DISTRIBUTION AGREEMENT
(as amended through January 26, 2007)
Advance Capital Services, Inc.
Xxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, ADVANCE CAPITAL I, Inc. (the "CompanyFund")
, a corporation organized under the laws of the State of Maryland has
agreed that ADVANCE CAPITAL SERVICES, INC. ("ServicesACS"), a corporation
organized under the laws of the State of Michigan, shall be, for the
period of this Distribution Agreement (the "Agreement"), a the
distributor of Class A shares of the Advance Capital I Retirement
Income Fund, the Advance Capital I Equity Growth Fund and the Advance
Capital I Balanced Fund, and any other portfolio series hereafter
established by the Company (the "Funds") whose Class A shares are
covered by an effective Registration Statement filed with the Securities
and Exchange Commission (the "SEC").
0.Xxxxxxxx as Distributor
a. Services ACS agrees to use its best efforts to solicit orders for
the sale of Class A shares of the Fund and will undertake such advertising
and promotion as it believes reasonable in connection with such
solicitation.
b. All activities of Services ACS as distributor of the Fund's Class A
shares shall comply witwith h all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or adopted
pursuant to the Investment Company Act of 1940 (the "1940 Act"), by the SEC
or any securities association registered under the Securities
Exchange Act of 1934.
c. Services will transmit any orders received by it for purchase or
redemption of the a Fund's Class A shares to the entity serving as
transfer agent, registrar and dividend disbursing agent for the fund of
which the Fund has notified Services ACS in writing.
d. Whenever in their judgment such action is warranted by market,
economic or political conditions, or by abnormal circumstances of any
kind, the Fund's Company's officers may decline to accept any orders for,
or make any sales of, the Class A shares until such time as those
officers deem it advisable to accept such orders and
to make such sales.
e. Services ACS will act only on its own behalf as principal should
it choose to enter into selling agreements with selected dealers or
others.
2. Duties of the FundCompany.
a. The Fund Company agrees, at its own expense, to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the
qualification of the each Fund's Class A
shares for sale in such states as Services ACS may designate.
b. The Fund Company shall furnish from time to time, for use in connection
with the sale of the each Fund's Class A shares such information with
respect to the Funds and their Class A its shares as Services ACS may
reasonably request, all of which shall be signed by one or more
of the Fund's Company's duly authorized officers; and the fund Company
warrants that the statements contained in any such information, when so
signed by the Fund's Company's officers, shall be true and correct.
c. The Fund Company shall make available to Services ACS the number of
copies of the Fund's currently effective Prospectus and Statement of
Additional Information that Services ACS may reasonably request.
3. Representations and Warranties
a. The Fund Company represents to Services ACS 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 Fund's Class A shares have been prepared in
conformity with the requirements of said such Acts and rules and
regulations of the SEC thereunder. As used in this Agreement the term
"Registration Statement" shall mean any Registration Statement, Prospectus
and Statement of Additional Information filed with
the SEC and any amendments and supplements thereto which at any time
shall have been filed with the SEC.
b. The Fund Company further represents and warrants to Services ACS that
any Registration Statement, when such Registration Statement becomes
effective, will contain all statements required to be stated therein in
conformity with the 1933 Act and the 1940 Act and
the rules and regulations of the SEC thereunder; that all statements of
fact contained in any such Registration Statement will be true and correct
when such Registration Statement becomes effective; and that no Registration
Statement 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 Fund's Class A shares. The fund
Company 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 and/or Statement of
Additional Information as, in the light of future developments, may, in
the opinion of the Fund's Company's counsel, be
necessary or advisable.
4. Indemnification
4.1 The Fund Company agrees to indemnify, defend and hold Services ACS,
its several officers and directors, and any person who controls Services
ACS 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 Services ACS, its officers and directors, 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, or alleged untrue statement, of a material fact contained in
any Registration Statement 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 or necessary to
make the statements in either document not misleading; provided, however,
that the Fund's Company's agreement to indemnify Services ACS, its
officers or directors, and any such controlling person shall not be deemed
to cover any claims, demands, liabilities, or expenses arising out of any
statements or representations as are contained in any Registration
Statement and in such financial and other statements as are furnished to
the Fund Company by Services ACS pursuant to paragraph 4.2; and further
provided that the Fund's Company's agreement to indemnify Services ACS
and the Fund's Company's representations and warranties herein
before set forth in paragraph 3 shall not be deemed to cover any
liabilities to the Fund Company or its shareholders to which Services ACS
would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties,
or by reason of Services' ACS's reckless disregard of its obligations
and duties under this Agreement.
a. The Fund's Company's agreement to indemnify Services ACS, its
officers and directors, and any such controlling person, as aforesaid,
is expressly conditioned under the Fund's Company being
notified of any action brought against Services ACS, its officers or
directors, or any such controlling person, such notification to be given
by letter or by telegram addressed to the Fund Company at its principal
office in Southfield, Michigan and sent to the Fund Company by the person
against whom such action is brought, within 10 days after the
summons or other first legal process shall have been properly served.
The failure to so notify the Fund Company of any such action shall not
relieve the Fund Company from any liability which the Fund Company 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 Company's indemnity agreement
contained in this paragraph 4.1.
b. The Fund Company 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 Company and approved by Services ACSD. In the event the Fund
Company elects to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees
and expenses of any additional counsel retained by any of them; but if
the Fund Company does not elect to assume the defense of any such suit,
or in case Services ACS does not approve of counsel
chosen by the FundCompany, the Fund Company will reimburse Services ACS,
its officers and directors, or the controlling person or persons named as
defendant or defendants in such suit, for
the fees and expenses of any counsel retained by Services ACS or them.
c. The Fund's Company's indemnification agreement contained in this
paragraph 4.1 and the Fund's Company'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 Services ACS, its officers and directors, or any controlling
person, and shall survive the delivery of any of the Fund's Company's
shares. This agreement of indemnity will inure exclusively to
Services' ACS's benefit, to the benefit of its several officers and
directors, and their respective estates, and to the benefit of the
controlling persons and their successors.
d. The Fund Company agrees promptly to notify Services ACS of the
commencement of any litigation or proceedings against the Fund Company
or any of its officers or Directors in connection with the issuance
and sale of any of the shares.
4.2 Services ACS agrees to indemnify, defend and hold the Fund Company,
its several officers and Directors, and any person who controls the
Fund Company 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)
which the Fund Company, its officers or Directors 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
expenses incurred by the FundCompany, its officers or Directors or
such controlling person resulting from such claims or demands, shall
arise out or be based upon any untrue, or alleged untrue, statement
of a material fact contained in information furnished in writing by
Services ACS to the Fund Company and used in the answers to any
of the items of the Registration Statement, 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
Services ACS to the Fund Company and required to be stated in
such answers or necessary to make such information not misleading.
a. Services' ACS's agreement to indemnify the Fund Company, its
officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon Services' ACS being
notified of any action brought against the FundCompany, its
officers or Directors, or any such controlling person, such
notification to be given by letter or telegram addressed to
Services ACS at its principal office in Southfield, Michigan
and sent to Services ACS by the person against whom such action is
brought, within 10 days after the summons or other first legal
process shall have been properly served. Services ACS shall
have the right to control the defense of such action, with counsel
of its own choosing, satisfactory to the FundCompany, if such
action is based solely upon such alleged misstatement or
omission on Services' ACS's part, and in any other event the
FundCompany, its officers or Directors 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 Services ACS of any such action shall not relieve Services
ACS from any liability which Services ACS may have to the
FundCompany, its officers or Directors, or to such controlling
person by reason or any such untrue, or alleged untrue, statement or
omission, or alleged omission, otherwise than on account of
Services' ACS's indemnity agreement contained in this paragraph 4.2.
5. Effectiveness of Registration
None of the Fund's Company's Class A shares shall be offered by either
Services ACS or the Fund Company under any of the provisions of this
Agreement, and no orders for the purchase or sale of the a Fund's Class
A shares hereunder shall be accepted by the fundCompany, 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 10 (a)(3) 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 a Fund's
obligation to repurchase its shares from any shareholder in accordance
with the provisions of the Fund's Company's Prospectus, Statement of
Additional Information or Articles of Incorporation or Bylaws.
6. Notice to Services ACS
The Fund Company agrees to advise Services ACS immediately in writing:
a. of any request by the SEC for amendments to the Registration
Statement 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 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 then in effect or
which requires the making of a change in such Registration Statement in
order to make the statements therein on misleading; and
d. of all action of the SEC with respect to any amendment to any
Registration Statement which may from time to time be filed with the SEC.
7. Term
This Agreement shall continue until December 31, 2007, and thereafter
shall continue automatically for successive annual periods ending on
December 31 of each year, provided such continuance is specifically
approved at least annually by (i) the Directors of the Fund or (ii) by
a vote of a majority (as defined in the 0000 Xxx) of the Fund's
aggregate outstanding Class A sharesvoting securities, provided that,
in either event, the continuance is also approved by the majority of the
Directors 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: (a) with respect to any Fund at any time
without notice by vote of a majority of the Directors of the the Company
Fund who are not interested persons (as defined in the 0000 Xxx) of any
party to this Agreement; or (b) on not less than 60 days' written notice
by the Directors of the Fund Company or, with respect to any Fund, by
vote of the holders of a majority of the that Fund's Class A shares; or
(c) upon not less than 90 days' written notice by Services ACS. This
Agreement will also terminate automatically in the event of its assignment
as defined in the 1940 Act).
8. Payments
Payments made to Services ACS or any other person or entity by the
Fund Company on behalf of the Funds as a result of actions taken pursuant
to the provisions of this Agreement shall be made in conformance with and
shall be subject to the terms of the Fund's Company's Plan of Distribution
pursuant to Rule 12b-1, as amended from time to time by the Board of
Directors of the FundCompany, and the provisions of which are hereby
incorporated by reference into this Agreement and made a part hereof, and
shall be made in conformity with all rules and regulations made or adopted
pursuant to the 1940 Act.
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below
indicated, whereupon it shall become a binding agreement between us.
Very truly yours,
ADVANCE CAPITAL I, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Xxxxxx X. Xxxxxxxx
Its: President
Accepted:
ADVANCE CAPITAL SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
Its: President
Approved: August 3, 1987
Amended: July 1992; July 1998; July 1999;, June 30, 2006 and
January 26, 2007
