DISTRIBUTING AGREEMENT
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DISTRIBUTING AGREEMENT, dated as of June 24, 1999, between XXXXXXXX NEW
TECHNOLOGIES FUND, INC., a Maryland corporation (the "Fund"), and XXXXXXXX
ADVISORS, INC., a Delaware corporation ("Xxxxxxxx Advisors").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Exclusive Distributor. The Fund hereby agrees that Xxxxxxxx Advisors shall
be for the period of this Agreement exclusive agent for distribution within
the United States and its territories, and Xxxxxxxx Advisors agrees to use
its best efforts during such period to effect such distribution, of shares
of capital stock ("Shares") of the Fund; provided, however, that nothing
herein shall prevent the Fund, if it so elects, from selling or otherwise
distributing its Shares directly to any persons other than dealers. The
Fund understands that Xxxxxxxx Advisors also acts as agent for distribution
of the shares of capital stock or beneficial interests of certain open-end
investment companies which have entered into management agreements with J.
& X. Xxxxxxxx & Co. Incorporated.
2. Sales of Shares.
(a) The Shares will be offered initially at a fixed price (plus applicable
sales charges) during an offering period (the "Initial Offering
Period") that will terminate on the date specified in the preliminary
prospectus of the Fund, as the same may be amended or supplemented
during the Initial Offering Period. Sales of Shares during the Initial
Offering Period will be limited to an aggregate value of approximately
$500 million. Not less than 30 days after completion of the Initial
Offering Period, the Fund may commence a continuous offering of its
Shares at a price equal to their net asset value plus applicable sales
charges, as disclosed in the Fund's then current Prospectus (as defined
below). Such continuous offering may be discontinued at any time by the
officers of the Fund for any reason sufficient to them. The Fund may,
upon notice to Xxxxxxxx Advisors, commence other continuous offerings
from time to time in the future. The Fund will advise Xxxxxxxx Advisors
of any limit on the aggregate value of Shares to be sold during any
continuous offering. The Initial Offering Period and any subsequent
continuous offerings are referred to herein as "Offering Periods."
(b) Xxxxxxxx Advisors is authorized, as agent for the Fund and not as
principal, during any Offering Period (i) to offer and sell Shares of
the Fund to such dealers or brokers as Xxxxxxxx Advisors may select
pursuant to the terms of written selected dealer agreements or selected
broker agreements, as the case may be, in form or forms approved by the
Fund, and (ii) to offer and sell Shares of the Fund to other
purchasers on such terms as may be provided in the then current
Prospectus of the Fund relating to such Shares; provided, however, that
no sales of Shares shall be confirmed by Xxxxxxxx Advisors at any time
when the Fund has informed Xxxxxxxx Advisors that sales will not be
accepted. Each sale of Shares shall be effected by Xxxxxxxx Advisors
only at the applicable price determined by the Fund in the manner
prescribed in its then current Prospectus relating to such Shares.
Xxxxxxxx Advisors shall comply with all applicable laws, rules and
regulations applicable to the sale of Shares. The Fund agrees, as long
as its Shares may legally be issued, to fill all orders confirmed by
Xxxxxxxx Advisors in accordance with the provisions of this Agreement.
3. Compensation. As compensation for the services of Xxxxxxxx Advisors under
this Agreement, Xxxxxxxx Advisors shall be entitled to receive the sales
charge, determined in conformity with the Fund's then current Prospectus
relating to such Shares, on all sales of Shares of the Fund confirmed by
Xxxxxxxx Advisors hereunder and for which payment has been received, less
the dealers' concession allowed in respect of such sales. Xxxxxxxx Advisors
acknowledges that, in the initial offering of Shares, the dealers'
concession will be equal to the sales charge and that no portion of the
sales charge will be retained by Xxxxxxxx Advisors, and that it is
currently contemplated that the same arrangement will be in effect in the
event of an offering after the initial offering.
4. Expenses. The Fund agrees to pay the costs incident to the authorization,
issuance, sale and delivery of the Shares and any taxes payable in that
connection; the costs incident to the preparation, printing and filing
under the Investment Company Act of 1940 (the "1940 Act") and the
Securities Act of 1933 (the "Securities Act") of the Fund's Registration
Statement (as defined below) and notification of registration on Form N8-A
and any amendments and exhibits thereto; the costs of preparing, printing
and distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including
exhibits), any preliminary prospectus, the Prospectus and any amendment or
supplement to the Prospectus; the costs of printing this Agreement and the
Selected Dealer Agreement, Selected Broker Agreement and Shareholder
Servicing Agreement; the costs of filings with the National Association of
Securities Dealers, Inc.; the costs and expenses of advertising and sales
material used in any offering of the Shares; and all other costs and
expenses incident to the performance of the obligations of the Fund under
this Agreement; provided that, except as provided in this Section, Xxxxxxxx
Advisors shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the Shares which they may
sell, the up-front compensation to dealers, the structuring fee to
PaineWebber Incorporated referred to in the Prospectus and all fees and
related expenses connected with its own qualification as a broker or dealer
authorized under Federal or State laws to distribute shares of a closed-end
"interval" investment company within the meaning of Rule 23c-3 under the
1940 Act; and provided further that in the event the transactions
contemplated hereunder are not consummated, Xxxxxxxx Advisers will pay all
costs and
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expenses set forth in this Section which the Fund would have paid if such
transactions were consummated.
The Fund also agrees to pay all fees and related expenses which may be
incurred in connection with the qualification of Shares of the Fund for
sale in such States (as well as the District of Columbia, Puerto Rico and
other territories) as Xxxxxxxx Advisors may designate, and all expenses in
connection with maintaining facilities for the issue and transfer of its
Shares, of supplying information, prices and other data to be furnished by
it hereunder and, through Xxxxxxxx Data Corp., of all data processing and
related services related to the share distribution activity contemplated
hereby.
5. Prospectus and Other Information. The Fund represents and warrants to and
agrees with Xxxxxxxx Advisors that:
(a) A registration statement on Form N-2, including a prospectus relating
to the Shares, has been filed by the Fund under both the Securities Act
and the 1940 Act. Such registration statement, as from time to time
hereafter amended, and also any other registration statement relating
to the Shares which may be filed by the Fund pursuant to the Securities
Act and the 1940 Act, is herein referred to as the "Registration
Statement", and any prospectus filed by the Fund as a part of the
Registration Statement and any prospectus within the meaning of Rule
482 under the Securities Act prepared or authorized by the Fund, as the
"Prospectus".
(b) As of the date of this Agreement, the Registration Statement has not
been declared effective, and the Fund does not expect it to be declared
effective until on or about the close of the Initial Offering Period;
the Fund will not request Xxxxxxxx Advisors to confirm any sales of
Shares until such time as the Registration Statement has been declared
effective.
(c) At all times during any Offering Period, the Registration Statement and
Prospectus will conform in all respects to the requirements of the
Securities Act, the 1940 Act and the rules and regulations of the
Securities and Exchange Commission (including, in the case of a
preliminary prospectus, Section 10(b) of the Securities Act and the
rules thereunder), and neither of such documents will include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading (in the case of a Prospectus, in the light of
the circumstances under which they were made), except that the
foregoing does not apply to any statements or omissions in either of
such documents based upon written information furnished to the Fund by
Xxxxxxxx Advisors specifically for use therein.
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The Fund agrees to prepare and furnish to Xxxxxxxx Advisors from time to
time a copy of its Prospectus, and authorizes Xxxxxxxx Advisors to use such
Prospectus, in the form furnished to Xxxxxxxx Advisors from time to time,
in connection with the sale of the Fund's Shares. The Fund also agrees to
furnish Xxxxxxxx Advisors from time to time, for use in connection with the
offer and sale of such Shares, such information with respect to the Fund
and its Shares as Xxxxxxxx Advisors may reasonably request.
6. Compliance with NASD Rules. In selling Fund Shares, Xxxxxxxx Advisors will
in all respects duly comply with all state and federal laws relating to the
sale of such securities and with all applicable rules and regulations of
all regulatory bodies, including, without limitation, the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., and all
applicable rules and regulations of the Securities and Exchange Commission
under the 1940 Act, and will indemnify and hold the Fund harmless from any
damage or expense on account of any unlawful act by Xxxxxxxx Advisors or
its agents or employees. Xxxxxxxx Advisors is not, however, to be
responsible for the acts of other dealers or agents except as and to the
extent that they shall be acting for Xxxxxxxx Advisors or under its
direction or authority. None of Xxxxxxxx Advisors, any dealer, any agent or
any other person is authorized by the Fund to give any information or to
make any representations, other than those contained in the Registration
Statement or Prospectus, as supplemented or amended by the Fund from time
to time.
7. No Secondary Market Activity. Xxxxxxxx Advisors shall have the right to buy
from the Fund the Shares needed, but not more than the Shares needed
(except for reasonable allowances for clerical errors, delays and errors of
transmission and cancellation of orders) to fill unconditional orders for
Shares received by Xxxxxxxx Advisors from dealers, agents and investors. It
is understood that Shares of the Fund will not be repurchased by Xxxxxxxx
Advisors or by the Fund (except as described in the Prospectus) and that no
secondary market for the Fund Shares exists currently or is expected to
develop. Any representation as to a tender offer by the Fund, other than
that which is set forth in the Fund's then current Prospectus, is expressly
prohibited. Xxxxxxxx Advisors hereby covenants that it (i) will not make a
secondary market in any Shares of the Fund, (ii) will not purchase or hold
such Shares in inventory for the purpose of resale in the open market,
(iii) will not repurchase such Shares in the open market and (iv) will
require every dealer or broker or other agent participating in the
distribution of the Fund's Shares in the Offering Periods to make the same
covenants contained in clauses (i), (ii) and (iii) of this Section 7 as a
condition precedent to their participation in such distribution.
8. Indemnification.
(a) The Fund will indemnify and hold harmless Xxxxxxxx Advisors and each
person, if any, who controls Xxxxxxxx Advisors within the meaning of
the Securities Act against any losses, claims, damages or liabilities
to which Xxxxxxxx Advisors or such controlling person may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
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arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Fund's Registration
Statement or Prospectus or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading (in the case of a Prospectus, in the light of the
circumstances under which they were made); and will reimburse Xxxxxxxx
Advisors and each such controlling person for any legal or other
expenses reasonably incurred by Xxxxxxxx Advisors or such controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Fund
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or Prospectus in conformity with
written information furnished to the Fund by Xxxxxxxx Advisors
specifically for use therein; and provided further that nothing herein
shall be so construed as to protect Xxxxxxxx Advisors against any
liability to the Fund or its security holders to which Xxxxxxxx
Advisors would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence, in the performance of its duties, or by
reason of the reckless disregard by Xxxxxxxx Advisors of its
obligations and duties under this Agreement. This indemnity agreement
will be in addition to any liability which the Fund may otherwise have.
(b) Xxxxxxxx Advisors will indemnify and hold harmless the Fund, each of
its Directors and officers and each person, if any, who controls the
Fund within the meaning of the Securities Act, against any losses,
claims, damages or liabilities to which the Fund or any such Director,
officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or Prospectus or arise out
of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading (in the case of the
Prospectus, in the light of the circumstances under which they were
made), to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in conformity with written information furnished to the Fund
by Xxxxxxxx Advisors specifically for use therein; or (ii) any untrue
statement or alleged untrue statement of any material fact contained in
any sales material not prepared or authorized by the Fund which is
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utilized in connection with the sale of Shares or arises out of or is
based upon an omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and Xxxxxxxx Advisors will reimburse any legal or other
expenses reasonably incurred by the Fund or any such Director, officer
or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement
will be in addition to any liability which Xxxxxxxx Advisors may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from liability which it may have to any
indemnified party otherwise than under this Section. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
9. Effective Date. This Agreement shall become effective upon its execution by
an authorized officer of the respective parties to this Agreement.
10. Term of Agreement. This Agreement shall continue in effect until December
31, 1999 and through December 31 of each year thereafter if such
continuance is approved in the manner required by the 1940 Act and the
rules thereunder and Xxxxxxxx Advisors shall not have notified the Fund in
writing at least 60 days prior to the anniversary date of the previous
continuance that it does not desire such continuance. This Agreement may be
terminated at any time, without payment of penalty, on 60 days' written
notice to Xxxxxxxx Advisors by vote of a majority of the Directors of the
Fund who are not interested persons (as defined in the 0000 Xxx) of the
Fund, or by vote of a majority of the outstanding voting securities of the
Fund (as defined by the 1940 Act). This Agreement shall automatically
terminate in the event of its assignment (as defined in the 1940 Act).
11. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the state of New York. Anything herein to the
contrary notwithstanding, this
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Agreement shall not be construed to require, or to impose any duty upon,
either of the parties to do anything in violation of any applicable laws or
regulations.
IN WITNESS WHEREOF, the Fund and Xxxxxxxx Advisors have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
XXXXXXXX NEW TECHNOLOGIES FUND, INC.
By /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, President
XXXXXXXX ADVISORS, INC.
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President
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