Exhibit 6(a)
THE XXXXXX SQUARE TAX-EXEMPT FUND
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made as of the 31st day of December,
1992, between The Xxxxxx Square Tax-Exempt Fund, a Massachusetts business trust
(the "Fund"), having its principal place of business in Wilmington, Delaware,
and Xxxxxx Square Distributors, Inc., a corporation organized under the laws of
the State of Delaware (the"Distributor"), having its principal place of business
in Wilmington, Delaware.
WHEREAS, the Fund wishes to employ the services of Distributor, with such
assistance from its affiliates as the latter may provide, such employment to
take effect at the close of business on December 31, 1992; and
WHEREAS, Distributor wishes to provide distribution services to the Fund as
set forth below;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. SALE OF SHARES. The Fund grants to the Distributor the right to sell shares
of beneficial interest of all series of the Fund, now or hereafter created,
(the "shares") on its behalf during the term of this Agreement and subject
to the registration requirements of the Securities Act of 1933, as amended
(the "1933 Act"), and of the laws governing the sale of securities in
various states (the "Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Fund, shares authorized for issue and registered under the
1933 Act; (ii) may sell shares under offers of exchange, if available,
between and among the funds distributed by Distributor and advised by Xxxxxx
Square Management Corporation or Wilmington Trust Company; and (iii) shall
sell such shares only in compliance with the terms set forth in the Fund's
currently effective registration statement. Distributor may enter into
selling agreements with selected dealers and others for the sale of Fund
shares and will act only on its own behalf as principal in entering into
such selling agreements.
2. SALE OF SHARES BY THE FUND. The rights granted to the Distributor shall be
non-exclusive in that the Fund reserves the right to sell its shares to
investors on applications received and accepted by the Fund. Further, the
Fund reserves the right to issue shares in connection with (a) the merger or
consolidation, or acquisition by the Fund through purchase or otherwise,
with any other investment company, trust or personal holding company; and
(b) a pro rata distribution directly to the holders of shares in the nature
of a stock dividend or split-up.
3. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to issued
shares of all series of the Fund, shares of all series of the Fund held in
its treasury in the event that in the discretion of the Fund treasury shares
shall be sold, and shares of all series of the Fund repurchased for resale.
4. SUSPENSION OF SALES. If and whenever the determination of net asset value
is suspended and until such suspension is terminated, no further orders for
shares shall be processed by the Distributor except such unconditional
orders placed with the Distributor before it had knowledge of the
suspension. In addition, 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. In addition, the Distributor reserves the right to
reject any purchase order.
5. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Fund. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. Distributor agrees to use all reasonable
efforts to ensure that taxpayer identification numbers provided for
shareholders of the Fund are correct.
6. 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 appropriate registration statements, Prospectuses or SAI's
filed with the Securities and Exchange Commission under the 1933 Act (as
those registration statements, Prospectuses and SAI's may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Fund for the Distributor's use. This
shall not be construed to prevent the Distributor from preparing and
distributing, in compliance with applicable laws and regulations, sales
literature or other material as it may deem appropriate. Distributor will
furnish or cause to be furnished copies of such sales literature or other
material to the President of the Fund or his designee and will provide him
with a reasonable opportunity to comment on it. Distributor agrees to take
appropriate action to cease using such sales literature or other material to
which the Fund reasonably objects as promptly as practicable after receipt
of the objection.
7. PORTFOLIO SECURITIES. Portfolio securities of every series of the Fund may
be bought or sold by or through the Distributor, and the Distributor may
participate directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of any series of the Fund. However,
all sums of money received by the Distributor as a result of such purchases
and sales or as a result of such participation must, after reimbursement of
actual expenses of the Distributor in connection with such activity, be paid
over by the Distributor to or for the benefit of the applicable series.
8. REGISTRATION OF SHARES. The Fund agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval, if any, of its shareholders) so that there will be available for
sale the number of shares the Distributor may reasonably be expected to
sell. 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 each series
of the Fund.
9. EXPENSES, COMPENSATION AND REIMBURSEMENT.
(a) The Fund shall pay all fees and expenses:
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(i) in connection with the preparation, setting in type and filing of
any registration statement, Prospectus and SAI under the 1933 Act,
and any amendments thereto, for the issue of its shares;
(ii) in connection with the registration and qualification of shares
for sale in the various states in which the Board of Trustees (the
"Trustees") of the Fund shall determine it advisable to qualify
such shares for sale (including registering the Fund or Series as
a broker or dealer or any officer of the Fund as agent or
salesperson in any state);
(iii) of preparing, setting in type, printing and mailing any report or
other communication to shareholders of the Fund in their capacity
as such; and
(iv) of preparing, setting in type, printing and mailing Prospectuses,
SAI's, and any supplements thereto, sent to existing shareholders.
(b) The Distributor shall pay expenses of:
(i) printing and distributing Prospectuses, SAI's and reports prepared
for its use in connection with the offering of the shares for sale
to the public;
(ii) any other literature used in connection with such offering; and
(iii) advertising in connection with such offering.
(c) In addition to the services described above, Distributor will provide
services including assistance in the production of marketing and
advertising materials for the sale of shares of the Fund and their
review for compliance with applicable regulatory requirements, entering
into dealer agreements with broker-dealers to sell shares of the Fund
and monitoring their financial strength and contractual compliance,
providing, directly or through its affiliates certain investor support
services, personal service, and the maintenance of shareholder
accounts.
(d) In connection with the services to be provided by the Distributor under
this Agreement, the Distributor shall receive:
(i) a service fee and reimbursement from the Fund (which may include
reimbursement for the expenses incurred pursuant to Section 10(b)
hereof), to the extent and under the terms and conditions set
forth in any Plan of Distribution of the Fund or its series
("Plan"), as such Plan may be in effect from time to time, and
subject to any further limitations on such fee or reimbursement as
the Trustees of the Fund may impose, and
(ii) any sales charge, as set forth in the Fund's registration
statement, paid by any purchaser of Fund shares.
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10.INDEMNIFICATION.
(a) 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 against
any loss, liability, claim, damages or expense (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 1933 Act or any other statute or
common law, alleging any wrongful act of the Fund or any of its
employees or representatives, or based upon the grounds that the
registration statements, Prospectuses, SAI's, 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. However, the Fund does
not agree to indemnify the Distributor or hold it harmless to the
extent that the statement or omission was made in reliance upon, and in
conformity with, information furnished to the Fund in writing by or on
behalf of the Distributor. In no case (i) is the indemnity of the Fund
in favor of the Distributor or any person indemnified to be deemed to
protect the Distributor or any person against any liability to the Fund
or its security holders to which the Distributor or such person would
otherwise be subject by reason of willful misfeasance, bad faith or
gross 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 Section 11(a) with respect to any claim made against
the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Fund in writing of
the claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim
shall have been served upon the Distributor or any such person or after
the Distributor or such person 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 the
Distributor or any person against whom such action is brought other
than on account of its indemnity agreement contained in this Section
11(a). 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, but if the Fund elects to assume the
defense, the defense shall be conducted by counsel chosen by it and
satisfactory to the Distributor, or person or persons, defendant or
defendants in the suit. In the event the Fund elects to assume the
defense of any suit and retain counsel, the Distributor, officers or
directors or controlling person(s) or 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, officers or directors or controlling
person(s) or 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
proceedings against it or any of its officers or Trustees in connection
with the issuance or sale of any of the shares.
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(b) The Distributor also covenants and agrees that it will indemnify and
hold harmless the Fund and each of the members of its Trustees and
officers and each person, if any, who controls the Fund within the
meaning of Section 15 of the 1933 Act, against any loss, liability,
damages, claim 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 or any other statute or common law, alleging any
wrongful act of the Distributor or any of its employees or
representatives, or alleging that the registration statements,
Prospectuses, SAI's, 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, insofar as the statement or omission was made in reliance
upon, and in conformity with, information furnished in writing 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 or any person
indemnified to be deemed to protect the Fund or any person against any
liability to which the Fund or such person would otherwise be subject
by reason of willful misfeasance, bad faith or gross 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 Section
11(b) with respect to any claim made against the Fund or any person
indemnified unless the Fund or person, as the case may be, shall have
notified the Distributor in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Fund or any such person or after the Fund or such person 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 or any
person against whom the action is brought other than on account of its
indemnity agreement contained in this Section 11(b). 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 any claims, but if the
Distributor elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Fund, to its
officers and Trustees and to any controlling person(s) or any
defendants(s) in the suit. In the event the Distributor elects to
assume the defense of any suit and retain counsel, the Fund or
controlling person(s) or defendant(s) in the suit, shall bear the fees
and expenses 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, its officers or Trustees, controlling person(s) or
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 issue and sale of any of the shares.
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11.EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become effective at
the close of business on December 31, 1992, and unless terminated as
provided, shall continue in force for one (1) year from the date of its
execution and thereafter from year to year, provided continuance after the
one (1) year period is approved at least annually by either (i) the vote of
a majority of the Trustees of the Fund, or by the vote of a majority of the
outstanding voting securities of the Fund, and (ii) the vote of a majority
of those Trustees of the Fund who are not interested persons of the Fund,
who have no direct or indirect financial interest in the operation of any
Plan of the Fund or any agreements related to the Plan and who are not
parties to this Agreement or interested persons of any party, cast in person
at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this Section 12, the terms "vote of a majority of the outstanding
voting securities," "assignment" and "interested person" shall have the
respective meanings specified in the 1940 Act and the rules enacted
thereunder as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated without the payment of any penalty
by vote of a majority of the Trustees of the Fund who are not interested
persons of the Fund and who have no direct or indirect financial interest in
the operation of any Plan of the Fund or any agreements related to the Plan,
or by vote of a majority of the outstanding voting securities of the Fund,
on not more than sixty (60) days' written notice to the Fund. This
Agreement may be terminated by the Distributor upon not less than sixty (60)
days' prior written notice to the Fund..
12.NOTICE. Any notice under this Agreement shall be given in writing addressed
and hand delivered or sent by registered or certified mail, postage prepaid,
to the other party to this Agreement at its principal place of business.
13.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.
14.GOVERNING LAW. To the extent that state law has not been preempted by the
provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the State of
Delaware.
15.SHAREHOLDER LIABILITY. The Distributor is hereby expressly put on notice of
the limitation of shareholder liability as set forth in the Declaration of
Trust of the Fund and agrees that obligations assumed by the Fund pursuant
to this Agreement shall be limited in all cases to the Fund and its assets.
The Distributor agrees that it will not seek satisfaction of any such
obligation from the shareholders or any individual shareholder of the Fund,
nor from the Trustees or any individual Trustee of the Fund.
16.MISCELLANEOUS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
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 be
executed in two counterparts, each of which taken together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
THE XXXXXX SQUARE TAX-EXEMPT FUND
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Xxxxx X. Xxxxxxx, President
XXXXXX SQUARE DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx, President
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