Exhibit 6(a)
SECOND AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
FOR CLASS A SHARES
THIS AGREEMENT made as of the 1st day of November, 1996, by and between
GAM FUNDS, INC. a Maryland corporation (the "Fund"), and GAM SERVICES INC., a
Delaware corporation ("GAM Services").
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, on December 11, 1989, the Fund and GAM Services entered into
an agreement to provide distribution services for the Fund (the "Original
Distribution Agreement");
WHEREAS, on August 17, 1995 the Fund and GAM Services entered into the
First Amended and Restated Distribution Agreement for Class A Shares, and
simultaneously entered into a separate Distribution Agreement regarding the
Fund's Class D Shares; and
WHEREAS, the Fund and GAM Services now desire to amend the Original
Distribution Agreement to provide that GAM Services shall provide distribution
services for the Fund's Class A Shares on the terms and conditions hereinafter
set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT. The Fund hereby appoints GAM Services as distributor of
the Class A Shares of the Fund for the period and on the terms set forth in this
Agreement. GAM Services accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Fund has furnished GAM Services Services
with true and correct copies of each of the following:
(a) the Fund's Certificate of Incorporation and all amendments
thereto (such Certificate of Incorporation, as presently in effect and
as it shall from time to time be amended, is herein called the
"Certificate");
(b) the Fund's By-Laws and all amendments thereto (such
By-Laws, as presently in effect and as they shall from time to time be
amended, are herein called the "By-Laws");
(c) the Fund's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), and under the 1940
Act as filed with the Securities and Exchange Commission (the "SEC")
relating to the shares of the Fund and all amendments thereto;
(d) the Fund's most recent prospectus and statement of
additional information (such prospectus and statement of additional
information, as presently in effect and all amendments and supplements
thereto, are herein called the "Prospectus" and "SAI", respectively);
and
(e) the Fund's Plan of Distribution for Class A Shares.
The Fund will furnish GAM Services from time to time with copies of all
amendments or supplements to the foregoing, if any.
3. DUTIES AS DISTRIBUTOR. GAM Services shall give the Fund the benefit
of its best judgment, efforts and facilities in rendering its services as
distributor of the Fund's Class A Shares. In carrying out its obligations
hereunder, GAM Services shall:
(a) receive orders for the purchase of the Fund's Class A
Shares, accept or reject such orders on behalf of the Fund in
accordance with the Fund's currently effective Prospectus and SAI and
transmit such orders as are so accepted to the Fund's transfer agent as
promptly as possible;
(b) receive requests for redemption from holders of the Fund's
Class A Shares and transmit such redemption requests to the Fund's
transfer agent as promptly as possible; and
(c) respond to inquiries from the Fund's Class A shareholders
concerning the status of their accounts with the Fund.
4. DISTRIBUTION OF CLASS A SHARES. GAM Services shall be exclusive
distributor of the Fund's Class A Shares. It is mutually understood and agreed
that GAM Services does not undertake to sell all or any specific portion of the
Class A Shares of the Fund. The Fund shall not sell any of its Class A Shares
through any securities dealer other than GAM Services. Notwithstanding the
provisions of the foregoing sentence:
(a) the Fund may issue its Class A Shares to any other
investment company or personal holding company, or to the shareholders
thereof, in exchange for all or a majority of the shares or assets of
any such company;
(b) the Fund may issue its Class A Shares at their net asset
value to any shareholder of the Fund purchasing such shares with
dividends or other cash distributions received from the Fund pursuant
to an offer made to all shareholders;
(c) GAM Services may enter into shareholder processing and
servicing agreements in accordance with Section 7 hereof;
(d) GAM Services may, and when requested by the Fund shall,
suspend its efforts to effectuate sales of the Class A Shares of the
Fund at any time when in the opinion of GAM Services or of the Fund no
sales should be made because of market or other economic considerations
or abnormal circumstances of any kind;
(e) the Fund may withdraw the offering of its Class A Shares
(i) at any time with the consent of GAM Services, or (ii) without such
consent when so required by the provisions of any statute or of any
order, rule or regulation of any governmental body having jurisdiction;
and
(f) the price at which the Class A Shares may be sold (the
"offering price") shall be the net asset value per Class A Share plus
any applicable sales load as determined in the manner established from
time to time by the Fund's Board of Directors and as set forth in the
Fund's then current Prospectus and SAI.
5. CONTROL BY BOARD OF DIRECTORS. Any distribution activities
undertaken by GAM Services pursuant to this Agreement, as well as any other
activities undertaken by GAM Services on behalf of the Fund pursuant thereto,
shall at all times be subject to any applicable directives of the Board of
Directors of the Fund.
6. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, GAM Services shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules
and regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Fund
under the 1933 Act and the 1940 Act;
(c) the provisions of the Certificate of the Fund;
(d) the provisions of the By-Laws of the Fund;
(e) the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD") and all other self-regulatory
organizations applicable to the sale of investment company shares; and
(f) any other applicable provision of state and Federal law.
7. DEALER AND SHAREHOLDER SERVICE AGREEMENTS. GAM Services may enter
into dealer and shareholder service agreements (the "Dealer Agreements") with
any securities dealer ("Securities Dealer") who is registered under the
Securities Exchange Act of 1934 (the "1934 Act") and a member in good standing
of the NASD (or who is not required to be so registered or a member of the NASD
because such Securities Dealer does not have any customers in the United
States), who may wish to establish accounts or sub-accounts on behalf of such
Securities Dealer's customers. GAM Services may enter into shareholder
processing and service agreements ("Shareholder Service Agreements") with
persons other than Securities Dealers ("Shareholder Service Agents") who are not
required to be registered under the 1934 Act or members in good standing of the
NASD, who are exempt from registration as a broker or a dealer under the 1934
Act or who may otherwise lawfully furnish services to Fund shareholders without
registration under the 1934 Act. GAM Services will supervise the Fund's
relations with Securities Dealers and Shareholder Service Agents. Securities
Dealers and Shareholder Service Agents shall be paid such amounts as GAM
Services may determine from time to time in its discretion.
8. EXPENSES. The expenses connected with the Fund shall be allocable
between the Fund and GAM Services as follows:
(a) GAM Services shall furnish, at its expense and without
cost to the Fund, the services of personnel to the extent that such
services are required to carry out its obligations under this
Agreement.
(b) GAM Services shall bear the fees payable to Securities
Dealers and Shareholder Service Agents as set forth in Section 7 above,
except that the Fund may pay fees to Securities Dealers and
Shareholders Service Agents in an amount not to exceed an annual rate
of 0.25% of the daily net asset value of the Class A Shares of the Fund
owned by shareholders with whom such Securities Dealer or Shareholder
Service Agent has a servicing relationship in exchange for
administrative services provided to such shareholders as described in
the Prospectus and SAI.
(c) The expenses of printing and distributing Prospectuses and
SAI (other than those Prospectuses and SAI distributed to shareholders
of the Fund) and any other promotional or sales literature used by GAM
Services or furnished by GAM Services to investors, Securities Dealers
or Shareholder Service Agents in connection with the public offering of
the Fund's Class A Shares, and other advertising or promotional
expenses incurred in connection with such public offering, shall be
paid by GAM Services.
(d) The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund (other than those expressly assumed by the
Fund's investment advisors), including, without limitation: the fees of
the Fund's investment advisors; the charges and expenses of any
registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities and other property, and
any transfer, dividend or accounting agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with
portfolio securities transactions to which the Fund is a party; all
taxes, including securities issuance and transfer taxes, and fees
payable by the Fund to Federal, state or other governmental agencies;
the costs and expenses of engraving or printing of certificates
representing shares of the Fund; all costs and expenses in connection
with the registration and maintenance of registration of the Fund and
its shares with the SEC and various states and other jurisdictions
(including filing fees, legal fees and disbursements of counsel); the
costs and expenses of printing, including typesetting, and distributing
the Prospectuses and SAI of the Fund and supplements thereto to the
Fund's shareholders; all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing of proxy statements and
reports to shareholders; fees and travel expenses of directors or
members of any advisory board or committee; all expenses incident to
the payment of any dividend, distribution, withdrawal or redemption,
whether in shares or in cash; charges and expenses of any outside
service used for pricing of the Fund's shares; fees and expenses of
legal counsel and of independent accountants, in connection with any
matter relating to the Fund; membership dues of industry associations;
interest payable on Fund borrowings; postage; insurance premiums on
property or personnel (including officers and directors) of the Fund;
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Fund's operation
unless otherwise explicitly provided herein.
9. COMPENSATION. The Fund shall pay or cause to be paid to GAM
Services: (i) any sales load received by the Fund with respect to the sale of
its Class A Shares in accordance with the Prospectus and SAI, and (ii)
compensation at the annual rate of 0.30% of the average daily net assets of each
series of the Fund attributable to the Class A Shares, which shall be calculated
and accrued daily and paid monthly or at such other intervals as the Board of
Directors and GAM Services shall mutually agree.
10. NON-EXCLUSIVITY. The services of GAM Services to the Fund are not
to be deemed to be exclusive, and GAM Services and its officers and directors
shall be free to render distribution or other services to others (including
other investment companies) and to engage in other activities.
11. TERM. This Agreement shall become effective on the date hereof and
shall continue in force and effect, subject to Section 13 hereof, until the
first anniversary of the date hereof.
12. RENEWAL. Following the expiration of its initial one-year term,
this Agreement shall continue in force and effect from year to year, subject to
Section 13 hereof, provided that such continuance is specifically approved at
least annually:
(a) by the Fund's Board of Directors; and
(b) by the affirmative vote of a majority of the Directors who
are not parties to this Agreement or "interested persons" (as defined
by the 0000 Xxx) of any such party and have no direct or indirect
financial interest in the operation of this Agreement or any agreement
related to this Agreement, by votes cast in person at a meeting
specifically called for the purpose of voting on such approval.
13. TERMINATION. This Agreement may be terminated at any time, without
the payment of any penalty, (i) by vote of the Fund's Board of Directors, (ii)
by vote of a majority of the members of the Board of Directors of the Fund who
are not "interested persons" of the Fund and have no direct or indirect
financial interest in the operation of this Agreement or in any agreement
related to this Agreement, (iii) with respect to any Series of the Fund, by vote
of a majority of the outstanding Class A Shares of such Series (as defined in
Section 2(a)(42) of the 1940 Act), or (iv) by GAM Services, on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by either party. This Agreement shall automatically terminate in the event of
its "assignment" as defined in Section 2(a)(4) of the 1940 Act.
14. AMENDMENTS.
(a) This Agreement may be amended by the parties hereto only if such
amendment is specifically approved (i) by the Board of Directors of the Fund and
(ii) by a majority of those Directors who are not parties to this Agreement or
"interested persons" of any such party, which vote must be cast in person at a
meeting called for the purpose of voting on such approval.
(b) In the event that this Agreement is proposed to be amended to
increase materially the amount to be spent by the Fund for distribution, such
amendment will not be effected with respect to any Series without the approval
of the holders of the Class A Shares of such Series.
15. LIABILITY OF THE DISTRIBUTOR. In the performance of its duties
hereunder, GAM Services shall be obligated to exercise care and diligence and to
act in good faith and to use its best efforts within reasonable limits to ensure
the accuracy of all services performed under this Agreement, but GAM Services
shall not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of GAM Services or
reckless disregard by GAM Services of its duties under this Agreement.
16. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold GAM Services, its
officers and directors and any person who controls GAM Services 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 GAM Services, its officers,
directors or any such controlling person may incur arising out of or based upon
any untrue statement of a material fact contained in the Registration Statement,
Prospectus or SAI or arising out of or based upon any alleged omission to state
a material fact required to be stated therein or necessary to make the
statements therein 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 GAM Services to the Fund for
use in the Registration Statement, Prospectus or SAI; provided, however, that
this indemnity agreement, to the extent that it might require indemnity of any
person who is also an officer or director of the Fund or who controls the Fund
within the meaning of Section 15 of the 1933 Act, shall not inure to the benefit
of such officer, director or controlling person unless a court of competent
jurisdiction shall determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy as expressed in
the 1933 Act; and further provided, that in no event shall anything contained
herein be so construed as to protect GAM Services against any liability to the
Fund or to its security holders to which GAM Services 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 under this Agreement. In the event that GAM Services becomes a party
to any action or proceeding in respect of which indemnification may be sought
hereunder, GAM Services shall promptly notify the Fund thereof. Following such
notice, the Fund shall be entitled to participate therein, and to the extent
that it may wish, to assume the defense thereof with counsel reasonably
satisfactory to GAM Services. After notice from the Fund to GAM Services of an
election so to assume the defense thereof, the Fund shall not be liable to GAM
Services hereunder for any legal or other expenses subsequently incurred by GAM
Services in connection with the defense thereof other than reasonable costs of
investigation.
(b) GAM Services agrees to indemnify, defend and hold the Fund, its
officers and directors and any person who controls the Fund, if any, 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 costs of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Fund, its directors or
officers or any such controlling person may incur, but only to the extent that
such liability or expense incurred by the Fund, its directors 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 GAM Services to the Fund for use in the
Registration Statement, Prospectus or SAI 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, Prospectus or
SAI or necessary to make such information not misleading.
(c) Neither party to this Agreement shall be liable under this Section
16 for any settlement of any action or claim effected without its prior written
consent.
17. REPORTS. GAM Services shall provide to the Board of Directors of
the Fund, and the Board of Directors shall review, at least quarterly, a written
report of the amounts expended pursuant to this Agreement and the purposes for
which such expenditures were made, including, without limitation, commissions,
advertising, printing, interest, carrying charges and allocated overhead
expenses. GAM Services shall also provide the Board of Directors of the Fund
with such other information regarding the implementation of this Agreement as
the Board of Directors may reasonably request from time to time.
18. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of each party
for this purpose shall be 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
19. INTERPRETATION. This Agreement shall be implemented and construed
in a manner consistent with the provisions of the 1940 Act. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the 1940 Act shall be
resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers on the day and year first above written.
GAM FUNDS, INC.
By:_________________________
Name: Xxxxx X. Xxxxxxxxxxx
Title: Treasurer
GAM SERVICES, INC.
By:__________________________
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director - Mutual Funds
