DISTRIBUTION AGREEMENT
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 "Company"), a
corporation organized under the laws of the State of Maryland has agreed
that ADVANCE CAPITAL SERVICES, INC. ("ACS"), a corporation organized under
the laws of the State of Michigan, shall be, for the period of this
Distribution Agreement (the "Agreement"), the distributor of Retail
shares of the Advance Capital I Retirement Income Fund, the Advance Capital
I Equity Growth Fund, the Advance Capital I Balanced Fund, the Advance
Capital I Core Equity Fund and any other portfolio series hereafter
established by the Company (the "Funds") whose Retail shares are
covered by an effective Registration Statement filed with the Securities
and Exchange Commission (the "SEC").
1. Services as Distributor
a. ACS agrees to use its best efforts to solicit orders for the sale of
Retail shares of the Fund and will undertake such advertising and promotion
as it believes reasonable in connection with such solicitation.
b. All activities of ACS as distributor of the Fund's Retail shares
shall comply with 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 a Fund's Retail shares to the entity serving as transfer agent,
registrar and dividend disbursing agent for the fund of which the Fund has
notified 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 Company's officers may decline to accept any orders for, or make any
sales of, the Retail shares until such time as those officers deem it
advisable to accept such orders and to make such sales.
e. 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 Company
a. The 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 each Fund's Retail shares for sale in such states as ACS may designate.
b. The Company shall furnish from time to time, for use in connection
with the sale of each Fund's Retail shares such information with respect to
the Funds and their Retail shares as ACS may reasonably request, all of which
shall be signed by one or more of the Company's duly authorized officers; and
the Company warrants that the statements contained in any such information,
when so signed by the Company's officers, shall be true and correct.
c. The Company shall make available to ACS the number of copies of the
Funds' currently effective Prospectus and Statement of Additional Information
that ACS may reasonably request.
3. Representations and Warranties
a. The Company represents to ACS that all Registration Statements,
Prospectuses and Statements of Additional Information filed with the SEC
under the 1933 Act and the 1940 Act with respect to the Funds' Retail shares
have been prepared in conformity with the requirements of 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 Company further represents and warrants to 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 Funds' Retail shares. The 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 Company's counsel, be
necessary or advisable.
4. Indemnification
4.1 The Company agrees to indemnify, defend and hold ACS, its several
officers and directors, and any person who controls 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 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 Company's agreement to indemnify 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 Company by
ACS pursuant to paragraph 4.2; and further provided that the Company's
agreement to indemnify ACS and the Company's representations and warranties
herein before set forth in paragraph 3 shall not be deemed to cover any
liabilities to the Company or its shareholders to which 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 ACS' reckless disregard of
its obligations and duties under this Agreement.
a. The Company's agreement to indemnify ACS, its officers and directors,
and any such controlling person, as aforesaid, is expressly conditioned under
the Company being notified of any action brought against ACS, its officers or
directors, or any such controlling person, such notification to be given by
letter or by telegram addressed to the Company at its principal office in
Southfield, Michigan and sent to the 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
Company of any such action shall not relieve the Company from any liability
which the 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 Company's indemnity
agreement contained in this paragraph 4.1.
b. The 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
Company and approved by ACSD. In the event the 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 Company does not elect to assume the defense of
any such suit, or in case ACS does not approve of counsel chosen by the
Company, the Company will reimburse 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 ACS or them.
c. The Company's indemnification agreement contained in this paragraph
4.1 and the 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 ACS, its officers and directors, or any controlling
person, and shall survive the delivery of any of the Company's shares. This
agreement of indemnity will inure exclusively to ACS' 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 Company agrees promptly to notify ACS of the commencement of any
litigation or proceedings against the Company or any of its officers or
Directors in connection with the issuance and sale of any of the shares.
4.2 ACS agrees to indemnify, defend and hold the Company, its several
officers and Directors, and any person who controls the 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 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 Company, 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 ACS to
the 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 ACS to the Company and required to be stated in
such answers or necessary to make such information not misleading.
a. ACS' agreement to indemnify the Company, its officers and directors,
and any such controlling person, as aforesaid, is expressly conditioned upon
ACS being notified of any action brought against the Company, its officers or
Directors, or any such controlling person, such notification to be given by
letter or telegram addressed to ACS at its principal office in Southfield,
Michigan and sent to 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. ACS shall have the right to control the defense of
such action, with counsel of its own choosing, satisfactory to the Company,
if such action is based solely upon such alleged misstatement or omission on
ACS' part, and in any other event the Company, 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 ACS of any such action shall not relieve ACS from any liability which
ACS may have to the Company, 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
ACS' indemnity agreement contained in this paragraph 4.2.
5. Effectiveness of Registration
None of the Company's Retail shares shall be offered by either ACS or the
Company under any of the provisions of this Agreement, and no orders for
the purchase or sale of a Fund's Retail shares hereunder shall be accepted
by the Company, 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 a Fund's obligation to repurchase its shares from any
shareholder in accordance with the provisions of the Company's Prospectus,
Statement of Additional Information or Articles of Incorporation or Bylaws.
6. Notice to ACS
The Company agrees to advise 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 July 31, 2008, and thereafter shall
continue automatically for successive annual periods ending on July 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 Funds' aggregate outstanding Retail
shares, 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 Company 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 Company or, with respect
to any Fund, by vote of the holders of a majority of that Fund's Retail
shares; or (c) upon not less than 90 days' written notice by ACS. This
Agreement will also terminate automatically in the event of its assignment
(as defined in the 1940 Act).
8. Payments
Payments made to ACS or any other person or entity by the 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 Company's Plan of Distribution pursuant to Rule 12b-1, as amended from
time to time by the Board of Directors of the Company, 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:-------------------------
Xxxxxx X. Xxxxxxxx
Its: President
Accepted:
ADVANCE CAPITAL SERVICES, INC.
By: ----------------------------
Xxxxxx X. Xxxxxxx
Its: President
Approved: August 1987
Amended: July 1992; 1998; 1999; June 2006, January 2007, October 2007