EXHIBIT 6(a)
FORM OF DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this _____ day of ___________, 1997, by and between
THE COLORADO DOUBLE TAX-EXEMPT BOND FUND, INC., a Maryland corporation (the
"Fund"), and XXXXX XXXX INVESTMENTS, INC., a Colorado corporation (the
Underwriter").
W I T N E S S E T H:
Section 1. Underwriting Services. The Fund hereby engages the Underwriter,
and the Underwriter hereby agrees to act, as principal underwriter for the Fund
in the sale and distribution of the shares of the Fund to the public, either
through dealers or otherwise. The Underwriter agrees to offer such shares for
sale at all times when such shares are available for sale and may lawfully be
offered for sale and sold.
Section 2. Sale of Fund Shares. Such shares are to be sold only on the
following terms:
(a) All subscriptions, offers, or sales shall be subject to acceptance
or rejection by the Fund. Any offer or sale shall be conclusively presumed
to have been accepted by the Fund if the Fund shall fail to notify the
Underwriter of the rejection of such offer or sale prior to the computation
of the net asset value of the Fund's shares next following receipt by the
Fund of notice of such offer or sale.
(b) No share of the Fund shall be sold by the Underwriter for any
consideration other than cash or, except in instances otherwise provided
for by the Fund's currently effective Prospectus, for any amount less than
the public offering price per share, which shall be determined in
accordance with the Fund's currently effective Prospectus.
Section 3. Sale of Shares by the Fund. The Fund reserves the right to issue
shares at any time directly to its shareholders as a stock dividend or stock
split and to sell shares to its shareholders or to other persons approved by the
Underwriter at not less than net asset value.
Section 4. Registration of Shares. The Fund agrees to make prompt and
reasonable efforts to effect and keep in effect, at its expense, the
registration or qualification of its shares for sale in such jurisdictions as
the Fund may designate.
Section 5. Information to be furnished to the Underwriter. The Fund agrees
that it will furnish the Underwriter with such information with respect to the
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affairs and accounts of the Fund as the Underwriter may from time to time
reasonably require, and further agrees that the Underwriter, at all reasonable
times, shall be permitted to inspect the books and records of the Fund.
Section 6. Allocation of Expenses. During the period of this Agreement, the
Fund shall pay or cause to be paid all expenses, costs, and fees incurred by the
Fund which are not assumed by the Underwriter or Funds Management Corporation, a
Colorado corporation and the Fund's investment adviser ("the Manager"). The
Underwriter shall pay all advertising and promotional expenses in connection
with the distribution of the Fund's shares including paying for prospectuses for
new shareholders, except as paid by the Fund under its Distribution Plan and
Agreement.
Section 7. Compensation to the Underwriter. It is understood and agreed by
the parties hereto that the Underwriter will receive compensation for services
it performs hereunder in accordance with Schedule A hereto.
Section 8. Limitation of the Underwriter's Authority. The Underwriter shall
be deemed to be an independent contractor and, except as specifically provided
or authorized herein, shall have no authority to act for or represent the Fund.
Section 9. Subscription for Shares_Refund for Cancelled Orders. The
Underwriter shall subscribe for the shares of the Fund only for the purpose of
covering purchase orders already received by it or for the purpose of investment
for its own account. In the event that an order for the purchase of shares of
the Fund is placed with the Underwriter by a customer or dealer and subsequently
cancelled, the Underwriter shall forthwith cancel the subscription for such
shares entered on the books of the Fund, and, if the Underwriter has paid the
Fund for such shares, shall be entitled to receive from the Fund in refund of
such payment the lesser of:
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by
the Underwriter.
Section 10. Freedom to Deal with Third Parties. The Underwriter shall be
free to render to others services of a nature either similar to or different
from those rendered under this Agreement, except such as may impair its
performance of the services and duties to be rendered by it hereunder.
Section 11. Indemnification.
(a) The Fund will indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which the Underwriter
or such controlling person may become subject, under the Act or otherwise,
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insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Fund's
Registration Statement or Prospectus or any other written sales material
prepared by the Fund which is utilized by the Underwriter in connection
with the sale of Shares of the Fund or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or (in the case of the Registration Statement and
Prospectus) necessary to make the statements therein not misleading or (in
the case of such other sales material) necessary to make the statements
therein not misleading in the light of the circumstances under which they
were made; and will reimburse the Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by the
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Fund will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement or Prospectus in
conformity with written information furnished to the Fund by the
Underwriter specifically for use therein; and provided, further, that
nothing herein shall be so construed as to protect the Underwriter against
any liability to the Fund or the Fund's shareholders to which the
Underwriter would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence, in the performance of its duties, or by
reason of the reckless disregard by the Underwriter of its obligations and
duties under this Agreement. This indemnity agreement will be in addition
to any liability which the Fund may otherwise have.
(b) The Underwriter will indemnify and hold harmless the Fund, each of
its directors and officers and each person, if any, who controls the Fund
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Fund or any such director, officer or controlling
person may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
Prospectus or any sales material not prepared by the Fund which is utilized
in connection with the sale of shares of the Fund or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or (in the case of the Registration
Statement and Prospectus) necessary to make the statements therein not
misleading or (in the case of such other sales material) necessary to make
the statements therein not misleading in the light of the circumstances
under which they were made, in the case of the Registration Statement and
Prospectus to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in conformity with written information furnished to the Fund by the
Underwriter specifically for use therein; and the Underwriter will
reimburse any legal or other expenses reasonably incurred by the Fund or
any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability which
the Underwriter may otherwise have.
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(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 10, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from liability which it may have to any indemnified party
otherwise than under this Section 10. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, to assume the
defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 10 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
Section 12. Rules of NASD, etc. The Underwriter will conform to the Rules
of Fair Practice of the National Association of Securities Dealers, Inc. and the
securities laws of any jurisdiction in which it sells, directly or indirectly,
any shares. The Underwriter also agrees to furnish to the Fund sufficient copies
of any agreements or plans it intends to use in connection with any sales of
shares in adequate time for the Fund to file and clear them with the proper
authorities before they are put into use, and not to use them until so filed and
cleared.
Section 13. Effective Date, Duration and Termination of Agreement. The
effective date of this Agreement shall be ____________, 1997. Whenever referred
to in this Agreement, the vote or approval of the holders of a majority of the
outstanding voting securities of the Fund shall mean (a) the vote of 67% or more
of such securities if the holders of more than 50% of such securities are
present in person or by proxy or (b) the vote of more than 50% of such
securities, whichever is the lesser.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect until ___________, 1999 and from year to year thereafter but
only so long as such continuance is specifically approved at least annually 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; provided that in either event
the continuance also is approved by a majority of the Board of Directors who are
not "interested persons" of the Fund, the Underwriter or the Manager as defined
by the provisions of the Investment Company Act of 1940, as amended (the "1940
Act"), cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time without the payment of any
penalty by the vote of 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, or by
the Underwriter, upon 60 days' written notice to the other party.
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This Agreement shall automatically terminate in the event of its assignment
(as defined by the provisions of the 1940 Act).
Section 14. Amendments to Agreement. No material amendment to this
Agreement shall be effective until approved by the Underwriter and by vote of a
majority of the Board of Directors of the Fund who are not "interested persons"
of the Underwriter.
Section 15. Notices. Any notice under this Agreement shall be in writing,
addressed, delivered, or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for receipt of such notice.
Section 16. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Colorado.
IN WITNESS WHEREOF, the Fund and the Underwriter have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
THE COLORADO DOUBLE TAX-EXEMPT
BOND FUND, INC.
By _______________________________________
Xxxxxx X. Xxxxx, President
XXXXX XXXX INVESTMENTS, INC.
By _______________________________________
Xxxxxx X. Xxxxx, President
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SCHEDULE A
No sales charge will be imposed upon closing.
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