EXHIBIT 6(b)
DISTRIBUTION AND SERVICING AGREEMENT
This Distribution and Servicing Agreement is made this 30th day of
June, 1998, by and between Security Capital Real Estate Mutual Funds
Incorporated, a Maryland corporation ("Fund") and Security Capital Markets Group
Incorporated, a Delaware corporation, (the "Distributor").
WHEREAS, the Fund is registered with the Securities and Exchange
Commission as an open-end investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and issues registered shares of the classes
of common stock ("Classes") of its investment portfolios ("Series"), as set
forth on Schedule A hereto, for sale to the public under the Securities Act of
1933 (the "1933 Act") and various state securities laws; and
WHEREAS, the Fund may suspend the sales of shares of any one or more Series
or Classes at any time and may resume the sales of any such Series or Class(es)
at a later date; and
WHEREAS, the Fund has retained the Distributor as the principal underwriter
in connection with the offering and sale of the Class I and Class R shares of
Security Capital U.S. Real Estate Shares; and
WHEREAS, the Fund wishes to retain the Distributor as the principal
underwriter in connection with the offering and sale of all Classes of the
Series' shares ("Shares"), as may now or hereinafter be established, and to
furnish certain other services to the Series' shareholders as specified in this
Agreement; and
WHEREAS, this Agreement has been approved by separate votes of the Fund's
Board of Directors and of its disinterested directors in conformity with Section
15 of, and paragraph (b)(2) of Rule 12b-1 under, the 1940 Act; and
WHEREAS, the Distributor is willing to act as principal underwriter and to
furnish such services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. (a) The Fund hereby appoints the Distributor as principal underwriter in
connection with the offering and sale of the Shares. The Distributor,
as exclusive agent for the Fund, and subject to applicable federal and
state law and the Articles of Incorporation and By-Laws of the Fund,
shall: (1) provide services to the Fund primarily intended to result
in the sale of the Shares; (2) solicit orders for the purchase of the
Shares subject to such terms and conditions as the Fund may specify;
and (3) accept orders for the purchase of the Shares on behalf of the
Fund (collectively, "Distribution
Services"). The appointment of the Distributor hereunder shall not
preclude the Fund from selling the Shares directly to the public.
The Distributor shall comply with all applicable federal and state
laws and offer the Shares of the Fund on an agency or "best efforts"
basis under which the Fund shall issue only such Shares as are
actually sold. The Distributor shall have the right to use any list
of shareholders of the Fund or the Fund or any other list of investors
which it obtains in connection with its provision of services under
this Agreement; provided, however, that the Distributor shall not sell
or knowingly provide such list or lists to any unaffiliated person
without the consent of the Fund's Board of Directors.
(b) The Distributor shall provide to the Series' shareholders ongoing
shareholder liaison services, including responding to shareholder
inquiries, providing shareholders with information on their
investments, recordkeeping, sub-accounting services and any other
services now or hereafter deemed to be appropriate subjects for the
payments of "service fees" under Rule 2830 of the Conduct Rules of the
National Association of Securities Dealers, Inc. (collectively,
"Shareholder Services").
2. The Distributor accepts such appointment. The Distributor shall offer the
Fund's shares only on the terms set forth in the Fund's Registration
Statement, Prospectus or Statement of Additional Information.
3. As used in this Agreement, the term "Registration Statement" shall mean the
registration statement most recently filed by the Fund with the Securities
and Exchange Commission and effective under the 1940 Act and 1933 Act, as
such Registration Statement is amended by any amendments thereto at the
time in effect, and the terms "Prospectus" and "Statement of Additional
Information" shall mean, respectively, the form of prospectus and statement
of additional information with respect to the Fund filed by the Fund as
part of the Registration Statement, or as they may be amended from time to
time.
4. The Distributor may enter into dealer agreements with registered and
qualified securities dealers and other financial intermediaries it may
select for the performance of Distribution Services and Shareholder
Services, the form of such agreements to be as mutually agreed upon and
approved by the Fund and the Distributor. In making such arrangements, the
Distributor shall act only as principal and not as agent for the Fund. No
such dealer or other financial intermediary is authorized to act as agent
for the Fund in connection with the provision of Distribution Services,
Shareholder Services or otherwise.
5. As compensation for providing Distribution Services and Shareholder
Services under this Agreement, with respect to the Shares, the Distributor
shall receive from the Fund a distribution fee and a service fee at the
rates and under the terms and conditions of the Distribution Services and
Service Plans (each, a "Plan") adopted by the Fund with respect to each
Series, as such Plans
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are in effect from time to time, and subject to any further limitations on
such fees as the Fund's Board of Directors may impose. The Distributor may
reallow any or all of the distribution fee and service fee that it has
received under this Agreement to such dealers, financial intermediaries or
sub-accountants as it may from time to time determine.
6. Allocation of Expenses.
(a) The Fund will pay (or will enter into arrangements providing that
persons other than the Fund will pay) for all expenses of the offering
of its shares incurred in connection with:
(1) The registration of the Fund or the registration or qualification
of the Fund's shares for offer or sale under the federal
securities laws and the securities laws of any state or other
jurisdiction in which the Distributor may arrange for the sale of
the Fund's shares; and
(2) The printing and distribution of the Fund's prospectuses to
existing shareholders as may be required under the federal
securities laws and the applicable securities laws of any state or
other jurisdiction; and
(3) The preparation, printing and distribution of any proxy
statements, notices and reports, and the performance of any acts
required to be performed by the Fund by and under the federal
securities laws and the applicable securities laws of any state or
other jurisdiction; and
(4) The issuance of the Fund's shares, including any share issue and
transfer taxes.
(b) The Distributor will pay from its own resources (or will enter into
arrangements providing that persons other than the Distributor or the
Fund shall pay), or promptly reimburse the Fund, for all expenses in
connection with:
(1) The printing and distribution of the Fund's prospectuses utilized
in connection with the provision of Distribution Services;
(2) The preparation, printing and distribution of advertising and
sales literature for use in the offering of the Fund's shares and
printing and distribution of reports to shareholders used as sales
literature;
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(3) The qualification of the Distributor as a distributor or broker or
dealer under any applicable federal or state securities laws;
(4) Any investment program of the Fund, including the reinvestment of
dividends and capital gains distributions, to the extent such
expenses exceed the Fund's normal costs of issuing its shares; and
(5) All other expenses in connection with the provision of
Distribution Services and Shareholder Services which have not been
herein specifically allocated to the Fund.
7. Duties of the Distributor.
(a) The Distributor shall devote reasonable time and effort to effect sales
of the Fund's shares, but it shall not be obligated to sell any
specific number of shares.
(b) The Distributor 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 NASD, in providing Distribution
Services and Shareholder Services. Neither the Distributor nor any
other person is authorized by the Fund to give any information or to
make any representations, other than those contained in the Fund's then
current registration statement or related prospectus and any sales
literature authorized by responsible officers of the Distributor.
(c) The Distributor shall act as an independent contractor and nothing
herein contained shall constitute the Distributor, its agents or
representatives, or any employees thereof as employees of the Fund in
connection with the sale of the Fund's shares.
The Distributor is responsible for its own conduct and the employment,
control and conduct of its agents and employees and for injury to such
agents or employees or to others through its agents or employees. The
Distributor assumes full responsibility for its agents and employees
under applicable statutes and agrees to pay all employer taxes
thereunder.
8. Sale and Redemption of the Fund's Shares.
(a) Orders for the purchase and redemption of the Fund's shares (and
payment for the Fund's shares, in the case of a purchase) shall be
transmitted directly from the Purchaser to the Fund or its agent.
(b) The Fund shall have the right to suspend the redemption of the Fund's
shares pursuant to the conditions set forth in the Fund's then current
registration statement or related prospectus. The Fund shall also have
the right to suspend the sale of the Fund's shares at any time.
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(c) The Fund will give the Distributor prompt notice of any such suspension
and shall promptly furnish such other information in connection with
the sale and redemption of the Fund's shares as the Distributor
reasonably requests.
(d) The Fund (or its agent) will make appropriate book entries upon receipt
by the Fund (or its agent) of orders and payments for the Fund's shares
or requests for redemption thereof, and will issue and redeem the
Fund's shares and confirm such transactions in accordance with
applicable laws and regulations.
9. Indemnification.
The Fund agrees to indemnify, defend and hold the Distributor, its several
officers and directors, and any person who controls the Distributor 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 such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which the
Distributor, its officers or directors, or any such controlling person may
incur, under the 1933 Act or under common law or otherwise, arising out of
or based upon any alleged untrue statement of a material fact contained in
the Registration Statement or arising out of or based upon any alleged
omission to state a material fact required to be stated or necessary to
make the Registration Statement not misleading, provided that in no event
shall anything contained in this Agreement be construed so as to protect
the Distributor against any liability to the Fund or its shareholders to
which the Distributor would otherwise 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.
The Distributor agrees to indemnify, defend and hold the Fund, its several
officers and directors, and any person who controls the Fund 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 such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Fund, its officers
or directors, or any such controlling person may incur, under the 1933 Act
or under common law or otherwise, on account of any wrongful act of the
Distributor or any of its employees or arising out of or based upon any
alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Fund for use in the
Registration Statement or arising out of or based upon any alleged omission
to state a material fact in connection with such information required to be
stated in the Registration Statement or necessary to make such information
not misleading. As used in this paragraph, the term "employee" shall not
include a corporate entity under contract to provide services to the Fund
or the Fund, or any employee of such a corporate entity, unless such person
is otherwise an employee of the Fund.
10. The Fund shall not issue certificates representing Shares unless requested
by a shareholder. If such request is transmitted through the Distributor,
the Fund will cause certificates
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evidencing the Shares owned to be issued in such names and denominations as
the Distributor shall from time to time direct, provided that no
certificates shall be issued for fractional Shares.
11. The Distributor may at its sole discretion, directly or through dealers,
repurchase Shares offered for sale by shareholders, dealers or financial
intermediaries. Any repurchase of Shares by the Distributor shall be at
the net asset value next determined after a repurchase order has been
received. The Distributor will receive no commission or other remuneration
for repurchasing Shares. At the end of each business day, the Distributor
shall notify by facsimile or in writing, the Fund and the Fund's transfer
agent, of the orders for repurchase of Shares received by the Distributor
since the last such report, the amount to be paid for such Shares, and the
identity of the shareholders or dealers offering Shares for repurchase.
Upon such notice, the Fund shall pay the Distributor such amounts as are
required by the Distributor for the repurchase of such Shares in cash or in
the form of a credit against moneys due the Fund from the Distributor as
proceeds from the sale of Shares. The Fund reserves the right to suspend
such repurchase right upon written notice to the Distributor. The
Distributor further agrees to act as agent for the Fund to receive and
transmit promptly to the Fund's transfer agent shareholder and dealer
requests for redemption of Shares.
12. The services of the Distributor to the Fund under this Agreement are not to
be deemed exclusive, and the Distributor shall be free to render similar
services or other services to others so long as its services hereunder are
not impaired thereby.
13. The Distributor shall prepare reports for the Fund's Board of Directors on
a quarterly basis showing such information concerning expenditures related
to this Agreement as from time to time shall be reasonably requested by the
Board of Directors.
14. As used in this Agreement, the terms "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 Securities and Exchange Commission by any rule,
regulation or order.
15. This Agreement will become effective with respect to the Fund on the date
first written above and, unless sooner terminated as provided herein, will
continue in effect for one year from the above written date. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to
the Fund for successive annual periods ending on the same date of each
year, provided that such continuance is specifically approved at least
annually (i) by the Fund's Board of Directors or (ii) by a vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx)
of each Series, or a Class thereof, provided that in either event the
continuance is also approved by a majority of the Fund's Directors who are
not interested persons (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval.
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16. This Agreement is terminable with respect to a Series, or a Class thereof,
or in its entirety, without penalty, on not less than 60 days notice to the
other party, by: (i) the Fund's Board of Directors by a vote of the
Directors who are not interested persons of the Fund within the meaning of
Section 2(a)(19) of the 1940 Act, and have no direct or indirect financial
interest in the operation of the Plans or in any agreement related to the
Plans, including this Agreement; (ii) by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of a Series or a
Class thereof; (iii) by the Distributor; or (iv) upon the mutual written
consent of the Distributor and the Fund. This Agreement will also
automatically and immediately terminate in the event of its assignment.
17. No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination is
sought.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: SECURITY CAPITAL REAL ESTATE MUTUAL
FUNDS INCORPORATED
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
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Attest: SECURITY CAPITAL MARKETS GROUP
INCORPORATED
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxx
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SCHEDULE A
Series of Security Capital Real Estate Mutual Funds Incorporated
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Security Capital U.S. Real Estate Shares/1/
Security Capital European Real Estate Shares ("SC-EURO")
Security Capital Asia/ Pacific Real Estate Shares ("SC-ARBITRAGE")
Security Capital Real Estate Arbitrage Shares ("SC-ASIA")
Security Capital Real Estate Mutual Funds Incorporated Classes of Shares
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Class I Shares: Class I shares of SC-EURO, SC-ARBITRAGE and SC-ASIA are sold
at net asset value to investors whose minimum initial
purchase of the shares of that Series is $250,000.
Class R Shares: Class R shares of SC-EURO and SC-ASIA are sold at net asset
value to investors whose minimum initial purchase of the
shares of that Series is $2,500.
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/1/ Distribution Services and Shareholder Services are provided by the
Distributor pursuant to a Distribution and Servicing Agreement dated as of
December 17, 1997.
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