Exhibit 6
DISTRIBUTION AGREEMENT
TAX EXEMPT PROCEEDS FUND, INC.
the "Fund"
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx 00, 0000
Xxxxx & Xxxx Distributors L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
1. In consideration of the agreements on your
part herein contained and of the payment by us to you of a fee of $1 per year
and on the terms and conditions set forth herein, we have agreed that you shall
be, for the period of this agreement, a distributor, as our agent, for the
unsold portion of such number of shares of our common stock $.001 par value per
share, as may be effectively registered from time to time under the Securities
Act of 1933, as amended (the "1933 Act"). This agreement is being entered into
pursuant to the Distribution Plan (the "Plan") adopted by us in accordance with
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act").
2. We hereby agree that you will act as our agent,
and hereby appoint you our agent, to offer, and to solicit offers to
subscribe to, the unsold balance of shares of our common stock as shall then be
effectively registered under the Act. All subscriptions for shares of our common
stock obtained by you shall be directed to us for acceptance and shall not be
binding on us until accepted by us. You shall have no authority to make binding
subscriptions on our behalf. We reserve the right to sell shares of our common
stock through other distributors or directly to investors through subscriptions
received by us at our principal office in New York, New York. The right given to
you under this agreement shall not apply to shares of our common stock issued in
connection with (a) the merger or consolidation of any other investment company
with us, (b) our acquisition by purchase or otherwise of all or substantially
all of the assets or stock of any other investment company, or (c) the
reinvestment in shares of our common stock by our stockholders of dividends or
other distributions or any other offering by us of securities to our
stockholders.
3. You will use your best efforts to obtain
subscriptions to shares of our common stock upon the terms and
conditions contained herein and in our Prospectus, as in effect from time to
time. You will send to us promptly all subscriptions placed with you. We shall
furnish you from time to time, for use in connection with the offering of shares
of our common stock, such other information with respect to us and shares of our
common stock as you may reasonably request. We shall supply you with such copies
of our Registration Statement and Prospectus, as in effect from time to time, as
you may request. Except as we may authorize in writing, you are not authorized
to give any information or to make any representation that is not contained in
the Registration Statement or Prospectus, as then in effect. You may use
employees, agents and other persons, at your cost and expense, to assist you in
carrying out your obligations hereunder, but no such employee, agent or other
person shall be deemed to be our agent or have any rights under this agreement.
You may sell our shares to or through qualified brokers, dealers and financial
institutions under selling and servicing agreements provided that no dealer,
financial institution or other person shall be appointed or authorized to act as
our agent without our written consent. It is recognized that we shall have no
obligation or liability to you or them for any such payments under the
agreements with them. Our obligation is solely to make payments to you under the
Management Contract. All sales of our shares effected through you will be made
in compliance with all applicable federal securities laws and regulations and
the Constitution, rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD").
4. We reserve the right to suspend the offering of
shares of our common stock at any time, in the absolute discretion of
our Board of Directors, and upon notice of such suspension you shall cease to
offer shares of our common stock hereunder.
5. Both of us will cooperate with each other in
taking such action as may be necessary to qualify shares of our common
stock for sale under the securities laws of such states as we may designate,
provided, that you shall not be required to register as a broker-dealer or file
a consent to service of process in any such state where you are not now so
registered. Pursuant to the Management Contract dated September 14, 1993 in
effect between us and the Manager, the Manager will bear all our expenses as
described in the Prospectus, including all fees and expenses of registering
shares of our common stock under the 1933 Act and of qualification of shares of
our common stock, and to the extent necessary, our qualification under
applicable state securities laws. You will pay all expenses relating to your
broker-dealer qualification.
6. We represent to you that our Registration
Statement and Prospectus have been carefully prepared to date in
conformity with the requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Securities and Exchange Commission (the "SEC")
thereunder. We represent and warrant to you, as of the date hereof, that our
Registration Statement and Prospectus contain all statements required to be
stated therein in accordance with the 1933 Act and the 1940 Act and the SEC's
rules and regulations thereunder; that all statements of fact contained therein
are or will be true and correct at the time indicated or the effective date as
the case may be; and that neither our Registration Statement nor our Prospectus,
when they shall become effective or be authorized for use, will include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading to
a purchaser of shares of our common stock. We will from time to time file such
amendment or amendments to our Registration Statement and Prospectus as, in the
light of future development, shall, in the opinion of our counsel, be necessary
in order to have our Registration Statement and Prospectus at all times contain
all material facts required to be stated therein or necessary to make any
statements therein not misleading to a purchaser of shares of our common stock.
If we shall not file such amendment or amendments within fifteen days after our
receipt of a written request from you to do so, you may, at your option,
terminate this agreement immediately. We will not file any amendment to our
Registration Statement or Prospectus without giving you reasonable notice
thereof in advance; provided, however, that nothing in this agreement shall in
any way limit our right to file such amendments to our Registration Statement or
Prospectus, of whatever character, as we may deem advisable, such right being in
all respects absolute and unconditional. We represent and warrant to you that
any amendment to our Registration Statement or Prospectus hereafter filed by us
will be carefully prepared in conformity within the requirements of the 1933 Act
and the 1940 Act and the SEC's rules and regulations thereunder and will, when
it becomes effective, contain all statements required to be stated therein in
accordance with the 1933 Act and the 1940 Act and the SEC's rules and
regulations thereunder; that all statements of fact contained therein will, when
the same shall become effective, be true and correct; and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of our
shares.
7. We agree to indemnify, defend and hold you,
and any person who controls you within the meaning of Section 15 of the 1933
Act, free and harmless from and against any and all claims, liabilities and
expenses (including the cost of investigating or defending such claims, demands
or liabilities and any counsel fees incurred in connection therewith) which you
or any such controlling person may incur, under the 1933 Act or
the 1940 Act, or under common law or otherwise, arising out of or based upon any
alleged untrue statement of a material fact contained in our Registration
Statement or Prospectus in effect from time to time or arising out of or based
upon any alleged omission to state a material fact required to be stated in
either of them or necessary to make the statements in either of them not
misleading; provided, however, that in no event shall anything herein contained
be so construed as to protect you against any liability to us or our security
holders to which you would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of your duties,
or by reason of your reckless disregard of your obligations and duties under
this agreement. Our agreement to indemnify you and any such controlling person
is expressly conditioned upon our being notified of any action brought against
you or any such controlling person, such notification to be given by letter or
by telegram addressed to us at our principal office in New York, New York, and
sent to us by the person against whom such action is brought within ten days
after the summons or other first legal process shall have been served. The
failure so to notify us of any such action shall not relieve us from any
liability which we may have to the person against whom such action is brought
other than on account of our indemnity agreement contained in this paragraph 7.
We will be entitled to assume the defense of any suit brought to enforce any
such claim, and to retain counsel of good standing chosen by us and approved by
you. In the event we do elect to assume the defense of any such suit and retain
counsel of good standing approved by you, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them; but in case we do not elect to assume the defense of any such suit, or
in case you, in good faith, do not approve of counsel chosen by us, we will
reimburse you or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained by
you or them. Our indemnification agreement contained in this paragraph 7 and our
representations and warranties in this agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of you or any
controlling person and shall survive the sale of any shares of our common stock
made pursuant to subscriptions obtained by you. This agreement of indemnity will
inure exclusively to your benefit, to the benefit of your successors and
assigns, and to the benefit of any of your controlling persons and their
successors and assigns. We agree promptly to notify you of the commencement of
any litigation or proceeding against us in connection with the issue and sale of
any shares of our common stock.
8. You agree to indemnify, defend and hold us, our
several officers and directors, and any person who controls us within
the meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands,
liabilities, and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which we, our officers or directors, or any such
controlling person may incur under the 1933 Act or under common law or
otherwise, but only to the extent that such liability or expense incurred by us,
our officers or directors or such controlling person shall arise out of or be
based upon any alleged untrue statement of a material fact contained in
information furnished in writing by you to us for use in our Registration
Statement or Prospectus as in effect from time to time, or shall arise out of or
be based upon any alleged omission to state a material fact in connection with
such information required to be stated in the Registration Statement or
Prospectus or necessary to make such information not misleading. Your agreement
to indemnify us, our officers and directors, and any such controlling person is
expressly conditioned upon your being notified of any action brought against us,
our officers or directors or any such controlling person, such notification to
be given by letter or telegram addressed to you at your principal office in New
York, New York, and sent to you by the person against whom such action is
brought, within ten days after the summons or other first legal process shall
have been served. You shall have a right to control the defense of such action,
with counsel of your own choosing, satisfactory to us, if such action is based
solely upon such alleged misstatement or omission on your part, and in any other
event you and we, our officers or directors or such controlling person shall
each have the right to participate in the defense or preparation of the defense
of any such action. The failure so to notify you of any such action shall not
relieve you from any liability which you may have to us, to our officers or
directors, or to such controlling person other than on account of your indemnity
agreement contained in this paragraph 8.
9. We agree to advise you immediately:
a. of any request by the SEC for amendments to our
Registration Statement or Prospectus or for additional
information,
b. of the issuance by the SEC of any stop order suspending
the effectiveness of our Registration Statement or Prospectus or
the initiation of any proceedings for that purpose,
c. of the happening of any material event which makes untrue
any statement made in our Registration Statement or Prospectus or
which requires the making of a change in either of them in order
to make the statements therein not misleading, and
d. of all action of the SEC with respect to any amendments
to our Registration Statement or Prospectus.
10. This agreement will become effective on the date hereof
and will remain in effect until December 31, 1996 and thereafter for successive
twelve-month periods (computed from each January 1st), provided that such
continuation is specifically approved at least annually by vote of our Board of
Directors and of a majority of those of our directors who are not interested
persons (as defined in the 0000 Xxx) and have no direct or indirect financial
interest in the operation of the Plan or in any agreements related to the Plan,
cast in person at a meeting called for the purpose of voting on this agreement.
This agreement may be terminated at any time, without the payment of any
penalty, (i) by vote of a majority of our entire Board of Directors, and by a
vote of a majority of our Directors who are not interested persons (as defined
in the 0000 Xxx) and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan, or (ii) by vote
of a majority of our outstanding voting securities, as defined in the Act, on
sixty days' written notice to you, or by you on sixty days' written notice to
us.
11. This Agreement may not be transferred, assigned, sold or
in any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the SEC thereunder.
12. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, the
right of any of your employees or the right of any officers or directors of
Xxxxx & Xxxx Asset Management, Inc., your general partner, who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the 1940 Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to another
corporation, firm, individual or association.
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
TAX EXEMPT PROCEEDS FUND, INC.
By:/s/ Xxxxxxxxxx X. Xxxx
Accepted: Xxxxxx 00, 0000
XXXXX & XXXX DISTRIBUTORS L.P.
By: XXXXX & TANG ASSET MANAGEMENT, INC.,
as General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
