DISTRIBUTION AGREEMENT
AGREEMENT, made as of October 14, 2003 between MATTERHORN GROWTH
FUND, INC. a Maryland corporation (formerly The 00 Xxxx Xxxxxx Equity Fund,
Inc.) (the "Fund"), and BAINBRIDGE SECURITIES INC., a Pennsylvania corporation
(the "Distributor").
WHEREAS, the Fund is an open-end, non-diversified, management type
investment company registered as such under the Investment Company Act of 1940
(the "1940 Act");
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Act of 1934 (the "1934 Act"); and
WHEREAS, the Fund desires to retain the Distributor as its
distributor to provide for the sale and distribution of the shares of the Fund's
Common Stock ("Shares"), and the Distributor is willing to furnish such
services;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, it is agreed between the Fund and the Distributor as follows:
1. APPOINTMENT. The Fund hereby appoints the Distributor as the
Distributor of Fund Shares which may from time to time be
registered under the Securities Act of 1933 (the "1933 Act")
for the period and on the terms set forth in this Agreement.
The Distributor hereby accepts such appointment and agrees to
render the services herein set.
2. DUTIES AS THE DISTRIBUTOR. Except as otherwise provided
herein, the Fund agrees to sell Shares (whether authorized but
unissued or treasury shares, in he Fund's sole discretion)
through the Distributor, as the Fund's agent, and to deliver
Shares which the Distributor has received and confirmed
unconditional purchase orders, subject to the following:
(a) The Distributor may sell and distribute Shares in such
manner not inconsistent with the provisions hereof as
the Distributor may determine from time to time;
provided, however, that the Distributor shall comply
with all laws, rules, and regulations applicable to it,
including, without limitation, all applicable rules or
regulations under the 1940 Act and of any securities
association registered under the 0000 Xxx.
(b) All sales literature and advertisements used by the
Distributor in connection with the sale of the Fund's
Shares shall be subject to the approval of the Fund.
(c) All purchase orders from the Distributor shall be
subject to acceptance and confirmation by the Fund;
provided, however, that no Shares shall be sold through
the Distributor or by the Fund under this Agreement and
no purchase orders shall be confirmed or accepted by the
Fund if and so long as the Fund's Registration Statement
shall not be effective under the 1933 Act.
(d) The Fund's Board of Directors or, upon authority from
the Board, the Fund's officers, at any time such action
is deemed advisable, may suspend or terminate sales of
the Fund's Shares, give the Distributor notice of such
suspension or termination, and decline to accept or
confirm and purchase orders for, or make any sales of
Shares under this Agreement until such time as may be
deemed advisable.
(e) The Fund may, from time to time, set upper and lower
limits on the number of Shares for which a purchaser may
subscribe and may limit sales of Shares to then existing
stockholders.
(f) The Distributor may, from time to time, at its own
expense, employ or associate with itself, such persons
or entities as it believes necessary to assist it in
carrying out its obligations under this Agreement.
3. OFFERING PRICE. All Shares offered for sale and sold by the
Distributor shall be offered for sale and sold by the
Distributor at an amount equal to the net asset value per
share next determined after receipt by the Fund's transfer
agent, by the Distributor, or by any dealer with whom the
Distributor has entered into a selling agreement, of a
purchase order for Shares, without any sales charge.
The Fund shall determine, and promptly furnish to the
Distributor, a statement of the offering price at such times
and with such frequency, as the Board of Directors of the
Fund, from time to time, shall specify. Each offering price
shall become effective at that time and shall remain in effect
during the period specified in the statement.
Purchase of Shares shall be made for full and fractional
shares,
4. CERTIFICATES FOR SHARES. If certificates for shares are
requested by the purchaser, they shall be delivered as
promptly as practicable. Ownership of Shares sold hereunder
shall be registered in such names and denominations as are
specified, in writing to the Fund or to its agent designated
for the purpose.
5. EXPENSES; COMPENSATION. During the term of this Agreement, the
Distributor shall bear the expenses incurred in connection
with (i) the qualification of the Distributor as dealer or
broker under Federal or state laws, (ii) the prospectuses
delivered by it, other than to stockholders of the Fund, and
(iii) all sales and promotional literature and advertising
used by the Distributor in connection with the offering of
Shares for sale to the public.
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The Fund shall pay all of its expenses, including those
incurred in connection with (i) the preparation, printing, and
distribution to stockholders of the Fund's prospectus and
reports and other communications to stockholders, (ii)
registration of its Shares under the 1933 Act, (iii)
qualification of its Shares in those jurisdictions designated
by the Distributor, (iv) qualification of the Fund as a broker
or dealer under the laws of any jurisdiction designated by the
Distributor, if the Distributor determines that such
qualification is necessary or desirable to facilitate the
sales of the Fund's Shares, (v) maintaining facilities by the
Fund under this Agreement, and (vi) any taxes applicable to
the sale or delivery of Shares or certificates there for.
6. INDEMNIFICATION. The Fund agrees to indemnify and hold
harmless the Distributor and each officer and director of the
Distributor and each person who controls the Distributor
within the meaning of Section 15 of the 1933 Act from, and
against, any and all losses, claims, damages, or liabilities,
joint or several, to which they, or any of them, may become
subject under the 1933 Act, under the 1940 Act, under any
other statute, at common law or otherwise, and to reimburse
the Distributor and such officers, directors, and other
persons for any legal or other expenses (including the cost of
any investigation and preparation) reasonably incurred by
them, or any of them, in connection with investigating or
defending any such losses claims, damages, or liabilities
arising out of, or based upon, any untrue statement, or
alleged untrue statement, of a material fact contained in the
Registration Statement covering the Shares filed under the
1933 Act or the prospectus contained therein, or any omission,
or alleged omission, to state therein a material fact required
to be stated therein, or necessary to make the statements
there not misleading; provided, however, that such indemnity
shall not apply to any such losses, claims, damages, or
liabilities, arising out of, or based upon, and such untrue
statement, or alleged untrue statement, or omission, or
alleged omission, which was made in reliance upon information
furnished in writing to the Fund by, or on behalf of, the
Distributor for inclusion in the Registration Statement or the
prospectus. Nothing herein contained shall, however, be deemed
to protect, or purport to protect, the Distributor against any
liability to the Fund or its stockholders to which the
Distributor would otherwise be subject, by reason of the
reckless disregard by the Distributor of its obligation and
duties under this Agreement.
(b) The Distributor agrees to indemnify, and hold harmless,
the Fund, its directors, and officers, and each person who
controls the Fund with in the meaning of Section 15 of the
1933 Act, from and against, any and all losses, claims,
damages, or liabilities, joint or several, to which they, or
any of them, may become subject under the 1933 Act, the 1940
Act, or under any other statute, at common law or other
expenses (including the cost of any investigation and
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preparation) reasonable incurred by them, or any of them, in
connection with investigating or defending against any such
losses, claims, damages, or liabilities, insofar as such
losses, claims, damages, or liabilities arise out of, or are
based upon, any untrue statement, or alleged untrue statement,
or the prospectus, or any omission, or alleged omission, to
state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading,
which statement or omission was made in reliance upon
information furnished, in writing, to the Fund by, or on
behalf of, the Distributor for inclusion in the Registration
Statement of the prospectus.
7. DURATION AND TERMINATION. (a) This Agreement shall become
effective, and the term hereof, shall commence as of the date
hereof. Unless sooner terminated as provided herein, or
otherwise by law, the Agreement shall continue in force until
the date of the next annual meeting of shareholders of the
Fund, or until the second anniversary of the execution hereof
, whichever is sooner, and from year to year thereafter, but
only so long as such continuance is specifically approved, at
least annually, by the Board of Directors of the Fund,
including a majority of the Fund's directors who are not
interested persons (as defined in the 0000 Xxx) of the
Distributor, or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Fund and
a majority of those directors who are not parties to this
Agreement or interested persons (as defined in the 1940 Act)
of the Distributor.
(b) This Agreement shall automatically terminate in the event
of its assignment (as defined in the 1940 Act).
(c) This Agreement may be terminated by either party, at any
time, without the payment of any penalty, upon sixty (60) days
written notice to the other party, except that the Fund may
terminate the Agreement under this Section 7(c) only if such
termination is authorized by resolution of its Board of
Directors or by vote of a majority of its outstanding voting
securities (as defined in the 1940 Act).
(d) The indemnification provisions contained in Section 6
above, shall remain operative and in full force and effect,
regardless of any termination hereof, it being understood,
however, that such provisions only apply to acts and events
which occur while this Agreement is in effect.
8. PROVIDING OF INFORMATION. (a) With respect to the services
rendered hereunder, by it in connection with the offering or
sale of Shares, the Distributor agrees to supply to the Fund
such information as it may possess, and as the Fund may
require, in order to meet the reporting requirements of the
Securities and Exchange Commission (the "Commission") and any
other governmental agency or body.
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(b) The Fund agrees to supply the Distributor with copies of
all documents and instruments filed with the Commission. The
Fund hereby authorizes the Distributor and its agents and
registered representatives, and any registered dealer entering
into a selling agreement with the Distributor, to use the
prospectus in connection with the distribution and sale of
Shares.
9. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York and may be executed in several
counterparts, each of which shall be deemed original against
any per by whom it is manually signed, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
MATTERHORN GROWTH FUND, INC.
By________________________________
Xxxxxxx X. Church
Secretary
BAINBRIDGE SECURITIES INC.
By_______________________________
Xxxxxxx Xxxxxx Xxxxxxxxx
President
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