required by this Agreement to be given to the Fund's Transfer
Agent, State Street Bank and Trust Company, shall be sufficiently given if
addressed to The Xxxxxxx Fund Inc., c/o State Street Bank & Trust Company, P. O.
Xxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, or such other place as State Street
Bank & Trust Company may from time to time designate in writing.
(d) All notices shall be effective upon receipt.
18. This Agreement constitutes the entire agreement
between the parties hereto with regard to its subject matter and supersedes any
prior agreement related to the subject matter hereunder.
19. NEITHER PARTY SHALL TRANSFER OR ASSIGN THIS
AGREEMENT, OR ANY right or obligation under it, by operation of law or
otherwise, to any entity without the other party's prior written consent and any
such attempted assignment shall be VOID.
20. No failure or delay (in whole or in part) on the
part of either party hereto to exercise any right or remedy hereunder shall
impair any such right or remedy, operate as a waiver thereof, or affect any
other right or remedy hereunder. All rights and remedies hereunder are
cumulative and are not exclusive of any of the rights or remedies provided
hereunder or by law or equity.
21. If any of the provisions contained in this
Agreement is or becomes invalid, illegal or unenforceable in whole or in part,
such invalidity, illegality or unenforceability shall not affect the remaining
provisions and portions of this Agreement with respect to the subject matter
hereof. This Agreement may not be modified except by written instrument executed
by both parties.
22. This Agreement shall be governed and construed in accordance with the laws
of the State of New York without reference to principles of conflicts of law.
Xxxxxxx Securities Inc.
By:
We have read the foregoing Agreement and accept and agree to the terms and
conditions thereof:
(Dealer Name)
By:
(Sign Here)
Title:
Date:
(Print Here)
EXHIBIT A
FEE SCHEDULE
TO
SELLING AND SERVICE AGREEIVIENT
THE XXXXXXX FUND INC.
SALES CHARGE RULE 12b-1 FEE SERVICE FEE
CLASS A* Sales concession of .25% per annum of none
(5)% of public average daily net
offering price. assets.
[Full dealer re-allowance]
Purchases of $1 Million or More.
CLASS B** Dealers will receive .75% per annum of .25% per annum
from the Distributor a fee of average daily net of average net
S'O of the gross proceeds assets. assets.
from the sale at the time [Full dealer
of settlement. A CDSC.- will be re-allowance]
imposed on and deducted from
proceeds of Class B shares
if redeemed within six years.
CLASS C Dealers will receive .75% per annum of .25% per annum
from the Distributor a fee of average daily net of average net
1% of the gross proceeds assets. assets.
from the sale at the time [.60% dealer re-allowance [Full dealer
of settlement. A CDSC...... will be commencing at the end of re-allowance
imposed on and deducted from the thirteenth (13) month commencing at
proceeds of Class C shares following each sale of shares.] the end of the
if redeemed within I year. thirteenth ( 13)
month following
each sale of
shares.]
* Shareholders who purchased Class A shares before April 28, 1995 are subject to
a reduced sales load of up to 3% for Class A Shares.
** Class B shares purchased before April 28, 1995 are subject to no CDSC unless
shares ARE REDEEMED within 18 MONTHS of purchase; in which case a CDSC of
1.25% will be IMPOSED.
On purchases by a single purchaser aggregating $1 million or more, the
investor will not pay a load at the time of purchase. The Distributor will pay
authorized dealers an amount equal to: 1.00% of the first $2 million; 0.80%
on the next million; and 0.40% on any amount over $3 Million. If the client
redeems these million dollar assets the fund will impose a CDSC based upon a
24 month period as follows: first 12 months 1.00% CDSC; next 12 months 0.50%
CDSC.
The CDSC will be deducted from the redemption proceeds otherwise payable to the
shareholder and will be retained by the distributor.
COMPLIANCE STANDARDS
FOR THE SALE OF SHARES OF
THE XXXXXXX FUND INC.
EXHIBIT B
As distributor of The Xxxxxxx Fund Inc. (the "Fund"), which offers its shares on
both a front-end and deferred sales charge basis, it is incumbent upon Xxxxxxx
Securities Inc. ("BSI~) to establish compliance standards setting forth the
basis upon which shares of the Fund may be sold. These standards are designed
for each broker/dealer ("dealer") which distributes shares of the Fund and for
each dealer's financial advisers/registered representatives.
Since shares of the Fund are offered with different alternative purchase
arrangements, it is important for an investor to choose a sales financing method
that best suits his particular situation. To assist clients of those firms which
distribute the Fund in these decisions and to ensure proper supervision of
purchase recommendations regarding the Fund, BSI is instituting the following
compliance standards to which dealers must adhere when selling shares of the
Fund:
(1) Any purchase for less than $50,000 may be either subject to a front-end or
contingent deferred sales charge.
(2) Any purchase order for $100,000 or more but less than $1 million is subject
to review prior to entry by the branch office manager and such review must be
writing. The dealer's branch officer manager (or other appropriate reviewing of
ricer) must review for suitability the purchase order ticket for shares subject
to either a front-end or contingent deferred sales charge, given the relevant
facts and circumstances, including, but not limited to:
(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 letter of intention or rights of accumulation.
(3) Any purchase order of more than $ 1 million should be for Class A shares
which are subject to no front-end sales charge at the time of purchase but are
subject to a contingent deferred sales charge over a 24 month period from the
time of purchase.
(4) The maximum investment per shareholder account for Class B shares is
$250,000.
(5) THE MAXIMUM INVESTMENT PER SHAREHOLDER ACCOUNT ~ CLASS (shares is
$1,000,000.
GENERAL GUIDELINES
The alternative purchase arrangements of the Fund permit an investor to
choose the method of purchasing shares that is most beneficial given the length
of time the investor may expect to hold the shares, the investor's expected
overall level of investment in the Fund and other circumstances. Investors
should consider whether during the anticipated life of their investment in the
Fund the accumulated distribution and service fees attributable to Class B and C
shares would be less than the initial sales charge and accumulated distribution
fees of Class A shares if purchased at the same time. The prospective investor
should consider these fees plus the applicable sales charge alternatives in
choosing the method of purchasing shares.
Responsibilities of the Branch Office Manager (or other appropriate reviewing
officer)
The dealer's branch office manager or other appropriate reviewing
officer (the "Reviewing Officer") must ensure that the financial
adviser/registered representative has advised the client of the available
alternative purchase arrangements offered by the Fund, and the impact of
choosing one method over another. In certain instances, it may be appropriate
for the Reviewing Officer to discuss the purchase directly with the client. The
foregoing guidelines, as well as the examples cited above, should assist the
Reviewing Officer in reviewing purchase orders in the $100,000 to less than $1
million range.
Effectiveness and Amendments
These compliance guidelines are effective immediately upon receipt hereof by the
dealer.
Questions relating to these compliance guidelines should be directed by
the dealer to its national mutual fund sales and marketing group or its Legal
Department or Compliance Director. BSI will advise dealers in writing of any
future changes in these guidelines.
