Exhibit 6(c)
DISTRIBUTION AND SERVICING AGREEMENT
This Distribution and Servicing Agreement, made as of this 24/th/ day of
November 2003 by and between Security Capital Real Estate Mutual Funds
Incorporated, a Maryland corporation ("Fund") and SC-R&M Capital Markets
Incorporated, a Delaware corporation (the "Distributor").
WHEREAS, the Fund is registered with the Securities and Exchange Commission
as an open-end investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and issues registered shares of Security Capital U.S.
Real Estate Shares ("SC-US") for sale to the public under the Securities Act of
1933 (the "1933 Act") and various state securities laws; and
WHEREAS, the Fund wishes to retain the Distributor as the principal
underwriter in connection with the offering and sale shares ("Shares") of SC-US;
and
WHEREAS, this Agreement has been approved by separate votes of the Fund's
Board of Directors and of its disinterested directors in conformity with Section
15 of the Investment Company Act of 1940, and paragraph (b)(2) of Rule 12b-1
thereunder; and
WHEREAS, the Distributor is willing to act as principal underwriter and to
furnish such services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. (a) The Fund hereby appoints the Distributor as principal underwriter in
connection with the offering and sale of the Shares. The Distributor, as
exclusive agent for the Fund, and subject to applicable federal and state law
and the Articles of Incorporation and By-Laws of the Fund, shall: (1) provide
services to the Fund primarily intended to result in the sale of the Shares; (2)
solicit orders for the purchase of the Shares subject to such terms and
conditions as the Fund may specify; and (3) accept orders for the purchase of
the Shares on behalf of the Fund (collectively, "Distribution Services"). The
Distributor shall comply with all applicable federal and state laws and offer
the Shares of the Fund on an agency or "best efforts" basis under which the Fund
shall issue only such Shares as are actually sold. The Distributor shall have
the right to use any list of shareholders of the Fund or any other list of
investors which it obtains in connection with its provision of services under
this Agreement; provided, however, that the Distributor shall not sell or
knowingly provide such list or lists to any unaffiliated person without the
consent of the Fund's Board of Directors.
(b) The Distributor shall provide ongoing shareholder liaison
services, including responding to shareholder inquiries, providing shareholders
with information on their investments, and any other services now or hereafter
deemed to be appropriate subjects for the payments of "service fees" under Rule
2830 of the Conduct Rules of the National Association of Securities Dealers,
Inc. (collectively, "Shareholder Services").
2. The Distributor may enter into agreements with registered and qualified
securities dealers it may select for the performance of Distribution and
Shareholder Services, and may
enter into agreements with qualified dealers and other qualified entities to
perform record keeping and subaccounting services, the form of such agreements
to be as mutually agreed upon and approved by the Fund and the Distributor. In
making such arrangements, the Distributor shall act only as principal and not as
agent for the Fund. No such dealer or other entity is authorized to act as agent
for the Fund in connection with the offering or sale of Shares to the public or
otherwise.
3. The public offering price of the Shares shall be the net asset value per
share of the outstanding Shares. The Fund or its administrator shall furnish the
Distributor with a statement each computation of public offering price and of
the details entering into such computation.
4. As compensation for providing Distribution Services under this
Agreement, the Distributor shall receive from the Fund a distribution fee and a
service fee at the rates and under the terms and conditions of the Distribution
and Service Plan for SC-US (the "Plan") adopted by the Fund, as such Plan is in
effect from time to time, and subject to any further limitations on such fees as
the Fund's Board of Directors may impose. The Distributor may reallow any or all
of the distribution fee and service fee that it has received under this
Agreement to such dealers or sub-accountants as it may from time to time
determine.
5. As used in this Agreement, the term "Registration Statement" shall mean
the registration statement most recently filed by the Fund with the Securities
and Exchange Commission and effective under the 1940 Act and 1933 Act, as such
Registration Statement is amended by any amendments thereto at the time in
effect, and the terms "Prospectus" and "Statement of Additional Information"
shall mean, respectively, the form of prospectus and statement of additional
information with respect to the Fund filed by the Fund as part of the
Registration Statement, or as they may be amended from time to time.
6. The Distributor shall print and distribute to prospective investors
Prospectuses, and shall print and distribute, upon request, to prospective
investors Statements of Additional Information, and may print and distribute
such other sales literature, reports, forms and advertisements in connection
with the sale of the Shares as comply with the applicable provisions of federal
and state law. In connection with such sales and offers of sale, the Distributor
and any dealer or sub-accountant shall give only such information and make only
such statements or representations as are contained in the Prospectus, Statement
of Additional Information, or in information furnished in writing to the
Distributor by the Fund, and the Fund shall not be responsible in any way for
any other information, statements or representations given or made by the
Distributor, any dealer or sub-accountant, or their representatives or agents.
Except as specifically provided in this Agreement, the Fund shall bear none of
the expenses of the Distributor in connection with its offer and sale of the
Shares.
7. The Fund agrees at its own expense to register the Shares with the
Securities and Exchange Commission, state and other regulatory bodies, and to
prepare and file from time to time such Prospectuses, Statements of Additional
Information, amendments, reports and other documents as may be necessary to
maintain the Registration Statement. The Fund shall bear all expenses related to
preparing and typesetting such Prospectuses, Statements of Additional
Information, and other materials required by law and such other expenses,
including printing and
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mailing expenses, related to such Fund's communications with persons who are
shareholders of the Fund.
8. The Fund agrees to indemnify, defend and hold the Distributor, its
several officers and directors, and any person who controls the Distributor
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
counsel fees incurred in connection therewith) which the Distributor, its
officers or directors, or any such controlling person may incur, under the 1933
Act or under common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in the Registration Statement or
arising out of or based upon any alleged omission to state a material fact
required to be stated or necessary to make the Registration Statement not
misleading, provided that in no event shall anything contained in this Agreement
be construed so as to protect the Distributor against any liability to the Fund
or its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations and
duties under this Agreement, and further provided that the Fund shall not
indemnify the Distributor for conduct set forth in paragraph 9.
9. The Distributor agrees to indemnify, defend and hold the Fund, its
several officers and directors, and any person who controls the Fund 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 counsel
fees incurred in connection therewith) which the Fund, its officers or
directors, or any such controlling person may incur, under the 1933 Act or under
common law or otherwise, on account of any wrongful act of the Distributor or
any of its employees or arising out of or based upon any alleged untrue
statement of a material fact contained in information furnished in writing by
the Distributor to the Fund for use in the Registration Statement or arising out
of or based upon any alleged omission to state a material fact in connection
with such information required to be stated in the Registration Statement or
necessary to make such information not misleading. As used in this paragraph,
the term "employee" shall not include a corporate entity under contract to
provide services to the Fund or the Fund, or any employee of such a corporate
entity, unless such person is otherwise an employee of the Fund.
10. The Fund reserves the right at any time to withdraw all offerings of
the Shares of the Fund by written notice to the Distributor at its principal
office.
11. The Fund shall not issue certificates representing Shares unless
requested by a shareholder. If such request is transmitted through the
Distributor, the Fund will cause certificates evidencing the Shares owned to be
issued in such names and denominations as the Distributor shall from time to
time direct, provided that no certificates shall be issued for fractional
Shares.
12. The Distributor may at its sole discretion, directly or through
dealers, repurchase Shares offered for sale by the shareholders or dealers. Any
repurchase of Shares by the Distributor shall be at the net asset value next
determined after a repurchase order has been received. The Distributor will
receive no commission or other remuneration for repurchasing
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Shares. At the end of each business day, the Distributor shall notify by
facsimile or in writing, the Fund and the Fund's transfer agent, of the orders
for repurchase of Shares received by the Distributor since the last such report,
the amount to be paid for such Shares, and the identity of the shareholders or
dealers offering Shares for repurchase. Upon such notice, the Fund shall pay the
Distributor such amounts as are required by the Distributor for the repurchase
of such Shares in cash or in the form of a credit against moneys due the Fund
from the Distributor as proceeds from the sale of Shares. The Fund reserves the
right to suspend such repurchase right upon written notice to the Distributor.
The Distributor further agrees to act as agent for the Fund to receive and
transmit promptly to the Fund's transfer agent shareholder and dealer requests
for redemption of Shares.
13. The Distributor is an independent contractor and shall be agent for the
Fund only in respect to the sale and redemption of the Shares.
14. The services of the Distributor to the Fund under this Agreement are
not to be deemed exclusive, and the Distributor shall be free to render similar
services or other services to others so long as its services hereunder are not
impaired thereby.
15. The Distributor shall prepare reports for the Fund's Board of Directors
on a quarterly basis showing such information concerning expenditures related to
this Agreement as from time to time shall be reasonably requested by the Board
of Directors.
16. As used in this Agreement, the terms "assignment", "interested person",
and "majority of the outstanding voting securities" shall have the meanings
given to them by Section 2(a) of the 1940 Act, subject to such exemptions as may
be granted by the Securities and Exchange Commission by any rule, regulation or
order.
17. This Agreement will become effective with respect to the Fund on the
date first written above and, unless sooner terminated as provided herein, will
continue in effect for one year from the above written date. Thereafter, if not
terminated, this Agreement shall continue in effect with respect to the Fund for
successive annual periods ending on the same date of each year, provided that
such continuance is specifically approved at least annually (i) by the Fund's
Board of Directors or (ii) by a vote of a majority of the outstanding voting
securities of SC-US (as defined in the 1940 Act), provided that in either event
the continuance is also approved by a majority of the Fund's Directors who are
not interested persons (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval.
18. This Agreement is terminable with respect to SC-US or in its entirety
without penalty, on not less than 60 days notice to the other party, by: (i) the
Fund's Board of Directors by a vote of the Directors who are not interested
persons of the Fund within the meaning of Section 2(a)(19) of the 1940 Act, and
have no direct or indirect financial interest in the operation of the Plan or in
any agreement related to the Plan, including this Agreement; (ii) by vote of a
majority of the outstanding voting securities of SC-US (as defined in the 1940
Act); (iii) by the Distributor, or (iv) upon the mutual written consent of the
Distributor and the Fund. This Agreement will also automatically and immediately
terminate in the event of its assignment.
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19. No provision of this Agreement may be changed, waived, discharged or
terminated orally, except by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be executed
by their officers thereunto duly authorized.
Attest: SECURITY CAPITAL REAL ESTATE
MUTUAL FUNDS INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Attest: SC-R&M CAPITAL MARKETS INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx, Xx.
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