FIRST EAGLE FUNDS, INC.
AMENDED AND RESTATED RULE 12B-1 DISTRIBUTION AND SERVICES AGREEMENT
AGREEMENT made as of the 10th day of December, 2002, between FIRST
EAGLE FUNDS, INC., a Maryland corporation (the "Company"), and ASB SECURITIES,
INC., a New York corporation (the "Distributor"), such Distributor to act on
behalf of those Series (hereinafter referred to as the "Funds") of the Company
listed in Exhibit A hereto in the manner contemplated by this Agreement.
W I T N E S S E T H :
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WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and it is in the interest of the Company to continuously offer shares of the
Funds for sale under the Securities Act of 1933, as amended (the "1933 Act").
WHEREAS, the Company and the Distributor wish to enter into an
agreement with each other with respect to the continuous offering of the classes
of shares of beneficial interest of the Funds ("Shares") as listed in Exhibit A
upon the terms described in the Prospectus and Statement of Additional
Information that is included as part of the Company's Registration Statement on
Form N-1A, as may be amended from time to time (the "Registration Statement").
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor. The Company hereby appoints
the Distributor to act as its exclusive agent to sell and to arrange for the
sale of Shares on the terms and for the period set forth in this Agreement and
in accordance with the Registration Statement, and the Distributor hereby
accepts such appointment and agrees to act hereunder.
Section 2. Services and Duties of the Distributor.
(a) The Distributor agrees to sell, as agent for the Company during the
term of this Agreement, Shares upon the terms described in the Prospectus and
Statement of Additional Information that is included in Registration Statement.
(b) The Distributor will make itself available to receive orders,
satisfactory to the Distributor, for the purchase of Shares and will accept such
orders on behalf of the Company and will transmit such orders to the Funds'
transfer agent as promptly as practicable. Purchase orders shall be deemed
effective at the time and in the manner set forth in the current Prospectus and
Statement of Additional Information (hereinafter referred to jointly as the
"Prospectus").
(c) The offering price of Shares shall be determined following the
receipt of an order in accordance with procedures set forth in the Prospectus.
The Company shall furnish the
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Distributor, with all possible promptness, advice of each computation of net
asset value of the Shares.
(d) The Distributor in its discretion may sell Shares to such
registered and qualified retail dealers and financial services firms ("Firms")
as it may select. In making agreements with such firms, the Distributor shall
act only as principal and not as agent for the Company.
(e) The Distributor may also appoint such Firms to provide distribution
services to investors. The Firms shall provide such facilities and personnel as
is necessary or beneficial for providing information regarding the Funds,
distribution of sales literature, prospectuses, promotional material and
information, and assisting with Fund services and privileges for clients of such
Firms and shareholders of the Funds. The Distributor may also provide the above
services to the Company and shall coordinate transfer agency services for the
Company.
(f) The Distributor shall order Shares from the Company only to the
extent it has received purchase orders therefor. Shares offered for sale or sold
by the Distributor shall be so offered or sold at a price per share determined
in accordance with the Prospectus. The price the Company shall receive for all
Shares purchased from it shall be the net asset value of such Shares as
determined in accordance with the Prospectus. The Distributor may pay
commissions or fees to Firms and to others in its discretion in such amounts as
the Distributor shall determine from time to time and as provided in the
Prospectus. The Distributor shall be entitled to receive and retain any
applicable contingent deferred sales charge as described in the current
Prospectus. In addition to sales made by it as agent of the Company, the
Distributor may also sell Shares as principal to persons with whom it does not
have selling group agreements.
(g) The Distributor will not make, or authorize Firms or others to
make, any short sales of Shares. The Distributor, as agent of and for the
account of the Company, may repurchase the Shares at such prices and upon such
terms and conditions as shall be specified in the Prospectus. In selling or
reacquiring Shares for the account of the Company, the Distributor will in all
respects conform to the requirements of all state and federal laws and the rules
and regulations of the National Association of Securities Dealers, Inc. ("NASD")
relating to such sale or reacquisition, as the case may be, and will indemnify
and save harmless the Fund from any damage or expense on account of any wrongful
act by the Distributor or any employee, representative or agent of the
Distributor. The Distributor will observe and be bound by all the provisions of
the Agreement and the provisions of the Prospectus.
(h) The Distributor shall, for all purposes herein provided, be deemed
to be an independent contractor and, unless expressly provided herein or
otherwise authorized, shall have no authority to act for or represent the
Company in any way. The Distributor and its affiliates, by separate agreement
with the Company, may also serve the Company in other capacities. The services
of the Distributor to the Company under this Agreement are not to be deemed
exclusive, and the Distributor shall be free to render similar services or other
services to others so long as its services hereunder are not materially impaired
thereby. (i) The Distributor shall issue and deliver or shall arrange for
various Firms to issue and deliver on behalf of the Company such confirmations
of sales made by it pursuant to this Agreement as may be required. At or prior
to the time of issuance of Shares, the Distributor will pay or cause to be paid
to the
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Company the amount due the Company for the sale of such Shares. Certificates
shall be issued or Shares registered on the transfer books of the Company in
such names and denominations as the Distributor may specify.
Section 3. Compensation to the Distributor. For services rendered
pursuant to this Agreement, the Company shall pay to the Distributor, on a
monthly basis, the fees as set forth in Exhibit B to this Agreement. This
Agreement contemplates that the Firms providing services in connection with the
sale and servicing of Shares will be compensated by the Distributor in
accordance with the terms of this Agreement and the Prospectus. For the month
and year in which this Agreement becomes effective or terminates, there shall be
an appropriate proration on the basis of the number of days that the Agreement
is in effect during the month and year, respectively. The net asset value per
Share and the net assets of each of the Funds shall be calculated in accordance
with the provisions of the Prospectus. On each day when net asset value is not
calculated, the net asset value per Share shall be deemed to be the net asset
value of such a Share as of the close of business on the last previous day on
which such calculation was made. The fees payable to the Distributor shall be in
addition to and shall not be reduced or offset by the amount of any contingent
deferred sales charge received by the Distributor. The Distributor may also
receive compensation from Xxxxxxx and X. Xxxxxxxxxxxx Advisors, Inc., the Fund's
investment adviser, as the Distributor and the investment adviser may agree from
time to time.
Section 4. Duties of the Company.
(a) The Company agrees to sell its Shares so long as it has Shares
available for sale and agrees to deliver or cause the Funds' transfer agent to
deliver Share certificates or to register such Shares on the records of the
Funds in non-certificated form and to register such Shares on the records of the
Funds in such names and amounts as the Distributor has requested in writing, as
promptly as practicable after receipt by the Company of the net asset value
thereof and written instructions for registering such Shares.
(b) The Company shall keep the Distributor fully informed with regard
to its affairs and shall furnish to the Distributor copies of all financial
statements and other information that the Distributor may reasonably request for
use in connection with the distribution of Shares. Upon request by the
Distributor, the Company will furnish a certified copy of the current financial
statements prepared for the Funds by the Company's independent accountants. The
Company will furnish such reasonable number of copies of the current Prospectus
and financial statements as the Distributor may request. The Company shall
cooperate fully in the efforts of the Distributor to sell and arrange for the
sale of Shares.
(c) The Company shall take all necessary action to provide for
authorized Shares and for the payment of filing fees as may be necessary to
register the Shares under the 1933 Act and the 1940 Act so that Shares will be
available for sale by the Distributor. The Company agrees to file from time to
time such amendments, reports and other documents as may be necessary in order
that there will be no untrue statement of a material fact in the Registration
Statement or Prospectus, and so that there will be no omission to state a
material fact in the Registration Statement or Prospectus.
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(d) The Company shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Shares for sale under the securities
laws of such states as the Distributor and the Fund may approve; and, if
necessary or appropriate in connection therewith, to qualify and maintain the
qualification of the Company as a broker or dealer in such states. The Company
shall not be required to amend its Agreement of Company or By-Laws to comply
with the laws of any state, to maintain an office in any state, to change the
terms of the offering of its Shares in any state from the terms set forth in its
Registration Statement, to qualify as a foreign corporation in any state or to
consent to service of process in any state other than with respect to claims
arising out of the offering of Shares. The Distributor shall furnish such
information and other material relating to its affairs and activities as may be
required by the Company in connection with such qualifications.
Section 5. Expenses.
(a) The Company shall bear all expenses of the continuous offering of
Shares in connection with: (i) fees and disbursements of its counsel and
independent accountants, (ii) the preparation, filing and printing of the
Registration Statement required by and under the federal securities laws, (iii)
the preparation and mailing of annual and interim reports, Prospectuses and
proxy materials to existing shareholders and (iv) the qualifications of Shares
for sale and of the Company as a broker or dealer under the securities laws of
such states or other jurisdictions as shall be selected by the Company and the
Distributor pursuant to Section 4(d) hereof and the cost and expenses payable to
each such state for continuing qualification therein.
(b) The Distributor shall bear (i) the costs and expenses of preparing,
printing and distributing any materials not prepared by the Company and other
materials used by the Distributor in connection with its offering of Shares for
sale to the public, (ii) the cost and expense of printing such extra copies of
the Prospectus and Statement of Additional Information for use in the sale of
Shares to the public, (iii) the expenses of registration or qualification of the
Distributor as a dealer or broker under federal or state laws and the expense of
continuing such registration or qualification and (iv) the expenses of any sales
commissions for sales of the Funds' Shares (except such expenses as are
specifically undertaken by the Company).
Section 6. Reports to the Board. The Distributor shall prepare reports
for the Board of Directors of the Company on a quarterly basis in connection
with the Company's Rule 12b-1 plan and agreement for such Classes of Shares
subject to Rule 12b-1 as described in the Prospectus showing amounts paid to the
various Firms and such other information as shall be reasonably requested by the
Board of Directors.
Section 7. Distribution Services Plan. To the extent applicable, this
Agreement constitutes the Rule 12b-1 plan and agreement for such payments as
described in Exhibit B as being made pursuant to Rule 12b-1 under the 1940 Act;
and this Agreement and plan shall be approved and renewed in accordance with
Rule 12b-1. However, payments for services not specifically identified as being
in accordance with Rule 12b-1 shall be deemed not to be in accordance with Rule
12b-1.
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Section 8. Indemnification. The Company agrees to indemnify, defend and
hold the Distributor, its directors, officers and any person who controls the
Distributor 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) which the
Distributor, its directors, officers or any such controlling person may incur
under the 1933 Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact contained in the Registration
Statement or arising out of or based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such claims, demands, liabilities or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by the Distributor to the Company for use
in the Registration Statement; provided, however, that this indemnity agreement
shall not inure to the benefit of such Distributor, director, officer or
controlling person unless a court of competent jurisdiction shall determine in a
final decision on the merits that the person to be indemnified was not liable by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations under
this Agreement ("disabling conduct"), or, in the absence of such a decision, a
reasonable determination, based upon a review of the facts, that the indemnified
person was not liable by reason of disabling conduct, by (a) a vote of a
majority of a quorum of directors who are neither "interested persons" of the
Company as defined in Section 2(a)(19) of the 1940 Act nor parties to the
proceeding or (b) an independent legal counsel in a written opinion. The
Company's agreement to indemnify the Distributor, its directors, officers and
any controlling person as aforesaid is expressly conditioned upon the Company
being promptly notified of any action brought against the Distributor, its
directors, officers or any controlling person, and such notification is to be
given by letter or telegram addressed to the Company at its principal business
office. The Company agrees to promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its directors
or officers in connection with the issue and sale of Shares.
The Distributor agrees to indemnify, defend and hold the Company, its
directors, officers and any person who controls the Company, if any, 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 against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Company, its directors,
officers or any such controlling person may incur under the 1933 Act or under
common law or otherwise, but only to the extent that such liability or expense
incurred by the Company, its directors, officers or such controlling person
resulting from such claims or demands shall arise out of or be based upon any
alleged untrue statement of a material fact contained in information furnished
in writing by the Distributor to the Company for use in the Registration
Statement or Prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information required
to be stated in the Registration Statement or Prospectus or necessary to make
such information not misleading. The Distributor's agreement to indemnify the
Company, its directors, officers and any such controlling person as aforesaid is
expressly conditioned upon the Distributor's being promptly notified of any
action brought
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against the Company, its directors, officers or any such controlling person,
such notification being given to the Distributor at its principal business
office.
Section 9. Compliance with Securities Laws. The Company represents that
it is registered as an open-end, non-diversified management investment company
under the 1940 Act, and agrees that it will comply with all of the provisions of
the 1940 Act and of the rules and regulations thereunder. The Fund and the
Distributor each agree to comply with all of the applicable terms and provisions
of the 1940 Act, the 1933 Act and, subject to the provisions of Section 4(d)
hereof, all applicable state securities ("Blue Sky") laws. The Distributor
agrees to comply with all of the applicable terms and provisions of the
Securities Exchange Act of 1934.
Section 10. Duration and Termination of this Agreement. This Agreement
shall become effective as of the date first above written. This Agreement shall
continue in effect until February 28, 2004 and shall continue from year to year
thereafter only so long as such continuance is specifically approved at least
annually by (i) the Board of Directors of the Company, or by the vote of a
majority of the outstanding voting securities of the Funds, cast in person or by
proxy, and (ii) a majority of those directors who are not parties to this
Agreement or interested persons of any such party and who have no direct or
indirect financial interest in this Agreement or in any agreement related
thereto, cast in person at a meeting called for the purpose of voting upon such
approval.
This Agreement may be terminated at any time without the payment of any
penalty, by the Board of Directors of the Company, by vote of a majority of the
outstanding voting securities of the Funds or by the Distributor on not more
than sixty (60) days' nor less than thirty (30) days' written notice to the
other party. This Agreement shall automatically terminate in the event of its
assignment, as defined in the 1940 Act.
Section 11. Amendments of this Agreement. This Agreement may be amended
by the parties only if such amendment is specifically approved by (i) the Board
of Directors of the Company or by vote of a majority of the outstanding voting
securities of the Funds, and (ii) a majority of those directors of the Company
who are not parties to this Agreement or interested persons of any such party
and who have no direct or indirect financial interest in this Agreement, cast in
person at a meeting called for the purpose of voting on such approval. However,
this Agreement may not be amended to increase any fee payable hereunder by any
existing Fund or Class of Shares without a vote of shareholders of such Class of
Shares or Fund.
Section 12. Notices. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (1) to the Distributor at 1345 Avenue of the Americas, New
York, N.Y. 10105, Attention: First Eagle Funds Distributors or (2) to the Fund
at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, X.X. 00000, Attention: Secretary.
Section 13. Entire Agreement. Except as provided in the Class C Share
Distribution Agreement and the Services Agreement, this Agreement contains the
entire agreement between the parties hereto and supersedes all prior agreements,
understandings and arrangements with
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respect to the subject matter hereof. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
Section 14. Governing Law. This Agreement shall be governed by and
construed in accordance with the applicable federal securities laws and the laws
of the State of New York. This Agreement is the entire contract between the
parties relating to the subject matter hereof and supersedes all prior
agreements between the parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
FIRST EAGLE FUNDS, INC.
By: Xxxxxx Xxxxx
By: Xxxxx Xxxxx
ASB SECURITIES, INC.
By: Xxxxxxxx X. Xxxxxxxxxx
By: Xxxx X. Xxxxxxx
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EXHIBIT A
December 10, 2002
FIRST EAGLE FUNDS, INC.
DISTRIBUTION AND SERVICES AGREEMENT
The following Series of the Company is referred to as the "Fund" in the
Distribution Agreement:
First Eagle Fund of America
The above listed Fund offers the following classes of Shares as described in the
Company's Registration Statement:
Class Y Shares
Class C Shares
Class A Shares
FIRST EAGLE FUNDS, INC. ASB SECURITIES, INC.
By: Xxxxxx Xxxxx By: Xxxxxxxx X. Xxxxxxxxxx
By: Xxxxx Xxxxx By: Xxxx X. Xxxxxxx
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EXHIBIT B
December 10, 2002
FIRST EAGLE FUNDS, INC.
DISTRIBUTION AND SERVICES AGREEMENT
The following Series of the Company is referred to as the "Fund" in the
Distribution Agreement:
First Eagle Fund of America
For services rendered pursuant to this Agreement, the Company shall pay to the
Distributor, on a monthly basis, a services fee at the annual rate of 0.25% of
the average daily net assets of Class C Shares of the Fund.
For services pursuant to the Company's Rule 12b-1 plan and agreement, the
Company shall pay to the Distributor, on a monthly basis, a fee at the annual
rate of 0.25% of the average daily net assets of Class Y Shares of the Fund.
For services pursuant to the Company's Rule 12b-1 plan and agreement, the
Company shall pay to the Distributor, on a monthly basis, a fee at the annual
rate of 0.75% of the average daily net assets of Class C Shares of the Fund.
For services pursuant to the Company's Rule 12b-1 plan and agreement, the
Company shall pay to the Distributor, on a monthly basis, a fee at the annual
rate of 0.50% of the average daily net assets of Class A Shares of the Fund.
FIRST EAGLE FUNDS, INC. ASB SECURITIES, INC.
By: Xxxxxx Xxxxx By: Xxxxxxxx X. Xxxxxxxxxx
By: Xxxxx Xxxxx By: Xxxx X. Xxxxxxx
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