EXHIBIT 6
DISTRIBUTION AGREEMENT
Distribution Agreement ("Agreement") made this 27 day of November, 1997,
by and between Monument Series Fund, Inc., a Maryland corporation (the
"Company"), on behalf of each of its Portfolios (as hereinafter defined), and
Monument Distributors, Inc., a Maryland corporation ("Distributors")
(collectively, the "Parties").
WHEREAS, the Company is organized and intends to operate as an open-end
management investment company and is so registered under the Investment
Company Act of 1940, as amended, (the "Act"), and will register shares of each
Portfolio (defined below) under the Securities Act of 1933 ("1933 Act"), to
the extent required thereby, on Form N-1A (collectively, "Registration
Statement"); and
WHEREAS, the Board of Directors of the Company ("Board") has established
and authorized the issuance of the shares of the series listed on Schedule A
hereto (each, a "Portfolio" and collectively, the "Portfolios"), as the same
may be amended from time to time by mutual written agreement of the Parties
("Schedule A"); and
WHEREAS, Distributors desires to act as the exclusive principal
underwriter, and the distributor, of the shares of each Portfolio; and
WHEREAS, Distributors will be a broker-dealer registered under the
Securities Exchange Act of 1934 ("1934 Act") and a member of the National
Association of Securities Dealers, Inc. ("NASD") prior to engaging in any act
as the exclusive principal underwriter, and the distributor, of the shares of
each Portfolio; and
WHEREAS, the Company has entered into a Custody and Investment Accounting
Agreement, a Transfer Agency and Service Agreement, and an Administration
Agreement with other entities pursuant to which these entities have agreed to
provide a range of services to the Company and each Portfolio thereof.
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties agree as follows:
1. APPOINTMENT AND OBLIGATION OF UNDERWRITER.
The Company, on behalf of each Portfolio, hereby appoints Distributors as
the exclusive principal underwriter, and the distributor, for the sale of the
shares of each Portfolio (except for sales made directly by the Company
without sales charge), effective upon Distributors' approval for membership in
the NASD, and Distributors hereby accepts such appointment, effective at such
time.
Distributors shall be obligated to perform the services for the Fund as
described in this Agreement, and, to the extent necessary or appropriate,
shall do so in coordination with service agreements entered into by the
Company with other entities, such as, for example, the Company's Custody and
Investment Accounting Agreement, Transfer Agency and Service Agreement, and
Administration Agreement.
2. SALE OF PORTFOLIO SHARES.
2.1 AVAILABILITY OF SHARES. The Company, on behalf of each Portfolio,
agrees to deliver such shares as Distributors may sell, in accordance with the
terms and conditions set forth herein and the disclosure in the Company's
Registration Statement.
2.2 BEST EFFORTS. Distributors agrees to use its best efforts to
promote the sale of each Portfolio's shares, but is not obligated to sell any
specific number of shares.
2.3 REJECTION OR SUSPENSION OF SALES; CORPORATE ACTIONS.
Notwithstanding anything herein to the contrary:
(a) Distributors may temporarily suspend its efforts to
effectuate sales of any Portfolio at any time when in its opinion no
sales should be made because of market or other economic considerations
or abnormal circumstances of any kind; and
(b) the Board may, at any time, reject for any reason any order
to purchase shares of any Portfolio. In addition, the Board may suspend
or terminate the offering of shares of any Portfolio, if such action is
required by law, judicial order, or by regulatory authorities having
jurisdiction, or if the Board, in its sole discretion, acting in good
faith and in light of its fiduciary duties under applicable law,
determines that such action is in the best interests of the shareholders
of that Portfolio. Further, the Company reserves the right at all times
to take any corporate actions, including, but not limited to, the
dissolution, merger, and sale of the assets of each Portfolio, solely
upon the authorization of its Board.
2.4 OFFERING PRICE. Distributors shall offer the shares of each
Portfolio for sale at the net asset value per share plus a sales charge, if
any, all as described in the Company's then effective prospectus and statement
of additional information, as each may be amended or supplemented from time to
time (collectively, "Prospectus," unless the context otherwise requires). On
each business day on which the Company is required by Rule 22c-1 under the Act
to calculate the net asset value per share of each Portfolio ("Business Day"),
the Company shall furnish, or cause to be furnished, to Distributors each
Portfolio's then current net asset value per share.
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2.5 MANNER OF OFFERING. Distributors shall offer the shares of each
Portfolio for sale in the manner described in the Company's Prospectus, and
only in those jurisdictions where they have been properly registered or
qualified, or are exempt from registration.
2.6 SALES COMMISSIONS. Distributors shall be entitled to a commission
on the sale of the shares of each Portfolio in accordance with Schedule A.
2.7 ORDER AND PAYMENT PROCESSING. Distributors shall immediately
transmit to the Company's transfer agent ("Transfer Agent") any order to
purchase shares of a Portfolio that it receives to the Transfer Agent, and
shall immediately pay, or cause to be paid, to the Company's custodian
("Custodian"), for the Company's account on behalf of a Portfolio, an amount
in cash equal to the net asset value of such shares. Distributors shall accept
orders for the purchase of shares of each Portfolio only to the extent of
purchase orders actually received and not in excess of such orders.
Distributors shall not avail itself of any opportunity of making a profit by
expediting or withholding orders.
2.8 PURCHASES FOR OWN ACCOUNT. Distributors shall not purchase shares
for its own account for purposes of resale to the public. Distributors, to the
extent disclosed in the Prospectus, may purchase such shares for its own
investment account at net asset value upon its written assurance to the
Company that the purchase is for investment purposes only and that such shares
will not be resold except through redemption by the Company.
2.9 SALE OF SHARES TO AFFILIATES AND CERTAIN OTHER Persons.
Distributors may sell shares of each Portfolio at net asset value to certain
of its and the Company's affiliated persons, as well as certain other persons
identified in the Prospectus pursuant to the provisions of applicable law,
including Rule 22d-1 under the Act, and in accordance with the relevant
disclosures made in the Prospectus.
2.10 SELLING GROUP AGREEMENTS. Distributors may, from time to time,
effect offers and sales of the shares of each Portfolio through unaffiliated
broker-dealers that are registered under the 1934 Act, that are members of the
NASD, and that have entered into an appropriate selling group agreement with
Distributors, the form of which agreement shall be approved by the Company
prior to its implementation. Distributors may allow these broker-dealers such
commissions or discounts not exceeding the total sales commission set forth in
Schedule A, as it shall deem advisable, so long as any such commissions or
discounts are set forth in the Company's Prospectus to the extent required by
applicable law.
3. REDEMPTION OF PORTFOLIO SHARES.
3.1 RECEIPT OF REDEMPTION REQUESTS. Distributors shall promptly forward
any redemption request that it receives to the Transfer Agent, or its
designee, each Business Day.
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3.2 CASH REDEMPTIONS. Subject to paragraph 3.3, below, the Company
shall arrange to effect any redemption request for full or fractional shares
of each Portfolio in cash at the net asset value per share next computed on
each Business Day.
3.3 PAYMENT OF REDEMPTION PROCEEDS. To the extent that Distributors may
be deemed to effect any redemption of Fund shares, the Company shall request
that the Transfer Agent or its designee provide for payment of redemption
proceeds no later than the third business day after receipt of any redemption
request by Distributors, pursuant to paragraph 3.1, above, or by the Company's
Transfer Agent or its designee; provided that the Company shall not be liable
to Distributors in this connection.
3.4 REDEMPTIONS IN KIND. Notwithstanding anything herein to the
contrary, subject to compliance with the provisions of Section 18(f) of the
Act, the Company reserves the right to effect all or a portion of a redemption
request for shares of each Portfolio by payment in kind of portfolio
securities, if the Company's Board determines that it would be detrimental to
the best interests of the shareholders of a Portfolio to make a redemption
wholly or partially in cash.
3.5 DELAY IN PAYMENT OF REDEMPTION PROCEEDS; SUSPENSION OF REDEMPTION.
The Company, on behalf of each Portfolio, shall have the right to delay the
payment of redemption proceeds, and to suspend the redemption of shares of the
Portfolio, pursuant to the conditions set forth in the Prospectus.
4. ALLOCATION OF EXPENSES.
Except as set forth herein, each Party shall bear all expenses of
fulfilling its duties and obligations under this Agreement; provided, however,
that Distributors shall bear the expenses attributable to any sales or
promotional activity, other than those expenses borne by the Company pursuant
to a Plan of Distribution Pursuant to Rule 12b-1, or any redemption activity
that may be deemed to be an activity of Distributors.
5. MARKETING MATERIALS.
5.1 PREPARATION, PRINTING, AND DISTRIBUTION. Distributors, at its sole
cost, shall be responsible for preparing, printing, and distributing, or
causing the same to be done, all marketing materials to be used in connection
with the offer and sale of the shares of each Portfolio. As used herein,
"marketing materials" shall mean any "advertisement" or "sales literature," as
those terms are defined in Section 2210(a) of the NASD's Conduct Rules, as
amended from time to time, and shall include any so-called "dealer only"
materials, as well as any Prospectuses, periodic reports to shareholders
("Reports"), and other materials sent to persons other than the then current
shareholders of each Portfolio (except that the Company shall bear the cost of
preparing, printing, and distributing any Prospectuses, Reports, and other
materials specified in paragraph 6.3, below).
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5.2 COMPANY APPROVAL. Distributors shall submit definitive copies of
all marketing materials to the Company for its approval, which shall not be
unreasonably withheld, at least five (5) business days prior to their first
use. The Company shall be deemed to have granted its approval of such
marketing materials unless it objects within such five (5) business day
period.
5.3 REGULATORY APPROVALS. Distributors shall, to the extent required,
file in a timely manner all marketing materials with the NASD, the Securities
and Exchange Commission ("SEC"), or any other regulatory body, as appropriate,
and shall obtain any necessary approval of these regulatory bodies of any
marketing materials.
6. NON-MARKETING MATERIALS.
6.1 SHAREHOLDER CORRESPONDENCE. Distributors, at its sole cost, shall
be responsible for preparing, printing, and distributing, or causing the same
to be done, all correspondence with shareholders in its capacity as principal
underwriter, except for correspondence prepared, printed, and distributed by
Distributors at the Company's request. Distributors shall, from time to time,
make such correspondence available to the Company for review upon request.
6.2 CONFIRMATIONS. Distributors, at its sole cost, shall be responsible
for preparing, printing, and distributing in a timely manner, or causing the
same to be done, confirmations of shareholder transactions required to be
delivered to shareholders pursuant to applicable law. Notwithstanding the
foregoing, the Company may retain the services of a transfer agent, which
services may include the delivery of confirmations of shareholder
transactions.
6.3 PROSPECTUSES, REPORTS, ETC. The Company, at its sole cost, shall be
responsible for preparing, printing, and distributing, or causing the same to
be done, all Prospectuses, Reports, proxy materials, and other documents
required by applicable law to be provided to shareholders of each Portfolio,
and for filing such materials with the NASD, SEC or any other regulatory body,
as appropriate, and shall obtain any necessary approval of these regulatory
bodies of these materials.
6.4 DISTRIBUTORS APPROVAL. The Company shall provide Distributors with
definitive copies of all documents enumerated in paragraph 6.3 above for
Distributors' prior approval, which shall not be unreasonably withheld, at
least five (5) business days prior to their first use. Distributors shall be
deemed to have granted its approval of such materials unless it objects within
such five (5) business day period.
7. CONDUCT OF BUSINESS.
7.1 GENERAL. Distributors shall be subject to the direction and control
of the Company in the sale of the shares of each Portfolio. In selling
Portfolio shares, Distributors shall comply in all respects with the
requirements of all federal and state laws and regulations and the regulations
of the NASD, relating to the sale of the shares of each Portfolio. Neither
Distributors nor any other person is authorized by the Company to give any
information or to make any representations, other than those contained in the
Company's Registration Statement or Prospectus, and any marketing materials
authorized by responsible officers of the Company.
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7.2 INDEPENDENT CONTRACTOR. Distributors shall undertake and discharge
its obligations hereunder as an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Company or any Portfolio in any way and shall not be deemed to
be an employee of the Company.
7.3 NON-EXCLUSIVE SERVICES. Distributors' services pursuant to this
Agreement shall not be deemed to be exclusive, and Distributors may render
similar services and act as an underwriter, distributor or dealer for other
investment companies in the offering of their shares, consistent with its best
efforts obligations to each Portfolio set forth herein.
7.4 RECORDS. Distributors shall maintain and preserve such records as
are necessary or appropriate to record its transactions with the Company, as
required by Section 31(a) of the Act. To the extent required, Distributors
shall promptly return to the Company all records relating to the Company, free
from any claim or retention of rights by Distributors and without charge by
Distributors except for its direct expense.
8. INDEMNIFICATION.
8.1 GENERAL. Distributors shall indemnify and hold harmless the Company
and each of its Directors and officers (or former Directors and officers) and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act (collectively, "Indemnitees") against any loss, liability,
claim, damage, or expense (including the reasonable cost of investigating and
defending against the same and any counsel fees reasonably incurred in
connection therewith) incurred by any Indemnitee under the 1933 Act or under
common law or otherwise, which arise out of or are based upon:
(a) any untrue or alleged untrue statement of a material fact
contained in information furnished to the Company by Distributors for use
in the Company's Registration Statement, Prospectus, Reports or other
documents sent to its shareholders,
(b) any omission or alleged omission to state a material fact in
connection with information furnished to the Company by Distributors for
use in the Company's Registration Statement, Prospectus, Reports or other
documents sent to its shareholders, which fact is required to be stated
in any of such documents or necessary to make such information not
misleading,
(c) any misrepresentation or omission or alleged
misrepresentation or omission to state a material fact on the part of
Distributors or any agent or employee of Distributors or any other person
for whose acts Distributors is responsible, unless such misrepresentation
or omission or alleged misrepresentation or omission was made in reliance
on written information furnished by the Company, or
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(d) the willful misconduct or failure to exercise reasonable care
and diligence on the part of Distributors or any agent or employee of
Distributors or any other person for whose acts Distributors is
responsible with respect to services rendered under this Agreement. This
indemnity provision, however, shall not operate to protect any officer or
Director of the Company from any liability to the Company or any
shareholder by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of his or her duties.
8.2 LIMITATIONS; NOTICE OF CLAIM; ASSUMPTION OF DEFENSE. In case any
action shall be brought against any Indemnitee, Distributors shall not be
liable under its indemnity agreement contained in paragraph 8.1, above, with
respect to any claim made against any Indemnitee, unless the Indemnitee shall
have notified Distributors 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 Indemnitee (or after the Indemnitee
shall have received notice of such service on any designated agent), but
failure to notify Distributors of any such claim shall not relieve it from
liability to the Indemnitees against whom such action is brought otherwise
than on account of paragraph 8.1, above. Distributors shall 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
Distributors elects to assume the defense, such defense shall be conducted by
counsel chosen by it and satisfactory to the Indemnitees that are defendants
in the suit. In the event Distributors elects to assume the defense of any
such suit and retain such counsel, the Indemnitees that are defendants in the
suit shall bear the fees and expenses of any additional counsel retained by
them, but, in case Distributors does not elect to assume the defense of any
such suit, Distributors will reimburse the Indemnitees that are defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
Distributors shall promptly notify the Company of the commencement of any
litigation or proceedings in connection with the issuance or sales of the
Company's shares.
9. TERM AND TERMINATION.
9.1 TERM. This Agreement shall become effective upon Distributors'
approval for membership in the NASD, and shall remain in force for two years
from such date, and thereafter, but only so long as such continuance is
specifically approved at least annually by (i) the Board of Directors, or by
the vote of a majority of the outstanding voting securities of each Portfolio,
cast in person or by proxy, and (ii) a majority of those Directors who are not
parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, the Board of Directors may, from time to time,
establish a new effective date for the continuance of this Agreement with
respect to any Portfolio, provided that such new effective date precedes the
then current termination date of this Agreement. Any approval of this
Agreement by the holders of a majority of the outstanding voting securities of
any Portfolio shall be effective to continue this Agreement with respect to
that Portfolio notwithstanding (i) that this Agreement has not been approved
by the vote of a majority of the outstanding voting securities of any other
Portfolio affected thereby, and (ii) that this Agreement has not been approved
by the vote of a majority of the outstanding voting securities of the Company,
unless such approval shall be required by any other applicable law or
otherwise.
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9.2 TERMINATION. This Agreement may be terminated at any time without
the payment of any penalty, by the Board of Directors, by vote of a majority
of the outstanding voting securities of a Portfolio, or by Distributors, on
sixty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
10. DEFINITIONS.
As used herein the terms "net asset value," "offering price," "investment
company," "open-end management investment company," "assignment," "principal
underwriter," "interested person," "affiliated person," and "majority of the
outstanding voting securities" shall have the meanings set forth in the 1933
Act or the Act, and the rules and regulations thereunder. Nothing herein
contained shall require the Company to take any action contrary to any
provision of its Articles of Incorporation, By-Laws, or any applicable statute
or regulation.
11. NOTICES.
Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage prepaid, to the other party at such address as
the other party may designate for the receipt of notices. Until further notice
to the other party, it is agreed that the address of both the Company and
Distributors shall be 0000 Xxxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000.
12. SEVERABILITY.
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby.
13. CONFIDENTIALITY.
Distributors shall not disclose or use any records or information
obtained pursuant to this Agreement, pursuant to its relationship with the
Company, or in the course of discharging its obligations hereunder, in any
manner whatsoever except as expressly authorized by this Agreement or in a
writing by the Company, or as expressly required by applicable federal or
state regulatory authorities.
14. APPLICABLE LAW.
This Agreement shall be governed by the laws of the State of Maryland,
notwithstanding any conflict of laws provisions thereof, and shall be
construed to promote the operation of the Company as an open-end management
investment company.
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15. PARTIES TO COOPERATE.
The Company and Distributors agree to fully cooperate with each other in
assuring compliance under this Agreement with all federal and state laws and
regulations.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as
of the date first written above.
MONUMENT SERIES FUND, INC.
By:/s/XXXXX X. XXXXXX
---------------------
Xxxxx X. Xxxxxx
President
ATTEST
By:/s/XXXXXXX XXXXX, III
---------------------
Xxxxxxx Xxxxx, III
Secretary
MONUMENT ADVISORS, LTD.
By:/s/XXXXX X. XXXXXX
---------------------
Xxxxx X. Xxxxxx
President
ATTEST
By:/s/XXXXXXX XXXXX, III
---------------------
Xxxxxxx Xxxxx, III
Secretary
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SCHEDULE A
This Schedule A is an integral part of the Agreement to which it is
attached. Capitalized terms used herein have the same meaning as given to them
in the Agreement, except as otherwise noted. This Schedule A sets out the
names of the Portfolios covered by the Agreement and the compensation of
Distributors for the services rendered with respect thereto.
NAMES OF PORTFOLIOS
Monument Washington Regional Growth Fund
Monument Washington Regional Aggressive Growth Fund
COMPENSATION
For its services rendered pursuant to the Agreement, Distributors shall
be entitled to receive, as full compensation therefor, the following sales
commissions (subject to any scheduled variations or eliminations of commission
as set forth in the Company's Prospectus):
INITIAL SALES CHARGE (as a percentage of offering price)
o applicable to purchase payments through $50,000.................... 1.50%
o applicable to purchase payments greater than $50,000
through $100,000................................................. 1.00%
o applicable to purchase payments greater than $100,000
through $1 million............................................... 0.50%
o applicable to purchase payments greater than $1 million............ 0.25%
If shares of a Portfolio are tendered to the Company for redemption or
repurchase within seven (7) business days after Distributors' acceptance of
the original purchase order for such shares, Distributors shall immediately
return to the Company the full sales commission (net of any allowances to
brokers or dealers) allowed to Distributors on the original sale, and shall
promptly, upon receipt thereof, pay to the Company any reallowance from
brokers or dealers of the balance of the sales commission reallowed by
Distributors. The Company shall notify Distributors, or cause Distributors to
be notified, of such tender for redemption within 10 days of the day on which
the Company receives notice of such tender for redemption.
