EXHIBIT 10.35
UNDERWRITING AGREEMENT
THIS AGREEMENT, made this ___ day of ______, 199_, by and between
______________________ (hereinafter the "Company"), a Maryland corporation,
and Xxxxxxx & Xxxx, Inc. (hereinafter "W&R"), a Delaware corporation;
I. REPRESENTATIONS
A. The Company represents that
1) it is a registered open-end management
investment company (mutual fund), and
2) the shares of each of its classes of shares
("Fund") and of each sub-class thereof ("Class"), if any, are, as of the date
of the effectiveness of this Agreement as to each such Fund or Class,
registered with the Securities and Exchange Commission ("SEC") and qualified
or otherwise authorized for sale in all states of the United States as may be
agreed upon. (As to any Fund or Class not registered with the SEC and
qualified or otherwise authorized for sale in all states of the United States
as may be agreed upon, this Agreement shall become effective as to such Fund
or Class upon such registration and qualification or authorization.)
B. W&R represents that
1) it is a broker-dealer registered with the SEC
and is duly qualified to offer shares of the Company in all states in which
the shares are currently qualified or otherwise authorized for offer for sale;
2) it is a member of the National Association of
Securities Dealers, Inc. ("NASD");
3) it maintains a retail securities and insurance
sales organization consisting in part of a number of representatives
authorized under Federal and state securities laws to solicit as
representatives of W&R orders for Company shares and other securities;
4) it maintains and enforces procedures to enable
it to supervise its representatives and associated persons in accordance with
applicable securities laws, rules and regulations including the Rules of the
NASD; and
5) it maintains and enforces procedures to review
for compliance with applicable securities laws, rules and regulations all
sales literature and promotional materials used by it and authorized to be
used by its representatives in solicitation of orders to buy Company shares,
and it files, when applicable, such literature and materials with the NASD.
II. APPOINTMENT OF UNDERWRITER and OBLIGATIONS
The Company hereby, as applicable, appoints W&R or continues the
appointment of W&R, and W&R, as applicable, agrees to act or continues to
act, as the Company's principal underwriter under the terms and provisions of
this Agreement.
A. Company agrees
1) to use its best efforts to register from time
to time under the Securities Act of 1933 (the "Securities Act") adequate
amounts of its shares for sale by W&R to the public and to qualify or to
permit W&R to qualify such shares for offering to the public in such states
as may from time to time be agreed upon;
2) to immediately advise W&R (i) when any
post-effective amendment to its registration statement or any further
amendment or supplement thereto or any further registration statement or
amendment or supplement thereto becomes effective, (ii) of any request by the
SEC for amendments to the registration statement(s) or any then effective
prospectus or for additional information, (iii) of the issuance by the SEC of
any stop-order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose, and (iv) of the happening
of any event which makes untrue any material statement made in the
registration statement or any then effective prospectus or which, in the
opinion of counsel for the Company, requires the making of a change in the
registration statement or any then effective prospectus in order to make the
statements therein not misleading; in case of the happening at any time of
any event which materially affects the Company or its securities and which
should be set forth in a supplement to or an amendment of any then effective
prospectus in order to make the statements therein not misleading, to prepare
and furnish to W&R such amendment or amendments to that prospectus as will
correct the prospectus so that as corrected it will not contain, or such
supplement or supplements to that prospectus which when read in conjunction
with that prospectus will make the combined information not contain any
untrue statement of a material fact or any omission to state any material
fact necessary in order to make the statements in that prospectus not
misleading; if any time the SEC shall issue any stop-order suspending the
effectiveness of the registration statement, to make every reasonable effort
to obtain the prompt lifting of such order; and, before filing any amendment
to the registration statement or to any then effective prospectus, to furnish
W&R with a copy of the proposed amendment;
3) to advise W&R of the net asset value of the
shares of each of its Funds and Classes, as applicable, as often as computed
and to furnish to W&R as soon as practical such information as may be
reasonably requested by W&R in order that it may know all of the facts
necessary to sell shares of the Company;
4) to make delivery of its shares subject to the
provisions of its Articles of Incorporation and Bylaws to W&R as ordered by
W&R as soon as reasonably possible after receipt of the orders and against
payment of the consideration to be received by the Company therefor from W&R;
5) to pay or cause to be paid all expenses
incident to the issuance, transfer, registration and delivery of its shares,
all taxes in connection therewith, costs and expenses incident to preparing
and filing any registration statements and prospectuses and any amendments or
supplements to a registration statement or a prospectus, statutory fees
incidental to the registration of additional shares with the SEC, statutory
fees and expenses incurred in connection with any Blue Sky law qualifications
undertaken by or at the request of W&R, and the fees and expenses of the
Company's counsel, accountants or any other experts used in connection with
the foregoing; and
6) not without the consent of W&R to offer any of
its shares for sale directly or to any persons or corporations other than
W&R, except only
a) the reinvestment of dividends and/or
distributions or their declaration in shares of the Company, in optional form
or otherwise;
b) the issuance of additional shares to
stock splits or stock dividends;
c) sale of shares to another investment
or securities holding company in the process of purchasing all or a portion
of its assets;
d) in connection with an exchange of
shares of the Company for shares in another investment or securities holding
company;
e) the sale of shares to registered unit
investment trusts; or
f) in connection with the exchange of
one Fund's shares for shares of another Fund of the Company.
B. W&R agrees
1) to offer Company shares in such states as may
be agreed upon through its retail account representatives and, at its sole
discretion, through broker-dealers which are members of the NASD on such
terms as are not inconsistent with this Agreement;
2) to order shares from the Company only after it
has received a purchase order therefor;
3) to pay to the Company the net asset value of
shares sold within two business days after the day payment is received by W&R
at its principal place of business from the investor or broker-dealer, or pay
the Company at such other time as may be agreed upon hereafter by the Company
and W&R, or as may be prescribed by law or the Rules of the NASD;
4) in offering shares to comply with the
provisions of the Articles of Incorporation and Bylaws of the Company and
with the provisions stated in its applicable then current prospectus(es);
5) timely to inform the Company of any action or
proceeding to terminate, revoke or suspend W&R's registration as a
broker-dealer with the SEC, membership in the NASD, or authority with any
state securities commission to offer Company shares; and
6) to pay the cost of all sales literature,
advertising and other materials which it may at its discretion use in
connection with the sale of Company shares, including the cost of reports to
the shareholders of the Company in excess of the cost of reports to existing
shareholders and the cost of printing the prospectus(es) furnished to it by
the Company.
III. TERMS FOR SALE OF SHARES
A. It is mutually agreed that
1) W&R shall act as principal in all matters
relating to promotion and sale of Company shares, including the preparation
and use of all advertising, sales literature and other promotional materials,
and shall make and enter into all other arrangements, agreements and
contracts as principal on its own account and not as agent for the Company.
Title to shares issued and sold by the Company through W&R shall pass
directly from the Company to the dealer or investor, or shall first pass to
W&R as it may from time to time be determined by W&R and the Company; except
provided, however, that W&R may, if so agreed by W&R and the Company, act as
agent of the Company without commission on repurchase of shares of the
Company;
2) certificates for shares shall not be created
or delivered by the Company in any case in which the purchase is pursuant to
any provisions of the Company described in its applicable then current
prospectus(es) under the terms of which certificates are not to be issued to
the shareholder. Shares sold by W&R shall be registered in such name or names
and amounts as W&R may request from time to time, and all shares when so paid
for and issued shall be fully paid and non-assessable;
3) the offering price at which shares of the
Company may be sold by W&R shall include such selling commission as may be
applicable to that Class and as may be fixed from time to time by W&R but
shall not be in excess of 8.5 percent of the offering price. W&R shall retain
any such sales commission and may re-allow all or any part of the sales
commission to its account representatives and to selected brokers and dealers
who sell shares of the Company; and
4) W&R may designate, reduce or eliminate its
selling commissions in certain sales or exchanges to the extent described in
the applicable then current prospectus(es) of the Company and in accordance
with Section 22(d) of the Investment Company Act of 1940 and any rules,
regulations or orders of the SEC thereunder.
IV. THE PLAN
A. It is mutually acknowledged that the Company has adopted
a plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended (a "Plan"), which Plan is applicable to certain shares and that the
Company may in the future adopt Plans applicable to certain Funds and
Classes, respectively.
B. With respect to any Fund or Class as to which the
Company has adopted a Plan, pursuant to that Plan, each day the Company shall
pay to W&R a distribution fee and/or a service fee at the maximum rates and
under the terms and conditions set forth in the applicable Plan, as amended
from time to time, or such lesser amount as the Company and W&R may agree.
C. The Company shall, after excluding from the redemption
proceeds that portion represented by the reinvestment of dividends and
distributions and the appreciation of the value of Fund shares being
redeemed, promptly pay W&R an amount, if any, equal to the percent of the
amount invested as determined by W&R and as is then stated in the Company's
current prospectus applicable to the shares redeemed (the "contingent
deferred sales charge"). For purposes of determining the applicable
contingent deferred sales charge, if any: the redemptions shall be deemed in
order of investment made when more than one investment has been made; and
when the shares being redeemed were acquired by exchange of shares of another
Fund or Class of the Company, or corresponding class of another registered
investment company for which W&R or its affiliate serves as principal
underwriter, the investment shall be deemed as if it had been made when the
Company's shares were first purchased, and the applicable contingent deferred
sales charges, if any, shall be with respect to the amount originally
invested in Company shares; and provided that any contingent deferred sales
charge shall be determined in accordance with and in the manner set forth in
the applicable then current prospectus and any applicable Order or Rule
issued by the SEC.
D. It is contemplated that W&R may pay commissions to its
field sales force at the time of sale of the Company's shares and may incur
other expenses substantially in advance of receiving the distribution fee, if
any, that may be applicable to the payment of such commissions and expenses.
W&R recognizes that such payments are at its risk and that this Agreement may
be terminated or not continued as hereinafter provided without the payment to
it of any further distribution fees or service fees whatsoever and without
the payment of any penalty. The contingent deferred sales charges, if any,
shall, however, be payable to W&R with respect to all subject sales made
prior to the termination of this Agreement.
E. W&R shall at least quarterly provide to the Company's
board of directors a written report with respect to each Fund or Class, as
applicable, of the amounts of the distribution and/or service fees expended
and the purposes for which these expenditures were made. W&R shall in
addition furnish to the board of directors of the Company such information as
may be requested or as may be necessary to an informed determination by the
directors of whether or not the directors should continue the Company's
Plan(s) and continue this Agreement and to determine whether there is
reasonable likelihood that the Plan(s) and this Agreement will benefit the
Company and its shareholders affected by such Plan(s).
V. INDEMNIFICATION
A. The Company agrees with W&R for the benefit of W&R and
each person, if any, who controls W&R within the meaning of Section 15 of the
Securities Act and each and all and any of them, to indemnify and hold
harmless W&R and any such controlling person from and against any and all
losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act, under any other
statute, at common law or otherwise, and to reimburse the underwriter and
such controlling persons, if any, for any legal or other expenses (including
the cost of any investigation and preparation) reasonably incurred by them or
any of them in connection with any litigation whether or not resulting in any
liability, insofar as such losses, claims, damages, liabilities or litigation
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or any
prospectus or any amendment thereof or supplement thereto or arise out of or
are based upon 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; provided, however, that this indemnity agreement
shall not apply to amounts paid in settlement of any such litigation if such
settlement is effected without the consent of the Company or to any such
losses,
claims, damages, liabilities or litigation arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus or any amendment thereof or
supplement thereto, or arising out of or based upon 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, which statement or
omission was made in reliance upon information furnished in writing to the
Company by W&R for inclusion in any registration statement or any prospectus
or any amendment thereof or supplement thereto. W&R and each such controlling
person shall promptly, after the complaint shall have been served upon W&R or
such controlling person in any litigation against W&R or such controlling
person in respect of which indemnity may be sought from the Company on
account of its agreement contained in this paragraph, notify the Company in
writing of the commencement thereof. The omission of W&R or such controlling
person so to notify the Company of any such litigation shall relieve the
Company from any liability which it may have to W&R or such controlling
person on account of the indemnity agreement contained in this paragraph but
shall not relieve the Company from any liability which it may have to W&R or
controlling person otherwise than on account of the indemnity agreement
contained in this paragraph. In case any such litigation shall be brought
against W&R or any such controlling person and the underwriter or such
controlling person shall notify the Company of the commencement thereof, the
Company shall be entitled to participate in (and, to the extent that it shall
wish, to direct) the defense thereof at its own expense but such defense
shall be conducted by counsel of good standing and satisfactory to W&R or
such controlling person or persons, defendant or defendants in the
litigation. The indemnity agreement of the Company contained in this
paragraph shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of W&R or any such controlling person
and shall survive any delivery of shares of the Company. The Company agrees
to notify W&R promptly of the commencement of any litigation or proceeding
against it or any of its officers or directors of which it may be advised in
connection with the issue and sale of its shares.
B. Anything herein to the contrary notwithstanding, the
agreement in Section A of this article, insofar as it constitutes a basis for
reimbursement by the Company for liabilities (other than payment by the
Company of expenses incurred or paid in the successful defense of any action,
suit or proceeding) arising under the Securities Act, shall not extend to the
extent of any interest therein of any person who is an underwriter or a
partner or controlling person of an underwriter within the meaning of Section
15 of the Securities Act or who, at the date of this Agreement, is a director
of the Company, except to the extent that an interest of such character shall
have been determined by a court of appropriate jurisdiction the question of
whether or not such interest is against public policy as expressed in the
Securities Act.
C. W&R agrees to indemnify and hold harmless the Company
and its directors and such officers as shall have signed any registration
statement from and against any and all losses, claims, damages or
liabilities, joint or several, to which the Company or such directors or
officers may become subject under the Securities Act, under any other
statute, at common law or otherwise, and will reimburse the Company or such
directors or officers for any legal or other expenses (including the cost of
any investigation and preparation) reasonably incurred by it or them or any
of them in connection with any litigation, whether or not resulting in any
liability insofar as such losses, claims, damages, liabilities or litigation
arise out of, or are based upon, any untrue statement or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, which statement or omission was
made in reliance upon information furnished in writing to the Company by W&R
for inclusion in any registration statement or any prospectus, or any
amendment thereof or supplement thereto, or which statement was made in, or
the alleged omission was from, any advertising or sales literature (including
any reports to shareholders used as such) which relate to the Company.
W&R shall not be liable for amounts paid in settlement of
any such litigation if such settlement was effected without its consent. The
Company and its directors and such officers, defendant or defendants, in any
such litigation shall, promptly after the complaint shall have been served
upon the Company or any such director or officer in any litigation against
the Company or any such director or officer in respect of which indemnity may
be sought from W&R on account of its agreement contained in this paragraph,
notify W&R in writing of the commencement thereof. The omission of the
Company or such director or officer so to notify the underwriter of any such
litigation shall relieve W&R from any liability which it may have to the
Company or such director or officer on account of the indemnity agreement
contained in this paragraph, but shall not relieve W&R from any liability
which it may have to the Company or such director or officer otherwise than
on account of the indemnity agreement contained in this paragraph. In case
any such litigation shall be brought against the Company or any such officer
or director and notice of the commencement thereof shall have been so given
to W&R, W&R shall be entitled to participate in (and, to the extent that it
shall wish, to
direct) the defense thereof at its own expense, but such defense shall be
conducted by counsel of good standing and satisfactory to the Company. The
indemnity agreement of W&R contained in this paragraph shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Company and shall survive any delivery of shares of the
Company. W&R agrees to notify the Company promptly of the commencement of any
litigation or proceeding against it or any of its officers or directors or
against any such controlling person of which it may be advised, in connection
with the issue and sale of the Company's shares.
D. Notwithstanding any provision contained in this
Agreement, no party hereto and no person or persons in control of any party
hereto shall be protected against any liability to the Company or its
security holders to which they would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of
their duties or by reason of their reckless disregard of their obligations
and duties under this Agreement.
VI. OTHER TERMS
A. This Agreement shall not be deemed to limit W&R from
acting as underwriter and/or dealer for any other mutual fund, from engaging
in any other aspects of the securities business, whether or not such may be
deemed in competition with the sale of shares of the Company, and to carry on
any other lawful business whatsoever.
B. Except as expressly provided in Article V and
hereinabove, the agreements herein set forth have been made and are made
solely for the benefit of the Company and W&R, and the persons expressly
provided for in Article V, their respective heirs and successors, personal
representatives and assigns, and except as so provided, nothing expressed or
mentioned herein is intended or shall be construed to give any person, firm
or corporation other than the Company, W&R and the persons expressly provided
for in Article V any legal or equitable right, remedy or claim under or in
respect of this Agreement or any representation, warranty or agreement herein
contained. Except as so provided, the term "heirs, successors, personal
representatives and assigns" shall not include any purchaser of shares merely
because of such purchase.
C. This Agreement shall continue in effect, unless
terminated as hereinafter provided, for a period of one (1) year and
thereafter only if such continuance is specifically approved at least
annually by the Board of Directors, including the vote of a majority of the
directors who are not parties to the Agreement or "interested persons" (as
defined in the Investment Company Act of 1940) or any such party and who have
no direct or indirect financial interest in the operation of any Plan or any
agreement relating to that Plan (hereafter the "Plan directors"), cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement may be terminated by W&R at any time without penalty upon giving
the Company sixty (60) days' written notice (which notice may be waived by
the Company) and may be terminated by the Company at any time without penalty
upon giving W&R sixty (60) days' written notice (which notice may be waived
by W&R), provided that such termination by the Company shall be directed or
approved by the vote of a majority of the Plan directors, or by the vote of a
majority (as defined in the Investment Company Act of 1940) of the
outstanding voting securities of a Fund with respect to that Fund. This
Agreement shall automatically terminate in the event of its assignment, the
term "assignment" for this purpose having the meaning defined in Section
2(a)(4) of the Investment Company Act of 1940.
D. This Agreement shall be governed and construed in
accordance with the laws of Kansas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers and their corporate
seals to be affixed as of the day and year first above written.
--------------------------------
By:_____________________________
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XXXXXXX & XXXX, INC.
By:____________________________
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