UNDERWRITING AGREEMENT
This Agreement, dated as of the 1st day of August, 1995, made by and
between IAA Trust Growth Fund, Inc. ("the Growth Fund"), a corporation duly
organized under the laws of the state of Maryland and operating as a registered
investment company under the Investment Company Act of 1940, as amended (the
"Act"); IAA Trust Company ("IAA Trust"), a corporation duly organized and
existing under the laws of the State of Illinois; and Fund/Plan Broker Services,
Inc. ("Fund/Plan"), a corporation duly organized and existing under the laws of
the State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, IAA Trust has been appointed investment advisor (the "Advisor") to
the Growth Fund; and
WHEREAS, Fund/Plan is a broker-dealer registered with the U.S. Securities
and Exchange Commission and a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Parties are desirous of entering into an agreement providing
for the distribution by Fund/Plan of the shares of the Growth Fund (the
"Shares");
NOW, THEREFORE, in consideration of the promises and agreements of the
Parties contained herein and in exchange of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:
1. Appointment.
The Growth Fund hereby appoints Fund/Plan as its exclusive agent for the
distribution of the Shares in the fifty United States of America, the
District of Columbia and Puerto Rico, and Fund/Plan hereby accepts such
appointment under the terms of this Agreement. The Growth Fund agrees that
it will not sell any shares to any person except to fill orders for the
shares received through Fund/Plan; provided, however, that the foregoing
exclusive right shall not apply: (a) to shares issued or sold in connection
with the merger or consolidation of any other investment company with the
Growth Fund or the acquisition by purchase or otherwise of all or
substantially all of the assets of any investment company or substantially
all of the outstanding shares of any such company by the Growth Fund; (b)
to shares which may be offered by the Growth Fund to its stockholders for
reinvestment of cash distributed from capital gains or net investment
income of the Growth Fund; or (c) to shares which may be issued to
shareholders of other funds who
exercise any exchange privilege set forth in the Growth Fund's Prospectus.
Notwithstanding any other provision hereof, the Growth Fund may terminate,
suspend, or withdraw the offering of the Shares whenever in its sole
discretion, it deems such action to be desirable.
2. Sale and Repurchase of Shares.
(a) Fund/Plan is hereby granted the right as agent for the Growth Fund, to
sell Shares to the public against orders therefor at the public
offering price (as defined in sub- paragraph 2. (c) below).
(b) Fund/Plan will also have the right to take, as agent for the Growth
Fund, all actions which, in Fund/Plan's judgment, are necessary to
carry into effect the distribution of the Shares.
(c) The public offering price shall be the net asset value of the Shares
then in effect.
(d) The net asset value of the Shares shall be determined in the manner
provided in the then current prospectus and statement of additional
information relating to the Shares and when determined shall be
applicable to all transactions as provided in the prospectus. The net
asset value of the Shares shall be calculated by the Growth Fund or
by another entity on behalf of the Growth Fund. Fund/Plan shall
have no duty to inquire into or liability for the accuracy of the net
asset value per Share as calculated.
(e) On every sale, the Growth Fund shall receive the applicable net asset
value of the Shares promptly.
(f) Upon receipt of purchase instructions, Fund/Plan will transmit such
instructions to the Growth Fund or its transfer agent for registration
of the Shares purchased.
(g) Nothing in this Agreement shall prevent Fund/Plan or any affiliated
person (as defined in the Act) of Fund/Plan from acting as
underwriter or distributor for any other person, firm or corporation
(including other investment companies) or in any way limit or
restrict Fund/Plan or 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 Fund/Plan expressly agrees that it will
not for its own account purchase any shares of the Growth Fund except
for investment purposes and that it will not for its own account sell
any such shares except by redemption of such shares by the Growth
Fund, and that it will not undertake any activities which, in its
judgment, will adversely affect the performance of its obligations to
the Growth Fund under this Agreement.
(h) Fund/Plan may repurchase Shares at such prices and upon such terms
and conditions as shall be specified in the Prospectus.
3. Rules of Sale of Shares.
Fund/Plan does not agree to sell any specific number of Shares. Fund/Plan,
as Underwriter for the Growth Fund, undertakes to sell Shares on a best
efforts basis and only against orders received therefor. The Growth Fund
reserves the right to terminate, suspend or withdraw the sale of its Shares
for any reason deemed adequate by it and the Growth Fund reserves the right
to refuse at any time or times to sell any of its Shares to any person for
any reason deemed adequate by it.
4. Rules of NASD.
(a) Fund/Plan will conform to the Rules of Fair Practice of the NASD and
the securities laws of any jurisdiction in which it directly or
indirectly sells any Shares.
(b) Fund/Plan will require each dealer with whom Fund/Plan has a selling
agreement to conform to the applicable provisions of the Prospectus,
with respect to the public offering price of the Shares, and Fund/Plan
shall not cause the Growth Fund to withhold the placing of purchase
orders so as to make a profit thereby.
(c) The Growth Fund and IAA Trust agree to furnish to Fund/Plan
sufficient copies of any and all: agreements, plans, communications
with the public or other materials which the Growth Fund or IAA
Trust intends to use in connection with any sales of Shares in
adequate time for Fund/Plan to file and clear such materials with
the proper authorities before they are put in use. Fund/Plan and the
Growth Fund or IAA Trust may agree that any such material does
not need to be filed prior to distribution. In addition, the Growth
Fund and IAA Trust agree not to use any such materials until
so filed and cleared for use by appropriate authorities as well as by
Fund/Plan.
(d) Fund/Plan, at its own expense, will qualify as a dealer or broker, or
otherwise, under all applicable state or federal laws required in
order that the Shares may be sold in such states as may be mutually
agreed upon by the Parties.
(e) Fund/Plan shall remain registered with the U.S. Securities and
Exchange Commission and a member of the National Association of
Securities Dealers for the term of this Agreement.
(f) Fund/Plan shall not, in connection with any sale or solicitation of
a sale of the Shares, make or authorize any representative, Service
Organization, broker or dealer to make, any representations
concerning the Shares except those contained in the Prospectus
covering the Shares and in communications with the public or sales
materials approved by Fund/Plan as information supplemental to
such Prospectus. Copies of the Prospectus will be supplied by the
Growth Fund or IAA Trust to Fund/Plan in reasonable quantities
upon request.
5. Records to be Supplied by the Growth Fund.
The Growth Fund shall furnish to Fund/Plan copies of all information,
financial statements and other papers which Fund/Plan may reasonably
request for use in connection with the distribution of the Shares
including, but not limited to, one certified copy of all financial
statements prepared for the Growth Fund by its independent public
accountants.
6. Expenses.
(a) The Growth Fund will bear the following expenses:
(i) preparation, setting in type, and printing of sufficient copies
of the prospectuses and statements of additional information for
distribution to shareholders, and the distribution of same to the
shareholders;
(ii) preparation, printing, and distribution of reports and other
communications to shareholders;
(iii) registration of the Shares under the federal securities laws;
(iv) qualification of the Shares for sale in the jurisdictions as
directed by the
Growth Fund;
(v) maintaining facilities for the issue and transfer of the Shares;
(vi) supplying information, prices, and other data to be furnished by
the Growth Fund under this Agreement; and
(vii) any original issue taxes or transfer taxes applicable to the
sale or delivery of the Shares or certificates therefor.
(b) Underwriter will pay expenses incident to the sale and distribution of
the Shares sold hereunder to the extent that payment of such expenses
is made by the Fund pursuant to a Distribution Plan as set forth under
Rule 12b-1 of the Investment Company Act of 1940, as amended. All
expenses in excess of those monies paid pursuant to the Distribution
Plan will be paid by the Advisor.
(c) The Underwriter will provide a report to the Growth Fund regarding the
Distribution Plan under Rule 12b-1 on a quarterly basis. The report
will identify accruals, expenditures and trail commission payments.
7. Term.
(a) The term of this Agreement shall commence on the date hereinabove
first written ("Effective Date").
(b) This Agreement shall remain in effect for two (2) years from the
Effective Date. This Agreement shall continue thereafter for periods
not exceeding one (1) year if approved at least annually (i) by a vote
of a majority of the outstanding voting securities of each Series or
by a vote of the Board of Directors of the Growth Fund, and (ii) by a
vote of a majority of the Directors of the Growth Fund who are not
interested persons or parties to this Agreement (other than as
Directors of the Growth Fund), cast in person at a meeting called for
the purpose of voting on such approval.
(c) This Agreement (i) may at any time be terminated without the payment
of any penalty, either by a vote of the Directors of the Growth Fund
or by a vote of a majority of the outstanding voting securities on
sixty (60) days' written notice to Fund/Plan; and (ii) may be
terminated by Fund/Plan on sixty (60) days' written notice to the
Growth Fund.
(d) This Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Administration Agreement
between Fund/Plan
Services, Inc., and the Growth Fund.
8. Indemnification of Fund/Plan by IAA Trust.
IAA Trust will indemnify and hold Fund/Plan harmless for the actions of IAA
Trust's employees registered with the NASD as Fund/Plan representatives and
will undertake to maintain compliance with all rules and regulations
concerning any and all sales presentations made by such employees.
9. Liability of Fund/Plan.
(a) Fund/Plan, its directors, officers, employees, shareholders and agents
shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Growth Fund in connection with the
performance of this Agreement, except a loss resulting from a breach
of Fund/Plan's obligation pursuant to Section 4 of this Agreement, a
breach of fiduciary duty with respect to the receipt of compensation
for services or a loss resulting from willful misfeasance, bad faith
or negligence on the part of Fund/Plan in the performance of its
obligations and duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(b) The Growth Fund agrees to indemnify and hold harmless Fund/Plan
against any and all liability, loss, damages, costs or expenses
(including reasonable counsel fees) which Fund/Plan may incur or be
required to pay hereafter, in connection with any action, suit or
other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which Fund/Plan may be involved
as a party or otherwise or with which Fund/Plan may be threatened, by
reason of the offer or sale of the Growth Fund shares by persons other
than Fund/Plan or its representatives.
(c) Any person, even though also a director, officer, employee,
shareholder or agent of Fund/Plan, who may be or become an officer,
director, trustee, employee or agent of the Growth Fund, shall be
deemed, when rendering services to the Growth Fund or acting on any
business of the Growth Fund (other than services or business in
connection with Fund/Plan's duties hereunder), to be rendering such
services to or acting solely for the Growth Fund and not as a
director, officer, employee, shareholder or agent, or one under the
control or direction of Fund/Plan even though receiving a salary from
Fund/Plan.
(d) The Growth Fund agrees to indemnify and hold harmless Fund/Plan, and
each
person, who controls Fund/Plan within the meaning of Section 15
of the Securities Act of 1933, as amended (the "Securities Act"), or
Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigative,
legal and other expenses incurred in connection therewith) to which
they, or any of them, may become subject under the Act, the Securities
Act, the Exchange Act or other federal or state law or regulation, at
common law or otherwise insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in a prospectus, statement of
additional information, supplement thereto, sales literature or other
written information prepared by the Growth Fund and furnished by the
Growth Fund to Fund/Plan for Fund/Plan's use hereunder, disseminated
by the Growth Fund or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading. Such indemnity shall not, however, inure to the benefit of
Fund/Plan (or any person controlling Fund/Plan) on account of any
losses, claims, damages or liabilities (or actions, suits or
proceedings in respect thereof) arising from the sale of the shares of
the Growth Fund to any person by Fund/Plan (i) if such untrue
statement or omission or alleged untrue statement or omission was made
in the prospectus, statement of additional information, or supplement,
sales or other literature, in reliance upon and in conformity with
information furnished in writing to the Growth Fund by Fund/Plan
specifically for use therein or (ii) if such losses, claims, damages,
or liabilities arise out of or are based upon an untrue statement or
omission or alleged untrue statement or omission found in any
prospectus, statement of additional information, supplement, sales or
other literature, subsequently corrected, but, negligently distributed
by Fund/Plan and a copy of the corrected prospectus was not delivered
to such person at or before the confirmation of the sale to such
person. Underwriter agrees to indemnify and hold harmless the Fund,
each person, if any, who controls the Fund within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement of a material fact contained in a
Prospectus or Statement of Additional Information or any supplement
thereto, or arise out of or are based upon any 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
based upon information furnished to the Fund by the Underwriter in
writing specifically for use therein.
(e) Fund/Plan shall not be responsible for any damages, consequential or
otherwise, which IAA Trust or the Growth Fund may experience, due to
the disruption of the distribution of Shares caused by any action
arising out of the actions or inactions of any registered
representative or affiliate of Fund/Plan.
10. Amendments.
No provision of this Agreement may be amended or modified, in any manner
whatsoever except by a written agreement properly authorized and executed
by the Parties.
11. Section Headings.
Section and Paragraph headings are for convenience only and shall not be
construed as part of this Agreement.
12. Reports.
Fund/Plan shall prepare reports for the Board of Directors of the Growth
Fund on a quarterly basis showing such information as from time to time
shall be reasonably requested by such Board.
13. Severability.
If any part, term or provision of this Agreement is held by any court to be
illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not affected, and the
rights and obligations of the parties shall be construed and enforced as if
the Agreement did not contain the particular part, term or provision held
to be illegal or invalid provided that the basic agreement is not thereby
substantially impaired.
14. Governing Law.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania and the venue of any action arising under this Agreement shall
be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
15. Authority to Execute
The Parties represent and warrant that the execution and delivery of this
Agreement by the undersigned officers of the Parties has been duly and
validly authorized by resolution of the respective Boards of Directors or
each of the Parties.
16. This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of nine typewritten pages to be signed by their duly authorized
officers, as of the day and year first above written.
IAA Trust Company Fund/Plan Broker Services, Inc.
------------------------------------ ------------------------------------
By: Xxxx X. Xxxx By: Xxxxxxx X. Xxxxx,
President President
IAA Trust Growth Fund, Inc.
------------------------------------
By: Xxxxxxx X. Xxxxxx
Vice President
