UNDERWRITING AGREEMENT
This Agreement made as of November 18, 1993 by and between
MIDWEST INCOME TRUST, a Massachusetts business trust (the
"Trust"), and MIDWEST GROUP FINANCIAL SERVICES, INC., an Ohio
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, Underwriter serves as the principal underwriter of
shares of beneficial interest (the "Shares") of each series of
shares of the Trust (the "Series") pursuant to an underwriting
agreement dated November 24, 1986, and the Trust and Underwriter
are desirous of continuing such arrangement; and
WHEREAS, certain events have transpired since the parties
entered into the underwriting agreement dated November 24, 1986,
including (i) a change in the name of Underwriter; (ii) the
planned introduction of multiple classes of Shares of certain
Series; (iii) a statutory merger between Underwriter and an
affiliated company whereby Underwriter has become the investment
adviser to the Trust as well as its principal underwriter, and
(iv) the adoption of amendments to the Rules of Fair Practice of
the NASD concerning the permissible levels of sales charges; and
mit.und
WHEREAS, the Trust and Underwriter are desirous of entering
into a new agreement which reflects the circumstances described
in the previous recital;
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 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 whenever,
in its sole discretion, it deems such action to be desirable.
2. 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.
(b) Underwriter will also 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 the 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 each 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. Underwriter shall have the right to retain the
sales charge less any applicable dealer discount.
(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 the 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.
3. Sale 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
in exchange for substantially all the assets of any corporation
or trust or for the shares of any corporation or trust.
4. Basis of Sale 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.
5. Rules of NASD, etc.
(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, any Shares.
(b) Underwriter will require each dealer with whom
Underwriter has a dealer agreement to conform to the applicable
provisions hereof and the Registration Statement with respect to
the public offering price of the Shares, 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.
(e) 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 by 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.
6. 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.
7. Expenses.
In the performance of its obligations under this
Agreement, Underwriter will pay the costs incurred in qualifying
as a broker or dealer under state and federal laws and in
establishing and maintaining its relationships with the dealers
selling the Shares. All other costs in connection with the
offering of the Shares will be paid by the Trust or Underwriter
in accordance with agreements between them as permitted by
applicable law, including the Act and rules and regulations
promulgated thereunder.
8. Indemnification of Trust.
Underwriter, to the extent of the net commission
received by it from the sale of Shares but to no greater amount,
agrees to indemnify and hold harmless the Trust, and each person
who has been, is, or may hereafter be a trustee, officer,
employee, shareholder or control person of the Trust, against any
loss, damage or expense (including the reasonable costs of
investigation) reasonably incurred by any of them in connection
with any claim or in connection with any action, suit or
proceeding to which any of them may be a party, which arises out
of or is alleged to arise out of or is based upon any untrue
statement or alleged untrue statement of a material fact, or the
omission or alleged omission to state a material fact necessary
to make the statements not misleading, on the part of Underwriter
or any agent or employee of Underwriter or any other person for
whose acts Underwriter is responsible, unless such statement or
omission was made in reliance upon written information furnished
by the Trust. Underwriter likewise, to the extent of the net
commission received by it from the sale of Shares but to no
greater amount, agrees to indemnify and hold harmless the Trust
and each such person in connection with any claim or in
connection with any action, suit or proceeding which arises out
of or is alleged to arise out of Underwriter's failure to
exercise reasonable care and diligence with respect to its
services, if any, rendered in connection with investment,
reinvestment, automatic withdrawal and other plans for Shares.
The term "expenses" for purposes of this and the next paragraph
includes amounts paid in satisfaction of judgments or in
settlements which are made with Underwriter's consent. The
foregoing rights of indemnification shall be in addition to any
other rights to which the Trust or each such person may be
entitled as a matter of law.
9. Indemnification of Underwriter.
Underwriter, its directors, officers, employees,
shareholders and control persons shall not be liable for any
error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of any of such persons in
the performance of Underwriter's duties or from the reckless
disregard by any of such persons of Underwriter's obligations and
duties under this Agreement. The Trust will advance attorneys'
fees or other expenses incurred by any such person in defending a
proceeding, upon the undertaking by or on behalf of such person
to repay the advance if it is ultimately determined that such
person is not entitled to indemnification. Any person employed
by Underwriter who may also be or become an officer or employee
of the Trust shall be deemed, when acting within the scope of his
employment by the Trust, to be acting in such employment solely
for the Trust and not as an employee or agent of Underwriter.
10. Termination and Amendment of this Agreement.
This Agreement shall automatically terminate, without
the payment of any penalty, in the event of its assignment. 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.
11. 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 (2)
years from the date of its execution (unless terminated
automatically as set forth in Section 10), 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.
12. Limitation on Liability.
The term "Midwest Income Trust" means and refers to the
Trustees from time to time serving under the Trust's Declaration
of Trust as the same may subsequently thereto have been, or
subsequently hereto be, amended. 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 any of them personally, but shall bind only the trust property
of the Trust as provided in its Declaration of Trust.
13. 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.
14. Successor Investment Company.
Unless this Agreement has been terminated in accordance
with Paragraph 10, 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.
15. 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.
16. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of
the State of Ohio.
(b) 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 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.
17. 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 the Trust and of Underwriter for this
purpose shall be 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000.
IN WITNESS WHEREOF, the Trust and Underwriter have each
caused this Agreement to be signed in duplicate on its behalf,
all as of the day and year first above written.
ATTEST: MIDWEST INCOME TRUST
/s/ Xxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxx
_____________________________ By: __________________________
Xxxx X. Xxxxxx Xxxxxx X. Xxxxxxx
ATTEST: MIDWEST GROUP FINANCIAL
SERVICES, INC.
/s/ Xxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxxx, Xx.
_____________________________ By: __________________________
Xxxx X. Xxxxxx Xxxxx X. Xxxxxxx, Xx.
