Exhibit 99.6(b)
CLASS B SHARES
DISTRIBUTION AGREEMENT
AGREEMENT made this day of , ,
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between XXXXXXX XXXXX VARIABLE SERIES FUNDS, INC., a corporation organized under
the laws of Maryland (the "Company"), and XXXXXXX XXXXX FUNDS DISTRIBUTOR, INC.,
a Delaware corporation ("MLFD");
W I T N E S S E T H:
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WHEREAS, the Company is registered under the Investment
Company Act of 1940, as amended to date (the "Investment Company Act"), as a
diversified open-end investment company and it is affirmatively in the interest
of the Company to offer its shares for sale continuously to the separate
accounts (the "Separate Accounts") of insurance companies (the "Insurance
Companies") pursuant to a currently effective prospectus (the "Prospectus")
under the Securities Act of 1933 (the "Securities Act"); and
WHEREAS, the Company comprises sixteen separate funds (the
"Funds"), each of which pursues its own investment objective through separate
investment policies, and may in the future comprise one or more additional
funds; and
WHEREAS, MLFD is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or through
other securities dealers; and
WHEREAS, the Company and MLFD wish to enter into an agreement
with each other with respect to the continuous offering to the Insurance
Companies for their Separate Accounts of shares of the Class B Common Stock, par
value $.10 per share, of each Fund
(the "Class B Shares"), in order to promote the growth of the Funds and
facilitate the distribution of their Class B Shares.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of MLFD. The Company hereby appoints MLFD as
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the principal underwriter and distributor of the Funds to sell their Class B
Shares to the Insurance Companies for their Separate Accounts and MLFD hereby
accepts such appointment. The Company, during the term of this Agreement, shall
sell its Class B Shares to MLFD upon the terms and conditions set forth below.
Section 2. Exclusive Nature of Duties. MLFD shall be the exclusive
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representative of the Company to act as principal underwriter and distributor of
the Class B Shares.
Section 3. Purchase of Class B Shares from the Company.
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(a) The Company will offer its Class B Shares and MLFD shall have the
right to buy from the Company the Class B Shares needed, but not more than the
Class B Shares needed (except for clerical errors in transmission) to fill
unconditional orders for the Class B Shares placed with MLFD by the Insurance
Companies for their Separate Accounts. The price which MLFD shall pay for the
Class B Shares so purchased from the Company shall be the net asset value per
share, determined as set forth in Section 3(c) hereof.
(b) The Class B Shares are to be resold by MLFD to the Insurance
Companies for their Separate Accounts at the net asset value per share.
(c) The net asset value of the Class B Shares shall be determined as
of fifteen minutes following the close of trading on
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each day the New York Stock Exchange is open for business, in accordance with
the method set forth in the Prospectus of the Company and guidelines established
by the Board of Directors of the Company. The Company may also cause the net
asset value of the Class B Shares to be determined in substantially the same
manner or estimated in such manner and as of such other hour or hours as may
from time to time be agreed upon in writing by the Company and MLFD. All
payments to the Company hereunder shall be made in the manner set forth in
Section 3(e).
(d) The Company shall have the right to suspend the sale of the Class
B Shares at times when redemption of any Class B Shares is suspended pursuant to
the condition set forth in Section 4(b) hereof. The Company shall also have the
right to suspend the sale of the Class B Shares if trading on the New York Stock
Exchange shall have been suspended, if a banking moratorium shall have been
declared by Federal or New York authorities, or if there shall have been some
other extraordinary event which, in the judgment of the Company, makes it
impracticable to sell Class B Shares.
(e) The Company, or any agent of the Company designated in writing by
the Company, shall be promptly advised of all purchase orders for the Class B
Shares received by MLFD. The Company (or its agent) will confirm orders upon
their receipt, will make appropriate book entries and, upon receipt by the
Company (or its agent) of payment therefor, will deliver deposit receipts or
certificates for such Class B Shares pursuant to the instructions of MLFD.
Payment shall be made to the Company in New York Clearing
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House funds. MLFD agrees to cause such payment and such instructions to be
delivered promptly to the Company (or its agent).
Section 4. Repurchase or Redemption of Class B Shares by the Company.
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(a) Any of the outstanding Class B Shares may be tendered for
redemption at any time, and the Company agrees to repurchase or redeem any such
Class B Shares so tendered in accordance with its obligations as set forth in
Article VII of its Articles of Incorporation, as amended from time to time, and
in accordance with the applicable provisions set forth in the Prospectus of the
Company. The price to be paid to redeem or repurchase Class B Shares shall be
equal to the net asset value per share calculated in accordance with the
provisions of Section 3(c) hereof. All payments by the Company hereunder shall
be made in the manner set forth below.
The Company shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of MLFD in
New York Clearing House funds on or before the third business day subsequent to
its having received the notice of redemption in proper form.
(b) Redemption of Class B Shares of a Fund or payment therefor may be
suspended for any period during which trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission or such
Exchange is closed (other than customary weekend and holiday closings), for any
period during which an emergency exists as defined by the Securities and
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Exchange Commission as a result of which disposal of securities or determination
of the net asset value of such Fund is not reasonably practicable, and for such
other periods as the Securities and Exchange Commission may by order permit for
the protection of shareholders of the Fund.
Section 5. Duties of the Company.
(a) The Company shall furnish to MLFD copies of all information,
financial statements and other papers which MLFD may reasonably request for use
in connection with the distribution of Class B Shares of the Company, and this
shall include one certified copy, upon request by MLFD, of all financial
statements prepared for the Company by independent public accountants. The
Company shall make available to MLFD such number of copies of its Prospectus as
MLFD shall reasonably request.
(b) The Company shall take, from time to time, but subject to the
necessary approval of its shareholders, all necessary action to fix the number
of its authorized Class B Shares and to register Class B Shares under the
Securities Act, to the end that there will be available for sale such number of
Class B Shares as investors may reasonably be expected to purchase.
(c) The Company shall use its best efforts to qualify and maintain
the qualification of an appropriate number of the Class B Shares for sale under
the securities laws of such states as MLFD and the Company may approve, if such
qualification is required by such securities laws. Any such qualification may
be withheld, terminated or withdrawn by the Company at any time in its
discretion. As provided in Section 7(b) hereof, the expense of
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qualification and maintenance of qualification of the Class B Shares shall be
borne by the Company for the account of each Fund. MLFD shall furnish such
information and other material relating to its affairs and activities as may be
required by the Company in connection with such qualification.
(d) The Company will furnish, in reasonable quantities upon request
by MLFD, copies of annual and interim reports of the Company.
Section 6. Duties of MLFD.
(a) MLFD shall devote reasonable time and effort to effect sales of
Class B Shares of the Company, but shall not be obligated to sell any specific
number of Class B Shares. The services of MLFD hereunder are not to be deemed
exclusive and nothing herein contained shall prevent MLFD from entering into
distribution arrangements with other investment companies so long as the
performance of its obligations hereunder is not impaired thereby.
(b) In selling the Class B Shares of the Company, MLFD shall use its
best efforts in all respects duly to conform with the requirements of all
federal and state laws and regulations and the regulations of the National
Association of Securities Dealers, Inc. (the "NASD"), relating to the sale of
such securities. Neither MLFD nor any Insurance Company nor any other person is
authorized by the Company to give any information or to make any
representations, other than those contained in the registration statement or
related Prospectus and any sales literature specifically approved by the
Company.
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(c) MLFD shall require each Insurance Company to which it sells, and
which purchases, Class B Shares to enter into a Sub-Agreement with the Company
substantially in the form attached to the Distribution Plan agreed to by MLFD in
accordance with Rule 12b-1 under the Investment Company Act, which authorizes
the payment of a distribution fee to such Insurance Company.
Section 7. Payment of Expenses.
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(a) The Company shall bear all costs and expenses of the Company
relating to the Funds, including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of any required
registration statements and prospectuses under the Investment Company Act, the
Securities Act, and all amendments and supplements thereto, and the expense of
preparing, printing, mailing and otherwise, distributing prospectuses, annual or
interim reports to shareholders and proxy materials.
(b) The Company shall bear, for the account of the Funds, the costs
and expenses of qualification of the Class B Shares for sale, and, if necessary
or advisable in connection Therewith, the Company shall bear the cost and
expense of qualifying the Company as a broker or dealer, in such states of the
United States or other jurisdictions as shall be selected by the Company and
MLFD pursuant to Section 5(c) hereof and the cost and expenses payable to each
such state for continuing qualification therein until the Company decides to
discontinue such qualification pursuant to Section 5(c) hereof.
Section 8. Indemnification.
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(a) The Company shall, for the account of the Funds, indemnify and
hold harmless MLFD and each person, if any, who controls MLFD against any loss,
liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or expense
and reasonable counsel fees incurred in connection therewith) arising by reason
of any person acquiring any Class B Shares, which may be based upon the
Securities Act, or on any other statute or at common law, on the ground that the
registration statement or related prospectus, as from time to time amended and
supplemented, or the annual or interim reports to shareholders of the Company
relating to the Funds, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, information furnished to the
Company in connection therewith by or on behalf of MLFD; provided, however that
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in no case (i) is the indemnity of the Company in favor of MLFD and any such
controlling persons to be deemed to protect MLFD or any such controlling persons
thereof against any liability to the Company or its security holders to which
MLFD or any such controlling persons would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement; or (ii) is the Company to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made against
MLFD or any such controlling persons, unless
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MLFD or such controlling persons, as the case may be, shall have notified the
Company in writing within a reasonable time after the summons or other first
legal process giving information or the nature of the claim shall have been
served upon MLFD or such controlling persons (or after MLFD or such controlling
persons shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve it from any
liability which it may have to the person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Company will be entitled to participate at its own expense in
the defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Company elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to MLFD
or such controlling person or persons, defendant or defendants in the suit. In
the event the Company elects to assume the defense of any such suit and retain
such counsel, MLFD or such controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case the Company does not elect to assume the
defense of any such suit, it will reimburse MLFD or such controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Company shall promptly notify
MLFD of the commencement of any litigation or proceedings against it or any of
its officers or directors in connection with the issuance or sale of the Class B
Shares.
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(b) MLFD shall indemnify and hold harmless the Company and each of its
directors and officers and each person, if any, who controls the Company against
any loss, liability, claim, damage or expense described in the foregoing
indemnity contained in subsection (a) of this Section, but only with respect
to statements or omissions made in reliance upon, and in conformity with,
information furnished to the Company with respect to the Funds in writing by or
on behalf of MLFD for use in connection with the registration statement or
related prospectus, as from time to time amended, or the annual or interim
reports to shareholders. In case any action shall be brought against the
Company or any person so indemnified, in respect of which indemnity may be
sought against MLFD, MLFD shall have the rights and duties given to the Company,
and the Company and each person so indemnified shall have the rights and duties
given to MLFD by the provisions of subsection (a) of this Section 8.
Section 9. Duration and Termination of this Agreement. This Agreement
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shall become effective as of the date first above written and shall remain in
force as to each Fund until the second anniversary and thereafter, but only so
long as such continuance is specifically approved at least annually by (i) the
Board of Directors of the Company, or by the vote of a majority of the
outstanding voting securities of the Fund, cast in person or by proxy, and (ii)
a majority of those directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting upon such approval.
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This Agreement may be terminated at any time as to a Fund, without the
payment of any penalty, by the Board of Directors of the Company or by vote of a
majority of the outstanding voting securities of the Fund, or by the Adviser, on
sixty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.
Section 10. Amendments of this Agreement. This Agreement may be
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amended by the parties only if such amendment is specifically approved by (i)
the Board of Directors of the Company, or by the vote of a majority of
outstanding voting securities of the Funds affected by the amendment, and (ii) a
majority of those directors of the Company who are not parties to this Agreement
or interested persons of any such party cast in person at a meeting called for
the purpose of voting on such approval.
Section 11. Governing Law. This Agreement shall be construed in
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accordance with the laws of the State of New York and the applicable provisions
of the Investment Company Act. To the extent the applicable law of the State of
New York, or any of the
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provisions herein, conflicts with the applicable provisions of the Investment
Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written in New York, New York.
XXXXXXX XXXXX VARIABLE SERIES
FUNDS, INC.
By
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President
XXXXXXX XXXXX FUNDS DISTRIBUTOR, INC.
BY
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President
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