Underwriting and Distribution Agreement
THIS AGREEMENT, made this 12th day of May, 1991 by and between APEX FUND, Inc.,
a Minnesota corporation, (the "Fund") and XXXXX XXXXX Financial Services
Corporation, a Nebraska corporation (the "Distributor").
WITNESSETH:
1. UNDERWRITING SERVICES.
The Fund hereby engages the Distributor, and the Distributor hereby
agrees to act, as principal underwriter for the Fund in the sale and
distribution to the public of the shares (the "Shares") of the portfolios of the
Fund referred to herein (the "Portfolios"), either through dealers or otherwise.
TheDistributor agrees to offer such Shares for sale at all times when such
Shares are available for sale and may lawfully beoffered for sale and sold.
2. SALE OF FUND SHARES.
.
Such Shares are to be sold only on the following terms:
(a) All subscriptions, offers or sales shall be subject to acceptance
or rejection by the Fund. Any offer or sale shall be conclusively presumed to
have been accepted by the Fund if the Fund shall fail to notify the Distributor
of the rejection of such offer or sale prior to the computation of the net asset
value of the Fund's Shares next following receipt by the Fund of notice of such
offer or sale.
(b) No Share of the Fund shall be sold by the Distributor for any
consideration other than cash or for any amount less than the net asset value of
such Share, computed as provided in the currently effective Prospectus of the
Fund (the "Net Asset Value"). Except as provided below, all Shares of the Fund
sold by the Distributor shall be sold at the public offering price, as
hereinafter defined.
(c) Subject to paragraph (b) above, the public offering price of the
Shares shall be the Net Asset Value thereof next determined following receipt of
an order by the Fund's transfer agent plus the sales load, if any, which shall
be such percentage of the public offering price, computed to the nearest cent,
as may be agreed upon by the Fund and the Distributor and specifically approved
by the Board of Directors of the Fund (the "Sales Load"), provided that no
schedule of Sales Loads shall be effective until set forth in a prospectus of
the Fund meeting the requirements of the Securities Act of 1933. Said Sales Load
maybe graduated on a scale based on the dollar amount of Shares sold.
(d) The Sales Load may, at the discretion of the Fund and the
Distributor, be reduced or eliminated as permitted by the Investment Company Act
of 1940, and the rules and regulations thereunder, as they may be amended from
time to time, or as set forth below, provided that the Fund shall in no event
receive for any Shares sold an amount less than the Net Asset Value thereof. In
addition,
(i) Shares may be sold at their Net Asset Value, without a
Sales Load, to Consolidated Investment Corporation or its subsidiaries
or to Union Bank and Trust Company and its subsidiaries and to the
directors, officers, employees, sales representatives and retirees of
Consolidated Investment Corporation or its subsidiaries or to Union
Bank and Trust Company and its subsidiaries and spouses or children,
under the age of 21 of any such persons. Such persons must give written
assurance that they have bought for investment purposes, and that the
securities will not be resold except through redemption or repurchase
by or on behalf of the Fund.
(ii) The Distributor may exchange Shares of any Portfolio of
the Fund at the Net Asset Value, without Sales Load, to any purchaser
who shall pay for such Shares entirely with the proceeds of the
redemption of redeemable Shares of anyother Portfolio or Portfolios of
the Fund.
3. INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. The Fund may extend to
its shareholders with respect to any of its Portfolios the right to purchase
Shares issued by such Portfolio at the Net Asset Value thereof with the proceeds
of any dividend or capital gain distribution paid or payable by such Portfolio
to its shareholders.
4. REGISTRATION OF SHARES.
The Fund agrees to make prompt and reasonable efforts to effect and
keep in effect, at its own expense, the registration or qualification of its
Shares for sale, in such jurisdictions as the Fund may designate.
5. INFORMATION TO BE FURNISHED THE DISTRIBUTOR. The Fund agrees that it
will furnish the Distributor with such information with respect to the affairs
and accounts of the Fund, as the Distributor may, from time to time, reasonably
require, and further agrees that the Distributor, at all reasonable times, shall
be permitted to inspect the books and records of the Fund.
6. ALLOCATION OF EXPENSES.
During the periods of this contract, the Fund shall pay or cause to be
paid all expenses, costs and fees incurred by the Fund which are not assumed by
the Distributor. The Distributor shall pay all costs of distributing the Shares
including, but not limited to, compensation in addition to Sales Loads, if any,
paid to registered representatives of the Distributor and to broker/dealers that
have entered into sales agreements with the Distributor, costs of printing and
distributing prospectuses, statements of additional information and shareholder
reports for new shareholders, costs of printing, preparing and distributing
sales literature, costs of preparing and running advertisements on radio,
television, newspapers or magazines and costs connected with the use of a
"toll-free" telephone number for the Fund, and other distribution related
expenses.
7. COMPENSATION TO THE DISTRIBUTOR
As compensation for all of its services provided and its costs assumed
under this Agreement, the Distributor shall receive the following forms and
amounts of compensation.
(a) Sales Loads.
On sales of Shares of the Fund, the Distributor shall receive the Sales
Load, if any, that is, the difference between the total amount charged and
received by the Distributor as the purchase price for the Shares and the Net
Asset Value thereof. The amount of such Sales Loads may be retained or deducted
by the Distributor from any sums received by it in payment for Shares so sold.
If such amount is not deducted by the Distributor from such payments, such
amount shall be paid to the Distributor by the Fund not later than five business
days after the close of any month during which any such sales were made by the
Distributor and payment received by the Fund.
(b) Reimbursement for Expenses.
The Fund shall reimburse the Distributor for its actual costs,
including but not limited to compensation (in addition to Sales Loads) paid to
registered representatives of the Distributor and to broker/dealers that have
entered into sale agreements with the Distributor, costs of printing, preparing
and distributing sales literature, costs of preparing and running advertisements
on radio, television, newspapers or magazines and cost connected with the use of
a "toll-free" telephone number for the Fund, and other distribution-related
expenses as set for in the Fund's Plan of Distribution (the "Plan"), Section 6
of this Agreement and in any related agreements, incurred with respect to each
of the Fund's Portfolios. All such reimbursements will be separately computed
and paid for each Portfolio and will be based on the actual costs of
distribution incurred with respect to each Portfolio. Such reimbursements shall
be subject to the following limitations.
(i) Expense reimbursement to the Distributor shall not exceed
the percentages of the average daily net assets of a Portfolio
computed in accordance with the currently effective Prospectus
of the Fund of each of the Portfolios and as identified in the
Plan of Distribution adopted by the Fundpursuant to Rule 12b-1
under the Investment Company Act of1940.
(ii) On or before the 15th day of each month, the Distributor
shall provide the Fund with an itemized list of costs of
distribution incurred during the preceding month with respect
to each Portfolio reimbursable under this Agreement and the
Plan for which the Distributor desires to be reimbursed. The
Fund shall reimburse the Distributor for such costs within 30
days of receipt of such itemized list. The Fund may, in any
month, reimburse the Distributor for costs in excess of 1/12
of the per annum limitations of paragraph (b)(i) above, but in
no event shall the total reimbursement made by the Fund for
any Portfolio in any calendar year exceed the limitations of
paragraph (b)(i) above.
8. LIMITATION OF THE DISTRIBUTOR'S AUTHORITY.
The Distributor shall be deemed to be an authorized independent
contractor and, except as specifically provided or authorized herein, shall have
no authority to act for or represent the Fund.
9. SUBSCRIPTION FOR SHARES--REFUND FOR CANCELLED ORDERS. The
Distributor shall subscribe for the Shares of the Fund only for the purpose of
covering purchase orders already received by it or for the purpose of investment
for its own account. In the event that an order for the purchase of Shares of
the Fund is placed with the Distributor by a customer or dealer and subsequently
cancelled, the Distributor shall forthwith cancel the subscription for such
Shares entered on the books of the Fund, and, if the Distributor has paid the
Fund for such Shares, shall be entitled to receive from the Fund in refund of
such payment the lessor of:
(a) the consideration received by the Fund for said Shares; or
(b) the Net Asset Value of such Shares at the time of cancellation
by the Distributor.
10. INDEMNIFICATION OF THE FUND.
The Distributor agrees to indemnify the Fund against any and all
litigation and other legal proceedings of any kind or nature and against any
liability, judgment, cost or penalty imposed as a result of such litigation or
proceedings in any way arising out of or in connection with the sale or
distribution of the Shares of the Fund by the Distributor. In the event of the
threat or institution of any such litigation or legal proceedings against the
Fund, the Distributor shall defend such action on behalf of the Fund at its own
expense, and shall pay any such liability, judgment, cost or penalty resulting
therefrom, whether imposed by legal authority or agreed upon by way of
compromise and settlement; provided, however, the Distributor shall not be
required to pay or reimburse the Fund for any liability, judgment, cost or
penalty incurred as a result of an omission to supply information by the Fund to
the Distributor, or to the Distributor by a director, officer or employee of the
Fund who is not an Interested Person of the Distributor (as defined in Section
2(a)(19) of the Investment Company Act of 1940 and the rules, regulations and
releases relating thereto), unless the information so supplied or omitted was
available to the Distributor or the Fund's investment adviser without recourse
to the Fund or any such Interested Person of the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES.
The Distributor shall be free to render to others services of a nature
either similar to or different from those rendered under this contract, except
such as may impair its performance of the services and duties to be rendered by
it hereunder.
12. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
The effective date of this Agreement shall be the date of commencement
of the Fund's initial public offering of shares. Wherever referred to in this
Agreement, the vote or approval of the holders of a majority of the outstanding
Shares of the Fund or any Portfolio of the Fund shall mean the vote of 67% or
more of such Shares if the holders of more than 50% of such Shares are present
in person or by proxy or the vote of more than 50% of such Shares, whichever is
less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect from year to year after April 30, 1989, but only so long as
such continuance is specifically approved at least annually either: (1) by the
Board of Directors of the Fund, including the specific approval of a majority of
the directors who are not Interested Persons of the Fund or of the Distributor
and who have no direct or indirect financial interest in the operation of the
Plan, or in any agreements relating to the Plan, cast in person at a meeting
called for the purpose of voting on such approval; or (2) by the vote of the
holders of a majority of the outstanding Shares of the Fund; provided that if a
majority of the outstanding Shares of any Portfolio votes to approve this
Agreement, such approval shall be effective with respect to such Portfolio
whether or not the shareholders of any other Portfolio have voted to approve
this Agreement.
This Agreement may be terminated at any time without the payment of any
penalty by the vote of a majority of the members of the Board of Directors of
the Fund who are not Interested Persons of the Fund and who have no direct or
indirect or financial interest in the operation of the Plan or in any agreements
relating to the Plan, by the vote of the holders of a majority of the
outstanding Shares of the Fund (provided that if a majority of the outstanding
Shares of any Portfolio votes to terminate this Agreement, such termination
shall be effective with respect to such Portfolio whether or not the
shareholders of any other Portfolio have voted to terminate this Agreement) or
by the Distributor, upon not more than sixty (60) days' written notice to the
other party. This Agreement shall automatically terminate in the event of its
assignment.
13. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by the Distributor and by vote of a majority of the Board of Directors
of the Fund who are not Interested Persons of the Distributor.
14. NOTICES.
Any notices under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid to the other party at such address as such
other party may designate in writing for the receipt of such notice.
IN WITNESS WHEREOF, the Fund and the Distributor have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
APEX FUND, Inc.
/s/ Xxxxxxx Xxxxxx
By --------------------------
President
XXXXX XXXXX Financial Services
Corporation
/s/ Xxxxxx X. Xxxxx
By --------------------------
President
