SPARROW GROWTH FUND
Dealer's Agreement
Unified Management Corporation ("Distributor") invites you, as a
selected dealer, to participate as principal in the distribution of shares (the
"Shares") of the Sparrow Growth Fund (the "Fund"), of which it is the exclusive
underwriter. Distributor agrees to sell to you, subject to any limitations
imposed by the Fund, Shares issued by the Fund and to promptly confirm each sale
to you. All sales will be made according to the following terms:
1. All offerings of any of the Shares by you must be made at the public
offering prices, and shall be subject to the conditions of offering, set forth
in the then current prospectus of the Fund (the "Prospectus") and to the terms
and conditions herein set forth, and you agree to comply with all requirements
applicable to you of all applicable laws, including federal and state securities
laws, the rules and regulations of the Securities and Exchange Commission, and
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. (the "NASD"), including Section 24 of the Rules of Fair Practice of the
NASD. You will not offer the Shares for sale in any state or other jurisdiction
where they are not qualified for sale under the Blue Sky Laws and regulations of
such state or jurisdiction, or where you are not qualified to act as a dealer.
Upon application to Distributor, Distributor will inform you as to the states or
other jurisdictions in which Distributor believes the Shares may legally be
sold.
2. You hereby authorize Distributor to act as your agent in connection
with all transactions in open accounts in which you are designated as Dealer of
Record. All designations as Dealer of Record, and all authorizations of
Distributor to act as your Agent pursuant thereto, shall cease upon the
termination of this Agreement or upon the investor's instructions to transfer
his open account to another Dealer of Record.
3. Distributor reserves the right to cancel this Agreement at any time
without notice if any Shares shall be offered for sale by you at less than the
then current public offering prices determined by, or for, the Fund.
4. All orders are subject to acceptance or rejection by Distributor in
its sole discretion. The Distributor reserves the right, in its discretion,
without notice, to suspend sales or withdraw the offering of Shares entirely.
5. Payment shall be made to the Fund and shall be received by its
transfer agent within three (3) business days after the acceptance of your order
or such shorter time as may be required by law. With respect to all Shares
ordered by you for which payment has not been received, you hereby assign and
pledge to Distributor all of your right, title and interest in such Shares to
secure payment therefor. You appoint Distributor as your agent to execute and
deliver all documents necessary to effectuate any of the transactions described
in this paragraph. If such payment is not received within the required time
period, Distributor reserves the right, without notice, and at its option,
forthwith (a) to cancel the sale, (b) to sell
the Shares ordered by you back to the Fund, or (c) to assign your payment
obligation, accompanied by all pledged Shares, to any person. You agree that
Distributor may hold you responsible for any loss, including loss of profit,
suffered by the Fund, its Transfer Agent or Distributor, resulting from your
failure to make payment within the required time period.
6. No person is authorized to make any representations concerning
Shares of the Fund except those contained in the current applicable Prospectus
and Statement of Additional Information and in sales literature issued and
furnished by Distributor supplemental to such Prospectus. Distributor will
furnish additional copies of the current Prospectus and Statement of Additional
Information and such sales literature and other releases and information issued
by Distributor in reasonable quantities upon request.
7. Under this Agreement, you act as principal and are not employed by
Distributor as broker, agent or employee. You are not authorized to act for
Distributor nor to make any representation on its behalf; and in purchasing or
selling Shares hereunder, you rely only upon the current Prospectus and
Statement of Additional Information furnished to you by Distributor from time to
time and upon such written representations as may hereafter be made by
Distributor to you over its signature.
8. You appoint the transfer agent for the Fund as your agent to execute
the purchase transactions of Shares in accordance with the terms and provisions
of any account, program, plan or service established or used by your customers
and to confirm each purchase to your customers on your behalf, and you guarantee
the legal capacity of your customers purchasing such Shares and any co-owners of
such Shares.
9. You will (a) maintain all records required by law relating to
transactions in the Shares, and upon the request of Distributor, or the request
of the Fund, promptly make such records available to Distributor or to the Fund
as are requested, and (b) promptly notify Distributor if you experience any
difficulty in maintaining the records required in the foregoing clause in an
accurate and complete manner. In addition, you will establish appropriate
procedures and reporting forms and schedules, approved by Distributor and by the
Fund, to enable the parties hereto and the Fund to identify all accounts opened
and maintained by your customers.
10. You will be compensated, as of the end of each calendar quarter, by
the Fund at the rate of _____% per annum of the average daily balances of the
accounts for which you are designated as Dealer of Record.
11. Each party hereto represents that it is presently, and, at all
times during the term of this Agreement, will be, a member in good standing of
the NASD and agrees to abide by all its Rules of Fair Practice including, but
not limited to, the following provisions:
(a) You shall not withhold placing customers' orders for any Shares so
as to profit yourself as a result of such withholding. You shall not purchase
any Shares from Distributor other than for investment, except for the purpose of
covering purchase orders already received.
(b) All conditional orders received by Distributor must be at a
specified definite price.
(c) Neither Distributor, as exclusive underwriter for the Fund, nor you
as principal, shall purchase any Shares from a record holder at a price lower
than the net asset value then quoted by, or for, the Fund. Nothing in this
sub-paragraph shall prevent you from selling Shares for the account of a record
holder to Distributor or the Fund at the net asset value currently quoted by, or
for, the Fund and charging the investor a fair commission for handling the
transaction.
(d) You warrant on behalf of yourself and your registered
representatives and employees that any purchase of Shares at net asset value by
the same pursuant to the terms of the Prospectus of the Fund is for investment
purposes only and not for purposes of resale. Shares so purchased may be resold
only to the Fund.
12. Distributor represents that (a) the Fund is properly registered
pursuant to the Investment Company Act of 1940; (b) that the Fund's Shares are
properly registered under the Securities Act of 1933; (c) that the registration
statement and Prospectus comply in all material respects with the provisions of
the Securities Act of 1933, including the rules and regulations promulgated
thereunder, and do not contain any untrue statement of material fact nor omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and (d) Distributor is not aware of any
investigation commenced by the Securities and Exchange Commission or any other
regulatory or self-regulatory organization, or any proceeding or threatened
proceeding, that concerns the Fund.
13. You agree that you will indemnify Distributor, the Fund, the Fund's
transfer agent, the Fund's investment adviser, and the Fund's custodian and hold
such persons harmless from any claims or assertions relating to the lawfulness
of your participation in this Agreement and the transactions contemplated hereby
or relating to any activities of any persons or entities affiliated with you
which are performed in connection with the discharge of your responsibilities
under this Agreement. If any such claims are asserted, the indemnified parties
shall have the right to engage in their own defense, including the selection and
engagement of legal counsel of their choosing, and all costs of such defense
shall be borne by you.
14. Distributor shall indemnify, defend and hold harmless you and each
of your affiliates, directors, officers, employees and agents and each person
who controls you within the meaning of the Securities Act of 1933, as amended
(collectively, the "Indemnified Parties") from and against any and all losses
insofar as such losses arise out of or are based upon (1) Distributor's
negligence, willful misconduct or violation of applicable law in the performance
of its duties and obligations under the Agreement, (2) any untrue or alleged
untrue statement of a material fact contained in the registration statement,
Prospectus or Statement of Additional Information of the Fund or any promotional
material or other information furnished to the Indemnified Parties, in writing,
for distribution to the shareholders, and (3) any material breach by Distributor
of a representation, warranty or covenant made in this Agreement. Distributor
shall also reimburse the Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
against such losses. This indemnity provision is in addition to any other
liability which Distributor may otherwise have. Promptly after receipt by an
Indemnified Party of notice of the
commencement of an investigation, action, claim or proceeding, such Indemnified
Party will, if a claim in respect thereof is to be made against Distributor
under this section, notify Distributor of the commencement thereof, but the
omission so to notify Distributor will not relieve it from any liability which
it may have to any Indemnified Party otherwise than under this section. In case
any such action is brought against any Indemnified Party, and it has notified
Distributor of the commencement thereof, Distributor will be entitled to
participate therein and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such Indemnified Party. After notice from
Distributor of its intention to assume the defense of an action, the Indemnified
Party shall bear the expenses of any additional counsel obtained by it, and
Distributor shall not be liable to such Indemnified Party under this section for
any legal or other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation. The Indemnified Party may not settle any action without the
written consent of Distributor. Distributor may not settle any action without
the written consent of the Indemnified Party unless such settlement completely
and finally releases the Indemnified Party from any and all liability. In either
event, consent shall not be unreasonably withheld.
15. This Agreement may be assigned by Distributor to an affiliated
entity controlling, controlled by, or under common control with Distributor,
provided, however, that this Agreement will automatically terminate in the event
of its assignment as such term is defined in the Investment Company Act of 1940.
Either party hereto may cancel this Agreement without penalty upon ten days'
written notice. This Agreement may also be terminated at any time without
penalty by the vote of a majority of the members of the Board of Trustees of the
Fund who are not "interested persons" (as such term is defined in the Investment
Company Act of 1940), or by a vote of a majority of the outstanding voting
securities of the Fund on ten days' written notice.
16. All communications to Distributor should be sent to Unified
Management Corporation, 000 X. Xxxxxxxxxxxx Xx., Xxxxxxxxxxxx, Xxxxxxx 00000,
Attention: President, or at such other address as Distributor may designate in
writing. Any notice to you shall be duly given if mailed or telegraphed to you
at the address of your principal office, as indicated below in your acceptance
of this Agreement.
17. This Agreement supersedes any other agreement with you relating to
the offer and sale of the Shares, and relating to any other matter discussed
herein.
18. Distributor agrees that the names, addresses and telephone numbers
of all customers of you and your affiliates obtained by virtue of this Agreement
shall remain confidential and shall not be used by Distributor for any purpose
whatsoever except as may be necessary to distribute and administer the Fund. In
no event shall the names, addresses or telephone numbers of customers or
prospective customers of you and your affiliates be furnished by Distributor or
its agents to any other individuals, organizations or institutions except as may
be required by law. This provision shall survive termination of this Agreement.
19. This Agreement shall be binding (i) upon placing your first order
with Distributor for
the purchase of Shares, or (ii) upon receipt by Distributor in Indianapolis,
Indiana of a counterpart of this Agreement duly accepted and signed by you,
whichever shall occur first. This Agreement shall be construed in accordance
with the laws of the State of Ohio.
20. The undersigned, executing this Agreement on behalf of Dealer,
hereby warrants and represents that he is duly authorized to so execute this
Agreement on behalf of Dealer.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return one copy of this Agreement to the Distributor.
ACCEPTED BY DEALER UNIFIED MANAGEMENT
CORPORATION
By: By:
Name:
Authorized Signature, Position Position:
By:
Type or Print Name
Name:
Position:
Dealer Name
Address
Address
Phone
Date
