EXHIBIT (e)
DISTRIBUTION AGREEMENT
THIS AGREEMENT made as of the 1st day of September, 2000 between XXXXXXXX
XXXXX RESEARCH TRUST, a Delaware business trust (the "Fund") and J.J.B.
XXXXXXXX, X.X. XXXXX, INC., a Kentucky corporation (the "Distributor").
WITNESSETH:
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 N1-A 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 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 units of
beneficial interest 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 shareholders 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. ("NASD") 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 will 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
Trustees 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
judgement 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
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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 and will make
appropriate book entries thereof. 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 shareholder 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
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.
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Section 6. DUTIES OF THE DISTRIBUTOR. a) The Distributor shall use its
best efforts to solicit an offer 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 NASD governing and 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 of the Fund and may enter into servicing agreements with financial
institutions (including banks) and others ("Service Agents") for shareholder
servicing and administrative services with respect to Shares owned by
shareholders 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 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 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.
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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 shareholders (including but
not limited to the expense of setting in type and printing and distributing to
existing shareholders any such Registration Statement, Prospectus, Statement of
Additional Information, annual or interim report or proxy materials).
b) (i) Subject to Section 9(b)(i) 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 Trustees 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 shareholders 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.
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
sales 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
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amended and supplemented, or an annual or interim report to shareholders 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 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 have 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 trustees in
connection with the issuance or sale of any of the Shares.
b) The Distributor shall indemnify and hold harmless the Fund
and each of its trustees 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 shareholders. 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 until July 1, 2001 and thereafter for successive
periods of one year each if such
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continuance is specifically approved at least annually by (i) the Board of
Trustees 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 trustees 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 Trustees 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 amendments is specifically approved by (i) the Board
of Trustees 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 trustees 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 Delaware
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 Delaware conflicts with any of
the provisions of the 1940 Act, the latter shall control.
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 RESEARCH TRUST
By: __________________________________
J.J.B. XXXXXXXX, X.X. XXXXX, INC.
By: __________________________________
Xxxxx X. Xxxxxx, Executive Vice President
and Chief Operating Officer
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