UNDERWRITING AGREEMENT
BETWEEN
X. XXXX PRICE REAL ESTATE FUND, INC.
AND
X. XXXX PRICE INVESTMENT SERVICES, INC.
THIS UNDERWRITING AGREEMENT, made as of the 29th day of October, 1997,
by and between X. XXXX PRICE REAL ESTATE FUND, INC., a corporation organized
and existing under the laws of the State of Maryland (hereinafter called the
"Fund"), and X. XXXX PRICE INVESTMENT SERVICES, INC., a corporation organized
and existing under the laws of the State of Maryland (hereinafter called the
"Distributor").
W I T N E S S E T H:
WHEREAS, the Fund proposes to engage in business as an open-end
management investment company and to register as such under the federal
Investment Company Act of 1940, as amended ("ICA-40"); and
WHEREAS, the Distributor is engaged principally in the business of
distributing shares of the investment companies sponsored and managed by
either X. Xxxx Price Associates ("Price Associates") or Xxxx Xxxxx-Xxxxxxx
International, Inc. ("Xxxxx-Xxxxxxx") and is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended, ("SEA-34") and is a
member of the National Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, the Fund desires the Distributor to act as the distributor in
the public offering of the Shares of the Funds; and
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. Delivery of Fund Documents.
The Fund has furnished Distributor with copies, properly certified or
authenticated, of each of the following:
(a) Articles of Incorporation, dated September 18, 1997.
(b) By-Laws of the Fund as in effect on the date hereof.
(c) Resolutions of the Board of Directors of the Fund selecting
Distributor as principal underwriter and approving this form of
agreement.
The Fund shall furnish the Distributor from time to time with copies,
properly certified or authenticated, of all the amendments of, or supplements
to, the foregoing, if any.
The Fund shall furnish Distributor promptly with properly certified or
authenticated copies of any registration statements filed by it on behalf of
the Fund with the Securities and Exchange Commission under the Securities Act
of 1933, as amended ("SA-33") or ICA-40, together with any financial
statements and exhibits included therein, and all amendments or supplements
thereto hereafter filed.
2. Sale of Shares. Subject to the provisions of Paragraphs 3, 4, and
6 hereof, and to such minimum purchase requirements as may from time to time
be currently indicated in the Fund's prospectus, the Distributor is authorized
to sell, as agent on behalf of the Fund, shares of the Fund's capital stock
("Shares") authorized for issuance and registered under SA-33. Distributor
may also sell Shares under offers of exchange between and among the investment
companies for which Price Associates and/or Xxxxx-Xxxxxxx act as investment
advisers ("Price Funds"). Distributor may also purchase as principal such
Shares for resale to the public. Such sale will be made by Distributor on
behalf of the Fund by accepting unconditional orders to purchase the Shares
placed with Distributor by investors and such purchases will be made by
Distributor only after acceptance by Distributor of such orders. The sales
price to the public of such Shares shall be the public offering price as
defined in Paragraph 5 hereof.
3. Sale of Shares by the Fund. The rights granted to the Distributor
shall be nonexclusive in that the Fund reserves the right to sell its Shares
to investors pursuant to applications received and accepted by the Fund or its
transfer agent. Further, the Fund reserves the right to issue Shares in
connection with the merger or consolidation of any other investment company,
trust, or personal holding company with the Fund or the Fund's acquisition by
the purchase or otherwise, of all or substantially all of the assets of an
investment company, trust, or personal holding company. Any right granted to
Distributor to accept orders for Shares, or to make sales on behalf of the
Fund or to purchase Shares for resale, will not apply to Shares issued in
connection with the merger or consolidation of any other investment company
with the Fund or its acquisition by purchase or otherwise, of all or
substantially all of the assets of any investment company, trust, or personal
holding company, or substantially all of the outstanding shares or interests
of any such entity, and such right shall not apply to Shares that may be
offered by the Fund to shareholders by virtue of their being shareholders of
the Fund.
4. Shares Covered by This Agreement. This Agreement relates to the
issuance and sale of Shares that are duly authorized, registered, and
available for sale by the Fund, including redeemed or repurchased Shares if
and to the extent that they may be legally sold and if, but only if, the Fund
authorizes the Distributor to sell them.
5. Public Offering Price. All Shares sold by the Distributor
pursuant to this Agreement shall be sold at the public offering price. The
public offering price for all accepted subscriptions will be the net asset
value per share, as determined in the manner provided in the Fund's Articles
of Incorporation, as now in effect, or as they may be amended (and as
reflected in the Fund's then current prospectus), next determined after the
order is accepted by the Distributor. The Distributor will process orders
submitted by brokers for the sale of Shares at the public offering price
exclusive of any commission charged by such broker to his customer.
6. Suspension of Sales. If and whenever the determination of net
asset value is suspended and until such suspension is terminated, no further
orders for Shares shall be accepted by the Distributor except such
unconditional orders placed with the Distributor before it had knowledge of
the suspension. In addition, the Fund reserves the right to suspend sales and
Distributor's authority to accept orders for Shares on behalf of the Fund if,
in the judgment of the Board of Directors of the Fund, it is in the best
interests of the Fund to do so, such suspension to continue for such period as
may be determined by the Board of Directors of the Fund; and in that event, no
orders to purchase Shares shall be processed or accepted by the Distributor on
behalf of the Fund while such suspension remains in effect except for Shares
necessary to cover unconditional orders accepted by Distributor before it had
knowledge of the suspension, unless otherwise directed by the Board of
Directors of the Fund.
7. Solicitation of Orders. In consideration of the rights granted to
the Distributor under this Agreement, Distributor will use its best efforts
(but only in states in which Distributor may lawfully do so) to obtain from
investors unconditional orders for Shares authorized for issuance by the Fund,
and registered under SA-33, provided that Distributor may in its discretion
reject any order to purchase Shares. This does not obligate the Distributor to
register or maintain its registration as a broker or dealer under the state
securities laws of any jurisdiction if, in the discretion of the Distributor,
such registration is not practical or feasible. The Fund shall make available
to the Distributor at the expense of the Distributor such number of copies of
the Fund's currently effective prospectus as the Distributor may reasonably
request.
The Fund shall furnish to 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.
8. Authorized Representations. The Fund is not authorized by the
Distributor to give, on behalf of the Distributor, any information or to make
any representations other than the information and representations contained
in a registration statement or prospectus filed with the SEC under SA-33
and/or ICA-40, covering Shares, as such registration statement and prospectus
may be amended or supplemented from time to time.
Distributor is not authorized by the Fund to give any information or to
make any representations in connection with the sale of Shares other than the
information and representations contained in a registration statement or
prospectus filed with the Securities and Exchange Commission ("SEC") under
SA-33 and/or ICA-40, covering Shares, as such registration statement and
prospectus may be amended or supplemented from time to time, or contained in
shareholder reports or other material that may be prepared by or on behalf of
the Fund for the Distributor's use. This shall not be construed to prevent
the Distributor from preparing and distributing tombstone ads and sales
literature or other material as it may deem appropriate. No person other than
Distributor is authorized to act as principal underwriter (as such term is
defined in ICA-40, as amended) for the Fund.
9. Registration and Sale of Additional Shares. The Fund will, from
time to time, use its best efforts to register under SA-33, such Shares of the
Fund as Distributor may reasonably be expected to sell on behalf of the Fund.
In connection therewith, the Fund hereby agrees to register an indefinite
number of Shares pursuant to Rule 24f-2 under ICA-40, and to register such
Shares as shall be deemed advisable pursuant to Rule 24e-2 under ICA-40, as
amended. The Fund will, in cooperation with the Distributor, take such action
as may be necessary from time to time to qualify such Shares (so registered or
otherwise qualified for sale under SA-33), in any state mutually agreeable to
the Distributor and the Fund, and to maintain such qualification.
10. Expenses. The Fund shall pay all fees and expenses:
a. in connection with the preparation, setting in type and
filing of any registration statement and prospectus under
SA-33 and/or ICA-40, and any amendments or supplements that
may be made from time to time;
b. in connection with the sale in the various states in which
the Fund shall determine it advisable to sell such Shares.
(Including registering the Fund as a broker or dealer or any
officer of the Fund or other person as agent or salesman of
the Fund in any state.);
c. of preparing, setting in type, printing and mailing any
report or other communication to shareholders of the Fund in
their capacity as such;
d. of preparing, setting in type, printing and mailing
prospectuses annually to existing shareholders;
e. in connection with the issue and transfer of Shares
resulting from the acceptance by Distributor of orders to
purchase Shares placed with the Distributor by investors,
including the expenses of confirming such purchase orders;
and
f. of any issue taxes or (in the case of Shares redeemed) any
initial transfer taxes.
The Distributor shall pay (or will enter into arrangements providing
that persons other than Distributor shall pay) all fees and expenses:
a. of printing and distributing any prospectuses or reports
prepared for its use in connection with the distribution of
Shares to the public;
b. of preparing, setting in type, printing and mailing any
other literature used by the Distributor in connection with
the distribution of the Shares to the public;
c. of advertising in connection with the distribution of such
Shares to the public;
d. incurred in connection with its registration as a broker or
dealer or the registration or qualification of its officers,
directors or representatives under federal and state laws;
and
e. incurred in connection with the sale and offering for sale
of Shares which have not been herein specifically allocated
to the Fund.
11. Conformity With Law. Distributor agrees that in selling Shares it
shall duly conform in all respects with the laws of the United States and any
state in which such Shares may be offered for sale by Distributor pursuant to
this Agreement and to the rules and regulations of the NASD.
12. Independent Contractor. Distributor shall be an independent
contractor and neither Distributor, nor any of its officers, directors,
employees, or representatives is or shall be an employee of the Fund in the
performance of Distributor's duties hereunder. Distributor shall be
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. Distributor assumes full
responsibility for its agents and employees under applicable statutes and
agrees to pay all employee taxes thereunder.
13. Indemnification. Distributor agrees to indemnify and hold
harmless the Fund and each of its directors, officers, employees,
representatives and each person, if any, who controls the Fund within the
meaning of Section 15 of SA-33 against any and all losses, liabilities,
damages, claims or expenses (including the reasonable costs of investigating
or defending any alleged loss, liability, damage, claim, or expense and
reasonable legal counsel fees incurred in connection therewith) to which the
Fund or such of its directors, officers, employees, representatives, or
controlling person may become subject under SA-33, under any other statute, at
common law, or otherwise, arising out of the acquisition of any Shares by any
person which (i) may be based upon any wrongful act by Distributor or any of
Distributor's directors, officers, employees, or representatives, or (ii) may
be based upon any untrue statement or alleged untrue statement of a material
fact contained in a registration statement, prospectus, shareholder report, or
other information covering Shares filed or made public by the Fund, or any
amendment thereof or supplement thereto, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading if such statement or omission was
made in reliance upon information furnished to the Fund by Distributor. In no
case (i) is Distributor's indemnity in favor of the Fund, or any person
indemnified to be deemed to protect the Fund or such indemnified person
against any liability to which the Fund or such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of his duties or by reason of his reckless disregard of his
obligations and duties under this Agreement or (ii) is Distributor to be
liable under its indemnity agreement contained in this Paragraph with respect
to any claim made against the Fund or any person indemnified unless the Fund
or such person, as the case may be, shall have notified Distributor in writing
of the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Fund or upon such person (or after the Fund or such person
shall have received notice of such service on any designated agent). However,
failure to notify Distributor of any such claim shall not relieve Distributor
from any liability which Distributor may have to the Fund or any person
against whom such action is brought otherwise than on account of Distributor's
indemnity agreement contained in this Paragraph.
Distributor shall be entitled to participate, at its own expense, in the
defense, or, if Distributor so elects, to assume the defense of any suit
brought to enforce any such claim, but, if Distributor elects to assume the
defense, such defense shall be conducted by legal counsel chosen by
Distributor and satisfactory to the Fund, to its directors, officers,
employees, or representatives, or to any controlling person or persons,
defendant or defendants, in the suit. In the event that Distributor elects to
assume the defense of any such suit and retain such legal counsel, the Fund,
its directors, officers, employees, representatives, or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional legal counsel retained by them. If Distributor does not
elect to assume the defense of any such suit, Distributor will reimburse the
Fund, such directors, officers, employees, representatives, or controlling
person or persons, defendant or defendants in such suit for the reasonable
fees and expenses of any legal counsel retained by them. Distributor agrees
to promptly notify the Fund of the commencement of any litigation or
proceedings against it or any of its directors, officers, employees, or
representatives in connection with the issue or sale of any Shares.
The Fund agrees to indemnify and hold harmless Distributor and each of
its directors, officers, employees, representatives, and each person, if any,
who controls Distributor within the meaning of Section 15 of SA-33 against any
and all losses, liabilities, damages, claims, or expenses (including the
reasonable costs of investigating or defending any alleged loss, liability,
damage, claim, or expense and reasonable legal counsel fees incurred in
connection therewith) to which Distributor or such of its directors, officers,
employees, representatives, or controlling person may become subject under
SA-33, under any other statute, at common law, or otherwise, arising out of
the acquisition of any Shares by any person which (i) may be based upon any
wrongful act by the Fund or any of the Fund's directors, officers, employees,
or representatives, or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, shareholder report, or other information covering Shares filed or
made public by the Fund, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
if such statement or omission was made in reliance upon information furnished
to Distributor by the Fund. In no case (i) is the Fund's indemnity in favor
of the Distributor, or any person indemnified to be deemed to protect the
Distributor or such indemnified person against any liability to which the
Distributor or such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties
or by reason of his reckless disregard of his obligations and duties under
this Agreement, or (ii) is the Fund, to be liable under its indemnity
agreement contained in this Paragraph with respect to any claim made against
Distributor, or person indemnified unless Distributor, or such person, as the
case may be, shall have notified the Fund in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon Distributor
or upon such person (or after Distributor or such person shall have received
notice of such service on any designated agent). However, failure to notify
the Fund of any such claim shall not relieve the Fund from any liability which
the Fund may have to Distributor or any person against whom such action is
brought otherwise than on account of the Fund's indemnity agreement contained
in this Paragraph.
The Fund shall be entitled to participate, at its own expense, in the
defense, or, if the Fund so elects, to assume the defense of any suit brought
to enforce any such claim, but, if the Fund elects to assume the defense, such
defense shall be conducted by legal counsel chosen by the Fund and
satisfactory to Distributor, to its directors, officers, employees or
representatives, or to any controlling person or persons, defendant or
defendants, in the suit. In the event that the Fund elects to assume the
defense of any such suit and retain such legal counsel, Distributor, its
directors, officers, employees, representatives, or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional legal counsel retained by them. If the Fund does not elect
to assume the defense of any such suit, the Fund will reimburse Distributor,
such directors, officers, employees, representatives, or controlling person or
persons, defendant or defendants in such suit for the reasonable fees and
expenses of any legal counsel retained by them. The Fund agrees to promptly
notify Distributor of the commencement of any litigation or proceedings
against it or any of its directors, officers, employees, or representatives in
connection with the issue or sale of any Shares.
14. Limitation on Liability of Fund. The term "X. Xxxx Price Real
Estate Fund, Inc.," means and refers to the directors from time to time
serving under the Articles of Incorporation of the Fund effective as of
September 18, 1997, as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations
of the Fund hereunder shall not be binding upon any of the directors,
shareholders, nominees, officers, agents, or employees of the Fund,
personally, but bind only the trust property of the Fund, as provided in the
Articles of Incorporation of the Fund. The execution and delivery of this
Agreement have been authorized by the directors of the Fund and signed by an
authorized officer of the Fund, acting as such, and neither such authorization
by such directors nor such execution and delivery by such officer shall be
deemed to have been made by any of them but shall bind only the trust property
of the Fund as provided in its Articles of Incorporation.
15. Duration and Termination of This Agreement. This Agreement shall
become effective upon its execution ("effective date") and, unless terminated
as provided, shall remain in effect through April 30, 1998, and from year to
year thereafter, but only so long as such continuance is specifically approved
at least annually by the vote of a majority of the directors of the Fund who
are not interested persons of Distributor or of the Fund, cast in person at a
meeting called for the purpose of voting on such approval, and by vote of the
directors of the Fund or of a majority of the outstanding voting securities of
the Fund. This Agreement may, on 60 days' written notice, be terminated at
any time, without the payment of any penalty, by the vote of a majority of the
directors of the Fund who are not interested persons of Distributor or the
Fund, by a vote of a majority of the outstanding voting securities of the
Fund, or by Distributor. This Agreement will automatically terminate in the
event of its assignment. In interpreting the provisions of this Paragraph 15,
the definitions contained in Section 2(a) of ICA-40 (particularly the
definitions of "interested person," "assignment," and "majority of the
outstanding securities") shall be applied.
16. Amendment of This Agreement. No provisions of this Agreement may
be changed, waived, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought. If the Fund should at
any time deem it necessary or advisable in the best interests of the Fund that
any amendment of this Agreement be made in order to comply with the
recommendations or requirements of the SEC or other governmental authority or
to obtain any advantage under state or federal tax laws and notifies
Distributor of the form of such amendment, and the reasons therefor, and if
Distributor should decline to assent to such amendment, the Fund may terminate
this Agreement forthwith. If Distributor should at any time request that a
change be made in the Fund's Articles of Incorporation or By-Laws or in its
methods of doing business, in order to comply with any requirements of federal
law or regulations of the SEC, or of a national securities association of
which Distributor is or may be a member relating to the sale of Shares, and
the Fund should not make such necessary change within a reasonable time,
Distributor may terminate this Agreement forthwith.
17. Additional Funds. In the event that the Fund establishes one or
more series of Shares in addition to the Fund with respect to which it desires
to have Distributor render services as distributor under the terms hereof, it
shall so notify Distributor in writing, and if Distributor agrees in writing
to provide such services, such series of Shares shall become a Fund hereunder.
18. Miscellaneous. It is understood and expressly stipulated that
neither the shareholders of the Fund, nor the directors of the Fund shall be
personally liable hereunder. The captions in this Agreement are included for
convenience of reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
19. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party
giving notice: if to the Fund, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000, and if to the Distributor, at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000.
ATTEST: X. XXXX PRICE REAL ESTATE FUND, INC.
/s/Xxxxxxxx X. Xxxxxxx /s/Xxxxxxx X. Xxxxxxxxx
____________________________ By: _________________________________
Xxxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxxxx
Assistant Secretary President
ATTEST: X. XXXX PRICE INVESTMENT SERVICES, INC.
/s/Xxxxxxx X. Xxx Xxxx /s/Xxxxx X. Xxxxxxx
____________________________ By: _________________________________
Xxxxxxx X.Xxx Xxxx Xxxxx X. Xxxxxxx
Assistant Secretary Vice President
