UNDERWRITING AGREEMENT
This Agreement, dated as of the 1st day of August, 1995, made by and
between IAA Trust Asset Allocation Fund, Inc. ("the Asset Allocation Fund"), a
corporation duly organized under the laws of the state of Maryland and operating
as a registered investment company under the Investment Company Act of 1940, as
amended (the "Act"); IAA Trust Company ("IAA Trust"), a corporation duly
organized and existing under the laws of the State of Illinois; and Fund/Plan
Broker Services, Inc. ("Fund/Plan"), a corporation duly organized and existing
under the laws of the State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, IAA Trust has been appointed investment advisor (the "Advisor") to
the Asset Allocation Fund; and
WHEREAS, Fund/Plan is a broker-dealer registered with the U.S. Securities
and Exchange Commission and a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Parties are desirous of entering into an agreement providing
for the distribution by Fund/Plan of the shares of the Asset Allocation Fund
(the "Shares");
NOW, THEREFORE, in consideration of the promises and agreements of the
Parties contained herein and in exchange of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:
1. Appointment.
The Asset Allocation Fund hereby appoints Fund/Plan as its exclusive agent
for the distribution of the Shares in the fifty United States of America,
the District of Columbia and Puerto Rico, and Fund/Plan hereby accepts such
appointment under the terms of this Agreement. The Asset Allocation Fund
agrees that it will not sell any shares to any person except to fill orders
for the shares received through Fund/Plan; provided, however, that the
foregoing exclusive right shall not apply: (a) to shares issued or sold in
connection with the merger or consolidation of any other investment company
with the Asset Allocation Fund or the acquisition by purchase or otherwise
of all or substantially all of the assets of any investment company or
substantially all of the outstanding shares of any such company by the
Asset Allocation Fund; (b) to shares which may be offered by the Asset
Allocation Fund to its stockholders for reinvestment of cash distributed
from
capital gains or net investment income of the Asset Allocation Fund;
or (c) to shares which may be issued to shareholders of other funds who
exercise any exchange privilege set forth in the Asset Allocation Fund's
Prospectus. Notwithstanding any other provision hereof, the Asset
Allocation Fund may terminate, suspend, or withdraw the offering of the
Shares whenever in its sole discretion, it deems such action to be
desirable.
2. Sale and Repurchase of Shares.
(a) Fund/Plan is hereby granted the right as agent for the Asset
Allocation Fund, to sell Shares to the public against orders therefor
at the public offering price (as defined in sub-paragraph 2. (c)
below).
(b) Fund/Plan will also have the right to take, as agent for the Asset
Allocation Fund, all actions which, in Fund/Plan's judgment, are
necessary to carry into effect the distribution of the Shares.
(c) The public offering price shall be the net asset value of the Shares
then in effect.
(d) The net asset value of the Shares shall be determined in the
manner provided in the then current prospectus and statement of
additional information relating to the Shares and when
determined shall be applicable to all transactions as provided in
the prospectus. The net asset value of the Shares shall be
calculated by the Asset Allocation Fund or by another entity on
behalf of the Asset Allocation Fund. Fund/Plan shall have no
duty to inquire into or liability for the accuracy of the net asset
value per Share as calculated.
(e) On every sale, the Asset Allocation Fund shall receive the applicable
net asset value of the Shares promptly.
(f) Upon receipt of purchase instructions, Fund/Plan will transmit such
instructions to the Asset Allocation Fund or its transfer agent for
registration of the Shares purchased.
(g) Nothing in this Agreement shall prevent Fund/Plan or any
affiliated person (as defined in the Act) of Fund/Plan from acting
as underwriter or distributor for any other person, firm or
corporation (including other investment companies) or in any way
limit or restrict Fund/Plan or such affiliated person from buying,
selling, or trading any securities for its or
their own account or for the accounts of others for whom it or they
may be acting; provided, however, that Fund/Plan expressly agrees
that it will not for its own account purchase any shares of the Asset
Allocation Fund except for investment purposes and that it will
not for its own account sell any such shares except by redemption
of such shares by the Asset Allocation Fund, and that it will not
undertake any activities which, in its judgment, will adversely
affect the performance of its obligations to the Asset Allocation
Fund under this Agreement.
(h) Fund/Plan may repurchase Shares at such prices and upon such terms and
conditions as shall be specified in the Prospectus.
3. Rules of Sale of Shares.
Fund/Plan does not agree to sell any specific number of Shares. Fund/Plan,
as Underwriter for the Asset Allocation Fund, undertakes to sell Shares on
a best efforts basis and only against orders received therefor. The Asset
Allocation Fund reserves the right to terminate, suspend or withdraw the
sale of its Shares for any reason deemed adequate by it and the Asset
Allocation Fund reserves the right to refuse at any time or times to sell
any of its Shares to any person for any reason deemed adequate by it.
4. Rules of NASD.
(a) Fund/Plan will conform to the Rules of Fair Practice of the NASD and
the securities laws of any jurisdiction in which it directly or
indirectly sells any Shares.
(b) Fund/Plan will require each dealer with whom Fund/Plan has a selling
agreement to conform to the applicable provisions of the Prospectus,
with respect to the public offering price of the Shares, and Fund/Plan
shall not cause the Asset Allocation Fund to withhold the placing of
purchase orders so as to make a profit thereby.
(c) The Asset Allocation Fund and IAA Trust agree to furnish to
Fund/Plan sufficient copies of any and all: agreements, plans,
communications with the public or other materials which the
Asset Allocation Fund or IAA Trust intends to use in connection
with any sales of Shares in adequate time for Fund/Plan to file
and clear such materials with the proper authorities before they
are put in use. Fund/Plan and the Asset Allocation
Fund or IAA Trust may agree that any such material does not need to
be filed prior to distribution. In addition, the Asset Allocation
Fund and IAA Trust agree not to use any such materials until so filed
and cleared for use by appropriate authorities as well as by
Fund/Plan.
(d) Fund/Plan, at its own expense, will qualify as a dealer or broker, or
otherwise, under all applicable state or federal laws required in
order that the Shares may be sold in such states as may be mutually
agreed upon by the Parties.
(e) Fund/Plan shall remain registered with the U.S. Securities and
Exchange Commission and a member of the National Association of
Securities Dealers for the term of this Agreement.
(f) Fund/Plan shall not, in connection with any sale or solicitation of
a sale of the Shares, make or authorize any representative,
Service Organization, broker or dealer to make, any
representations concerning the Shares except those contained in
the Prospectus covering the Shares and in communications with
the public or sales materials approved by Fund/Plan as
information supplemental to such Prospectus. Copies of the
Prospectus will be supplied by the Asset Allocation Fund or IAA
Trust to Fund/Plan in reasonable quantities upon request.
5. Records to be Supplied by the Asset Allocation Fund.
The Asset Allocation Fund shall furnish to Fund/Plan copies of all
information, financial statements and other papers which Fund/Plan may
reasonably request for use in connection with the distribution of the
Shares including, but not limited to, one certified copy of all financial
statements prepared for the Asset Allocation Fund by its independent public
accountants.
6. Expenses.
(a) The Asset Allocation Fund will bear the following expenses:
(i) preparation, setting in type, and printing of sufficient copies
of the prospectuses and statements of additional information for
distribution to shareholders, and the distribution of same to
the shareholders;
(ii) preparation, printing, and distribution of reports and other
communications to shareholders;
(iii) registration of the Shares under the federal securities laws;
(iv) qualification of the Shares for sale in the jurisdictions as
directed by the Asset Allocation Fund;
(v) maintaining facilities for the issue and transfer of the Shares;
(vi) supplying information, prices, and other data to be furnished by
the Asset Allocation Fund under this Agreement; and
(vii) any original issue taxes or transfer taxes applicable to the
sale or delivery of the Shares or certificates therefor.
(b) Underwriter will pay expenses incident to the sale and distribution of
the Shares sold hereunder to the extent that payment of such expenses
is made by the Fund pursuant to a Distribution Plan as set forth under
Rule 12b-1 of the Investment Company Act of 1940, as amended. All
expenses in excess of those monies paid pursuant to the Distribution
Plan will be paid by the Advisor.
(c) The Underwriter will provide a report to the Asset Allocation Fund
regarding the Distribution Plan under Rule 12b-1 on a quarterly basis.
The report will identify accruals, expenditures and trail commission
payments.
7. Term.
(a) The term of this Agreement shall commence on the date hereinabove
first written ("Effective Date").
(b) This Agreement shall remain in effect for two (2) years from the
Effective Date. This Agreement shall continue thereafter for periods
not exceeding one (1) year if approved at least annually (i) by a
vote of a majority of the outstanding voting securities of each
Series or by a vote of the Board of Directors of the Asset
Allocation Fund, and (ii) by a vote of a majority of the Directors of
the Asset Allocation Fund who are not interested persons or parties
to this Agreement (other than as Directors of the Asset Allocation
Fund), cast in person at a meeting called for the purpose of voting
on such approval.
(c) This Agreement (i) may at any time be terminated without the payment
of any penalty, either by a vote of the Directors of the Asset
Allocation Fund or by a vote of a majority of the outstanding voting
securities on sixty (60) days' written notice to Fund/Plan; and (ii)
may be terminated by Fund/Plan on sixty (60) days' written notice to
the Asset Allocation Fund.
(d) This Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Administration Agreement
between Fund/Plan Services, Inc., and the Asset Allocation Fund.
8. Indemnification of Fund/Plan by IAA Trust.
IAA Trust will indemnify and hold Fund/Plan harmless for the actions of IAA
Trust's employees registered with the NASD as Fund/Plan representatives and
will undertake to maintain compliance with all rules and regulations
concerning any and all sales presentations made by such employees.
9. Liability of Fund/Plan.
(a) Fund/Plan, its directors, officers, employees, shareholders and
agents shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Asset Allocation Fund in
connection with the performance of this Agreement, except a loss
resulting from a breach of Fund/Plan's obligation pursuant to
Section 4 of this Agreement, a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or negligence on the part of Fund/Plan
in the performance of its obligations and duties or by reason of its
reckless disregard of its obligations and duties under this Agreement.
(b) The Asset Allocation Fund agrees to indemnify and hold harmless
Fund/Plan against any and all liability, loss, damages, costs or
expenses (including reasonable counsel fees) which Fund/Plan may
incur or be required to pay hereafter, in connection with any action,
suit or other proceeding, whether civil or criminal, before any court
or administrative or legislative body, in which Fund/Plan may be
involved as a party or otherwise or with which Fund/Plan may be
threatened, by reason of the offer or sale of the Asset Allocation
Fund shares by persons other than Fund/Plan or its representatives.
(c) Any person, even though also a director, officer, employee,
shareholder or agent of Fund/Plan, who may be or become an officer,
director, trustee, employee or agent of the Asset Allocation Fund,
shall be deemed, when rendering services to the Asset Allocation Fund
or acting on any business of the Asset Allocation Fund (other than
services or business in connection with Fund/Plan's duties
hereunder), to be rendering such services to or acting solely for the
Asset Allocation Fund and
not as a director, officer, employee, shareholder or agent, or one
under the control or direction of Fund/Plan even though receiving a
salary from Fund/Plan.
(d) The Asset Allocation Fund agrees to indemnify and hold harmless
Fund/Plan, and each person, who controls Fund/Plan within the meaning
of Section 15 of the Securities Act of 1933, as amended (the
"Securities Act"), or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), against any and all losses,
claims, damages and liabilities, joint or several (including any
reasonable investigative, legal and other expenses incurred in
connection therewith) to which they, or any of them, may become
subject under the Act, the Securities Act, the Exchange Act or other
federal or state law or regulation, at common law or otherwise insofar
as such losses, claims, damages or liabilities (or actions, suits or
proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in a prospectus, statement of additional information,
supplement thereto, sales literature or other written information
prepared by the Asset Allocation Fund and furnished by the Asset
Allocation Fund to Fund/Plan for Fund/Plan's use hereunder,
disseminated by the Asset Allocation Fund or arise out of or are based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Such indemnity shall not, however, inure to
the benefit of Fund/Plan (or any person controlling Fund/Plan) on
account of any losses, claims, damages or liabilities (or actions,
suits or proceedings in respect thereof) arising from the sale of the
shares of the Asset Allocation Fund to any person by Fund/Plan (i) if
such untrue statement or omission or alleged untrue statement or
omission was made in the prospectus, statement of additional
information, or supplement, sales or other literature, in reliance
upon and in conformity with information furnished in writing to the
Asset Allocation Fund by Fund/Plan specifically for use therein or
(ii) if such losses, claims, damages, or liabilities arise out of or
are based upon an untrue statement or omission or alleged untrue
statement or omission found in any prospectus, statement of additional
information, supplement, sales or other literature, subsequently
corrected, but, negligently distributed by Fund/Plan and a copy of the
corrected prospectus was not delivered to such person at or before
the
confirmation of the sale to such person.
Underwriter agrees to indemnify and hold harmless the Fund, each
person, if any, who controls the Fund within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, insofar as
such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or omission or alleged untrue statement of a
material fact contained in a Prospectus or Statement of Additional
Information or any supplement thereto, or arise out of or are based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, if based upon information furnished to the
Fund by the Underwriter in writing specifically for use therein.
(e) Fund/Plan shall not be responsible for any damages, consequential or
otherwise, which IAA Trust or the Asset Allocation Fund may
experience, due to the disruption of the distribution of Shares caused
by any action arising out of the actions or inactions of any
registered representative or affiliate of Fund/Plan.
10. Amendments.
No provision of this Agreement may be amended or modified, in any manner
whatsoever except by a written agreement properly authorized and executed
by the Parties.
11. Section Headings.
Section and Paragraph headings are for convenience only and shall not be
construed as part of this Agreement.
12. Reports.
Fund/Plan shall prepare reports for the Board of Directors of the Asset
Allocation Fund on a quarterly basis showing such information as from time
to time shall be reasonably requested by such Board.
13. Severability.
If any part, term or provision of this Agreement is held by any court to be
illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not affected, and the
rights and obligations of the parties shall be construed and enforced as if
the Agreement did not contain the particular part, term or provision held
to be illegal or invalid provided that the basic agreement is not thereby
substantially impaired.
14. Governing Law.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania and the venue of any action arising under this Agreement shall
be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
15. Authority to Execute
The Parties represent and warrant that the execution and delivery of this
Agreement by the undersigned officers of the Parties has been duly and
validly authorized by resolution of the respective Boards of Directors or
each of the Parties.
16. This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of nine typewritten pages to be signed by their duly authorized
officers, as of the day and year first above written.
IAA Trust Company Fund/Plan Broker Services, Inc.
/s/ Xxxx X. Xxxx /s/ Xxxxxxx X. Xxxxx
------------------------------------ ------------------------------------
By: Xxxx X. Xxxx By: Xxxxxxx X. Xxxxx,
Vice President President
IAA Trust Asset Allocation Fund, Inc.
/s/ Xxxxxxx X. Xxxxxx
------------------------------------
By: Xxxxxxx X. Xxxxxx
Vice President
