# Appendix — United States v. National Ass'n of Securities Dealers, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_0100%3A02 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1974 - **Citation:** 419 U.S. 822 ## Text . Supreme Court, U. | JOINT =! ; APPENDIX | FEB 10 1975 | BICHAEL RODAS ee In the Supreme Court of the Anited States Ocroper Term, 1974 No. 73-1701 Uwrrep States or AMERICA, APPELLANT, Vv. Natrona, Association or Securities Deauers, INc., ET AL. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA JURISDICTIONAL STATEMENT FILED MAY 13, 1974 PROBABLE JURISDICTION NOTED OCTOBER 15, 1974 Hn the Supreme Court of the Anited States Octoper Term, 1974 No. 73-1701 Unrtep States or AMERICA, APPELLANT, NaTIONAL AssoctaTION or Securities DeaLers, Inc - ET AL, ON APPEAL FROM THE UNITED STATES DISTRICT CGURT FOR THE DISTRICT OF COLUMBIA INDEX ee en re . ciswosecesbeseenseusees Complaint by the United States filed February 21,1973 ...... Answer of National Association of Securities Dealers, Inc., oe en he eeneennseedheunasees® Answer of Massachusetts Investors Growth Stock Fund, filed March 26, 1973 Answer of Crosby Corporation and Fidelity Fund, Inc., filed i i ie Ueieis ied eee Phebe eek eneeneke seed Answer of Wellington Fund, Inc., filed March 26,1973 ...... Answer of Vance, Sanders & Co., Inc., filed March 26, 1973 ... Answer of Wellington Management Co., filed March 26,1973 .. Answer of Bache & Co., et al., filed March 26, 1973 .......... Motien of National Association of Securities Dealers, Ine. to A ES GE DE occ beccccnncccocesvaseesvecs Notice of Motion of Massachusetts Investment Growth Stock Fund, Ine. to Dismiss with supporting affidavits of John Barnard, Jr. and Tnomas Otis and exhibits, filed May 29, 1973 Motions of Fidelity Fund, Ine. and Crosby Corp. to Dismiss, with supporting affidavit of Caleb Loring, Jr., filed May 29, 1973 “eevee eeevees eee eeneeereeeeneeneeeneeeneneeneeeneeeenr eee eee 117 o- ll INDEX (Continued) Page Motion of Vance, Sanders & Co., Inc. to Dismiss, filed May 29, ROU. 6UViabsiness desineuaeiess bececdensdderceetateucs 225 Motion of Wellington Management Co. and Wellington Fund, Ine. to Dismiss, filed May 29, 1973 ................cc0ee. 227 Motion of Bache & Co., et al., to Dismiss, filed May 29,1973... 228 Affidavit of Daniel R. Hunter, filed July 5, 1973 ............ 230 Government Exhibits: Me acbdsenootedenubusbeéednnsecdedsdsidtdeécicskcaduas 233 ET AA bANOneeddenatbeebedbnededuaedtcdestendabedouse 238 Me SRbGS kasencKaneede en Mihediatetguarbaiadseees 241 De SUbatksenediadsaucdsudasuesstbenieesseesecbeceens 243 Pe 6apebbenknnsdedeeducdeeseeeksucdsndickedesesenes 246 i EE ee CCC EE Po PR eae rT 251 Dy Ctkavecccukaused sdncuusnGsesunceucesnsuessscuaaaaus 253 SE, +5bbbde dade deeU 4ks0d Ge bacdbs nous candeucnes biknee 254 DT: Hdkeunacshaehs dasekekbibadeedueadendaetasQumadaee 255 EE £60868 nuddesbhoeeces.banedeedseceesseninssadeudne 256 EE ht 6-4bdddaeernee a duenedeeaen eeu ma aun Lacie aed 258 DEE SbG0knuRER AEE OUR GEEES bdceteeebenbatdbasenkeads 263 DEY sn ceonndeend used isamenendeaeecectabeicuacacalans 267 SE 5866-0040 dbddasseeaduttisedcasecenedieessesdcese 268 SUED éacneRadknnnewinssdede cet enna ie Cacuded modded 272 SEE S408 0bsNuedennschakadhiedsdddadecneddckdebeuns 274 ST 4kib oees bee dédedehnnddedeuniddsbecdusadeneabades 276 Dy SbheSENbRS kde nekaedsdsdonscdaudeieiedde ccc dens 278 ET 60000 dneddT eohandecuccteiebddeenudcieoudeceecns 280 MED ih de chhdonsides6e6esededderukessadseerssusan duu 281 Dn ¢eciiedbasadésdenakeudteeusdsidsidecmeidaa 288 ST c6bsse desadeveheshsecnsenneeedians caduasieeades 289 SD -p604n0wiisinediiseadbandedededdusussnmoemiidans 291 ED A¢bOGESR he n60senddieebedebdeddeusécuckad caauus 294 DE Ko ee URRRCAdbedtdineweaduvadaeeddacdaboseaian 295 EE A6GRDSOSEDEvEsdasEENeceuddeeeseddicdambecussoen 296 DT it eidsiieeees bbnden bdein teabaedeedénesedaddadane 298 DE shagusedenauascaueuseaddsddansdsdksns dae deouwete 299 DY shedudeddsaceséenewaed siendeseudentueddssiaenene 301 DE Shéedededguddediaeadiddededwaomsded dees ecesnue cs 302 DEG SitRNbRhbdekecdbndnewnoenndediudssdaedentwaidinn 306 Bache & Co. Exhibits A & B filed July 20,1973 ............. 309 Letter of SEC General Counsel to District Court dated August BREE See ee wren eee a Re > Met we EA, ©: kom ete 323 ili INDEX (Con'inued) Page Letter of Appellant in reply to SEC General Counsel’s letter Ss SD ER. EE 09 6..00.06660000ecsasesedcensctensas 327 Transcript of oral argument of August 3, 1973 [43], [57], Sis ROUTE UPN 5 v06666000000000000060000006066 328 Memorandum Opinion of Judge Corcoran dated December 14, UE 66 6.004666b60 04000600068 0606 erRerdnsessensensesee 333 Notice of Appeal to the Supreme Court by the United States PUREE POROURED BD, BOGE cc ccccccescccctccecvccsceccets 363 Order of the Supreme Court noting probable jurisdiction, Gated Gatewet TB, BOGS « ccccccccccccesccescecsecccocces 364 Date 2/21/73 3/26/ 73 3/26/73 3/26/73 3/26/73 3/26/73 3/26/73 3/27/73 0/29/73 0/29/73 0/29/73 5/29/73 0/29/73 0/30/73 Reitevant Docker ENrries Complaint, appearance—+#7 serv. 3-1; +5 serv. 3-0; #6 serv. 3-5; #4 serv. 3-1; #11, 12,13 serv. 2-23; #3 serv. 3-5; #15 serv. o-1; #2 serv. 3-2; #1, #8, #9, #10, #14, #16 serv. 2/23. Answer of deft. #2 to complaint. 3/m 3/26. Answer of defts. 3 and 5 to complaint; exhibit A;e¢/m 3/26. Answer of deft #1 to complaint; e/m 3/26. Answer of deft #4 to complaint; e/m 3/26 Exhibit A & B. Answer of deft #7 to complaint; exhibit A & B;¢/m 3/26. Answer of defts 8,9.10,11,12,13,14,15 and 16 to complaint; exhibit A, B and C; ¢/m 3/26. Answer of deft. #6 to complaint. Attachments (2);¢/m 3/26. Motion of deft #6 to dismiss; affidavit; P & A; table of contents; table of authorities; memorandum ; ¢/m 5/29/73. Motions of defts 8,9,10,11,12,13,14,15 and 16 to dismiss; ¢/m 5/29/73 Motion of defts 4 and 7 to dismiss; P & A; e/m 5/29/73 Notice by deft. #2 of motion to dismiss; affi- davit of John Barnard, Jr. exhibit A,B,C,D; affidavit of Thomas Otis, exhibit A; state- ment; brief. ¢/m 5/29/73 Motion of deft. +1 to dismiss; P & A; e/m 0/29/73. appendix A-F. Motion of defts 3 and 5 to dismiss; affidavit; P & A; ¢/m 5/29/73. 1 9 oo Retevant Docket Entries—Continued Date 8/3/73 MOTIONS to dismiss on issues of Investors Co, Act 22(d), 22(f) jurisdiction argued and taken under advisement. (Rep: Doyne Spencer) Corcoran, J. 9/11/73 TRANSCRIPT of proceedings, August 3, 1973, Rep: Doyne Spencer; Court’s copy (Filed in C.A, 2454-72) 12/14/73 ORDER dismissing cause. 12/14/73 MEMORANDUM OPINION. (N) (Filed in CA 2454-72) 2/11/74 NOTICE of Appeal by pltf. to the Supreme Court of the U.S. from Judgment of 12/14/74; ¢/m 2/11/74. Daniel R. Hunter Antitrust Division U.S. Department of Justice Washington, D. C. 20530 Telephone: 739-2497 Harold H. Titus, Jr. United States Attorney ord Street and Constitution Avenue, N. W. Washington, D. C. 20001 Telephone: 426-7456 Unitrep States District Court District or CoLUMBIA Unirep States or AMERICA, ) PLAINTIFF, Vv. Tue NatTionaL ASSOCIATION OF Securities Deauers, Inc, ; MassacHUSETTS INVESTORS GrowtH Stock Funp, Ine.; Fipe.ity Funp, Inc.; WELLINGTON Funp, Inc.; Tue Crospy CorporaTIon ; Vance, Sanvers & Company, Inc. ; Civil Action No. 338-73 THe WeLLIncton MANAGEMENT Company, Inc.; Filed: Merritt Lyncu, Prerce Feb. 21, 1973 Fenner & Smirtn, Ino.; Antitrust Bacue & Company, Inc.; Equitable Relief Sought ReYNOLDs SECURITIES CORPORATION ; F. I. pu Pont, Gore Forean, INc.; EK. F. Hutton, Inc.; Watston & Company, Inc.; Dean Witter & Company, INc.; Paine, WEBBER, JACKSON & Curtis, Inc. ; Hornsiower & WEEKs- Hempuiu, Noyegs, Inc., DEFENDANTS, 3 4 COMPLAINT The United States of America, plaintiff, by its attorneys, acting under the direction of the Attorney General of the United States, brings this civil action against the above- named defendants, and complains and alleges as follows: JURISDICTION AND VENUE 1. This complaint is filed and this aetion is instituted under Section 4 of the Act of Congress of July 2, 1890 (15 U.S.C. 64), as amended, entitled ‘An Act to protect trade and commerce against unlawful restraints and monopolies, ”’ commonly known as the Sherman Act, in order to prevent and restrain continuing violations by the defendants, as hereinafter alleged, of Section 1 of the Sherman Act. 2. Mach of the defendants in each of the Counts herein- after alleged, except Fidelity Fund, Ine., Massachusetts Investors Growth Stoek Fund, Ine., and Wellington Mund, Ine, tramsacts business or is found within the Distriet of Columbia. i] DevintTions ». As used herein: (a) ‘*mutual fund’? means an open-end management Investinent company as that term is defined in the Invest ment Company Act of 1940 (15 U.S.C. © SOa-(3), (4), and (9) ); (b) “S principal underwriter’? means a principal under writer of a mutual fund as that term is defined in the Investment Company Act of 1940 (15 U.S.C. © 80a-2¢29) ; (c) *Sbroker/dealer’? means a securities broker/dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. " 7TRoO) ; (d) ‘‘brokerage transaction’? means a securities trans- action executed by a broker/dealer as agent for the ae- count of others ; (e) “fdealer transaction’? means a securities trans- action executed by a broker/dealer as principal for its own account; 5 (f) “primary distribution system’’ means the pur- chase of mutual fund shares by an investor through (1) a broker/dealer which has a sales agreement wth the principal underwriter, (2) the principal underwriter, and 3) the mutual fund; (vr) ‘secondary dealer market’? means an interdealer market in mutual fund shares and a market in which any dealer can purchase mutual fund shares from investors at more than the redemption price ; and (h) “brokerage market’? means the trarsfer, by means of a brokerage transaction, of already issued and out- standing mutual fund shares between investors, acting through broker /dealers. Count | | DEFENDANTS 4. The Crosby Corporation (hereinafter ‘*Crosby"’), at corporation organized under the laws of the State of pete ware and having its principal plac. of business in Boston, Massachusetts is made a defendar: herein. ( rosby 1s the principal underw riter of the following mutual funds, hereim- after collectively called the Fidelity F unds : Kyerest Mund, Ine. Fidelity Trend Fund, Ine. Midelity Capita: und, Ine. Midelity Fund, Ine. KMssex Fund, Ine. Salem Fund, Ine. Puritan Fund, Ine. Midelity Bond Debenture Fund ° . ‘ . : , oe excess of The Fidelity Funds have combined net assets in exces $3.4 billion. ped. ; i 7 ” 5 Vanee, Sanders & Company (hereinafter \ , Fs — 30 belief as to the truth of the allegations contained in para- graph 11 of the complaint, except admit that shares of ‘‘load’’ mutual funds are sold at a public offering price described in the fund’s prospectus which is based on the net asset value of the fund plus a sales load. 10. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 12 of the complaint. 11. Deny the allegations contained in paragraphs 13 and 14 of the complaint, and respectfully refer the Court to Section 22(d) of the 'nvestment Company Act of 1940 for the provisions thereof. 12. Deny the allegations contained in paragraphs 15 through 18 of the complaint. Answering Count II 13. The allegations contained in paragraphs 19 and 20 of the complaint do not require further answer. 14. With respect to paragraph 21 of the complaint, de- fendants repeat and reallege the admissions and denials set forth in this answer with respect to paragraphs 9 through 14 of the complaint as if here fully set forth. 15. Deny the allegations contained in paragraphs 22 and 23 of the complaint, and respectfully refer the Court to the standard dealer agreement between Crosby and broker/ dealers distributing Fidelity shares, a copy of which is annexed hereto as Exhibit A, for the terms and conditions thereof. 16. Deny the allegations contained in paragraph 24 of the complaint. answering Count III 17. To the extent that paragraphs 25 and 26 require further answer, admit the allegations contained therein, except deny that Fidelity has assets of $1.86 billion. 18. With respect to paragraph 27 of the complaint, de- fencants repeat and reallege the admissions and denials set forth in this answer with respect to paragraphs 9 through 14 of the complaint as if here fully set forth. 19. Deny the allegations contained in paragraphs 28 through 30 of the complaint. 20. Counts IV through VIII assert no claim against de- 31 fendants Crosby and Fidelity, and therefore no answer is required as to paragraphs 31 through 59. First Defense 21. The complaint fails to state a claim upon which relief can be granted. Second Defense 22. The Court does not have jurisdiction over the per- sons of defendants Crosby and Fidelity. Third Defense 23. Each and every sales agreement between defendant Crosby and the defendant broker/dealers, a typical sample copy of which is annexed as Exhibit A, contains the follow- ing provisions, among others: ‘*You agree not to purchase as principal or to participate as broker in the purchase of, any Fund shares except through or from us or from investors, and to pay a price not lower than the bid price then quoted by or for the appropriate Fund. You further agree not to sell as prin- cipal, or to participate as broker in the sale of, any Fund shares except at a price to the purchaser equal to the applicable public offering price (determined as set forth in the then currently effective applicable Fund prospec- tus) in effect at the time of such sale, unless such sale is to the Fund or to us, provided nothing in this paragraph shall prevent you from selling any shares for the account of an investor to us or the appropriate Fund at the bid price currently quoted by or for the Fund and charging the investor a fair commission for handling the trans- action.”’ 24. A true sample copy of the then existing sales agree- ments between defendant Crosby and defendant broker/ dealers was and is an exhibit to and made a part of registra- tion statements filed with the Securities and Exchange Commission (‘‘Commission’’) in conection with the issu- ance, sale and distribution of shares in the load mutual funds included in the Fidelity Group of Funds, and par- ticulariy the shares of Fidelity, and in the event of any change in said agreements, a true copy of the new sales 32 agreement is filed with the Commission in accordance with its rules and regulations. 25. The sales agreements and practices of these defend- ants which are alleged in the complaint to be in violation of the Sherman Act were and are authorized by the Invest- ment Company Act and by the Commission, and therefore are exempt from the operation of the Sherman Act. Fourth Defense 26. The Investment Company Act vested the Commission with the exclusive power and authority to regulate and supervise continuously the investment company industry and the activities of those engaged therein, and to protect the public interest and especially the interests of investors in mutual funds against any and all evils and abuses arising from the agreements, practices or other activities of invest- ment companies, investment advisors, dealers and broker/ dealers, including methods employed in the issuance, dis- tribution, sale, purchase, redemption and resale of the shares of open-end investment companies. 27. By reason of the foregoing, the agreements, trans- actions and practices alleged in the complaint to be in violation of the Sherman Act are exempt from the provi- sions of the Act. Fifth Defense 28. By reason of the authority vested in the Commission under the Securities Exchange Act of 1934 and Investment Company Act of 1940, primary jurisdiction to regulate the agreements and activities complained of and to deal with any legal challenge to the practices and procedures con- nected with the distribution and sale of mutual fund shares rests with the Commission. Prayer WHEREFORE, defendants pray for judgment dismiss- ing the complaint on the merits and awarding defendants the costs and disbursements of this action and reasonable counsel fees and such other and further relief as this Court deems just and proper. Dated: March 26, 1973 33 /s/ Daniel P. Levitt Daniet P. Levirr Attorney for Defendants The Crosby Corporation and Fidelity Fund, Inc. Paul, Weiss, Rifkind, Wharton & Garrison 1775 K Street, N.W., Suite 700 Washington, D.C, 20006 Tel. No.: (202) 293-6370 OF COUNSEL: William R. Meagher, Esq. Joseph H. Flom, Esq. Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, N.Y. 10022 Tel. No.: (212) 371-6000 SALES AGREEMENT The Crosby Corporation, Fidelity Fund, Ine. Distributor Fidelity Debenture Fund, Ine. 225 Franklin Street, Fidelity Capital Fund, Ine. Boston, Mass. 02110 Fideltiy Trend Fund, Ine. Executive Offices Puritan Fund, Ine. 617-726-0400—C able- Salem Fund, Ine. Crosfidel Everest Fund, Ine. Order Department— 617-742-5700—Teletype 710-321-0411 The Fidelity Group of Mutual Funds November 1, 1972 Dear Sirs: We are the principal underwriter of shares of the above Funds which we agree to sell to you to cover orders received by you as principal from your customers. All orders should be communicated directly to The Crosby Corporation which will accept and confirm such orders to you at the applicable public offering price computed as described in the appli- cable Fund’s then currently effective Prospectus, less the Dealer Discount deser bed below. The net asset value and public offering prices of the Funds’ shares will be furnished from time to time to public information sources. Sales Charge and Dealer Discount The sales charges and discounts allowed to dealers on shares purchased are as follows (the percentage in each case being a percentage of the applicable public offering price) : Sales Charge Paid by Dealer At least But less than Investor Discount On investments ee ° $ 10,000 8.5% 7.0% On investments — $ 10,000 20,000 8.0% 6.5% On investments of ....... 25,000 50,000 6.0% 4.8% On investments of ....... 50,000 100,000 4.5% 3.6% On investments 7 ssenene 100,000 250,000 3.5% 2.8% On investments a specece 250,000 500,000 2.5% 2.0% On investments of ....... 500,000 1,000,000 2.0% 1.6% On investments over ..... 1,000,000 1.0% 0.8% * The minimum initial and subsequent investments must be as specified in the then currently effective applicable Fund Prospectus. 34 35 The schedule of sales charges and dealer discounts set forth above is applicable to purchases by ‘‘any person’’ (a) of a single Fund at any one time, or (b) in accordance with ‘‘Combined Purchase Privilege,’’ ‘‘Cumulative Quan- tity Discount’’ and/or ‘‘Statement of Intention’’ as each of those terms is described in the then currently effective applicable Fund Prospectus. You must notify us of the total holdings, if applicable, of ‘‘any person’’ before he may vail himself of a reduced sales charge pursuant to the foregoing. Such notification, in writing, must be re- ceived by Crosby within four (4) usiness days of the placing of the order. An application form is available for this purpose. As used in this paragraph, ‘‘any person’’ means an individual, or an individual, his spouse and children under the age of 21, or a trustee, or other like fiduciary of a single trust estate or single fiduciary account, (including a pension, profit-sharing, or other employee benefit trust created pursuant to a plan qualified under Section 401 of the Internal Revenue Code) although more than one beneficiary is involved; provided, however, that the term ‘‘any person’’ shall not include a group of indi- viduals whose funds are combined, directly or indirectly, for the purpose of purchasing shares of any one or more of the Funds jointly or through a trustee, agent, custodian, or other representative, nor shall it include a trustee, agent, custodian, or other representative of such a group of individuals. If any shares are repurchased by any Fund, or by us for the account of any Fund, or are tendered for redemption within seven (7) business days (Saturdays, Sundays and holidays not being considered business days) after con- firmation to you of the original purchase order for such shares, you shall forthwith refund to us (or we may retain) the full discount allowed to you on the original sale, and upon receipt thereof we will as soon as practicable there- after pay to the applicable Fund the full amount of the sales charge on the original sale by us. You will be notified by us of such repurchase or redemption within ten (10) days of the date on which the certificate is delivered to us or to the Fund. 36 Payment and Delivery Upon receipt of confirmation you will pay promptly the net amount due as shown thereon. Payment should be made as follows: The Crosby Corporation Cash Clearing Department, 3rd Floor Ten Post Office Square Boston, Massachusetts 02109 FOR IDENTIFICATION PURPOSES ALL PAY- MENTS AND TRANSFER INSTRUCTIONS MUST REFER TO THE INVOICE NUMBER SHOWN ON THE CONFIRMATION. THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. REQUIRE US TO NOTIFY THE ASSOCIATION OF ANY PAYMENTS NOT RECEIVED FROM YOU WITHIN TEN BUSINESS DAYS FOLLOWING THE DATE OF A TRANSACTION INVOLVING MORE THAN $100. WE RESERVE THE RIGHT TO HOLD YOU RESPONSIBLE FOR ANY LOSS WE MAY INCUR AS THE RESULT OF YOUR FAILURE TO MAKE ANY SUCH PAYMENTS. Other Transactions in Fund Shares You agree not to purchase as principal, or to participate as broker in the purchase of, any Fund shares except through or from us or from investors, and to pay a price not lower than the net asset value then quoted by or for the appropriate Fund. You further agree not to sell as principal, or to participate as broker in the sale of, any Fund shares except at a price to the purchaser equal to the applicable publie offering price (determined as set forth in the then currently effective applicable Fund Prospectus), unless such sale is to the Fund or to us, provided nothing in this paragraph shall prevent you from selling to us fer the account of an investor any shares of the appropriate Fund at the net asset value price currently quoted by or for the Fund and charging the investor a fair commission for handling the transaction. You agree that you will not withhold placing a customer’s order in such manner as to profit yourself as a result of such withholding. You further agree that you will not pur- 37 chase shares, other than for investment, except for the purpose of covering purchase orders already received, and then only at the public offering price at which such orders were taken less the dealer discount allowed hereunder. We will not accept a conditional order for shares of the Funds. Miscellaneous We reserve the right to amend this Agreement and, in our discretion, to reject in whole or in part any order re- ceived by us from you and to terminate this Agreement in the event of violation by you of any of its provisions or for any cause which in our opinion justifies such action. This Agreement shall be in substitution for any prior Sales Agreement between us regarding shares of any of the Funds, and shall terminate automatically in the event of your ceasing to be a member in good standing of the Na- tional Association of Securities Dealers, Inc. as you repre- sent vourself_to be. All transactions pursuant to this Agreement are subject to and must be in compliance with any and all applicable federal and state laws, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Investment Company Act of 1940, as amended, and the Rules and Regulations there- under, and any applicable rules of the National Associat'on of Securities Dealers, Inc., particularly rule 26 of the Rules of Fair Practice. No person is authorized or permitted to give any infor- mation or make any representations concerning the Funds other than those which are contained in the then currently effective applicable Fund Prospectus and in such other printed information as may be subsequently issued by us as information supplemental to such Prospectus or approved by us in writing for use in connection therewith. You will not use the words ‘‘Fidelity Fund, Inc.,’’ ‘‘Puritan Fund, Ine.,”’ ‘‘Fidelity Capital Fund, Ine.,’’ Fidelity Trend Fund, Ine.,’’ ‘‘Salem Fund, Inc.,’’ ‘‘Everest Fund, Ine.,”’ ‘‘Fidelity Bond-Debenture Fund, Inc.,’’ ‘‘ Fidelity Group of Funds”’ or ‘‘The Crosby Corporation’’ whether in writing, by radio or television or any other advertising media with- out our prior written approval. Nothing in this Agreement shall be deemed or construed to make you an employee, agent or representative of any of the Funds or of this Corporation, and you are not 38 authorized to act for use or for any of the Funds or to make any representations on our or their behalf. We shall not be liable in any way or for any matter connected herewith, except such as may be incurred under the Securities Act of 1933, as amended, and except for lack of good faith. This Agreement supersedes and cancels any prior agree- ment with respect to the sale of shares of any of the Funds for which we are the principal underwriter and we reserve the right to amend this Agreement at any time and from time to time or to terminate the same at any time. We and/or the Funds in the Fidelity Group of Funds may at any time modify the sales charge and dealer dis- count to be paid in connection with the sale of shares of any of those Funds, In the event of any such change you agree that you will have no continuing claim to or vested interest in the level of sales charges or dealer discounts established by this Agreement as to any shares purchased subsequent to such change. Very truly yours, THe Crospy Corporation By The undersigned hereby accepts this Agreement and agrees to abide by all of its terms and conditions, Er — = Firm By Authorized Signature Address (Title Omitted in Printing) ANSWER OF DEFENDANT WELLINGTON FUND, INC. Comes now Wellington Fund, Ine. named as one of the defendants in the above styled case, and answers and responds to the complaint as follows: First Defense The complaint fails to state a claim against the defendant upon which relief can be granted. Second Defense The alleged unlawful activities of this defendant were required by the Investment Company Act of 1940, 15 U.S.C. § 80a-1, et seq., the Securities Exchange Act of 1934, 15 U.S.C. § 78a, et seq., and rules and regulations adopted pursuant to such Acts, and are exempt from the prohibi- tions of the antitrust laws. Third Defense The Court lacks jurisdiction over the subject matter of the complaint and the person of the defendant. Fourth Defense 1. With respect to the section of the complaint entitled ‘Jurisdiction and Venue’’ this defendant admits that the complaint purports to seek relief under 4 4 of the Sherman Act (15 U.S.C. § 4), admits that it is not found and does not transact business in the District of Columbia, and is without knowledge or information sufficient to form a belief as to whether the other defendants are found or transact business in the District of Columbia. 2. With respect to the section of the complaint entitled **Definitions,’’ this defendant admits the definitions con- 39 40 tained in paragraphs 3(a)-(e) and denies the statement of the definitions contained in paragraphs 3(f)-(h). 3. This defendant is without knowledge or information sufti- cient to form a belief as to the truth of the allegations contained in paragraphs 4 and 5 of the complaint. 4. This defendant admits the allegations contained in para- graph 6 of the complaint. This defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraphs 7 and 8 of the complaint. 6. This defendant admits that Wellington Management Company, Inc. acts as principal underwriter for it and for the six other open-end management investment companies listed in paragraph 6 of the complaint (which investment companies are registered with the Securities and Exchange Commission under the Investment Company Act of 1940), pursuant to an underwriting agreement, a specimen copy of which is attached hereto as Exhibit A, and which is filed with the Securities and Exchange Commission as required by the Investment Company Act of 1940 and regulations issued thereunder. This defendant also admits that Well- ington Management Company, Ine. has existing sales agree- ments with each of the defendants named in paragraph 7 of the complaint relating to the sale of shares of each of the registered open-end management investment companies for which Wellington Management Company, Inc. acts as principal underwriter, a specimen copy of which is at- tached hereto as Exhibit B, and specimens of which are on file with the Securities and Exchange Commission as re- quired by the Investment Company Act of 1940 and regula- tions issued thereunder. The underwriting agreement referred to above is the only agreement relating to the sale of such shares between this defendant and Wellington 41 Management Company, Inc. The sales agreement referred to above is the only agreement referring to the sales of the shares of this defendant between Wellington Management Company, Ine. and the broker-dealers named in paragraph 7 of the complaint. This defendant also admits that it must redeem its shares in accordance with the provisions of the Investment Company Act of 1940. Other than as stated above, this defendant denies, or is without information sufficient to form a belief as to the truth of the allegations contained in paragraph 9. 7. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraph 10 of the eomplaint. 8, With respect to the allegations of paragraphs 11 and 12 of the complaint, this defendant admits that its shares are normally sold at an offering price described in the prospec- tus as required by § 22(d) of the Investment Act of 1940, and set forth in the sales agreement attached hereto as Exhibit B. Except as stated above this defendant either denies or is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraphs 11 and 12 of the complaint. 9. With respect to paragraphs 13 and 14 of the complaint, this defendant avers that the allegations contained therein constitute conclusions of law incapable of being either admitted or denied. To the extent such allegations may be deemed to be allegations of material fact they are denied. 10. This defendant denies the allegations contained in para- graphs 15, 16, 17 and 18 of the complaint. 11. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations 42 contained in paragraphs 19, 20, 22, 23 and 24. This de- fendant reasserts its response in paragraphs 6 through 9 of this Fourth Defense to the allegations contained in paragraph 21 of the complaint. 12. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 25, 26, 28, 29 and 230. This de- fendant reasserts its response in paragraphs 6 through 9 of this Fourth Defense to the allegations contained in paragraph 27 of the complaint. 13. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 31, 32, 24, 35 and 36. This defend- ant reasserts its response in paragraphs 6 through 9 of this Fourth Defense to the allegations contained in paragraph 53 of the complaint. 14. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 37, 38, 40, 41 and 42. This defend- ant reasserts its response in paragraphs 6 through 9 of this Fourth Defense to the allegations contained in paragraph 39 of the complaint. 15. With respect to the allegations contained in paragraphs 43 through 48 of the complaint this defendant reasserts its response contained in paragraphs 6 through 9 of this Fourth Defense. Except as stated above, this defendant denies the allegations contained in paragraphs 43 through 48. 16, This defendant admits the allegations of paragraph 49. 17. With respect to the allegations contained in paragraphs 50 tarough 54 of the complaint, this defendant reasserts its 48 response contained in paragraphs 6 through 9 of this Fourth Defense. Except as stated above this defendant denies the allegations contained in paragraphs 50 through 54 of the complaint. 18. With respect to the allegations contained in paragraphs 95, 57 through 59 of the complaint, defendant admits that Wellington Management Company, Inc. has in effect sales agreements with the broker-dealers named in paragraph 7 of the complaint (a specimen copy of which is attached as Exhibit B) with respect to the sale of this defendant’s shares. This defendant reasserts its response contained in paragraphs 6 through 9 of this Fourth Defense in response to the allegations of paragraph 56 of the complaint. Except as stated above, this defendant denies the allegations contained in paragraphs 55 through 59. WHEREFORE, this defendant files its answer to the plaintiff’s complaint and prays that the complaint be dis- missed. By Robert E. Jensen Ropert E. Jensen Or CouNSEL: By W.L. Dickey Richard M. Phillips WruuiaM L, Dickey Hill, Christopher & WiiuuaMs & Jensen Phillips Attorneys for Defendant 2000 L, Street, N.W. Wellington Fund, Ine. Washington, D.C. Suite 620, 1130 17th Street, N.W. 20036 Washington, D.C. 20036 Tel. (202) 833-3990 Tel. (202) 223-6150 (Ce ctifieate of Service Omitted in Printing) EXHIBIT A UNDERWRITING AGREEMENT Tuts AGREEMENT, by and between WeLLinctTor Funp, Inc. a corporation organized and existing under the laws of the State of Maryland (hereinafter called ‘*Fuxp’’) and WELLINGTON Manacement Company, a corporation orga- nized and existing under the laws of the State of Delaware (hereinafter called ‘‘Company’’) : WITNESSETH: Wuereas, Funp is an open-end investment company registered under the Investment Company Act of 1940, the shares of which are registered under the Securities Act of 1933, and is desirous of issuing to the general public all of its now or hereafter authorized, but unissued, shares of capital stock and/or shares of capital stock now or later held in its Treasury; and Whereas, Company is interested in promoting the growth of Funp and will be equipped financially and with qualified personnel and extensive facilities to encourage the sale of shares of Funp by investment dealers and to create and provide the sales literature, advertising and other sales promotional aids necessary to accomplish such growth. Now, Turrerore, in consideration of the mutual covenants herein contained, the parties hereto hereby covenant and agree to and with each other as follows: 1. (a) Company agrees to act as the principal under- writer and exclusive national distributor for the shares of Funp and will, upon receipt of unconditional orders from investment dealers or investors (and not before), transmit such bids or orders as agent for Funp for acceptance and confirmation by Funp to its principal office as Fuyp may from time to time direct. The price ac which shares of Funp are offered to the publie through Company shall be com- puted and shall be effective as set forth in the Prospectus of Funp current as of the time of such sale. (9) Funp reserves the right to reject any order, pro- vided, however, that Funp does hereby covenant and agree that it will not arbitrarily or without reasonable cause refuse acceptance or confirmation of orders obtained and 44 45 submitted under this Agreement for the purchase of shares of stock of Funp and, upon receipt thereof, will in all proper cases confirm orders directly through the Company as agent for Funp or authorize the Company, as agent for Funp, to deliver proper confirmations and, if requested, will deliver certificates for shares so purchased to Company as soon as practicable after receipt of payment therefore in cash. (ce) Company agrees that it will not directly or indi- rectly withhold orders for the purchase of stock of Funp or purchase stock of Funp in anticipation of orders, and does further agree that in all contracts or arrangements with dealers or distributors acting under or through it, it will require a similar contractual undertaking. Company further agrees that it will arrange for the purchase of shares of Fuynp only from Funp, except when acting as agent for Funp on repurchase of shares under Paragraph 2 hereof. 2. Sales of Funp’s shares under this Agreement shall be handled by Company as agent for Fuxp. With Funp’s consent, Company may also act as agent for Funxp without commission on repurchase of shares of Fuxp. Except for such sales and repurchase of shares of Funp, Company shall act as principal in all other matters relating to promotion of the growth of Funv and shall enter into all of its engage- ments, agreements and contracts as principal on its own account. Furthermore, this Agreement shall not be con- strued as authorizing any dealer or other person to act as agent, either of Funp or of Company. 3. Funp covenants and agrees that it will, at its own expense : (a) use its best efforts to keep authorized, but un- issued, sufficient of its capital stock to meet the reasonable requirements of Company; (b) execute or cause to be executed all documents requiring signatures of Funp necessary to permit Company to comply with the provisions of Paragraph 4 hereof ; (c) supply Company with the ‘‘net asset value per share’’ computed as at the time(s) prescribed by and in compliance with all pertinent requirements of the National Association of Securities Dealers and the Securities and Exchange Commission, so as to permit Company to comply with the provisions of Paragraph 4 hereof. 46 4. Company covenants and agrees that it will, at its own expense : (a) prepare, file and keep effective registration state- ments, prospectuses and licenses covering so many shares of stock of Funp as may be necessary to meet ComPpany’s reasonable requirements for distribution and sale of such shares in ail jurisdictions where shares of Fuxp may law- fully be sold; (b) prepare as often as, and at the specific times, re- quired by appropriate authority on each business day for publication in newspapers or other financial publications both the offering price to the public and the liquidation price of Funp shares: (c) prepare, print and distribute (subject to the pro- visions of Paragraph 5 hereof) all advertising and sales literature relating to Funp. 0. (a) Company does hereby covenant and agree that it will not issue any statements other than Funp’s properly approved Prospectus, except such supplemental literature or advertising (prepared at the expense of Company) as shall be lawful under state and federal securities laws and regulations and under applicable laws and regulations of foreign jurisdictions. Company agrees to file with the Securities and Exchange Commission, the National Asso- ciation of Securities Dealers, Inc. and such other regulatory authorities as may be required, copies of any advertise- ment, pamphlet, circular, form letter, or other sales litera- ture relating to Funp or its shares, addressed to or intended for distribution to prospective investors, within the time required by such regulatory authorities, to furnish Fuxp at its principal office with a copy of all such material prior to its use and not to use such material if the Funp shall reasonably and promptly object to such use. (b) Company shall conform to all applicable By-Laws, charter provisions, and regulations to which Funp is sub- ject and to applicable laws and regulations of the United States and of the individual states within which Compaxy or Funp may do business, or where shares of Funp are offered for sale, and will conduct its affairs both with rela- tion to Funp and with relation to dealers, or investors, in accordance with the rules of fair practice of the National Association of Securities Dealers, Inc. Company shall also comply with applicable laws and regulations of foreign 47 jurisdictions in which shares of Funp or securities of an investment company using shares of Funp as its sole under- lying investment are offered. (c) Company agrees to indemnify and hold harmless F'unp and each person who has been, is, or may hereafter be an officer or director of Funp against expenses reason- ably incurred by any of them in connection with any claim or in connection with any action, suit or proceeding to which any of them may be a party, which arises out of, or is alleged to arise out of any wrongful act of Company or its employees or any misrepresentation in the registration statement of Funp filed under the Securities Act of 1933 of a material fact, or out of any alleged omission to state therein a material fact necessary to make the statements made therein not misleading, insofar as any such statement or omission was made in reliance upon, and in conformity with, information furnished to Funp in connection there- with by, or in behalf of Company, provided, however, that (i) in no case is the indemnity of Compaxy in favor of Funp or any person indemnified to be deemed to protect Funp or any such person against any liability to which Funp or any such person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence, in the per- formance of its duties or by reason of its reckless disregard of its obligation and duties under this agreement, and (ii) in no case is Company to be liable under its indemnity agree- ment contained in this paragraph with respect to any claim made against Funp or any person indemnified, unless Funp or such person, as the case may be, shall have noti- fied Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon Funp or upon such person (or after Funp or such persen shall have received notice of such service on any designated agent). In the case of any such notice to Company, Com- pany shall be entitled to participation, at its own expense, in the defense of any suit brought to enforce any such liability. Company agrees promptly to notify Funp of the commencement of any litigation or proceedings against it in connection with the issue and sale of any of the shares. The term ‘‘expenses’’ includes amounts paid in satisfaction of judgments or in settlement. The foregoing right of indemnification shall be in addition to any other rights to 48 which Funp or any such officer or director may be entitled as a matter of law. 6. Funp covenants and agrees that it will not, during the term of this Agreement offer any of its shares for sale directly or through any person or corporation other than Company, excepting only (a) the issuance of rights to stockholders to subscribe to shares to the extent of all or part of any dividend that may be distributed to stockholders of Funp or to the extent of any shares that may be taken up under an optional or alternative dividend, or the issu- ance of additional shares through stock splits or stock dividends, and (b) sales of shares to another investment or securities holding company in the process of converting all or a portion of its assets into shares of Funp or in connection with an issuance of Funp’s shares in exchange for shares of another investment or securities holding company, to the extent permitted by the Investment Com- pany Act of 1940, as from time to time amended. Provided, however, that in the event Company should be unable to continue to distribute shares of Funp aud such restriction shall not apply to the sale of shares of Funp by any other person, F'unp may at its option make arrangements for the offer and sale of its shares within the jurisdiction or jurisdictions in which distribution and sale thereof by Company has been prevented, provided, further however, that if Company shall have removed all material obstacles to resyming the offer and sale within said jurisdictions within ninety days from its first restraint or inability, then the right of Funp to distribute through instrumentalities other than Company shall be extinguished, subject only to the provisions of Paragraph 8 hereof. Funp further agrees that Company may act as principal underwriter and ex- elusive national distributor for the shares of other invest- nent companies registered under Investment Company Act of 1940. Funp and Company further agree that the shares of the Funp may be sold through Company as agent for the Funp to any investment company which uses the shares of the Funp as its sole underlying investment, provided that such other investment company is sponsored by the Com- PANY (or, if a United States investment company, spon- sored by a distributor approved by the Company), or by a wholly-owned subsidiary of the Company and, provided further, that if such investment company is organized under 49 the laws of the United States or is designed to permit its securities to be sold to United States citizens or residents, it shall additionally register under the Investment Com- pany Act of 1940, as from time to time amended. 7. It is hereby mutually agreed that Company in full satisfaction of all services herein agreed to be performed by it shall receive a commission not to exceed 814% of the offering price of all shares of Funp sold by it after the effective date hereof; provided, however, that the commis- sion payable on separate volume and other special trans- actions shall be as from time to time set forth in the Pro- spectus of Funp then in effect, provided further that, if the Prospectus of the Funp so specifies, Company shall receive no commission on sales of shares of Funp at net asset value to those persons described and on the terms provided in Rule 22d-1(h) promulgated under the Investment Company Act of 1940, as amended. The commissions aforesaid shall become due and owing immediately upon settlement for any sale made through Company and Company shall deduct such commissions from any remittance to Funp, provided, however, that if change is required in the aforesaid com- missions, either by duly constituted regulatory authorities, or for husiness reasons, the amount payable to Funp from the sale of shares shall always equal the then current net asset value per share. Company agrees that, if shares are repurchased by Funp or by Company as agent for Funp, or are tendered to Funp for redemption within seven days after confirmation by Company, as agent, of the original purchase order to any broker or dealer originating such transaction, Company will immediately remit to Funp the commission (net of allowances of dealers or brokers) on such sale paid to Company and will promptly, upon receipt thereof, pay to Funp ‘any refunds of the balance of sales commissions repaid to Company by brokers or dealers. Notwithstanding the foregoing, all sales of shares of Funp to any investment company in accordance with the provi- sions of Paragraph 6 of this Agreement as amended shall be made through Company at net asset value, and no com- missions shall be charged to, or paid by, such investment company with respect to suck shares. 8. This Agreement shall become effective on April 1, 1973, and shall continue in force until March 31, 1975, and thereafter, only so long as such continuance is approved at 50 least annually thereafter by a vote of the Fund’s Board of Directors, including the votes of a majority of the directors who are not parties to such Contract or interested persons of any such party, cast in person at a meeting called for the purpose of voting such approval. 9. Subject to the provisions of the immediately preceding paragraph, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respec- live successors, provided, however, that this Agreement shall terminate automatically upon assignment by Company as provided for and defined in the Investment Company Act of 1940 as amended, unless under the exemptive provi- sions of Section 6(c) of such Act, the Securities and Ex- change Commission shall determine that a conditional or unconditional order of exemption is necessary or appro- priate in the public interest and consistent with the protee- tion of investors and the purpose fairly interded by the policy and practice of such Act; in which event this Agree- ment shall continue in full force and effect. 10. In the event that this Agreement, or any part thereof, shall become unlawful under any future law of the United States, or any state, territory, possession or district thereof, or any regulations of the United States, any state, territory, possession and district thereof, or any department, board or commission or other governmental authority having jurisdiction over its performance, such unlawful portion of the Agreement shall be considered as though it were deleted by mutual consent; but the remaining provisions of the Agreement shall not cease and terminate and the parties hereto shall confer and attempt to agree to such change or modification in the said Agreement as will cause it to con- form to said law or regulation and will maintain the general purpose and provisions of this Agreement in a manner equitable to each of the parties hereto. If, in such event, the parties hereto are unable to agree with respect to the said modification, each shall promptly appoint one arbitra- tor and the two arbitrators so appointed shall appoint a third arbitrator, who shall consider all the facts and cir- cumstances relating to this Agreement and to the necessary modification thereof to comply with such future law or regulation, and if, in the opinion of said arbitrators, or a majority of them, a modification of the said Agreement may be made which will comply with the said new law or regula- 51 tion and will maintain the general purposes of this Agree- ment and be fair and equitable to both of the parties hereto, they shall direct in what particulars this Agreement shall be modified and amended, and upon the receipt by each of the parties hereto of the written report of the arbitrators, the Agreement shall thereupon be deemed to be altered and amended as provided in the said report and as so altered and amended shall continue to be effective and binding on both of the parties hereto. The provisions of this Para- graph 10 shall be administered in accordance with provi- sions of the Act of Assembly of the Commonwealth of Pennsylvania, enacted April 25, 1927, P.L., 381 Number 248, as amended. Provided, however, that neither Funp, nor Company, shall be bound to accept the directions of the arbitrators if the modification or amendment of the Agree- ment stated in the Arbitrators’ written report would, in the opinion of counsel for Funp, require approval under the provisions of Section 15(c) of the Investment Company Act of 1940, as amended, and provided further that Funp reserves the right in the event of any award or decision by the arbitrators to call a special meeting of the stockholders of the Funp and to submit to the vote of the stockholders the question of whether the recommendations of the arbitra- tors shall or shall not be adopted by and binding upon the Funp, in which case the decision of the stockholders shall be final and binding upon Funp and Company. 11. It is the intention of the parties hereto that this Agreement shall be governed and construed according to the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers and to have hereunto affixed their respective corporate seals this First day of April, 1973. Attest: Secretary Attest: Secretary WELLINGTON Funp, Ino, By: President WELLINGION MANAGEMENT COMPANY By: President EXHIBIT B WELLINGTON MANAGEMENT CoMPANY 1630 LocUST STREET * PHILADELPHIA, PA. 19103 Sales Agreement with respect to WeELLINGtron Funp Wuxpsor Funp Ivest Funp W. L. Morcan Growtn Funp Wetiestey Income Funp ExpLorer Funp Trustees’ Eeuitry Funp Gentlemen: As National Distributor for the shares of Wellington Fund, Windsor Fund, Ivest Fund, Explorer Fund, W. L. Morgan Growth Fund, Trustees’ Equity Fund, Wellesley Income Fund, and any other mutual fund for which we may hereafter act as Distributor (the ‘‘Funds’’), we invite you to become a member of the Selling Group to distribute the shares of said Funds upon the following terms: Ordering of Shares i. Orders received from you will be accepted by us for the Funds only at the public offering price applicable to each order, as established in accordance with the provisions of the then current Prospectus of each of the Funds. The procedure stated herein relating to the pricing and handling of orders shall be subject to instructions which we will for- ward from time to time to all members of the Selling Group. All orders are subject to acceptance or rejection by the Funds in their sole discretion. 2. You agree to purchase shares only from the Funds through us or from your customers. If you purchase shares from the Funds you agree that all such purchases shall be made only to cover orders already received by you from your customers (who may be any ,‘ersons other than a securities dealer or broker), or for your own investment. If you purchase shares from your customers, you agree to pay such customers not less than the bid prices quoted by us as agent at the time of such purchase. As distributor, we will not accept a conditional offer for shares of the Funds. 3. You agree to sell shares only 52 53 (a) as principal, for your own account, to customers at the public offering price then in effect ; (b) to the Funds through Wellington Management Company, as agent for the Funds at the net asset value next determined after our receipt of the request for re- purchase of the shares subject to such procedural stand- ards as may from time to time be established or approved by the appropriate regulatory agencies. In such a sale to the Funds you may act either as principal for your own account or as agent for your customer. If you act as principal for your own account, you agree to pay your customer (unless the shares are in your investment ac- count) not less than the price so determined. If you act as agent for your customer in selling shares to the Funds you may charge a fair commission for handling the trans- action. All transactions in shares of Funds between you and us are between us as agent for the Funds concerned and you, either as principal for your own account or as agent for an undisclosed principal. Dealer Discount and Sales Charge 4. The shares of the Funds will be offered to the public at a public offering price which will include a sales charge in varying amounts depending on the size of the purchase or other circumstances as described in the then current Prospectus of each of the Funds. On such sales you will receive a discount as shown in the following table (with the sales charge and discount stated as a percentage of the applicable offering price). Gross Sales Dealer Amount of Sale Charge Discount Less than $10,000 °............. 8.50% 7.00% $10,000 but under $25,000....... 7.75 6.25 $25,000 but under $50,000....... 6.00 4.50 $50,000 but under $100,000...... 4.5 3.50 $100,000 but under $250,000..... 3.25 3.5 $250,000 but under $500,000... .. 2.50 2.00 $500,000 but under $1,000,000... . 2.00 1.50 $1,000,000 but under $5,000,000. . 1.50 1.125 $5,000,000 and over............. 1.00 0.75 *The minimum initial purchase for Explorer Fund is $5,000. 54 d. The Funds may change the amount of the gross sales charge or the dealer discount or both at any time upon written notice to you. 6. You shall not withhold placing with us orders received from your customers so as to profit yourself as a result of such withholding, nor shall we accept from you any order for shares on any basis other than in accordance with the rules for such orders as may, from time to time, be estab- lished by the appropriate regulatory agencies. 7. If any shares sold to you under the terms of this agree- ment are repurchased by the Funds or by Wellington Man- agement Company for the account of the Funds, or are tendered for repurchase or redemption within seven busi- ness days after the date of the confirmation of the original purchase by you, it is agreed that you shall forfeit your right to an; discount received by you on such shares. We shall notify you of any such repurchase or redemp- tion within ten business days from the date on which the certificate is delivered to Wellington Management Com- pany, or to the Funds and you shall forthwith refund to us the full discount allowed to you on such sale. We agree, in the event of any such repurchase or redemption, to refund to the Funds our share of the sales charge and upon receipt from you of the refund of the discount allowed to you, to pay svch refund forthwith to the Funds. 8. Notwithstanding any of the foregoing provisions, orders to purchase shares received by us in connection with any exchange privilege made available to the shareholders of the respective Funds will be at the public offering price less all sales charges as applicable to each order and estab- lished by the then effective Prospectus of the Fund con- cerned. Orders to redeem shares under such exchange privilege shall not be subject to commission charge by either you or us. Payment and Delivery 9. Orders and confirmation should be sent directly to Wellington Management Company, 1630 Locust Street, Philadelphia, Pa. 19103. Payment for shares shall be made payable to the order of Wellington Management Company and sent to the Funds’ Transfer Agent, Data-Sys-Tance, Inec., P. O. Box 1400, Kansas City, Mo. 64141. The Funds reserve the right to delay issuance or transfer until the 55 check is cleared. Payment shall be received by us within five days after acceptance by us for the Funds of your order. If such payment is not so received we reserve the right, without notice, forthwith to cancel the sale, and we may hold you responsible for any loss, including loss of profit, suffered by us or by the Funds resulting from your failure to make such payment. . 10. No person is authorized to make any representations concerning shares of the Funds except those contained in the then current Prospectus of each of the Funds and in printed information subsequently issued by each of the Funds as information supplemental to such Prospectus. In all sales of these shares to the publie you shall act as dealer for your own account, and in no transaction shall you have any authority to act as agent for the Funds for us or for any other member of the Selling Group. In purchasing shares from us you shall rely solely on the representations contained in the Prospectus of each of the Funds concerned and supplemental information above mentioned. 11. Additional copies of the then current Prospectus for each of the Funds and any printed information issued as supplemental to such Prospectus will be supplied by us in reasonable quantities upon request. . 12. The Funds reserve the right in their own discretion, without notice, at any time and from time to time, to sus- pend sales or withdraw the offering of shares entirely. W e reserve the right to amend this Agreement, and to reject in whole or in part any order received by us from you. Kither party hereto may cancel this Agreement at any time. All purchase orders received by us will be subject to receipt of shares by us from the Fund concerned. 13. Each of us hereby represents and agrees that each of us is and will continue to be during the life of this Agree- ment a member of the National Association of Securities Dealers, Inc., or that we are a foreign dealer and we are not eligible for membership in said Association, and in any event we both hereby agree to abide by the Rules of Fair Practice of that Association. 14. All communications to us should be sent to the above address. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below. This Agreement shall be construed in accordance with the laws of Pennsylvania. 56 15. Your first order placed with us for the purchase of shares of any of the Funds will represent your acceptance of this Agreement. WELLINGTON MANAGEMENT COMPANY By William G. Gallagher Senior Vice President—Sales Please return one signed cepy of this agreement to: Wellington Management Company Order Department 1630 Locust Street Philadelphia, Pa. 19103 Accepted: eeeoeveeeeeeeeeeeeeseeeseeeeseseeeeeeeeeeee VY" rFTSeeeeeeeeseeeeseeeeseeeseeseeeeewmeeeeeeseeeees ~we Ceeeeseeseseesseeeeeseeeseeesseeemwesseeeseeeeees Pe ey Se eee SeSeSe eee eSeSeeeeeseeeeoeeeseeeseeeeeeeeeeaeeeeeees (Title Omitted in Printing) ANSWER OF THE DEFENDANT VANCE, SANDERS & COMPANY, INC. 1. The defendant Vance, Sanders & Company, Inc. (‘‘the defendant’’) admits that the action purports to be brought under section 4 of the Act of Congress of July 2, 1890 com- monly known as the Sherman Act, 15 U.S.C. 4 4, to restrain alleged continuing violations of section 1 of said Act, 15 U.S.C. § 1, but denies that the action can be so maintained. 2. The defendant admits that it presently has an office in the District of Columbia and that the defendant Massa- chusetts Investors Growth Stock Fund, Inc. does not trans- act business, and is not found, therein. The defendant is without information sufficient to form a belief as to the truth or falsity of the other allegations of paragraph 2 of the Complaint. 3. Paragraph 3 of the Complaint does not call for any answer. The defendant further says that it does not accept as correct the definitions in paragraph 3 of the Complaint. 4. The defendant is without information sufficient to form a belief as to the truth or falsity of the allegations of para- graph 4 of the Complaint. 5. The defendant admits the allegations of the first sen- tence of paragraph 5 of the Complaint. The defendant admits that it is presently the principal underwriter of the mutual funds listed in paragraph 5 of the Complaint and says that said mutual funds presently have combined net assets in excess of $3.7 billion. Further answering the allegations of paragraph 5 of the Complaint, the defendant says that after June 30, 1973, it will no longer act as princi- pal underwriter for Massachusetts Investors Growth Stock Fund, Inc., Massachusetts Investors Trust, Massachusetts Income Development Fund, Massachusetts Capital Develop- ment Fund and Massachusetts Financial Development Fund and that it does not aecept the characterization of any of the funds listed in paragraph 5 of the Complaint as the ‘*Vance Sanders Funds’”’. 6. The defendant is without information sufficient to form a belief as to the truth or falsity of the allegations of para- graph 6 of the Complaint. 7. The defendant is without information sufficient to form 57 58 a belief as to the truth or falsity of the allegations of para- graph 7 of the Complaint. 8. The defendant admits the allegations of the first and third sentences of paragraph 8 of the Complaint. The defendant is without information sufficient to form a belief as to the truth of falsity of the allegations of the second sentence of paragraph 8 of the Complaint. 9. The defendant admits the allegations of the first sen- tence of paragraph 9 of the Complaint. The defendant admits that shares of the mutual funds for which it acted as principal underwriter as of February 21, 1973 (‘the Vance Sanders underwritten funds’’) are continuously issued and redeemed by said mutual funds, that the shares of the Vance Sanders underwritten funds are presently distributed throngh the defendant which presently has the exclusive contractual right to distribute said shares to deal- ers for resale and that the defendant enters into selling group agreements with broker-dealers which sell shares of the Vance Sanders underwritten funds to investors, the current form of which selling group agreement is attached hereto and incorporated herein marked ‘‘A’’. The defend- ant is otherwise without information sufficient to form a belief as to the truth or falsity of the allegations of the second, third and fourth sentences of paragraph 9 of the Complaint. The defendant denies the allegations of the fifth sentence of paragraph 9 of the Complaint. The sixth sentence of paragraph 9 of the Complaint is a conclusion of law which the defendant is not required to answer. The defendant admits that some mutual fund shares are pur- chased, sold and redeemed in interstate commerce. The defendant is otherwise without information sufficient to form a belief as to the truth or falsity of the allegations of the seventh sentence of paragraph 9 of the Complaint. The defendant is without information sufficient to form a belief as te the truth or falsity of the allegations of the eighth sentence of paragraph 9 of the Complaint. 10. The defendant is without information sufficient to form a belief as to the truth or falsity of the allegations of paragraph 10 of the Complaint. 11. The defendant admits that the public offering prices of the Vance Sanders underwritten funds, as described in the prospectuses thereof, are based on net asset values plus sales charges, the maxima of which are presently 8.5% of 59 the public offering prices for purchases of less than $12,500 (less on larger purchases), and that the Vance Sanders underwritten funds redeem their outstanding shares, upon presentation for redemption, at the then current net, asset values. The defendant is otherwise without information sufficient to form a belief as to the truth or falsity of the allegations of paragraph 11 of the Complaint. 12. The defendant admits that, when a share of a Vance Sanders underwritten fund is sold, the defendant presently retains a portion of the sales charge which is usually 2.0% when the sales charge is 8.5% (less when the sales charge is less). The defendant is otherwise without information suffi- cient to form a belief as to the truth or falsity of the allega- tions of the first sentence of paragraph 12 of the Complaint. The defendant is without information sufficient to form a belief as to the truth or falsity of the allegations of the second and third sentences of paragraph 12 of the Complaint. 13. Answering the allegations of paragraph 13 of the Complaint, the defendant says that section 22(d) of the Investment Company Act is codified as 15 U.S.C. § 80a- 22(d) and is in writing and, read in conjunction with its history and all other relevant and pertinent interpretive material, speaks for itself. And further answering the allegations of paragraph 13 of the Complaint, the defendant says that neither as enacted in 1940, nor as amended in 1970, has section 22(d) of the Investment Company Act ever contained the alleged provision ‘‘engaged in a dealer transaction’’ which the plaintiff now gratuitously inter- polates into the statute. 14. The allegations of paragraph 14 of the Complaint are legal conclusions which the defendant is not required to answer. 15. The defendant denies the allegations of paragraph 15 of the Complaint. 16. The defendant denies the allegaticus of paragraph 16 of the Complaint. 17. Answering the allegations of paragraph 17 of the Complaint, the defendant says that he rules of the NASD have always been on file with the Securities and Exchange Commission and have always been readily available to inter- ested members of the public and are in writing and speak for themselves and that this is not the proper forum or 60 type of proceeding for an attack by the plaintiff on rules promulgated pursuant to authority conferred by the Con- gress of the United States and under the supervision of the Securities and Exchange Commission. Otherwise the de- fendant denies the allegations of paragraph 17 of the Complaint. 18. The defendant denies the allegations of paragraph 18 of the Complaint. 19-30. The defendant is not made a defendant in Count IT or Count [11 of the Complaint and is therefore not called upon to answer the allegations of paragraphs 19 through 30 inclusive of the Complaint. 41. The defendant admits that it is made a defendant in Count IV of the Complaint and further answering the allegations of paragraph 31 of the Complaint restates the averments of paragraph 5 of this Answer with the same force and effect as if herein set forth and repeated in full. 32. The defendant admits that the so-called defendant broker dealers are made defendants in Count IV of the Complaint and further answering the allegations of para- graph 52 of the Complaint restates the averments of para- graph ¢ of this Answer with the same force and effect as if herein set forth and repeated in full. 33. The defendant restates the averments of paragraphs 9 through 14 inclusive of this Answer with the same force and effect as if herem set forth and repeated in full. 34. The defendant denies the allegations of paragraph 34 of the Complaint. 4). The defendant says that the current form of its selling group agreement is attached hereto and _ incor- porated herein marked ‘*A’’ and is in writing and speaks for itself. Except as averred, the defendant denies the allegations of paragraph 35 of the Complaint. 36. The defendant denies the allegations of paragraph 36 of the Complaint. 37. The defendant admits that Massachusetts Investors Growth Stock Fund, Ine. (‘**MIGS"’) is made a defendant in Count V of the Complaint, that MIGS is a corporation organized under the law of the Commonwea!th of Massa- chusetts, that MIGS is an open-end management type investment company commonly known as a mutual fund, that as of February 21, 1973, MIGS had net assets in excess of $1.2 billion and that in the fiscal year ended November 61 30, 1970 approximately $69.9 million of treasury or newly issued MIGS shares were sold to investors. The defendant is without information sufficient to form a belief as to the truth or falsity of the other allegations of paragraph 37 of the Complaint. 38. The defendant admits that it is made a defendant in Count V of the Complaint and further answering the allegations of paragraph 38 of the Complaint restates the averments of paragraph 5 of this Answer with the same force and effect as if herein set forth and repeated in full. 39. The defendant restates the averments of paragraphs 9 through 14 inclusive of this Answer with the same force and effect as if herein set forth and repeated in full. 40. The defendant denies the allegations of paragraph 40 of the Complaint. 41. The defendant admits that, pursuant te its agree- ments with the Vanee Sanders underwritten funds, it pre- sently acts as principal for its own account in the sale of shares of said funds to dealers. Except as expressly ad- mitted, the defendant denies the allegations of paragraph 41 of the Complaint. 42. The defendant denies the allegations of paragraph 42 of the Complaint. 43-59. The defendant is not made a defendant im Count VI, Count VII or Count VIII of the Complaint and is therefore not called upon to answer the allegations of para- graphs 43 through 59 inclusive of the Complaint. Second Defense The Complaint and each of Counts I, IV and V thereof fails to state a claim on which relief can be granted. Third Defense Any acts of the defendant and the other defendants which are the subject matter of the Complaint were authorized by the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a et seq., by the Investment Company Act of 1940, 15 U.S.C, ‘§ 80a-1 et seq., and by the Securities and Exchange Com- mission acting with the powers conferred upon it by said Acts and as so authorized do not constitute a violation of any of the laws of the United States. 62 Fourth Defense The Congress of the United States has delegated exelu- sive authority and administrative supervision over the matters alleged in the Complaint to the Securities and Exchange Commission to the exclusion of the jurisdiction of the courts of the United States including this Court. Wuererore, the defendant prays that the Complaint be dismissed and for its costs. Vance, Sanvers & Company, Ive. By its attorneys, Herbert J. Miller, Jr. Miller, Cassidy, Larroca & Lewin Suite 500 1520 19th Street, N.W. Washington, D.C. 20036 Telephone 293-6400 Or CouNSEL: George C. Caner, Jr. John Silas Hopkins, ITT Ropes & Gray 225 Franklin Street Boston, Massachusetts 02110 Telephone 617-423-6100 March 26, 1973 Exutsit A To Answer or Derenpant Vance, Sanvers & Co, Vance, Sanvers & Company, Inc. 111 Devonshire Street Boston 02109 Boston Fund Boston Common Stock Fund Century Shares Trust Massachusetts Capital Development Fund Massachusetts Financial Development Fund Massachusetts Income Development Fund Massachusetts Investors Growth Stock Fund Massachusetts Investors Trust Vance, Sanders Special Fund Dear Sirs: We are the Principal Underwriter of the shares of Boston Fund, Ine., Boston Common Stock Fund, Inc., Cen- tury Shares Trust, Massachusetts Capital Development Fund, Inc., Massachusetts Financial Development Fund, Ine., Massachusetts Income Development Fund, Inc., Massa- chusetts Investors Growth Stock Fund, Inc., Massachusetts Investors Trust and Vance, Sanders Special Fund, Ine. and, as such, have the exclusive right to distribute shares of these Funds for resale. As principal, we offer to sell to you, as a member of the Selling Group, shares of each of these Funds upon the following terms and conditions: 1. In all sales of these shares to the publie you shall act as dealer for your own account, and in no transaction shall you have any authority to act as agent for the issuer, for us or for any other member of the Selling Group. 2. Orders received from you will be accepted through us only at the public offering price applicable to each order, as established by the then current Prospectus of the Fund for whose shares the order is placed. The procedure relat- ing to the handling of orders shall be subject to instructions which we shall forward from time to time to all members of the Selling Group. All orders are subject to acceptance or rejection by us in our sole discretion. 3. For a schedule of the offering prices of the shares of each of the Funds and of your discount with respect to the sale of shares of each of the Funds see the reverse side hereof. The term ‘‘single transaction’’ shall have the same 63 64 meaning as set forth in the current Prospectus of each Fund. 4. You agree to purchase shares only through us or from your customers other than dealers or brokers. If you purchase shares through us, you agree that all such pur- chases shall be made only to cover orders already received by you from your customers, or for your own bona fide investment. If you purchase shares from your customers, you agree to pay such customers not less than the bid price quoted by us as agent for the issuer at the time of such purchase. 9. You shall sell shares only (a) to customers at the public offering price then in effect. (b) to us or the Fund upon the terms and conditions set forth in the current Prospectus of each Fund. In such a sale, you may act either as principal for your own account or as agent for your customer. If you act as agent for your customer in selling shares, you agree not to charge your customer more than a fair commission for handling the transaction. 6. You shall not withhold placing through us orders re- ceived from your customers so as to profit yourself as a result of such withholding: e.g., by a change in the ‘net asset value’’ from that used in determining the offering price to your customers, 7. We will not accept from you any conditional orders or shares, except ata definite specified price. 8. If anv shares sold to you under the terms of this agreement are repurchased by the issuer or by us as agent for any such Fund or are tendered for redemption, within seven business days after the date of our confirmation of the original purchaser by you, it is agreed that you shall forfeit your right to any discount received by you on such shares. We will notify vou of any such repurchase or redemption within ten business days from the date on which the cer- tificate is delivered to us or to the issuer, and you shall forthwith refund to us the full discount allowed to you, and we agree to pay such refund forthwith to the issuer. 9. Payment for shares ordered from us shall be in New York or Boston clearing house funds received by us within 65 five days after our acceptance of your order. If such pay- ment is not received by us, we reserve the right, without notice, forthwith to cancel the sale, or, at our option, to sell the shares ordered back to the issuer, in which latter case we may hold you responsible for any loss, including loss of profit, suffered by us resulting from your failure to make payment as aforesaid. 10. Shares sold to you hereunder shall be available to you for delivery against payment at the office of our agent, the New England Merchants National Bank, Mutual Funds Clearance Department, Boston, Massachusetts, unless other arrangements are made with us for delivery and payment. 11. No person is authorized to make any representations concerning shares of the issuer except those contained in the current Prospectus and in such printed information subsequently issued by us as information supplemental to such Prospectus. In purchasing shares through us you shall rely solely on the representations contained in the appro- priate Prospectus and supplemental information above mentioned. Qualification of the shares of Boston Fund, Ine., Boston Common Stock Fund, Inc., Century Shares Trust, Massachusetts Capital Development Fund, Ine., Massachu- setts Financial Development Fund, Ine., Massachusetts Income Development Fund, Ine., Massachusetts Investors Growth Stock Fund, Ine., Massachusetts Investors Trust and Vance, Sanders Special Fund, Ine. in the various states, including the filing of any state or further state notices respecting such shares, and any printed information which we furnish you other than the Funds’ Prospectuses and periodic reports are our sole responsibility and not the responsibility of the respective Funds, and you agree that these Funds shall have no liability or responsibility to you in these respects. 12. Additional copies of any current Prospectus and any printed information issued as supplemental to such Pro- spectus will be supplied by us in reasonable quantities upon request, 13. We reserve the right in our discretion, without notice, to suspend sales or withdraw the offering of shares entirely. Each party hereto has the right to caneel this agreement upon notice to the other party. 14. You represent that you are a member of the National 66 Association of Securities Dealers and we both hereby agree to abide by the Rules of Fair Practice of such Association. 15. All communications to us should be sent to the above address. Any notice to you shall be duly given if mailed or telegraphed to you at the address spec ified by you below. This agreement shall be construed in accordance with the laws of Massachusetts. 16. This agreement supersedes and cancels any prior agreement with respect to the sale of shares of any of the «" ementioned Funds. You appoint the transfer agent for each Fund your agent to execute the purchase transactions of shares of each Fund in accordance with the terms and provisions of any account, program, plan or service established or used by your customers and to confirm each purchase to your customers on your behalf, and you guarantee the legal capacity of your customers so purchasing such shares and any co-owners of such shares. NOTE: The term ‘‘net asset value’’ as used in paragraphs ® and 6 and on the schedule ‘‘Offering Prices”’ means ‘‘liquidating value’”’ in the case of Boston Fund and Century Shares Trust. Vance, Sanpvers & Company, Inc. By John D. Wilson President ee ee bond a The undersigned hereby accepts the offer set forth in the above letter. eeeseveeec eee eeeeeeeeeeeeeee see Authorized Representative Address eoeeeeeeeeeeeeeeeesee 6 OFFERING PRICES In single transactions by you of shares of Boston Fund, Boston Common Stock Fund, Century Shares Trust, Massachusetts Capital Development Fund, Massachusetts Financial Development Fund, Massachusetts Income De- velopment Fund, Massachusetts Investors Growth Stock Fund, Massachusetts Investors Trust or Vance, Sanders Special Fund involving: (1) less than $12,500, the public offering price of each of these Funds will be fixed by dividing the ‘‘net asset value’? per share by .915, in each case determined in the manner and as of the time specified in the Prospectus; (2) $12,500 but less than $25,000, the publie offering price of each of these Funds will be fixed by dividing the ‘‘net asset value’? per share by .925; (3) $25,000 but less than $50,000, the public offering price of each of these Funds will be fixed by dividing the ‘net asset value’’ per share by .9425; (4) $50,000 but less than $100,000, the publie offering price of each of these Funds will be fixed by dividing the ‘‘net asset value’’ per share by .96; (5) $100,000 but less than $250,000, the publie offer- ing price of each of these Funds will be fixed by dividing the ‘‘net asset value’’ per share by .9675; (6) $250,000 but less than $500,000, the public offering price of each of these Funds will be fixed by dividing the ‘‘net asset value’’ per share by .975; (7) $500,000 but less than $1,000,000, the ~?—- offering price of each of these Funds will be fixed by dividing the *‘net asset value’’ per share by .9775; and (8) $1,000,000 or more, the public offering price of each of these Funds will be fixed by dividing the ‘‘net asset value’’ per share by .9825. Deater Discounts On the purchase of shares by you to cover a single trans- action involving: (1) less than $12,500, you shall receive a discount from the applicable public offering price of 6.50% with respect to shares of Boston Fund, Boston Common Stock Fund, Century Shares Trust, Massachusetts Capital Development Fund, Massachusetts Financial Development Fund, Massachusetts Income Development Fund, Massa- chusetts Investors Growth Stock Fund, Massachusetts In- vestors Trust and Vance, Sanders Special Fund, except that 67 68 in supplementary purchases of shares of any of these Funds under the invest-by-mail program, you shall receive a discount from the applicable public offering price of 6.00% (except that on Dividend Reinvestments only, dis- counts of less than $5 will not be paid); (2) $12,500 but less than $25,000, you shall receive a discount from the appli- cable public offering price of 6.0007; (8) $25,000 but less than $50,000, you shall receive a discount from the ap- plicable publie offering price of 4.25% ; (4) $50,000 but less than $100,000, you shall receive a discount from the appli- cable public offering price of 3.00° ; (5) $100,000 but less than $250,006, vou shall receive a discount from the ap- plicable publie offering price of 2.50%; (6) $250,000 but less than $500,000, you shall receive a discount from the applicable publie offering price of 2.00% ; (7) $500,000 but less than $1,000,000, you shall receive a discount from the applicable public offering price of 1.75% and (8) $1,000,000 or more, you shall receive a discount from the applicable public offering price of 1.25%. December 29, 1972 AMENDMEN’ To Sev_uinec Group AGREEMENT To Selling Group Members: Effective today, the name of Boston Common Stock Fund is changed to Vance, Sanders Common Stock Fund. Ac- cordingly, we wish to advise you that the present Selling Group Agreement between our firms is amended to reflect this name change in the following paragraphs: (1) The initial paragraph of the Agreement which lists the group of Funds for which we are the underwriter. (2) The third sentence of paragraph 11 of the Agree- ment. (3) The two paragraphs on the reverse side of the Agree- ment headed ‘‘Offering Prices’’ and ‘‘ Dealer Dis- counts.”’ In place of your signing and returning a duplicate copy of this revision of the Selling Group Agreement, we will consider your first order on or after December 29, 1972 as acceptance of this revision. This amendment to the Selling Group Agreement should be attached to your file copy of the Agreement inasmuch as it is part of the Agreement as of the date hereof. Vance, Sanpers & Company, Inc. By John D. Wilson JOHN D. WILSON President (Certificate of Service Omitted in Printing) (Title Omitted in Printing) ANSWER OF DEFENDANT WELLINGTON MANAGEMENT COMPANY, INC. Comes now Wellington Management Company, Ine. named as one of the defendants in the above styled case, and answers and responds to the complaint as follows: First Defense The complaint fails to state a claim against the defendant upon which relief can be granted. Second Defense The alleged unlawful activities of this defendant were required by the Investment Company Act of 1940, 15 U.S.C. § 80a-1, ef seq., the Securities Exchange Act of 1934, 15 U.S.C. § 78a, ef seq., and rules and regulations adopted pursuant to such Acts, and are exempt from the prohibi- tions of the antitrust laws. Third Defense The Court lacks jurisdiction over the subjeet matter of the complaint and the person of the defendant. Fourth Defense 1. With respect to the section of the complaint entitled ‘* Jurisdiction and Venue’ this defendant admits that the complaint purports to seek relief under § 4 of the Sherman Act (15 U.S.C. © 4), admits that Wellington Fund, Ine. is not found and does not transact business in the District of Columbia, and is without knowledge or information suffi- cient to form a belief as to whether the other defendants are found or transact business in the District of Columbia. ) With respect to the section of the complaint entitled **Definitions,’’ this defendant admits the definitions con- 70 71 tained in paragraph 3(a)-(e) and denies the statement of the definitions contained in paragraphs 3(f)-(h). 2 This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 4 and 5 of the complaint. 4. This defendant admits the allegations contained in para- graph 6 of the complaint. D. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 7 and 8 of the complaint. 6. This defendant admits that it acts as principal under- writer for the seven open-end management investment companies listed in paragraph 6 of the complaint (which investment companies are registered with the Securities and Exehange Commission under the Investment Company Act of 1940) pursuant to an underwriting agreement, a specimen copy of which is attached hereto as Exhibit A, and which is filed with the Securities and Exchange Com- mission as required by the Investment Company Act of 1940 and regulations issued thereunder. This defendant also admits that it has existing sales agreements with each of the defendants named in paragraph 7 of the complaint relating to the sale of shares of each of the registered open-end management investment companies for which it acts as principal underwriter, a specimen copy of which is attached hereto as Exhibit B, and specimens of which are on file with the Securities and Exchange Commission as required by the Investment Company Act of 1940 and regulations issued thereunder. The underwriting agree- ment referred to above is the only agreement relating to the sale of such shares between this defendant and the registered open-end companies referred to in paragraph 6 of the complaint. The sales agreement referred to above is 72 the only agreement referring to the sales of the shares of such registered companies between this defendant and the broker-dealers named in paragraph 7 of the complaint. This defendant also admits that the registered open-end management investment companies for which it acts as principal underwriter must redeem their shares in accord- ance with the provisions of the Investment Company Act of 1940. Other than as stated above, this defendant denies, or is without information sufficient to form a belief as to the truth of the allegations contained in paragraph 9. i. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations cor ‘uined in paragraph 10 of the complaint. Ss. With respect to the allegations of paragraphs 11 and 12 of the complaint, this defendant admits that shares of the registered open-end management investment companies for which it acts as principal underwriter are normally sold at an offering price described in the prospectus as required by § 22(d) of the Investment Act of 1940, and set forth im the sales agreement attached hereto as Exhibit B. Except as stated above this defendant either denies or is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraphs 11 and 12 of the comp!aint. + With respect to paragraphs 13 and 14 of the complaint, this defendant avers that the allegations contained therein constitute conclusions of law incapable of being either admitted or denied. To the extent such allegations may be deemed to be allegations of material fact they are denied. 10. This defendant denies the allegations contained in para- graphs 15, 16, 17 and 18 of the complaint. 73 11. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 19, 20, 22, 23 and 24. This defend- ant reasserts its response in paragraphs 6 through 9 of this Fourth Defense to the allegations contained in paragraph 21 of the complaint. 12. This defendant is without knowledge or informatien suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 25, 26, 28, 29 and 30. This defend- ant reasserts its response in paragraphs 6 through 9 of this Fourth Defense to the allegations contained in paragraph 27 of the complaint. 13. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 31, 32, 34, 35 and 36. This defend- ant reasserts its response in paragraphs 6 through 9 of this Fourth Defense to the allegations contained in paragraph 33 of the complaint. 14. This defendant is without knowledge or information suffi- cient to form a belief as to the truth of the allegations contained in paragraphs 37, 38, 40, 41 and 42. This defend- ant reasserts its response in paragraphs 6 through 9 of this Fourth Defense to the allegations contained in paragraph 39 of the complaint. 15. With respect to the allegations contained in paragraphs 43 through 48 of the complaint this defendant reasserts its response contained in paragraphs 6 through 9 of this Fourth Defense. Except as stated above, this defendant denies the allegations contained in paragraphs 43 through 48. 16. This defendant admits the allegations of paragraph 49. 17. With respect to the allegations contained in paragraphs 50 through 54 of the complaint, this defendant reasserts its response contained in paragraphs 6 through 9 of this Fourth Defense. Except as stated above this defendant denies the allegations contained in paragraphs 50 through 54 of the complaint. 18. With respect to the allegations contained in paragraphs 29, 57 through 59 of the complaint, defendant admits that it has in effect sales agreements with the broker-dealers named in paragraph 7 of the complaint, a specimen copy of which is attached as Exhibit B. This defendant reasserts its response contained in paragraphs 6 through 9 of this Fourth Defense in response to the allegations of paragraph 06 of the complaint. Except as stated above, this defendant denies the allegations contained in paragraphs 55 through oy. Wuererore, this defendant files its answer to the plain- tiff’s complaint and prays that the complaint be dismissed. By Robert E. Jensen Ropert Kk. Jensen By W.L. Dickey Wituiam L. Dickey Wittiams & JENSEN Attorneys for Defendant Wellington Management Company, ine. Suite 620, 1130 17th Street, N.W. Washington, D.C. 20036 Tel. (202) 223-6150 Or CouUNSEL: Richard M. Phillips Hill, Christopher & Phillips 2000 L, Street, N.W. Washington, D.C. 20036 Tel. (202) 833-3990 (Certificate of Service Omitted in Printing) EXHIBIT A UNDERWRITING AGREEMENT Tuts AcreeMent, by and between Wetiincton Fwunp, Inc. a corporation organized and existing under the laws of the State of Maryland (hereinafter called ‘‘Funp’’) and WeLuincton ManaGement Company, a corporation orga- nized and existing under the laws of the State of Delaware (hereinafter called ‘*Company’’): WITNESSETH: Whereas, Funp is an open-end investment company registered under the Investment Company Act of 1940, the shares of which are registered under the Securities Act of 1933, and is desirous of issuing to the general public all of its now or hereafter authorized, but unissued, shares of capital stock and/or shares of capital stock now or later held in its Treasury ; and W Heneas, Company is interested in promoting the growth of Funp and will be equipped financially and with qualified personnel and extensive facilities to encourage the sale of shares of Funp by investment dealers and to create and provide the sales literature, advertising and other sales promotional aids necessary to accomplish such growth. Now, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto hereby covenant and agree to and with each other as follows: 1. (a) Company agrees to act as the principal under- writer and exclusive national distributor for the shares of Funp and will, upon receipt of unconditional orders from investment dealers or investors (and not before), transmit such bids or orders as agent for Funp for acceptance and confirmation by Funp to its principal office as Funp may from time to time direct. The price at which shares of Funp are offered to the public through Company shall be com- puted and shall be effective as set forth in the Prospectus of Funp current as of the time of such sale. (b) Funp reserves the right to reject any order, pro- vided, however, that Funp does hereby covenant and agree that it will not arbitrarily or without reasonable cause refuse acceptance or confirmation of orders obtained and 75 76 submitted under this Agreement for the purchase of shares of stock of Funp and, upon receipt thereof, will in all proper ‘ases confirm orders directly through the Company as agent for Funp or authorize the Company, as agent for Funp, to deliver proper confirmations and, if requested, will deliver certificates for shares so purchased to CoMPANY as soon as practicable after receipt of payment therefore in cash. (c) Company agrees that it will not directly or indi- rectly withhold orders for the purchase of stock of Funp or purchase stock of Funp in anticipation of orders, and does further agree that in all contracts or arrangements with dealers or distributors acting under or through it, it will require a similar contractual undertaking. Company further agrees that it will arrange for the purchase of shares of Funp only from Funp, except when acting as agent for Funp on repurchase of shares under Paragraph 2 hereof. 2. Sales of Funp’s shares under this Agreement shall be handled by Company as agent for Fuxp. With Funp’s consent, COMPANY may also act as agent for Funp without commission on repurchase of shares of Funp. Except for such sales and repurchase of shares of Funp, Company shall act as principal in all other matters relating to promotion of the growth of Funp and shall enter into all of its engage- ments, agreements and contracts as principal on its own account. Furthermore, this Agreement shall not be con- strued as authorizing any dealer or other person to act as agent, either of Funp or of Company. 3. Fuxp covenants and agrees that it will, at its own expense : (a) use its best efforts to keep authorized, but un- issued, sufficient of its capital stock to meet the reasonable requirements of COMPANY; (b) execute or cause to be executed all documents requiring signatures of Funp necessary to permit CoMPANY to comply with the provisions of Paragraph 4 hereof ; (c) supply Company with the ‘‘net asset value per share’? computed as at the time(s) prescribed by and in compliance with all pertinent requirements of the National Association of Securities Dealers and the Securities and Exchange Commission, so as to permit Company to comply with the provisions of Paragraph 4 hereof. 77 4. Company covenants and agrees that it will, at its own expense: (a) prepare, file and keep effective registration state- ments, prospectuses and licenses covering so many shares of stock of Funp as may be necessary to meet Company’s reasonable requirements for distribution and sale of such shares in all jurisdictions where shares of Funp may law- fully be sold; (b) prepare as often as, and at the specific times, re- quired by appropriate authority on each business day for publication in newspapers or other financial publications both the offering price to the public and the liquidation price of Funp shares; (c) prepare, print and distribute (subject to the pro- visions of Paragraph 5 hereof) all advertising and sales literature relating to Funp. 5. (a) Company does hereby covenant and agree that it will not issue any statements other than Funp’s properly approved Prospectus, except such supplemental literature or advertising (prepared at the expense of Company) as shall be lawful under state and federal securities laws and regulations and under applicable laws and regulations of foreign jurisdictions. Company agrees to file with the Securities and Exchange Commission, the National Asso- ciation of Securities Dealers, Inc. and such other regulatory authorities as may be required, copies of any advertise- ment, pamphlet, circular, form letter, or other sales litera- ture relating to Funp or its shares, addressed to or intended for distribution to prospective investors, within the time required by such regulatory authorities, to furnish Funp at its principal office with a copy of all such material prior to its use and not to use such material if the Funp shall reasonably and promptiy object to such use. (b) Company shall conform to all applicable By-Laws, charter provisions, and regulations to which Funp is sub- ject and to applicable laws and regulations of the United States and of the individual states within which Company or Funp may do business, or where shares of Funp are offered for sale, and will conduct its affairs both with rela- tion to Funp and with relation to dealers, or investors, in accordance with the rules of fair practice of the National Association of Securities Dealers, Inc. Company shall also comply with applicable laws and regulations of foreign 78 jurisdictions in which shares of Funp or securities of an investment company using shares of Funp as its sole under- lying investment are offered. (c) Company agrees to indemnify and hold harmless Funp and each person who has been, is, or may hereafter be an officer or director of Funp against expenses reason- ably incurred by any of them in connection with any claim or in connection with any action, suit or proceeding to which any of them may be a party, which arises out of, or is alleged to arise out of any wrongful act of Compayy or its employees or any misrepresentation in the registration statement of Funp filed under the Securities Act of 193: of a material fact, or out of any alleged omission to state therein a material fact necessary to make the statements made therein not misleading, insofar as any such statement or omission was made in reliance upon, and in conformity with, information furnished to Funp in connection there- with by, or in behalf of Company, provided, however, that (1) in no case is the indemnity of Company in favor of Funp or any person indemnified to be deemed to protect Funp or any such person against any liability to which Funp or any such person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence, in the per- formance of its duties or by reason of its reckless disregard of its obligation and duties under this agreement, and (ii) in no case is Company to be liable under its indemnity agree- ment contained in this paragraph with respect to any claim made against Funp or any person indemnified, unless F'unv or such person, as the case may be, shall have noti- fed Compayy in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon Funp or upon such person (or after Funp or such person shall have received notice of such service on any designated agent). In the case of any such notice to Company, Com- PANY shall be entitled to participation, at its own expense, in the defeise of any suit brought to enforce any such liability. Company agrees promptly to notify Funp of the commencement of any litigation or proceedings against it in connection with the issue and sale of any of the shares, The term ‘‘expenses’’ includes amounts paid in satisfaction of judgments or in settlement. The foregoing right of indemnification shall be in addition to any other rights to 79 which Funp or any such officer or director may be entitled as a matter of law. Funp covenants and agrees that it will not, during the term of this Agreement offer any of its shares for sale directly or through any person or corporation other than CoMPANY, excepting only (a) the issuance of rights to stockholders to subscribe to shares to the extent of all or part of any dividend that may be distributed to stockholders of Funp or to the extent of any shares that may he taken up under an optional or alternative dividend, or the issu- ance of additional shares through stock splits or stock dividends, and (b) sales of shares to another investment or securities holding company in the process of converting all or a portion of its assets into shares of Funp or in connection with an issuance of Funp’s shares in exchange for shares of another investment or securities holding company, to the extent permitted by the Investment Com- pany Act of 1940, as from time to time amended. Provided, however, that in the event Company should be unable to continue to distribute shares of Funp and such restriction shall not apply to the sale of shares of Funp by any other person, Funp may at its option make arrangements for the offer and sale of its shares within the jurisdiction or jurisdictions in which distribution and sale thereof by (Company has been prevented, provided, further however, that if Company shall have removed all material obstacles to resuming the offer and sale within said jurisdictions within ninety days from its first restraint or inability, then the right of Funp to distribute through instrumentalities other than Company shall be extinguished, subject only to the provisions of Paragraph 8 hereof. Funxp further agrees that Company may act as principal underwriter and ex- clusive national distributor for the shares of other invest- ment companies registered under Investment Company Act of 1940. Funp and Company further agree that the shares of the Funp may be sold through Company as agent for the F'unp to any investment company which uses the shares of the Funp as its sole underlying investment, provided that such other investment company is sponsored by the Com- PANY (or, if a United States investment company, spon- sored by a distributor approved by the Company), or by a wholly-owned subsidiary of the «‘ompany and, provided further, that if such investment company is organized under 80 the laws of the United States or is designed to permit its securities to be sold to United States citizens or residents, it shall additionally register under the Investment Com- pany Act of 1940, as from time to time amended. 7. It is hereby mutually agreed that Company in full satisfaction of all services herein agreed to be performed by it shall receive a commission not to exceed 8'4% of the offering price of all shares of Funp sold by it after the effective date hereof ; provided, however, that the commis- sion payable on separate volume and other special trans- actions shall be as from time to time set forth in the Pro- spectus of Funp then in effect, provided further that, if the Prospectus of the Funp so specifies, Company shall receive no commission on sales of shares of Funp at net asset value to those persons described and on the terms provided in Rule 22d-1(h) promulgated under the Investment Company Act of 1940, as amended. The commissions aforesaid shall become due and owing immediately upon settlement for any sale made through Company and Company shall deduct such commissions from any remittance to Funp, provided, however, that if change is required in the aforesaid com- missions, either by duly constituted regulatory authorities, or for business reasons, the amount payable to Funp from the sale of shares shall always equal the then current net asset value per share. Company agrees that, if shares are repurchased by Funv or by Company as agent for Funp, or are tendered to Funp for redemption within seven days after confirmation by Company, as agent, of the original purchase order to any broker or dealer originating such transaction, Company will immediately remit to Funp the commission (net of allowances of dealers or brokers) on such sale paid to Company and will promptly, upon receipt thereof, pay to Funp any refunds of the balance of sales commissions repaid to Company by brokers or dealers. Notwithstanding the foregoing, all sales of shares of Funp to any investment company in accordance with the provi- sious of Paragraph 6 of this Agreement as amended shall be made through Company at net asset value, and no com- missions shall be charged to, or paid by, such investment company with respect to such shares. 8. This Agreement shall become effective on April 1, 1973, and shall continue in force until March 31, 1975, and thereafter, only so long as such continuance is approved at 81 least annually thereafter by a vote of the Fund’s Board of Directors, including the voies of a majority of the directors who are not parties to such Contract or interested persons of any such party, cast in person at a meeting called for the purpose of voting such approval. 9. Subject to the provisions of the immediately preceding paragraph, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respec- tive successors, provided, however, that this Agreement shall terminate automatically upon assignment by Company as provided for and defined in the Investment Company Act of 1940 as amended, unless under the exemptive provi- sions of Section 6(c) of such Act, the Securities and Ex- change Commission shall determine that a conditional or unconditional order of exemption is necessary or appro- priate in the public interest and consistent with the protec- tion of investors and the purpose fairly intended by the policy and practice of such Act; in which event this Agree- ment shall continue in full force and effect. 10. In the event that this Agreement, or any part thereof, shall become unlawful under any future law of the United States, or any state, territory, possession or district thereof, or any regulations of the United States, any state, territory, possession and district thereof, or any department, board or commission or other governmental authority having jurisdiction over its performance, such unlawful portion of the Agreement shall be considered as though it were deleted by mutual consent; but the remaining provisions of the Agreement shall not cease and terminate and the parties hereto shall confer and attempt to agree to such change or modification in the said Agreement as will cause it to con- form to said law or regulation and will maintain the general purpose and provisions of this Agreement in a manner equitable to each of the parties hereto. If, in such event, the parties hereto are unable to agree with respect to the said modification, each shall promptly appoint one arbitra- tor and the two arbitrators so appointed shall appoint a third arbitrator, who shall consider all the facts and cir- cumstances relating to this Agreement and to the necessary modification thereof to comply with such future law or regulation, and if, in the opinion of said arbitrators, or a majority of them, a modification of the said Agreement may be made which will comply with the said new law or regula- 82 tion and will maintain the general purposes of this Agree- ment and be fair and equitable to both of the parties hereto, they shall direct in what particulars this Agreement shall be modified and amended, and upon the receipt by each of the parties hereto of the written report of the arbitrators, the Agreement shall thereupon be deemed to be altered and amended as provided in the said report and as so altered and amended shall continue to be effective and binding on both of the parties hereto. The provisions of this Para- graph 10 shall be administered in aecordance with provi- sions of the Act of Assembly of the Commonwealth of Pennsylvania, enacted April 25, 1927, P.L., 381 Number 248, as amended. Provided, however, that neither Kinp, nor Company, shall be bound to accept the directions of the arbitrators if the modification or amendment of the Agree- ment stated in the Arbitrators’ written report would, in the opinion of counsel for Fuxp, require approval under the provisions of Section 15(c) of the Investment Company Act of 1940, as amended, and provided further that Funp reserves the right in the event of any award or decision by the arbitrators to call a special meeting of the stockholders of the Funp and to submit to the vote of the stockholders the question of whether the recommendations of the arbitra- tors shall or shall not be adopted by and binding upon the Funp, in which case the decision of the stockholders shall be final and binding upon Funp and Company. 11. It is the intention of the parties hereto that this Agreement shall be governed and construed according to the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers and to have hereunto affixed their respective corporate seals this First day of April, 1973. Attest: WELLINGTON Funp, Ine, By: Secretary . President Attest: WELLINGTON MANAGEMENT COMPANY By: Secretary President EXHIBIT B WELLINGTON MANAGEMENT COMPANY 1630 LocUST STREET * PHILADELPHIA, PA. 191038 Sales Agreement with respect to WeLuINGTon Funp Winpsor Funp Ivest Funpn W. L. 7 ‘ , * Morcan Growtu Funp Wetuestey Income FunpD ;\ > a Exptorer Funp Trustees’ Eeuity Funp Gentlemen: As National Distributor for the shares of Wellington Fund, Windsor Fund, Ivest Fund, Explorer Fund, W. L. Morgan Growth Fund, Trustees’ Equity Fund, Wellesley Income Fund, and any other mutual fund for which we may hereafter act as Distributor (the ‘‘Funds’’), we invite you to become a member of the Selling Group to distribute the shares of said Funds upon the following terms: Ordering of Shares 1. Orders received from you will be accepted by us for the Funds only at the public offering price applicable to each order, as established in accordance with the provisions of the then current Prospectus of each of the Funds. The procedure stated herein relating to the pricing and handling of orders shall be subject tu instructions which we will for- ward from time to time to all members of the Selling Group. All orders are subject to acceptance or rejection by the Funds in their sole discretion. 2. You agree to purchase shares only from the Funds through us or from your customers. If you purchase shares from the Funds you agree that all such purchases shall be made only to cover orders already received by you from your customers (who may be any persons other than a securities dealer or broker’, or for your own investment. If you purchase shares from. your customers, you agree to pay such customers not less than the bid prices quoted by us as agent at the time of such purchase. As distributor, 83 84 we will not accept a conditional offer for shares of the Funds. 5. You agree to sell shares enly (a) as principal, for your own account, to customers at the public offering price then in effect; (b) to the Funds through Wellington Management Company, as agent for the Funds at the net asset value next determined after our receipt of the request for re- purchase of the shares subject to such procedural stand- ards as may from time to time be established or approved by the appropriate regulatory agencies. In such a sale to the Funds you may act either as principal for your own account or as agent for your customer. If you act as principal for your own account, you agree to pay your customer (unless the shares are in your investment ac- count) not less than the price so determined. Jf you act as agent for your customer in selling shares to the Funds you may charge a fair commission for handling the trans- action. All transactions in shares of Funds between vou and us are between us as agent for the Funds concerned and you, either as principal for vour own account or as agent for an undisclosed principal. Dealer Discount and Sales Charge 4. The shares of the Funds will be offered to the public at a public offering price which will include a sales charge in varying amounts depending on the size of the purchase or other circumstances as deseribed in the then current Prospectus of each of the Funds. On such sales you will receive a discount as shown in the following table (with the sales charge and discount stated as a percentage of the applicable offering price). Gross Sales Dealer Amount of Sale Charge Discount Less than $10,000 *............. 8.905% % 7.000 . $10,000 but under $25,000....... 7.79 6.25 $25,000 but under $50,000... .... 6.00 4.50 $50,000 but under $100,000... .. 4.50 3.50 > . . . . . The minimum initial purchase for Explorer Fund is $5,000. Gross Sales Dealer Amount of Sale Charge Discount $100,000 but under $250,000, .... 3.25 2.50 $250,000 but under $500,000... .. 2.50 2.00 $500,000 but under $1,000,000. . . . 2.00 1 50 $1,000,000 but under $5,000,000. . 1.50 1.125 $5,000,000 and over ............ 1.00 0.75 5. The Funds may change the amount of the gros» sales charge or the dealer discount or both at any time upon written notice to you. 6. You shall not withhold placing with us orders received from your customers so as to profit yourself as a result of such withholding, nor shall we accept from you any order for shares on any basis other than in accordance with the rules for such orders as may, from time to time, be estab- lished by the appropriate regulatory agencies. 7. If any shares sold to you under the terms of this agree- ment are repurchased by the Funds or by Wellington Man- agement Company for the account of the Funds, or are tendered for repurchase or redemption within seven busi- ness days after the date of the confirmation of the original purchase by you, it is agreed that you shall forfeit your right to any discount received by you on such shares. We shall notify you of any such repurchase or redemp- tion within ten business days from the date on which the certificate is delivered to Wellington Management Com- pany, or to the Funds and you shall forthwith refund to us the full discount allowed to you on such sale. We agree, in the event of any such repurchase or redemption, to refund to the Funds our share of the sales charge and upon receipt from you of the refund of the discount allowed to you, to pay such refund forthwith to the Funds. 8. Notwithstanding any of the foregoing provisions, orders to purchase shares received by us in connection with any exchange privilege made available to the shareholders of the respective Funds will be at the public offering price less all sales charges as applicable to each order and estab- lished by the then effective Prospectus of the Fund con- cerned. Orders to redeem shares under such exchange privilege shall not be subject to commission charge by either you or us. 86 Payment and Delivery 9. Orders and confirmation should be sent directly to Wellington Management Company, 1630 Locust Street, Philadelphia, Pa. 19103. Payment for shares shall be made payable to the order of Wellington Management Company and sent to the Funds’ Transfer Agent, Data-Sys-Tance, Inec., P. O. Box 1400, Kansas City, Mo. 64141. The Funds reserve the right to delay issuance or transfer: until the check is cleared. Payment shall be received by us within five days after acceptance by us for the Funds of your order. If such payment is not so received we reserve the right, without notice, forthwith to cancel the sale, and we may hold you responsible for any loss, including loss of profit, suffered by us or by the Funds resulting from your failure to make such payment. 10. No person is authorized to make any representations concerning shares of the Funds except those contained in the then current Prospectus of each of the Funds and in printed information subsequently issued by each of the Funds as information supplemental to such Prospectus. In all sales of these shares to the publie you shall act as dealer for your own account, and in no transaction shall you have any authority to act as agent for the Funds for us or for any other member of the Selling Group. In purchasing shares from us you shall rely solely on the representations contained in the Prospectus of each of the Funds concerned and supplemental information above mentioned. 11. Additional copies of the then current Prospectus for each of the Funds and any printed information issued as supplemental to such Prospectus will be supplied by us in reasonable quantities upon request. 12. The Funds reserve the right in their own discretion, without notice, at any time and from time to time, to sus- pend sales or withdraw the offering of shares entirely. We reserve the right to amend this Agreement, and to reject in whole or in part any order received by us from you. Kither party hereto may cancel this Agreement at any time. All purchase orders received by us will be subject to receipt of shares by us from the Fund concerned. 13. Each of us hereby represents and agrees that each of us is and will continue to be during the life of this Agree- ment a member of the National Association of Securities Dealers, Inc., or that we are a foreign dealer and we are 87 not eligible for membership in said Association, and in any event we both hereby agree to abide by the Rules of Fair Practice of that Association. 14. All communications to us should be sent to the above address. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below. This Agreement shall be construed in accordance wit [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_0100%3A02. Public record. Not legal advice.