Exhibit 6(a)
DISTRIBUTION AGREEMENT
THIS AGREEMENT made as of the 30th day of April, 2000 between XXXXXXXX
XXXXX GROWTH FUND, INC., a Maryland corporation (the "Fund"), and J.J.B.
XXXXXXXX, X.X. XXXXX, INC., a Kentucky corporation (the "Distributor").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940
(the "1940 Act"), as an open-end non-diversified management investment company
and an indefinite number of the Fund's shares have been registered under the
Securities Act of 1933 (the "Securities Act"), to be offered for sale to the
public in a continuous public offering in accordance with the terms and
conditions set forth in the prospectus and statement of additional information
(the "Prospectus" and "Statement of Additional Information", respectively)
included in the Fund's registration statement on Form N-1A as the same may be
amended and supplemented from time to time (the "Registration Statement"); and
WHEREAS, the Distributor is a securities firm engaged in the business of
selling securities either directly to purchasers or through other securities
dealers; and
WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other with respect to the continuous offering of the Fund's shares in order
to promote the growth of the Fund and facilitate the distribution of its shares.
NOW, THEREFORE, for and in consideration of the premises and the covenants
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
Section 1. Appointment of the Distributor. The Fund hereby appoints the
Distributor as the general distributor and agent of the Fund to sell shares of
Common Stock, par value $.001 per share, of the Fund (hereinafter referred to as
"Shares") to the public on a best efforts basis pursuant to the continuous
offering of the Fund's Shares.
Section 2. Exclusive Nature of Duties. The Distributor shall be the
exclusive representative of the Fund to act as general distributor and agent in
connection with the continuous offering of the Fund's Shares, except that:
(a) The exclusive rights granted to the Distributor to sell Shares of
the Fund shall not apply to Shares issued and sold (i) in connection with the
merger or consolidation of any other investment company or personal holding
company with the Fund or the acquisition by purchase or otherwise of all (or
substantially all) the assets or the outstanding shares of any such company by
the Fund; (ii) in connection with offers of exchange exempted from Section 11(a)
of the 1940 Act; or (iii) pursuant to reinvestment of dividends or capital gain
distributions.
(b) Such exclusive rights shall also not apply to Shares issued and
sold directly by the Fund to its stockholders and other persons, provided that,
except with respect to
Shares issued and sold by the Fund in transactions of the type described in
Section 2(a) above, the Distributor shall be entitled to the applicable sales
load as set forth in the Prospectus with respect to such Shares.
Section 3. Purchase of Shares from the Fund. (a) The Distributor agrees
to use its best efforts to solicit offers to purchase the Shares upon the terms
and conditions set forth in the Prospectus.
(b) The Shares are to be sold by the Distributor and, if deemed
advisable by the Distributor, by securities dealers and financial advisors who
are members in good standing of the National Association of Securities Dealers,
Inc. and who have entered into sales agreements with the Distributor
("Authorized Dealers") upon the terms and conditions set forth in Section 8
hereof, to investors at the public offering price, as set forth in Section 3(c)
hereof.
(c) The public offering price of the Shares, i.e., the price per Share
at which the Distributor or Authorized Dealers may sell Shares to the public,
shall be the public offering price as set forth in the currently effective
Prospectus and Statement of Additional Information included in the Fund's
Registration Statement, but not to exceed the net asset value at which the
Distributor is to purchase the Shares, plus the applicable sales charge as set
forth in the Prospectus. If the public offering price does not equal an even
cent, the public offering price may be adjusted to the nearest cent. All
payments to the Fund hereunder shall be made in the manner set forth in Section
3(f).
(d) The net asset value of Shares shall be determined by the Fund or
its agent in accordance with the method set forth in the Prospectus and
Statement of Additional Information and guidelines established by the Board of
Directors of the Fund. Such net asset value shall be determined on each day the
New York Stock Exchange is open for business and such public offering price
based upon such net asset value shall become effective as set forth from time to
time in the current Prospectus. The Fund (or its agent) shall furnish the
Distributor, with all possible promptness, a statement of each computation of
net asset value, and of the details entering into such computation.
(e) The Fund shall have the right to suspend the sale of its Shares at
times when redemption is suspended pursuant to the conditions set forth in
Section 4(b) hereof. The Fund shall also have the right to suspend the sale of
its Shares if trading on the New York Stock Exchange shall have been suspended,
if a banking moratorium shall have been declared by federal authorities, or if
there shall have been some other event, which, in the judgment of the Fund,
makes it impracticable or inadvisable to sell the Shares.
(f) The Distributor shall accept or reject orders it receives for the
purchase of Shares in accordance with the Prospectus or Statement of Additional
Information, and shall promptly transmit such orders as are so accepted to the
Fund, or any agent of the Fund designated in writing by the Fund. Any order may
be rejected by the Fund or the Distributor; provided, however, that neither the
Fund nor the Distributor will arbitrarily or without reasonable
2
cause refuse to accept or confirm orders for the purchase of Shares. The Fund
(or its agent) will confirm orders upon receipt by the Fund (or its agent) of
such orders together with payment therefor, will apply such payment to the
purchase of Shares and the payment of the applicable sales charge, will make
appropriate book entries therefor, and will deliver the notice prescribed by the
Maryland General Corporation Law and Article 8 of the Maryland Uniform
Commercial Code pursuant to the instructions of the Distributor. The Distributor
agrees to cause such orders, such payment and such instructions to be delivered
promptly to the Fund (or its agent). The Distributor agrees to indemnify and
reimburse the Fund for any loss arising from non-payment by any investor of any
purchase order accepted by the Distributor.
Section 4. Redemption of Shares by the Fund. (a) Any of the outstanding
Shares may be tendered for redemption at any time, and the Fund agrees to redeem
the Shares so tendered in accordance with its obligations as set forth in the
Prospectus and Statement of Additional Information. Requests for redemption
from holders of Shares shall be submitted to the Distributor, Authorized Dealers
or to the Fund (or its agent) in accordance with the applicable provisions set
forth in the Prospectus. The price to be paid to redeem the Shares shall be
equal to the net asset value calculated in accordance with the provisions of
Section 3(d) hereof less any contingent deferred sales charge that may be
applicable in accordance with the Prospectus. All payments by the Fund (or its
agent) hereunder shall be made in accordance with the instructions of the
Distributor or redeeming stockholder on or before the seventh day subsequent to
the receipt by the Distributor or the Fund (or its agent) of a request for
redemption in proper form unless the Shares were recently purchased, in which
case the redemption proceeds will not be sent until the check received for the
Shares purchased has cleared.
(b) The Fund may suspend the right of redemption or postpone the date
of payment for more than seven days during any period when (i) trading on the
New York Stock Exchange is restricted or the New York Stock Exchange is closed,
other than customary weekend and holiday closings, (ii) the Securities and
Exchange Commission has by order permitted such suspension, or (iii) an
emergency, as defined by rules of the Securities and Exchange Commission, exists
making disposal of portfolio investments or determination of the value of the
net assets of the Fund not reasonably practicable.
Section 5. Duties of the Fund. (a) The Fund, or any agent of the Fund
designated in writing by the Fund, shall furnish to the Distributor such
material regarding the Fund which the Distributor may reasonably request for use
in connection with the distribution of Shares, and this shall include copies of
its Prospectus and Statement of Additional Information and one certified copy of
all financial statements prepared for the Fund by independent public
accountants.
(b) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of its Shares for sale under the
securities laws of such states as the Distributor and the Fund may approve. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. As provided in Section 9(c) hereof, the expense of
qualification and maintenance of qualification shall be borne by the Fund. The
3
Distributor shall furnish such information and other material relating to its
affairs and activities as may be required by the Fund in connection with such
qualification.
(c) The Fund (or its agent) will furnish, in reasonable quantities
upon request by the Distributor, copies of annual and interim reports of the
Fund.
Section 6. Duties of the Distributor. (a) The Distributor shall use its
best efforts to solicit offers to purchase the Shares, but shall not be
obligated to sell any specific number of Shares. The services of the
Distributor to the Fund hereunder are not to be deemed exclusive and nothing
herein contained shall prevent the Distributor from entering into like
arrangements with other investment companies so long as the performance of its
obligations hereunder is not impaired thereby.
(b) In selling the Shares of the Fund, the Distributor shall use its
best efforts to comply with the requirements of all federal and state laws and
the requirements of the National Association of Securities Dealers, Inc.
("NASD") governing the sale of such securities. Neither the Distributor nor any
Authorized Dealer nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in the
Registration Statement, related Prospectus and Statement of Additional
Information, or any sales literature specifically approved by the Fund.
(c) The Distributor will submit orders for Shares of the Fund only to
the extent of purchase orders actually received and not in excess of such
orders, and it will not avail itself of any opportunity of making a profit by
expediting or withholding orders.
(d) Immediately following the receipt of a redemption request, the
Distributor will transmit the redemption request to the Fund (or its agent).
(e) The Fund has adopted a Distribution Plan pursuant to the
provisions of Rule 12b-1 under the 1940 Act (the "Plan") which provides for the
payment of fees to the Distributor to reimburse it for expenses incurred in
connection with the offering and sale of the Shares and the Distributor agrees
to take no action inconsistent with, and to file all reports required by, the
Plan.
Section 7. Compliance with Laws. The Fund shall use its best efforts in
all respects to comply with the requirements of all federal and state laws and
the requirements of the NASD governing the issuance and sale of the Shares.
Section 8. Authorized Dealers and Service Agents. The Distributor may
enter into sales agreements with Authorized Dealers who wish to offer and sell
Shares and may enter into servicing agreements with financial institutions
(including banks) and others ("Service Agents") for stockholder servicing and
administrative services with respect to Shares owned by stockholders for whom
the Service Agent is the holder of record or for whom the Service Agent performs
administrative or servicing functions; provided that the Fund shall approve the
form of
4
sales agreement or servicing agreement used. The Distributor will supervise the
Fund's relations with Authorized Dealers and Service Agents. The Distributor
will be responsible for payment of all fees and other charges owed to Authorized
Dealers or Service Agents. The Fund (or its agent) will pay to Authorized
Dealers, on behalf of the Distributor and solely out of any sales charge
received by the Fund with respect to sales of Shares by Authorized Dealers, the
applicable reallowance to dealers in accordance with the Prospectus and
Statement of Additional Information.
Section 9. Payment of Expenses. (a) The Fund shall bear all costs and
expenses of the Fund, including fees and disbursements of its counsel and
auditors and fees and expenses incurred in connection with (i) the preparation
and filing of its Registration Statement, including the Prospectus and Statement
of Additional Information, under the 1940 Act and the Securities Act, and all
amendments and supplements thereto, and (ii) the preparation and mailing of
annual and interim reports and proxy materials to stockholders (including but
not limited to the expense of setting in type and printing and distributing to
existing stockholders any such Registration Statement, Prospectus, Statement of
Additional Information, annual or interim report or proxy materials).
(b) (i) Subject to Section 9(b)(ii) hereof, after the Prospectus,
Statement of Additional Information and annual and interim reports have been
prepared and set in type, the Distributor shall bear the costs and expenses of
printing and distributing any copies thereof which are to be used in connection
with the offering of Shares to Authorized Dealers or investors pursuant to this
Agreement, and the Distributor shall bear the costs and expenses of preparing,
printing and distributing any other literature used by the Distributor or
furnished by it for use by Authorized Dealers in connection with the offering of
the Shares for sale to the public and any expenses of advertising incurred by
the Distributor in connection with such offering.
(ii) Notwithstanding anything in Section 9(b)(i) to the contrary, to
the extent authorized by the Fund's Board of Directors pursuant to the Plan and
for so long as the Plan shall remain in effect, the Fund may reimburse the
Distributor for the expenses of printing and distributing Prospectuses and
Statements of Additional Information (other than those distributed to existing
stockholders of the Fund) and any other promotional sales literature used by the
Distributor or furnished by the Distributor to investors or Authorized Dealers
in connection with the offering of the Fund's Shares.
(c) The Fund shall bear the costs and expenses of qualification of the
Shares for sale pursuant to this Agreement, and, if necessary or advisable in
connection therewith, of qualifying the Fund as a broker or dealer in such
states or other jurisdictions as shall be selected by the Fund and the
Distributor, and the cost and expenses payable to each such state for continuing
qualification therein until the Fund decides to discontinue such qualification,
pursuant to Section 5(c) hereof.
5
Section 10. Compensation. The Fund shall promptly pay or cause to be paid
to the Distributor any sales charge received by the Fund (net of any reallowance
payable to Authorized Dealers pursuant to Section 8 hereof) with respect to the
sale of Shares in accordance with the Prospectus and Statement of Additional
Information.
Section 11. Indemnification. (a) The Fund shall indemnify and hold
harmless the Distributor and each person, if any, who controls the Distributor
against any loss, liability, claim, damage or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, claim, damage or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any Shares, which may be based upon the
Securities Act, or on any other statute or at common law, on the ground that the
Registration Statement or related Prospectus and Statement of Additional
Information, as from time to time amended and supplemented, or an annual or
interim report to stockholders of the Fund, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, unless such
statement or omission was made in reliance upon, and in conformity with,
information furnished to the Fund in connection therewith by or on behalf of the
Distributor; provided, however, that in no case (i) is the indemnity of the Fund
in favor of the Distributor and any such controlling persons to be deemed to
protect the Distributor or any such controlling person thereof against any
liability to the Fund or its security holders to which the Distributor or any
such controlling person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of the reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Fund to be liable under its indemnity obligation
contained in this paragraph with respect to any claim made against the
Distributor or such controlling persons, unless the Distributor or such
controlling persons, as the case may be, shall have notified the Fund 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 the
Distributor or such controlling persons (or after the Distributor or such
controlling persons shall have received notice of such service on any designated
agent), but failure to notify the Fund of any such claim shall not relieve it
from any liability which it may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
subsection (a). The Fund will be entitled to participate at its own expense in
the defense, or, if it so elects, to assume the defense, of any suit brought to
enforce any such liability, but if the Fund elects to assume the defense, such
defense shall be conducted by counsel chosen by it and reasonably satisfactory
to the Distributor or such controlling person or persons, defendant or
defendants in the suit. In the event the Fund elects to assume the defense of
any such suit and retain such counsel, the Distributor or such controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Fund does
not elect to assume the defense of any such suit, it will reimburse the
Distributor or such controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by them.
The Fund shall promptly notify the Distributor of the commencement of any
litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of any of the Shares.
6
(b) The Distributor shall indemnify and hold harmless the Fund and
each of its directors and officers and each person, if any, who controls the
Fund against any loss, liability, claim, damage or expense described in the
foregoing indemnity contained in subsection (a) of this Section, but only with
respect to statements or omissions made in reliance upon, and in conformity
with, information furnished to the Fund by or on behalf of the Distributor for
use in connection with the Registration Statement or related Prospectus and
Statement of Additional Information, as from time to time amended, or the annual
or interim reports to stockholders. In case any action shall be brought against
the Fund or any person so indemnified, in respect of which indemnity may be
sought against the Distributor, the Distributor shall have the rights and duties
given to the Fund, and the Fund and each person so indemnified shall have the
rights and duties given to the Distributor by the provisions of subsection (a)
of this Section 11.
Section 12. Duration and Termination of this Agreement. This Agreement
shall continue in effect for two years from the date of its execution and
thereafter for successive periods of one year each if such continuance is
specifically approved at least annually by (i) the Board of Directors of the
Fund, or by the vote of a majority of the outstanding voting securities of the
Fund, and (ii) the vote of a majority of those directors who are not interested
persons of the Distributor or of the Fund and have no direct or indirect
financial interest in the operation of the Plan or in this or any other
agreement related to the Plan, cast in person at a meeting called for the
purpose of voting on such approval.
This Agreement may be terminated at any time, without the 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, or by the Distributor, on sixty days
written notice to the other party. This Agreement shall automatically terminate
in the event of its assignment.
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the 1940 Act.
Section 13. Amendments of this Agreement. This Agreement may be amended
by the parties only if such amendment is specifically approved by (i) the Board
of Directors of the Fund, or by the vote of a majority of outstanding voting
securities of the Fund, and (ii) by the vote of a majority of those directors of
the Fund who are not interested persons of the Distributor or of the Fund and
have no direct or indirect financial interest in the operation of the Plan or in
this or any other agreement related to the Plan cast in person at a meeting
called for the purpose of voting on such approval.
Section 14. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of Maryland
as at the time in effect and the applicable provisions of the 1940 Act. To the
extent that the applicable law of the State of Maryland conflicts with any of
the provisions of the 1940 Act, the latter shall control.
7
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the day and year first above
written.
XXXXXXXX XXXXX GROWTH FUND,
INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------------------
Xxxxxx X. Xxxxx, Xx., Treasurer and Secretary
J.J.B. XXXXXXXX, X.X. XXXXX, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------------
Xxxxx X. Xxxxxx, Executive Vice President
and Chief Operating Officer
8
