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EXHIBIT 6
BUILDERS PROLOAN FUND, INC.
DISTRIBUTION AGREEMENT
This Distribution Agreement is made this ___ day of ________,
1997, by and between Builders ProLoan Fund, Inc., a Maryland corporation (the
"Fund"), and Huntleigh Fund Distributors, Inc., a ________ corporation (the
"Distributor").
WHEREAS, the Fund is registered as an open-end, nondiversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has registered and intends to register or
qualify its shares of common stock (the "Shares") for sale to the public
under the Securities Act of 1933, as amended (the "1933 Act"), and various
state securities laws; and
WHEREAS, the Fund intends to offer for public sale one or more
distinct series of Shares, each corresponding to a distinct portfolio
("Portfolio"); and
WHEREAS, the Fund wishes to retain the Distributor as the Fund's
distributor in connection with the offering and sale of the Shares of each
Portfolio and to furnish certain other services to the Fund as specified in
this Agreement; and
WHEREAS, this Agreement has been approved by a vote of the Board
of Directors of the Fund and disinterested Directors in conformity with
Paragraph (b)(2) of Rule l2b-1 under the 1940 Act; and
WHEREAS, the Distributor is willing to act as distributor of the
Shares and to furnish such services on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. APPOINTMENT OF DISTRIBUTOR. The Fund hereby appoints
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the Distributor as distributor in connection with the offering and sale of
the Shares. The Fund authorizes the Distributor as exclusive agent for the
Fund, subject to applicable federal and state law and the Articles of
Incorporation, By-Laws and current Prospectus and Statement of Additional
Information of the Fund to: (a) promote the Portfolios; (b) solicit orders
for the purchase of the Shares of the Portfolios subject to such terms and
conditions as the Fund may specify; (c) hold itself available to receive
orders for the purchase of the Shares of the Portfolios and to accept such
orders on behalf of the Fund as of the time of receipt of such orders and
promptly transmit such orders as are accepted to the Fund and its transfer
agent; and (d) provide a telephone number and hold itself available to answer
telephone inquiries from shareholders regarding their investments in the
Fund. Purchase orders shall be deemed effective at the time and in the
manner set forth in the Registration Statement (defined below). The
Distributor shall offer the
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Shares of each Portfolio on an agency or "best efforts" basis under which the
Fund shall only issue such Shares as are actually sold. In connection with
such sales and offers of sales, the Distributor shall give only such
information as is permitted by applicable law, and the Fund shall not be
responsible in any way for any other information, statements or representations
given or made by the Distributor or its representatives or agents. The Fund
reserves the right at any time to withdraw all offerings of the Shares of any
or all Portfolios by written notice to the Distributor at its principal office.
2. FUND OBLIGATIONS. The Fund shall keep the Distributor
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fully informed of its affairs and shall make available to Distributor copies
of all information, financial statements, and other papers which Distributor
may reasonably request for use in connection with the distribution of Shares,
including, without limitation, certified copies of any financial statements
prepared for the Fund by its independent public accountant and such
reasonable number of copies of the most current prospectus, statement of
additional information, and annual and interim reports of a Portfolio as the
Distributor may request, and the Fund shall cooperate fully in the efforts of
the Distributor to sell and arrange for the sale of the Shares and in the
performance of the Distributor under this Agreement.
3. SALES TO DEALERS. With the consent of the Fund, the
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Distributor may enter into agreements to sell Shares to registered and
qualified retail dealers.
4. PUBLIC OFFERING PRICE. The public offering price of the
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Shares of each Portfolio shall be the net asset value per Share (as
determined by the Fund) of the outstanding Shares of the Portfolio plus any
applicable sales charge as set forth in the then effective Registration
Statement of the Fund. The Fund shall furnish (or arrange for another person
to furnish) the Distributor with a quotation of public offering price on each
business day.
5. COMPENSATION. As compensation for providing services
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under this contract the Distributor shall retain the sales charge, if any, on
purchases of Shares as set forth in the Registration Statement. The
Distributor is authorized to collect the gross proceeds derived from the sale
of the Shares, remit the net asset value thereof to the Fund upon receipt of
the proceeds and retain the sales charge, if any. The Distributor may
reallow any or all of such sales charges to dealers who have entered into
agreements with the Distributor as it may from time to time determine.
Whether a sales charge shall be retained by the Distributor shall be
determined in accordance with the Registration Statement. The Distributor
also shall receive from each Portfolio distribution and/or service fees at
the rate and under the terms and conditions of the Distribution Plan ("Plan")
adopted by the Fund with respect to such Portfolio, as such Plan is in effect
from time to time, and subject to any further limitations on such fee as the
Board of Directors may impose.
6. DISTRIBUTOR'S EXPENSES. The Distributor shall finance
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activity which is intended to result in the sale and retention of Shares of
each Portfolio including, but not limited to, compensation paid to registered
representatives of the Distributor and to participating dealers, if any,
which have entered into sales agreements with the Distributor, advertising,
salaries and
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other expenses of the Distributor relating to selling or servicing efforts,
expenses of organizing and conducting sales seminars, printing of Prospectuses,
Statements of Additional Information and reports for other than existing
shareholders, preparation and distribution of advertising material and sales
literature and other sales promotion expenses. Except as specifically provided
in this Agreement, the Fund and the Portfolios shall bear none of the expenses
of the Distributor in connection with its offer and sale of the Shares.
7. FUND EXPENSES. The Fund agrees, at its own expense, to
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register the Shares with the Securities and Exchange Commission, to make
notification filings and pay fees as required by the various states and other
regulatory bodies, and to prepare and file from time to time such
Prospectuses, Statements of Additional Information, amendments, reports and
other documents as may be necessary to maintain the Registration Statement.
Each Portfolio shall bear all expenses related to preparing and typesetting
such Prospectuses, Statements of Additional Information and other materials
required by law and such other expenses, including printing and mailing
expenses, related to the Portfolio's communications with persons who are
shareholders of that Portfolio.
8. INDEMNIFICATION BY THE FUND. The Fund agrees to
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indemnify, defend and hold harmless the Distributor, its several officers and
directors, and any person who controls the Distributor within the meaning of
Section 15 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, its officers or trustees, or any
such controlling person may incur under the 1933 Act or under common law or
otherwise arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement, Prospectus or
Statement of Additional Information or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading,
provided that in no event shall anything contained in this Agreement be
construed so as 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.
9. INDEMNIFICATION BY THE DISTRIBUTOR. The Distributor
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agrees to indemnify, defend and hold harmless the Fund and its Portfolios,
its several officers and trustees, and any person who controls the Fund
within the meaning of Section 15 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 Fund, its officers
or trustees, or any such controlling person may incur under the 1933 Act or
under common law or otherwise arising out of or based upon any alleged untrue
statement of a material fact contained in information furnished in writing by
the Distributor to the Fund for use in the Registration Statement, Prospectus
or Statement of Additional Information or arising out of or based upon any
alleged omission to state a material fact in connection with
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such information required to be stated in the Registration Statement or
Prospectus or necessary to make such information not misleading.
10. SHARE CERTIFICATES. The Fund shall not issue
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certificates representing Shares unless requested by a shareholder. If such
request is transmitted through the Distributor, the Fund will cause
certificates evidencing the Shares owned to be issued in such names and
denominations as the Distributor shall from time to time direct.
11. REPURCHASE OF SHARES. The Distributor at its sole
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discretion may repurchase Shares offered for sale by the shareholders.
Repurchase of Shares of any Portfolio by the Distributor shall be at the net
asset value of the applicable Portfolio next determined after a repurchase
order has been received, less any applicable redemption fee. the Distributor
will receive no commission or other remuneration for repurchasing Shares. On
each business day, the Distributor shall notify by telex or in writing the
Fund and the Fund's transfer agent of the orders for repurchase of shares
received by the Distributor since the last such report, the amount to be paid
for such Shares, and the identity of shareholders offering Shares for
repurchase. Upon such notice, the Fund shall pay the Distributor such
amounts as are required by the Distributor for the repurchase of such shares
in cash or in the form of a credit against moneys due the Fund from the
Distributor as proceeds from the sale of Shares. The Fund reserves the right
to suspend such purchases with respect to any or all Portfolios upon written
notice to the Distributor. the Distributor further agrees to act as agent
for the Fund to receive and transmit promptly to the Fund's transfer agent
shareholder requests for redemption of Shares.
12. STATUS OF DISTRIBUTOR. The Distributor is an independent
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contractor and shall be an agent for the Fund only with respect to the sale
and repurchase of the Shares.
13. NON-EXCLUSIVE SERVICES. The services of the Distributor
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to the Fund under this Agreement are not to be deemed exclusive, and the
Distributor shall be free to render similar services or other services to
others so long as its services hereunder are not impaired thereby.
14. REPORTS OF THE DISTRIBUTOR. The Distributor shall
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provide to the Board of Directors and the Board shall review, at least
quarterly, or at such other intervals as reasonably requested by the Board, a
written report of the amounts expended under the Fund's Distribution Plan and
the purposes for which such expenditures were made. The Distributor shall
prepare such other reports and provide such other information for the Board
of Directors upon request concerning expenditures related to this Agreement
as from time to time shall be reasonably requested by the Board.
15. DEFINITIONS. As used in this Agreement, the term
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"Registration Statement" shall mean the Registration Statement most recently
filed by the Fund with the Securities and Exchange Commission and effective
under the 1933 Act, as such Registration Statement is amended by any
amendments thereto at the time in effect, and the terms "Prospectus" and
"Statement of Additional Information" shall mean the current form of
Prospectus(es) and Statement(s) of Additional Information filed by the Fund
as part of the Registration Statement.
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Additionally, the term "net asset value" shall have the meaning ascribed to it
in the Fund's Articles of Incorporation; and the terms "assignment,"
"interested person," and "majority of the outstanding voting securities" shall
have the meanings given to them by Section 2(a) of the 1940 Act, subject to
such exemptions as may be granted by the Securities and Exchange Commission by
any rule, regulation or order.
16. EFFECTIVENESS OF AGREEMENT. This Agreement shall become
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effective upon the date hereabove written, provided that, with respect to a
Portfolio, this Agreement shall not take effect unless such action has first
been approved by vote of a majority of the Board of Directors and by vote of
a majority of those trustees who are not interested persons of the Fund and
have no direct or indirect financial interest in the operation of the Plan or
in any agreements related thereto (all such trustees collectively being
referred to herein as the "Independent Directors"), cast in person at a
meeting called for the purpose of voting on such action.
17. TERMINATION OF AGREEMENT. Unless sooner terminated as
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provided herein, this Agreement shall continue in effect for one year from
the above written date. Thereafter, if not terminated, this Agreement shall
continue automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (a) by a
vote of a majority of the Independent Directors, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Directors or with respect to any given series by vote of a majority of the
outstanding voting securities of such Portfolio. Notwithstanding the
foregoing, with respect to any Portfolio, this Agreement may be terminated at
any time, without the payment of any penalty, by vote of the Board of
Directors, by vote of a majority of the Independent Directors or by vote of a
majority of the outstanding voting securities of such Portfolio on 60 days'
written notice to the Distributor or by the Distributor at any time, without
the payment of any penalty, on 60 days' written notice to the Fund or such
Portfolio. Termination of this Agreement with respect to any given Portfolio
shall in no way affect the continued validity of this Agreement or the
performance thereunder with respect to any other Portfolio. This Agreement
automatically will terminate in the event of its assignment.
18. AMENDMENTS. No provision of this Agreement may be changed,
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waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
19. GOVERNING LAW. This Agreement shall be construed in
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accordance with the laws of the State of Missouri, without giving effect to
the conflicts of laws principles thereof, and the 1940 Act. To the extent
that the applicable laws of the State of Missouri conflict with the
applicable provisions of the 1940 Act, however, the latter shall control.
20. NOTICE. Any notice required or permitted to be given by
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either party to the other shall be deemed sufficient upon receipt in writing
at the other party's principal offices.
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21. MISCELLANEOUS. The captions in this Agreement are
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included for convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their construction or
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers thereunto duly authorized.
Attest: BUILDERS PROLOAN FUND, INC.
By: _________________________ By: _____________________________
Xxxx X. Xxxxxxx
President and Chairman
Attest: HUNTLEIGH FUND DISTRIBUTORS, INC.
By: _________________________ By: ______________________________
Xxxxx X. Xxxxxxxxxx
President
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