MARKETING AGREEMENT
This Agreement is made as of this 16th day of May, 1997, among Security
Distributors, Inc. ("SDI"), a Kansas corporation, located at 000 XX Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxx 00000, and MFR Advisors, Inc. ("MFR Advisors"), Xxxxx
Xxxxxxx Xxxxxxx Securities, Inc. ("MFR Securities"), and Xxxxx Xxxxxxx Xxxxxxx,
Inc. ("MFR") (collectively referred to herein as the "MFR Parties" or
individually as an "MFR Party"), each a New York corporation located at Xxx
Xxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
WITNESSETH:
WHEREAS, SDI is registered as a broker-dealer under SEA-34 and is a member
of the National Association of Securities Dealers, Inc. ("NASD");
WHEREAS, MFR Securities is also registered as a broker-dealer under SEA-34
and is a member of the NASD;
WHEREAS, MFR Advisors is an investment adviser registered under the
Investment Advisers Act of 1940;
WHEREAS, MFR is the parent company of MFR Securities and MFR Advisors;
WHEREAS, SDI is the distributor of the following series of Security Income
Fund (the "Fund"): Emerging Markets Total Return Series, Global Asset Allocation
Series and Global High Yield Series (collectively referred to herein as the
"Series");
WHEREAS, MFR Advisors is the investment adviser to each of the Series; and
WHEREAS, SDI desires to engage MFR Securities to market the Series;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. ADDITIONAL DEFINITIONS
(a) AFFILIATE -- With respect to a person, any other person controlling,
controlled by, or under common control with, such person.
(b) APPLICATION -- An application to purchase shares of a Series and any
other forms required to be completed in connection with a purchase of
shares.
(c) EFFECTIVE DATE -- The date as of which this Agreement is executed.
(d) ICA-40 -- The Investment Company Act of 1940, as amended.
(e) PROSPECTUS -- The prospectus and statement of additional information,
if any, included within a Registration Statement, except that, if the
most recently filed prospectus and statement of additional information
filed pursuant to Rule 497 under SA-33 subsequent to the date on which
a Registration Statement became effective differs from the prospectus
and statement of additional information included within such
Registration Statement at the time it became effective, the term
"Prospectus" shall refer to the most recently filed prospectus and
statement of additional information filed under Rule 497 under SA-33,
from and after the date on which they each shall have been filed. For
purposes of Section 12 of this Agreement, the term "any Prospectus"
means any document which is or at any time was a Prospectus within the
meaning of this definition.
(f) REGISTRATION STATEMENT -- At any time that this Agreement is in
effect, each currently effective registration statement, or currently
effective post-effective amendment thereto, relating to the Series,
including financial statements included in, and all exhibits to, such
registration statement or post-effective amendment. For purposes of
Section 12 of this Agreement, the term "Registration Statement" means
any document which is or at any time was a Registration Statement
within the meaning of this definition.
(g) REGULATIONS -- The rules and regulations promulgated by the SEC under
SA-33, SEA-34 and ICA-40.
(h) SA-33 -- The Securities Act of 1933, as amended.
(i) SEA-34 -- The Securities Exchange Act of 1934, as amended.
(j) SEC -- The Securities and Exchange Commission.
(k) SECURITY FUNDS -- The group of mutual funds for which Security
Management Company, LLC is investment adviser.
2. SOLICITATION ACTIVITIES AND APPLICATIONS
MFR Securities agrees that its solicitation activities with respect to the
shares of the Series shall be subject to applicable laws and regulations,
any procedures provided by SDI, and the rules set forth herein:
(a) MFR Securities shall use Applications and other materials approved by
SDI for use in the solicitation activities with respect to shares of
the Series.
(b) During the term of this Agreement, no MFR Party, nor any officer,
director, employee or agent shall intentionally encourage a
broker-dealer to exchange shares of the Security Funds owned by his or
her clients for shares of any other mutual fund, including the Series
except (i) with SDI's written consent or (ii) to comply with
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applicable laws, regulations or rules, including but not limited to
the NASD Conduct Rules.
(c) All solicitation and sales activities engaged in by MFR Securities'
registered representatives in regard to the Series shall be in
compliance with all applicable federal and state securities laws and
regulations. No such registered representative shall solicit the sale
of shares of any Series unless at the time of such solicitation such
individual is properly licensed by the NASD and all applicable state
securities regulatory authorities.
(d) Neither MFR Securities nor any registered representative thereof shall
give any written information or make any written or oral
representation in regard to the Series in connection with the offer or
sale of shares thereof that is inconsistent with the then-currently
effective Prospectus for such Series.
(e) Neither MFR Securities nor any registered representative thereof shall
offer, attempt to offer, or solicit Applications for purchases of
shares of the Series in any state or other jurisdiction as to which
SDI has notified MFR Securities that such shares may not legally be
sold or offered for sale.
3. ADMINISTRATION
(a) SDI shall confirm to each applicant for and purchaser of shares of the
Series in accordance with Rule 10b-10 under SEA-34 acceptance of
payments and such other transactions as are required to be confirmed
by Rule l0b-10 or administrative interpretations thereunder, or any
NASD requirements.
(b) SDI shall maintain and preserve such books and records with respect to
the Series in conformity with the requirements of Rules 17a-3 and
17a-4 under SEA-34 including, to the extent such requirements apply,
all books and records with respect to confirmations provided under
Rule 10b-10.
(c) SDI shall report periodically to MFR Securities the amount of
production for each Series in a format mutually acceptable to SDI and
MFR Securities.
4. MARKETING
MFR Securities shall have responsibility for the marketing arrangements,
marketing materials and marketing practices, respecting shares of the
Series, subject to SDI's right to require that MFR Securities discontinue
any marketing arrangement or practice or use of any marketing material. MFR
Securities shall be responsible for hiring and maintaining a group of
wholesalers to promote sales of shares of the Series and the ongoing
supervision of such wholesalers. MFR Securities also shall be responsible
for the design and preparation of all promotional, sales and advertising
material relating to the Series. No promotional, sales or advertising
material may be used by any party without the approval of the other party.
Prior to any use with members of the public, the following procedures shall
be observed:
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(a) Each party shall provide to the other party copies of any promotional,
sales and advertising material developed by such party, if any, for
such other party's review and written approval, and each party shall
be given a reasonable amount of time to complete its review.
(b) Each party shall respond on a prompt and timely basis in approving any
such material and shall act reasonably in connection therewith.
(c) SDI shall be responsible for filing all promotional sales or
advertising material, as required, with the NASD, and state securities
regulatory authorities.
(d) SDI shall notify the other party expeditiously of any comments
provided by the NASD or any securities regulatory authority on such
material and will cooperate expeditiously in resolving and
implementing any comments, as applicable.
Each party reserves the right, after having approved a piece of material,
to object to further use of such material and may require the other party
to cease use of such material.
5. COMPENSATION
(a) COMPENSATION OF MFR SECURITIES
SDI shall pay MFR Securities the following amounts in connection with
sales of shares of the Series:
(1) a payment on sales of Class A shares in an amount equal to the
"applicable percentage of the offering price" less the
"percentage reallowable to dealers" as set forth in the Series'
prospectus; and
(2) a payment on sales of Class B shares in the amount of .25% of the
net asset value of each Class B share sold.
Notwithstanding the foregoing, SDI will not compensate MFR Securities
in connection with sales of Class A shares at net asset value, nor
sales of Class A or Class B shares sold through broker/dealers other
than the broker/dealers listed on Schedule A hereto, as it may be
amended by the parties from time to time.
(b) COMPENSATION OF SELLING DEALERS
SDI shall compensate broker-dealers in connection with sales of shares
of the Series according to the fee schedule set forth in the Selling
Agreements between SDI and such broker-dealers. A sample selling
agreement is Exhibit A to this Agreement.
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6. EXPENSES
(a) MFR SECURITIES
With respect to this Agreement, MFR Securities shall pay all expenses
in connection with:
(1) the printing of the Prospectus and any supplements thereto and
Semiannual Reports for the Series for distribution to prospective
shareholders of the Series;
(2) the printing of the promotional, sales and advertising material
including Applications relating to the Series;
(3) the fees charged by NSCC with respect to transactions in shares
of the Series;
(4) the compensation of wholesalers and other employees of MFR
Securities who support marketing of the Series;
(5) expenses associated with the registration and training of
wholesalers and other employees of MFR Securities involved in the
distribution of shares of the Series; and
(6) commissions on sales of Class A shares in amounts of $1,000,000
or more.
(b) SDI
With respect to this Agreement, SDI shall pay the administrative
expenses associated with compensating selling broker-dealers and
maintaining selling agreements with such broker-dealers.
(c) BILLING
SDI will pay: (1) the fees of NSCC incurred in connection with sales
of shares of the Series, and (2) commissions on sales of Class A
shares in amounts of $1,000,000 or more. SDI will xxxx MFR Securities
monthly for such fees and commissions paid, and MFR Securities will
remit payment to SDI within 30 days of receipt of such xxxx. In
addition, MFR may engage SDI or an Affiliate to design and/or print
promotional materials, Applications and Prospectuses and SDI or such
Affiliate will xxxx periodically MFR Securities for such services. MFR
Securities will remit payment to SDI promptly upon receipt of such
xxxx.
(d) OTHER EXPENSES
Other than as specifically provided in this Agreement each party shall
pay all expenses that it incurs in connection with this Agreement.
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7. REPRESENTATIONS AND WARRANTIES OF THE MFR PARTIES
(a) Each of the MFR Parties represents and warrants to SDI on the
Effective Date that:
(1) Each MFR Party has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of New
York with full power and authority to own, lease and operate its
properties and conduct its business and is in good standing, in
each state or jurisdiction in which its business so requires.
(2) The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein have been duly authorized
by all necessary corporate action by each MFR Party, and when so
executed and delivered this Agreement shall be the valid and
binding obligation of each such party enforceable in accordance
with its terms.
(3) The consummation of the transactions contemplated herein, and the
fulfillment of the terms of this Agreement, shall not conflict
with, result in any breach in any material respect of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default in any material respect under, the
articles of incorporation or bylaws of any MFR Party, or any
indenture, agreement, mortgage, deed of trust, or other
instrument to which any MFR Party is a party or by which it is
bound, or, to the best of its knowledge, violate in any material
respect any law, any order, rule or regulation applicable to the
MFR Party of any court or of any federal or state regulatory
body, administrative agency or any other governmental
instrumentality having jurisdiction over the MFR Party or any of
its properties.
(b) The MFR Parties further represent and warrant to SDI on the effective
date of the initial Registration Statement for the Series, and
undertake to use their best efforts to ensure as of the effective date
of each subsequent Registration Statement, that:
Neither the Registration Statement nor the Prospectus contains an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances in which they
were made; provided, however, that none of the representations and
warranties in this Section 8(b) shall apply to statements or omissions
from a Registration Statement or Prospectus made in reliance upon and
in conformity with information furnished to any MFR Party in writing
by SDI (or any Affiliate thereof) for use in such Registration
Statement or Prospectus.
8. UNDERTAKINGS OF THE MFR PARTIES
The MFR Parties undertake as follows:
(a) The MFR Parties shall notify SDI immediately upon discovery or in any
event as soon as possible under the following circumstances.
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(1) Of any event which makes any material statement made in the
Registration Statement or the Prospectus untrue in any material
respect or results in a material omission in the Registration
Statement or the Prospectus;
(2) Of any request by the SEC for any amendment to the Registration
Statement, or any supplement to the Prospectus, or statement of
additional information;
(3) Of the issuance by the SEC of any notice pursuant to Section 8(e)
of ICA-40, any stop order with respect to the Registration
Statement or any amendment thereto, or the initiation of any
proceedings for that purpose or for any other purpose relating to
the registration and/or offering of shares of the Series;
(4) Of any event of the Series' noncompliance with the applicable
requirements of the Internal Revenue Code or regulations,
rulings, or interpretations thereunder that could jeopardize any
Series' status as a regulated investment company;
(5) Of any loss or suspension of the approval of the Series or
distribution of shares thereof by a state securities regulatory
body, administrative agency, or any other governmental
instrumentality of any state or jurisdiction authorizing the sale
of shares of the Series, or any loss or suspension of approval or
clearance in any such state or jurisdiction;
(6) Of any material adverse change in the condition (financial or
otherwise) of any Series that would cause the information in the
Registration Statement to be materially misleading; and
(7) Of any event which causes a representation or warranty of the MFR
Parties contained in this Agreement to no longer be true.
(b) MFR Advisors shall provide SDI access to such records, officers and
employees of MFR Advisors at reasonable times as is necessary to
enable SDI to fulfill its obligation, as the underwriter under SA-33
for shares of the Series and as principal underwriter for the Series
under ICA-40, to perform due diligence and to use reasonable care.
(c) MFR Securities will use its best efforts to maintain its registration
as a broker-dealer under SEA-34 and its membership with the NASD, and
will use its best efforts to maintain its registration as a
broker-dealer with the applicable securities authorities under the
laws of any applicable state or jurisdiction where necessary in
connection with its obligations under this Agreement.
(d) MFR Securities will notify SDI if its SEC broker-dealer registration
or NASD membership is terminated or if it is the subject of any
proceeding that, in its reasonable judgment, is likely to result in
such termination.
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9. REPRESENTATIONS AND WARRANTIES OF SDI
SDI represents and warrants to the MFR Parties on the Effective Date as
follows:
(a) SDI has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Kansas with full power
and authority to own, lease and operate its properties and to conduct
its business, and is in good standing, in each state in which its
business so requires.
(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein have been duly authorized by a
necessary corporate action by SDI, and when so executed and delivered
this Agreement shall be the valid and binding obligation of SDI
enforceable in accordance with its terms.
(c) The consummation of the transactions contemplated herein, and the
fulfillment of the terms of this Agreement, shall not conflict with,
result in any breach in any material respect of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default in any material respect under, the articles of incorporation
or bylaws of SDI, or any indenture, agreement, mortgage, deed of
trust, or other instrument to which SDI is a party or by which it is
bound, or to the best of SDI's knowledge violate in any material
respect any law, or, to the best of SDI's knowledge, any order, rule
or regulation applicable to SDI of any court or of any federal or
state regulatory body, administrative agency or any other governmental
instrumentality having jurisdiction over SDI or any of its properties.
(d) SDI is registered as a broker-dealer under SEA-34, is a member of the
NASD, and is duly registered as a broker-dealer under the securities
laws of the states or jurisdictions to the extent required in
connection with its obligations under this Agreement.
10. UNDERTAKINGS OF SDI
SDI undertakes as follows:
(a) SDI will use its best efforts to maintain its registration as a
broker-dealer under SEA-34 and its membership with the NASD, and will
use its best efforts to maintain its registration as a broker-dealer
with the applicable securities authorities under the laws of any
applicable state or jurisdiction where necessary in connection with
its obligations under this Agreement.
(b) SDI will notify the MFR Parties if its SEC or state broker-dealer
registration or NASD membership is terminated or if it is the subject
of any proceeding that, in its reasonable judgment, is likely to
result in such termination.
(c) SDI shall notify the MFR Parties immediately upon discovery or in any
event as soon as possible under the following circumstances:
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(1) Of any material adverse change in the condition (financial or
otherwise) of SDI that would materially affect SDI's obligations
with respect to the distribution of shares of the Series; and
(2) Of any event which causes a representation or warranty of SDI
contained in this Agreement to no longer be true.
11. INVESTIGATIONS AND PROCEEDINGS
(a) COOPERATION
SDI and the MFR Parties shall cooperate fully in any securities
regulatory investigation or proceeding or judicial proceeding to the
extent that such investigation or proceeding is in connection with the
offering, sale or distribution of shares of the Series distributed
under this Agreement. Without limiting the foregoing, SDI and the MFR
Parties shall notify each other promptly of any notice of any
regulatory investigation or proceeding or judicial proceeding, arising
in connection with the offering, sale or distribution of the shares
distributed under this Agreement, received by either party.
(b) CUSTOMER COMPLAINT
SDI and the MFR Parties shall notify each other promptly in the case
of a substantive customer complaint arising in connection with the
offering, sale or distribution of the shares distributed under this
Agreement. In addition, SDI and the MFR Parties shall cooperate in
investigating such complaint and any response by either party to such
complaint shall be sent to the other party for written approval not
less than five business days prior to its being sent to the customer
or any regulatory authority, except that if a more prompt response is
required, the proposed response shall be communicated by telephone or
facsimile. In any event, neither party shall release any such response
without the other party's prior written approval.
12. INDEMNIFICATION
(a) BY SDI
SDI agrees to indemnify and hold harmless the MFR Parties and the
directors and officers thereof and each person, if any, who controls
the MFR Parties within the meaning of Section 15 of SA-33
(collectively, the "Indemnified Parties" for purposes of this Section
12(a)), against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement with the written
consent of SDI) or litigation (including legal and other expenses) to
which the Indemnified Parties may become subject under any statute or
regulation, at common law, or otherwise, insofar as such losses,
claims, expenses, damages, liabilities (or actions in respect thereof)
or settlements:
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(1) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact or omission or alleged
omission to state a material fact required to be stated therein
or necessary in order to make the statements therein not
misleading, in light of the circumstances in which they were
made, contained in any Registration Statement or in any
Prospectus; to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon information furnished
by SDI thereto; or
(2) result because of any use by SDI of promotional, sales or
advertising material not authorized by the MFR Parties or any
written or oral misrepresentations by SDI or any unlawful sales
practices concerning the Series by SDI under federal securities
laws or NASD regulations or other applicable law; or
(3) arise out of or result from any material breach by SDI of any
provision of this Agreement.
This indemnification shall be in addition to any liability that SDI
may otherwise have; provided, however, that no Indemnified Party shall
be entitled to indemnification pursuant to this provision if such
loss, claim, expense, damage, liability or litigation is due to the
willful misfeasance, bad faith or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this
Agreement.
SDI shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified SDI in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon
such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure
to notify SDI of any such claim shall not relieve SDI from any
liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified
Party, SDI will be entitled to participate, at its own expense, in the
defense thereof. SDI also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action.
After notice from SDI to such party of SDI's election to assume the
defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional legal counsel retained by it, and SDI will
not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
SDI agrees to promptly notify the MFR Parties of the commencement of
any litigation or proceedings against it or the Fund or any of SDI's
directors, officers, employees or agents in connection with the sale
of shares of any Series.
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(b) BY THE MFR PARTIES
Each MFR Party, jointly and severally, agrees to indemnify and hold
harmless SDI and each of its directors and officers and each person,
if any, who controls SDI within the meaning of Section 15 of SA-33
(collectively, the "Indemnified Parties" for purposes of this Section
12(b)), against any and all losses, claims, expenses, damages,
liabilities (including amounts paid in settlement with the written
consent of each MFR Party) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under
any statute or regulation, at common law, or otherwise, insofar as
such losses, claims, expenses, damages, liabilities (or actions in
respect thereof) or settlements:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact or omission or alleged
omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, in
light of the circumstances in which they were made, contained in
any Registration Statement or in any Prospectus; provided that
the MFR Parties shall not be liable in any such case to the
extent that such loss, liability, damage, claim or expense arises
out of, or is based upon, an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon
information furnished by SDI for use in the preparation of any
such Registration Statement or any amendment thereof or
supplement thereto; or
(2) result because of any use by any MFR Party or any officer,
director, employee or agent thereof of promotional, sales and/or
advertising material that has not been approved by SDI in
accordance with Section 4 of this Agreement or any written or
oral misrepresentations by any MFR Party or any officer,
director, employee or agent thereof or any unlawful sales
practices concerning shares of the Series by any MFR Party, or
any officer, director, employee, or agent thereof under the
federal securities laws or NASD regulations or other applicable
law; or
(3) arise out of or result from any material breach by any MFR Party
of any provision of this Agreement.
(4) This indemnification shall be in addition to any liability that
any MFR Party may otherwise have; provided, however, that no
Indemnified Party shall be entitled to indemnification pursuant
to this provision if such loss, claim, expense, damage, liability
or litigation is due to the willful misfeasance, bad faith or
gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement.
The MFR Parties shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the MFR
Parties in writing within a reasonable time after the summons or
other first legal process giving information of the nature of
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the claim shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify the MFR
Parties of any such claim shall not relieve the MFR Parties from
any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought
against the Indemnified Party, the MFR Parties will be entitled
to participate, at their own expense, in the defense thereof. The
MFR Parties also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After
notice from the MFR Parties to such party of the MFR Parties'
election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional legal counsel
retained by it, and the MFR Parties will not be liable to such
party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of
investigation.
The MFR Parties agree to promptly notify SDI of the commencement
of any litigation or proceedings against any MFR Party or any of
their directors, officers, employees or agents in connection with
the sale of any shares of the Series.
(c) SURVIVAL OF INDEMNIFICATION
The indemnification provisions contained in this Section 12 shall
remain operative in full force and effect, regardless of (1) any
investigation made by or on behalf of the MFR Parties or SDI or by or
on behalf of any controlling person thereof, and (2) any termination
of this Agreement. A successor by law of SDI or the MFR Parties, as
the case may be, shall be entitled to the benefits of the
indemnification provisions contained in this Section.
13. CONFIDENTIAL AND PROPRIETARY INFORMATION
At all times throughout the term of this Agreement, and following any
termination or expiration of this Agreement, each party and all of its
respective Affiliates, and each officer, director, shareholder, employee or
agent thereof, shall maintain the confidentiality of (i) this Agreement,
(ii) the transactions and other matters contemplated herein, (iii) any
proprietary or other information provided by one party to the other party
to facilitate the transactions contemplated herein, provided that this
obligation of confidentiality shall not apply to: (i) disclosures required
to be made to any regulatory bodies, administrative agencies or other
governmental instrumentalities or disclosures deemed by such party to be
desirable to disclose to any such entity; (ii) disclosures made to
attorneys, accountants and other representatives in order to assist in the
consummation of the transactions and other matters contemplated herein;
(iii) disclosures otherwise required by applicable law; or (iv) disclosures
to which the other party consents; provided further that, with respect to
the immediately foregoing clauses (i) and (iii), any party that makes such
a disclosure shall so notify the other party prior to or simultaneously
with making such disclosure to the extent
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reasonably practicable; and provided further that, with respect to the
foregoing clause (ii), a party shall make disclosures regarding this
Agreement and the transactions contemplated herein only to such party's
attorneys, accountants and other third party representatives who agree to
keep such information confidential in accordance with this Section.
14. DURATION AND TERMINATION OF THIS AGREEMENT
(a) TERM
This Agreement shall become effective upon the Effective Date and
shall remain in effect from year to year thereafter, unless terminated
as provided herein.
(b) TERMINATION
This Agreement may be terminated at any time, on 60 days written
notice, without the payment of any penalty, by any party hereto.
(c) ASSIGNMENT
This Agreement will automatically terminate in the event of its
assignment, as such term is defined in ICA-40, without the prior
written consent of the other party.
(d) TERMINATION UPON MATERIAL BREACH
This Agreement may be terminated at the option of either party to this
Agreement upon the other party's material breach of any provision of
this Agreement or of any representation made in this Agreement, unless
such breach has been cured within 10 days after receipt of notice of
breach from the non-breaching party.
(e) EFFECT OF TERMINATION
Upon termination of this Agreement all authorizations, rights and
obligations shall cease except the obligations contained in Sections
7(b), 8(a) and (b), 11, 12 and 13 hereof.
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.
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16. MISCELLANEOUS
(a) CAPTIONS
The captions in this Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
(b) COUNTERPARTS
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.
(c) RIGHTS, REMEDIES, ETC., ARE CUMULATIVE
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are
entitled to under state and federal laws. Failure of either party to
insist upon strict compliance with any of the conditions of this
Agreement shall not be construed as a waiver of any of the conditions,
but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provisions, whether or not similar,
nor shall any waiver constitute a continuing waiver.
(d) INTERPRETATION: JURISDICTION
This Agreement constitutes the whole agreement between the parties
hereto with respect to the subject matter hereof, and supersedes all
prior oral or written understandings, agreements or negotiations
between the parties with respect to such subject matter. No prior
writings by or between the parties with respect to the subject matter
hereof shall be used by either party in connection with the
interpretation of any provision of this Agreement. This Agreement
shall be construed and its provisions interpreted under and in
accordance with the internal laws of the state of Kansas without
giving effect to principles of conflict of laws.
(e) SEVERABILITY
This is a severable Agreement. In the event that any provision of this
Agreement would require a party to take action prohibited by
applicable federal or state law or prohibit a party from taking action
required by applicable federal or state law, then it is the intention
of the parties hereto that such provision shall be enforced to the
extent permitted under the law, and, in any event, that all other
provisions of this Agreement shall remain valid and duty enforceable
as if the provision at issue had never been a part hereof.
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(f) REGULATION
This Agreement shall be subject to the provisions of SA-33, SEA-34 and
ICA-40 and the Regulations and the rules and regulations of the NASD,
from time to time in effect, including such exemptions from ICA-40 as
the SEC may grant, and the terms hereof shall be interpreted and
construed in accordance therewith. Without limiting the generality of
the foregoing, the term "assigned" shall not include any transaction
exempted from Section 15(b)(2) of ICA-40.
17. NOTICE, CONSENT AND REQUEST
Any notice, consent or request required or permitted to be given by either
party to the other shall be deemed sufficient if sent by facsimile
transmission followed by Federal Express or other overnight carrier, or if
sent by registered or certified mail, postage prepaid, addressed by the
party giving notice to the other party at the following address (or at such
other address, for a party as shall be specified by like notice):
if to SDI:
Security Distributors, Inc.
Attn: Xxx X. Xxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
if to MFR:
Xxxxx Xxxxxxx Xxxxxxx, Inc.
Attn: Xxxxx Xxxxxxx
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
if to MFR Securities:
Xxxxx Xxxxxxx Xxxxxxx Securities, Inc.
Attn: Xxxxx Xxxxxx
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
and if to MFR Advisors:
MFR Advisors, Inc.
Attn: Xxxxx Xxxxxxx
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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IN WITNESS WHEREOF, the parties have each duly executed this Agreement as
of the day and year first above written.
SECURITY DISTRIBUTORS, INC.
By Its Authorized Officer
By: XXXXX X. XXXXXXX
-----------------------------
Title: Xxxxx X. Xxxxxxx, Vice President
Date: August 21, 1997
XXXXX XXXXXXX XXXXXXX, INC.
By Its Authorized Officer
By: XXXXX X. XXXXXXX
-----------------------------
Title: Xxxxx Xxxxxxx Xxxxxxx, President and CEO
Date: 9/15/97
MFR ADVISORS, INC.
By Its Authorized Officer
By: XXXXX X. XXXXXXX
-----------------------------
Title: Xxxxx Xxxxxxx Xxxxxxx, President and CEO
Date: 9/15/97
XXXXX XXXXXXX XXXXXXX SECURITIES, INC.
By Its Authorized Officer
By: XXXXX XXXXXX
-----------------------------
Title: Xxxxx Xxxxxx, Chief Executive Officer
Date: 9/15/97
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