Exhibit 99(e)
VALUE LINE LEVERAGED GROWTH INVESTORS, INC.
UNDERWRITING CONTRACT
This Agreement made this 14th day of February, 1972, between VALUE
LINE LEVERAGED GROWTH INVESTORS, INC., a Maryland corporation (hereinafter
called "the Fund") and VALUE LINE SECURITIES, INC., a New York corporation
(hereinafter called "the Underwriter").
WITNESSETH
WHEREAS the Fund and the Underwriter desire to enter into an
Underwriting Contract, for the sale of shares of the Fund in certain limited
offerings, through the Underwriter acting as agent for the Fund, to dealers
and investors, all subject to, and in compliance with, the provisions of the
Securities Act of 1933 and of the Investment Company Act of 1940, and of all
other applicable laws and regulations.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Sec. 1. INTERPRETATION AND CONSTRUCTION
A. In this Underwriting Contract, unless the context otherwise
requires, -
(a) the expression "dealer" means a dealer in securities who is a
member of the National Association of Securities Dealers, Inc., or a
dealer who is a 'non-member broker or dealer in a foreign country
who is not
eligible for membership in a registered securities association
as that phrase is used in Paragraph (c) of Section 25 of the Rules of
Fair Practice of the National Association of Securities Dealers, Inc.,
or as that or any similar phrase is used in any amendment of, or
substitute for, that Rule:
Provided that all future sales agreement contemplated by this
Underwriting Contract with such non-eligible foreign dealers shall contain
provisions forbidding the sale of shares of the Fund by such dealers to
residents, citizens or nationals of the United States or to purchasers who
such dealers have reason to believe may resell such shares to such persons;
(b) the expression "shares" means shares of the capital stock of the
Fund;
(c) the expression "shareholder" means a registered holder of shares;
(d) the expression "prospectus" means the prospectus of the Fund;
(e) the expression "net asset value", in relation to a share, means
the net asset value of that share determined in accordance with the
provisions of the currently effective prospectus;
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(g) the expression "selling commission" means, in relation to the
sale of shares, that part of the public offering price treated as selling
commission, determined in accordance with the provisions of the currently
effective prospectus;
(h) the expression "dealer's discount", in relation to the sale of
shares, means the proportion of the selling commission allowed to a dealer
when such sale is made by him;
(i) the expression "sales agreement" means an agreement relating to
the sale of shares in the form authorized by Section 7 of this
Underwriting Contract, and in effect between the Underwriter and a dealer.
B. Any reference in this Underwriting Contract to a term or thing in the
singular shall, where the context requires, also constitute a reference to
such terms or things in the plural.
Sec. 2 APPLICATION OF UNDERWRITING CONTRACT
This Underwriting Contract relates to the issue and sale of shares which
are from time to time duly authorized and registered and available for sale
by the Fund, including repurchased and treasury shares, if and to the extent
that such shares may legally be sold, but if, and only if, the Board of
Directors of the Fund sees fit to sell them and only to the extent set forth
in Sec. 3 below.
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Sec. 3. APPOINTMENT OF UNDERWRITER
The Fund hereby appoints Value Line Securities, Inc. as the principal
underwriter (as defined in the Investment Company Act of 1940) and general
distributor of the shares of the Fund but only in connection with certain
limited offerings as described in the first effective prospectus of the Fund.
Sec. 4. GRANT OF AUTHORITY TO UNDERWRITER TO SELL SHARES
A. The Fund hereby grants to the Underwriter of authority to sell shares
as agent of the Fund; and in consideration of the grant of such authority the
Underwriter agrees, subject to the terms of any further instructions given
to it from time to time by the Fund, to use its best efforts to sell shares
to BONA FIDE investors and to solicit orders for shares from responsible
dealers, all upon the terms, and subject to the conditions, set forth in this
Underwriting Contract.
B. The Fund hereby grants to the Underwriter the authority, during the
term of this Underwriting Contract, to sell for the Fund shares to be issued
or sold by the Fund on orders for such shares placed with the Underwriter by
investors or by dealers with whom the Underwriter has sales agreements.
C. The authority to sell shares granted to the Underwriter by the
foregoing provisions of this Section shall, subject as hereinafter provided,
be exclusive:
Provided that such exclusive authority shall not apply or have effect in
relation to -
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(a) shares issued by the Fund to shareholders as a stock dividend;
(b) shares offered by the Fund to shareholders for reinvestment of
cash distributed by the Fund to shareholders (together with cash received
to pay for full shares) in any case where, by virtue of the provisions of
the currently effective prospectus, no selling commission is required to
be paid by the shareholder in the circumstances;
(c) shares issued by the Fund to shareholders in connection with a
reorganization or recapitalization of the Fund, or the merger or
consolidation of any other investment company with the Fund, or the
acquisition by the Fund, by purchase or otherwise, of all or substantially
all of the assets of any other investment company or all or substantially
all of the outstanding stock of any cash investment company.
(d) shares issued by the Fund at the asset value per share to any
registered unit investment trust or foreign unit investment trust which is
the issuer of periodic payment plan certificates (as that expression is
defined in the Investment Company Act of 1940) the net proceeds of which
are invested in shares of the Fund, and to any foreign investment company
substantially all the assets of which, or substantially all the assets
attributable to a class of shares of which, consist of shares of the Fund.
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D. The Underwriter hereby agrees that no selling commission shall be paid -
(a) in respect of any purchase of shares by the Fund's directors or
officers, or by the Underwriter, or by the Fund's Manager and Investment
Adviser, or by the directors, officers and BONA FIDE full-time employees
or sales representatives of the Underwriter or of the Fund's Manager and
Investment Adviser who have acted as such for not less than ninety days,
or by any pension or profit sharing plan established for any of such
persons, in any case where the purchaser of such shares gives a written
assurance that the purchase is made for investment purposes and that the
shares will not be resold except through redemption or repurchase by or on
behalf of the Fund, to the extent permitted by Rule 22d-1 under the
Investment Company Act of 1940; or
(b) in respect of any purchase of shares in exercise of the dividend
reinvestment privilege as set forth in the currently effective prospectus.
Sec. 5. SALES OF SHARES; PRICE AND TIME
The Fund agrees that it will cause the public offering price of shares to
be computed on each day during which the New York Stock Exchange ("the NYSE")
is open for trading as of the close of the NYSE to the extent required in
connection with the limited offerings of its shares contemplated by Sec. 3.
hereof.
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All sales of shares made hereunder, in respect of an order received by
the Underwriter prior to the close of the NYSE on a day when the NYSE is open
for trading, shall be at the public offering price computed as of the time of
such close.
The public offering price for orders received by dealers prior to the
close of the NYSE on a day when the NYSE is open for trading shall be the
public offering price computed as of the time of such close, provided the
order is accepted by the Underwriter and received by the Underwriter prior to
5:00 P.M. (New York City time) on that day.
Orders received by dealers on any day after the close of the NYSE, or on
any day on which the NYSE is not open for trading, shall be filled, if
accepted by the Underwriter at the public offering price computed as of the
next close of the NYSE.
Sec. 6. COMPENSATION FOR SALES OF SHARES
A. As compensation for any sale of shares hereunder the Underwriter
shall be entitled to retain the applicable selling commission, less the
amount of the applicable dealer's discount (if any) which shall be paid to
the dealer in any case where he makes the sale.
B. The Fund shall in all cases receive not less than the difference
between the public offering price in effect at the time of the sale and the
selling commission.
Sec. 7. SALES AGREEMENTS
The form of all sales agreements between the Underwriter and dealers
shall at all times be in such form as may from time to time be approved by
the Board of Directors of the Fund.
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Sec. 8. COVENANTS BY UNDERWRITER
A. The Underwriter agrees that in selling shares it will in all respects
duly conform with all federal and state laws relating to the sale of such
securities.
B. The Underwriter agrees that it will endeavor to ensure that dealers
sell shares of the Fund only to bona fide investors and that the method and
materials used in selling such shares are sound and conservative.
C. The Underwriter agrees that it will indemnify and save harmless the
Fund from any damage or expense on account of any wrongful act done by it or
by its representatives.
D. All written communications or reports to shareholders or investors
and all sales literature and all advertisements or radio or television
broadcasts used in connection with the sale of shares or relating to the Fund
or the management of the Fund shall be approved in writing in advance of any
use thereof by the Board of Directors of the Fund or a duly authorized
representative of such Board.
Sec. 9. PAYMENT OF CHARGES BY FUND
The Fund agrees that it will pay, or cause to be paid, in connection
with the limited offerings mentioned in Sec. 3 hereof, expenses for
registering shares under Federal laws and regulations, transfer agent fees
and the cost of preparing, printing and mailing stock certificates.
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Sec. 10. PAYMENT OF CHARGES BY UNDERWRITER
The Underwriter agrees that it will pay, or cause to be paid all
expenses of the limited offerings contemplated by Sec. 3 hereof which are not
set forth in Sec. 9 hereof.
Sec. 11. DEALINGS WITH THE FUND
The Underwriter agrees that it will not deal with the Fund as principal
in connection with purchases or sales of securities or other property for the
account of the Fund, and that it will not take any long or short positions in
shares.
Sec. 12. GUARANTEE BY UNDERWRITER OF NET PURCHASE PRICE TO FUND
With respect to any shares which are from time to time hereafter issued
pursuant to instructions of the Fund upon receipt of the net purchase price
therefor by check but prior to clearance of such check through the Fund's
account, the Underwriter, in each such instance, guarantees to the Fund the
payment in full of such check and agrees to indemnify the Fund against, and
save it harmless from, any and all loss, cost, expense or damage which it may
directly or indirectly suffer, or be subject to, as a result of any such
check not being promptly honored in full upon presentment thereof for payment.
Sec. 13. AMENDMENT OF CONTRACT, BY-LAWS, ETC.
A. If at any time during the term of this Underwriting Contract the Fund
considers it necessary or advisable in its best
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interests that any amendment of this Underwriting Contract be made in order
to comply with any recommendations or requirements of the Securities and
Exchange Commission or other government authority, or to obtain any advantage
under federal or state tax laws, and notifies the Underwriter of the form of
amendment which it considers necessary or advisable and the reasons therefor,
and if the Underwriter declines to assent to such amendment, then the Fund
may terminate this Underwriting Contract forthwith.
B. If at any time during the term of this Underwriting Contract, upon
request by the Underwriter, the Fund fails after a reasonable time to make any
changes in its Articles of Incorporation or By-Laws or in its methods of
doing business which are necessary in order to comply with any requirements
of federal law or regulation of which the Underwriter is or may be a member,
relating to the sales of shares, then the Underwriter may terminate this
Underwriting Contract forthwith.
Sec. 14. APPROVAL AND CONTINUANCE OF UNDERWRITING CONTRACT
A. This Underwriting Contract shall become effective on the date hereof
and shall continue in effect, unless terminated as hereinafter provided, for
a period of two years and thereafter only if such continuance is specifically
approved at least annually by the Board of Directors of the Fund, 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)
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or any such party, cast in person at a meeting called for the purpose of
voting on such approval, or by the vote of the holders of a majority (as so
defined) of the outstanding voting securities of the Fund and by the vote of
a majority of the directors who are not parties to this Agreement or
"interested persons" (as so defined) of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
B. This Underwriting Contract may, on sixty (60) days' written notice to
the other party, be terminated at any time without payment of penalty -
(a) by the Fund acting pursuant to a direction given by a majority
of the Board of Directors of the Fund or by a vote of the holders of a
majority of the outstanding shares; or
(b) by the Underwriter.
C. This Underwriting Contract shall automatically terminate in the event
of its assignment (as defined in the Investment Company Act of 1940).
Sec. 15. COVENANT BY UNDERWRITER WITH REGARD TO ASSOCIATION WITH FUND
The Underwriter agrees that if it ceases to be the principal
underwriter, as defined in the Investment Company Act of 1940, of the Fund,
then -
(a) if the Fund continues thereafter to use the name Value Line
Leveraged Growth Investors, Inc.,
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or any other name including the words "Value Line", the Underwriter
will, upon receipt of a written request from the Fund, thenceforth cease
to use the name "Value Line Securities, Inc." or any other name including
the words "Value Line"; and
(b) the Underwriter will not thenceforth in any manner refer to or
otherwise publicise its former association with the Fund.
IN WITNESS WHEREOF the Fund has caused this instrument to be executed in
its name and behalf and under its corporate seal by one of its Vice
Presidents thereunto duly authorized and the Underwriter has caused this
instrument to be executed in its name and behalf and under its corporate seal
by its President thereunto duly authorized, all as of the date and year first
above written.
VALUE LINE LEVERAGED GROWTH INVESTORS, INC.
By /s/ Xxxxxx Xxxxxxxx
-----------------------------------------
V. Pres.
Attest /s/ Xxxxx Xxxxxx
-------------------------
Secretary
VALUE LINE SECURITIES, INC.
By /s/ Xxxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
President
Attest /s/ Xxxxx Xxxxxx
-------------------------
Secretary
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AGREEMENT AMENDING
UNDERWRITING CONTRACT
THIS AGREEMENT, made as of the 3rd day of April, 1972 between VALUE LINE
LEVERAGED INVESTORS, INC., a Maryland corporation (hereinafter called ("xxx
Xxxx") and VALUE LINE SECURITIES, INC., a New York corporation (hereinafter
called "the Underwriter")
W I T N E S S E T H
WHEREAS the Fund and the Underwriter duly entered into an Underwriting
Contract made the 14th day of February, 1972 (hereinafter called "the
Underwriting Contract")
AND WHEREAS the Fund and the Underwriter have mutually agreed to amend
Section 3 of the Underwriting Contract to remove certain limitations on the
effect of the appointment of the Underwriter as principal underwriter (as
defined in the Investment Company Act of 1940) and general distributor of the
shares of the Fund.
NOW, THEREFORE, the parties hereto agree that Section 3 of the Underwriting
Contract should be amended by deleting the words "but only in connection with
certain limited offerings as described in the first effective prospectus of the
Fund".
IN WITNESS WHEREOF, the Fund has caused this instrument to be executed in
its name and behalf and under its corporate seal by its Vice President thereunto
duly authorized, and the Underwriter has caused this instrument to be executed
in its name and behalf and under its corporate seal by its President
thereunto duly authorized, all as of the day and year first above written.
VALUE LINE LEVERAGED GROWTH INVESTORS, INC.
ATTEST
By /s/ Xxxxxx Xxxxxxxx
-------------------------------------------
Xxxxxx Xxxxxxxx, Vice President
/s/ Xxxxx Xxxxxx
----------------
Xxxxx Xxxxxx
Secretary
VALUE LINE SECURITIES, INC.
ATTEST
By /s/ Xxxxxxxx X. Xxxxxxxx, Xx.
------------------------------------------
Xxxxxxxx X. Xxxxxxxx, Xx., President
/s/ Xxxxx Xxxxxx
----------------
Xxxxx Xxxxxx
Secretary
