UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this __ day of April, 1998 between ▇▇▇▇▇▇▇ Global Fund, Inc., a
Maryland corporation (the "Company"), or behalf of Global Discovery Fund, a
series of the Company (the "Fund"), and ▇▇▇▇▇▇ DISTRIBUTORS, INC., a Delaware
corporation ("KDI").
In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:
1. The Company hereby appoints KDI to act as agent for the distribution of the
Class A shares, Class B shares and Class C shares of the capital stock
(hereinafter called "shares")of the Fund in jurisdictions wherein shares of the
Fund may legally be offered for sale; provided, however, that the Company in its
absolute discretion may (a) issue or sell shares directly to holders of shares
of the Fund upon such terms and conditions and for such consideration, if any,
as it may determine, whether in connection with the distribution of subscription
or purchase rights, the payment or reinvestment of dividends or distributions,
or otherwise; or (b) issue or sell shares at net asset value to the shareholders
of any other investment company for which KDI shall act as exclusive
distributor, who wish to exchange all or a portion of their investment in shares
of such other investment company for shares of the Fund. KDI shall appoint
various financial service firms ("Firms") to provide distribution services to
investors. The Firms shall provide such office space and equipment, telephone
facilities, personnel, literature distribution, advertising and promotion as is
necessary or beneficial for providing information and distribution services to
existing and potential clients of the Firms. KDI may also provide some of the
above services for the Fund.
KDI accepts such appointment as distributor and principal underwriter and agrees
to render such services and to assume the obligations herein set forth for the
compensation herein provided. KDI shall for all purposes herein provided be
deemed to be an independent contractor and, unless expressly provided herein or
otherwise authorized, shall have no authority to act for or represent the
Company in any way. KDI, by separate agreement with the Company, may also serve
the Company in other capacities. The services of KDI to the Fund under this
Agreement are not to be deemed exclusive, and KDI shall be free to render
similar services or other services to others so long as its services hereunder
are not impaired thereby.
In carrying out its duties and responsibilities hereunder, KDI will, pursuant to
separate written contracts, appoint various
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Firms to provide advertising, promotion and other distribution services
contemplated hereunder directly to or for the benefit of existing and potential
shareholders who may be clients of such Firms. Such Firms shall at all times be
deemed to be independent contractors retained by KDI and not the Company.
KDI shall use its best efforts with reasonable promptness to sell such part of
the authorized shares of the Fund remaining unissued as from time to time shall
be effectively registered under the Securities Act of 1933 ("Securities Act"),
at prices determined as hereinafter provided and on terms hereinafter set forth,
all subject to applicable federal and state laws and regulations and to the
Charter of the Company.
2. KDI shall sell shares of the Fund to or through qualified Firms in such
manner, not inconsistent with the provisions hereof and the then effective
registration statement (and related prospectus) of the Fund under the Securities
Act, as KDI may determine from time to time, provided that no Firm or other
person shall be appointed or authorized to act as agent of the Fund without the
prior consent of the Company. In addition to sales made by it as agent of the
Fund, KDI may, in its discretion, also sell shares of the Fund as principal to
persons with whom it does not have selling group agreements.
Shares of any class of the Fund offered for sale or sold by KDI shall be so
offered or sold at a price per share determined in accordance with the then
current prospectus. The price the Fund shall receive, on behalf of the Fund, for
all Fund shares purchased from it shall be the net asset value used in
determining the public offering price applicable to the sale of such shares. Any
excess of the sales price over the net asset value of the shares of the Fund
sold by KDI as agent shall be retained by KDI as a commission for its services
hereunder. KDI may compensate Firms for sales of shares at the commission levels
provided in the Fund's prospectus from time to time. KDI may pay other
commissions, fees or concessions to Firms, and may pay them to others in its
discretion, in such amounts as KDI shall determine from time to time. KDI shall
be entitled to receive and retain any applicable contingent deferred sales
charge as described in the Fund's prospectus. KDI shall also receive any
distribution services fee payable by the Fund as provided in Section 8 hereof.
KDI will require each Firm to conform to the provisions hereof and the
Registration Statement (and related prospectus) at the time in effect under the
Securities Act with respect to the public offering price or net asset value, as
applicable, of the Fund's shares, and neither KDI nor any such Firms shall
withhold the placing of purchase orders so as to make a profit thereby.
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3. The Company will use its best efforts to keep effectively registered under
the Securities Act for sale as herein contemplated such Fund shares as KDI shall
reasonably request and as the Securities and Exchange Commission shall permit to
be so registered. Notwithstanding any other provision hereof, the Company may
terminate, suspend or withdraw the offering of Fund shares whenever, in its sole
discretion, it deems such action to be desirable.
4. The Company will execute any and all documents and furnish any and all
information that may be reasonably necessary in connection with the
qualification of Fund shares for sale (including the qualification of the
Company or the Fund as a dealer where necessary or advisable) in such states as
KDI may reasonably request (it being understood that the Company shall not be
required without its consent to comply with any requirement which in its opinion
is unduly burdensome). The Company will furnish to KDI from time to time such
information with respect to the Fund and its shares as KDI may reasonably
request for use in connection with the sale of shares of the Fund.
5. KDI shall issue and deliver or shall arrange for various Firms to issue and
deliver on behalf of the Fund such confirmations of sales made by it pursuant to
this agreement as may be required. At or prior to the time of issuance of Fund
shares, KDI will pay or cause to be paid to the Fund the amount due the Company,
on behalf of the Fund, for the sale of such Fund shares. Certificates shall be
issued or shares registered on the transfer books of the Fund in such names and
denominations as KDI may specify.
6. KDI shall order shares of the Fund from the Company only to the extent that
it shall have received purchase orders therefor. KDI will not make, or authorize
Firms or others to make (a) any short sales of shares of the Fund; or (b) any
sales of such shares to any Director or officer of the Company or to any officer
or director of KDI or of any corporation or association furnishing investment
advisory, managerial or supervisory services to the Fund, or to any corporation
or association, unless such sales are made in accordance with the then current
prospectus relating to the sale of such shares. KDI, as agent of and for the
account of the Fund, may repurchase the shares of the Fund at such prices and
upon such terms and conditions as shall be specified in the current prospectus
of the Fund. In selling or reacquiring shares of the Fund for the account of the
Fund, KDI will in all respects conform to the requirements of all state and
federal laws and the Conduct Rules of the National Association of Securities
Dealers, Inc., relating to such sale or reacquisition,
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as the case may be, and will indemnify and save harmless the Company and its
Directors from any damage or expense on account of any wrongful act or failure
to act by KDI or any employee, representative or agent of KDI. KDI will observe
and be bound by all the provisions of the Charter of the Company (and of any
fundamental policies adopted by the Company pursuant to the Investment Company
Act of 1940, notice of which shall have been given to KDI) which at the time in
any way require, limit, restrict, prohibit or otherwise regulate any action on
the part of KDI hereunder.
7. The Company, on behalf of the Fund, shall assume and pay all charges and
expenses of its operations not specifically assumed or otherwise to be provided
by KDI under this Agreement. The Company, on behalf of the Fund, will pay or
cause to be paid expenses (including the fees and disbursements of its own
counsel) of any registration of the Fund and its shares under the United States
securities laws and expenses incident to the issuance of shares of capital
stock, such as the cost of share certificates, issue taxes, and fees of the
transfer agent. KDI will pay all expenses (other than expenses which one or more
Firms may bear pursuant to any agreement with KDI) incident to the sale and
distribution of the shares issued or sold hereunder, including, without limiting
the generality of the foregoing, all (a) expenses of printing and distributing
any prospectus and of preparing, printing and distributing or disseminating any
other literature, advertising and selling aids in connection with the offering
of the shares for sale (except that such expenses need not include expenses
incurred by the Fund in connection with the preparation, typesetting, printing
and distribution of any registration statement or prospectus, report or other
communication to shareholders in their capacity as such), (b) expenses of
advertising in connection with such offering and (c) expenses (other than the
Fund's auditing expenses) of qualifying or continuing the qualification of the
shares for sale and, in connection therewith, of qualifying or continuing the
qualification of the Company as a dealer or broker under the laws of such states
as may be designated by KDI under the conditions herein specified. No transfer
taxes, if any, which may be payable in connection with the issue or delivery of
shares sold as herein contemplated or of the certificates for such shares shall
be borne by the Fund, and KDI will indemnify and hold harmless the Company
against liability for all such transfer taxes.
8. For the services and facilities described herein in connection with Class B
shares and Class C shares of each series of the Fund, the Company, on behalf of
the Fund, will pay to KDI at the end of each calendar month a distribution
services fee computed at the annual rate of .75% of average daily net assets
attributable to the Class B shares and Class C shares of the
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Fund. For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during the month and year, respectively.
The foregoing fee shall be in addition to and shall not be reduced or offset by
the amount of any contingent deferred sales charge received by KDI under Section
2 hereof.
The net asset value shall be calculated in accordance with the provisions of the
Fund's current prospectus. On each day when net asset value is not calculated,
the net asset value of a share of any class of the Fund shall be deemed to be
the net asset value of such a share as of the close of business on the last
previous day on which such calculation was made. The distribution services fee
for any class of the Fund shall be based upon average daily net assets of the
Fund attributable to the class and such fee shall be charged only to such class.
9. KDI shall prepare reports for the Board of Directors of the Company on a
quarterly basis in connection with the Fund's distribution plan for Class B
shares and Class C shares showing amounts paid to the various Firms and such
other information as from time to time shall be reasonably requested by the
Board of Directors.
10. To the extent applicable, this Agreement constitutes the plan for the Class
B shares and Class C shares of the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940; and this Agreement and plan shall be approved
and renewed in accordance with Rule 12b-1 for such Class B shares and Class C
shares separately.
This Agreement shall become effective on the date hereof and shall continue
until September 30, 1998; and shall continue from year to year thereafter only
so long as such continuance is approved in the manner required by the Investment
Company Act of 1940.
This Agreement shall automatically terminate in the event of its assignment and
may be terminated at any time without the payment of any penalty by the Company,
on behalf of the Fund, or by KDI on sixty (60) days written notice to the other
party. The Company, on behalf of the Fund, may effect termination with respect
to any class of the Fund by a vote of (i) a majority of the Board of Directors,
(ii) a majority of the Directors who are not interested persons of the Company
and who have no direct or indirect financial interest in this Agreement or in
any agreement related to this Agreement, or (iii) a majority of the outstanding
voting securities of the class. Without prejudice to any other remedies of the
Company, the Company may terminate this Agreement
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at any time immediately upon KDI's failure to fulfill any of its obligations
hereunder.
This Agreement may not be amended to increase the amount to be paid to KDI by
the Company, on behalf of the Fund, for services hereunder with respect to a
class of the Fund without the vote of a majority of the outstanding voting
securities of such class. All material amendments to this Agreement must in any
event be approved by a vote of the Board of Directors of the Company including
the Directors who are not interested persons of the Company and who have no
direct or indirect financial interest in this Agreement or in any agreement
related to this Agreement, cast in person at a meeting called for such purpose.
The terms "assignment", "interested" and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the Investment Company
Act of 1940 and the rules and regulations thereunder.
Termination of this Agreement shall not affect the right of KDI to receive
payments on any unpaid balance of the compensation described in Section 8 earned
prior to such termination.
11. KDI will not use or distribute, or authorize the use, distribution or
dissemination by Firms or others in connection with the sale of Fund shares any
statements other than those contained in the Fund's current prospectus, except
such supplemental literature or advertising as shall be lawful under federal and
state securities laws and regulations. KDI will furnish the Company with copies
of all such material.
12. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder shall not be thereby
affected.
13. Any notice under this Agreement shall be in writing, addressed and delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate for the receipt of such notice.
14. All parties hereto are expressly put on notice of the Company's Charter, and
all amendments thereto, all of which are on file with the State Department of
Assessments and Taxation of Maryland. With respect to any claim by KDI for
recovery of any liability arising hereunder allocated to a particular class of
the Fund, whether in accordance with the express terms hereof or otherwise, KDI
shall have recourse solely against the assets of that class to satisfy such
claim and shall have no recourse against the assets of any other series of the
Company or class of the Fund for such purpose.
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15. This Agreement shall be construed in accordance with applicable federal law
and the laws of the State of Illinois.
16. This Agreement is the entire contract between the parties relating to the
subject matter hereof and supersedes all prior agreements between the parties
relating to the subject matter hereof.
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IN WITNESS WHEREOF, the Company and KDI have caused this Agreement to be
executed as of the day and year first above written.
▇▇▇▇▇▇▇ GLOBAL FUND, Inc., on behalf of
Global Discovery Fund
By:______________________
Title: President
ATTEST:
__________________________
Title:____________________
▇▇▇▇▇▇ DISTRIBUTORS, INC.
By:______________________
Title:___________________
ATTEST:
__________________________
Title:____________________
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