EXHIBIT 6(a)
GENERAL DISTRIBUTOR'S AGREEMENT
BETWEEN
SECURITY CAPITAL EMPLOYEE REIT FUND INCORPORATED
AND
SECURITY CAPITAL MARKETS GROUP INCORPORATED
Date: April ___, 1997
SECURITY CAPITAL MARKETS GROUP INCORPORATED
Dear Sirs:
Security Capital Employee REIT Fund Incorporated, a Maryland corporation
(the "Fund"), is registered as an investment company under the Investment
Company Act of 1940 (the "1940 Act"), and an indefinite number of one or more
classes of its shares of common stock ("Shares") have been registered under the
Securities Act of 1933 (the "1933 Act") to be offered for sale to the public in
a continuous public offering in accordance with the terms and conditions set
forth in the Prospectus and Statement of Additional Information ("SAI") included
in the Fund's Registration Statement as it may he amended from time to time (the
"current Prospectus and/or SAI").
In this connection, the Fund desires that your firm (the "General
Distributor") act in a principal capacity as General Distributor for the sale
and distribution of Shares which have been registered as described above and of
any additional Shares which may become registered during the term of this
Agreement. You have advised the Fund that you are willing to act as such
General Distributor, and it is accordingly agreed by and between us as follows:
1. Appointment of the Distributor. The Fund hereby appoints you as the
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sole General Distributor, pursuant to the aforesaid continuous public offering
of its Shares, and the Fund further agrees from and after the date of this
Agreement, that it will not, without your consent, sell or agree to sell any
Shares otherwise than through you, except (a) the Fund may itself sell Shares
without sales charge as an investment to the officers, trustees or directors and
bona fide present and former full-time employees of the Fund, the Fund's
Investment Adviser and affiliates thereof, and to other investors who are
identified in the current Prospectus and/or SAI as having the privilege to buy
Shares at net asset value; (b) the Fund may issue Shares in connection with a
merger, consolidation or acquisition of assets on such basis as may be
authorized or permitted under the 1940 Act; and (c) the Fund may issue Shares
for the reinvestment of dividends and other distributions of the Fund or of any
other fund if permitted by the current Prospectus and/or SAI; provided that in
no event as to any of the foregoing exceptions shall Shares be issued and sold
at less than the then-existing net asset value.
2. Sale of Shares. You hereby accept such appointment and agree to use
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your best efforts to sell Shares, provided, however, that when requested by the
Fund at any time because of market or other economic considerations or abnormal
circumstances of any kind, or when agreed to by mutual consent of the Fund and
the General Distributor, you will suspend such efforts. The Fund may also
withdraw the offering of Shares at any time when required by the provisions of
any statute, order, rule or regulation of any governmental body having
jurisdiction. It is understood that you do not undertake to sell all or any
specific number of Shares.
3. Sales Charge. Shares shall be sold by you at net asset value plus a
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front-end sales charge not in excess of 8.5% of the offering price, but which
front-end sales charge shall be proportionately reduced or eliminated for larger
sales and under other circumstances, in each case, on the basis set forth in the
Fund's current Prospectus and/or SAI. The redemption proceeds of Shares offered
and sold at net asset value with or without a front-end sales charge may be
subject to a redemption fee ("Redemption Fee") under the circumstances described
in the current Prospectus and/or SAI. You may reallow such portion of the
front-end sales charge to dealers or cause payment (which may exceed the front-
end sales charge, if any) of commissions to brokers through which sales are
made, as you may determine, and you may pay such amounts to dealers and brokers
on sales of Shares from your own resources (such dealers and brokers shall
collectively include all domestic or foreign institutions eligible to offer and
sell the Shares), and in the event the Fund has more than one class of Shares
outstanding, then you may impose a front-end sales charge and/or a Redemption
Fee on Shares of one class that is different from the charges imposed on Shares
of the Fund's other class(es), in each case, as set forth in the current
Prospectus and/or SAI, provided the front-end sales charge and Redemption Fee to
the ultimate purchaser do not exceed the respective levels set forth for such
category of purchaser in the Fund's current Prospectus and/or SAI.
4. Purchase of Shares.
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(a) As General Distributor, you shall have the right to accept or
reject orders for the purchase of Shares at your discretion. Any
consideration which you may receive in connection with a rejected
purchase order will be returned promptly.
(b) You agree promptly to issue or to cause the duly appointed
transfer or shareholder servicing agent of the Fund to issue as
your agent confirmations of all accepted purchase orders and to
transmit a copy of such confirmations to the Fund. The net asset
value of all Shares which are the subject of such confirmations,
computed in accordance with the applicable rules under the 1940
Act, shall be a responsibility of the General Distributor to the
Fund to forward promptly after receipt of payment from the
originating dealer or broker (or investor, in the case of direct
purchases). In no event shall the General Distributor forward such
payment to the Fund later than permitted by applicable rules of
the National Association of Securities Dealers, Inc.
(c) If the originating dealer or broker shall fail to make timely
settlement of its purchase order in accordance with applicable
rules of the National Association of Securities Dealers, Inc., or
if a direct purchaser shall fail, at the Fund's direction, to make
good payment for Shares in a timely manner, you shall cancel such
purchase order. You agree promptly to reimburse the Fund for
losses suffered by it that are attributable to errors on your part
in relation to the effective date of
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accepted purchase orders, limited to the amount that such losses
exceed contemporaneous gains realized by the fund for either of
such reasons with respect to other purchase orders.
(d) In the case of a canceled purchase for the account of a directly
purchasing shareholder, the Fund agrees that if such investor
fails to make you whole for any loss you pay to the Fund on such
canceled purchase order, the Fund will reimburse you for such loss
to the extent of the aggregate redemption proceeds of any other
Shares of the Fund owned by such investor, on your demand that the
Fund exercise its right to claim such redemption proceeds. The
Fund shall register or cause to be registered all Shares sold by
you pursuant to the provisions hereof in such names and amounts as
you may request from time to time and the Fund shall issue or
cause to be issued certificates evidencing such Shares for
delivery by you or pursuant to your direction if and to the extent
that the shareholder account in question contemplates the issuance
of such certificates. All Shares when so issued and paid for,
shall be fully paid and non-assessable by the Fund (which shall
not prevent the imposition of any Redemption Fee that may apply)
to the extent set forth in the current Prospectus and/or SAI.
5. Repurchase of Shares.
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(a) In connection with the repurchase of Shares, you are appointed and
shall act as agent of the Fund. You are authorized, for so long as
you act as General Distributor of the Fund, to arrange for the
repurchase, from authorized dealers, certificated or
uncertificated Shares of the Fund on the basis of orders received
from each dealer ("authorized dealer") with which you have a
dealer agreement for the sale of Shares and permitting resales of
Shares by you, provided that such authorized dealer, at the time
of placing such resale order, shall represent (i) if such Shares
are represented by certificate(s), that certificate(s) for the
Shares to be repurchased have been delivered to it by the
registered owner with a request for the redemption of such Shares
executed in the manner and with the signature guarantee required
by the then-currently effective prospectus of the Fund, or (ii) if
such Shares are uncertificated, that the registered owner(s) has
delivered to the dealer a request for the redemption of such
Shares executed in the manner and with the signature guarantee
required by the then-currently effective prospectus of the Fund.
(b) You shall (a) have the right in your discretion to accept or
reject orders for the repurchase of Shares; (b) promptly transmit
confirmations of all accepted repurchase orders; and (c) transmit
a copy of such confirmation to the Fund, or, if so directed, to
any duly appointed transfer or shareholder servicing agent of the
Fund. In your discretion, you may accept repurchase requests made
by a financially responsible dealer which provides you with
indemnification in form satisfactory to you in consideration of
your acceptance of such dealer's request in lieu of the written
redemption request of the owner of the account; you agree that the
Fund shall be a third party beneficiary of such indemnification.
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(c) Upon receipt by the Fund or its duly appointed transfer or
shareholder servicing agent of any certificates) (if any has been
issued) for repurchased Shares and a written redemption request of
the registered owner(s) of such Shares executed in the manner and
bearing the signature guarantee required by the then-currently
effective Prospectus or SAI of the Fund, the Fund will pay or
cause its duly appointed transfer or shareholder servicing agent
promptly to pay to the originating authorized dealer the
redemption price of the repurchased Shares (other than repurchased
Shares subject to the provisions of part (d) of Section 5 of this
Agreement) next determined after your receipt of the dealer's
repurchase order.
(d) Notwithstanding the provisions of part (c) of Section 5 of this
Agreement, repurchase orders received from an authorized dealer
after the determination of the Fund's redemption price on a
regular business day will receive that day's redemption price if
the request to the dealer by its customer to arrange such
repurchase prior to the determination of the Fund's redemption
price that day complies with the requirements governing such
requests as stated in the current Prospectus and/or SAI.
(e) You will make every reasonable effort and take all reasonably
available measures to assure the accurate performance of all
services to be performed by you hereunder within the requirements
of any statute, rule or regulation pertaining to the redemption of
Shares of a regulated investment company and any requirements set
forth in the then-current Prospectus and/or SAI of the Fund. You
shall correct any error or omission made by you in the performance
of your duties hereunder of which you shall have received notice
in writing and any necessary substantiating data; and you shall
hold the Fund harmless from the effect of any errors or omissions
which might cause an over- or under-redemption of the Fund's
Shares and/or an excess or nonpayment of dividends, capital gains
distributions, or other distributions.
(f) In the event an authorized dealer initiating a repurchase order
shall fail to make delivery or otherwise settle such order in
accordance with the rules, at the Fund's direction, of the
National Association of Securities Dealers, Inc., you shall cancel
such repurchase order. In the event that any cancellation of a
Share repurchase order or any error in the timing of the
acceptance of a Share repurchase order shall result in a gain or
loss to the Fund, you agree promptly to reimburse the Fund for any
amount by which any loss shall exceed then existing gains so
arising.
6. 1933 Act Registration. The Fund has delivered to you a copy of its
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most recent draft of the Prospectus and SAI. The Fund agrees that it will use
its best efforts to complete such registration and, when such registration is
declared effective, to continue the effectiveness of the Registration Statement
under the 1933 Act. The Fund further agrees to prepare and file any amendments
to its Registration Statement as may be necessary and any supplemental data in
order to comply with the 1933 Act. The Fund will furnish you with a reasonable
number of copies of the Prospectus and SAI and any amendments thereto for use in
connection with the sale of Shares.
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7. 1940 Act Registration. The Fund is currently in the process of
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registering under the 1940 Act as an investment company, and, when such
registration is declared effective, it will use its best efforts to maintain
such registration and to comply with the requirements of the 1940 Act.
8. State Blue Sky Qualification. At your request, the Fund will take
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such steps as may be necessary and feasible to qualify Shares for sale in
states, territories or dependencies of the United States, the District of
Columbia, the Commonwealth of Puerto Rico and in foreign countries, in
accordance with the laws thereof, and to renew or extend any such qualification;
provided, however, that the Fund shall not be required to qualify Shares or to
maintain the qualification of Shares in any jurisdiction where it shall deem
such qualification disadvantageous to the Fund.
9. Duties of Distributor. You agree that:
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(a) Neither you nor any of your officers will take any long or short
position in the Shares, but this provision shall not prevent you
or your officers from acquiring Shares for investment purposes
only; and
(b) You shall furnish to the Fund any pertinent information required
to be inserted with respect to you as General Distributor within
the purview of the Securities Act of 1933 in any reports or
registration required to be filed with any governmental authority;
and
(c) You will not make any representations inconsistent with the
information contained in the current Prospectus and/or SAI; and
(d) You shall maintain such records as may be reasonably required for
the Fund or its transfer or shareholder servicing agent to respond
to shareholder requests or complaints, and to permit the Fund to
maintain proper accounting records, and you shall make such
records available to the Fund and its transfer agent or
shareholder servicing agent upon request; and
(e) In performing under this Agreement, you shall comply with all
requirements of the Fund's current Prospectus and/or SAI and all
applicable laws, rules and regulations with respect to the
purchase, sale and distribution of Shares.
(f) You shall be responsible to reimburse the Fund for losses suffered
by it that are caused by reason of your willful misfeasance, bad
faith or gross negligence in the performance of your duties under
this Agreement.
10. Allocation of Costs. The Fund shall pay the cost of composition and
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printing of sufficient copies of its Prospectus and SAI as shall be required for
periodic distribution to its shareholders and the expense of registering Shares
for sale under federal securities laws.
11. Duration. This Agreement shall take effect on the date first written
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above, and shall supersede any and all prior General Distributor's Agreements by
and among the Fund and you. Unless earlier terminated pursuant to paragraph 12
hereof, this Agreement shall remain in effect for two years from the date of
execution hereof. This Agreement shall continue in effect from year to year
thereafter,
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provided that such continuance shall be specifically approved at least annually:
(a) by the Fund's Board of Directors or by vote of a majority of the voting
securities of the Fund; and (b) by the vote of a majority of the Directors, who
are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any such person, cast in person at a meeting called for the purpose
of voting on such approval.
12. Termination. This Agreement may be terminated (a) by the General
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Distributor at any time without penalty by giving sixty days' written notice
(which notice may be waived by the Fund); (b) by the Fund at any time without
penalty upon sixty days' written notice to the General Distributor (which notice
may be waived by the General Distributor); or (c) by mutual consent of the Fund
and the General Distributor, provided that such termination by the Fund shall be
directed or approved by the Board of Directors of the Fund or by the vote of the
holders of a "majority" of the outstanding voting securities of the Fund. In
the event this Agreement is terminated by the Fund, the General Distributor
shall be entitled to be paid the Redemption Fee under paragraph 3 hereof on the
redemption proceeds of Shares sold prior to the effective date of such
termination.
13. Assignment. This Agreement may not be amended or changed except in
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writing and shall be binding upon and shall enure to the benefit of the parties
hereto and their respective successors; however, this Agreement shall not be
assigned by either party and shall automatically terminate upon assignment.
14. Disclaimer of Shareholder Liability. The General Distributor
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understands and agrees that the obligations of the Fund under this Agreement are
not binding upon any Director or shareholder of the Fund personally, but bind
only the Fund and the Fund's property; the General Distributor represents that
it has notice of the provisions of the Articles of Incorporation of the Fund
disclaiming Director and shareholder liability for acts or obligations of the
Fund.
15. Section Headings. The heading of each section is for descriptive
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purposes only, and such headings are not to be construed or interpreted as part
of this Agreement.
If the foregoing is in accordance with your understanding, so indicate by
signing in the space provided below.
SECURITY CAPITAL EMPLOYEE REIT
FUND INCORPORATED
By:
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Xxxxxxx X. Xxxxx, Xx.
President
Accepted:
SECURITY CAPITAL MARKETS GROUP
INCORPORATED
By:
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