UNDERWRITING AGREEMENT
BETWEEN
X. XXXX PRICE RETIREMENT FUNDS, INC.
AND
X. XXXX PRICE INVESTMENT SERVICES, INC.
THIS UNDERWRITING AGREEMENT, made as of the 4th day of September,
2002, by and between X. XXXX PRICE RETIREMENT FUNDS, INC., a corporation
organized and existing under the laws of the State of Maryland (hereinafter
called the Corporation"), and X. XXXX PRICE INVESTMENT SERVICES, INC., a
corporation organized and existing under the laws of the State of Maryland
(hereinafter called the "Distributor").
WITNESSETH:
WHEREAS, the Corporation 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 Corporation is authorized to issue shares of capital stock
("Shares") in separate series, with each such series representing the interests
in a separate portfolio of securities and other assets; and
WHEREAS, the Corporation intends initially to offer Shares in five series,
X. Xxxx Price Retirement 2010 Fund, X. Xxxx Price Retirement 2020 Fund, X. Xxxx
Price Retirement 2030 Fund, X. Xxxx Price Retirement 2040 Fund, and X. Xxxx
Price Retirement Income Fund (the "Funds"), such series together with any other
series which may be established later and served by the Distributor hereunder,
being herein referred to collectively as the "Funds" and individually referred
to as a "Fund"); 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, Inc. ("Price Associates") or X. Xxxx Price
International, Inc. ("Price International") 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 Corporation desires the Distributor to act as the distributor
in the public offering of the Shares of the Funds;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
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1.
DELIVERY OF CORPORATION DOCUMENTS. The Corporation has furnished Distributor
with copies, properly certified or authenticated, of each of the following:
(a) Articles of Amendment and Restatement, dated September 26, 2002.
(b) By-Laws of the Corporation as in effect on the date hereof.
(c)
Resolutions of the Board of Directors of the Corporation selecting Distributor
as
principal underwriter for the Funds and approving this form of agreement.
The Corporation 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 Corporation shall furnish Distributor promptly with properly certified
or authenticated copies of any registration statements filed by it on behalf of
the Funds 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 Corporation's prospectus, on behalf of the Funds, the
Distributor is authorized to sell, as agent for the Corporation, on behalf of
the Funds, 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 Price International 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 Funds by accepting unconditional orders to purchase
the Shares placed with Distributor by investors or by selected dealers 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.
The Distributor shall have the right to enter into selected dealer
agreements with registered and qualified securities dealers and other financial
institutions of its choice for the sale of Shares, provided that the Fund shall
approve the forms of such agreements. Within the United States, the Distributor
shall offer and sell Shares only to such selected dealers as are members in good
standing of the NASD or are institutions exempt from registration under
applicable federal securities laws. Shares sold to selected dealers shall be for
resale by such dealers only at the public offering price as defined in Paragraph
5 hereof.
3.
SALE OF SHARES BY THE CORPORATION. The rights granted to the Distributor shall
be nonexclusive in that the Corporation, on behalf of the Funds, reserves the
right to sell Shares of the Funds to investors pursuant to applications received
and accepted by the Corporation or its transfer agent. Further, the Corporation
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 Corporation or the Corporation'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
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to Distributor to accept orders for Shares, or to make sales on behalf of the
Funds 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 Corporation 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 Corporation to shareholders by virtue of their being shareholders of the
Funds.
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 Corporation, on behalf of the Funds, including redeemed or repurchased
Shares if and to the extent that they may be legally sold and if, but only if,
the Corporation 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 Corporation's Articles of
Incorporation, with respect to the Funds, as now in effect, or as they may be
amended (and as reflected in the then current prospectus of the Corporation,
with respect to the Funds), next 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
Corporation reserves the right to suspend sales and Distributor's authority to
accept orders for Shares on behalf of the Funds if, in the judgment of the Board
of Directors of the Corporation, it is in the best interests of the Corporation
or Funds to do so, such suspension to continue for such period as may be
determined by the Board of Directors; and in that event, no orders to purchase
Shares shall be processed or accepted by the Distributor on behalf of the Funds
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.
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 Corporation, on
behalf of the Funds, 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 Funds shall
make available to the Distributor at the expense of the Distributor such number
of copies of the currently effective prospectus pertaining to the Funds as the
Distributor may reasonably request. The Funds 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.
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8.
AUTHORIZED REPRESENTATIONS. The Corporation 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.
Neither Distributor nor any selected dealer nor any other person is
authorized by the Corporation to give on behalf of the Funds 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, on behalf of the Funds, 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 Funds 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 Corporation.
9.
REGISTRATION AND SALE OF ADDITIONAL SHARES. The Corporation, on behalf of the
Funds, will, from time to time, use its best efforts to register under SA-33,
such Shares of the Funds as Distributor may reasonably be expected to sell on
behalf of the Funds. In connection therewith, the Corporation, on behalf of the
Funds, hereby agrees to register an indefinite number of Shares pursuant to Rule
24f-2 under ICA-40, as amended. The Corporation, on behalf of the Funds, 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
Funds, and to maintain such qualification.
10.
EXPENSES. The Corporation or Funds, as appropriate, 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 registration and qualification of Shares for sale in
the various states in which the Funds shall determine it advisable to qualify
such Shares for sale. (Including registering the Corporation as a broker or
dealer or any officer of the Corporation or other person as agent or salesman of
the Corporation in any state.);
c. of preparing, setting in type, printing and mailing any report or other
communication to shareholders of the Funds in their capacity as such;
d. of preparing, setting in type, printing and mailing prospectuses annually to
existing shareholders;
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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 Funds.
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 Corporation 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
Corporation or Funds, as appropriate, and each of the Corporation's directors,
officers, employees, representatives and each person, if any, who controls the
Corporation or Funds 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 Corporation or Funds or such of the Corporation's 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
5
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 Corporation, on behalf of the Funds, 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 Corporation by Distributor. In no case (i) is
Distributor's indemnity in favor of the Corporation or Funds, as appropriate, or
any person indemnified to be deemed to protect the Corporation or Funds, as
appropriate, or such indemnified person against any liability to which the
Corporation or Funds, as appropriate, 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 Corporation or Funds, as appropriate, or any person
indemnified unless the Corporation or Funds, as appropriate, 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
Corporation or Funds, as appropriate, or upon such person (or after the
Corporation or Funds 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 Corporation or Funds 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 Corporation, on behalf of the Funds, 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
Corporation, 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
Corporation, on behalf of the Funds, 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 Corporation 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 Corporation, on behalf of the Funds, 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
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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 Corporation or any of
the Corporation'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 Corporation, on
behalf of the Funds, 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 Corporation. In no case (i) is the Corporation'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 Corporation, on behalf of the Funds, 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 Corporation 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 Corporation of any such claim shall not relieve the
Corporation from any liability which the Corporation may have to Distributor or
any person against whom such action is brought otherwise than on account of the
Corporation's indemnity agreement contained in this Paragraph.
The Corporation, on behalf of the Funds, shall be entitled to participate, at
its own expense, in the defense, or, if the Corporation, on behalf of the Funds,
so elects, to assume the defense of any suit brought to enforce any such claim,
but, if the Corporation, on behalf of the Funds, elects to assume the defense,
such defense shall be conducted by legal counsel chosen by the Corporation, on
behalf of the Funds, 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 Corporation, on
behalf of the Funds, 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 Corporation, on behalf of the Funds, does not elect to assume
the defense of any such suit, the Corporation, on behalf of the Funds, 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
Corporation, on behalf of the Funds, 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.
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, 2003 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 Corporation who
are not interested persons of Distributor or of the Corporation, cast in person
at a meeting
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called for the purpose of voting on such approval, and by vote of the directors
of the Corporation or of a majority of the outstanding voting securities of the
Corporation. 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 Corporation who are not interested persons of Distributor or
the Corporation, by a vote of a majority of the outstanding voting securities of
the Corporation, or by Distributor. This Agreement will automatically terminate
in the event of its assignment. In interpreting the provisions of this Paragraph
14, 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.
15.
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 Corporation should at any time deem it
necessary or advisable in the best interests of the Corporation 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 Corporation may terminate this Agreement
forthwith. If Distributor should at any time request that a change be made in
the Corporation'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
Corporation, on behalf of the Funds, should not make such necessary change
within a reasonable time, Distributor may terminate this Agreement forthwith.
16.
ADDITIONAL FUNDS. In the event that the Corporation establishes one or more
series of Shares in addition to the Funds 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.
17.
MISCELLANEOUS. It is understood and expressly stipulated that neither the
shareholders of the Funds, nor the directors of the Corporation 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.
18.
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
Corporation, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and if to the
Distributor, at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
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ATTEST: X. XXXX PRICE RETIREMENT FUNDS, INC.
/s/Xxxxxxxx X. Xxxxxxx By: /s/Xxxxxx X. Xxxxxx III
Xxxxxxxx X. Xxxxxxx, Secretary Xxxxxx X. Xxxxxx III, President
ATTEST: X. XXXX PRICE INVESTMENT SERVICES, INC.
/s/Xxxxxxx X. Xxx Xxxx By: /s/Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxx Xxxx, Secretary Xxxxx X. Xxxxxxx, Vice President
L:\TRPPROD\EDG\Agreements\Underwriting Agreements\XxxxxXXX.xx
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