ADDENDUM TO draft 10/25/96
DISTRIBUTION AGREEMENT
AGREEMENT made this ____ day of October, 1996 by and between LORD XXXXXX
SERIES FUND, INC. a Maryland Corporation (hereinafter called the "Fund"), and
LORD XXXXXX DISTRIBUTOR LLC, a New York limited liability company (hereinafter
called the "Distributor") to serve as an addendum (the "Addendum") to the
Distribution Agreement, dated October ___, 1996, between the Fund and the
Distributor (the "Distribution Agreement").
WHEREAS, the Fund and the Distributor entered into the Distribution
Agreement primarily to cover shares of the Fund offered to life insurance
companies as the funding vehicle for certain variable annuity contracts and
variable life insurance policies (collectively referred to "Variable
Contracts"); and
WHEREAS, the Board of Directors has subsequently been authorized by Fund
shareholders to allocate classes of the Fund's shares to series of the Fund, as
described in the Fund's proxy material for a special meeting of shareholders
held on December 21, 1994; and
WHEREAS, the Fund desires to amend the Distribution Agreement to authorize
the Distributor to find purchasers for its securities (which may be issued in
various Series and in various classes of such Series) in a manner similar to the
Distributor's current arrangements (not involving Variable Contracts) with other
funds in the Lord Xxxxxx family of funds.
NOW, THEREFORE, in consideration of the mutual covenants and of other good
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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 all classes
thereof, and all other securities now or hereafter created or issued by the Fund
(except (i) notes and other evidences of indebtedness issued for borrowed money
and (ii) securities of the Fund covered by the Distribution Agreement with
respect to Variable Contracts), pursuant to paragraph 2 of this Addendum, 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 investment professionals, such
as 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 investment
professionals, such as independent 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
Addendum are not deemed to be exclusive, and nothing in this Addendum 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 Series and class of
shares
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of beneficial interest of the Fund shall be determined by the Board of 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 under Rule 12b-1
of the Investment Company Act of 1940, the Fund and the Distributor may arrange
for payment of a distribution fee to investment professionals, such as
independent broker-dealers and/or payment to the Distributor for its
distribution expenses, in whole or in part.
Recognizing the need for providing an incentive to sell and providing
necessary and continuing informational and investment services to shareholders
of the Fund, the Fund or the Distributor (by agreement) may pay investment
professionals, such as independent broker dealers periodic servicing and sales
distribution fees based on percentages of average annual net asset value of
shareholder accounts.
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:
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(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 or orders of the Securities and
Exchange Commission under the Investment Company Act
of 1940 and the rules of National Association of
Securities Dealers, Inc.
4. The investment professionals, such as 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, transfer and servicing agent services, 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
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accept shares duly tendered to the Distributor. The net asset value shall be
determined as provided in the Articles of Incorporation of the Fund.
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. 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
Addendum, the Distributor shall not be deemed to have waived its rights under
this Addendum 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
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each Series and class of such 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 be obtained by reasonable efforts. The Distributor
is not authorized to act otherwise than in accordance with applicable laws.
9. Neither this Addendum nor any other transaction between the parties
hereto pursuant to this Addendum 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 Investment Company Act
of 1940.
10. The Distributor agrees that it will not sell for its own account to the
Fund 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 Addendum 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.
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12. The Distributor agrees that it shall observe and be bound by all of the
terms of the Articles of Incorporation of 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 Addendum shall continue in force until January 30, 1996 as part of
the Distribution Agreement, and it is renewable annually as part of the
Distribution Agreement 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 Addendum 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 Addendum may be terminated without penalty at any time by the Board of
Directors of the Fund or by vote of a majority of the outstanding voting
securities of a Series or class the Fund on 60 days' written notice with respect
to such Series or class. This Plan 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 InvIestment Company Act of 1940.
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IN WITNESS WHEREOF, the Fund has caused this Addendum to be executed by its
duly authorized officers and its seal to be affixed thereto, and the Distributor
has caused this Addendum to be executed by one of its partners all on the day
and year first above written.
LORD XXXXXX SERIES FUND, INC.
By:/s/ Xxxxxx X. Xxx
Chairman of the Board
Attest:
/s/ Xxxxxx X. Xxxxx
Assistant Secretary
LORD XXXXXX DISTRIBUTORS LLC
By: LORD, XXXXXX & CO
Managing Member
By:/s/ Xxxxxxx X. Xxxxxx
A Partner
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