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EXHIBIT 99.b.6
DISTRIBUTION AGREEMENT
This Distribution Agreement is made this 1st day of September, 1995, by
and among American AAdvantage Funds and American AAdvantage Mileage Funds, both
Massachusetts business trusts (the "Trusts"), Brokers Transaction Services,
Inc. ("BTS") or the "Distributor"), a Texas corporation, and AMR Investment
Services, Inc. ("AMR"), a Delaware corporation.
WHEREAS, the Trusts are registered as open-end, diversified management
investment companies under the Investment Company Act of 1940, as amended (the
"1940 Act"), and have registered and intend to continue to register their
shares of beneficial interest (the "Shares") for sale to the public under the
Securities Act of 1933, as amended (the "1933 Act"), and various state
securities laws; and
WHEREAS, the Trusts offer for public sale one or more distinct series of
shares of beneficial interest, each corresponding to a distinct portfolio
("Portfolio"); and
WHEREAS, the Trusts wish to retain BTS as the Trust's Distributor in
connection with the offering and sale of the Shares of each current Portfolio
and such other Portfolios as agreed upon between the Trusts and BTS from time
to time and to furnish certain other services to the Trusts as specified in
this Agreement;
WHEREAS, this Agreement has been approved by a vote of the Board of
Trustees of each Trust in conformity with Paragraph (b)(2) of Rule 12b-1 under
the 1940 Act;
WHEREAS, AMR is the Manager of each Trust; and
WHEREAS, BTS is willing to act as Distributor and to furnish such services
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT OF BTS. The Trusts hereby appoints BTS as Distributor of
their Shares. As such, BTS agrees to act as agent for the Trusts and, subject
to applicable federal and state laws and the Declaration of Trust, By-Laws and
current Prospectus and Statement of Additional Information of each Trust, (a)
to solicit orders for the purchase of the Shares, subject to such terms and
conditions as each Trust may specify, (b) to hold itself available to receive
orders for the purchase and redemption of the Shares, and to accept such orders
on behalf of each Trust as of the time of receipt of such orders and promptly
transmit such orders as are accepted to the Trust and its transfer agents, and
(c) to make Shares available through the National Securities Clearing
Corporation's FundServ system. Orders shall be deemed effective at the time and
in the manner set forth in the Registration Statement. BTS shall offer the
Shares of each Portfolio on an agency or "best efforts" basis under which each
Trust shall only issue such Shares as are actually sold. The public offering
price of the Shares of each Portfolio shall be the net asset value per share
(as determined by each Trust) of the outstanding Shares of the Portfolio as set
forth in the Registration Statement. The Trusts reserve the right at any time
to withdraw all offerings of the Shares of any or all Portfolios by notice to
BTS.
2. TRUST OBLIGATIONS. Each Trust shall keep BTS fully informed of its
affairs and shall make available to BTS copies of all information, financial
statements and other papers that BTS may reasonably request for use
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in connection with the distribution shares, including, without limitation,
such reasonable number of copies of the most current prospectus, statement of
additional information, and annual and interim reports of a Portfolio as BTS
may request, and each Trust shall cooperate fully in the efforts of BTS to
sell and arrange for the sale of the Shares.
3. SALES TO DEALERS. BTS, with the consent of the Trusts or AMR, may
enter into agreements to sell shares to registered and qualified retail
dealers.
4. SALES MATERIALS. BTS shall provide to investors and potential
investors only such information regarding the Trusts as is permitted by
applicable law. To the extent reasonably requested by AMR, BTS will file
proposed advertisements and sales literature with appropriate regulators and
consult with AMR regarding any comments provided by regulators with respect to
such materials.
5. COMPENSATION. As compensation for providing services under this
agreement, AMR (and not the Trusts) shall pay to BTS the sum of (a) $50,000
annually, payable monthly in arrears, (b) the ongoing licensing fees and
incidental costs of those employees of AMR who are designated by AMR to become
registered representatives of BTS, (c) the compensation paid by BTS to such
registered representatives in accordance with compensation schedules, as
agreed upon by BTS and AMR from time to time; (d) the reasonable fees
associated with listing and maintaining shares on the National Securities
Clearing Corporation's FundServ system, as agreed upon by BTS and AMR; and (e)
incidental expenses associated with printing and distributing advertising and
sales literature.
6. TRUST EXPENSES. Each Trust agrees, at its own expense, to register
Shares with the Securities and Exchange Commission ("SEC"), state and other
regulatory bodies, and to prepare and file from time to time such registration
statements, amendments, reports and other documents as may be necessary to
offer and sell Shares. Each Portfolio shall bear all expenses related to
preparing and typesetting Prospectuses, Statements of Additional Information
and other materials required by law and such other expenses, including printing
and mailing expenses, related to the Portfolio's communications with persons
who are shareholders of that Portfolio. Except as specifically provided in
this Agreement, the Trusts and the Portfolios shall bear none of the expenses
of BTS in connection with its offer and sale of the Shares.
7. INDEMNIFICATION BY THE TRUSTS AND AMR. The Trusts and AMR will
indemnify, defend and hold harmless BTS, its officers and directors, and any
person who controls BTS within the meaning of Section 15 of the 1933 Act
(collectively, "BTS Indemnified Persons") from and against any and all claims,
demands, liabilities and expenses (including the reasonable cost of
investigating or defending such claims, demands or liabilities) that any BTS
Indemnified Person may incur under the 1933 Act, common law or otherwise
arising out of or based upon any (a) untrue statement of a material fact in the
Registration Statement, (b) omission to state a material fact in the
Registration Statement, or (c) failure by the Trusts or AMR to comply with the
terms of this Agreement, provided that this Agreement shall not protect any BTS
Indemnified Person from liability to which such person otherwise would 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 duties
under this Agreement.
8. INDEMNIFICATION BY BTS. BTS will indemnify, defend and hold harmless
the Trusts and their Portfolios, AMR, their several officers, directors and
Trustees, and any person who controls the Trusts or AMR within the meaning of
Section 15 of the 1933 Act (collectively, "AMR Indemnified Persons") from and
against any and all claims, demands, liabilities and
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expenses (including the reasonable cost of investigating or defending such
claims, demands or liabilities) that any AMR Indemnified Person may incur under
the 1933 Act, common law or otherwise arising out of or based upon any (a)
untrue statement of a material fact furnished by a BTS Indemnified Person for
use in the Registration Statement, (b) failure by such a person to state a
material fact therein as necessary to make the statements therein not
misleading, or (c) failure by BTS to comply with the terms of this Agreement or
applicable law, provided that this Agreement shall not protect any AMR
Indemnified Person from liability to which such person otherwise would 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.
9. Share Certificates. The Trusts shall not issue certificates
representing Shares unless requested to do so by a shareholder. If such
request is transmitted through BTS, the Trusts will cause certificates
evidencing the Shares owned to be issued in such names and denominations as BTS
shall from time to time direct.
10. Status of BTS. BTS is an independent contractor and shall be agent
for the Trusts only with respect to the sale and redemption of Shares.
11. Non-Exclusive Services. The services of BTS to the Trusts under this
Agreement are not to be deemed exclusive, and BTS shall be free to render
similar services or other services to others so long as its services hereunder
are not impaired thereby.
12. Reports by BTS. BTS shall prepare reports for the Trustees regarding
its activities under this Agreement as from time to time shall be reasonably
requested by the Trustees.
13. Definitions. As used herein: the term "Registration Statement" shall
mean the registration statement filed by the Trust with the SEC and effective
under the 1933 Act, as such Registration Statement is amended or supplemented
from time to time; the terms "Prospectus" and "Statement of Additional
Information" shall mean the current form of prospectus(es) and statement(s) of
additional information filed by the Trusts as part of the Registration
Statement; the term "net asset value" shall have the meaning ascribed to it in
each Trust's Declaration of Trust; the term "Trustees" shall refer to the Board
of Trustees of each Trust; and the terms "affiliated person," "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 SEC by any rule, regulation or order.
14. Effectiveness of Agreement. This Agreement shall become effective
upon the date hereinabove written, provided that, with respect to a Portfolio,
this Agreement shall not take effect unless such action has first been approved
by vote of a majority of the Trustees of each Trust and by vote of a majority
of those Trustees who are not interested persons of the Trusts or BTS (all such
Trustees collectively being referred to herein as the "Independent Trustees"),
cast in person at a meeting called for the purpose of voting on such action.
15. Termination of Agreement. Unless sooner terminated as provided
herein, this Agreement shall continue in effect for one year from the above
written date. Thereafter, if not terminated, this Agreement shall continue
automatically for successive periods of twelve months each, provided that such
continuance is approved at least annually (a) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Board of Trustees of each Trust or,
with respect to any given series, by vote of a majority of the outstanding
voting securities of such Portfolio. Notwithstanding the foregoing, with
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respect to any Portfolio, this Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Board of Trustees of a Trust, by
vote of a majority of the Independent Trustees of a Trust or by vote of a
majority of the outstanding voting securities of such Portfolio on 180 days'
written notice to BTS or by BTS at any time, without the payment of any
penalty, on 180 days' written notice to the Trust or such Portfolio.
Termination of this Agreement with respect to any given Portfolio shall not
affect the continued validity of this Agreement or the performance thereunder
with respect to any other Portfolio. This Agreement automatically will
terminate in the event of its assignment.
16. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought.
17. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Texas, without giving effect to the conflicts of laws
principles thereof, and the 1940 Act. To the extent that the applicable laws
of the State of Texas conflict with the applicable provisions of the 1940 Act,
however, the 1940 Act shall control.
18. Representations. BTS represents and warrants that it (a) is duly
authorized to enter into this Agreement, (b) is duly registered and licensed as
a broker-dealer and in good standing with the National Association of
Securities Dealers, Inc. and all applicable state securities regulators and
that it is duly authorized and qualified to perform the services set forth in
this Agreement, and (c) promptly will notify AMR and each Trust if BTS or any
of its affiliated persons become subject to a legal proceeding which, if
adversely decided, could impair BTS's ability to satisfy its obligations under
this Agreement.
19. Notice. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient upon receipt in writing at the other
party's principal offices.
20. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
21. Massachusetts Business Trust. The Trusts are Massachusetts business
trusts. A copy of each Trust's Declaration of Trust of the Trust is on file
with the Secretary of the Commonwealth of Massachusetts. This Agreement is
not binding upon any of the Trustees, officers or shareholders of the Trusts
individually, and no such person shall be individually liable with respect to
any action or inaction resulting from this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: AMERICAN AADVANTAGE FUNDS
By: /s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Title: President
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Attest: AMERICAN AADVANTAGE MILEAGE FUNDS
By: /s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Title: President
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Attest: BROKERS TRANSACTION SERVICES, INC.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxx X. Xxxxx
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Title: Sr. Vice President
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Attest: AMR INVESTMENT SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Title: President
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