Exhibit (e)
DISTRIBUTION AGREEMENT
AGREEMENT dated as of September 9, 2002, between X.X. Xxxxxxx & Co.
Growth Fund, Inc. (the "Fund"), an open-end, management investment company
organized as a corporation under the laws of the State of Maryland, having its
principal place of business at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and ALPS Distributors, Inc., a Colorado corporation and a registered
broker-dealer under the Securities Exchange Act of 1934, having its principal
place of business at 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 (the
"Distributor").
WHEREAS, the Fund wishes to employ the services of the Distributor in
connection with the promotion and distribution of its shares (the "Shares");
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties agree as follows:
1. Documents -- The Fund has furnished or will furnish, upon request, the
Distributor with copies of the Fund's Articles of Incorporation, advisory
agreement, custodian agreement, transfer agency agreement, administration
agreement, current prospectus, and statement of additional information, and all
forms relating to any plan, program or service offered by the Fund. The Fund
shall furnish, within a reasonable time period, to the Distributor a copy of any
amendment or supplement to any of the above-mentioned documents. Upon request,
the Fund shall furnish promptly to the Distributor any additional documents
necessary or advisable to perform its functions hereunder. From time to time,
each party shall be permitted reasonable access to records maintained by the
other party in connection with this Agreement to the extent necessary to perform
its obligations hereunder. As used in this Agreement the terms "registration
statement", "prospectus" and "statement of additional information" shall mean
any registration statement, prospectus and statement of additional information
filed by the Fund with the Securities and Exchange Commission ("SEC") and any
amendments and supplements thereto that are filed with the SEC.
2. Sales of Shares -- The Fund grants to the Distributor the right to sell the
Shares as agent on behalf of the Fund, during the term of this Agreement,
subject to the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act") and of the laws governing the sale of securities in the various
states ("Blue Sky Laws"), under the terms and conditions set forth in this
Agreement. The Distributor shall have the right to sell, as agent on behalf of
the Fund, the Shares covered by the registration statement, prospectus and
statement of additional information for the Fund then in effect under the 1933
Act and 1940 Act.
3. Sales of Shares by the Fund -- The rights granted to the Distributor shall be
nonexclusive in that the Fund reserves the right to sell Shares to investors on
applications received and accepted by the Fund.
4. Public Offering Price -- Except as otherwise noted in the Fund's current
prospectus and/or statement of additional information, all Shares sold to
investors by the Distributor or the Fund will be sold at the public offering
price. The public offering price for all accepted subscriptions will be the net
asset value per Share, as determined in the manner described in the Fund's
current prospectus and/or statement of additional information, plus a sales
charge (if any) as described in the Fund's current prospectus and/or statement
of additional information. The Fund shall in all cases receive the net asset
value per Share on all sales. If a sales charge is in effect, the Distributor
shall have the right, subject to such rules or regulations of the SEC as may
then be in effect pursuant to Section 22 of the 1940 Act to pay a portion of the
sales charge to dealers who have sold Shares of the Fund.
5. Suspension of Sales -- The Fund reserves the right to suspend sales and the
Distributor's authority to process orders for Shares on behalf of the Fund if,
in the judgment of the Fund, it is in the best interests of the Fund to do so.
Suspension will continue for such period as may be determined by the Fund.
6. Solicitation of Sales -- In consideration of these rights granted to the
Distributor, the Distributor agrees to use its best efforts to solicit orders
for the sale of the Shares at the public offering price and will undertake, at
its own cost, such advertising and promotion as it believes is reasonable in
connection with such solicitation, subject to the Fund's approval. The
Distributor shall be responsible for reviewing and filing any sales literature
or advertising material (including material disseminated through radio,
television or other electronic media) concerning Fund shares with the SEC and
the National Association of Securities Dealers, Inc. (the "NASD") to the extent
required by the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the 1940 Act and the rules and regulations thereunder, and by the
rules of the NASD. All such materials must be approved by the Distributor, in
writing, prior to use. This shall not prevent the Distributor from entering into
like arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. The Distributor will act only on its own behalf
as principal should it choose to enter into selling agreements with selected
dealers or others.
7. National Securities Clearing Corporation -- The Distributor is a member of
the National Securities Clearing Corporation ("NSCC") and will sponsor the Fund
with NSCC.
8. Authorized Representations -- The Distributor is not authorized by the Fund
to give any information or to make any representations other than those
contained in the registration statement or prospectus and statement of
additional information, or contained in shareholder reports or other material
that may be prepared by or on behalf of the Fund for the Distributor's use.
Consistent with the foregoing, the Distributor may prepare and distribute sales
literature or other material as it may deem appropriate in consultation with the
Fund, provided such sales literature complies with applicable law and
regulations.
9. Registration of Shares -- The Fund agrees that it will take all action
necessary to register the Shares under the 1933 Act and the 1940 Act (subject to
the necessary approval of its shareholders). The Fund shall make available to
the Distributor, at the Distributor's expense, such number of copies of its
prospectus and statement of additional information as the Distributor may
reasonably request. The Fund shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of Shares of the
Fund.
10. Distribution Fees and Expenses -- The Distributor shall furnish, at its
expense and without cost to the Fund, the services of personnel to the extent
that such services are required to carry out its obligations under this
Agreement. Such personnel shall consist of one or more persons, during normal
business hours (7:00 a.m. to 6:OO p.m. Mountain Time), to respond to telephone
questions with respect to the Distributor's responsibilities to the Fund.
11. Fund Expenses -- Unless otherwise agreed to by the parties hereto in writing
or by the Fund and the Fund's other agents, the Distributor shall not be
responsible for fees and expenses in connection with (a) filing of any
registration statement, printing and the distribution of any prospectus and
statement of additional information under the 1933 Act and/or the 1940 Act and
amendments prepared for use in connection with the offering of Shares for sale
to the public, preparing, setting in type, printing and mailing the prospectus,
statement of additional information and any supplements thereto sent to existing
shareholders, (b) preparing, setting in type, printing and mailing any report
(including annual and semi-annual reports) or other communication to
shareholders of the Fund, and (c) the Blue Sky registration and
qualification of Shares for sale in the various states in which the officers of
the Fund shall determine it advisable to qualify such Shares for sale
(including registering the Fund as a broker or dealer or any officer of the Fund
as agent or salesman in any state).
12. Use of the Distributor's Name -- The Fund shall not use the name of the
Distributor, or any of its affiliates, in any prospectus or statement of
additional information, sales literature, and other material relating to the
Fund in any manner without the prior written consent of the Distributor (which
shall not be unreasonably withheld); provided, however, that the Distributor
hereby approves all lawful uses of the names of the Distributor and its
affiliates in the prospectus and statement of additional information of the Fund
and in all other materials which merely refer in accurate terms to their
appointment hereunder or which are required by the SEC, NASD, or any state
securities authority.
13. Use of the Fund's Name -- Neither the Distributor nor any of its affiliates
shall use the name of the Fund in any publicly disseminated materials, including
sales literature in any manner without the prior written consent of the Fund
(which shall not be unreasonably withheld); provided, however, that the Fund
hereby approves all lawful uses of its name in any required regulatory filings
of the Distributor which merely refer in accurate terms to the appointment of
the Distributor hereunder, or which are required by the SEC, NASD, or any state
securities authority.
14. Insurance -- The Distributor agrees to maintain fidelity bond and liability
insurance coverages which are, in scope and amount, consistent with coverages
customary for distribution activities relating to the Fund. The Distributor
shall notify the Fund upon receipt of any notice of material, adverse change in
the terms or provisions of its insurance coverage. Such notification shall
include the date of change and the reason or reasons therefor. The Distributor
shall notify the Fund of any material claims against it, whether or not covered
by insurance, and shall notify the Fund from time to time as may be appropriate
of the total outstanding claims made by it under its insurance coverage.
15. Indemnification -- The Fund agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act
(collectively, "Distributor Indemnitees"), against any loss, liability, claim,
damages or expenses (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable counsel
fees incurred in connection therewith) arising by reason of any person acquiring
any Shares, based upon the ground that the registration statement, prospectus,
statement of additional information, shareholder reports or other information
filed or made public by the Fund (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading under
the 1933 Act, the 1940 Act or any other statute or the common law. However, the
Fund does not agree to indemnify the Distributor Indemnitees or hold them
harmless to the extent that the statement or omission was made in reliance upon,
and in conformity with, information furnished to the Fund by or on behalf of the
Distributor. In no case (i) is the indemnity of the Fund in favor of the
Distributor Indemnitees to be deemed to protect the Distributor Indemnitees
against any liability to the Fund or its security holders to which the
Distributor Indemnitees would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Fund to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against a Distributor
Indemnitee unless the Distributor Indemnitees shall have notified the Fund in
writing of the claim promptly after the summons or other first written
notification giving information of the nature of the claims shall have been
served upon the Distributor Indemnitee (or after the Distributor Indemnitee
shall have received notice of service on any designated agent). However, failure
to notify the Fund of any claim shall not relieve the Fund from any liability
which it may have to any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Fund 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 claims,
and if the Fund elects to assume the defense, the defense shall be conducted by
counsel chosen by the Fund. In the event the Fund elects to assume the defense
of any suit and retain counsel, the Distributor Indemnitee(s), defendant(s) in
the Suit, shall bear the fees and expenses of any additional counsel retained by
them. If the Fund does not elect to assume the defense of any suit, it will
reimburse the Distributor Indemnitee(s) that are defendant(s) in the suit for
the reasonable fees and expenses of any counsel retained by them. The Fund
agrees to notify the Distributor promptly of the commencement of any litigation
or proceeding against it or any of its officers in connection with the issuance
or sale of any of the Shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Fund and each of its directors, officers and each person, if any,
who controls the Fund within the meaning of Section 15 of the 1933 Act
(collectively "Fund Indemnitees"), against any loss, liability, damages, claims
or expense (including the reasonable cost of investigating or defending any
alleged loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring any
Shares, based upon the 1933 Act, the 1940 Act or any other statute or common
law, alleging (a) any wrongful act of the Distributor or any of its employees or
(b) that any sales literature, advertisements, information, statements or
representations used or made by the Distributor or any of its affiliates or
employees or that the registration statement, prospectus, statement of
additional information, (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading, insofar as
the statement or omission was made in reliance upon, and in conformity with,
information furnished to the Fund by or on behalf of the Distributor. In no case
(i) is the indemnity of the Distributor in favor of the Fund Indemnitees to be
deemed to protect the Fund Indemnitees against any liability to which the Fund
Indemnitees would otherwise be subject by reason of willful misfeasance, bad
faith or negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or (ii)
is the Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against a Fund Indemnitee unless the
Fund Indemnitee shall have notified the Distributor in writing of the claim
promptly after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the Fund
Indemnitee (or after the Fund Indemnitee shall have received notice of service
on any designated agent). However, failure to notify the Distributor of any
claim shall not relieve the Distributor from any liability which it may have to
the Fund Indemnitee otherwise than on account of its indemnity agreement
contained in this paragraph. In the case of any notice to the Distributor it
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 the claim, and
if the Distributor elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Fund Indemnitee(s), defendant(s)
in the suit. In the event that the Distributor elects to assume the defense of
any suit and retain counsel, the Fund Indemnitee(s) that are defendant(s) in the
suit, shall bear the fees and expense of any additional counsel retained by
them. If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Fund Indemnitee(s) that are defendant(s) in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Distributor
agrees to notify the Fund promptly of the commencement of any litigation or
proceedings against it in connection with the Fund and sale of any of the
Shares.
16. Supplemental Information -- The Distributor and the Fund shall regularly
consult with each other regarding the Distributor's performance of its
obligations under this Agreement. In connection therewith, the Fund shall submit
to the Distributor at a reasonable time in advance of filing with the SEC
reasonably final copies of any amended or supplemented registration statement
(including exhibits) under the 1933 Act and the 1940 Act; provided, however,
that nothing contained in this Agreement shall in any way limit the Fund's right
to file at any time such amendments to any registration statement and/or
supplements to
any prospectus or statement of additional information, of whatever character, as
the Fund may deem advisable, such right being in all respects absolute and
unconditional.
The Distributor acknowledges that the only information provided to it by the
Fund is that contained in the registration statement, the prospectus, the
statement of additional information and reports and financial information
referred to herein. Neither the Distributor nor any other person is authorized
by the Fund to give any information or to make any representations, other than
those contained in such documents and any sales literature or advertisements
specifically approved by appropriate representatives of the Fund.
17. Term -- This Agreement shall become effective as of September 9, 2002, and
shall continue until two years from such date and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually (i) by the Fund's Board of Directors or
(ii) by a vote of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act), provided that in either event the continuance is
also approved by the majority of the Directors of the Fund who are not
interested persons (as defined in the 0000 Xxx) of any party to this Agreement
by vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable without penalty on sixty days' written
notice by the Fund's Board of Directors, by vote of the holders of a majority of
the outstanding voting securities of the Fund or by the Distributor. This
Agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act).
Upon the termination of this Agreement, the Distributor, at the Fund's expense
and direction, shall transfer to such successor as the Fund shall specify all
relevant books, records and other data established or maintained by the
Distributor under this Agreement.
18. Anti-Money Laundering -- The Distributor agrees to maintain an anti-money
laundering program in compliance with Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (the "USA Patriot Act") and all applicable laws and
regulations promulgated thereunder. The Distributor confirms that, as soon as
possible, following the request from the Fund, the Distributor will supply the
Fund with copies of the Distributor's anti-money laundering policy and
procedures, and such other relevant certifications and representations regarding
such policy and procedures as the Fund may reasonably request from time to time.
19. Notice -- Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by (i) telecopier (fax) or (ii)
registered or certified mail, postage prepaid, addressed by the party giving
notice to the other party at the last address furnished by the other party to
the party giving notice: if to the Fund at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn: Director of Fund Administration; and if to the
Distributor, at 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx, 00000, Attn:
Xxxxx Xxxxxx, or such other telecopier (fax) number or address as may be
furnished by one party to the other.
20. Confidential Information -- The Distributor, its officers, directors,
employees and agents will treat confidentially and as proprietary information of
the Fund all records and other information relative to the Fund and to prior or
present shareholders or to those persons or entities who respond to the
Distributor's inquiries concerning investment in the Fund, and will not use such
records and information for any purposes other than performance of its
responsibilities and duties hereunder. If the Distributor is requested or
required by, but not limited to, depositions, interrogatories, requests for
information or documents, subpoena, civil investigation, demand or other action,
proceeding or process or as otherwise required by law, statute, regulation,
writ, decree or the like to disclose such information, the Distributor will
provide the Fund with prompt written notice of any such request or requirement
so that the Fund may seek an appropriate protective order or other appropriate
remedy and/or waive compliance with this provision. If such order or other
remedy is not sought, or obtained, or waiver not received within a
reasonable period following such notice, then the Distributor may without
liability hereunder, disclose to the person, entity or agency requesting or
requiring the information, that portion of the information that is legally
required in the reasonable opinion of the Distributor's counsel.
21. Limitation of Liability -- The Distributor is expressly put on notice of the
limitation of shareholder, officer and Director liability as set forth in the
Articles of Incorporation of the Fund and agrees that the obligations assumed by
the Fund under this contract shall be limited in all cases to the Fund and its
assets. The Distributor agrees that it shall not seek satisfaction of any such
obligation from the shareholders or any individual shareholder of the Fund. Nor
shall the Distributor seek satisfaction of any such obligation from the
Directors, officers or any individual Director or officer of the Fund. Any
obligations of the Fund entered into in the name or on behalf thereof by any of
the Directors or officers, representatives or agents are made not individually,
but in such capacities, and are not binding upon any of the Directors or
officers, shareholders, or representatives of the Fund personally, but bind only
the Fund property, and all persons dealing with any class of Shares of the Fund
must look solely to the Fund property belonging to such class for the
enforcement of any claims against the Fund.
22. Miscellaneous -- Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof. This
Agreement shall be construed, interpreted, and enforced in accordance with and
governed by the laws of the State of Colorado. The captions in this Agreement
are 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.
This Agreement may not be changed, waived, discharged or amended except by
written instrument that shall make specific reference to this Agreement and
which shall be signed by the party against which enforcement of such change,
waiver, discharge or amendment is sought. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument. This Agreement contains the entire
agreement of the parties with respect to the subject matter contained herein,
and supersedes all prior agreements, arrangements and understandings.
All activities by the Distributor and its agents and employees as distributor of
the Shares shall comply with all applicable laws, rules and regulations
including, without limitation, all rules and regulations made or adopted by the
SEC or any securities association registered under the Exchange Act. The
Distributor represents and warrants that it is a member of the NASD and agrees
to abide by all of the rules and regulations of the NASD, including, without
limitation, its Conduct Rules, as defined thereunder. The Distributor agrees to
notify the Fund immediately in the event of its expulsion or suspension by the
NASD. Expulsion of the Distributor by the NASD will terminate this Agreement
immediately without notice. Suspension of the Distributor by the NASD will
terminate this Agreement effective immediately upon written notice of
termination to the Distributor from the Fund. The Distributor further represents
that it is registered in all fifty (50) states, and shall maintain such
registration. The Distributor shall not conduct any activity in any state if to
do so would require a license that the Distributor does not have.
The Distributor will promptly transmit any orders received by it for purchase,
redemption or exchange of the Shares to the Fund's transfer agent.
IN WITNESS WHEREOF, the Fund has executed this instrument in its name and
behalf, and the Distributor has executed this instrument in its name and behalf,
as of the date and year first above written.
X.X. XXXXXXX & CO. GROWTH FUND, INC. ALPS DISTRIBUTORS, INC.
By:_________________________________ By: Xxxxxx Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxxx Xxxxxx
Title: Treasurer Title: Chief Financial Officer
IN WITNESS WHEREOF, the Fund has executed this instrument in its name and
behalf, and the Distributor has executed this instrument in its name and behalf,
as of the date and year first above written.
X.X. XXXXXXX & CO. GROWTH FUND, INC. ALPS DISTRIBUTORS, INC.
By: Xxxxx X. Xxxxx By:___________________________
------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxxx Xxxxxx
Title: Treasurer Title: Chief Financial Officer
