DISTRIBUTION AGREEMENT
AGREEMENT, made the 12 day of OCTOBER, 1993, between XXXXX PARTNERS, INC.,
a Nebraska corporation (hereinafter called the "Fund"), and XXXXX SECURITIES,
INC., a Nebraska corporation (hereinafter called the "Underwriter"):
WITNESSETH:
In consideration of the mutual covenants herein contained it is agreed as
follows:
1. APPOINTMENT OF FUND UNDERWRITER. The Fund hereby appoints the
Underwriter as its exclusive agent to sell shares of common stock of the Fund
("Shares") during the term of this Agreement. The Underwriter hereby accepts
the appointment and agrees to use its best efforts to find investors to purchase
Shares through the Underwriter. The Underwriter does not undertake to sell any
specific number of Shares.
2. SALE OF SHARES THROUGH UNDERWRITER. The Fund hereby agrees to offer
and sell through the Underwriter as its agent, Shares of the Fund at the
applicable public offering price consisting of the net asset value per share.
The Fund reserves the right to reject any offer to purchase its Shares.
3. FUND TO SUPPLY NET ASSET VALUE. The Fund shall determine in the manner
provided in the Fund's By-Laws, and promptly furnish to the Underwriter, a
statement of the net asset value per Share as often and at such times as the
Fund shall determine, but not less than daily as of the close of business of the
New York Stock Exchange on any business day on which the New York Stock Exchange
is open for unrestricted trading. The net asset value shall become effective at
such time and shall remain in effect during such period as may be stated in a
statement thereof furnished to the Underwriter by the Fund.
4. DELIVERY OF SHARES. Upon receipt by the Fund at its principal place
of business of a written order or confirmation from the Underwriter, the Fund
will, if it elects to accept such order, as promptly as practicable, shall cause
an entry to be made in the records maintained by or on behalf of the Fund
crediting such Shares to the account of the purchaser thereof, in either event
against payment therefor in such manner as may be acceptable to the Fund.
5. UNDERWRITER NOT AGENT OF FUND IN CERTAIN CIRCUMSTANCES. In making
agreements with its salesmen or with dealers, the Underwriter shall act only in
its own behalf as principal and not as agent for the Fund. Underwriter shall be
agent for the Fund only in respect of sales of the Fund's Shares.
6. ISSUE OF SHARES BY FUND TO SHAREHOLDERS AS DIVIDEND. Nothing herein
shall prevent the Fund from issuing , distributing, or transferring Shares,
whether treasury or newly issued shares, at any time to its stockholders as
stock dividends, for not less than the net asset value of such Shares.
7. INFORMATION FURNISHED BY FUND TO UNDERWRITER. The Fund shall furnish
the Underwriter from time to time for use under Federal and state laws in the
filing of registration statements, copies of corporate documents, agreements and
any other related documents; provided that the Fund shall pay all legal,
accounting, registration and filing fees incident to such registrations and
filings.
8. SALES LITERATURE. The Underwriter shall pay the initial and continuing
expenses of preparing, printing and distributing all advertising and sales
literature.
9. INDEMNITIES.
(a) The Fund agrees to indemnify, defend and hold Underwriter, its
officers and directors and any person who controls Underwriter within the
meaning of Section 15 of the Securities Act of 1933, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims, demands
or liabilities and any counsel fees incurred in connection therewith) which
Underwriter, its officers and directors or any such controlling person may incur
under the Securities Act of 1933, or under the common law or otherwise, arising
out of or based upon any alleged untrue statement of a material fact contained
in the Fund's Registration Statement or Prospectus 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; providing, however, that this indemnity, to the extent that it might
require indemnity of any person who is an officer or director or controlling
person of Underwriter and who is also a director or officer of the Fund, shall
not inure to the benefit of such officer or director or controlling person
unless a court of competent jurisdiction shall determine, or it shall have been
determined by controlling precedent, that such result would not be against
public policy as expressed in the Securities Act of 1933; and further provided,
that in no event shall anything herein contained be so construed as to protect
Underwriter (or its officers and directors or any controlling persons) against
any liability to the Fund or its security holders to which Underwriter 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. The Fund's
agreement to indemnify Underwriter, it officers and directors and any such
controlling person as aforesaid is expressly conditioned upon its being notified
of any action brought against Underwriter, its officers and directors or any
such controlling person, such notification to be given by letter or telegram
addressed to the Fund at its principal office in Omaha, Nebraska, and sent to it
by the person against whom such action is brought, within ten (10) days after
the summons or other legal process shall have been served. The failure to so
notify the Fund of any such action shall not relieve it 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 the
indemnity contained in this paragraph. The Fund will be entitled, at its
election, to assume the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, such defense shall be conducted by
counsel of good standing chosen by the Fund and approved by Underwriter. In the
event the Fund does elect to assume the defense of any such suit and retain
counsel of good standing approved by the Underwriter, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not elect to assume
the defense of any such suit, or in case Underwriter does not approve of counsel
chosen by the Fund, the Fund will reimburse Underwriter, its officers and
directors, or the controlling person named as defendant or defendants in such
suit, for reasonable fees and expenses of any counsel retained by Underwriter or
them. This indemnity will inure exclusively to Underwriter's benefit, to the
benefit of its successors, to the benefit of its officers and directors and
their respective estates, and to the benefit of any controlling person and its
successors. The Fund agrees to notify the Underwriter promptly of the
commencement of any litigation or proceeding against it or any of its officers
or directors in connection with the issue and sale of any of its Shares.
(b) Underwriter agrees to indemnify, defend and hold the Fund, its several
officers and directors, and any person who controls the Fund within the meaning
of Section 15 of the Securities Act of 1933, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Fund, its officers or
directors, or any such controlling person may incur under the Securities Act of
1933 or under the common law or otherwise: but only to the extent that such
liability or expense incurred by the Fund, its officers or directors, or such
controlling person 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 Underwriter to the Fund for use in the
Fund's Registration Statement or 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 in the Registration Statement or Prospectus or
necessary to make such information not misleading. Underwriter's agreement to
indemnify the Fund, its officers and directors, and any such controlling person
is expressly conditioned upon its being notified of any action brought against
the Fund, its officers and directors and any such controlling person, such
notification to be given by letter or telegram addressed to Underwriter at its
principal office in Omaha, Nebraska, and sent to it by the person against whom
such action is brought, with ten (10) days
after the summons or other first legal process shall have been served.
Underwriter shall have a right to control the defense of such action, with
counsel of its own choosing, satisfactory to the Fund, if such action is based
solely upon such alleged misstatement or omission on its part, and in any other
event Underwriter or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action.
The failure to so notify Underwriter of any such action shall not relieve
Underwriter from any liability which Underwriter may have to the Fund, it
officers or directors, or to such controlling person by reason of any such
untrue statement or omission on Underwriter's part otherwise than on account of
its indemnity contained in the paragraph.
11. REGISTRATION AND QUALIFICATION OF UNDERWRITER AND SALESMEN.
(a) Underwriter shall be registered and qualified to act as a
broker-dealer with the U.S. Securities and Exchange Commission, the National
Association of Securities Dealers, Inc. and the securities commissions of the
states where the Shares of the Fund will be offered. Underwriter will comply
with all Federal and state securities laws applicable to the offer and sale of
securities and to the operation and conduct of the business of a broker-dealer.
(b) Underwriter, as its sole expense, shall employ, train, register and
qualify such securities salesmen in such states as shall be agreed upon by the
Underwriter and the Fund. Thereafter, Underwriter shall supervise the
activities of such salesmen to assure their continuing compliance with the
applicable securities laws.
12. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENT OF THIS AGREEMENT.
This Agreement shall automatically terminate in the event of its assignment; and
this Agreement may be amended only if the terms of the amendment are approved
either (a) by action of a majority of the Fund's directors and by a majority of
those directors of the Fund who are not interested or affiliated persons of the
Underwriter or officers or employees of the Fund or (b) by affirmative vote of
the holders of a majority of the outstanding voting securities of the Fund.
13. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
(a) This Agreement shall become effective as of the date first set forth
above and shall continue in force for an indefinite period, subject to prior
termination as provided herein, but only so long as its continuance shall be
specifically approved at least annually by a vote of a majority of the Board of
Directors of the Fund or by a vote of the majority of the outstanding voting
securities of the Fund. In any event, this Agreement shall not be renewed or
performed unless it has been approved annually by a majority vote of those
directors of the Fund who are not parties to such agreement or interested or
affiliated persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(b) This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund, or by vote of a majority of the
outstanding voting securities of the Fund, in either case upon sixty (60) days'
written notice to the Underwriter, and it may be terminated by the Underwriter
upon sixty (60) days' written notice to the Fund.
14. DEFINITIONS. For the purpose of this Agreement, the terms "vote of a
majority of the outstanding securities", "assignment", "affiliated person" and
"interested person" shall have the respective meanings specified in the
Investment Company Act of 1940 as now or hereafter in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
XXXXX PARTNERS, INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------
President
Attest:
/s/ Xxxxx X. Xxxxxx
-------------------
Secretary
XXXXX SECURITES, INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------
President
Attest:
/s/ Xxxxx X. Xxxxxx
-------------------
Secretary
