Exhibit 5(a)
XXXXXXX FINANCIAL SERVICES GROWTH FUND, INC.
PRINCIPAL UNDERWRITING CONTRACT
CONTRACT made as of September 20, 2001, between XXXXXXX FINANCIAL
SERVICES GROWTH FUND, INC., a Maryland corporation, ("Fund") and XXXXXXX
ADVISORS, INC., a Delaware corporation, ("Xxxxxxx Advisors").
WHEREAS the Fund is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company and
currently offers distinct series of shares of common stock ("Series"), which
correspond to distinct portfolios and for which the Fund's board of directors
("Board") has established shares of common stock as Class A shares, Class B
shares, Class C shares and Class Y shares (referred to collectively as
"Shares"); and
WHEREAS the Fund desires to retain Xxxxxxx Advisors as principal
underwriter in connection with the offering and sale of the Shares of the
above-referenced Series and of such other Series as may hereafter be designated
by the Board and have one or more classes of Class A shares, Class B shares,
Class C shares and/or Class Y shares established and has adopted separate Plans
of Distribution pursuant to Rule 12b-1 under the 1940 Act for its Class A
shares, Class B shares and Class C shares (respectively, "Class A Plan", "Class
B Plan" and "Class C Plan"); and
WHEREAS Xxxxxxx Advisors is willing to act as principal underwriter of
the Shares of each such Series on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Xxxxxxx Advisors as its
exclusive agent to be the principal underwriter to sell and to arrange for the
sale of the Shares on the terms and for the period set forth in this Contract.
Xxxxxxx Advisors hereby accepts such appointment and agrees to act hereunder. It
is understood, however, that this appointment does not preclude sales of the
Shares directly through the Fund's transfer agent in the manner set forth in the
Registration Statement. As used in this Contract, the term "Registration
Statement" shall mean the currently effective registration statement of the
Fund, and any supplements thereto, under the Securities Act of 1933, as amended
("1933 Act"), and the 1940 Act.
2. Services and Duties of Xxxxxxx Advisors.
(a) Xxxxxxx Advisors agrees to sell Shares on a best efforts basis
from time to time during the term of this Contract as agent for the Fund and
upon the terms described in the Registration Statement.
(b) Upon the later of the date of this Contract or the initial
offering of Shares to the public by a Series, Xxxxxxx Advisors will hold itself
available to receive purchase orders, satisfactory to Xxxxxxx Advisors, for
Shares of that Series and will accept such orders on behalf of the Fund as of
the time of receipt of such orders and promptly transmit such orders as are
accepted to the Fund's transfer agent. Purchase orders shall be deemed effective
at the time and in the manner set forth in the Registration Statement.
(c) Xxxxxxx Advisors in its discretion may enter into agreements to
sell Shares to such registered and qualified retail dealers as it may select.
In making agreements with such dealers, Xxxxxxx Advisors shall act only as
principal and not as agent for the Fund.
(d) The offering price of the Shares shall be the net asset value per
share as next determined by the Fund following receipt of an order at Xxxxxxx
Advisors' principal office plus the applicable initial sales charge, if any,
computed as set forth in the Registration Statement. The Fund shall promptly
furnish Brinson Advisors with a statement of each computation of net asset
value.
(e) Xxxxxxx Advisors shall not be obligated to sell any certain
number of Shares.
(f) To facilitate redemption of Shares by shareholders directly or
through dealers, Xxxxxxx Advisors is authorized but not required on behalf of
the Fund to repurchase Shares presented to it by shareholders and dealers at the
price determined in accordance with, and in the manner set forth in, the
Registration Statement. Such price shall reflect the subtraction of the
contingent deferred sales charge, if any, computed in accordance with and in the
manner set forth in the Registration Statement.
(g) Xxxxxxx Advisors shall provide ongoing shareholder services,
which include responding to shareholder inquiries, providing shareholders with
information on their investments in the Shares and any other services now or
hereafter deemed to be appropriate activities for the payment of "service fees"
under Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("NASD") (collectively, "service activities").
(h) Xxxxxxx Advisors shall have the right to use any list of
shareholders of the Fund or any other list of investors which it obtains in
connection with its provision of services under this Contract; provided,
however, that Xxxxxxx Advisors shall not sell or knowingly provide such list or
lists to any unaffiliated person.
3. Authorization to Enter into Dealer Agreements and to Delegate Duties
as Principal Underwriter. With respect to the Shares of any or all Series,
Xxxxxxx Advisors may enter into dealer agreements with any registered and
qualified dealer with respect to sales of Shares or the provision of service
activities. In a separate contract or as part of any such dealer agreement,
Xxxxxxx Advisors also may delegate to any registered and qualified dealer any or
all of its duties specified in this Contract, provided that such separate
contract or dealer agreement
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imposes on the counterparty bound thereby all applicable duties and conditions
to which Xxxxxxx Advisors is subject under this Contract.
4. Services Not Exclusive. The services furnished by Xxxxxxx Advisors
hereunder are not to be deemed exclusive and Xxxxxxx Advisors shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of Xxxxxxx Advisors, who may also be
a Board member, officer or employee of the Fund, to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar or a dissimilar nature.
5. Compensation.
(a) As compensation for its service activities under this contract
with respect to Class A, B and C shares, Xxxxxxx Advisors shall receive from the
Fund a service fee at the rate and under the terms and conditions of the Class A
Plan, Class B Plan and Class C Plan, respectively, as amended from time to time,
and subject to any further limitations on such fee as the Board may impose.
(b) As compensation for its activities under this contract with
respect to the distribution of the Class B and C shares, Xxxxxxx Advisors shall
receive from the Fund a distribution fee at the rate and under the terms and
conditions of the Class B Plan and Class C Plan, respectively, as amended from
time to time, and subject to any further limitations on such fee as the Board
may impose.
(c) As compensation for its activities under this contract with
respect to the distribution of Shares, Xxxxxxx Advisors shall retain the initial
sales charge, if any, on purchases of Shares as set forth in the Registration
Statement. Xxxxxxx Advisors is authorized to collect the gross proceeds derived
from the sale of Shares, remit the net asset value thereof to the Fund upon
receipt of the proceeds and retain the initial sales charge, if any.
(d) As compensation for its activities under this contract with
respect to the distribution of Shares, Xxxxxxx Advisors shall receive all
contingent deferred sales charges imposed on redemptions of Shares. Whether and
at what rate a contingent deferred sales charge will be imposed with respect to
a redemption shall be determined in accordance with, and in the manner set forth
in, the Registration Statement.
(e) Xxxxxxx Advisors may reallow any or all of the initial sales
charges, contingent deferred sales charges, distribution fees or service fees
which it is paid under this Contract to such dealers as Xxxxxxx Advisors may
from time to time determine.
6. Duties of the Fund.
(a) The Fund reserves the right at any time to withdraw offering any
class or classes of Shares of any or all Series by written notice to Xxxxxxx
Advisors at its principal office.
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(b) The Fund shall keep Xxxxxxx Advisors fully informed of its
affairs and shall make available to Xxxxxxx Advisors copies of all information,
financial statements, and other documents which Xxxxxxx Advisors may reasonably
request for use in connection with the distribution of Shares, including,
without limitation, certified copies of any financial statements prepared for
the Fund by its independent public accountant and such reasonable number of
copies of the most current prospectus, statement of additional information, and
annual and interim reports of any Series as Xxxxxxx Advisors may request, and
the Fund shall cooperate fully in the efforts of Xxxxxxx Advisors to sell and
arrange for the sale of the Shares of the Series and in the performance of
Xxxxxxx Advisors under this Contract.
(c) The Fund shall take, from time to time, all necessary action,
including payment of the related filing fee, as may be necessary to register its
Shares under the 1933 Act to the end that there will be available for sale such
number of Shares as Xxxxxxx Advisors may be expected to sell. The Fund agrees to
file, from time to time, such amendments, reports, and other documents as may be
necessary in order that there will be no untrue statement of a material fact in
the Registration Statement, nor any omission of a material fact which omission
would make the statements therein misleading.
(d) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Shares of each Series for sale under
the securities laws of such states or other jurisdictions as Xxxxxxx Advisors
and the Fund may approve, provided that the Fund shall not be required to amend
its Articles of Incorporation or By-Laws to comply with the laws of any
jurisdiction, to maintain an office in any jurisdiction, to change the terms of
the offering of the Shares in any jurisdiction from the terms set forth in its
Registration Statement, to qualify as a foreign corporation in any jurisdiction,
or to consent to service of process in any jurisdiction other than with respect
to claims arising out of the offering of the Shares. Xxxxxxx Advisors shall
furnish such information and other material relating to its affairs and
activities as may be required by the Fund in connection with such
qualifications.
7. Expenses of the Fund. The Fund shall bear all costs and expenses of
registering the Shares with the Securities and Exchange Commission
("Commission") and qualifying the Shares for offer and sale with state and other
regulatory bodies, and shall assume expenses related to communications with
shareholders of each Series, including (i) fees and disbursements of its counsel
and independent public accountant; (ii) the preparation, filing and printing of
registration statements and/or prospectuses or statements of additional
information required under the federal securities laws; (iii) the preparation
and mailing of annual and interim reports, prospectuses, statements of
additional information and proxy materials to shareholders; and (iv) the
qualifications of Shares for sale under the securities laws of such
jurisdictions as shall be selected by the Fund and Xxxxxxx Advisors pursuant to
Paragraph 6(d) hereof, and the costs and expenses payable to each such
jurisdiction for continuing qualification therein.
8. Expenses of Xxxxxxx Advisors. Xxxxxxx Advisors shall bear all costs
and expenses of (i) preparing, printing and distributing any materials not
prepared by the Fund and other materials used by Xxxxxxx Advisors in connection
with the sale of Shares under this
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Contract, including the additional cost of printing copies of prospectuses,
statements of additional information, and annual and interim shareholder reports
other than copies thereof required for distribution to existing shareholders or
for filing with any federal or state securities authorities; (ii) any expenses
of advertising incurred by Xxxxxxx Advisors in connection with such offering;
(iii) the expenses of registration or qualification of Xxxxxxx Advisors as a
broker or dealer under federal or state laws and the expenses of continuing such
registration or qualification; and (iv) all compensation paid to Xxxxxxx
Advisors' employees and others for selling Shares, and all expenses of Xxxxxxx
Advisors, its employees and others who engage in or support the sale of Shares
as may be incurred in connection with their sales efforts.
9. Indemnification.
(a) The Fund agrees to indemnify, defend and hold Xxxxxxx Advisors,
its officers and directors, and any person who controls Xxxxxxx Advisors within
the meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which Xxxxxxx Advisors, its officers,
directors or any such controlling person may incur under the 1933 Act, or under
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration Statement or arising
out of or based upon any alleged omission to state a material fact required to
be stated in the Registration Statement or necessary to make the statements
therein not misleading, except insofar as such claims, demands, liabilities or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by Xxxxxxx Advisors to the Fund for use in
the Registration Statement; provided, however, that this indemnity agreement
shall not inure to the benefit of any person who is also an officer or Board
member of the Fund or who controls the Fund within the meaning of Section 15 of
the 1933 Act, unless a court of competent jurisdiction shall determine, or it
shall have been determined by controlling precedent, that such result would not
be against public policy as expressed in the 1933 Act; and further provided,
that in no event shall anything contained herein be so construed as to protect
Xxxxxxx Advisors against any liability to the Fund or to the shareholders of any
Series to which Xxxxxxx Advisors would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations under this Contract. The
Fund shall not be liable to Xxxxxxx Advisors under this indemnity agreement with
respect to any claim made against Xxxxxxx Advisors or any person indemnified
unless Xxxxxxx Advisors or other such person shall have notified the Fund in
writing of the claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim shall have
been served upon Xxxxxxx Advisors or such other person (or after Xxxxxxx
Advisors or the person shall have received notice of service on any designated
agent). However, failure to notify the Fund of any claim shall not relieve the
Fund from any liability which it may have to Xxxxxxx Advisors or any person
against whom such action is brought otherwise than on account of this indemnity
agreement. The Fund shall 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 claims subject to this
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indemnity agreement. If the Fund elects to assume the defense of any such claim,
the defense shall be conducted by counsel chosen by the Fund and satisfactory to
indemnified defendants in the suit whose approval shall not be unreasonably
withheld. In the event that the Fund elects to assume the defense of any suit
and retain counsel, the indemnified defendants shall bear the fees and expenses
of any additional counsel retained by them. If the Fund does not elect to assume
the defense of a suit, it will reimburse the indemnified defendants for the
reasonable fees and expenses of any counsel retained by the indemnified
defendants. The Fund agrees to notify Xxxxxxx Advisors promptly of the
commencement of any litigation or proceedings against it or any of its officers
or Board members in connection with the issuance or sale of any of its Shares.
(b) Xxxxxxx Advisors agrees to indemnify, defend, and hold the Fund,
its officers and Board members and any person who controls the Fund within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Fund, its Board members
or officers, or any such controlling person may incur under the 1933 Act or
under common law or otherwise arising out of or based upon any alleged untrue
statement of a material fact contained in information furnished by Xxxxxxx
Advisors to the Fund for use in the Registration Statement, arising out of or
based upon any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement necessary to
make such information not misleading, or arising out of any agreement between
Xxxxxxx Advisors and any retail dealer, or arising out of any supplemental sales
literature or advertising used by Xxxxxxx Advisors in connection with its duties
under this Contract. Xxxxxxx Advisors shall 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 the claim, but if Xxxxxxx Advisors elects to assume the
defense, the defense shall be conducted by counsel chosen by Xxxxxxx Advisors
and satisfactory to the indemnified defendants whose approval shall not be
unreasonably withheld. In the event that Xxxxxxx Advisors elects to assume the
defense of any suit and retain counsel, the defendants in the suit shall bear
the fees and expenses of any additional counsel retained by them. If Xxxxxxx
Advisors does not elect to assume the defense of any suit, it will reimburse the
indemnified defendants in the suit for the reasonable fees and expenses of any
counsel retained by them.
10. Services Provided to the Fund by Employees of Xxxxxxx Advisors. Any
person, even though also an officer, director, employee or agent of Xxxxxxx
Advisors, who may be or become an officer, Board member, employee or agent of
the Fund, shall be deemed, when rendering services to the Fund or acting in any
business of the Fund, to be rendering such services to or acting solely for the
Fund and not as an officer, director, employee or agent or one under the control
or direction of Xxxxxxx Advisors even though paid by Xxxxxxx Advisors.
11. Duration and Termination.
(a) This Contract shall become effective upon the date written above,
provided that, with respect to any class of Shares of a Series, this Contract
shall not take effect
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unless such action has first been approved by vote of a majority of the Board
and by vote of a majority of those Board members who are not interested persons
of the Fund and, for a class of Shares for which a Plan of Distribution has been
adopted, also have no direct or indirect financial interest in the operation of
the Plan of Distribution or in any agreements related thereto (all such Board
members collectively being referred to herein as the "Independent Board
Members"), cast in person at a meeting called for the purpose of voting on such
action.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods of
twelve months each, provided that such continuance is specifically approved at
least annually (i) by a vote of a majority of the Independent Board Members,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by the Board or with respect to a class of Shares of any given Series
by vote of a majority of the outstanding voting securities of that class of
Shares of such Series.
(c) Notwithstanding the foregoing, with respect to a class of Shares
of a Series, this Contract may be terminated at any time, without the payment of
any penalty, by vote of the Board, by vote of a majority of the Independent
Board Members or by vote of a majority of the outstanding voting securities of
that class of Shares of the Series on sixty days' written notice to Xxxxxxx
Advisors or by Brinson Advisors at any time, without the payment of any penalty,
on sixty days' written notice to the Fund or such Series. This Contract will
automatically terminate in the event of its assignment.
(d) Termination of this Contract with respect to a class of Shares of
any given Series shall in no way affect the continued validity of this Contract
or the performance thereunder with respect to any other classes of Shares of
that Series or any classes of Shares of any other Series.
12. Amendment of this Contract. No provision of this Contract 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.
13. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient upon receipt in writing at the
other party's principal offices.
14. Governing Law. This Contract shall be construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act. To the extent that
the applicable laws of the State of New York conflict with the applicable
provisions of the 1940 Act, the latter shall control. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person"
and "assignment" shall have the same meaning as such terms have in the 1940 Act,
subject to any exemption or interpretation as may be issued by the Commission by
any rule, regulation or order or contained in any no-action or interpretive
positions taken by the Commission staff. Where the effect of a requirement of
the 1940 Act reflected in any provision of this Contract is revised by a rule,
regulation, order or interpretation of the Commission or the Commission staff,
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whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation, order or interpretation.
15. Miscellaneous. The captions in this Contract 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. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated as of the day and year first above
written.
XXXXXXX FINANCIAL SERVICES XXXXXXX FINANCIAL SERVICES
GROWTH FUND, INC. GROWTH FUND, INC.
By: /s/ Xxxxxxxx Xxxxxxxx Name: /s/ Xxxxx X. Xxxxxx
--------------------- --------------------
Name: Xxxxxxxx Xxxxxxxx Name: Xxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President and Assistant
Secretary
XXXXXXX ADVISORS, INC. XXXXXXX ADVISORS, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxx X. Doberman
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Name: Xxxx Xxxxx Name: Xxx X. Doberman
Title: Associate Director Title: General Counsel
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