EX-99.B(6)(a)
FLAG INVESTORS EQUITY PARTNERS FUND, INC.
FLAG INVESTORS CLASS A SHARES
DISTRIBUTION AGREEMENT
AGREEMENT, made as of the 31st day of January 1995, by and between FLAG
INVESTORS EQUITY PARTNERS 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 the class of shares of the Fund known as the Flag Investors
Class A Shares (the "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 appoints Alex. Xxxxx as Distributor for the
Shares for the period and on the terms set forth in this Agreement. The Fund
may from time to time issue separate series or classes of its shares of
common stock, or classify and reclassify shares of such series as classes,
and the appointment effected hereby shall constitute appointment for the
distribution of such additional series and classes unless the parties shall
otherwise agree in writing. 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 November 29, 1994 and all amendments thereto (the
"Articles of Incorporation");
(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 Notification of Registration filed pursuant to
Section 8(a) of the 1940 Act on Form N-8A under the 1940 Act, as filed with
the Securities and Exchange Commission (the "SEC") on November 30, 1994;
(e) The Fund's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), (File No. 33-86832) and
under the 1940 Act as filed with the SEC on November 30, 1994 relating to the
Shares of the Fund, and all amendments thereto; and
(f) 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. 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;
(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, the Fund
may issue its 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.
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 hereto,
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 this Agreement, provided that the Fund must obtain prior
approval of the shareholders of the Fund to any amendment which would result
in a material increase in the amount expended by the Fund.
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 and any amendments and supplements thereto;
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(c) the provisions of the Articles of Incorporation of the Fund and
any amendments thereto;
(d) the provisions of the By-Laws of the Fund;
(e) the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD") and all other self-regulatory organizations
applicable to the sale of investment company shares; and
(f) any other applicable provisions of Federal and State 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 their 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
investment advisor and sub-advisor; the charges and expenses of any
registrar, 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; all costs
and expenses in connection with maintenance of registration of the Fund and
the Shares with the SEC 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 who are not "interested
persons" of the Fund (as defined in the 0000 Xxx) or members of any advisory
board or committee; 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 Shares; charges
and expenses of legal counsel, including counsel to the Directors who are not
"interested persons" of the Fund (as defined in the 1940 Act), 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 request of the Fund's Board of Directors.
Such services will be performed on behalf of the Fund and Alex. Xxxxx'x
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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 or 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. 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. Sub-Distribution Agreements. Alex. Xxxxx may enter into Sub-
Distribution Agreements (the "Sub-Distribution 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 a
Participating Dealer in connection with the proposed offering. All Sub-
Distribution Agreements shall be in substantially the form of the agreement
attached hereto as 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 Dealer.
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 directors, officers or
employees of Alex. Xxxxx may serve as directors or officers of the Fund, and
that directors or officers of the Fund may serve as directors, officers and
employees of Alex. Xxxxx to the extent permitted by law; and that directors,
officers and employees 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, directors or officers 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 the 1940 Act),
and
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(b) by the affirmative vote of a majority of the Directors who are
not "interested persons" of the Fund (as defined in the 0000 Xxx) and 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 (as
defined in the 0000 Xxx) and 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 the 1940 Act) or (iv) by Alex. Xxxxx. The notice
provided for herein may be waived by each party. This Agreement shall
automatically terminate in the event of its assignment (as the term is defined
in 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 parties, 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] FLAG INVESTORS EQUITY PARTNERS
FUND, INC.
Attest: /s/ Xxxxxx X. XxXxxxx By /s/ Xxxxx X. Xxxxxx
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[SEAL] ALEX. XXXXX & SONS INCORPORATED
Attest: /s/ Xxxxxx X. XxXxxxx By /s/ Xxxxxxx X. Xxxx
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