DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of August, 1993 between THE GROWTH FUND OF
WASHINGTON, INC. a Maryland corporation (the "Fund"), and Vista Broker-Dealer
Services, Inc., a Delaware corporation (the "Distributor").
WHEREAS, the Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end diversified management investment
company and its shares of common stock ("Shares") are registered pursuant to a
registration statement filed under the 1940 Act and the Securities Act of 1933
("1933 Act") (such registration statement as it may be amended from time to
time hereinafter referred to as the "Registration Statement");
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934 (the "1934 Act"); and
WHEREAS, the Fund desires to engage the services of the Distributor to act as
distributor of the Fund's Shares;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the Fund and the Distributor hereby agree upon the following terms
and conditions:
1. The Distributor shall be the exclusive distributor (except as provided in
paragraph 6 hereof) and principal underwriter of the Fund's Shares with the
functions hereinafter stated, and agrees to use its best efforts to bring about
and maintain a broad distribution of the Fund's Shares among bona fide
investors.
2. The Fund will periodically take actions necessary to register under the
1933 Act such Shares as the Distributor may reasonably be expected to sell on
behalf of the Fund. The Fund will cooperate in taking such action as may be
necessary from time to time to qualify Shares so registered for sale by the
Distributor or the Fund in any jurisdictions mutually agreeable to the
Distributor and the Fund, and to maintain such qualifications. This Agreement
relates to the issue and sale of Shares that are duly authorized and registered
and available for sale by the Fund, including redeemed or repurchased Shares if
and to the extent that they may be legally sold and if, but only if, the Fund
sees fit to sell them.
3. The Distributor shall solicit responsible dealers for orders to purchase
as principal Shares of the Fund and may sign selling contracts with any such
dealers, the forms of such contracts to be as mutually agreed upon between the
Fund and the Distributor. The Distributor may sell Shares of the Fund to
individual investors. While this Agreement is in force, the Fund shall not
solicit sales or sell its Shares to any person other than the Distributor,
except as provided in paragraph 6, below.
4. All orders for Shares shall be subject to acceptance and confirmation by
the Fund. All of the Shares of the Fund sold under this Agreement shall be
sold only at the offering price in effect at the time of such sale (as
described in and determined in accordance with the then current prospectus of
the Fund ("Prospectus"), including any applicable reductions or eliminations of
sales charges described therein) and the Fund shall receive not less than the
full net asset value thereof, calculated as provided in the Prospectus. The
difference between offering price and net asset value shall be retained by the
Distributor, it being understood that such amounts will not be in excess of
those set forth in the Prospectus. The Distributor shall issue shares at net
asset value to individuals, groups and organizations as permitted by the Fund's
current Prospectus.
5. The Distributor may re-allow to dealers all or any part of the discount it
is allowed, in accordance with the Prospectus.
6. Any right granted to the Distributor to accept orders for Shares or to
make sales on behalf of the Fund or to purchase Shares for resale will not
apply to Shares issued in connection with the merger or consolidation of any
other investment company with the Fund or the Fund's acquisition, by purchase
or otherwise, of all or substantially all of the assets of any investment
company or substantially all the outstanding shares of any such company, and,
unless the Distributor is otherwise notified by the Fund, such right shall not
apply to Shares that may be offered by the Fund to shareholders by virtue of
their being holders of Shares of the Fund, including Shares to be purchased
through reinvestment of income dividends and capital gains distributions.
7. The Distributor will conduct its business in accordance with the
applicable requirements of the Articles of Incorporation and the By-Laws of the
Fund as from time to time amended, and in accordance with all applicable United
States statutes, rules and regulations, and the rules and regulations of the
National Association of Securities Dealers, Inc. and of the various
jurisdictions in which Shares are offered for sale.
8. The Fund is not authorized to give any information or to make any
representations on behalf of the Distributor other than the information and
representations contained in the Registration Statement or Prospectus, or
reports prepared for distribution to shareholders of the Fund. The Distributor
is not authorized to give any information or to make any representations on
behalf of the Fund in connection with the sale of Shares other than the
information and representations contained in the Registration Statement or
Prospectus, or reports prepared for distribution to shareholder of the Fund.
9. All sales literature and advertising developed by the Distributor in
connection with the Fund is subject to the approval of the Fund.
10. The Distributor shall be deemed an independent contractor and neither the
Distributor nor any of its officers or employees is or shall be deemed an
employee of the Fund in the performance of its duties hereunder.
11. The Fund shall furnish the Distributor from time to time, for use in
connection with the sale of Shares, such financial statements and written
information with respect to the Fund as the Distributor may reasonably request.
In each case such written information shall be signed by an authorized officer
of the Fund. The Fund represents and warrants that such information, when
signed by one of its officers, shall be true and correct. The Fund also shall
furnish to the Distributor copies of its reports to its stockholders and such
additional information regarding the Fund's financial condition as the
Distributor may reasonably request from time to time.
12. The Fund represents and warrants to the Distributor that the Registration
Statement and the Prospectus have been prepared in conformity with the 1933
Act, the 1940 Act and the rules and regulations of the Securities and Exchange
Commission (the "SEC") thereunder. The Fund represents and warrants to the
Distributor that the Registration Statement and the Prospectus contain all
statements required to be stated therein in accordance with the 1933 Act, the
1940 Act and the rules and regulations thereunder, that all statements of fact
contained therein are true and correct and that neither the Registration
Statement nor the Prospectus include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of Shares; provided,
however, that the Fund makes no representations or warranties as to the
information contained in the Registration Statement or the Prospectus in
reliance upon and in conformity with information furnished in writing to the
Fund by or on behalf of the Distributor specifically for use in connection with
the preparation of the Registration Statement or Prospectus. On its own
initiative or upon request from the Distributor the Fund shall from time to
time file such amendment or amendments to the Registration Statement and the
Prospectus as, in the light of future developments, shall, in the opinion of
counsel for the Fund or the Distributor, be necessary in order to have the
Registration Statement and the Prospectus at all times contain all material
facts required to be stated therein or necessary to make the statements therein
not misleading to a purchaser of Shares. If the Fund shall not file such
amendment or amendments within 15 days after receipt by the Fund of a written
request from the Distributor to do so, the Distributor may, at its option,
terminate this contract immediately. The Fund represents and warrants to the
Distributor that any amendment to the Registration Statement or the Prospectus
filed hereafter by the Fund will, when it becomes effective under the 1933 Act,
contain all statements required to be stated therein in accordance with the
1933 Act, the 1940 Act and the rules and regulations thereunder, that all
statements of fact contained therein will, when the same shall become
effective, be true and correct, and that no such amendment, when it becomes
effective, will include an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of Shares; provided, however,
that the Fund makes no representations or warranties as to the information
contained in any such amendment in reliance upon and in conformity with
information furnished in writing to the Fund by or on behalf of the Distributor
specifically for use in connection with the preparation of such amendment.
13. The Fund shall prepare and furnish to the Distributor from time to time,
at the Distributor's expense, such number of copies of the most recent form of
the Prospectus filed with the SEC as the Distributor may reasonably request.
The Fund authorizes the Distributor to use the Prospectus, in the form
furnished to the Distributor from time to time, in connection with the sale of
Shares. The Fund shall indemnify, defend and hold harmless the Distributor,
its officers and directors and any person who controls the Distributor within
the meaning of the 1933 Act, from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demands, or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, any of its officers and directors or any such
controlling person may incur under the 1933 Act, the 1940 Act, the common law
or otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or
arising out of or based upon any alleged omission to state a material fact
required to be stated in either or necessary to make the statements in either
not misleading. This Agreement shall not be construed to protect the
Distributor against any liability to the Fund or its shareholders to which the
Distributor would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement. If any
such action is brought against the Distributor or any of its officers,
directors or controlling persons, such person shall notify the Fund, which
notification shall be given by letter or by telegram addressed to the Fund at
its principal office in Washington, D.C., and sent to the Fund by the person
against whom such action is brought within 10 days after the summons or other
first legal process shall have been served. Failure to so notify the Fund will
not prevent indemnification hereunder. The indemnity agreement contained in
this paragraph shall not relieve the Fund from any liability which it may have
to the person against whom such action is brought by reason of any such alleged
untrue statement or omission otherwise than on account of such indemnity
agreement. The Fund shall be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but, in any such case,
the defense shall be conducted by counsel chosen by the Fund and approved by
the Distributor, such approval not to be unreasonably withheld by the
Distributor. If the Fund elects to assume the defense of any such suit and
retain counsel approved by the Distributor, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them, but in the case the Fund does not elect to assume the defense of any
such suit, or in case the Distributor does not approve of counsel chosen by the
Fund, the Fund will reimburse the Distributor, any of its officers and
directors or controlling persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by the Distributor or any of
such persons. In addition, the Distributor shall have the right to employ
counsel to represent it, or any of its officers, directors or any such
controlling person who may be subject to liability arising out of any claim in
respect of which the indemnity may be sought by the Distributor against the
Fund hereunder if in the reasonable judgement of the Distributor or any of such
officers, directors or controlling persons it is advisable for the Distributor
or such officer, director or controlling person to be represented by separate
counsel, in which event the fees and expenses of such separate counsel shall be
borne by the Fund. This indemnity agreement and the Fund's representations and
warranties in this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Distributor
or any of its officers and directors or any such controlling person. This
indemnity agreement shall inure exclusively to the benefit of the Distributor
and its successors, the Distributor's officers and directors and their
respective successors and estates and any such controlling persons and their
successors and estates. The Fund shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any Shares.
14. The Distributor agrees to indemnify, defend and hold harmless the Fund,
its officers and directors and any person who controls the Fund within the
meaning of the 1933 Act, from and against any and all such claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demand or liabilities and any counsel fees incurred in connection
therewith) which the Fund, any of its officers or directors or any such
controlling person, may incur under the 1933 Act, the 1940 Act, the common law
or otherwise, but only to the extent that such liability or expense incurred by
the Fund, or any of its officers or directors or controlling persons resulting
from such claims or demands shall arise out of or be based upon any alleged
untrue statement of a material fact contained in information furnished in
writing by the Distributor to the Fund specifically for use in the Registration
Statement or the Prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information required
to be stated or necessary to make such information not misleading. If any such
action is brought against the Fund or any of its officers, directors or
controlling persons, such person shall notify the Distributor, which
notification shall be given by letter or telegram addressed to the Distributor
at its principal office in New York City, N.Y., and sent to the Distributor by
the person against whom such action is brought within 10 days after the summons
or other first legal process shall have been served. Failure to so notify the
Distributor will not prevent indemnification hereunder. The indemnity
agreement contained in this paragraph shall not relieve the Distributor from
any liability which it may have to the Fund, its officers or directors or such
controlling persons by reason of any such alleged misstatement or omission on
the Distributor's part otherwise than on account of such indemnity agreement.
The Distributor shall have a right to control the defense of such action with
the counsel of its own choosing and approved by the Fund, such approval not to
be unreasonably withheld by the Fund.
15. No Shares shall be sold through the Distributor or by the Fund under
this contract and no orders for the purchase of shares shall be confirmed or
accepted by the Fund if and so long as the effectiveness of the Registration
Statement shall be suspended under any provisions of the 1933 Act. Nothing
contained in this paragraph 15 shall in any way restrict, limit or have any
application to or bearing upon the Fund's obligation to redeem Shares from any
shareholder as described in the Prospectus.
16. The Fund's Board of Directors or, upon authority from the Directors, the
Fund's officers, at any time such action is deemed advisable, may suspend or
terminate the offer or sale of Shares, give the Distributor notice of such
suspension or termination and decline to accept or confirm any purchase orders
for or make any sales of Shares under this agreement until such time as may be
deemed advisable.
17. The Fund agrees to advise the Distributor immediately:
(a) of any comments or actions of the SEC on the Registration Statement or
Prospectus and of any request by the SEC for amendments to the Registration
Statement or the Prospectus or for additional information, with matters
directly related to the Distributor's functions supplied in advance of filing;
(b) in the event of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or Prospectus under the 1933 Act or
the initiation of any proceedings for that purpose;
(c) of the happening of any material event which makes untrue any statement
made in the Registration Statement or Prospectus or which requires the making
of a change in either document in order to make the statements therein not
misleading; and
18. Insofar as they concern the Fund, the Fund shall comply with all
applicable laws,
rules and regulations, including without limiting the generality of the
foregoing, all rules or regulations made or adopted pursuant to the 1933 Act,
the 1940 Act or by any securities association registered under the 1934 Act.
19. (a) The Distributor shall from time to time employ or associate with it
such persons as it believes necessary to assist it in carrying out its
obligations under this contract. The compensation of such persons shall be
paid by the Distributor.
(b) The Distributor shall pay all expenses incurred in connection with its
qualification as a dealer or broker under Federal or state law.
(c) The Fund shall pay all expenses incurred in connection with (i) the
preparation, printing and distribution to stockholders of the Prospectus and
reports and other communications to stockholders , (ii) future registrations of
Shares under the 1933 Act and the 0000 Xxx, (xxx) amendments of the
Registration Statement, (iv) qualification of Shares for sale in jurisdictions
mutually agreed to by the Fund and the Distributor, (v) qualification of the
Fund as a foreign corporation authorized to do business in any jurisdiction if
the Fund and the Distributor determine that such qualification is necessary or
desirable for the purpose of facilitating sales of Shares, (vi) maintaining
facilities for the issue and transfer of Shares and (vii) supplying
information, prices and other data to be furnished by the Fund under this
contract.
(d) The Fund shall pay any original issue taxes or transfer taxes
applicable to the sale or delivery of Shares or certificates therefor.
(e) The Fund shall execute all documents and furnish any information which
may be reasonably necessary in conjunction with the qualification of Shares of
the Fund for sale in applicable jurisdictions.
20. Except as may otherwise be provided in any plan, or any agreement
pursuant to a plan, adopted by the Fund under Rule 12b-1 under the 1940 Act,
the Distributor will render all services hereunder without compensation or
reimbursement other than that specified in paragraph 4 hereof.
21. This Agreement shall become effective as of the date first named above,
and shall continue in effect until the close of business on July 31, 1994,
provided that this Agreement may continue in effect for periods of no more than
one year from August 1, 1993 only so long as such continuance is specifically
approved at least annually by (a) the Fund's Board of Directors or by the vote
of a majority of the Fund's outstanding voting securities (as defined by the
1940 Act), and (b) by the vote, cast in person at a meeting called for the
purpose, of a majority of the Fund's directors who are not parties to this
Agreement or "interested persons" (as defined in the 1940 Act). This Agreement
may, in any event, be terminated at any time, without the payment of any
penalty, by the Fund upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Fund.
22. No provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. If the Fund should at any time deem it necessary or advisable in the
best interests of the Fund that any amendment of this Agreement be made in
order to comply with the recommendations or requirements of the Securities and
Exchange Commission or other governmental authority or to obtain any advantage
under state or Federal tax laws and should notify the Distributor of the form
of such amendment, and the reasons therefor, and if the Distributor should
decline to assent to such amendment, the Fund may terminate this Agreement
forthwith. If the Distributor should at any time request that a change be made
in the Fund's Articles of Incorporation or By-Laws or in the Fund's method of
doing business, in order to comply with any requirements of Federal law or
regulations of the Securities and Exchange Commission or of a national
securities exchange or association of which the Distributor is or may be a
member relating to the sale of Shares, and the Fund should not make such
necessary change within a reasonable time, the Distributor may terminate this
Agreement forthwith.
23. Except to the extent necessary to perform the Distributor's obligation
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of the Distributor, or any affiliate of the Distributor, or any employee
of the Distributor, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of
a similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
24. This Agreement shall be construed under and shall be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on the date first above written.
The Growth Fund of Washington, Inc.
/s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Attest
Vista Broker Dealer Services, Inc.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxx Xxxxxx
Attest
