UNDERWRITING AGREEMENT
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This Agreement made as of January 12, 1998 by and between the Xxxxx Family
of Real Estate Funds, an Ohio business trust (the "Trust"), and Xxxxx Investment
Securities, Inc., a Georgia corporation ("Underwriter").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the Securities and
Exchange Commission and a member of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of beneficial
interest (the "Shares") of each series of shares of the Trust (the "Series");
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment.
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The Trust hereby appoints Underwriter as its exclusive agent for the
distribution of the Shares in jurisdictions wherein such shares may legally be
offered for sale, and Underwriter hereby accepts such appointment under the
terms of this Agreement. While this Agreement is in force, the Trust shall not
sell any Shares except on the terms set forth in this Agreement.
Notwithstanding any other provision hereof, the Trust may terminate, suspend or
withdraw the offering of Shares whenever, in its sole discretion, it deems such
action to be desirable.
2. Sale and Repurchase of Shares.
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(a) Underwriter will have the right, as agent for the Trust, to enter
into dealer agreements with responsible investment dealers, and to sell Shares
to such investment dealers against orders therefor at the public offering price
(as defined in subparagraph 2(e) hereof) less a discount determined by
Underwriter, which discount shall not exceed the amount of the sales charge
stated in the Trust's effective Registration Statement on Form N-1A under the
Securities Act of 1933, as amended, including the then current prospectus and
statement of additional information (the "Registration Statement"). Upon receipt
of an order to purchase Shares from a dealer with whom Underwriter has a dealer
agreement, Underwriter will promptly cause such order to be filled by the Trust.
(b) Underwriter will also have the right, as agent for the Trust, to
sell such Shares to the public against orders therefor at the public offering
price.
(c) Underwriter will also have the right, as agent for the Trust, to
sell Shares at their net asset value to such persons as may be approved by the
Trustees of the Trust, all such sales to comply with the provisions of the Act
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
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(d) Underwriter will also have the right to take, as agent for the
Trust, all actions which, in Underwriter's judgment, are necessary to carry into
effect the distribution of the Shares.
(e) The public offering price for the Shares of each Series shall be
the respective net asset value of the Shares of that Series then in effect, plus
any applicable sales charge determined in the manner set forth in the
Registration Statement or as permitted by the Act and the rules and regulations
of the Securities and Exchange Commission promulgated thereunder. In no event
shall any applicable sales charge exceed the maximum sales charge permitted by
the Rules of Fair Practice of the NASD.
(f) The net asset value of the Shares of each Series shall be
determined in the manner provided in the Registration Statement, and when
determined shall be applicable to transactions as provided for in the
Registration Statement. The net asset value of the Shares of each Series shall
be calculated by the Trust or by another entity on behalf of the Trust.
Underwriter shall have no duty to inquire into or liability for the accuracy of
the net asset value per Share as calculated.
(g) On every sale, the Trust shall receive the applicable net asset
value of the Shares promptly, but in no event later than the third business day
following the date on which Underwriter shall have received an order for the
purchase of the Shares. Underwriter shall have the right to retain the sales
charge less any applicable dealer discount.
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(h) Upon receipt of purchase instructions, Underwriter will transmit
such instructions to the Trust or its transfer agent for registration of the
Shares purchased.
(i) Nothing in this Agreement shall prevent Underwriter or any
affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor for any other person, firm or corporation (including
other investment companies) or in any way limit or restrict Underwriter or any
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 Underwriter expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
(j) Underwriter, as agent of and for the account of the Trust, may
repurchase the Shares at such prices and upon such terms and conditions as shall
be specified in the Registration Statement.
3. Sale of Shares by the Trust.
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The Trust reserves the right to issue any Shares at any time directly
to the holders of Shares ("Shareholders"), to sell Shares to its Shareholders or
to other persons approved by Underwriter at not less than net asset value and to
issue Shares in exchange for substantially all the assets of any corporation or
trust or for the shares of any corporation or trust.
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4. Basis of Sale of Shares.
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Underwriter does not agree to sell any specific number of Shares.
Underwriter, as agent for the Trust, undertakes to sell Shares on a best efforts
basis only against orders therefor.
5. Rules of NASD, etc.
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(a) Underwriter will conform to the Rules of Fair Practice of the NASD
and the securities laws of any jurisdiction in which it sells, directly or
indirectly, any Shares.
(b) Underwriter will require each dealer with whom Underwriter has a
dealer agreement to conform to the applicable provisions hereof and the
Registration Statement with respect to the public offering price of the Shares,
and neither Underwriter nor any such dealers shall withhold the placing of
purchase orders so as to make a profit thereby.
(c) Underwriter agrees to furnish to the Trust sufficient copies of
any agreements, plans or other materials it intends to use in connection with
any sales of Shares in adequate time for the Trust to file and clear them with
the proper authorities before they are put in use, and not to use them until so
filed and cleared.
(d) Underwriter, at its own expense, will qualify as dealer or broker,
or otherwise, under all applicable state or federal laws required in order that
Shares may be sold in such states as may be mutually agreed upon by the parties.
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(e) Underwriter shall not make, or permit any representative, broker
or dealer to make, in connection with any sale or solicitation of a sale of the
Shares, any representations concerning the Shares except those contained in the
then current prospectus and statement of additional information covering the
Shares and in printed information approved by the Trust as information
supplemental to such prospectus and statement of additional information. Copies
of the then effective prospectus and statement of additional information and any
such printed supplemental information will be supplied by the Trust to
Underwriter in reasonable quantities upon request.
6. Records to be Supplied by Trust.
--------------------------------
The Trust shall furnish to Underwriter copies of all information,
financial statements and other papers which Underwriter may reasonably request
for use in connection with the distribution of the Shares, and this shall
include, but shall not be limited to, one certified copy, upon request by
Underwriter, of all financial statements prepared for the Trust by independent
public accountants.
7. Expenses.
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In the performance of its obligations under this Agreement,
Underwriter will pay only the costs incurred in qualifying as a broker or dealer
under state and federal laws and in establishing and maintaining its
relationships with the dealers selling the Shares. All other costs in connection
with
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the offering of the Shares will be paid by the Trust or the Trust's investment
adviser (the "Adviser") in accordance with agreements between them as permitted
by applicable law, including the Act and rules and regulations promulgated
thereunder.
The Trust shall pay Underwriter (a) amounts necessary in order to
permit Underwriter to pay (i) payments to securities dealers and others who are
engaged in the sale of Shares and who may be advising shareholders of the Trust
regarding the purchase, sale or retention of Shares; (ii) expenses of
maintaining personnel (including personnel of organizations with which the Trust
has entered into agreements related to this Plan) who engage in or support
distribution of Shares or who render shareholder support services not otherwise
provided by the Trust's transfer agent, including, but not limited to, office
space and equipment, telephone facilities and expenses, answering routine
inquiries regarding the Trust, processing shareholder transactions, and
providing such other shareholder services as the Trust may reasonably request;
(iii) for expenses incurred in formulating and implementing of marketing and
promotional activities, including, but not limited to, direct mail promotions
and television, radio, newspaper, magazine and other mass media advertising;
(iv) for expenses incurred in preparing, printing and distributing sales
literature; (v) for expenses incurred in preparing, printing and distributing
prospectuses and statements of additional information and reports of the Trust
for recipients
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other than existing shareholders of the Trust; and (vi) for expenses incurred in
obtaining such information, analyses and reports with respect to marketing and
promotional activities as may, from time to time, be deemed advisable, and (b)
for such other distribution costs as the Board of Trustees of the Trust,
including a majority of the Rule 12b-1 Trustees (as that term is defined in the
Registration Statement), may from time to time specify in a resolution adopted
by the Board; provided, however, that the total amount reimbursed by the Fund in
any given year shall not exceed such maximum limits as may be set forth from
time to time under the Trust's Plan of Distribution Pursuant to Rule 12b-1 under
the Act. It is understood that at such time as this maximum is reached
Underwriter will have no obligation to continue to perform under this Agreement.
The Trust agrees that if Underwriter thereafter continues to perform under this
Agreement, Underwriter may seek payment from the Trust in the amount of the
expenses incurred by it on behalf of the Trust at such times in the future as
the expenditure limits set forth have not otherwise been reached. Underwriter
acknowledges that the Trust will have no contractual obligation to pay any
portion of such amounts, if any, and that the time and conditions under which
the Trust might make such payment as requested by Underwriter will be solely
within the discretion of those trustees who are deemed to be Rule 12b-1
Trustees. Underwriter agrees to provide to the Board of Trustees of the Trust,
for each
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fiscal quarter elapsing after the commencement of the offering contemplated
hereby, a written report accounting for the monies paid or payable to
Underwriter by the Trust under this Agreement, which report shall state the
amounts expended by Underwriter and the purposes for which such expenditures
were made.
8. Indemnification of Trust.
-------------------------
Underwriter, to the extent of the net commission received by it from
the sale of Shares but to no greater amount, agrees to indemnify and hold
harmless the Trust, the Adviser and each person who has been, is, or may
hereafter be a trustee, director, officer, employee, partner, shareholder or
control person of the Trust or the Adviser, against any loss, damage or expense
(including the reasonable costs of investigation) reasonably incurred by any of
them in connection with any claim or in connection with any action, suit or
proceeding to which any of them may be a party, which arises out of or is
alleged to arise out of or is based upon any untrue statement or alleged untrue
statement of a material fact, or the omission or alleged omission to state a
material fact necessary to make the statements not misleading, on the part of
Underwriter or any agent or employee of Underwriter or any other person for
whose acts Underwriter is responsible, unless such statement or omission was
made in reliance upon written information furnished by the Trust or the Adviser.
Underwriter likewise, to the extent of the net commission received by it from
the sale of Shares but
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to no greater amount, agrees to indemnify and hold harmless the Trust, the
Adviser and each such person in connection with any claim or in connection with
any action, suit or proceeding which arises out of or is alleged to arise out of
Underwriter's failure to exercise reasonable care and diligence with respect to
its services, if any, rendered in connection with investment, reinvestment,
automatic withdrawal and other plans for Shares. The term "expenses" for
purposes of this and the next paragraph includes amounts paid in satisfaction of
judgments or in settlements which are made with Underwriter's consent. The
foregoing rights of indemnification shall be in addition to any other rights to
which the Trust, the Adviser or each such person may be entitled as a matter of
law.
9. Indemnification of Underwriter.
-------------------------------
Underwriter, its directors, officers, employees, shareholders and
control persons shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of any of such persons in the performance
of Underwriter's duties. The Trust will advance attorneys' fees or other
expenses incurred by any such person in defending a proceeding, upon the
undertaking by or on behalf of such person to repay the advance if it is
ultimately determined that such person is not entitled to indemnification. Any
person
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employed by Underwriter who may also be or become an officer or employee of the
Trust shall be deemed, when acting within the scope of his employment by the
Trust, to be acting in such employment solely for the Trust and not as an
employee or agent of Underwriter.
10. Termination and Amendment of this Agreement.
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This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment (as such term is defined under the
Act). This Agreement may be amended only if such amendment is approved (i) by
Underwriter, (ii) either by action of the Board of Trustees of the Trust or at a
meeting of the Shareholders of the Trust by the affirmative vote of a majority
of the outstanding Shares, and (iii) by a majority of the Trustees of the Trust
who are not interested persons of the Trust or of Underwriter by vote cast in
person at a meeting called for the purpose of voting on such approval.
Either the Trust or Underwriter may at any time terminate this
Agreement on sixty (60) days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party.
11. Effective Period of this Agreement.
-----------------------------------
This Agreement shall take effect upon its execution and shall remain
in full force and effect for a period of two (2) years from the date of its
execution (unless terminated automatically as set forth in Section 10), and from
year to year
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thereafter, subject to annual approval (i) by Underwriter, (ii) by the Board of
Trustees of the Trust or a vote of a majority of the outstanding Shares, and
(iii) by a majority of the Trustees of the Trust who are not interested persons
of the Trust or of Underwriter by vote cast in person at a meeting called for
the purpose of voting on such approval.
12. Limitation of Liability.
------------------------
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, Shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust, as provided in the Agreement and Declaration of Trust of the
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees and Shareholders of the Trust and signed by an officer of the Trust,
acting as such, and neither such authorization by such Trustees and Shareholders
nor such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
its Agreement and Declaration of Trust.
13. New Series.
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The terms and provisions of this Agreement shall become automatically
applicable to any additional series of the Trust established during the initial
or renewal term of this Agreement.
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14. Successor Investment Company.
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Unless this Agreement has been terminated in accordance with Paragraph
10, the terms and provisions of this Agreement shall become automatically
applicable to any investment company which is a successor to the Trust as a
result of reorganization, recapitalization or change of domicile.
15. Severability.
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In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
16. Questions of Interpretation.
----------------------------
(a) This Agreement shall be governed by the laws of the State of
Georgia.
(b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Act shall be resolved by reference to such term or provision of the Act
and to interpretation thereof, if any, by the United States courts or in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the Securities and Exchange Commission issued pursuant to said Act. In
addition, where the effect of a requirement of the Act, reflected in any
provision of this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
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17. Notices.
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Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust for this purpose
shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, Xxxx 00000 and that the
address of Underwriter for this purpose shall be 0000 Xxxxxxx Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxx 00000.
IN WITNESS WHEREOF, the Trust and Underwriter have each caused this
Agreement to be signed in duplicate on their behalf, all as of the day and year
first above written.
ATTEST: XXXXX FAMILY OF REAL ESTATE FUNDS
/s/ Xxxxx X. Xxxxxx By: /s/ Xxx X Xxxxx
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Secretary Its: President
ATTEST: XXXXX INVESTMENT SECURITIES, INC.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxx X. Xxxxx
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Secretary Its: President
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