EXHIBIT 6(c)
CLASS C SHARES
DISTRIBUTION AGREEMENT
AGREEMENT made as of the day of , 1997, between XXXXXXX XXXXX
CONVERTIBLE FUND, INC., a Maryland corporation (the "Company"), and XXXXXXX
XXXXX FUNDS DISTRIBUTOR, INC., a Delaware corporation (the "Distributor").
W I T N E S S E T H :
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WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"), as an open-end investment
company, and it is affirmatively in the interest of the Company to offer its
shares for sale continuously; and
WHEREAS, the Distributor is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or
through other securities dealers; and
WHEREAS, the Company and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of the Company's
Class C shares in order to promote the growth of the Company and facilitate
the distribution of its Class C shares.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor. The Company hereby appoints
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the Distributor as the principal underwriter and distributor of the Company
to sell Class C shares of common stock in the Company (sometimes herein
referred to as "Class C shares") to the public and hereby agrees during the
term of this Agreement to sell shares of the Company to the Distributor upon
the terms and conditions herein set forth.
Section 2. Exclusive Nature of Duties. The Distributor shall be the
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exclusive representative of the Company to act as principal underwriter and
distributor of the Class C shares, except that:
(a) The Company may, upon written notice to the Distributor, from time
to time designate other principal underwriters and distributors of Class C
shares with respect to areas other than the United States as to which the
Distributor may have expressly waived in writing its right to act as such.
If such designation is deemed exclusive, the right of the Distributor under
this Agreement to sell Class C shares in the areas so designated shall termi-
nate, but this Agreement shall remain otherwise in full effect until
terminated in accordance with the other provisions hereof.
(b) The exclusive right granted to the Distributor to purchase Class C
shares from the Company shall not apply to Class C shares of the Company
issued in connection with the merger or consolidation of any other investment
company or personal holding company with the Company or the acquisition by
purchase or otherwise of all (or substantially all) the assets or the
outstanding Class C shares of any such company by the Company.
(c) Such exclusive right also shall not apply to Class C shares issued
by the Company pursuant to reinvestment of dividends or capital gains
distributions.
(d) Such exclusive right also shall not apply to Class C shares issued
by the Company pursuant to any conversion, exchange or reinstatement
privilege afforded redeeming shareholders or to any other Class C shares as
shall be agreed between the Company and the Distributor from time to time.
Section 3. Purchase of Class C Shares from the Company.
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(a) The Company will commence an offering of its Class C shares, and
thereafter the Distributor shall have the right to buy from the Company the
Class C shares needed, but not more than the Class C shares needed (except
for clerical errors in transmission) to fill unconditional orders for Class C
shares of the Company placed with the Distributor by eligible investors or
securities dealers. Investors eligible to purchase Class C shares shall be
those persons so identified in the currently effective prospectus and
statement of additional information of the Company (the "prospectus" and
"statement of additional information," respectively) under the Securities Act
of 1933, as amended (the "Securities Act"), relating to such Class C shares.
The price which the Distributor shall pay for the Class C shares so purchased
from the Company shall be the net asset value, determined as set forth in
Section 3(c) hereof.
(b) The Class C shares are to be resold by the Distributor to investors
at net asset value, as set forth in Section 3(c) hereof, or to securities
dealers having agreements with the Distributor upon the terms and conditions
set forth in Section 7 hereof.
(c) The net asset value of Class C shares of the Company shall be
determined by the Company or any agent of the Company in accordance with the
method set forth in the prospectus and statement of additional information
and guidelines established by the Board of Directors.
(d) The Company shall have the right to suspend the sale of its Class C
shares at times when redemption is suspended pursuant to the conditions set
forth in Section 4(b) hereof. The Company shall also have the right to
suspend the sale of its Class C shares if trading on the New York Stock
Exchange shall have been suspended, if a banking moratorium shall have been
declared by Federal or New York authorities, or if there shall have been some
other event, which, in the judgment of the Company, makes it impracticable or
inadvisable to sell the Class C shares.
(e) The Company, or any agent of the Company designated in writing by
the Company, shall be promptly advised of all purchase orders for Class C
shares received by the Distributor. Any order may be rejected by the
Company; provided, however, that the Company will not arbitrarily or without
reasonable cause refuse to accept or confirm orders for the purchase of Class
C shares. The Company (or its agent) will confirm orders upon their receipt,
will make appropriate book entries and, upon receipt by the Company (or its
agent) of payment therefor, will deliver deposit receipts or certificates for
such Class C shares pursuant to the instructions of the Distributor. Payment
shall be made to the Company in New York Clearing House funds. The
Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Company (or its agent).
Section 4. Repurchase or Redemption of Class C Shares by the Company.
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(a) Any of the outstanding Class C shares may be tendered for
redemption at any time, and the Company agrees to repurchase or redeem the
Class C shares so tendered in accordance with its obligations as set forth in
Article VI of its Articles of Incorporation, as amended from time to time,
and in accordance with the applicable provisions set forth in the prospectus
and statement of additional information of the Company. The price to be paid
to redeem or repurchase the Class C shares shall be equal to the net asset
value calculated in accordance with the provisions of Section 3(c) hereof,
less any contingent deferred sales charge ("CDSC"), redemption fee or other
charge(s), if any, set forth in the prospectus and statement of additional
information of the Company. All payments by the Company hereunder shall be
made in the manner set forth below.
The Company shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of the
Distributor on or before the seventh business day subsequent to its having
received the notice of redemption in proper form.
The proceeds of any redemption of shares shall be paid by the Company as
follows: (i) any applicable CDSC shall be paid to the Distributor, and (ii)
the balance shall be paid to or for the account of the shareholder, in each
case in accordance with the applicable provisions of the prospectus and
statement of additional information.
(b) Redemption of Class C shares or payment may be suspended at times
when the New York Stock Exchange is closed, when trading on said Exchange is
suspended, when trading on said Exchange is restricted, when an emergency
exists as a result of which disposal by the Company of securities owned by it
is not reasonably practicable or it is not reasonably practicable for the
Company fairly to determine the value of its net assets, or during any other
period when the Securities and Exchange Commission, by order, so permits.
Section 5. Duties of the Company.
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(a) The Company 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 Class C
shares of the Company, and this shall include, upon request by the
Distributor, one certified copy of all financial statements prepared for the
Company by independent public accountants. The Company shall make available
to the Distributor such number of copies of its prospectus and statement of
additional information as the Distributor shall reasonably request.
(b) The Company shall take, from time to time, but subject to any
necessary approval of the shareholders, all necessary action to fix the
number of authorized shares and such steps as may be necessary to register
the same under the Securities Act to the end that there will be available for
sale such number of Class C shares as the Distributor reasonably may be
expected to sell.
(c) The Company shall use its best efforts to qualify and maintain the
qualification of an appropriate number of its Class C shares for sale under
the securities laws of such states as the Distributor and the Company may
approve. Any such qualification may be withheld, terminated or withdrawn by
the Company at any time in its discretion. As provided in Section 8(c)
hereof, the expense of qualification and maintenance of qualification shall
be borne by the Company. The Distributor shall furnish such information and
other material relating to its affairs and activities as may be required by
the Company in connection with such qualification.
(d) The Company will furnish, in reasonable quantities upon request by
the Distributor, copies of annual and interim reports of the Company.
Section 6. Duties of the Distributor.
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(a) The Distributor shall devote reasonable time and effort to effect
sales of Class C shares of the Company but shall not be obligated to sell any
specific number of shares. The services of the Distributor to the Company
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 Class C shares of the Company, the Distributor shall
use its best efforts in all respects duly to conform with the requirements of
all Federal and state laws relating to the sale of such securities. Neither
the Distributor nor any selected dealer, as defined in Section 7 hereof, nor
any other person is authorized by the Company to give any information or to
make any representations, other than those contained in the registration
statement or related prospectus and statement of additional information and
any sales literature specifically approved by the Company.
(c) The Distributor shall adopt and follow procedures, as approved by
the officers of the Company, for the confirmation of sales to investors and
selected dealers, the collection of amounts payable by investors and selected
dealers on such sales, and the cancellation of unsettled transactions, as may
be necessary to comply with the requirements of the National Association of
Securities Dealers, Inc. (the "NASD"), as such requirements may from time to
time exist.
Section 7. Selected Dealer Agreements.
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(a) The Distributor shall have the right to enter into selected dealer
agreements with securities dealers of its choice ("selected dealers") for the
sale of Class C shares; provided, that the Company shall approve the forms of
agreements with dealers. Class C shares sold to selected dealers shall be
for resale by such dealers only at net asset value determined as set forth in
Section 3(c) hereof. The form of agreement with selected dealers to be used
in the continuous offering of the shares is attached hereto as Exhibit A.
(b) Within the United States, the Distributor shall offer and sell
Class C shares only to such selected dealers that are members in good
standing of the NASD.
Section 8. Payment of Expenses.
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(a) The Company shall bear all costs and expenses of the Company,
including fees and disbursements of its counsel and auditors, in connection
with the preparation and filing of any required registration statements
and/or prospectuses and statements of additional information under the
Investment Company Act, the Securities Act, and all amendments and
supplements thereto, and preparing and mailing annual and interim reports and
proxy materials to Class C shareholders (including but not limited to the
expense of setting in type any such registration statements, prospectuses,
statements of additional information, annual or interim reports or proxy
materials).
(b) The Distributor shall be responsible for any payments made to
selected dealers as reimbursement for their expenses associated with payments
of sales commissions to financial consultants. In addition, after the
prospectuses, statements 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 Class C shares to selected
dealers or investors pursuant to this Agreement. 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 selected
dealers in connection with the offering of the Class C shares for sale to the
public and any expenses of advertising incurred by the Distributor in
connection with such offering. It is understood and agreed that so long as
the Company's Class C Shares Distribution Plan pursuant to Rule 12b-1 under
the Investment Company Act remains in effect, any expenses incurred by the
Distributor hereunder may be paid from amounts recovered by it from the
Company under such Plan.
(c) The Company shall bear the cost and expenses of qualification of
the Class C shares for sale pursuant to this Agreement and, if necessary or
advisable in connection therewith, of qualifying the Company as a broker or
dealer in such states of the United States or other jurisdictions as shall be
selected by the Company and the Distributor pursuant to Section 5(c) hereof
and the cost and expenses payable to each such state for continuing
qualification therein until the Company decides to discontinue such
qualification pursuant to Section 5(c) hereof.
Section 9. Indemnification.
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(a) The Company 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), as
incurred, arising by reason of any person acquiring any Class C 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 Class C shareholders of the
Company, 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
Company in connection therewith by or on behalf of the Distributor; provided,
however, that in no case (i) is the indemnity of the Company in favor of the
Distributor and any such controlling persons to be deemed to protect such
Distributor or any such controlling persons thereof against any liability to
the Company or its security holders to which the Distributor or any such
controlling persons would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of their duties
or by reason of the reckless disregard of their obligations and duties under
this Agreement; or (ii) is the Company to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made against
the Distributor or any such controlling persons, unless the Distributor or
such controlling persons, as the case may be, shall have notified the Company
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 Company 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 paragraph. The Company 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
Company elects to assume the defense, such defense shall be conducted by
counsel chosen by it and satisfactory to the Distributor or such controlling
person or persons, defendant or defendants in the suit. In the event the
Company 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, as incurred, of any
additional counsel retained by them, but in case the Company 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, as incurred, of any counsel retained by
them. The Company 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 Class C
shares.
(b) The Distributor shall indemnify and hold harmless the Company and
each of its Directors and officers and each person, if any, who controls the
Company against any loss, liability, claim, damage or expense, as incurred,
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 Company in writing
by or on behalf of the Distributor for use in connection with the regis-
tration 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 Company 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 Company, and the Company and each person so indemnified shall
have the rights and duties given to the Distributor by the provisions of sub-
section (a) of this Section 9.
Section 10. Xxxxxxx Xxxxx Mutual Fund Adviser Program. In connection
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with the Xxxxxxx Xxxxx Mutual Fund Adviser Program, the Distributor and its
affiliate, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, are authorized
to offer and sell shares of the Company, as agent for the Company, to
participants in such program. The terms of this Agreement shall apply to
such sales, including terms as to the offering price of shares, the proceeds
to be paid to the Company, the duties of the Distributor, the payment of
expenses and indemnification obligations of the Company and the Distributor.
Section 11. Duration and Termination of this Agreement. This Agreement
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shall become effective as of the date first above written and shall remain in
force until , 1999 and thereafter, but only for so long as such
continuance is specifically approved at least annually by (i) the Directors
or by the vote of a majority of the outstanding voting securities of the
Company and (ii) by the vote of 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.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Directors or by vote of a majority of the outstanding voting
securities of the Company, 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 Investment
Company Act.
Section 12. Amendments of this Agreement. This Agreement may be
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amended by the parties only if such amendment is specifically approved by (i)
the Directors or by the vote of a majority of outstanding voting securities
of the Company and (ii) by the vote of a majority of those Directors of the
Company 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.
Section 13. Governing Law. The provisions of this Agreement shall be
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construed and interpreted in accordance with the laws of the State of New
York as at the time in effect and the applicable provisions of the Investment
Company Act. To the extent that the applicable law of the State of New York,
or any of the provisions herein, conflict with the applicable provisions of
the Investment Company Act, the latter shall control. IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
XXXXXXX XXXXX CONVERTIBLE FUND, INC.
By
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Title:
XXXXXXX XXXXX FUNDS DISTRIBUTOR, INC.
By
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Title:
EXHIBIT A
XXXXXXX XXXXX CONVERTIBLE FUND, INC.
CLASS C SHARES OF COMMON STOCK
SELECTED DEALER AGREEMENT
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Ladies and Gentlemen:
Xxxxxxx Xxxxx Funds Distributor, Inc. (the "Distributor") has an
agreement with Xxxxxxx Xxxxx Convertible Fund, Inc., a Maryland corporation
(the "Company"), pursuant to which it acts as the distributor for the sale of
Class C shares of common stock, par value $0.10 per share (herein referred to
as the "Class C shares"), of the Company and as such has the right to
distribute Class C shares of the Company for resale. The Company is an open-
end investment company registered under the Investment Company Act of 1940,
as amended, and its Class C shares being offered to the public are registered
under the Securities Act of 1933, as amended (the "Securities Act"). You
have received a copy of the Class C Shares Distribution Agreement (the
"Distribution Agreement") between ourself and the Company and reference is
made herein to certain provisions of such Distribution Agreement. The terms
"Prospectus" and "Statement of Additional Information" as used herein refer
to the prospectus and statement of additional information, respectively, on
file with the Securities and Exchange Commission (the "Commission") which is
part of the most recent effective registration statement pursuant to the
Securities Act. We offer to sell to you, as a member of the Selected Dealers
Group, Class C shares of the Company upon the following terms and conditions:
1. In all sales of these Class C shares to the public, you shall act as
dealer for your own account and in no transaction shall you have any
authority to act as agent for the Company, for us or for any other member of
the Selected Dealers Group, except in connection with the Xxxxxxx Xxxxx
Mutual Fund Adviser program and such other special programs as we from time
to time agree, in which case you shall have authority to offer and sell
shares, as agent for the Company, to participants in such program.
2. Orders received from you will be accepted through us only at the
public offering price applicable to each order, as set forth in the current
Prospectus and Statement of Additional Information of the Company. The
procedure relating to the handling of orders shall be subject to Section 4
hereof and instructions which we or the Company shall forward from time to
time to you. All orders are subject to acceptance or rejection by the
Distributor or the Company in the sole discretion of either. The minimum
initial and subsequent purchase requirements are as set forth in the current
Prospectus and Statement of Additional Information of the Company.
3. You shall not place orders for any of the Class C shares unless you
have already received purchase orders for such Class C shares at the
applicable public offering prices and subject to the terms hereof and of the
Distribution Agreement. You agree that you will not offer or sell any of the
Class C shares except under circumstances that will result in compliance with
the applicable Federal and state securities laws and that in connection with
sales and offers to sell Class C shares you will furnish to each person to
whom any such sale or offer is made a copy of the Prospectus and, if
requested, the Statement of Additional Information (as then amended or
supplemented) and will not furnish to any person any information relating to
the Class C shares of the Company which is inconsistent in any respect with
the information contained in the Prospectus and Statement of Additional
Information (as then amended or supplemented) or cause any advertisement to
be published in any newspaper or posted in any public place without our
consent and the consent of the Company.
4. As a selected dealer, you are hereby authorized (i) to place orders
directly with the Company for Class C shares of the Company to be resold by
us to you subject to the applicable terms and conditions governing the
placement of orders by us set forth in Section 3 of the Distribution
Agreement and (ii) to tender Class C shares directly to the Company or its
agent for redemption subject to the applicable terms and conditions set forth
in Section 4 of the Distribution Agreement.
5. You shall not withhold placing orders received from your customers
so as to profit yourself as a result of such withholding: e.g., by a change
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in the "net asset value" from that used in determining the offering price to
your customers.
6. No person is authorized to make any representations concerning Class
C shares of the Company except those contained in the current Prospectus and
Statement of Additional Information of the Company and in such printed
information subsequently issued by us or the Company as information
supplemental to such Prospectus and Statement of Additional Information. In
purchasing Class C shares through us you shall rely solely on the
representations contained in the Prospectus and Statement of Additional
Information and supplemental information above mentioned. Any printed
information which we furnish you other than the Company's Prospectus,
Statement of Additional Information, periodic reports and proxy solicitation
material is our sole responsibility and not the responsibility of the
Company, and you agree that the Company shall have no liability or
responsibility to you in these respects unless expressly assumed in
connection therewith.
7. You agree to deliver to each of the purchasers making purchases from
you a copy of the then current Prospectus and, if requested, the Statement of
Additional Information at or prior to the time of offering or sale and you
agree thereafter to deliver to such purchasers copies of the annual and
interim reports and proxy solicitation materials of the Company. You further
agree to endeavor to obtain proxies from such purchasers. Additional copies
of the Prospectus and Statement of Additional Information, annual or interim
reports and proxy solicitation materials of the Company will be supplied to
you in reasonable quantities upon request.
8. We reserve the right in our discretion, without notice, to suspend
sales or withdraw the offering of Class C shares entirely or to certain
persons or entities in a class or classes specified by us. Each party hereto
has the right to cancel this Agreement upon notice to the other party.
9. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the continuous offering.
We shall be under no liability to you except for lack of good faith and for
obligations expressly assumed by us herein. Nothing contained in this
paragraph is intended to operate as, and the provisions of this paragraph
shall not in any way whatsoever constitute, a waiver by you of compliance
with any provision of the Securities Act or of the rules and regulations of
the Commission issued thereunder.
10. You represent that you are a member of the National Association of
Securities Dealers, Inc. and, with respect to any sales in the United States,
we both hereby agree to abide by the Rules of Fair Practice of such
Association.
11. Upon application to us, we will inform you as to the states in which
we believe the Class C shares have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws of such
states, but we assume no responsibility or obligation as to your right to
sell Class C shares in any jurisdiction. We will file with the Department of
State in New York a Further State Notice with respect to the Class C shares,
if necessary.
12. All communications to us should be sent to the address below. Any
notice to you shall be duly given if mailed or telegraphed to you at the
address specified by you below.
13. Your first order placed pursuant to this Agreement for the purchase
of Class C shares of the Company will represent your acceptance of this
Agreement.
XXXXXXX XXXXX FUNDS DISTRIBUTOR, INC.
By
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(Authorized Signature)
Please return one signed copy
of this Agreement to:
XXXXXXX XXXXX FUNDS DISTRIBUTOR, INC.
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Accepted:
Firm Name:
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By:
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Address:
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Date:
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