FOUNDERS FUNDS, INC.
AMENDED AND RESTATED UNDERWRITING AGREEMENT
This Agreement made as of the 7th day of March, 1997, by and between
Founders Asset Management, Inc., a Delaware corporation (the "Underwriter"), and
Founders Funds, Inc., a Maryland corporation (the "Company"), on behalf of any
series of its shares which may now exist or hereafter be created (the "Funds").
WITNESSETH:
That in consideration of the mutual covenants herein contained and for
other good and valuable consideration the parties hereto, intending to be
legally bound hereby, agree as follows:
1. APPOINTMENT OF UNDERWRITER. Except as otherwise provided herein,
the Company hereby appoints the Underwriter its exclusive agent to sell and
distribute shares of the Funds without compensation at the public offering price
thereof, which shall be equivalent to their net asset value, calculated as
described in the current prospectus of the Company. The Company agrees that it
will deliver such shares as the Underwriter may sell. The Underwriter agrees to
use its best efforts to promote the sale of shares of the Funds, but is not
obligated to sell any specific number of shares.
2. INDEPENDENT CONTRACTOR. The Underwriter will undertake and
discharge its obligations hereunder as an independent contractor and shall have
no authority of power to obligate or bind the Company by its actions, conduct or
contracts except that it may be authorized to accept orders for the sale or
repurchase of shares of the Funds as the Company's agent. The Underwriter may
appoint subagents or distribute shares of the Funds through dealers or otherwise
as it may determine from time to time including, without limitation, appointing
subagents for the purpose of accepting orders for the sale or repurchase of Fund
shares, provided that no such appointment shall relieve the Underwriter of its
responsibility for the proper performance of this Agreement by the Underwriter
or, where applicable, its subagents.
3. PAYMENT FOR SHARES AND SHARE REGISTRATION. The Underwriter shall
notify the Company or cause the Company to be notified, at the end of each
business day, or as soon thereafter as orders placed during such day have been
compiled, of the number of shares and the prices thereof which the Underwriter
shall have sold on behalf of each Fund. The Underwriter shall use its best
efforts to cause the sums due for shares ordered from a Fund to be collected or
to be advanced to that Fund on behalf of purchasers on or before the third
business day after the shares have been so ordered. The Underwriter shall issue
and
deliver on behalf of the Company or cause to be issued and delivered all
confirmations of transactions effected hereunder for the account of a Fund.
Unless otherwise requested by the purchaser, the Company will provide for the
recording of share purchases in "book accounts." Upon receipt of written request
from a purchaser, a certificate of shares in such names and amount as the
purchaser shall specify in writing will be delivered by the Company's Transfer
Agent as soon as practicable after payment therefor and their registration on
the books of the Company.
4. SUSPENSION OF SALES. The sale of shares of the Funds may be
suspended with or without prior notice whenever in the judgment of the Company
it is in its best interests to do so.
5. REPURCHASE OF SHARES. As the Company's agent, the Underwriter may
buy shares of a Fund offered for repurchase at the next effective net asset
value per share calculated and effective as set forth in Paragraphs 1 and 3
above. Whenever the officers of the Company deem it advisable, for the
protection of the shareholders of a Fund, they may suspend or cancel such
authority. The Underwriter will pay all expenses in connection with the
repurchase of shares.
6. CONDUCT OF BUSINESS. Neither the Underwriter nor any other person
is authorized by the Company or any Fund to give any information or make any
representation relative to the Company or any Fund's shares other than those
contained in the registration statement or prospectus filed with the Securities
and Exchange Commission as the same may be amended from time to time or in any
supplemental information to said prospectus approved by the Company. The
Underwriter agrees that any information or representation other than that
specified above which it or any dealer or other person who purchases shares
through the Underwriter may make in connection with the offer or sale of shares
shall be made entirely without liability on the part of the Company or any Fund.
The Underwriter agrees that in offering or selling shares as agent of the
Company, it will in all respects duly conform to all applicable state and
federal laws. The Underwriter will submit to the Company copies of all sales
literature before using the same and will not use such literature if disapproved
by the Company.
7. ALLOCATION OF EXPENSES. In connection with the sale and
distribution of shares pursuant to this Agreement, the Underwriter shall pay all
of its own expenses and such other expenses as are not specifically assumed by
the Company as hereinafter provided.
The Company specifically assumes and shall pay all fees and expenses,
including legal fees, incurred in (1) the preparation of audited financial
statements to the Company; (2) the preparation and initial printing of all post-
effective amendments, supplements and revisions of its registration statements;
(3) printing and distributing copies of any prospectus to its shareholders; (4)
the preparation and initial printing of shareholder reports and communications
and distributing copies thereof to its shareholders; (5) the registration of the
Company and its shares with the Securities and Exchange Commission; and (6) the
qualification of the Company and its shares in each state in which its shares
will be qualified for sale.
8. OTHER ACTIVITIES. The Underwriter's services pursuant to this
Agreement shall not be deemed to be exclusive, and it may render similar
services and act as an underwriter, distributor or dealer for other investment
companies in the offering of their shares.
9. LIABILITY. The Underwriter is not to be liable to the Company or
any Fund hereunder for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties imposed on it by this Agreement.
10. TERM OF AGREEMENT. This Agreement shall become effective upon the
date first above written. This Agreement shall continue in effect through May
31, 1997, and thereafter for successive annual periods, provided that its
continuance is specifically approved at least annually by the Company's
directors or, with respect to any Fund, by vote of a majority of that Fund's
outstanding voting securities and, in any event, by a majority of those
directors who are not parties to this Agreement or interested persons of any
party to this Agreement (other than as directors of the Company) at a meeting
called for the purpose of voting on such approval.
This Agreement shall automatically terminate in the event of its
assignment (within the meaning of the Investment Company Act of 1940, as
amended); provided, however, that the Underwriter may employ such other person,
persons, corporation or corporations, as it shall determine, in order to assist
it in carrying out the provisions of this Agreement.
This Agreement may be terminated at any time by either party hereto by
giving six months' written notice to the other party, or at any time by mutual
consent of the parties hereto. Such notice shall be sent by certified mail.
Until further notice, the mailing address of both the Fund and the Underwriter
shall be:
Founders Financial Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
11. MISCELLANEOUS. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Colorado and shall be
interpreted and construed to further and promote the operation of the Company as
an open-end investment company. As used herein, the terms "Net Asset Value,"
"Offering Price," "Investment Company," and "Interested Persons" shall have the
meanings set forth in the Investment Company Act of 1940, as amended, and the
Rules, Regulations, Orders, and Forms thereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the
Underwriter and the Company as of the day and year first above written.
FOUNDERS FUNDS, INC.
ATTEST: By: /S/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, President
/S/ XXXXXXX X. XXXXXXXXXXXXXX
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Xxxxxxx X. Xxxxxxxxxxxxxx, Secretary
FOUNDERS ASSET MANAGEMENT, INC.
ATTEST: By: /S/ XXXXXXXX X. XXXXXXX
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Xxxxxxxx X. Xxxxxxx, President
/S/ XXXXX X. XXX
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Xxxxx X. Xxx, Assistant Secretary
