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EXHIBIT 6
FORM OF
UNDERWRITING AGREEMENT
THIS AGREEMENT is made on ____________, 1996, by and between THE
KENWOOD FUNDS, a Delaware business trust (the "Trust"), and AMERIPRIME
FINANCIAL SECURITIES, INC., a Texas corporation ("Underwriter").
WHEREAS, the Trust is an investment company registered under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the Securities
and Exchange Commission and a member of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of beneficial
interest (the "Shares") of THE KENWOOD FUNDS.
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment. The trust hereby appoints Underwriter as its
exclusive agent for the distribution of the Shares, and the Underwriter hereby
accepts such appointment under the terms of this Agreement. While this
Agreement is in force, the Trust shall not sell any Shares except on the terms
set forth in this Agreement. Notwithstanding any other provision hereof, the
Trust may terminate, suspend or withdraw the offering of Shares of any Series
whenever, in its sole discretion, it deems such action to be desirable.
2. Compensation. The compensation to be paid for the services
performed and the obligations assumed by Underwriter under this Agreement shall
be as set forth in Exhibit A attached hereto.
3. The compensation to be paid for the services performed and the
obligations assumed by the Distributor under this Agreement shall be as set
forth in Exhibit A attached hereto.
4. Sale and Repurchase of Shares
(a) Underwriter will have the right, as agent for the
Trust, to enter into dealer agreements with responsible investment dealers, and
to sell Shares to such investment dealers against orders therefor at the public
offering price (as defined in subparagraph 2(e) hereof) less a discount
determined by Underwriter, which discount shall not exceed the amount of the
sales charge stated in the Trust's effective Registration Statement on Form
N-1A under the Securities Act of 1933, as amended, including the then current
prospectus and statement of additional information (the "Registration
Statement"). Upon receipt of an order to purchase Shares from a dealer with
whom Underwriter has a dealer agreement, Underwriter will promptly cause such
order to be filled by the Trust.
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(b) Underwriter will have the right, as agent for the
Trust, to sell such Shares to the public against orders therefor at the public
offering price.
(c) Underwriter will also have the right, as agent for
the Trust, to sell shares at their net asset value to such persons as may be
approved by the Trustees of the Trust, all such sales to comply with the
provisions of the Act and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
(d) Underwriter will also have the right to take, as
agent for the Trust, all actions which, in Underwriter's judgment, are
necessary to carry into effect the distribution of the Shares.
(e) The public offering price for the Shares of each
Series (and, with respect to each Series offering multiple classes of Shares,
the Shares of each Class of such Series) shall be the respective net asset
value of the Shares of that Series (or Class of that Series) then in effect,
plus any applicable sales charge determined in the manner set forth in the
Registration Statement or as permitted by the Act and rules and regulations of
the Securities and Exchange Commission promulgated thereunder. In no event
shall any applicable sales charge exceed the maximum sales charge permitted by
the Rules of Fair Practice of the NASD.
(f) The net asset value of the Shares of each Series (or
Class of a Series) shall be determined in the manner provided in the
Registration Statement, and when determined shall be applicable to transactions
as provided for in the Registration Statement. The net asset value of the
Shares of each Series (or each Class of a Series) shall be calculated by the
Trust or by another entity on behalf of the Trust. Underwriter shall have no
duty to inquire into or liability for the accuracy of the net asset value per
share as calculated.
(g) On every sale, the Trust shall receive the applicable
net asset value of the Shares promptly, but in no event later than the tenth
business day following the date on which Underwriter shall have received an
order for the purchase of the Shares.
(h) Upon receipt of purchase instructions, Underwriter
will transmit such instructions to the Trust or its transfer agent for
registration of the Shares purchased.
(i) Nothing in this Agreement shall prevent Underwriter
or any affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor for any other person, firm or corporation (including
other investment companies) or in any way limit or restrict Underwriter or any
such affiliated person from buying, selling or trading any securities for its
or their own account or for accounts of others for whom it or they may be
acting' provided, however, that Underwriter expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
(j) Underwriter, as agent of and for the account of the
Trust may repurchase the Shares at such prices and upon such terms and
conditions as shall be specified in the Registration Statement.
5. Sales of Shares by the Trust. The Trust reserves the right to
issue any Shares at any time directly to the holders of Shares
("Shareholders"), to sell Shares to its Shareholders or to other persons
approved by Underwriter at not less than net asset value and to issue Shares,
at a price to be
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solely determined by the Trust, in exchange for substantially all the assets of
any corporation or trust or for the shares of any corporation or trust.
6. Basis of Sales of Shares. Underwriter does not agree to sell
any specific number of Shares. Underwriter, as agent for the Trust, undertakes
to sell Shares on a best efforts basis only against orders therefor.
7. Compliance with NASD and Government Rules.
(a) Underwriter will conform to the Rules of Fair
Practice of the NASD and the securities laws of any jurisdiction in which it
sells, directly or indirectly, and Shares.
(b) Underwriter, at its own expense, will pay the costs
incurred in establishing and maintaining its relationship with the dealers
selling the Shares. Underwriter will require each dealer with who Underwriter
has a dealer agreement to conform to the applicable provisions hereof and the
Registration Statement, and neither Underwriter nor any such dealers shall
withhold the placing of purchase orders so as to make a profit thereby.
(c) Underwriter agrees to furnish to the Trust sufficient
copies of any agreements, plans or other materials it intends to use in
connection with any sales of Shares in adequate time for the Trust to file and
clear them with the proper authorities before they are put in use, and not to
use them until so filed and cleared.
(d) Underwriter, at its own expense, will qualify as
dealer or broker, or otherwise, under all applicable State or federal laws
required in order that Shares may be sold in such States as may be mutually
agreed upon by the parties.
(c) Underwriter shall not make, or permit any
representative, broker or dealer to make, in connection with any sale or
solicitation of a sale of the Shares, any representations concerning the Shares
except those contained in the then current prospectus and statement of
additional information covering the Shares and in printed information approved
the Trust as information supplemental to such prospectus and statement of
additional information. Copies of the then effective prospectus and statement
of additional information and any such printed supplemental information will be
supplied by the Trust to Underwriter in reasonable quantities upon request.
8. Records to be Supplied by Trust. The Trust shall furnish to
Underwriter copies of all information, financial statements and other papers
which Underwriter may reasonably request for use in connection with the
distribution of the Shares, and this shall include, but shall not be limited
to, one certified copy, upon request by Underwriter, of all financial
statements prepared for the Trust by independent public accountants.
9. Expenses to be Borne by Trust. The Trust will bear the
following expenses:
(a) preparation, setting in type, printing of sufficient
copies of the prospectus and statement of additional information for
distribution to shareholders, and the distribution to shareholders of the
prospectus and statement of additional information;
(b) preparation, printing and distribution of reports and
other communications to shareholders;
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(c) registration of the Shares under the federal
securities law;
(d) qualification of the Shares for sale in the
jurisdictions as agreed between Underwriter and the Trust;
(e) qualification of the Trust as a dealer or broker
under the laws of jurisdictions designated by Underwriter as well as
qualification of the Trust to do business in any jurisdiction, if Underwriter
and the Trust's legal counsel determine that such qualification is necessary or
desirable for the purpose of facilitating sales of the Shares;
(f) maintaining facilities for the issue and transfer of
the Shares;
(g) supplying information, prices and other data to be
furnished by the Trust under this Agreement; and
(h) any original issue taxes or transfer taxes applicable
to the sale or delivery of the Shares of certificates therefor.
10. Services to and Actions for Trust, Not Underwriter. Any
person, even though also a director, officer, employee, shareholder or agent of
Underwriter, who may be or become an officer, trustee, employee or agent of the
Trust, shall be deemed, when rendering services to the Trust or acting on any
business of the Trust (other than services or business in connection with
Underwriter's duties hereunder), to be rendering such services to or acting
solely for the Trust and not as a director, officer, employee, shareholder or
agent, or one under the control or direction of Underwriter, even though paid
by it.
11. The Trust agrees to indemnify, defend and hold Underwriter,
its several officers and directors, and any person who controls the Underwriter
within the meaning of Section 15 of the Securities Act of 1933 (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 Underwriter, 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 (i) a breach by the Trust of its
obligations under this Agreement or (ii) any alleged untrue statement of a
material fact contained in the Registration Statement, Prospectus or Statement
of Additional Information of the Trust 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, provided that in no
event shall anything contained in this Agreement be construed so as to protect
Underwriter against any liability to the Trust or its shareholders to which
Underwriter 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.
12. Underwriter agrees to indemnify, defend and hold the Trust,
its several officers and directors, and any person who controls the Trust
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 Trust, 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 (i) a breach by
Underwriter of its obligations under this agreement or (ii) any alleged untrue
statement of a material fact contained in information furnished in writing by
Underwriter to the Trust
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for use in the Registration statement, Prospectus or Statement of Additional
Information of a Fund 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, Prospectus or Statement of Additional
Information or necessary to make such information not misleading.
13. Termination and Amendment of this Agreement. This Agreement
shall automatically terminate, without the payment of any penalty, in the event
of its "assignment" (as defined under the Investment Company Act of 1940. This
Agreement may be amended only if such amendment is approved (i) by Underwriter,
(ii) either by action of the Board of Trustees of the Trust or at a meeting of
the Shareholders of the Trust by the affirmative vote of a majority of the
outstanding Shares, and (iii) by a majority of the Trustees of the Trust who
are not interested persons of the Trust or of Underwriter, by vote cast in
person at a meeting called for the purpose of voting on such approval. Either
the Trust or Underwriter may at any time terminate this Agreement on sixty (60)
days' written notice delivered or mailed by registered mail, postage prepaid,
to the other party.
14. Effective Period of this Agreement. This Agreement shall take
effect upon its execution and shall remain in full force and effect for a
period of two years from the date of its execution (unless terminated
automatically as set forth in Paragraph 12, and from year to year thereafter),
subject to annual approval (i) by Underwriter, (ii) by the Board of Trustees of
the Trust or a vote of a majority of the outstanding Shares, and (iii) by a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of Underwriter, by vote cast in person at a meeting called for the
purpose of voting on such approval.
15. Limitation of Trust's Liability. It is expressly agreed that
the obligations of the Trust hereunder shall not be binding upon any of the
Trustees, Shareholders, nominees, officers, agents or employees of the Trust,
personally, but bind only the trust property of the Trust, as provided in the
Declaration of Trust of the Trust. The execution and delivery of this
Agreement have been authorized by the Trustees and Shareholders of the Trust
and signed by the officers of the Trust, acting as such, and neither such
authorization by such Trustees and Shareholders nor such execution and delivery
by such officers shall be deemed to have been made by any of them individually
or to impose any liability on them personally, but shall bind only the trust
property of the Trust as provided in its Declaration of Trust. A copy of the
Certificate of Trust of the Trust is on file with the Secretary of State of the
State of Delaware.
16. New Series. The terms and provisions of this Agreement shall
become automatically applicable to any additional series of the Trust
established during the initial or renewal term of this Agreement.
17. Successor Investment Company. Unless this Agreement has been
terminated in accordance with Paragraph 13, the terms and provisions of this
Agreement shall become automatically applicable to any investment company which
is a successor to the Trust as a result of a reorganization, recapitalization
or change of domicile.
18. Severability. In the event any provision of this Agreement is
determined to be void or unenforceable, such determination shall not affect the
remainder of this Agreement, which shall continue to be in force.
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19. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of the
internal laws of the State of Illinois.
(b) Any questions of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the Act shall be resolved by reference to such term or
provision of the Act and to interpretation 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 Securities and Exchange Commission
issued pursuant to said Act. In addition, where the effect of a requirement of
the Act, reflected in any provision of this Agreement is revised by rule,
regulation or order of the Securities and Exchange Commission, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
20. 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 for this purpose the
address of the Trust is 00 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
and of the Underwriter shall be 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxx 00000.
21. Counterparts. This Agreement may be in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
22. Binding Effect. Each of the undersigned expressly warrants
and represents that he has the full power and authority to sign this Agreement
on behalf of the party indicated, and that his signature will operate to bind
the party indicated to the foregoing terms.
23. Force Majeure. If either party shall be delayed in its
performance of services or prevented entirely or in part from performing
services due to causes or events beyond its control, including and without
limitation, acts of God, interruption of power or other utility, transportation
or communication services, acts of civil or military authority, sabotages,
national emergencies, explosion, flood, accident, earthquake or other
catastrophe, fire, strike or other labor problems, legal action, present or
future law, governmental order, rule or regulation, or shortages of suitable
parts, materials, labor or transportation, such delay or non-performance shall
be excused and a reasonable time for performance in connection with this
Agreement shall be extended to include the period of such delay or non-
performance.
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IN WITNESS WHEREOF, the Trust and Underwriter have each caused this
Agreement to be signed on its behalf, all as of the day and year first above
written.
ATTEST: THE KENWOOD FUNDS
BY:
ATTEST: AMERIPRIME FINANCIAL SECURITIES, INC.
BY:
