EX-99.B(6)(b)
FLAG INVESTORS EQUITY PARTNERS FUND, INC.
FLAG INVESTORS CLASS B 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, diversified,
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 B 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 9 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") 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 for the Shares (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;
(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;
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(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; 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
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.
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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 .75% of the average daily net assets of
the shares 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. Service Fee. The Fund shall pay Alex. Xxxxx a service fee
(as such term is defined in the NASD Rules of Fair Practice) equal to .25% of
the average daily net assets of the Shares of the Fund. Such fee shall be
calculated and accrued daily and the amounts of the daily accruals shall be
paid monthly in the manner described in paragraph 9 above.
11. 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.
12. 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.
13. 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.
14. 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
(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.
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15. 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).
16. 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.
17. 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.
18. 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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Title:
[SEAL] ALEX. XXXXX & SONS INCORPORATED
Attest: /s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxxx X. Xxxx
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Title:
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