PILGRIM AMERICA MASTERS SERIES, INC.
Pilgrim America Masters Asia-Pacific Equity Fund
Pilgrim America Masters MidCap Value Fund
Pilgrim America Masters LargeCap Value Fund
00 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
April 7, 0000
Xxxxxxx Xxxxxxx Securities, Inc.
00 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Re: Restated Underwriting Agreement
Gentlemen:
Pilgrim America Masters Series, Inc. is a Maryland corporation
operating as an open-end management investment company (hereinafter referred to
as the "Company"). The Company is registered as such under the Investment
Company Act of 1940, as amended (the "1940 Act"), and its shares are registered
under the Securities Act of 1933, as amended (the "1933 Act"). The Company
consists of three separate series: Pilgrim America Masters Asia-Pacific Equity
Fund, Pilgrim America Masters LargeCap Value Fund and Pilgrim America Masters
MidCap Value Fund (the "Funds"). The Company on behalf of the Funds desires to
offer and sell the authorized but unissued shares of the Funds to the public in
accordance with applicable federal and state securities laws.
You have informed us that your company, Pilgrim America Securities,
Inc. ("PAS"), is registered as a broker-dealer under the provisions of the
Securities Exchange Act of 1934 and that PAS is a member in good standing of the
National Association of Securities Dealers, Inc. You have indicated your desire
to act as the exclusive selling agent and principal underwriter for the shares
of the Funds. We have been authorized by the Company to execute and deliver this
Agreement to you by a resolution of our Board of Directors (the "Directors")
adopted at a meeting of the Directors, at which a majority of Directors,
including a majority of our Directors who are not otherwise interested persons
of our investment manager or its related organizations, were present and voted
in favor of the said resolution approving this Agreement.
1. Appointment of Underwriter. Upon the execution of this Agreement and
in consideration of the agreements on your part herein expressed and upon the
terms and conditions set forth herein, we hereby appoint you as the exclusive
sales agent for distribution of the shares (other than sales made directly by
the Company without sales charge) and agree that we will deliver to you such
shares as you may sell. You agree to use your best efforts to promote the sale
of the shares, but you are not obligated to sell any specific number of the
shares.
2. Independent Contractor. You will undertake and discharge your
obligations hereunder as an independent contractor and shall have no authority
or power to obligate or bind the Company or the Funds by your actions, conduct
or contracts, except that you are authorized to accept orders for the purchase
or repurchase of the shares as our agent. You may appoint sub-agents or
distribute the shares through dealers (or otherwise) as you may determine
necessary or desirable from time to time. This Agreement shall not, however, be
construed as authorizing any dealer or other person to accept orders for sale or
repurchase on our behalf or to otherwise act as our agent for any purpose.
3. Offering Price. Shares of the Funds shall be offered at a price
equivalent to their net asset value plus, as appropriate, a variable percentage
of the public offering price as a sales load, as set forth in the Funds'
Prospectus. On each business day on which the New York Stock Exchange is open
for business, we will furnish you with the net asset value of the shares, which
shall be determined and become effective as of the close of business of the New
York Stock Exchange on that day. The net asset value so determined shall apply
to all orders for the purchase of the shares received by dealers prior to such
determination, and you are authorized in your capacity as our agent to accept
orders and confirm sales at such net asset value; provided that, such dealers
notify you of the time when they received the particular order and that the
order is placed with you prior to your close of business on the day on which the
applicable net asset value is determined. To the extent that our Shareholder
Servicing and Transfer Agent (collectively, "Agent") and the Custodian(s) for
any pension, profit-sharing, employer or self-employed plan receive payments on
behalf of the investors, such Agent and Custodian(s) shall be required to record
the time of such receipt with respect to each payment, and the applicable net
asset value shall be that which is next determined and effective after the time
of receipt by them. In all events, you shall forthwith notify all of the dealers
comprising your selling group and the Agent and Custodian(s) of the effective
net asset value as received from us. Should we at any time calculate our net
asset value more frequently than once each business day, you and we will follow
procedures with respect to such additional price or prices comparable to those
set forth above in this Section 3.
4. Sales Commission. (a) You shall be entitled to receive a sales
commission on the sale of shares of the Funds in the amounts and according to
the procedures set forth in the Funds' Prospectus then in effect under the 1933
Act (including any supplements or amendments thereto).
(b) In addition to the payments of the sales commissions to you
provided for in paragraph 4(a), you may also receive reimbursement for expenses
or a maintenance or trail fee as may be required by and described in the
distribution plans adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act
(the "Distribution Plan").
(c) You may allow appointed sub-agents or dealers such commissions or
discounts (not exceeding the total sales commission) as you shall deem
advisable, so long as any such commissions or discounts are set forth in the
Fund's then current Prospectus, to the extent required by the applicable federal
and state securities laws.
5. Payment of Shares. At or prior to the time of delivery of any of our
shares you will pay or cause to be paid to the Custodian, for our account, an
amount in cash equal to the net asset value of such shares. In the event that
you pay for shares sold by you prior to your receipt of payment from purchasers,
you are authorized to reimburse yourself for the net asset value of such shares
from the offering price of such shares when received by you.
6. Registration of Shares. No shares shall be registered on our books
until (i) receipt by us of your written request therefor; (ii) receipt by the
Custodian and Agent of a certificate signed by an officer of the Company stating
the amount to be received therefor; and (iii) receipt of payment of that amount
by the Custodian. We will provide for the recording of all shares purchased in
unissued form in "book accounts", unless a request in writing for certificates
is received by the Agent, in which case certificates for shares in such names
and amounts as is specified in such writing will be delivered by the Agent, as
soon as practicable after registration thereof on the books.
7. Purchases for Your Own Account. You shall not purchase shares for
your own account for purposes of resale to the public, but you may purchase
shares for your own investment account upon your written assurance that the
purchase is for investment purposes only and that the shares will not be resold
except through redemption by us.
8. Sale of Shares to Affiliates. You may sell the Class A and Class M
shares at net asset value, without a sales charge as appropriate, pursuant to a
uniform offer described in the Fund's current Prospectus (i) to our Directors
and officers, our investment manager or your company or affiliated companies
thereof, (ii) to the bona fide, full time employees or sales representatives of
any of the foregoing who have acted as such for at least ninety (90) days, (iii)
to any trust, pension, profit-sharing, or other benefit plan for such persons,
or (iv) to any other person set forth in the Funds' then current Prospectus;
provided that such sales are made in accordance with the rules and regulations
under the 1940 Act and that such sales are made upon the written assurance of
the purchaser that the purchases are made for investment purposes only, not for
the purpose of resale to the public and that the shares will not be resold
except through redemption by us.
9. Allocation of Expenses.
(a) We will pay the following expenses in connection with the sales
and distribution of shares of the Funds:
(i) expenses pertaining to the preparation of our audited and
certified financial statements to be included in any amendments
("Amendments") to our Registration Statement under the 1933 Act,
including the Prospectuses and Statements of Additional Information
included therein;
(ii) expenses pertaining to the preparation (including legal
fees) and printing of all Amendments or supplements filed with the
Securities and Exchange Commission, including the copies of the
Prospectuses and Statements of Additional Information included in such
Amendments and the first ten (10) copies of the definitive
Prospectuses and Statements of Additional Information or supplements
thereto, other than those necessitated by or related to your
(including your "Parents") activities where such amendments or
supplements result in expenses which we would not otherwise have
incurred;
(iii) expenses pertaining to the preparation, printing, and
distribution of any reports or communications, including Prospectuses
and Statements of Additional Information, which are sent to our
existing shareholders;
(iv) filing and other fees to federal and state securities
regulatory authorities necessary to register and maintain registration
of the shares; and
(v) expenses of the Agent, including all costs and expenses in
connection with the issuance, transfer and registration of the shares,
including but not limited to any taxes and other governmental charges
in connection therewith.
(b) Except to the extent that you are entitled to reimbursement under
the provisions of any of the Distribution Plans for the Funds, you
will pay the following expenses:
(i) expenses of printing additional copies of the Prospectus and
Statement of Additional Information and any amendments or supplements
thereto which are necessary to continue to offer our shares to the
public;
(ii) expenses pertaining to the preparation (excluding legal
fees) and printing of all amendments and supplements to our
Registration Statement if the Amendment or supplement arises from or
is necessitated by or related to your (including your "Parent")
activities where those expenses would not otherwise have been incurred
by us; and
(iii) expenses pertaining to the printing of additional copies,
for use by you as sales literature, of reports or other communications
which have been prepared for distribution to our existing shareholders
or incurred by you in advertising, promoting and selling our shares to
the public.
10. Furnishing of Information. We will furnish to you such information
with respect to our company and its shares, in such form and signed by such of
our officers as you may reasonably request, and we warrant that the statements
therein contained when so signed will be true and correct. We will also furnish
you with such information and will take such action as you may reasonably
request in order to qualify our shares for sale to the public under the Blue Sky
Laws or in jurisdictions in which you may wish to offer them. We will furnish
you at least annually with audited financial statements of our books and
accounts certified by independent public accountants, and with such additional
information regarding our financial condition, as you may reasonably request
from time to time.
11. Conduct of Business. Other than the currently effective Prospectus
and Statement of Additional Information, you will not issue any sales material
or statements except literature or advertising which conforms to the
requirements of federal and state securities laws and regulations and which have
been filed, where necessary, with the appropriate regulatory authorities. You
will furnish us with copies of all such material prior to their use and no such
material shall be published if we shall reasonably and promptly object.
You shall comply with the applicable federal and state laws and
regulations where our shares are offered for sale and conduct your affairs with
us and with dealers, brokers or investors in accordance with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
12. Redemption or Repurchase within Seven Days. If shares are tendered
to us for redemption or are repurchased by us within seven (7) business days
after your acceptance of the original purchase order for such shares, you will
immediately refund to us the full amount of any sales commission (net of
allowances to dealers or brokers) allowed to you on the original sale, and will
promptly, upon receipt thereof, pay to us any refunds from dealers or brokers of
the balance of sales commissions reallowed by you. We shall notify you of such
tender for redemption within ten (10) days of the day on which notice of such
tender for redemption is received by us.
13. Other Activities. Your services pursuant to this Agreement shall
not be deemed to be exclusive, and you may render similar services and act as an
underwriter, distributor or dealer for other investment companies in the
offering of their shares.
14. Term of Agreement. This Agreement shall remain in effect until
April 7, 1999, and shall continue annually thereafter for successive one (1)
year periods if approved at least annually (i) by a vote of a majority of the
outstanding voting securities of the Funds or by a vote of the Directors of the
Company, and (ii) by a vote of a majority of the Directors of the Company who
are not interested persons or parties to this Agreement (other than as Directors
of the Company), cast in person at a meeting called for the purpose of voting on
this Agreement.
15. Termination. This Agreement: (i) may be terminated at any time
without the payment of any penalty, either by vote of the Directors of the
Company or by a vote of a majority of the outstanding voting securities of each
Fund, on sixty (60) days' written notice to you; (ii) shall terminate
immediately in the event of its assignment; and (iii) may be terminated by you
on sixty (60) days' written notice to us.
16. Suspension of Sales. We reserve the right at all times to suspend
or limit the public offering of the shares upon written notice to you, and to
reject any order in whole or in part.
17. Miscellaneous. This Agreement shall be subject to the laws of the
State of Maryland 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," "Open-End
Investment Company," "Assignment," "Principal Underwriter," "Interested Person,"
"Parents," and "Majority of the Outstanding Voting Securities," shall have the
meanings set forth in the 1933 Act and the 1940 Act, as applicable, and the
rules and regulations promulgated thereunder.
18. Liability. Nothing contained herein shall be deemed to protect you
against any liability to us or to our shareholders to which you would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of your duties hereunder, or by reason of your reckless
disregard of your obligations and duties hereunder.
If the foregoing meets with your approval, please acknowledge your
acceptance by signing each of the enclosed counterparts hereof and returning
such counterparts to us, whereupon this shall constitute a binding agreement as
of the date first above written.
Very truly yours,
PILGRIM AMERICA MASTERS SERIES, INC.
(on behalf of Pilgrim America Masters Asia
Pacific Equity Fund, Pilgrim America Masters
MidCap Value Fund and Pilgrim America Masters
LargeCap Value Fund)
By: ___________________________________
Title: ___________________________________
Agreed to and Accepted:
PILGRIM AMERICA SECURITIES, INC.
By: ______________________________
Title: ______________________________
