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EXHIBIT 6
THE TARGET PORTFOLIO TRUST
Distribution Agreement
Agreement made as of November 9, 1992, between The Target Portfolio
Trust, a Delaware business trust (the Trust) and Prudential Securities
Incorporated, a Delaware Corporation (the Distributor).
WITNESSETH
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the Investment Company Act), as a diversified, open-end,
management investment company and it is in the interest of the Trust to offer
its shares for sale continuously;
WHEREAS, the shares of beneficial interest of the Trust are divided
into separate series or portfolios (each a Portfolio), each of which is
established by resolution of the Trustees of the Trust, and the Trustees may
from time to time terminate such Portfolios or establish and terminate
additional Portfolios;
WHEREAS, the Distributor is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is engaged in the business of
selling shares of registered investment companies either directly or through
other broker-dealers; and
WHEREAS, the Trust and the Distributor wish to enter into an agreement
with each other, with respect to the continuous offering of the shares of the
Trust and each Portfolio thereof from and after the date hereof in order to
promote the growth or the Trust and facilitate the distribution of its shares.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor
The Trust hereby appoints the Distributor as the principal underwriter
and distributor of the shares of the Trust to sell shares of each Portfolio to
the public and the Distributor hereby accepts such appointment and agrees to act
hereunder. The Trust hereby agrees during the term of this Agreement to sell
shares of the Trust to the Distributor on the terms and conditions set forth
below.
Section 2. Exclusive Nature of Duties
The Distributor shall be the exclusive representative of the Trust to
act as principal underwriter and distributor of the Trust's shares, except that:
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2.1 The exclusive rights granted to the Distributor to purchase
shares from the Trust shall not apply to shares of the Trust issued in
connection with the merger or consolidation of any other investment company or
personal holding company with the Trust or the acquisition by purchase or
otherwise of all (or substantially all) the assets or the outstanding shares of
any such company by the Trust.
2.2 Such exclusive rights shall not apply to shares issued by the
Trust pursuant to reinvestment of dividends or capital gains distributions.
2.3 Such exclusive rights shall not apply to shares issued by the
Trust pursuant to any reinstatement privilege afforded redeeming shareholders.
2.4 Such exclusive rights shall not apply to purchases made
through the Trust's transfer and dividend disbursing agent in the manner set
forth in the currently effective Prospectus of the Trust. The term "Prospectus"
shall mean the Prospectus and Statement of Additional Information included as
part of the Trust's Registration Statement, as such Prospectus and Statement of
Additional Information may be amended or supplemented from time to time, and the
term "Registration Statement" shall mean the Registration Statement filed by the
Trust with the Securities and Exchange Commission and effective under the
Securities Act of 1933, as amended (Securities Act), and the Investment Company
Act, as such Registration Statement is amended from time to time.
Section 3. Purchase of Shares from the Trust
3.1 The Distributor shall have the right to buy from the Trust the
shares needed, but not more than the shares needed (except for clerical errors
in transmission) to fill unconditional orders for shares placed with the
Distributor by investors or registered and qualified securities dealers and
other financial institutions (selected dealers). The price which the Distributor
shall pay for the shares so purchased from the Trust shall be the net asset
value, determined as set forth in the Prospectus.
3.2 The shares are to be resold by the Distributor or selected
dealers, as described in Section 6.4 hereof, to investors at the offering price
as set forth in the Prospectus.
3.3 The Trust shall have the right to suspend the sale of its
shares at times when redemption is suspended pursuant to the conditions in
Section 4.3 hereof or at such other times as may be determined by the Trustees.
The Trust shall also have the right to suspend the sale of its shares if a
banking moratorium shall have been declared by federal or New York authorities.
3.4 The Trust, or any agent of the Trust designated in writing by
the Trust, shall be promptly advised of all purchase orders for shares received
by the Distributor. Any order may be rejected by the Trust; provided, however,
that the Trust will not arbitrarily or without reasonable cause refuse to accept
or confirm orders for the purchase of shares. The Trust (or its agent) will
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confirm orders upon their receipt, will make appropriate book entries and upon
receipt by the Trust (or its agent) of payment therefor, will deliver deposit
receipts for such shares pursuant to the instructions of the Distributor.
Payment shall be made to the Trust in New York Clearing House funds or federal
funds. The Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Trust (or its agent).
Section 4. Repurchase or Redemption of Shares by the Trust
4.1 Any of the outstanding shares may be tendered for redemption at any
time, and the Trust agrees to repurchase or redeem the shares so tendered in
accordance with its Declaration of Trust as amended from time to time, and in
accordance with the applicable provisions of the Prospectus. The price to be
paid to redeem or repurchase the shares shall be equal to the net asset value
determined as set forth in the Prospectus. All payments by the Trust hereunder
shall be made in the manner set forth in Section 4.2 below.
4.2 The Trust shall pay the total amount of the redemption price
as defined in the above paragraph pursuant to the instructions of the
Distributor on or before the seventh calendar day subsequent to its having
received the notice of redemption in proper form. The proceeds of any redemption
of shares shall be paid by the Trust to or for the account of the redeeming
shareholder, in each case in accordance with applicable provisions of the
Prospectus.
4.3 Redemption of shares or payment may be suspended at times when
the New York Stock Exchange is closed for other than customary weekends and
holidays, when trading on said Exchange is restricted, when an emergency exists
as a result of which disposal by the Trust of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or during any other period when the
Securities and Exchange Commission, by order, so permits.
Section 5. Duties of the Trust
5.1 Subject to the possible suspension of the sale of shares as
provided herein, the Trust agrees to sell its shares so long as it has shares
available.
5.2 The Trust shall furnish the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of shares, and
this shall include one certified copy, upon request by the Distributor, of all
financial statements prepared for the Trust by independent public accountants.
The Trust shall make available to the Distributor such number of copies of its
Prospectus and annual and interim reports as the Distributor shall reasonably
request.
5.3 The Trust shall take, from time to time, but subject to the
necessary approval of the Trustees and the shareholders, all necessary action to
fix the number of authorized shares and such steps as may be necessary to
register the same under the Securities Act, to the end that there
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will be available for sale such number of shares as the Distributor reasonably
may expect to sell. The Trust agrees to file from time to time such amendments,
reports and other documents as may be necessary in order that there will be no
untrue statement of a material fact in the Registration Statement, or necessary
in order that there will be no omission to state a material fact in the
Registration Statement which omission would make the statements therein
misleading.
5.4 The Trust shall use its best efforts to qualify and maintain
the qualification of any appropriate number of its shares for sale under the
securities laws of such states as the Distributor and the Trust may approve;
provided that the Trust shall not be required to amend its Declaration of Trust
or By-Laws to comply with the laws of any state, to maintain an office in any
state, to change the terms of the offering of its shares in any state from the
terms set forth in its Registration Statement, to qualify as a foreign
corporation in any state or to consent to service of process in any state other
than with respect to claims arising out of the offering of its shares. Any such
qualification may be withheld, terminated or withdrawn by the Trust at any time
in its discretion. As provided in Section 7 hereof, the expense of qualification
and maintenance of qualification shall be borne by the Trust. The Distributor
shall furnish such information and other material relating to its affairs and
activities as may be required by the Trust in connection with such
qualifications.
Section 6. Duties of the Distributor
6.1 The Distributor shall devote reasonable time and effort to
effect sales of shares of the Trust, but shall not be obligated to sell any
specific number of shares. Sales of the shares shall be on the terms described
in the Prospectus. The Distributor may enter into like arrangements with other
investment companies.
6.2 In selling the shares, the Distributor shall use its best
efforts in all respects duly to conform with the requirements of all federal and
state laws relating to the sale of such securities. Neither the Distributor nor
any selected dealer nor any other person is authorized by the Trust to give any
information or to make any representations, other than those contained in the
Registration Statement or Prospectus and any sales literature approved by
appropriate officers of the Trust.
6.3 The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales and the
cancellation of unsettled transactions, as may be necessary to comply with the
requirements of the National Association of Securities Dealers, Inc. (NASD).
6.4 The Distributor shall have the right to enter into selected
dealer agreements with registered and qualified securities dealers and other
financial institutions of its choice for the sale of shares, provided that the
Trust shall approve the forms of such agreements. Within the United States, the
Distributor shall offer and sell shares only to such selected dealers as are
members in
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good standing of the NASD. Shares sold to selected dealers shall be for resale
by such dealers only at the offering price determined as set forth in the
Prospectus.
Section 7. The Trust shall bear all costs and expenses of the continuous
offering of its shares, including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of any required
Registration Statements and/or Prospectuses under the Investment Company Act or
the Securities Act, and preparing and mailing annual and periodic reports and
proxy materials to shareholders (including but not limited to the expense of
setting in type any such Registration Statements, Prospectuses, annual or
periodic reports or proxy materials). The Trust shall also bear the cost of
expenses of qualification of the shares for sale, and, if necessary or advisable
in connection therewith, of qualifying the Trust as a broker or dealer, in such
states of the United States or other jurisdictions as shall be selected by the
Trust and the Distributor pursuant to Section 5.4 hereof and the cost and
expense payable to each such state for continuing qualification therein until
the Trust decides to discontinue such qualification pursuant to Section 5.4
hereof.
Section 8. Indemnification
8.1 The Trust agrees to indemnify, defend and hold the
Distributor, its officers and directors and any person who controls the
Distributor within the meaning of Section 15 of the Securities 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, directors or any such controlling person may incur
under the Securities Act, or under common law or otherwise, arising out of or
based upon any untrue statement of a material fact contained in the Registration
Statement or Prospectus or arising out of or based upon any alleged omission to
state a material fact required to be stated in either thereof or necessary to
make the statements in either thereof not misleading, except insofar as such
claims, demands, liabilities or expenses arise out of or are based upon any such
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished in writing by the
Distributor to the Trust for use in the Registration Statement or Prospectus;
provided, however, that this indemnity agreement shall not inure to the benefit
of any such officer, director, trustee or controlling person unless a court of
competent jurisdiction shall determine in a final decision on the merits, that
the person to be indemnified was not liable 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 under this Agreement (disabling
conduct), or, in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnified person was not liable by
reason of disabling conduct, by (a) a vote of a majority of a quorum of
directors or trustees who are neither "interested persons" of the Trust as
defined in Section 2(a)(19) of the Investment Company Act nor parties to the
proceeding, or (b) an independent legal counsel in a written opinion. The
Trust's agreement to indemnify the Distributor, its officers and directors and
any such controlling person as aforesaid is expressly conditioned upon the
Trust's being promptly notified of any action brought against the Distributor,
its officers or directors, any such controlling
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person, such notification to be given by letter or telegram addressed to the
Trust at its principal business office. The Trust agrees promptly to notify the
Distributor of the commencement of any litigation or proceedings against it or
any of its officers or directors in connection with the issue and sale of any
shares.
8.2 The Distributor agrees to indemnify, defend and hold the Trust, its
officers and Trustees and any person who controls the Trust, if any, within the
meaning of Section 15 of the Securities Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Trust, its officers and
Trustees or any such controlling person may incur under the Securities Act or
under common law or otherwise, but only to the extent that such liability or
expense incurred by the Trust, its Trustees or officers or such controlling
person resulting from such claims or demands shall arise out of or be based upon
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Trust for use in the Registration
Statement or Prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information required
to be stated in the Registration Statement or Prospectus or necessary to make
such information not misleading. The Distributor's agreement to indemnify the
Trust, its officers and Trustees and any such controlling person as aforesaid,
is expressly conditioned upon the Distributor's being promptly notified of any
action brought against the Trust, its officers and Trustees or any such
controlling person, such notification being given to the Distributor at its
principal business office.
Section 9. Duration and Termination of this Agreement
9.1 This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof and
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) the Trustees of the Trust, or by the vote of a majority of
the outstanding voting securities of the Trust or a Portfolio thereof, and (b)
by the vote of a majority of those Trustees who are not parties to this
Agreement or interested persons of any such parties (Independent Trustees), cast
in person at a meeting called for the purpose of voting upon such approval.
9.2 This Agreement may be terminated at any time, without the payment
of any penalty, by a majority of the Independent Trustees or by vote of a
majority of the outstanding voting securities of the Trust, or by the
Distributor, on sixty (60) days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.
9.3 The terms "affiliated person," "assignment," "interested person"
and "vote of a majority of the outstanding voting securities", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.
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Section 10. Amendments to this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by (a) the Trustees of the Trust, or by the vote of a
majority of the outstanding voting securities of the Trust, and (b) by the vote
of a majority of the Independent Trustees cast in person at a meeting called for
the purpose of voting on such amendment.
Section 11. Governing Law
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
Section 12. Liabilities of the Trust
The Trust is a business trust organized under the Delaware Business
Trust Act pursuant to a certificate of trust dated July 29, 1992. The Trust is a
series trust and all debts, liabilities, obligations and expenses of a
particular Portfolio shall be enforceable only against the assets of that
Portfolio and not against the assets of any other Portfolio or of the Trust as a
whole. Neither the Trustees, officers, agents or shareholders of the Trust
assume any personal liability for obligations entered into on behalf of the
Trust (or a Portfolio thereof).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year above written.
Prudential Securities
Incorporated
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Senior Vice President
The Target Portfolio Trust
By: /s/ Xxxxxxxx X. XxXxxxx
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Xxxxxxxx X. XxXxxxx
President
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