EX-99.B(6)(a)
FLAG INVESTORS TOTAL RETURN U.S. TREASURY
FUND SHARES DISTRIBUTION AGREEMENT
TOTAL RETURN U.S. TREASURY FUND. INC.
AGREEMENT made as of the 15th day of June, 1988 by and between
TOTAL RETURN U.S. TREASURY FUND, INC., a Maryland Corporation (the "Fund") and
ALEX. XXXXX & SONS INCORPORATED, a Maryland corporation ("Alex. Xxxxx").
W I T N E S S E T H
WHEREAS, the Fund is registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to appoint Alex. Xxxxx as the
exclusive distributor of Flag Investors Total Return U.S. Treasury Fund Shares,
(the "Shares"), a class of the Fund's shares, and Alex. Xxxxx wishes to become
the distributor of the Shares; and
WHEREAS, the compensation to Alex. Xxxxx hereunder and the
payments contemplated by paragraph 5 constitute the financing of activities
intended to result in the sale of Shares, and this Agreement is entered into
pursuant to a "written plan" pursuant to Rule 12b-1 under the Act (the "Plan")
allowing the Fund to make such payments.
NOW THEREFORE, in consideration of the premises herein and of
other good and valuable consideration the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment. The Fund hereby appoints Alex. Xxxxx as
Distributor for the Shares for the period and on the terms set forth in this
Agreement. Alex. Xxxxx accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Delivery of Documents. The Fund has furnished Alex. Xxxxx
with copies properly certified or authenticated of each of the following:
(a) The Fund's Articles of Incorporation, filed with the
Secretary of State of Maryland on June 3, 1988 and all amendments thereto;
(b) The Fund's By-Laws and all amendments thereto (such
By-Laws, as presently in effect and as they shall from time to time be amended,
are herein called the "By-Laws");
(c) Resolutions of the Fund's Board of Directors and
shareholders authorizing the appointment of Alex. Xxxxx as the Fund's
Distributor of the Shares and approving this Agreement;
(d) The Fund's Registration Statement on Form N-1A under
the Securities Act of 1933, as amended (the "1933 Act") (File No. 33-12179) and
under the 1940 Act as filed with the SEC on June 6, 1988 relating to the shares
of the Fund and all amendments thereto; and
(e) The Fund's most recent prospectus (such prospectus and
all amendments and supplements thereto are herein called "Prospectus").
The Fund will xxxxxxx Xxxx. Xxxxx from time to time with
copies, properly certified or authenticated, of all amendments or supplements to
the foregoing, if any, and all documents, notices and reports filed with the
SEC.
3. Duties as Distributor. Alex. Xxxxx shall give the Fund the
benefit of its best judgment, efforts and facilities in rendering its services
as Distributor of the Shares. In carrying out its obligations hereunder. Alex.
Xxxxx shall:
(a) respond to inquiries from the Fund's shareholders
concerning the status of their accounts with the Fund;
(b) take, on behalf of the Fund, all actions deemed
necessary to carry into effect the distribution of the Shares; and,
(c) provide the Board of Directors of the fund with
quarterly reports as required by Rule 12b-1 under the 1940 Act.
4. Distribution of Shares. Alex. Xxxxx shall be the exclusive
distributor of the shares. It is mutually understood and agreed that Alex. Xxxxx
does not undertake to sell all or any specific portion of the Shares. The Fund
shall not sell any of the Shares except through Alex. Xxxxx and securities
dealers who have valid Sub-Distribution Agreements with Alex. Xxxxx.
Notwithstanding the provisions of the foregoing sentence:
(a) the fund may issue Shares at their net asset value to
any shareholder of the Fund purchasing such Shares with dividends or other cash
distributions received from the Fund pursuant to an offer made to all
shareholders; and
(b) Alex. Xxxxx may, but shall not be obligated to purchase
Shares that have been tendered for redemption and resell them in accordance with
the terms of the Prospectus.
5. Control by Board of Directors. Any distribution activities
undertaken by Alex. Xxxxx pursuant to this Agreement, as well as any other
activities undertaken by Alex. Xxxxx on behalf of the Fund pursuant thereto,
shall at all times be subject to any directives of the Board of Directors of the
Fund. The Board of Directors may agree on behalf of the Fund, to amendments to
the Agreement, provided that any such amendment that would provide for a
material increase in the amount expended by the Fund, must be approved by Fund
Shareholders before becoming effective.
6. Compliance with Applicable Requirements. In carrying out
its obligations under this Agreement. Alex. Xxxxx shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules
and regulations adopted thereunder as amended;
(b) the provisions of the Registration Statement of the
Fund under the 1933 Act and the 1940 Act;
(c) the provisions of the Articles of Incorporation of the
Fund;
(d) the provisions of the By-Laws of the Fund;
(e) the rules and regulations of the National Association
of Securities Dealers ("NASD") and all other self-regulatory organizations
applicable to the sale of investment company shares; and
(f) any other applicable provisions of state and Federal
law.
7. Expenses. The expenses connected with the Fund shall be
allocable between the Fund and Alex. Xxxxx as follows:
(a) Alex. Xxxxx 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.
(b) Alex. Xxxxx shall bear the expenses of any promotional
or sales literature used by Alex. Xxxxx or furnished by Alex. Xxxxx to
purchasers or dealers in connection with the public offering of the Shares, the
expenses of advertising in connection with such public offering and all legal
expenses in connection with the foregoing.
(c) The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund, including, without limitation: the fees of the
Fund's Advisor; the charges and expenses of any registrar, any custodian or
depositary appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any stock transfer, dividend or accounting
agent or agents appointed by the Fund; brokers' commissions chargeable to the
Fund in connection with portfolio securities transactions to which the Fund is a
party; all taxes, including securities issuance and transfer taxes, and
corporate fees payable by the Fund to federal, state or other governmental
agencies; the cost and expense of engraving or printing of stock certificates
representing Shares of the Fund; all costs and expenses in connection with
maintenance of registration of the Fund and the Shares with the Securities and
Exchange Commission and various states and other jurisdictions (including filing
fees and legal fees and disbursements of counsel); except as provided in
subparagraph (a) above, the expenses of printing, including typesetting, and
distributing prospectuses of the Fund and supplements thereto to the Fund's
shareholders; all expenses of shareholders' and Directors' meetings and of
preparing, printing and mailing of proxy statements and reports to shareholders;
fees and travel expenses of Directors or members of any advisory board or
committee other than such Directors or members who are "interested persons"
within the meaning of Section 2(a)(19) of the Investment Company Act of 1940;
all expenses incident to the payment of any dividend, distribution, withdrawal
or redemption, whether in Shares or in cash; charges and expenses of any outside
service used for pricing of the Fund's shares; charges and expenses of legal
counsel, including counsel to the Directors of the Fund who art not interested
persons (as defined in the Investment Company Act of 1940, as amended) of the
Fund, and of independent accountants, in connection with any matter relating to
the Fund, membership dues of industry associations; interest payable on Fund
borrowings; postage; insurance premiums on property or personnel (including
officers and directors of the Fund which inure to its benefit; extraordinary
expenses (including, but not limited to legal claims and liabilities and
litigation costs and any indemnification related thereto) and all other charges
and costs of the Fund's operation unless otherwise explicitly provided herein.
8. Delegation of Responsibilities. Alex. Xxxxx may, but shall
be under no duty to, perform services on behalf of the Fund which are not
required by this Agreement upon the rest of the Fund's Board of Directors. Such
services will be performed on behalf of the Fund and Alex. Xxxxx'x charge in
rendering such services may be billed monthly to the Fund, subject to
examination by the Fund's independent accountants. Payment or assumption by
Alex. Xxxxx of any Fund expense that Alex. Xxxxx is not required to pay or
assume under this Agreement shall not relieve Alex. Xxxxx of any of its
obligations to the Fund nor obligate Alex. Xxxxx to pay or assume any similar
Fund expense on any subsequent occasions.
9. Compensation. For the services to be rendered and the
expenses assumed by Alex. Xxxxx, the Fund shall pay to Alex. Xxxxx, compensation
at the annual rate of .25% of the average daily net assets of the Fund allocable
to the Shares. Except as hereinafter set forth, continuing compensation under
this Agreement shall be calculated and accrued daily and the amounts of the
daily accruals shall be paid monthly. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day of
a month compensation for that part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculations of the fees as
set forth above. Payment of Alex. Xxxxx'x compensation for the preceding month
shall be made as promptly as possible.
10. Compensation for Servicing Shareholder Accounts. The Fund
acknowledges that Alex. Xxxxx may compensate its investment representatives for
opening accounts, processing investor letters of transmittals and applications
and withdrawal and redemption orders responding to inquiries from Fund
shareholders concerning the status of their accounts and the operations of the
Fund, and communicating with the Fund and its transfer agent on behalf of the
Fund shareholders.
11. Participating Dealer Agreements. Alex. Xxxxx may enter
into participating dealer agreements (the "Participating Dealer Agreements")
with any securities dealer who is registered under the Securities Exchange Act
of 1934 and a member in good standing of the NASD, who may wish to act as
Participating Dealers in connection with the proposed offering. All
Participating Dealer Agreements shall be in substantially the form of the
agreement attached hereto an Exhibit "A". For processing Fund shareholders'
redemption orders, responding to the inquiries from Fund shareholders concerning
the status of their accounts and the operations of the Fund and communicating
with the Fund, its transfer agent and Alex. Xxxxx, Xxxx. Xxxxx may pay each such
Participating Dealer an amount not to exceed that portion of the compensation
paid to Alex. Xxxxx hereunder that is attributable to accounts of Fund
shareholders who are customers of such Participating Dealers.
12. Non-Exclusivity. The services of Alex. Xxxxx to the Fund
are not to be deemed exclusive and Alex. Xxxxx shall be free to render
distribution or other services to others (including other investment companies)
and to engage in other activities. It is understood and agreed that employees or
partners of Alex. Xxxxx may serve as officers or directors of the Fund, and that
officers or directors of the Fund may serve as employees or partners of Alex.
Xxxxx to the extent permitted by law; and that employees and partners of Alex.
Xxxxx are not prohibited from engaging in any other business activity or from
rendering services to any other person, or from serving as partners, officers or
directors of any other firm or corporation, including other investment
companies.
13. Term and Approval. This Agreement shall become effective
at the close of business on the date hereof and shall remain in force and effect
for an initial term of two years and from year to year thereafter, provided that
such continuance is specifically approved at least annually:
(a) (i) by the Fund's Board of Directors or (ii) by the
vote of a majority of the outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the directors
who are not interested persons of the Fund and who do not have a financial
interest in the operation of this Agreement, by votes cast in person at a
meeting specifically called for such purpose.
14. Termination. This Agreement may be terminated at any time
on sixty (60) days' written notice to the other party without the payment of any
penalty, (i) by vote of the Fund's Board of Directors, (ii) by vote of a
majority of the directors who are not interested persons of the Fund and who do
not have a financial interest in the operation of this Agreement, (iii) by vote
of a majority of the Fund's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), or (iv) by Alex. Xxxxx. The notice provided for
herein may be waived by either party. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for this purpose
having the meaning defined in Section 2(a)(4) of the 1940 Act.
15. Liability. In the performance of its duties hereunder,
Alex. Xxxxx shall be obligated to exercise care and diligence and to act in good
faith and to use its best efforts within reasonable limits in performing all
services provided for under this Agreement, but shall not be liable for any act
or omission which does not constitute willful misfeasance, bad faith or gross
negligence on the part of Alex. Xxxxx or reckless disregard by Alex. Xxxxx of
its duties under this Agreement.
16. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other party at
such address as such other party may designate for the receipt of such notice.
Until further notice to the other party it is agreed that the address of both
Alex. Xxxxx and the Fund for this purpose shall be 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000.
17. Questions of Interpretation. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the 1940 Act shall be
resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order. Otherwise the
provisions of this Agreement shall be interpreted in accordance with the laws of
Maryland.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in duplicate by their respective officers as of the day
and year first above written.
[SEAL] TOTAL RETURN U.S. TREASURY FUND,
INC.
Attest: /s/ Xxxxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxxx
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Vice President and Secretary
ALEX. XXXXX & SONS INCORPORATED
[SEAL]
Attest: /s/ Xxxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxxxxx
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