EX-99.B(e)-scua
UNDERWRITING AGREEMENT
THIS AGREEMENT, made this 18th day of August, 1999, by and between
United Small Cap Fund, Inc. (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 appoints W&R, and W&R agrees 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) and statement of
additional information;
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) and statement of additional information 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) and statement of additional information
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 (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
and statement of additional information 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 statement of additional information 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.
United Small Cap Fund, Inc.
By: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx, Vice President
ATTEST:
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Assistant Secretary
XXXXXXX & XXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
ATTEST:
By: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx, Secretary
