DISTRIBUTION AGREEMENT
October 24, 1986
Amended as of December 31, 0000
Xxxx Xxxxx & Company, Incorporated
00 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, The Xxxxx Fund (the "Fund"), an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts, has agreed that Xxxx Xxxxx & Company, Incorporated ("Xxxxx")
shall be, for the period of this agreement, the distributor of shares of
beneficial interest of the Fund.
1. SERVICES OF THE DISTRIBUTOR
1.1 Xxxxx will act as agent for the distribution of each series
of shares of beneficial interest of the Fund (the "Shares") covered by the
registration statement, prospectus and statement of additional information then
in effect (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), and the Investment Company Act of 1940, as amended (the
"1940 Act").
1.2 Xxxxx agrees to use its best efforts to solicit orders for
the sale of the Shares at the public offering price, as determined in accordance
with the Registration Statement, and will undertake such advertising and
promotion as it believes is reasonable in connection with such solicitation.
Xxxxx agrees to bear all selling expenses, including the cost of printing
prospectuses and statements of additional information and distributing them to
prospective shareholders.
1.3 All activities by Xxxxx as distributor of the Shares shall
comply with all applicable laws, rules and regulations, including, without
limitation, all rules and regulations made by the Securities and exchange
Commission (the "SEC") or by any securities association registered under the
Securities Exchange Act of 1934.
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1.4 Xxxxx will provide one or more persons during normal business
hours to respond to telephone inquiries concerning the Fund.
1.5 Xxxxx acknowledges that, whenever in the judgment of the
Fund's officers such action is warranted for any reason, including, without
limitation, market, economic or political conditions, those officers may decline
to accept any orders for, or make any sales of, the Shares until such time as
those officers deem it advisable to accept such orders and to make such sales.
1.6 Xxxxx will act only on its own behalf as principal should it
choose to enter into selling agreements with selected dealers or others.
1.7 As promptly as is possible after the last day of each month
this Agreement is in effect, the Fund may reimburse Xxxxx for certain expenses
incurred by Xxxxx in connection with the offering and sales of the Class B
Shares of each of the portfolios of the Fund, other than the Xxxxx Money Market
Portfolio (each a "Portfolio" and collectively, the "Portfolios"), under this
Agreement that ore not covered by any contingent deferred sales charges received
by Xxxxx with respect to Class B Shares of that Portfolio; provided that payment
shall be made in any month only to the extent that such payment, together with
any other payments made by the Fund pursuant to its Plan of Distribution adopted
in accordance with Rule 12b-1 under the 1940 Act (the "Plan"), shall not exceed
(originally .0833% - as of 5112/93:) .0625% ([originally 1.00 - as of 5112193:]
.75 on an annualized basis) of the average daily net assets represented by Class
B Shares of each of the Portfolios for the prior month. If distribution expenses
incurred during a month in excess of any contingent deferred sales charges
received by Xxxxx in respect of the Class B Shares of a Portfolio are not fully
reimbursed by said monthly payment, the unpaid portion of the expenses may be
carried forward for payment by the Portfolio at the end of the following
month(s) and interest, at the prevailing broker loan rate, may be charged
thereon, but only if such payment would not cause the Portfolio for that month
to exceed the monthly or annual limitations on distribution expenses stated
above. The payments contemplated by this paragraph shall be made only out of the
assets allocable to each Portfolio's Class B Shares.
For purposes of this Agreement, "distribution expenses" of Xxxxx shall
mean all expenses borne by Xxxxx or by any other person with which Xxxxx has an
agreement approved by the Fund, which expenses represent payment for activities
primarily intended to result in the sale of the Class B Shares, including, but
not limited to, the following to the extent that they relate to Class B Shares:
(a) payments made to and expenses of the persons who provide
support services in connection with the distribution of the Shares, including,
but not limited to, answering routine inquiries regarding the Portfolios,
processing shareholder transactions and providing any other shareholder services
not otherwise provided by the Fund's transfer agent:
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(b) costs relating to the formulation and implementation of
marketing and promotional activities, including but not limited to, direct mail
promotions and television, radio, newspaper, magazine and other mass media
advertising;
(c) costs of printing and distributing prospectuses and reports
of the Fund to prospective shareholders of the Portfolios;
(d) costs involved in preparing, printing and distributing sales
literature pertaining to the Portfolios;
(e) costs involved in obtaining whatever information, analyses
and reports with respect to marketing and promotional activities on behalf of
the Portfolios that the Fund may, from time to time, deem advisable.
Expenses incurred in connection with promotional activities shall be
identified to the Portfolio involved, except that, where expenses cannot be
identified to any particular Portfolio, expenses shall be allocated among the
Portfolios pro rata on the basis of their relative net assets represented by
Class B shares. Distribution expenses shall not include any expenditures in
connection with services that Xxxxx, any of its affiliates or any other person
have agreed to bear without reimbursement.
1.8 Each written request for reimbursement under section 1.7
shall be directed to the Treasurer of the Fund and shall show in reasonable
detail the expenses incurred by Xxxxx.
1.9 Xxxxx shall prepare and deliver reports to the Treasurer of
the Fund, for review by the Trustees, on a regular, at least quarterly, basis
showing the distribution expenses expected to be incurred in the ensuing quarter
pursuant to this Agreement and the Plan and the purposes therefor. Xxxxx shall
also prepare and deliver reports to the Treasurer of the Fund, for review by the
Trustees, on regular, at least quarterly, basis, showing the distribution
expenses actually incurred in the past quarter, as well as any supplemental
reports as the Trustees, from time to time, may request.
1.10 Xxxxx acknowledges that payments under the Plan are subject
to the approval of the Fund's board of Trustees and that no Portfolio is
contractually obligated to make payments in any amount or at anytime, including
those in reimbursement of Xxxxx for expenses and interest thereon incurred in a
prior month or year.
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2. DUTIES OF THE FUND
2.1 The Fund agrees to execute at its own expense any and all
documents, to furnish any and all information and to take any other actions that
may be reasonably necessary in connection with the qualification of the Shares
for sale in those states that Xxxxx may designate.
2.2 The Fund shall furnish from time to time, for use in
connection with the sale of the Shares, such information reports with respect to
the Fund and the Shares as Xxxxx may reasonably request, all of which shall be
signed by one or more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such reports, when so signed by
one or more of the Fund's officers, shall be true and correct. The Fund shall
also furnish Alger upon request with: (a) annual audits of the Fund's books and
accounts made by independent public accountants regularly retained by the Fund,
(b) semiannual unaudited financial statements pertaining to the Fund, (c)
quarterly earnings statements prepared by the Fund, (d) a monthly itemized list
of the securities in each Portfolio, (e) monthly balance sheets as soon as
practicable after the end of each month and (f) from time to time such
additional information regarding the Fund's financial condition as Xxxxx may
reasonably request.
3. REPRESENTATIONS AND WARRANTIES
The Fund represents to Xxxxx 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 Shares have been
prepared in conformity with the requirements of the 1933 Act, the 1940 Act and
the rules and regulations of the SEC thereunder. As used in this Agreement the
terms Registration statement", "prospectus" and "statement of additional
information" shall mean any registration statement, prospectus and statement of
additional information filed by the Fund with the SEC and any amendments and
supplements thereto that at any time shall have been filed with the SEC. The
Fund represents and warrants to Xxxxx that any registration statement,
prospectus and statement of additional information, when such registration
statement becomes effective, will include all statements required to be
contained therein in conformity with the 1933 Act, the 1940 Act and the rules
and regulations of the SEC; that all statements of fact contained in any
registration statement, prospectus or statement of additional information will
be true and correct when such registration statement becomes effective; and that
neither any registration statement nor any prospectus or statement of additional
information when such registration
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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 Shares. Xxxxx
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 or statement of additional information as, in the light of future
developments, may, in the opinion of Xxxxx'x counsel, be necessary or advisable.
If the Fund shall not propose such amendment or amendments and/or supplement or
supplements within fifteen days after receipt by the Fund of a written request
from Xxxxx to do so, Xxxxx may, at its option, terminate this Agreement. The
Fund shall not file any amendment to any registration statement or supplement to
any prospectus or statement of additional information without giving Xxxxx
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Fund's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus or statement of additional information, of whatever character, as the
Fund may deem advisable, such right being in all respects absolute and
unconditional.
4. INDEMNIFICATION
4.1 The Fund authorizes Xxxxx and any dealers with whom Xxxxx has
entered into dealer agreements to use any prospectus or statement of additional
information furnished by the Fund from time to time, in connection with the sale
of the Fund's shares. The Fund agrees to indemnify, defend and hold Xxxxx, its
several officers and directors, and any person who controls Xxxxx 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) that Xxxxx, its officers and directors,
or any such controlling person, may incur under the 1933 Act, the 1940 Act or
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, any prospectus or any statement of additional information, 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, any prospectus or any
statement of additional information, or necessary to make the statements in any
of them not misleading; provided, however, that the Fund's agreement to
indemnify Xxxxx, its officers or directors, and any such controlling person
shall not be deemed to cover any claims, demands,
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liabilities or expenses arising out of or based upon any statements or
representations made by Xxxxx or its representatives or agents other than such
statements and representations as are contained in any registration statement,
prospectus or statement of additional information and in such financial and
other statements as are furnished to Xxxxx pursuant to paragraph 2.2 hereof; and
further provided that the Fund's agreement to indemnify Xxxxx and the Fund's
representations and warranties hereinbefore set forth in paragraph 3 shall not
be deemed to cover any liability to the Fund or its shareholders to which Xxxxx
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of Xxxxx'x reckless
disregard of its obligations and duties under this Agreement. The Fund's
agreement to indemnify Xxxxx, its officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Fund's being
notified of any action brought against Xxxxx, its officers or directors, or any
such controlling person, such notification to be given by letter or by telegram
addressed to the Fund at its principal office in New York, New York and sent to
the Fund by the person against whom such action is brought, within ten days
after the summons or other first legal process shall have been served. The
failure so to notify the Fund of any such action shall not relieve the Fund from
any liability that the Fund 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 indemnity agreement
contained in this paragraph 4.1. The Fund 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 and approved by Xxxxx. In the event the Fund elects to assume the
defense of any such suit and retain counsel of good standing approved by Xxxxx,
the defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them; but in case the Fund does not elect
to assume the defense of any such suit, or in case Xxxxx does not approve of
counsel chosen by the Fund, the Fund will reimburse Xxxxx, its officers and
directors, or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses or any counsel retained by
Xxxxx or them. The Fund's indemnification agreement contained in this paragraph
4.1 and the Fund'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 Xxxxx, its officers and directors, or any controlling person,
and shall survive the delivery of any of the Fund's shares. This agreement of
indemnity will inure exclusively to Xxxxx'x
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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. The Fund agrees to notify Xxxxx promptly-of the commencement of any
litigation or proceedings against the Fund or any of its officers or Trustees in
connection with the issuance and sale of any of the Shares.
4.2 Xxxxx agrees to indemnify, defend and hold the Fund, its
several officers and Trustees, and any person who controls the Fund 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
incurred in connection therewith) that the Fund, its officers or Trustees or any
such controlling person may incur under the 1933 Act, the 1940 Act or common law
or otherwise, but only to the extent that such liability or expense incurred by
the Fund, its officers or Trustees or such controlling person resulting from
such claims or demands shall arise out of or be based upon (a) any unauthorized
sales literature, advertisements, information, statements or representations or
(b) any untrue or alleged untrue statement of a material fact contained in
information furnished in writing by Xxxxx to the Fund and used in the answers to
any of the items of the registration statement or in the corresponding
statements made in the prospectus or statement of additional information, 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 Xxxxx
to the Fund and required to be stated in such answers or necessary to make such
information not misleading. Xxxxx'x agreement to indemnify the Fund, its
officers and Trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon Xxxxx'x being notified of any action brought against
the Fund, its officers or Trustees, or any such controlling person, such
notification to be given by letter or telegram addressed to Xxxxx at its
executive office in New York, New York and sent to Xxxxx by the person against
whom such action is brought, within ten days after the summons or other first
legal process shall have been served. Xxxxx shall have the right of first
control of the defense of such action, with counsel of its own choosing,
satisfactory to the Fund, if such action is based solely upon such alleged
misstatement or omission on Xxxxx'x part, and in any other event the Fund, its
officers or Trustees 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 Xxxxx of any such action shall not relieve Xxxxx from any
liability that Xxxxx may have to the Fund, its officers or Trustees, or to such
controlling person by reason of any such untrue or alleged
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untrue statement or omission or alleged omission otherwise than on account of
Xxxxx'x indemnity agreement contained in this paragraph 4.2. Xxxxx agrees to
notify the Fund promptly of the commencement of any litigation or proceedings
against Xxxxx or any of its officers or directors in connection with the
issuance and sale of any of the Shares.
5. EFFECTIVENESS OF REGISTRATION
None of the Shares shall be offered by either Xxxxx or the Fund under
any of the provisions of this Agreement and no orders for the purchase or sale
of the Shares hereunder shall be accepted by the Fund 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 5(b)(2) 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 Fund's obligation to redeem its shares from any
shareholder in accordance with the provisions of the Fund's prospectus,
statement of additional information or articles of incorporation.
6. NOTICE TO XXXXX
The Fund agrees to advise Xxxxx immediately in writing:
(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information 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, prospectus or
statement of additional information 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, prospectus or statement of
additional information then in effect or that requires the making of a change in
such registration statement, prospectus or statement of additional information
in order to make the statements therein not misleading; and
(d) of all actions of the SEC with respect to any amendment to any
registration statement, prospectus or statement of additional information which
may from time to time be filed with the SEC.
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7. TERM OF AGREEMENT
This Agreement shall continue until October 24, 1988 and
thereafter shall continue automatically for successive annual periods ending on
October 24th of each year, provided such continuance is specifically approved at
least annually by (a) the Fund's Board of Trustees or (b) a vote of a majority
(as-defined in the 0000 Xxx) of the Fund's outstanding voting securities,
provided that in either event the continuance is also approved by a majority of
the Trustees 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, on 60 days' written notice, by the Fund's Board of Trustees or
by vote of the holders of a majority of the Fund's shares, or on 90 days'
written notice, by Xxxxx. This agreement will also terminate automatically in
the event of its assignment (as defined in the 1940 Act and the rules
thereunder).
8. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration
of Trust, dated March 20, 1986, together with all amendments thereto, is on file
in the office of the Secretary of the Commonwealth of Massachusetts.
9. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this Agreement shall be binding upon the assets and property of
the Fund only and shall not be binding upon any Trustee, officer or shareholder
of the Fund individually.
10. GOVERNING LAW
This Agreement shall be governed by and construed in accordance
with the laws (except the conflict of law rules) of the State of New York.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning the enclosed copy
hereof.
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Very truly yours,
THE XXXXX FUND
By:-------------------------------
Authorized Officer
Accepted and Agreed:
XXXX XXXXX & COMPANY, INCORPORATED
By:--------------------------------------
Authorized Officer
Section 1.7 amended as of December 31, 0000
XXXX XXXXX & COMPANY, THE XXXXX FUND
INCORPORATED
By:----------------------------------- By:--------------------------------
Authorized Officer Authorized Officer
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