Exhibit 6
XXXXXX BROTHERS FUNDS, INC.
DISTRIBUTION AGREEMENT
August 2, 1993
Xxxxxx Brothers Incorporated
American Express Tower
World Financial Center
New York, New York 10285
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Xxxxxx Brothers Funds, Inc. (the "Company"), a
Maryland corporation organized under the laws of the State of Maryland, has
agreed that Xxxxxx Brothers Incorporated ("Xxxxxx Brothers") will be, for the
period of this Agreement, a distributor of shares of common stock (the
"Shares") of each investment fund currently offered by the Company or to be
offered in the future (individually, a "Fund" and collectively, the "Funds").
1. Services as Distributor.
1.1 Xxxxxx Brothers will act as agent for the distribution of Shares
covered by the Company's registration statement, prospectuses and statements
of additional information then in effect (the "Registration Statement") under
the Securities Act of 1933, as amended (the "1933 Act"), and the Investment
Company Act of 1940, as amended (the "1940 Act").
1.2 Xxxxxx Brothers agrees to use its best efforts to solicit orders
for the sale of Shares at the public offering price, as determined in
accordance with the Registration Statement, and will undertake such
advertising and promotion as it believes is reasonable in connection with such
solicitation. Xxxxxx Brothers shall not be obligated to sell any certain
number of Shares.
1.3 All activities by Xxxxxx Brothers as distributor of the Shares
will comply with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or adopted by the
Securities and Exchange Commission (the "SEC") or by any securities
association registered under the Securities Exchange Act of 1934, as amended.
1.4 Xxxxxx Brothers will provide one or more persons during normal
business hours to respond to telephone questions concerning the Funds.
1.5 Xxxxxx Brothers will transmit any orders received by it for
purchase or redemption of Shares to The Shareholder Services Group, Inc.
("TSSG"), the Company's transfer agent, or any successor to TSSG of which the
Company has notified Xxxxxx Brothers in writing.
1.6 Whenever in their judgment such action is warranted for any
reason, including, without limitation, market, economic or political
conditions, the Company's officers may decline to accept any orders for, or
make any sales of, the Shares until such time as those officers deem it
advisable to accept such orders and to make such sales.
1.7 Xxxxxx Brothers will act only on its own behalf as principal
should it choose to enter into selling agreements with selected dealers or
others.
2. Duties of the Company.
2.1 The Company agrees at its own expense to execute any and all
documents, to furnish any and all information and to take any other actions
that may be reasonably necessary in connection with the qualification of the
Shares for sale in those states that Xxxxxx Brothers may designate.
2.2 The Company shall furnish from time to time, for use in
connection with the sale of the Shares, such information reports with respect
to the Funds and the Shares as Xxxxxx Brothers may reasonably request, all of
which shall be signed by one or more of the Company's duly authorized
officers; and the Company warrants that the statements contained in any such
reports, when so signed by the Company's officers, will be true and correct.
The Company will also furnish Xxxxxx Brothers upon request with (a) annual
audits of the books and accounts of the Funds made by independent certified
public accountants regularly retained by the Company; (b) semi-annual
unaudited financial statements pertaining to each Fund; (c) quarterly earnings
statements prepared by the Company with respect to each Fund; (d) a monthly
itemized list of the securities in the portfolio of each Fund; (e) monthly
balance sheets with respect to each Fund as soon as practicable after the end
of each month; and (f) from time to time such additional information regarding
the financial condition of each Fund as Xxxxxx Brothers may reasonably
request.
3. Representations and Warranties.
The Company represents to Xxxxxx Brothers that all registration
statements, prospectuses and statements of additional information filed by the
Company with the SEC under the 1933 Act and the 1940 Act with respect to the
Shares have been carefully prepared in conformity with the requirements of the
1933 Act, the 1940 Act and the rules and regulations of the SEC thereunder.
As used in this Agreement, the terms "registration statement," "prospectus"
and "statement of additional information" mean any registration statement,
prospectus and statement of additional information filed by the Company with
the SEC and any amendments and supplements to the registration statement,
prospectus and statement of additional information that at any time has been
filed with the SEC. The Company represents and warrants to Xxxxxx Brothers
that any registration statement, prospectus and statement of additional
information, when the registration statement becomes effective, will include
all statements required to be contained in it in conformity with the 1933 Act,
the 1940 Act and the rules and regulations of the SEC; that all statements of
fact contained in any registration statement, prospectus or statement of
additional information will be true and correct when the registration
statement becomes effective; and that the registration statement, the
prospectus and the statement of additional information, when the registration
statement becomes effective, will include no untrue statement of a material
fact and will not omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading to a purchaser of
the Shares. Xxxxxx Brothers may, but is not be obligated to, propose from
time to time such amendment or amendments to any registration statement and
such supplement or supplements to any prospectus or statement of additional
information as, in the light of future developments, may, in the opinion of
Xxxxxx Brothers' counsel, be necessary or advisable. If the Company does not
propose such amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Company of a written request from Xxxxxx
Brothers to do so, Xxxxxx Brothers may, at its option, terminate this
Agreement. The Company will not file any amendment to any registration
statement or supplement to any prospectus or statement of additional
information without giving Xxxxxx Brothers reasonable advance notice except
that nothing contained in this Agreement will in any way limit the Company's
right to file at any time such amendments to any registration statement and/or
supplements to any prospectus or statement of additional information, of
whatever character, as the Company may deem advisable, such right being in all
respects absolute and unconditional.
4. Indemnification.
4.1 The Company authorizes Xxxxxx Brothers and any dealers with
whom Xxxxxx Brothers has entered into dealer agreements to use any prospectus
or statement of additional information furnished by the Company from time to
time, in connection with the sale of the Shares. The Company agrees to
indemnify, defend and hold Xxxxxx Brothers, its several officers and
directors, and any person who controls Xxxxxx Brothers 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 those claims, demands or liabilities and any related counsel
fees) that Xxxxxx Brothers, its officers and directors, or any such
controlling person, may incur under the 1933 Act, the 1940 Act or common law
or otherwise, arising out of or on the basis of any untrue statement, or
alleged untrue statement, of a material fact contained in any registration
statement, any prospectus or any statement of additional information or
arising out of or based upon any omission, or alleged omission, to state a
material fact required to be stated in any registration statement, any
prospectus or any statement of additional information or necessary to make the
statements in any of them not misleading, except that the Company's agreement
to indemnify Xxxxxx Brothers, its officers or directors, and any such
controlling person will not be deemed to cover any claims, demands,
liabilities or expenses arising out of or based upon any statements or
representations made by Xxxxxx Brothers or its representatives or agents other
than those statements and representations as are contained in any registration
statement, prospectus or statement of additional information and in the
financial and other statements as are furnished to Xxxxxx Brothers pursuant to
paragraph 2.2 of this Agreement; and except that the Company's agreement to
indemnify Xxxxxx Brothers and the Company's representations and warranties set
out in paragraph 3 of this Agreement will not be deemed to cover any liability
to the Funds or their shareholders to which Xxxxxx Brothers would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of Xxxxxx Brothers' reckless disregard
of its obligations and duties under this Agreement. The Company's agreement to
indemnify Xxxxxx Brothers, its officers and directors, and any such
controlling person, as described above, is expressly conditioned upon the
Company's being notified of any action brought against Xxxxxx Brothers, its
officers or directors, or any such controlling person, the notification to be
given by letter, via facsimile or by telegram addressed to the Company at its
principal office in New York, New York and sent to the Company by the person
against whom the action is brought, within ten days after the summons or other
first legal process has been served. The failure so to notify the Company of
any such action will not relieve the Company from any liability that the
Company may have to the person against whom the action is brought by reason of
any such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of the Company's indemnity agreement
contained in this paragraph 4.1. The Company will be entitled to assume the
defense of any suit brought to enforce any such claim, demand or liability,
but, in such case, the defense will be conducted by counsel of good standing
chosen by the Company and approved by Xxxxxx Brothers. In the event the
Company elects to assume the defense of any such suit and retains counsel of
good standing approved by Xxxxxx Brothers, the defendant or defendants in the
suit will bear the fees and expenses of any additional counsel retained by any
of them; but if the Company does not elect to assume the defense of any such
suit, or if Xxxxxx Brothers does not approve of counsel chosen by the Company,
the Company will reimburse Xxxxxx Brothers, its officers and directors, or the
controlling person or persons named as defendant or defendants in the suit,
for the fees and expenses of any counsel retained by Xxxxxx Brothers or them.
The Company's indemnification agreement contained in this paragraph 4.1 and
the Company's representations and warranties in this Agreement will remain
operative and in full force and effect regardless of any investigation made by
or on behalf of Xxxxxx Brothers, its officers and directors, or any
controlling person, and will survive the delivery of any of the Shares. This
agreement of indemnity will inure exclusively to Xxxxxx Brothers' benefit, to
the benefit of its several officers and directors, and their respective
estates, and to the benefit of the controlling persons and their successors.
The Company agrees to notify Xxxxxx Brothers promptly of the commencement of
any litigation or proceedings against the Company or any of its officers or
Directors in connection with the issuance and sale of any of the Shares.
4.2 Xxxxxx Brothers agrees to indemnify, defend and hold the
Company, its several officers and Directors, and any person who controls the
Company 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 costs of investigating or defending those claims, demands or
liabilities and any related counsel) that the Company, its officers or
Directors or any such controlling person may incur under the 1933 Act, the
1940 Act or common law or otherwise, but only to the extent that the liability
or expense incurred by the Company, its officers or Directors or such
controlling person resulting from the claims or demands arise out of or are
based upon (a) any unauthorized sales literature, advertisements, information,
statements or representations or (b) any untrue, or alleged untrue, statement
of a material fact contained in information furnished in writing by Xxxxxx
Brothers to the Company and used in the answers to any of the items of the
registration statement or in the corresponding statements made in the
prospectus or statement of additional information, or arise out of or are
based upon any omission, or alleged omission, to state a material fact in
connection with the information furnished in writing by Xxxxxx Brothers to the
Company and required to be stated in such answers or necessary to make such
information not misleading. Xxxxxx Brothers' agreement to indemnify the
Company, its officers and Directors, and any such controlling person, as
described above, is expressly conditioned upon Xxxxxx Brothers' being notified
of any action brought against the Company, its officers or Directors, or any
such controlling person, the notification to be given by letter via facsimile
or telegram addressed to Xxxxxx Brothers at its principal office in New York,
New York, and sent to Xxxxxx Brothers by the person against whom such action
is brought, within ten days after the summons or other first legal process has
been served. Xxxxxx Brothers will have the right to control the defense of
such action, with counsel of its own choosing, satisfactory to the Company, if
the action is based solely upon such alleged misstatement or omission on
Xxxxxx Brothers' part, and in any other event the Company, its officers or
Directors or such controlling person each will have the right to participate
in the defense or preparation of the defense of any such action. The failure
so to notify Xxxxxx Brothers of any such action will not relieve Xxxxxx
Brothers from any liability that Xxxxxx Brothers may have to the Company, its
officers or Directors, or to such controlling person by reason of the untrue,
or alleged untrue, statement or omission, or alleged omission, otherwise than
on account of Xxxxxx Brothers' indemnity agreement contained in this paragraph
4.2. Xxxxxx Brothers agrees to notify the Company promptly of the
commencement of any litigation or proceedings against Xxxxxx Brothers or any
of its officers or directors in connection with the issuance and sale of any
of the Company's shares.
5. Effectiveness of Registration.
None of the Shares may be offered by either Xxxxxx Brothers or the
Company under any of the provisions of this Agreement and no orders for the
purchase or sale of the Shares under this Agreement may be accepted by the
Company if and so long as the effectiveness of the registration statement then
in effect or any necessary amendments to the registration statement is
suspended under any of the provisions of the 1933 Act or if and so long as a
current prospectus as required by Section 5(b)(2) of the 1933 Act is not on
file with the SEC; except that nothing contained in this paragraph 5 will in
any way restrict or have an application to or bearing upon the Company's
obligation to repurchase Shares from any shareholder in accordance with the
provisions of the prospectuses or statement of additional information relating
to the Company's Articles of Incorporation dated May 5, 1993, as amended from
time to time (the "Articles of Incorporation").
6. Notice to Xxxxxx Brothers.
The Company agrees to advise Xxxxxx Brothers immediately in
writing:
(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information then in effect or
for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement, prospectus or
statement of additional information then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement, prospectus or statement of
additional information then in effect or that requires the making of a change
in the registration statement, prospectus or statement of additional
information in order to make the statements in those documents not misleading;
and
(d) of all actions of the SEC with respect to any amendment to any
registration statement, prospectus or statement of additional information that
may from time to time be filed with the SEC.
7. Term of the Agreement.
7.1 This Agreement will become effective with respect to a Fund
as of the date the Fund commences its investment operations and will continue
for an initial two-year term and will continue thereafter so long as such
continuance is specifically approved at least annually by the Company's Board
of Directors (all Directors voting) and by a majority of the Directors of the
Company who are not "interested persons" (as defined in the 0000 Xxx) of the
Company and have no direct or indirect financial interest in the operation of
this Agreement or in any agreements related hereto by vote cast in person at a
meeting called for the purpose of voting on the approval.
7.2 This Agreement is terminable with respect to a Fund, without
penalty, on 60 days' written notice, by a majority of the Directors of the
Company who are not "interested persons" of the Company and have no direct or
indirect financial interest in the operation of this Agreement or in any
agreements related hereto or by vote of holders of a majority of the Fund's
outstanding voting securities, or upon 60 days' written notice, by Xxxxxx
Brothers.
7.3 This Agreement will terminate automatically in the event of
its "assignment" (as defined in the 1940 Act).
8. Miscellaneous.
The Company recognizes that directors, officers and employees of
Xxxxxx Brothers, may from time to time serve as directors, trustees, officers
and employees of corporations and business trusts (including other investment
companies) and that such other corporations and trusts may include the name
"Shearson," "Shearson Xxxxxx," "Xxxxxx Brothers" or any variant, including
initials, as part of their names, and that Xxxxxx Brothers or its affiliates
may enter into distribution or other agreements with such other corporations
and trusts. If Xxxxxx Brothers ceases to act as a distributor of the
Company's shares, the Company agrees that, at Xxxxxx Brothers' request, the
Company's license to use the words "Xxxxxx Brothers" will terminate and that
the Company will take all necessary action to change the name of the Company
to a name not including the words "Xxxxxx Brothers" or any other name
referring to Xxxxxx Brothers.
9. Representation by the Company.
The Company represents that a copy of its Amended Articles of
Incorporation is on file with the Secretary of the State of Maryland.
10. Limitation of Liability.
The Company and Xxxxxx Brothers agree that the obligations of the
Company under this Agreement will not be binding upon any of the Directors of
the Company, shareholders of the Funds, nominees, officers, employees or
agents, whether past, present or future, of the Company, individually, but are
binding only upon the assets and property of the Funds, as provided in the
Articles of Incorporation. The execution and delivery of this Agreement have
been authorized by the Directors of the Company, and signed by an authorized
officer of the Company, acting as such, and neither the authorization by the
Directors nor the execution and delivery by the officer will be deemed to have
been made by any of them individually or to impose any liability on any of
them or any shareholder of the Company personally, but will bind only the
property of the Company as provided in its Articles of Incorporation. No Fund
will be liable for any claims against any other Fund.
11. Governing Law.
This agreement shall be governed by, and construed and interpreted
in accordance with, the law of the State of New York.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning to us the
enclosed copy of this Agreement.
Very truly yours,
XXXXXX BROTHERS FUNDS, INC.
By:/s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: President
Accepted:
XXXXXX BROTHERS INCORPORATED
By: /s/ Xxxxxx Xxxxxxx
Authorized Signatory
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