AMENDED UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 25th day of August, 1993, by and among
Piper Institutional Funds Inc., a Minnesota corporation (the "Piper Funds"),
Xxxxx Xxxxxxx Inc., a Delaware corporation (the "Distributor") and Piper
Capital Management Incorporated, a Delaware corporation (the "Adviser")
(the "Agreement").
WITNESSETH:
1. UNDERWRITING SERVICES. Piper Funds hereby engages the
Distributor, and the Distributor hereby agrees to act, as principal
underwriter for Piper Funds in the sale and distribution to the public of
Piper Funds shares of common stock, $.01 par value (the "Shares"), 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 Shares may be offered in one or
more series (the "Series"), with each designated Series representing a
separate portfolio of investments. The three Series currently outstanding
are Institutional Money Market Fund, Institutional Government Adjustable
Portfolio and Enhanced 500 Fund. Other Series may be created in the future
by Piper Fund's Board of Directors.
2. SALE OF PIPER FUNDS SHARES. Such Shares are to be sold only on
the following terms:
(a) All subscriptions, offers or sales shall be subject to
acceptance or rejection by Piper Funds. Any offer or sale shall be
conclusively presumed to have been accepted by Piper Funds if Piper Funds
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 Shares next following
receipt by Piper Funds of notice of such offer or sale.
(b) No Share 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
Piper Funds. With respect to Institutional Money Market Fund, the net asset
value per Share is normally expected to be $1.00. All Shares sold by the
Distributor shall be sold at the public offering price, as hereinafter
defined, provided that, with respect to a Series sold with a Sales Load (as
hereinafter defined), the Distributor may allow, or sell at, a discount from
said public offering price to broker-dealers that have entered into sales
agreements with the Distributor, which discount shall be no greater than the
Sales Load.
(c) The public offering price of the Shares shall be the net asset
value thereof next determined following receipt of an order by the
Distributor plus the
sales load or loading charge, if any, which shall be such percentage of the
public offering price, computed to the nearest cent, as is set forth in
Section 7(a) hereof, or as otherwise may be agreed upon in writing by Piper
Funds and the Distributor and specifically approved by the Board of Directors
of Piper Funds (the "Sales Load"), provided that no schedule of Sales Loads
shall be effective until set forth in a prospectus of Piper Funds meeting the
requirements of the Securities Act of 1933. Said Sales Load may be graduated
on a scale based upon the dollar amount of Shares sold.
(d) The Sales Load may, at the discretion of Piper Funds and the
Distributor, be reduced or eliminated as permitted by the Investment Company
Act of 1940, and the rules and regulations thereunder, as they may be amended
from time to time, provided that such reduction or elimination shall be set
forth in the currently effective prospectus for Piper Funds, and provided
that Piper Funds shall in no event receive for any Shares sold an amount less
than the net asset value thereof.
3. INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. Piper Funds may
extend to its shareholders the right to purchase Shares of any Series (or
Shares of any series of Xxxxx Xxxxxxx Investment Trust Inc. or Piper Global
Funds Inc. or any other open-end investment management companies or series
thereof managed by the Adviser) at the net asset value thereof with the
proceeds of any dividend or capital gain distribution paid or payable by a
Series of Piper Funds to its shareholders.
4. REGISTRATION OF SHARES. Piper Funds 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
Piper Funds may designate.
5. INFORMATION TO BE FURNISHED TO DISTRIBUTOR. Piper Funds agrees
that it will furnish the Distributor with such information with respect to
the affairs and accounts of Piper Funds 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
Piper Funds.
6. ALLOCATION OF EXPENSES. During the period of this agreement,
Piper Funds shall pay or cause to be paid all expenses, costs and fees
incurred by Piper Funds which are not assumed by the Adviser. The Adviser
shall pay all costs of distributing the Shares, including any direct costs
incurred by the Distributor under this Agreement.
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7. COMPENSATION TO DISTRIBUTOR. As compensation for all of its
services provided under this Agreement, the Distributor shall receive the
following forms and amounts of compensation:
(a) With respect to Institutional Government Adjustable Portfolio,
the Distributor shall receive the difference between the total amount charged
and received by the Distributor as the purchase price for the Shares and the
net asset value thereof. Such difference shall be equal to the Sales Loads
indicated below as a percentage of the public offering price and the net
asset value. As indicated, the Sales Loads are reduced on a graduated scale
on single purchases of $500,000 or more. Sales Loads for any future Series
shall be set forth in an amendment to this Agreement.
Sales Load as a Sales Load as a Sales Load as a Dealer Reallowance
Amount of Transaction Percentage of Percentage of as a Percentage of
at Offering Offering Price Net Asset Value Offering Price
--------------------- -------------- --------------- --------------------
Less than $250,000 1.00% 1.01% .75%
$250,000 but less than
$500,000 0.50% 0.50% .375%
$500,000 and over 0% 0% .0%
A percentage of the offering price, as set forth above, may be
reallowed by the Distributor to broker-dealers in connection with the sale of
Institutional Government Adjustable Portfolio Shares. The amount of the
Sales Loads set forth above may be retained or deducted by the Distributor
from any sums received by it in payment for Shares so sold. If such amount
is not deducted by the Distributor from such payments, such amount shall be
paid to the Distributor by Piper Funds 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 Piper Funds.
(b) It is understood and agreed by the parties hereto that sales of
Institutional Money Market Fund Shares and Enhanced 500 Fund Shares will
benefit the Adviser, an affiliate of the Distributor; therefore the
Distributor will receive no additional compensation for services it performs
hereunder in connection with sales of such Shares. However, the Adviser may
from time to time, from its own resources, pay the Distributor funds from
which the Distributor may compensate its investment executives or other
broker-dealers for sales of Shares of Institutional Government Adjustable
Portfolio, Institutional Money Market Fund and Enhanced 500 Fund or any other
Series of Piper Funds established in the future.
8. LIMITATION OF DISTRIBUTOR'S AUTHORITY. The Distributor shall be
deemed to be an authorized independent contractor and, except as specifically
provided or authorized herein, shall have no authority to act for or
represent Piper Funds. In connection with its role as underwriter of the
Shares of Piper Funds, the
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Distributor shall at all times be deemed an agent of Piper Funds and shall
sell Piper Funds Shares to purchasers thereof as agent and not as principal.
9. SUBSCRIPTION FOR SHARES; REFUND FOR CANCELED ORDERS. The
Distributor shall subscribe for the Shares of Piper Funds 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 is placed with the Distributor by a customer or dealer and
subsequently canceled, the Distributor shall forthwith cancel the
subscription for such Shares entered on the book of Piper Funds and, if the
Distributor has paid Piper Funds for such Shares, shall be entitled to
receive from Piper Funds in refund of such payment the lesser of:
(a) the consideration received by Piper Funds for said Shares; or
(b) the Net Asset Value of such Shares at the time of cancellation
by the Distributor.
10. INDEMNIFICATION OF PIPER FUNDS. The Distributor agrees to
indemnify Piper Funds 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 Piper Funds by the Distributor. In the event of the threat or institution
of any such litigation or legal proceedings against Piper Funds, the
Distributor shall defend such action on behalf of Piper Funds 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, that the Distributor shall
not be required to pay or reimburse Piper Funds for any liability, judgment,
cost or penalty incurred as a result of information supplied to the
Distributor by or as a result of an omission to supply information to the
Distributor by Piper Funds or a director, officer or employee of Piper Funds
who is not an Interested Person of the Distributor (as defined in Section
2(a)(19) of the Investment Company Act of 1940 and the rules, regulations and
releases relating thereto), unless the information so supplied or omitted was
available to the Distributor or Piper Fund's investment adviser without
recourse to Piper Funds or any such Interested Person of Piper Funds.
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.
12. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT. The
effective date of this Agreement shall be the date first set forth above.
Wherever referred to in this Agreement, the vote or approval of the holders
of a majority of
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the outstanding Shares of Piper Funds or of a Series of Piper Funds shall
mean 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 the vote of more than 50%
of such Shares, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement
shall continue in effect from year to year with respect to each Series, but
only so long as such continuance is specifically approved at least annually
(a) by the Board of Directors of Piper Funds or by the vote of a majority of
the outstanding voting securities of the applicable Series, and (b) by the
vote of a majority of the directors who are not Interested Persons of Piper
Funds or of the Distributor and who have no direct or indirect financial
interest in the operation of this Agreement, or in any agreements relating to
this Agreement, cast in person at a meeting called for the purpose of voting
on such approval.
This Agreement may be terminated at any time without the payment of
any penalty by the vote of a majority of the members of the Board of
Directors of Piper Funds who are not Interested Persons of Piper Funds and
who have no direct or indirect financial interest in the operation of this
Agreement or in any agreements relating to this Agreement, or by the
Distributor, upon not more than 60 days' written notice to the other party.
This Agreement may be terminated with respect to a particular Series at any
time without the payment of any penalty by the vote of the holders of a
majority of the outstanding Shares of such Series, upon 60 days' written
notice to the Distributor. This Agreement shall automatically terminate in
the event of its assignment.
13. AMENDMENTS TO AGREEMENT. No material amendment to this
Agreement shall be effective until approved by the Distributor and by the
vote of a majority of the Board of Directors of Piper Funds who are not
Interested Persons of the Distributor.
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.
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IN WITNESS WHEREOF, Piper Funds, the Distributor and the Adviser
have caused this Agreement to be executed by their duly authorized officers
as of the day and year first above written.
PIPER INSTITUTIONAL FUNDS INC.
By /s/ Xxxxxx X. Xxxxxx
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Its President
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XXXXX XXXXXXX INC.
By /s/ Xxxxx Xxxxx Xxxxxxxx
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Its Secretary
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PIPER CAPITAL MANAGEMENT
INCORPORATED
By /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Its President
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