THE XXXXXXXX FUND, INC.
AGREEMENT PURSUANT TO
PLAN OF DISTRIBUTION
The Xxxxxxxx Fund, Inc. (the "Fund"), a Maryland corporation, is registered
with the United States Securities and Exchange Commission as an open-end,
diversified, management investment company under the Investment Company Act of
1940 and its securities are registered under the Securities Act of 1933. Its
shares are also registered or qualified for sale in each of the United States,
the District of Columbia and the Commonwealth of Puerto Rico. The Fund acts as
the distributor of its own shares pursuant to a Rule 12b-1 Distribution Plan
which authorizes the financing of services which are primarily intended to
result in the sale of the Fund's shares including the compensation of persons
engaged in the offer and sale of the Fund's shares and/or administering the
accounts of and providing information to shareholders. The Fund is also
authorized to pay a service fee for personal service and the maintenance of
shareholder accounts.
(" ") is a broker-dealer in securities and is registered as such
with the United States Securities and Exchange Commission and is a member of the
National Association of Securities Dealers, Inc. agrees to
maintain such membership in good standing. wishes to offer
and sell the shares of the Fund.
The Fund agrees to sell to shares of its common stock (the
"Shares"), subject to any limitations imposed by the Fund and to confirmation by
the Fund in each instance of such sales. Securities thus purchased shall be only
(1) for the purpose of covering purchase orders previously received or (2) for
own investment.
By your acceptance hereof, you agree to all of the following terms and
conditions:
1. Offering Price and Fees. The public offering price at which the Shares
will be sold to you is the net asset value thereof, as computed from time to
time. You will be furnished, upon request, with the public offering price of the
Shares computed as described in the then current prospectus of the Fund. Your
attention is directed to the fact that each sale is made subject to confirmation
by the Fund at the public offering price next computed after receipt and
acceptance of the order by the Fund. As compensation you shall receive a
distribution fee as set forth on Schedule A attached.
2. Manner of Offering, Selling and Purchasing Shares. The Fund has
delivered to you a copy of the Fund's current prospectus and will provide you
with such number of copies of the Fund's prospectus, statement of additional
information,
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shareholder reports and of supplementary sales materials prepared by, or on
behalf of, the Fund as you may reasonably request. Shares will be offered and
sold only in accordance with the terms and conditions of the current prospectus
and statement of additional information of the Fund. Neither you nor any other
person is authorized to give any information or to make any representation,
whether written or oral, other than information and representations contained in
the prospectus, statement of additional information, shareholder reports or in
supplementary sales materials. You agree that you will not use any other
offering materials for the Fund without the Fund's written consent.
You will distribute prospectuses and reports to your customers in
accordance with applicable requirements, except to the extent that we expressly
undertake to do so on your behalf.
You hereby agree (i) to be responsible for the proper instruction and
training of all sales personnel that you employ; (ii) to exercise your best
efforts to find purchasers for the Shares of the Fund and to place Shares sold
by you on an investment basis; (iii) to furnish to each person to whom any sale
is made a copy of the then current prospectus of the Fund; (iv) to transmit to
the Fund promptly, upon receipt, any and all orders received by you; and (v) not
to withhold placing customers' orders with the Fund in order thereby to make a
profit for yourself.
You also agree to pay to the Fund the offering price, within three (3)
business days after the date of the Fund's acceptance of your order, or such
shorter time as may be required by law. All orders must be accompanied by
payment in U.S. dollars. Checks issued in payment of orders must be drawn on a
U.S. bank. If such payment is not received within said time period, the Fund
reserves the right, without prior notice, to cancel the sale and to redeem the
Shares. In the latter case the Fund shall have the right to hold you responsible
for any loss resulting to the Fund. Should payment be made by check, a request
for liquidation of Shares may be delayed pending clearance of the check. You
shall make all sales subject to the Fund's confirmation. You also agree to issue
confirmations promptly for all accepted purchase orders for accounts held in
street name. All orders are subject to acceptance or rejection by the Fund, in
its sole discretion. The procedure stated herein relating to the pricing and
handling of orders shall be subject to instructions which may be forwarded to
you, from time to time.
You agree to maintain records of all sales and redemptions of Shares made
through you and to furnish us with copies of such records on request.
We will not accept from you any conditional orders for Shares of the Fund.
Delivery of certificates for Shares purchased shall be made by the Fund only
against receipt of the purchase price. No certificates will be issued unless
specifically requested.
In connection with orders, by mail, order or wire, for the purchase of
Shares on behalf of an Individual Retirement Account, Self- Employed Retirement
Plan or other retirement account, you shall act as agent for the custodian or
trustee of such plans.
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(solely with respect to the time of receipt of the application and payment) and
shall not place such order until you have received from your customer payment
for such purchase and, if such purchase represents the first contribution to
such a plan, the completed documents necessary to establish the plan. You agree
to indemnify us as applicable for any claim, loss, or liability resulting from
incorrect investment instructions which cause a tax liability or other tax
penalty.
It is the Fund's policy to market its shares to investors and not to
purchasers whose investment policy is to time the market or who are short term
investors. The Fund asks that you keep this policy in mind in marketing its
shares. Additionally, you agree to notify Xx. Xxxx Xxxxxx at the Fund of any
purchase or redemption order in an amount of $250,000 or more immediately upon
receipt of such an order.
3. Fund's Relationship with You. Under this Agreement, you shall be acting
as principal and nothing herein shall be construed to constitute you or any of
your agents, employees or representatives as an agent, partner or employee of
the Fund. To the extent that you are involved in any of your customer's purchase
of Shares of the Fund, such involvement will be as agent of such customer only.
The Fund shall have full authority to take such action, as it may deem
advisable, in respect of all matters pertaining to the distribution of its
Shares. The Fund shall not be under any obligation to you, except for
obligations expressly assumed by the Fund in this Agreement or for liability
arising as a result of the Fund's lack of good faith.
4. Redemptions within Seven Days. If any Shares purchased are redeemed by
the Fund or are tendered for redemption within seven business days after
confirmation by the Fund of the original purchase order for such Shares, the
value of the Shares redeemed will not be taken into consideration in calculating
the amount of the distribution fee to which you are entitled. Notice will be
given to you of any such redemption within ten days of the date on which the
redemption request is received and, if applicable, Share certificates are
received by the Fund.
If, upon a redemption that is instituted by you, instructions received are
not in proper form (including the receipt of outstanding share certificates)
within the time customary, the redemption may be canceled by us without
liability on our part or the part of the Fund. At our option, we may buy the
Fund Shares and hold you responsible for any loss to the Fund or ourselves
resulting from your failure to complete the redemption satisfactorily.
5. Compliance with Law. You hereby represent that you are licensed and
qualified as a broker-dealer or otherwise authorized to offer and sell the
Shares under the laws of each jurisdiction in which the Shares will be offered
and sold by you.
You agree that in the selling Shares you will comply with all laws, rules
and regulations applicable to underwriters and dealers in the securities of
open-end investment companies, including the applicable provisions of the
Securities Act of 1933, the
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applicable rules and regulations of the National Association of Securities
Dealers, Inc., in particular Section 26 of Article III of the Association's
Rules of Fair Practice, and the applicable rules and regulations of any
jurisdiction in which you sell, directly or indirectly, any Shares. You agree
not to offer for sale or sell the Shares in any jurisdiction in which the Shares
are not qualified for sale or in which you are not qualified as a broker-dealer.
We shall have no responsibility for the qualification of, manner of sale,
or status of persons selling Shares of the Fund under the laws regulating the
sale of securities in any jurisdiction. If it is necessary to register or
qualify the Shares in any foreign jurisdictions in which you intend to offer the
Shares, it will be your responsibility to arrange for and to pay the costs of
such registration or qualification. Prior to any such registration or
qualification, you will notify us of your intent and of any limitations that
might be imposed on the Fund and you agree not to proceed with such registration
or qualification without the written consent of the Fund.
6. Indemnification. You shall indemnify, defend and protect the Fund and
each director, officer, employee and agent of the Fund and shall hold the Fund
and each such director, officer, employee and agent harmless from and against
any and all claims, demands, actions, losses, damages, liabilities, costs,
charges, reasonable counsel fees and expenses of any nature the Fund or they
incur ("Losses") to the extent such Losses rise out of (i) your dissemination of
information regarding the Fund that is materially incorrect and that is not
provided to you or approved by the Fund, or (ii) your willful misconduct or
negligence in the performance of, or failure to perform your obligations under
this Agreement except to the extent such Losses result from the Fund's breach of
this Agreement or the Fund's willful misconduct or negligence.
Fund shall indemnify, defend and protect you and each of your directors,
officers, employees and agents and hold you and each such director, officer,
employee and agent harmless from and against any and all Losses arising out of
(i) any inaccuracy or omission in any prospectus, registration statement,
annual report or proxy statement, of the Fund or any accuracy or omission in any
advertising or promotional material generated by the Fund or which is accurately
based by you on information published or provided by the Fund, (ii) any breach
by the Fund of any representation contained in this Agreement, and (iii) any
action taken or omitted to be taken by you pursuant to this Agreement, except
to the extent such Losses result from your breach of this Agreement, willful
misconduct, or negligence.
7. Status. It is agreed that the services that you are to perform hereunder
are not the services of an underwriter or principal underwriter of the Fund,
within the meaning of the Securities Act of 1933 or the Investment Company Act
of 1940. This Agreement does not grant you any right to purchase Shares from the
Fund (although it does not preclude you from purchasing any such Shares).
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8. Confidentiality of Information. You and the Fund acknowledge that the
identities of the other party's customers or shareholders, information
maintained by such other party regarding those customers or shareholders, and
all computer programs and procedures developed by such other party or such other
party's affiliates or agents in connection with such other party's performance
of its duties hereunder constitute the valuable property of such other party.
Each party agrees that should it come into possession of any list or compilation
of the identities of or other information about the other party's customers or
shareholders, or any other property of such party, pursuant to this Agreement,
the party who acquired such information or property in confidence and refrain
from using, disclosing, or distributing any of such information or other
property except (i) with the other party's prior written consent, or (ii) as
required by law or judicial process.
9. Termination and Amendment. Either party hereto may terminate this
Agreement, without cause, upon ten days' written notice to the other party. The
Fund may terminate this Agreement for cause upon the violation by you of any of
the provisions hereof, such termination to become effective on the date notice
of such termination is mailed to you. The Fund reserves the right to cancel this
Agreement at any time without notice if any Shares shall be offered for sale by
you at less than the then current public offering price determined by or for the
Fund except as may arise as the result of a surrender of part or all of the
distribution fee.
This Agreement will terminate immediately as to the payment of the fee
described in Schedule A attached in the event that the Fund's Rule 12b-1 Plan is
terminated. Fund agrees to give prompt notice of any such termination.
This Agreement shall terminate immediately upon the appointment of a
Trustee under the Securities Investor Protection Act or any other act of
insolvency by you.
The termination of this Agreement shall have no effect upon transactions
entered into prior to the effective date of termination. A trade placed by you
subsequent to your voluntary termination of the Agreement will not serve to
reinstate the Agreement. Reinstatement will only be effective upon written
notification by us.
This Agreement may be amended by us at any time by written notice to you
and your placing of an order after the effective date and after receipt of
notice of any such Amendment shall constitute your acceptance thereof.
10. No Assignment. This Agreement is not assignable or transferable, except
that the Fund may assign or transfer this Agreement to any successor which
becomes the general distributor of the Fund's Shares.
11. Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed under the laws of the State
of New York.
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12. "As Of " Transactions. If for any reason, a Fund share purchase order
or redemption order is not transmitted to the Fund's Transfer Agent on the
business day on which such order is placed by the investor, and you request that
such order be placed " as of" the date on which it was received by you, you will
reimburse the Fund for any loss that it sustains if the value of the shares
purchased or redeemed on the date of your request is more than ( for
redemptions) or less than ( for purchases) the value thereof on the " as of"
date.
13. Notices. All notices required by this Agreement shall be in writing and
delivered personally or sent by certified mail--return receipt requested. All
notices and other communications concerning this Agreement will be deemed to
have been received as of the earlier of actual physical receipt or three days
after the date of receipt of the certified mail as evidenced by the return
receipt. All such notices and other communications shall be made:
If to Fund, to:
The Xxxxxxxx Fund, Inc.
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx Xxxxxx
If to you, to the address given below in the signature block.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us both copies of the enclosed Agreement for
counter-signature thereof, whereupon it will become a binding agreement between
us in accordance with its terms. One executed copy will be returned to you for
your files.
THE XXXXXXXX FUND, INC.
BY:
------------------------------
Vice President
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We hereby confirm and accept the foregoing Agreement and acknowledge
receipt of the prospectus referred to in Section 2 thereof, all as of the date
set forth below.
BY:
------------------------------
(Authorized Signature/Title)
------------------------------
(Address)
------------------------------
------------------------------
(Telephone Number)
DATED:
------------------------
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Schedule A
THE XXXXXXXX FUND, INC.
AGREEMENT PURSUANT TO
PLAN OF DISTRIBUTION
Distribution And A distribution and service fee calculated at an
Service Fee: annual rate of 0.25% of the average monthly
market value of Fund shares sold by , shall
be paid to . Such fee will be payable
within thirty (30) days following the end of
each calendar quarter during the duration of the
Agreement.
Minimum Payments: Quarterly payments of fees of less than $1,000
will be accrued and paid within thirty (30) days
following the end of each calendar quarter in
which such payments cumulatively equal or
exceed $1,000.
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