Exhibit (e-3)
DISTRIBUTION AGREEMENT
September 9, 2003
As amended December 11, 2003
As further amended, and restated, as of January 17, 0000
Xxxx Xxxxx & Company, Incorporated
00 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, The China - U.S. Growth Fund (the "Fund"), an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts, has agreed that Xxxx Xxxxx & Company, Incorporated ("Xxxxx")
shall be, for the period of this Agreement, the distributor of shares of
beneficial interest of the Fund.
1. Services as Distributor
1.1 Xxxxx will act as agent for the distribution of each series of shares
of beneficial interest of the Fund (the "Shares") covered by the registration
statement, prospectus.and statement of additional information then in effect
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended (the "1940
Act").
1.2 Xxxxx agrees to use its best efforts to solicit orders for the sale of
the Shares at the public offering price, as determined in accordance with the
Registration Statement, and will undertake such advertising and promotion as it
believes is reasonable in connection with such solicitation. Xxxxx agrees to
bear all selling expenses, including the cost of printing prospectuses and
statements of additional information and distributing them to prospective
shareholders.
1.3 All activities by Xxxxx as distributor of the Shares shall comply with
all applicable laws, rules and regulations, including, without limitation, all
rules and regulations made or adopted by the Securities and Exchange Commission
(the "SEC") or by any securities association registered under the Securities
Exchange Act of 1934.
1.4 Xxxxx will provide one or more persons during normal business hours to
respond to telephone inquiries concerning the Fund.
1.5 Xxxxx acknowledges that, whenever in the judgment of the Fund's
officers such action is warranted for any reason, including, without limitation,
market, economic or political conditions,
those officers may decline to accept any orders for, or make any sales of, the
Shares until such time as those officers deem it advisable to accept such orders
and to make such sales.
1.6 As promptly as possible after the last day of each month that this
Agreement is in effect, the Fund may pay shareholder servicing fees to Xxxxx for
ongoing servicing and/or maintenance of shareholder accounts at an annual rate
of up to .25% of the average daily net assets allocable to the Class A Shares of
the Fund , such payments to be made in each case only out of the assets
allocable to the Fund's Class A Shares. The shareholder servicing fee shall be
used by Xxxxx to provide compensation for ongoing servicing and/or maintenance
of shareholder accounts and to cover an allocable portion of overhead and other
Xxxxx and selected dealer office expenses related to the servicing and/or
maintenance of shareholder accounts, or for such other purpose as may be
permitted under the then current Class A Distribution Plan of the Fund adopted
pursuant to Rule 12b-1 under the 1940 Act (the "Plan").
1.7 Xxxxx shall, at least quarterly, provide to the Board of Trustees of
the Fund for their review a written report of the amounts expended under
paragraph 1.6 and the purposes for which such expenditures were made, and shall
also provide such supplemental reports as the Trustees may from time to time
request.
1.8 Xxxxx acknowledges that the payments contemplated by paragraph 1.6 are
made pursuant to the Plan and may continue only so long as the Plan remains in
effect, that the payments are subject to the approval of the Fund's Board of
Trustees, and that the Fund is not contractually obligated to make such payments
in any amount at any time.
2. Duties of the Fund
2.1 The Fund agrees to execute at its own expense any and all documents, to
furnish any and all information and to take any other actions that may be
reasonably necessary in connection with the qualification of the Shares for sale
in those states that Xxxxx may designate.
2.2 The Fund shall furnish from time to time, for use in connection with
the sale of the Shares, such information reports with respect to the Fund and
the Shares as Xxxxx may reasonably request, all of which shall be signed by one
or more of the Fund's duly authorized officers; and the Fund warrants that the
statements contained in any such reports, when so signed by one of more of the
Fund's officers, shall be true and correct. The Fund shall also furnish Alger
upon request with: (a) annual audits of the Fund's books and accounts made by
independent public accountants regularly retained by the Fund, (b) semi-annual
unaudited financial statements pertaining to the Fund, (c) quarterly earnings
statements prepared by the Fund, (d) a monthly itemized list of the securities
in each Portfolio, (e) monthly balance sheets as soon as practicable after the
end of each month and (f) from time to time such additional information
regarding the Fund's financial condition as Xxxxx may reasonably request.
3. Representations and Warranties
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The Fund represents to Xxxxx that all registration statements, prospectuses and
statements of additional information filed by the Fund with the SEC under the
1933 Act and the 1940 Act with respect to the Shares have been prepared in
conformity with the requirements of the 1933 Act, the 1940 Act and the rules and
regulations of the SEC thereunder. As used in this Agreement the terms
"registration statement", "prospectus" and "statement of additional information"
shall mean any registration statement, prospectus and statement of additional
information filed by the Fund with the SEC and any amendments and supplements
thereto that at any time shall have been filed with the SEC. The Fund represents
and warrants to Xxxxx that any registration statement, prospectus and statement
of additional information, when such registration statement becomes effective,
will include all statements required to be contained therein in conformity with
the 1933 Act, the 1940 Act and the rules and regulations of the SEC; that all
statements of fact contained in any registration statement, prospectus or
statement of additional information will be true and correct when such
registration statement becomes effective; and that neither any registration
statement nor any prospectus or statement of additional information when such
registration statement becomes effective will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of the
Shares. Xxxxx may, but shall not be obligated to, propose from time to time such
amendment or amendments to any registration statement and such supplement or
supplements to any prospectus or statement of additional information as, in the
light of future developments, may, in the opinion of Xxxxx'x counsel, be
necessary or advisable. If the Fund shall not propose such amendment or
amendments and/or supplement or supplements within fifteen days after receipt by
the Fund of a written request from Xxxxx to do so, Xxxxx may, at its option,
terminate this Agreement. The Fund shall not file any amendment to any
registration statement or supplement to any prospectus or statement of
additional information without giving Xxxxx reasonable notice thereof in
advance; provided, however, that nothing contained in this Agreement shall in
any way limit the Fund's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus or statement of
additional information, of whatever character, as the Fund may deem advisable,
such right being in all respects absolute and unconditional.
4. Indemnification
4.1 The Fund authorizes Xxxxx to use any prospectus or statement of
additional information furnished by the Fund from time to time, in connection
with the sale of the Fund's shares. The Fund agrees to indemnify, defend and
hold Xxxxx, its several officers and trustees, and any person who controls Xxxxx
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) that Xxxxx, its officers and
trustees, or any such controlling person, may incur under the 1933 Act, the 1940
Act or common law or otherwise, arising out of. or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement, any prospectus or any statement of additional
information, or arising out of or based upon any omission or alleged omission to
state a material fact required to be stated in any registration statement, any
prospectus or any statement of additional information, or necessary to make the
statements in any of them not misleading; provided, however, that the Fund's
agreement to indemnify Xxxxx, its officers or trustees, and any such controlling
person
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shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of or based upon any statements or representations made by Xxxxx or
its representatives or agents other than such statements and representations as
are contained in any registration statement, prospectus or statement of
additional information and in such financial and other statements as are
furnished to Xxxxx pursuant to paragraph 2.2 hereof; and further provided that
the Fund's agreement to indemnify Xxxxx and the Fund's representations and
warranties hereinbefore set forth in paragraph 3 shall not be deemed to cover
any liability to the Fund or its shareholders to which Xxxxx would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of Xxxxx'x reckless disregard of its
obligations and duties under this Agreement. The Fund's agreement to indemnify
Xxxxx, its officers and trustees, and any such controlling person, as aforesaid,
is expressly conditioned upon the Fund's being notified of any action brought
against Xxxxx, its officers or trustees, or any such controlling person, such
notification to be given by letter or by telegram addressed to the Fund at its
principal office in New York, New York and sent to the Fund by the person
against whom such action is brought, within ten days after the summons or other
first legal process shall have been served. The failure so to notify the Fund of
any such action shall not relieve the Fund from any liability that the Fund may
have to the person against whom such action is brought by reason of any such
untrue or alleged untrue statement or omission or alleged omission otherwise
than on account of the Fund's indemnity agreement contained in this paragraph
4.1. The Fund will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by the Fund and approved
by Xxxxx. In the event the Fund elects to assume the defense of any such suit
and retain counsel of good standing approved by Xxxxx, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not elect to assume
the defense of any such suit, or in case Xxxxx does not approve of counsel
chosen by the Fund, the Fund will reimburse Xxxxx, its officers and trustees, or
the controlling person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by Xxxxx or them. The Fund's
indemnification agreement contained in this paragraph 4.1 and the Fund's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
Xxxxx, its officers and trustees, or any controlling person, and shall survive
the delivery of any of the Fund's shares. This agreement of indemnity will inure
exclusively to Xxxxx'x benefit, to the benefit of its several officers and
trustees, and their respective estates, and to the benefit of the controlling
persons and their successors. The Fund agrees to notify Xxxxx promptly of the
commencement of any litigation or proceedings against the Fund or any of its
officers or trustees in connection with the issuance and sale of any of the
Shares.
4.2 Xxxxx agrees to indemnify, defend and hold the Fund, its several
officers and trustees, and any person who controls the Fund 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 costs of investigating
or defending such claims, demands or liabilities and any counsel fees incurred
in connection therewith) that the Fund, its officers or trustees or any such
controlling person may incur under the 1933 Act, the 1940 Act or common law or
otherwise, but only to the extent that such liability or expense incurred by the
Fund, its officers or trustees or such controlling person resulting from such
claims or demands shall arise out of or be based upon (a) any unauthorized sales
literature, advertisements, information, statements or representations or
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(b) any untrue or alleged untrue statement of a material fact contained in
information furnished in writing by Xxxxx to the Fund and used in the answers to
any of the items of the registration statement or in the corresponding
statements made in the prospectus or statement of additional information, or
shall arise out of or be based upon any omission or alleged omission to state a
material fact in connection with such information furnished in writing by Xxxxx
to the Fund and required to be stated in such answers or necessary to make such
information not misleading.. Xxxxx'x agreement to indemnify the Fund, its
officers and trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon Xxxxx'x being notified of any action brought against
the Fund, its officers or trustees, or any such controlling person, such
notification to be given by letter or telegram addressed to Xxxxx at its
executive office in New York, New York and sent to Xxxxx by the person against
whom such action is brought, within ten days after the summons or other first
legal process shall have been served. Xxxxx shall have the right of first
control of the defense of such action, with counsel of its own choosing,
satisfactory to the Fund, if such action is based solely upon such alleged
misstatement or omission on Xxxxx'x part, and in any other event the Fund, its
officers or trustees or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action. The
failure so to notify Xxxxx of any such action shall not relieve Xxxxx from any
liability that Xxxxx may have to the Fund, its officers or trustees, or to such
controlling person by reason of any such untrue or alleged untrue statement or
omission or alleged omission otherwise than on account of Xxxxx'x indemnity
agreement contained in this paragraph 4.2. Xxxxx agrees to notify the Fund
promptly of the commencement of any litigation or proceedings against Xxxxx or
any of its officers or trustees in connection with the issuance and sale of any
of the Shares.
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5. Effectiveness of Registration
None of the Shares shall be offered by either Xxxxx or the Fund under any of the
provisions of this Agreement and no orders for the purchase or sale of the
Shares hereunder shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act or if and so long as a current prospectus as required by Section 5(b)(2) of
the 1933 Act is not on file with the SEC; provided, however, that nothing
contained in this paragraph 5 shall in any way restrict or have an application
to or bearing upon the Fund's obligation to redeem its shares from any
shareholder in accordance with the provisions of the Fund's prospectus,
statement of additional information or articles of incorporation.
6. Notice to Xxxxx
The Fund agrees to advise Xxxxx immediately in writing:
(a) of any request by the SEC for amendments to the registration statement,
prospectus or statement of additional information then in effect or for
additional information;
(b) in the event of the issuance by the SEC of any stop order suspending the
effectiveness of the registration statement, prospectus or statement of
additional information then in effect or the initiation of any proceeding for
that purpose;
(c) of the happening of any event that makes untrue any statement of a material
fact made in the registration statement, prospectus or statement of additional
information then in effect or that requires the making of a change in such
registration statement, prospectus or statement of additional information in
order to make the statements therein not misleading; and
(d) of all actions of the SEC with respect to any amendment to any registration
statement, prospectus or statement of additional information which may from time
to time be filed with the SEC.
7. Term of Agreement
This Agreement shall continue until December 31, 2008 and thereafter shall
continue automatically for successive annual periods, provided such continuance
is specifically approved at least annually by (a) the Fund's Board of Trustees
or (b) a vote of a majority (as defined in the 0000 Xxx) of the Fund's
outstanding voting securities, provided that in either event the continuance is
also approved by a majority of the Trustees of the Fund who are not interested
persons (as defined in the 0000 Xxx) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such approval.
This Agreement is terminable, without penalty, on sixty days' written notice, by
the' Fund's Board of Trustees or by vote of the holders of a majority of the
Fund's shares, or on ninety days' written notice, by Xxxxx. This Agreement will
also terminate automatically in the event of its assignment (as defined in the
1940 Act and the rules thereunder).
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8. Representation by the Fund
The Fund represents that a copy of its Agreement and Declaration of Trust, dated
February 14, 2003, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts.
9. Limitation of Liability
This Agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his capacity as an officer of the Fund. The obligations
of this Agreement shall be binding upon the assets and property of the Fund only
and shall not be binding upon any trustee, officer or shareholder of the Fund
individually.
10. Governing Law
This Agreement shall be governed by and construed in accordance with the laws
(except the conflict of law rules) of the State of New York.
If the foregoing is in accordance with your understanding, kindly indicate your
acceptance by signing and returning the enclosed copy hereof.
Very truly yours, Accepted and Agreed:
THE CHINA - U.S.GROWTH FUND XXXX XXXXX & COMPANY, INCORPORATED
By /s/ Xxx Xxxxxx By /s/ Xxx Xxxxxx
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