AARP CASH INVESTMENT FUNDS
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
June 18, 1986
Xxxxxxx Fund Distributors, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Underwriting Agreement
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Dear Sirs:
AARP Cash Investment Funds (hereinafter called the "Fund") is a business
trust organized under the laws of Massachusetts and is engaged in the business
of an investment company. The authorized capital of the Fund consists of shares
of beneficial interest, with $.01 par value ("Shares"), currently divided into
four series (the "Series"). Additional Series may be established from time to
time by action of the Trustees. The Fund has selected you to act as principal
underwriter (as such term is defined in Section 2(a)(29) of the Investment
Company Act of 1940, as amended (the "1940 Act")) of the Shares and you are
willing to act as such principal underwriter and to perform the duties and
functions of underwriter in the manner and on the terms and conditions
hereinafter set forth. Accordingly, the Fund hereby agrees with you as follows:
1. Delivery of Documents. The Fund has furnished you with copies properly
certified or authenticated of each of the following:
(a) Amended and Restated Declaration of Trust of the Fund, dated February
8, 1985, as amended to date.
(b) By-Laws of the Fund as in effect on the date hereof.
(c) Resolutions of the Board of Trustees of the Fund selecting you as
principal underwriter and approving this form of Agreement.
The Fund will furnish you from time to time with copies, properly certified
or authenticated, of all amendments of or supplements to the foregoing, if any.
The Fund will furnish you promptly with properly certified or authenticated
copies of any registration statement filed by it with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, (the "1933
Act") or the 1940 Act, together with any financial statements and exhibits
included therein, and all amendments or supplements thereto hereafter filed.
2. Registration and Sale of Additional Shares. The Fund will from time to
time use its best efforts to register under the 1933 Act such number of Shares
not already so registered as you may reasonably be expected to sell on behalf of
the Fund. You and the Fund will cooperate in taking such action as may be
necessary from time to time to qualify Shares so registered for sale by you or
the Fund in any states mutually agreeable to you and the Fund, and to maintain
such qualification. This Agreement relates to the issue and sale of Shares that
are duly authorized and registered and available for sale by the Fund,
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including redeemed or repurchased Shares if and to the extent that they may be
legally sold and if, but only if, the Fund sees fit to sell them.
3. Sale of Shares. No other person than you is authorized to act as
principal underwriter (as such term is defined in the 0000 Xxx) for the Fund.
Subject to the provisions of paragraphs 5 and 7 hereof and to such minimum or
maximum purchase or other requirements as may from time to time be currently
indicated in the Fund's prospectus or statement of additional information, you
are authorized to sell as agent on behalf of the Fund Shares authorized for
issue and registered under the 1933 Act. You may also purchase as principal
Shares for resale to the public. Such sales will be made by you on behalf of the
Fund by accepting unconditional orders to purchase Shares placed with you by
investors and such purchases will be made by you only after acceptance by you of
such orders. The sales price to the public of Shares shall be the public
offering price as defined in paragraph 6 hereof.
4. Solicitation of Orders. You will use your best efforts (but only in
states in which you may lawfully do so) to obtain from investors unconditional
orders for Shares authorized for issue by the Fund and registered under the 1933
Act, provided that you may in your discretion refuse to accept orders for Shares
from any particular applicant.
5. Sale of Shares by the Fund. Unless you are otherwise notified by the
Fund, any right granted to you to accept orders
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for Shares or to make sales on behalf of the Fund or to purchase Shares for
resale will not apply to (i) Shares issued in connection with the merger or
consolidation of any other investment company with the Fund or its acquisition,
by purchase or otherwise, of all or substantially all of the assets of any
investment company or substantially all the outstanding shares of any such
company, and (ii) Shares that may be offered by the Fund to shareholders of the
Fund by virtue of their being such shareholders, including Shares to be
purchased through reinvestment of income dividends and capital gain
distributions.
6. Public Offering Price. All Shares offered and sold to investors by you
will be offered and sold at the public offering price. The public offering price
for all accepted subscriptions will be the net asset value per Share,
determined, in the manner provided in the Fund's registration statements as from
time to time in effect under the 1933 Act and the 1940 Act, next after the order
is accepted by you.
7. Suspension of Sales. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further orders
for Shares shall be accepted by you except unconditional orders placed with you
before you had knowledge of the suspension. In addition, the Fund reserves the
right to suspend sales and your authority to accept orders for Shares on behalf
of the Fund if, in the judgment of a majority of the Board of Trustees or a
majority of
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the Executive Committee of such Board, if such body exists, it is in the best
interests of the Fund to do so, such suspension to continue for such period as
may be determined by such majority; and in that event, no Shares will be sold by
you on behalf of the Fund while such suspension remains in effect except for
Shares necessary to cover unconditional orders accepted by you before you had
knowledge of the suspension.
8. Portfolio Securities. Portfolio securities of any Series of the Fund may
be bought or sold by or through you and you may participate directly or
indirectly in brokerage commissions or "spread" in respect of transactions in
portfolio securities of any Series of the Fund; provided, however, that all sums
of money received by you as a result of such purchases and sales or as a result
of such participation must, after reimbursement of your actual expenses in
connection with such activity, be paid over by you to or for the benefit of the
Fund.
9. Expenses. (a) The Fund will pay (or will enter into arrangements
providing that others than you will pay) all fees and expenses:
(1) in connection with the preparation, setting in type and
filing of any registration statement (including a prospectus
and statement of additional information) under the 1933 Act
or the 1940 Act, or both, and any amendments or supplements
thereto that may be made from time to time;
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(2) in connection with the registration and qualification of
Shares for sale in the various jurisdictions in which the
Fund shall determine it advisable to qualify such Shares for
sale (including registering the Fund as a broker or dealer
or any officer of the Fund or other person as agent or
salesman of the Fund in any such jurisdictions);
(3) of preparing, setting in type, printing and mailing any
notice, proxy statement, report, prospectus or other
communication to shareholders of the Fund in their capacity
as such;
(4) of preparing, setting in type, printing and mailing
prospectuses annually, and any supplements thereto, to
existing shareholders;
(5) in connection with the issue and transfer of Shares
resulting from the acceptance by you of orders to purchase
Shares placed with you by investors, including the expenses
of printing and mailing confirmations of such purchase
orders and the expenses of printing and mailing a prospectus
included with the confirmation of such orders;
(6) of any issue taxes or any initial transfer taxes;
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(7) of WATS (or equivalent) telephone lines other than the
portion allocated to you in this paragraph 9;
(8) of wiring funds in payment of Share purchases or in
satisfaction of redemption or repurchase requests, unless
such expenses are paid for by the investor or shareholder
who initiates the transaction;
(9) of the cost of printing and postage of business reply
envelopes sent to Fund shareholders;
(10) of one or more CRT terminals connected with the computer
facilities of the transfer agent other than the portion
allocated to you in this paragraph 9;
(11) permitted to be paid or assumed by the Fund pursuant to a
plan ("12b-1 Plan"), if any, adopted by the Fund in
conformity with the requirements of Rule 12b-1 under the
1940 Act ("Rule 12b-1") or any successor rule,
notwithstanding any other provision to the contrary herein;
(12) of the expense of setting in type, printing and postage of
the periodic newsletter to shareholders other than the
portion allocated to you in this paragraph 9; and
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(13) of that portion of the salaries and overhead of persons
employed by you as shareholder representatives other than
the portion allocated to you in this paragraph 9.
(b) You shall pay or arrange for the payment of all fees and expenses:
(1) of printing and distributing any prospectuses or reports
prepared for your use in connection with the offering of
Shares to the public;
(2) of preparing, setting in type, printing and mailing any
other literature used by you in connection with the offering
of Shares to the public;
(3) of advertising in connection with the offering of Shares to
the public;
(4) incurred in connection with your registration as a broker or
dealer or the registration or qualification of your
officers, directors, agents or representatives under Federal
and state laws;
(5) of that portion of WATS (or equivalent) telephone lines,
allocated to you on the basis of use by investors (but not
shareholders) who request information or prospectuses;
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(6) of that portion of the expense of setting in type, printing
and postage of the periodic newsletter to shareholders
attributable to promotional material included in such
newsletter at your request concerning investment companies
other than the Fund or concerning the Fund to the extent you
are required to assume the expense thereof pursuant to
paragraph 9(b)(8), except such material which is limited to
information, such as listings of other investment companies
and their investment objectives, given in connection with
the exchange privilege as from time to time described in the
Fund's prospectus;
(7) of that portion of the salaries and overhead of persons
employed by you as shareholder representatives attributable
to the time spent by such persons in responding to requests
from investors, but not shareholders, for information;
(8) of any activity which is primarily intended to result in the
sale of Shares, unless a 12b-1 Plan shall be in effect which
provides that the Fund shall bear some or all of such
expenses, in which case the Fund shall bear such expenses in
accordance with such Plan; and
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9) of that portion of one or more CRT terminals connected with
the computer facilities of the transfer agent attributable
to your use of such terminal(s) to gain access to such of
the transfer agent's records as also serve as your records.
Expenses which are to be allocated between you and the Fund shall be
allocated pursuant to reasonable procedures or formulae mutually agreed upon
from time to time, which procedures or formulae shall to the extent practicable
reflect studies of relevant empirical data.
10. Sales Literature and Advertising. You agree that all sales literature
and advertising developed by you in connection with the Fund is subject to the
approval of the Fund. You and the Fund further acknowledge, as provided in the
agreement between the American Association of Retired Person ("AARP") and
Xxxxxxx, Xxxxxxx & Xxxxx (the Fund's investment adviser), dated as of October 9,
1984, that all sales literature and advertising, including that developed by
you, designed for use with the Fund shall be subject to the prior approval of
AARP through its properly delegated representatives.
11. Conformity with Law. You agree that in selling Shares you will duly
conform in all respects with the laws of the United States and any jurisdiction
in which Shares may be offered for sale by you pursuant to this Agreement and to
the rules and regulations of the National Association of Securities Dealers,
Inc., of which you are a member.
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12. Independent Contractor. You shall be an independent contractor and
neither you nor any of your officers or employees is or shall be an employee of
the Fund in the performance of your duties hereunder. You shall be responsible
for your own conduct and the employment, control and conduct of your agents and
employees and for injury to such agents or employees or to others through your
agents or employees. You assume full responsibility for your agents and
employees under applicable statutes and agree to pay all employee taxes
thereunder.
13. Services Not Exclusive. Except to the extent necessary to perform your
obligations hereunder, nothing hererin shall be deemed to limit or restrict your
right or that of any of your affiliates or employees, including any of your
employees who may also be a trustee, officer or employee of the Fund, to engage
in any other business or to devote time and attention to the distribution or
other related aspects of any other registered investment company or to render
services of any kind to any other corporation, firm, individual or association.
14. Indemnification. You agree to indemnify and hold harmless the Fund and
each of its Trustees and officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the 1933 Act, against any and all losses,
claims, damages, liabilities or litigation (including legal and other expenses)
to which the Fund or such Trustees, officers, or controlling person may become
subject under such Act, under any other statute, at common law or otherwise,
arising out of
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the acquisition of any Shares by any person which (i) may be based upon any
wrongful act by you or any of your employees or representatives, or (ii) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement (including a prospectus or statement of
additional information) covering Shares or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading if such statement or omission was made in reliance upon information
furnished to the Fund by you, or (iii) may be incurred or arise by reason of
your acting as the Fund's agent instead of purchasing and reselling Shares as
principal in distributing the Shares to the public, provided, however, that in
no case (i) is your indemnity in favor of a Trustee or officer or any other
person deemed to protect such Trustee or officer or other person against any
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his
duties or by reason of his reckless disregard of obligations and duties under
this Agreement or (ii) are you to be liable under your indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Fund or such person, as the case may be, shall
have notified you in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the
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claims shall have been served upon the Fund or upon such person (or after the
Fund or such person shall have received notice of such service on any designated
agent), but failure to notify you of any such claim shall not relieve you from
any liability which you may have to the Fund or any person against whom such
action is brought otherwise than on account of your indemnity agreement
contained in this paragraph. You shall be entitled to participate, at your own
expense, in the defense, or, if you so elect, to assume the defense of any suit
brought to enforce any such liability, but if you elect to assume the defense,
such defense shall be conducted by counsel chosen by you and satisfactory to the
Fund, to its officers and Trustees, or to any controlling person or persons,
defendant or defendants in the suit. In the event that you elect to assume the
defense of any such suit and retain such counsel, the Fund, such officers and
Trustees or controlling person or persons, defendant or defendants in the suit
shall bear the fees and expenses of any additional counsel retained by them,
but, in case you do not elect to assume the defense of any such suit, you will
reimburse the Fund, such officers and Trustees or controlling person or persons,
defendant or defendants in such suit for the reasonable fees and expenses of any
counsel retained by them. You agree promptly to notify the Fund of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of Shares.
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The Fund agrees to indemnify and hold harmless you and each of your
directors and officers and each person, if any, who controls you within the
meaning of Section 15 of the 1933 Act, against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
you or such directors, officers or controlling person may become subject under
such Act, under any other statute, at common law or otherwise, arising out of
the acquisition of any Shares by any person which (i) may be based upon any
wrongful act by the Fund or any of its employees or representatives, or (ii) may
be based upon any untrue statement or alleged untrue statement of a material
fact contained in a registration statement (including a prospectus or statement
of additional information) covering Shares or any amendment thereof or
supplement thereto or 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 if such statement or omission was made in reliance upon
information furnished to you by the Fund; provided, however, that in no case (i)
is the Fund's indemnity in favor of a director or officer or any other person
deemed to protect such director or officer or other person against any liability
to which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties or
by reason of his reckless disregard of obligations and duties under this
Agreement or (ii) is the Fund to be liable under its indemnity
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agreement contained in this paragraph with respect to any claims made against
you or any such director, officer or controlling person unless you or such
director, officer or controlling person, as the case may be, shall have notified
the Fund in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon you or upon such director, officer or controlling person (or after
you or such director, officer or controlling person shall have received notice
of such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve it from any liability which it may have to the
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Fund will be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but if the Fund
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to you, your directors, officers or controlling persons
or persons, defendant or defendants in the suit. In the event that the Fund
elects to assume the defense of any such suit and retain such counsel, you, your
directors, officers or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional counsel retained by
them, but, in case the Fund does not elect to assume the defense of any such
suit, it will
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reimburse you or such directors, officers or controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Fund agrees promptly to notify you of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any Shares.
15. Authorized Representations. The Fund is not authorized to give any
information or to make any representations on behalf of you other than the
information and representations contained in a registration statement (including
a prospectus or statement of additional information) covering Shares, as such
registration statement may be amended or supplemented from time to time, or
reports prepaid for distribution to shareholders of the Fund.
You are not authorized to give any information or to make any
representations on behalf of the Fund or in connection with the sale of Shares
other than the information and representations contained in a registration
statement (including a prospectus or statement of additional information)
covering Shares, as such registration statement may be amended or supplemented
from time to time, or reports prepared for distribution to shareholders of the
Fund.
16. Duration and Termination of this Agreement. This Agreement shall become
effective upon the date first written above and will remain in effect for a
period of two years from
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the date hereof and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Trustees who are not interested persons of you or of the Fund, cast in
person at a meeting called for the purpose of voting on such approval, and by
vote of the Board of Trustees or of a majority of the outstanding voting
securities of the Fund. This Agreement may, on 60 days' written notice, be
terminated at any time without the payment of any penalty, by the Board of
Trustees of the Fund, by a vote of a majority of the outstanding voting
securities of the Fund, or by you. This Agreement will automatically terminate
in the event of its assignment. In interpreting the provisions of this paragraph
16, the definitions contained in Section 2(a) of the 1940 Act (particularly the
definitions of "interested person", "assignment" and "majority of the
outstanding voting securities"), as modified by any applicable order of the
Securities and Exchange Commission, shall be applied.
17. Amendment of this Agreement. No provisions of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. If the Fund should at any time deem it
necessary or advisable in the best interests of the Fund that any amendment of
this Agreement be made in order to comply with the recommendations or
requirements of the
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Securities and Exchange Commission or other governmental authority or to
obtain any advantage under state or federal tax laws and should notify you of
the form of such amendment, and the reasons therefor, and if you should decline
to assent to such amendment, the Fund may terminate this Agreement forthwith. If
you should at any time request that a change be made in the Fund's Declaration
of Trust or By-Laws or in its methods of doing business, in order to comply with
any requirements of federal law or regulations of the Securities and Exchange
Commission or of a national securities association of which you are or may be a
member relating to the sale of shares of the Fund, and the Fund should not make
such necessary change within a reasonable time, you may terminate this Agreement
forthwith.
18. Termination of Prior Agreements. This Agreement upon its effectiveness
terminates and supersedes all prior underwriting contracts between the parties.
19. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
The name "AARP Cash Investment Funds" is the designation of the Trustees
for the time being under an Amended and Restated Declaration of Trust dated
February 8, 1985, as amended from
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time to time, and all persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
You acknowledge that if the Trustees of the Fund shall have established
additional series of the Shares, the Fund may, at any time such action is deemed
desirable, suspend or terminate sales of Shares of a Series and that upon your
receipt of notice of such action by the Fund you will, for such period as
determined by the Fund, accept no further orders for Shares of that Series
except unconditional orders placed with you before you had knowledge of such
action. You acknowledge further that the Fund may from time to time set upper
and lower limits on the number of Shares of a Series for which a purchaser may
subscribe and may limit sales of Shares of a Series to its existing
shareholders.
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If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Fund, whereupon this letter shall become a binding contract.
Very truly yours,
AARP CASH INVESTMENT FUNDS
BY: /s/Xxxxxx X. Xxxxxxx
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The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXX FUND DISTRIBUTORS, INC.
BY: /s/Xxxxx X. Xxx
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