DISTRIBUTION AGREEMENT
AGREEMENT made this __ day of _____________, 1995 by and
between LORD XXXXXX RESEARCH FUND, INC., a Maryland
Corporation(hereinafter called the "Fund"), and LORD, XXXXXX & CO., a
New York partnership (hereinafter called the "Distributor").
WHEREAS, the Fund desires to enter into an agreement with
the Distributor for the purpose of finding purchasers for its
securities which may be issued in various Series and/or classes, and
the Distributor is desirous of undertaking to perform these services
upon the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants
and of other good and valuable consideration, receipt of which is
hereby acknowledged, it is agreed as follows:
1. The Fund hereby appoints the Distributor its exclusive
selling agent for the sale of its shares of beneficial interest, of all
Series and classes, and all other securities now or hereafter created
or issued by the Fund (except notes and other evidences of indebtedness
issued for borrowed money), pursuant to paragraph 2 of this Agreement,
and the Fund agrees to issue its shares of beneficial interest or other
securities, subject to the provisions of its Articles of Incorporation,
to purchasers thereof and against payment of the consideration to be
received by the Fund therefor. The Distributor may appoint one or more
independent broker-dealers and the Distributor or any such
broker-dealer may transmit orders to the Fund for acceptance at its
office in New York. Such shares shall be registered in such name or
names and amounts as the Distributor or any such broker-dealer may
request from time to time, and all shares when so paid for and issued
shall be fully paid and non-assessable.
2. The Distributor will act as exclusive selling agent
for the Fund in selling shares of beneficial interest of the Fund.
The Distributor agrees to sell exclusively through independent
1
broker-dealers and agrees to use its best efforts to find purchasers
for shares of beneficial interest of the Fund to be offered; provided
however, that the services of the Distributor under this Agreement are
not deemed to be exclusive, and nothing in this Agreement shall prevent
Distributor, or any officer, partner or employee thereof, from
providing similar services to other investment companies and other
clients or to engage in other activities.
The sales charge or premium, if any, relating to each
class of shares of beneficial interest of the Fund shall be determined
by the Directors of the Fund, but in no event shall the sales charge
(front-end and/or asset-based) and service fees exceed the maximum rate
permitted under Federal and state regulations and the rules of National
Association of Securities Dealers, Inc., and the amount to be retained
by the Fund on any sale of its shares shall in each case be the net
asset value thereof (determined as provided in the Articles of
Incorporation). If a front-end sales charge is imposed from the
premium, the Fund agrees to pay the Distributor a sales commission. If
appropriate, the Distributor may allow concessions from such sales
commissions. In such event the amount of the payment hereunder by the
Fund to the Distributor shall be the difference between the sales
commission and any concessions which have been allowed in accordance
herewith. If a front-end sales charge is imposed, the sales commission
payable to the Distributor shall not exceed the front-end sales charge.
If the Fund adopts a Distribution Plan ("Plan") under Rule 12b-1 of the
Investment Company Act of 1940, as amended (the "Act"), the Fund and
the Distributor may arrange to authorize the Fund to pay distribution
and/or service fees to the Distributor for retention by it and/or
remittance to institutions and persons permitted by applicable law
and/or rules to receive such fees ("authorized institutions"). The
purpose of these Plan fees would be to (i) finance any activity which
is primarily intended to result in the sale of shares of the Fund and
(ii) provide continuing information and investment services to
shareholder accounts not covered by
2
authorized institutions which are not affiliated with the Distributor
and otherwise to encourage such accounts to remain invested in the
Fund.
3. Notwithstanding anything herein to the contrary, sales
and distributions of shares of beneficial interest of the Fund's
beneficial shares may be made upon the following special terms:
(a) Capital gains distributions and income dividends on
shares of the Fund may be reinvested by shareholders at net asset value
without any sales commission.
(b) Shares may be issued by the Fund at net asset value
without any sales commission in connection with any permitted offers of
exchange between investment companies having the same Distributor.
(c) Shares may be issued by the Fund at net asset value
without a sales commission or at a reduced sales commission or back-end
sales charge and with, or without, a service fee as may from time to
time be permitted by rules of the Securities and Exchange Commission
under the Act and the rules of National Association of Securities
Dealers, Inc.
4. The independent broker-dealers who sell the Fund's
shares may also render other services to the Fund, such as executing
purchases and sales of portfolio securities, providing statistical
information, and similar services. The receipt of compensation for such
other services shall in no way reduce the amount of the sales
commissions payable hereunder by the Fund to the Distributor or the
amount of the commissions, concessions or fees allowed.
5. The Distributor agrees to act as agent of the Fund in
connection with the repurchase of shares of beneficial interest of the
Fund, or in connection with permitted exchanges of shares between
investment companies having the same Distributor, and the Fund agrees
to advise the Distributor of the net asset value of its shares as
frequently as may be mutually agreed, and to accept shares duly
tendered to the Distributor. The net asset value shall
3
be determined as provided in the Fund's Articles of Incorporation.
6. The Fund will pay all fees, costs, expenses and charges
in connection with the issuance, federal registration, transfer,
redemption and repurchase of its shares, including without limitation,
all fees, costs, expenses and charges of transfer agents and
registrars, all taxes and other Governmental charges, the costs of
qualifying or continuing the qualifications of the Fund as
broker-dealer, if required, and of registering the Fund's shares under
the state blue sky laws, or similar laws of any jurisdiction (domestic
or foreign), costs of preparation and mailing prospectuses to its
shareholders, and any other cost, expense or charge not expressly
assumed by the Distributor hereunder. The Fund will also furnish to the
Distributor daily such information as may reasonably be requested by
the Distributor in order that it may know all of the facts necessary to
sell the Fund's shares.
7. The Distributor agrees to pay the cost of all sales
literature and other material which it may require or think desirable
to use in connection with sale of such shares, including the cost of
reproducing the offering prospectus furnished to it by the Fund, except
as may be provided for subsequently pursuant to paragraph 2 hereunder.
The Fund agrees to use its best efforts to qualify its shares for sale
under the laws of such states of the United States and such other
jurisdictions (domestic or foreign) as the Distributor may reasonably
request.
If the Distributor pays for other expenses of the Fund or
furnishes the Fund with services, the cost of which is to be borne by
the Fund under this Agreement, the Distributor shall not be deemed to
have waived its rights under this Agreement to have the Fund pay for
such expenses or provide such services in the future.
8. The Distributor agrees to use its best efforts to find
purchasers for shares of each class of each Series of the Fund issued
and to make reasonable efforts to sell the same so long as in the
judgment of the Distributor a substantial distribution can
4
be obtained by reasonable efforts. The Distributor is not
authorized to act otherwise than in accordance with applicable
laws.
9. Neither this Agreement nor any other transaction
between the parties hereto pursuant to this Agreement shall be
invalidated or in any way affected by the fact that any or all of the
directors, officers, shareholders, or other representatives of the Fund
are or may be interested in the Distributor, or any successor or
assignee thereof, or that any or all of the directors, officers,
partners, or other representatives of the Distributor are or may be
interested in the Fund, except as otherwise may be provided in the Act.
10. The Distributor agrees that it will not sell for its
own account to the Corporation any stocks, bonds or other securities of
any kind or character, except that if it shall own any of the Fund's
shares or other securities, it may sell them to the Fund on the same
terms as any other holder might do.
11. Other than to abide by the provisions hereof and
render the services called for hereunder in good faith, the Distributor
assumes no responsibility under this Agreement and, having so acted,
the Distributor shall not be held liable or held accountable for any
mistake of law or fact, or for any loss or damage arising or resulting
therefrom suffered by the Fund or any of the shareholders, creditors,
directors, or officers of the Fund; provided, however, that nothing
herein shall be deemed to protect the Distributor against any liability
to the Fund or its shareholders by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties hereunder,
or by reason of the reckless disregard of its obligations and duties
hereunder.
12. The Distributor agrees that it shall observe and be
bound by all of the terms of the Articles of Incorporation of the Fund,
including any amendments thereto, of the Fund which shall in any way
limit or restrict or prohibit or otherwise regulate any action of the
Distributor.
13. This Agreement shall continue in force until
5
December __, 1997, and it is renewable annually thereafter by specific
approval of the directors of the Fund or by vote of a majority of the
outstanding voting securities of the Fund; any such renewal shall be
approved by the vote of a majority of the directors who are not parties
to this Agreement or interested persons of the Distributor or of the
Fund, cast in person, at a meeting called for the purpose of voting on
such renewal.
This Agreement may be terminated without penalty at any
time by the Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Fund on 60 days' written notice.
This Agreement shall automatically terminate in the event of its
assignment. The terms "interested persons", "assignment" and "vote of a
majority of the outstanding voting securities" shall have the same
meaning as those terms are defined in the Act.
IN WITNESS WHEREOF, the Fund has caused this Agreement to
be executed by its duly authorized officers and its seal to be affixed
thereto, and the Distributor has caused this Agreement to be executed
by one of its partners all on the day and year first above written.
LORD XXXXXX RESEARCH FUND, INC.
By:_____________________________
Chairman of the Board
Attest:
----------------------
Assistant Secretary
LORD, XXXXXX & CO.
By:____________________________
A Partner
6
