DISTRIBUTION AGREEMENT
Agreement made this 31st day of October, 1985 by and
between The Royce Fund, a Massachusetts business trust (the
"Fund"), and Quest Distributors, Inc., a New York corporation
(the "Distributor").
WHEREAS, the Fund is or will be engaged in business
as an open-end management investment company and is or will be
so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund is authorized to issue its shares
of beneficial interest in one or more series (the "Shares").
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, it is hereby agreed by
and between the parties hereto as follows:
1. Appointment of Distributor. The Fund hereby
appoints the Distributor to act as distributor of each series
of the Shares for the period and on the terms herein set forth.
The Distributor accepts such appointment and agrees to render
the services herein set forth for the compensation herein
provided.
2. Services Provided by Distributor. The Distri
butor shall seek to promote the sale and/or continued holding
of each series of the Shares directly and through non-
affiliated broker-dealers, investment advisers and others.
3. Compensation and Expenses.
(a) The Distributor shall receive, as
compensation for its services hereunder in respect of each
series of the Shares, such fees and other compensation as may
be payable to it out of the assets of such series and/or by the
shareholders thereof under the Fund's Distribution Plan
pursuant to Rule 12b-1 under the 0000 Xxx.
(b) The Distributor shall, for each series of
the Shares, pay sales commissions and other fees to those
brokers-dealers, investment advisers and others who have
introduced investors to such series of the Fund or its
predecessor (which commissions and other fees may or may not be
the same amounts as or otherwise comparable to the compensation
payable to the Distributor); pay the costs of preparing,
printing and distributing any advertising or sales literature
and the cost of printing and mailing the Fund's prospectus to
persons other than shareholders of the Fund; and pay all other
expenses incurred by it in promoting the sale and/or continued
holding of such series and in rendering services under this
Agreement (except such expenses as are specifically undertaken
herein by the Fund). The Fund shall, for each of its portfolio
series, bear all of its other expenses, including, but not
limited to, (i) preparation of its reports,
proxies and prospectuses and printing and distributing reports,
proxies and prospectuses and other communications to its
shareholders; (ii) registration of the Shares of such series
with the Securities and Exchange Commission; (iii) registration
of such Shares for sale in jurisdictions designated by the
Distributor; and (iv) qualification of the Fund as a dealer or
broker under the laws of jurisdictions designated by the
Distributor.
4. Duration and Termination. This Agreement shall
become effective as of January 1, 1986. (Unless terminated as
to a series of the Shares as herein provided, this Agreement
shall remain in full force and effect until October 31, 1986,
and shall continue in full force and effect for periods of one
year thereafter with respect to each series of the Shares, so
long as such continuance is approved at least annually (a) by
either the Trustees of the Fund or by the vote of a majority of
the outstanding "voting securities" (as defined in the 0000
Xxx) of such series and (b) in either event, by the vote of a
majority of the Trustees of the Fund who are not parties to
this Agreement or "interested persons" (as defined in the 0000
Xxx) of any such party and who have no direct or indirect
financial interest in this Agreement or in the operation of the
Fund's Distribution Plan pursuant to Rule 12b-1 under the 1940
Act or in any other agreement related thereto, cast in person
at a meeting called for the purpose of voting on such approval.
This Agreement shall automatically terminate in the
event of its "assignment" (as such term is defined for purposes
of Section 15(b)(2) of the 0000 Xxx) and may be terminated as
to any series of the Shares at any time without the payment of
any penalty by the Fund or by the Distributor on sixty (60)
days' written notice to the other party. The Fund may effect
such termination by a vote of (a) a majority of the Trustees of
the Fund, (b) a majority of such Trustees who are not
interested persons of the Fund and who have no direct or
indirect financial interest in this Agreement or in any other
agreement related to the Fund's Distribution Plan pursuant to
Rule 12b-1 under the 1940 Act or (c) a majority of the
outstanding voting securities of such series.
Notwithstanding any termination of this Agreement,
the provisions of Paragraph 9 of this Agreement shall remain in
full force and effect, and the Distributor shall remain
entitled to the benefits thereof.
5. Services Not Exclusive. The services of the
Distributor to the Fund 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 impaired thereby.
6. Reports. The Distributor shall prepare reports
for the Trustees of the Fund on a quarterly basis, showing such
information as from time to time shall be reasonably requested
by the Trustees.
7. Distributor not an Agent. The Distributor
shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the
Fund.
8. Use of Statements. In connection with any
distribution activities pursuant to this Agreement, the
Distributor agrees that it shall not use or distribute or
authorize the use or distribution of any statements other than
those contained or incorporated in the Fund's current
prospectus or in such supplemental literature or advertising as
may be authorized by the Fund.
9. Protection of the Distributor. The Distributor
shall not be liable to the Fund or to any series thereof for
any action taken or omitted to be taken by the Distributor in
connection with the performance of any of its duties or
obligations under this Agreement or otherwise as an underwriter
of the Shares, and the Fund or each portfolio series thereof
involved, as the case may be, shall indemnify the Distributor
and hold it harmless from and against all damages, liabilities,
costs and expenses (including reasonable attorneys' fees and
amounts reasonably paid in settlement) incurred by the
Distributor in or by reason of any pending, threatened or
completed action, suit, investigation or other proceeding
(including an action or suit by or in the right of the Fund or
any series thereof or its security holders) arising out of or
otherwise based upon any action actually or allegedly taken or
omitted to be taken by the Distributor in connection with the
performance of any of its duties or obligations under this
Agreement or otherwise as an underwriter of the Shares.
Notwithstanding the preceding sentences of this Paragraph 9 to
the contrary, nothing contained herein shall protect or be
deemed to protect the Distributor against, or entitle or be
deemed to entitle the Distributor to indemnification in respect
of, any liability to the Fund or to any portfolio series
thereof or its security holders to which the Distributor would
otherwise be subject 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 duties and
obligations under this Agreement.
Determinations of whether and the extent to which
the Distributor is entitled to indemnification hereunder shall
be made by reasonable and fair means, including (a) a final
decision on the merits by a court or other body before whom the
action, suit or other proceeding was brought that the
Distributor was not liable by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties
or (b) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the
Distributor was not liable by reason of such misconduct by (a)
the vote of a majority of a quorum of the Trustees of the Fund
who are neither "interested persons" of the Fund (as defined in
Section 2(a)(19) of the 0000 Xxx) nor parties to the action,
suit or other proceeding or (b) an independent legal counsel in
a written opinion.
10. Miscellaneous.
(a) This Agreement shall be construed in
accordance with the laws of the State of New York, provided
that nothing herein shall be construed in a manner inconsistent
with the 1940 Act, the Securities Exchange Act of 1934, as
amended, or any rule or order of the Securities and Exchange
Commission thereunder.
(b) The captions of this Agreement are
included for convenience only and in no way define or delimit
any of the provisions hereof or otherwise affect their con
struction or effect.
(c) If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) Notice is hereby given that this Agreement
is entered into on the Fund's behalf by an officer of the Fund
in his capacity as an officer and not individually and that the
obligations of or arising out of this Agreement are not binding
upon any of the Fund's Trustees, officers, employees, agents or
shareholders individually but are binding only upon the assets
and property of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed the day and year first above
written.
THE ROYCE FUND
By: S/XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, President
QUEST DISTRIBUTORS, INC.
By: S/XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, Secretary
