Exhibit (e)
UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS UNDERWRITING AND DISTRIBUTION AGREEMENT ("Agreement"), made as of
the 31st day of October, 2002, by and between Status Fund, Inc., a
Minnesota corporation, (the "Fund") and UFS SECURITIES LLC, a Nebraska limited
liability company (the "Distributor").
WITNESSETH:
In consideration of the mutual covenants herein contained and other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. UNDERWRITING SERVICES. The Fund hereby engages the Distributor, and
the Distributor hereby agrees to act, as principal underwriter for the Fund in
the sale and distribution to the public of the Retail Class A shares (the "Class
A Shares") and the Institutional class shares (the "Institutional Shares" and
together with the Class A Shares the "Shares") of the portfolios of the Fund
referred to herein (the "Portfolios"), either through dealers or otherwise. The
Distributor agrees to offer such Shares for sale at all times when such Shares
are available for sale and may lawfully be offered for sale and sold. The
Distributor acknowledges that (I) it has received a copy of the Fund's
Distribution Plan for its Class A Shares (the "Plan") and (ii) will comply with
the terms of the Plan.
SECTION 2. SALE OF FUND SHARES. Such Shares are to be sold on the following
terms:
(a) All subscriptions, offers or sales shall be subject to
acceptance or rejection by the Fund. Any offer or sale shall be
conclusively presumed to have been accepted by the Fund if the
Fund shall fail to notify the Distributor of the rejection of
such offer or sale prior to the computation of the net asset
value of the Fund's Shares next following receipt by the Fund of
notice of such offer or sale.
(b) No share of the Fund shall be sold by the Distributor for any
consideration other than cash or for any amount less than the
net asset value of such Share, computed as provided in the
currently effective Prospectus of the Fund (the "Net Asset
Value"). Except as provided below, all Shares of the Fund sold
by the Distributor shall be sold at the public offering price,
as hereinafter defined.
(c) Subject to paragraph (b) above, the public offering price of the
Shares shall be (I) for Institutional Shares, the Net Asset
Value thereof next determined following receipt of an order by
the Fund's transfer agent, and (ii) for the Class A Shares, the
Net Asset Value thereof next determined following receipt of an
order by the Fund's transfer agent PLUS the sales load, if any,
which shall be such percentage of the public offering price,
computed to the nearest cent, as may be agreed upon by the Fund
and the Distributor and specifically approved by the Board of
Directors of the Fund (the "Sales Load"), provided that no
schedule of Sales Loads shall be effective until set forth in a
prospectus of the Fund meeting the requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and the
Investment Company Act of 1940, as amended (the "1940 Act").
Said Sales Load may be graduated on a scale based on the dollar
amount of Shares sold.
(d) The Sales Load may, at the discretion of the Fund and the
Distributor, be reduced or eliminated as permitted by the 1940
Act and the rules and regulations thereunder, as they may be
amended from time to time, or as set forth from time to time in
the Prospectus of the Fund, provided that the Fund shall in no
event receive for any Shares sold an amount less than Net Asset
Value thereof.
SECTION 3. INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. The fund may
extend to its shareholders with respect to any of its Portfolios the
right to purchase Shares issued by such Portfolio at the Net Asset Value
thereof with the proceeds of any dividend or capital gain distribution
paid or payable by such Portfolio to its shareholders.
SECTION 4. REGISTRATION OF SHARES. The Fund agrees to make prompt and
reasonable efforts to effect and keep in effect, at its own expense, the
registration or qualification of its Shares for sale, in such
jurisdictions as the Fund may designate.
SECTION 5. INFORMATION TO BE FURNISHED TO AND FROM THE DISTRIBUTOR.
(a) The Fund agrees that it will furnish the Distributor
with such information with respect to the affairs and
accounts of the Fund, as the Distributor may, from time
to time, reasonably require, and further agrees that the
Distributor, at all reasonable times, shall be permitted
to inspect the books and records of the Fund.
(b) The Distributor agrees to provide a quarterly written
report to the Board of Directors of the Fund as required
by the Plan.
SECTION 6. ALLOCATION OF EXPENSES. During the period of this agreement,
the Fund shall pay or cause to be paid all expenses, costs and fees
incurred by the Fund which are not assumed by the Distributor. The
Distributor shall pay all costs of distributing the Shares including,
but not limited to, compensation in addition to Sales Loads, if any,
paid to registered representatives of the Distributor and to the
broker/dealers that have entered into sales agreements with the
Distributor, costs of printing and distributing prospectuses, statements
of additional information and shareholder reports for new shareholders,
costs of printing, preparing and distributing sales literature, costs of
preparing and running advertisements on radio, television, newspapers or
magazines and costs connected with the use of a "toll-free" telephone
number for the Fund, and other distribution related expenses (the
"Distribution Expenses").
SECTION 7. COMPENSATION TO THE DISTRIBUTOR.
(a) As compensation for all of its services provided and its
costs assumed under this Agreement for the Institutional
Shares, the Fund shall reimburse the Distributor for its
actual Distribution Expenses incurred in connection with
sales of Institutional Shares. All such reimbursements
will be separately computed for and paid by each
Portfolio and will be based on the actual Distribution
Expenses incurred with respect thereto. On or before the
15th day of each month, the Distributor shall provide
the Fund with an itemized list of costs of distribution
incurred during the preceding month with respect to
distribution of Institutional Shares of each Portfolio.
The Fund shall reimburse the Distributor for such costs
within 30 days of receipt of such itemized list.
(b) As compensation for all of its services provided and its
costs assumed under this Agreement for the Class A
Shares, the Distributor shall receive the following
forms and amounts of Compensation, to the extent
permitted by the Plan and Rule 12b-1 of the 1940 Act.
(i) Sales Loads
On sales of Class A Shares of the Fund, the
Distributor shall receive the Sales Load, if
any. The amount of such Sales Load may be
retained or deducted by the Distributor from any
sums received by it in payment for Class A
Shares so sold. If such amount is not deducted
by the Distributor from such payments, such
amount shall be paid to the Distributor by the
Fund not later than five business days after the
close of any month during which any such sales
were made by the Distributor and payment
received by the Fund.
(ii) Rule 12b-1 Compensation Arrangement
The Distributor may receive reasonable
compensation for distribution related services
to the extent permitted by the Plan of
Distribution (the "Plan") and Rule 12b-1 of the
1940 Act. Amounts payable to the Distribution
under the Plan may exceed or be less than the
Distributor's actual Distribution Expenses. In
the event such Distribution Expenses exceed
amounts payable to the Distributor under the
Plan, the Distributor shall not be entitled to
reimbursement by the Fund.
SECTION 8. LIMITATION OF THE DISTRIBUTOR'S AUTHORITY.
The Distributor shall be deemed to be an authorized contractor
and, except as specifically provided or authorized herein, shall have no
authority to act for or represent the Fund.
SECTION 9. SUBSCRIPTION FOR SHARES--REFUND FOR CANCELLED ORDERS
The Distributor shall subscribe for the Shares of the Fund only
for the purpose of covering purchase orders already received by it or
for the purpose of investment for its own account. In the event that an
order for the purchase of Shares of the Fund is placed with the
Distributor by a customer or dealer and subsequently cancelled, the
Distributor shall forthwith cancel the subscription for such Shares
entered on the books of the Fund, and, if the Distributor has paid the
Fund for such Shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
(a) the consideration received by the Fund for said Shares;
or
(b) the Net Asset Value of such Shares at the time of
cancellation by the Distributor.
SECTION 10. INDEMNIFICATION OF THE FUND.
The Distributor agrees to indemnify the Fund against any and all
litigation and other legal proceedings of any kind or nature and against
any liability, judgment, cost or penalty imposed as a result of such
litigation or proceedings in any way arising out of or in connection
with the sale or distribution of the Shares of the Fund by the
Distributor. In the event of the threat or institution of any such
litigation or legal proceedings against the Fund, Distributor shall
defend such action on behalf of the Fund at its own expense, and shall
pay any such liability, judgment, cost or penalty resulting therefrom,
whether imposed by legal authority or agreed upon by way of compromise
and settlement; PROVIDED, HOWEVER, the Distributor shall not be required
to pay or reimburse the Fund for any liability, judgment, cost or
penalty incurred as a result of an omission to supply information by the
Fund to the Distributor, or to the Distributor by a director, officer or
employee of the Fund who is not an "Interested Person" of the
Distributor (as defined in Section 2(a)(19) of the 1940 Act and their
rules, regulations and releases relating thereto), unless the
information so supplied or omitted was available to the Distributor or
the Fund's investment adviser without recourse to the Fund or any such
Interested Person of the Fund.
SECTION 11. FREEDOM TO DEAL WITH THIRD PARTIES.
The Distributor shall be free to render to others services of a
nature either similar to or different from those rendered under this
contract, except such as may impair its performance of the services and
duties to be rendered by it hereunder.
SECTION 12. EFFECTIVE DATE, DURATION, AND TERMINATION OF AGREEMENT.
The effective date of this Agreement shall be the date first
above written. Unless sooner terminated as hereinafter provided, this
Agreement shall continue, in effect from year to year, but only so long
as such continuance is specifically approved at least annually either:
(i) by the vote of a majority of the Board of Directors of the Fund,
including the specific approval of a majority of the directors who are
not Interested Persons of the Fund or of the Distributor and who have no
direct or indirect financial interest in the operation of the Plan, or
in any agreements relating to the Plan, cast in person at a meeting
called for the purpose of voting on such approval; or (ii) by the vote
of the holders of a majority of the outstanding Shares of the Fund;
provided that if a majority of the outstanding Shares of any Portfolio
votes to approve this Agreement, such approval shall be effective with
respect to such Portfolio whether or not the shareholders of any other
Portfolio have voted to approve this Agreement. Wherever referred to in
this Agreement, the vote or approval of the holders of a majority of the
outstanding Shares of the Fund or any Portfolio of the Fund shall mean
(I) the vote of 67% or more of such Shares, if the holders of more than
50% of such Shares are present in person or by proxy; or (ii) the vote
of more than 50% of such Shares, whichever is less.
This Agreement may be terminated at any time without the payment
of any penalty by (i) the vote of a majority of the members of the Board
of Directors of the Fund who are not Interested Persons of the Fund and
who have no direct or indirect financial interest in the operation of
the Plan or in any agreements relating to the Plan, (ii) by the vote of
the holders of a majority of the outstanding Shares of the Fund
(provided that if a majority of the outstanding Shares of any Portfolio
votes to terminate this Agreement, such termination shall be effective
with respect to such Portfolio whether or not the shareholders of any
other Portfolio have voted to terminate this Agreement) or (iii) by the
Distributor, upon not more than sixty (60) days' written notice to the
other party. This Agreement shall automatically terminate in the event
of its assignment.
SECTION 13. AMENDMENTS TO AGREEMENT. No material amendments to this
Agreement shall be effective until approved by the Distributor and
approved (i) by a vote of the majority of the Board of Directors of the
Fund and (ii) by vote of a majority of the Board of Directors of the
Fund who are not Interested Persons.
SECTION 14. NOTICES.
Any notices under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid to the other party at such address
as such other party may designate in writing for the receipt of such
notice.
SECTION 15. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of
the State of Minnesota and the applicable provisions of the 1940 Act. To
the extent the applicable laws of the State of Minnesota, or any
provision herein, conflict with the applicable provisions of the 1940
Act, the latter shall control.
IN WITNESS WHEREOF, the Fund and the Distributor have caused this
Agreement to be executed by their duly authorized officers as of the day
and year first above written.
Stratus Fund, Inc.
By /s/ Xxxxxxx X. Xxxxxx
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President
UFS Securities LLC
By /s/ Xxxx Xxxxx
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President
