Principal Underwriter Agreement
THIS AGREEMENT is made and entered into as of this ___ day of _____, 2001,
by and between ____________________, an open end investment company (the
"Company"), and T. O. Xxxxxxxxxx Securities, Inc., a Connecticut corporation
(the "Principal Underwriter" or "Underwriter").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and is authorized to issue shares of common stock or beneficial interest
("Shares") in separate series, with each such series representing interests in a
separate portfolio of securities and other assets;
WHEREAS, the Company desires to retain the Underwriter as a statutory
principal underwriter in connection with the offering and sale of the Shares of
each series listed on Exhibit A hereto (as amended from time to time) (each a
"Fund", collectively the "Funds");
WHEREAS, the Underwriter is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member of
the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, this Agreement has been approved by a vote of the Company's board
of directors ("Board") and its disinterested directors in conformity with
Section 15(c) of the 1940 Act; and
WHEREAS, the Underwriter is willing to act as the statutory principal
underwriter for the Company on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. Appointment as Principal Underwriter
The Company hereby appoints the Underwriter as its agent for the sale and
distribution of Shares of the Funds, on the terms and conditions set forth in
this Agreement, and the Underwriter hereby accepts such appointment and agrees
to perform the services and duties set forth in this Agreement.
2. Services and Duties of the Underwriter
A. The Underwriter agrees to sell Shares of the Funds on a best efforts
basis as agent for the Company during the term of this Agreement, upon the terms
and at the current offering price (plus sales charge, if any) described in the
Prospectus. As used in this Agreement, the term "Prospectus" shall mean the
current prospectus, including the statement of additional information, as
amended or supplemented, relating to the Funds and included in the currently
effective registration statement or post-effective amendment thereto (the
"Registration Statement") of the Company under the Securities Act of 1933 (the
"1933 Act") and the 0000 Xxx.
B. During the continuous public offering of Shares of the Funds, the
Underwriter will hold itself available to receive orders, satisfactory to the
Underwriter, for the purchase of Shares of the Funds and will accept such orders
on behalf of the Company. Such purchase orders shall be deemed effective at the
time and in the manner set forth in the Prospectus.
C. The Underwriter, with the operational assistance of the Company's
transfer agent, shall make Shares available for sale and redemption through the
National Securities Clearing Corporation's Fund/SERV System.
D. In connection with all matters relating to this Agreement, the
Underwriter agrees to act in conformity with the Company's Charter Documents and
By-Laws and with the instructions of the Board and to comply with the
requirements of the 1933 Act, the 1934 Act, the 1940 Act, the regulations of the
NASD and all other applicable federal or state laws and regulations. The
Underwriter acknowledges and agrees that it is not authorized to provide any
information or make any representations other than as contained in the
Prospectus and any sales literature specifically approved by the Company and the
Underwriter.
E. The Underwriter at its sole discretion may repurchase Shares offered for
sale by shareholders of the Funds. Repurchase of Shares by the Underwriter shall
be at the price determined in accordance with, and in the manner set forth in,
the current Prospectus. At the end of each business day, the Underwriter shall
notify, by any appropriate means, the Company and its transfer agent of the
orders for repurchase of Shares received by the Underwriter since the last
report, the amount to be paid for such Shares, and the identity of the
shareholders offering Shares for repurchase. The Company reserves the right to
suspend such repurchase right upon written notice to the Underwriter. The
Underwriter further agrees to act as agent for the Company to receive and
transmit promptly to the Company's transfer agent shareholder requests for
redemption of Shares.
F. The Underwriter may, in its discretion, enter into agreements with such
qualified broker-dealers as it may select, in order that such broker-dealers
also may sell Shares of the Funds. The form of any such agreement shall be
mutually agreed upon and approved by the Company and the Underwriter. The
Underwriter may pay a portion of any applicable sales charge, or allow a
discount, to a selling broker-dealer, as described in the Prospectus or, if not
described, as agreed upon with the broker-dealer. The Underwriter shall include
in the forms of agreement with selling broker-dealers a provision for the
forfeiture by them of their sales charge or discount with respect to Shares sold
by them and redeemed, repurchased or tendered for redemption within seven
business days after the date of confirmation of such purchases.
G. The Underwriter shall devote its best efforts to effect sales of Shares
of the Funds but shall not be obligated to sell any certain number of Shares.
H. The Underwriter shall prepare reports for the Board regarding its
activities under this Agreement as from time to time shall be reasonably
requested by the Board.
I. The services furnished by the Underwriter hereunder are not to be deemed
exclusive and the Underwriter shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
3. Duties and Representations of the Company
A. The Company represents that it is duly organized and in good standing
under the law of its jurisdiction of organization and registered as an open-end
management investment company under the 1940 Act. The Company agrees that it
will act in material conformity with its Charter Documents, By-Laws, its
Registration Statement as may be amended from time to time and resolutions and
other instructions of its Board. The Company agrees to comply in all material
respects with the 1933 Act, the 1940 Act, and all other applicable federal and
state laws and regulations. The Company represents and warrants that this
Agreement has been duly authorized by all necessary action by the Company under
the 1940 Act, state law and the Company's Charter Documents and By-Laws.
B. The Company, or its agent, shall take or cause to be taken all necessary
action to register Shares of the Funds under the 1933 Act and to maintain an
effective Registration Statement for such Shares in order to permit the sale of
Shares as herein contemplated. The Company authorizes the Underwriter to use the
Prospectus, in the form furnished to the Underwriter from time to time, in
connection with the sale of Shares.
C. The Company represents and agrees that all Shares to be sold by it,
including those offered under this Agreement, are validly authorized and, when
issued in accordance with the description in the Prospectus, will be fully paid
and nonassessable. The Company further agrees that it shall have the right to
suspend the sale of Shares of any Fund at any time in response to conditions in
the securities markets or otherwise, and to suspend the redemption of Shares of
any Fund at any time permitted by the 1940 Act or the rules of the Securities
and Exchange Commission ("SEC"). The Company shall advise the Underwriter
promptly of any such determination.
D. The Company agrees to advise the Underwriter promptly in writing:
(i) of any correspondence or other communication by the SEC or its
staff relating to the Funds, including requests by the SEC for amendments
to the Registration Statement or Prospectus;
(ii) in the event of the issuance by the SEC of any stop-order
suspending the effectiveness of the Registration Statement then in effect
or the initiation of any proceeding for that purpose;
(iii) of the happening of any event which makes untrue any statement
of a material fact made in the Prospectus or which requires the making of a
change in such Prospectus in order to make the statements therein not
misleading; and
(iv) of all actions taken by the SEC with respect to any amendments to
any Registration Statement or Prospectus that may from time to time be
filed with the SEC.
E. The Company shall file such reports and other documents as may be
required under applicable federal and state laws and regulations. The Company
shall notify the Underwriter in writing of the states in which the Shares may be
sold and shall notify the Underwriter in writing of any changes to such
information.
F. The Company agrees to file from time to time such amendments to its
Registration Statement and Prospectus as may be necessary in order that its
Registration Statement and Prospectus will not contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
G. The Company shall fully cooperate in the efforts of the Underwriter to
sell and arrange for the sale of Shares and shall make available to the
Underwriter a statement of each computation of net asset value. In addition, the
Company shall keep the Underwriter fully informed of its affairs and shall
provide to the Underwriter from time to time copies of all information,
financial statements, and other papers that the Underwriter may reasonably
request for use in connection with the distribution of Shares, including,
without limitation, certified copies of any financial statements prepared for
the Company by its independent public accountants and such reasonable number of
copies of the most current Prospectus, statement of additional information and
annual and interim reports to shareholders as the Underwriter may request. The
Company shall promptly forward a copy of any SEC filings, including the
Registration Statement, to the Underwriter. The Company represents that it will
not use or authorize the use of any advertising or sales material unless and
until such materials have been approved and authorized for use by a registered
broker-dealer.
H. The Company represents and warrants that its Registration Statement and
any advertisements and sales literature of the Company (excluding statements
relating to the Underwriter and the services it provides that are based upon
written information furnished by the Underwriter expressly for inclusion
therein) shall not contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and that all statements or information
furnished to the Underwriter pursuant to this Agreement shall be true and
correct in all material respects.
4. Expenses
A. The Company shall bear all costs and expenses in connection with
registration of the Shares with the SEC and related compliance with state
securities laws, as well as all costs and expenses in connection with the
offering of the Shares and communications with shareholders of its Funds,
including but not limited to (i) fees and disbursements of its counsel and
independent public accountants; (ii) costs and expenses of the preparation,
filing, printing and mailing of Registration Statements and Prospectuses and
amendments thereto, as well as related advertising and sales literature, (iii)
costs and expenses of the preparation, printing and mailing of annual and
interim reports, proxy materials and other communications to shareholders of the
Funds; and (iv) fees required in connection with the offer and sale of Shares in
such jurisdictions as shall be selected by the Company pursuant to Section 3(E)
hereof.
B. The Underwriter shall bear the expenses of registration or qualification
of the Underwriter as a dealer or broker under federal or state laws and the
expenses of continuing such registration or qualification. The Underwriter does
not assume responsibility for any expenses not expressly assumed hereunder.
5. Indemnification
A. The Company shall indemnify, defend and hold the Underwriter, and each
of its present or former members, officers, employees, representatives and any
person who controls or previously controlled the Underwriter within the meaning
of Section 15 of the 1933 Act, free and harmless from and against any and all
losses, claims, demands, liabilities, damages and expenses (including the costs
of investigating or defending any alleged losses, claims, demands, liabilities,
damages or expenses and any reasonable counsel fee incurred in connection
therewith) which the Underwriter, each of its present and former members,
officers, employees or representatives or any such controlling person, may incur
under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, arising out
of or based upon any untrue statement, or alleged untrue statement of a material
fact contained in the Registration Statement or any Prospectus, as from time to
time amended or supplemented, or in any annual or interim report to
shareholders, or in any advertisement or sales literature, or arising out of or
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; provided, however, that the Company's obligation to indemnify the
Underwriter and any of the foregoing indemnitees shall not be deemed to cover
any losses, claims, demands, liabilities, damages or expenses arising out of any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, Prospectus, annual or interim report, or any
such advertisement or sales literature in reliance upon and in conformity with
information relating to the Underwriter and furnished to the Company or its
counsel by the Underwriter in writing and acknowledging the purpose of its use
for the purpose of, and used in, the preparation thereof. The Company's
agreement to indemnify the Underwriter, and any of the foregoing indemnitees, as
the case may be, with respect to any action, is expressly conditioned upon the
Company being notified of such action brought against the Underwriter, or any of
the foregoing indemnitees, within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon the Underwriter, or such person, unless the failure to give
notice does not prejudice the Company. Such notification shall be given by
letter or by telegram addressed to the Company's President, but the failure so
to notify the Company of any such action shall not relieve the Company from any
liability which the Company may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Company's indemnity
agreement contained in this Section 5(A).
B. The Company 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 such loss, claim, demand, liability, damage or expense, but if the
Company elects to assume the defense, such defense shall be conducted by counsel
chosen by the Company and approved by the Underwriter, which approval shall not
be unreasonably withheld. In the event the Company elects to assume the defense
of any such suit and retain such counsel, the indemnified defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by them. If the Company does not elect to assume the defense of
any such suit, or in case the Underwriter does not, in the exercise of
reasonable judgment, approve of counsel chosen by the Company or, if under
prevailing law or legal codes of ethics, the same counsel cannot effectively
represent the interests of both the Company and the Underwriter, and each of its
present or former members, officers, employees, representatives or any
controlling person, the Company will reimburse the indemnified person or persons
named as defendant or defendants in such suit, for the fees and expenses of any
counsel retained by Underwriter and them. The Company's indemnification
agreement contained in Sections 5(A) and 5(B) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Underwriter, and each of its present or former members, officers, employees,
representatives or any controlling person, and shall survive the delivery of any
Shares and the termination of this Agreement. This agreement of indemnity will
inure exclusively to the Underwriter's benefit, to the benefit of each of its
present or former members, officers, employees or representatives or to the
benefit of any controlling persons and their successors. The Company agrees
promptly to notify the Underwriter of the commencement of any litigation or
proceedings against the Company or any of its officers or directors in
connection with the issue and sale of any of the Shares.
C. The Company shall advance attorney's fees and other expenses incurred by
any person in defending any claim, demand, action or suit which is the subject
of a claim for indemnification pursuant to this Section 5 to the maximum extent
permissible under applicable law.
D. The Underwriter shall indemnify, defend and hold the Company, and each
of its present or former directors, officers, employees, representatives, and
any person who controls or previously controlled the Company within the meaning
of Section 15 of the 1933 Act, free and harmless from and against any and all
losses, claims, demands, liabilities, damages and expenses (including the costs
of investigation or defending any alleged losses, claims, demands, liabilities,
damages or expenses, and any reasonable counsel fee incurred in connection
therewith) which the Company, and each of its present or former directors,
officers, employees, representatives, or any such controlling person, may incur
under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, arising out
of or based upon any untrue, or alleged untrue, statement of a material fact
contained in the Company's Registration Statement or any Prospectus, as from
time to time amended or supplemented, or arising out of or based upon the
omission, or alleged omission, to state therein a material fact required to be
stated therein or necessary to make the statement not misleading, but only if
such statement or omission was made in reliance upon, and in conformity with,
written information relating to the Underwriter and furnished to the Company or
its counsel by the Underwriter for the purpose of, and used in, the preparation
thereof. The Underwriter's agreement to indemnify the Company, and any of the
foregoing indemnitees, is expressly conditioned upon the Underwriter's being
notified of any action brought against the Company, and any of the foregoing
indemnitees, such notification to be given by letter or telegram addressed to
the Underwriter's President, within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon the Company or such person unless the failure to give notice
does not prejudice the Underwriter, but the failure so to notify the Underwriter
of any such action shall not relieve the Underwriter from any liability which
the Underwriter may have to the person against whom such action is brought by
reason of any such untrue, or alleged untrue, statement or omission, otherwise
than on account of the Underwriter's indemnity agreement contained in this
Section 5(D).
E. The Underwriter 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 such loss, claim, demand, liability, damage or expense, but if the
Underwriter elects to assume the defense, such defense shall be conducted by
counsel chosen by the Underwriter and approved by the Company, which approval
shall not be unreasonably withheld. In the event the Underwriter elects to
assume the defense of any such suit and retain such counsel, the indemnified
defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by them. If the Underwriter does not elect to assume
the defense of any such suit, or in case the Company does not, in the exercise
of reasonable judgment, approve of counsel chosen by the Underwriter or, if
under prevailing law or legal codes of ethics, the same counsel cannot
effectively represent the interests of both the Company and the Underwriter, and
each of its present or former members, officers, employees, representatives or
any controlling person, the Underwriter will reimburse the indemnified person or
persons named as defendant or defendants in such suit, for the fees and expenses
of any counsel retained by the Company and them. The Underwriter's
indemnification agreement contained in Sections 5(D) and (E) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Company, and each of its present or former directors,
officers, employees, representatives or any controlling person, and shall
survive the delivery of any Shares and the termination of this Agreement. This
Agreement of indemnity will inure exclusively to the Company's benefit, to the
benefit of each of its present or former directors, officers, employees or
representatives or to the benefit of any controlling persons and their
successors. The Underwriter agrees promptly to notify the Company of the
commencement of any litigation or proceedings against the Underwriter or any of
its officers or directors in connection with the issue and sale of any of the
Shares.
F. No person shall be obligated to provide indemnification under this
Section 5 if such indemnification would be impermissible under the 1940 Act, the
1933 Act, the 1934 Act or the rules of the NASD; provided, however, in such
event indemnification shall be provided under this Section 5 to the maximum
extent so permissible.
6. Obligations of the Company
This Agreement is executed by and on behalf of the Company and the
obligations of the Company hereunder are not binding upon any of the directors,
officers or shareholders of the Company individually but are binding only upon
the Company and with respect to the Funds to which such obligations pertain.
7. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of Connecticut, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Connecticut, or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the latter
shall control, and nothing herein shall be construed in a manner inconsistent
with the 1940 Act or any rule or order of the SEC thereunder.
8. Duration and Termination
A. This Agreement shall become effective with respect to each Fund listed
on Exhibit A hereof as of the date hereof and, with respect to each Fund not in
existence on that date, on the date an amendment to Exhibit A to this Agreement
relating to that Fund is executed. This Agreement shall continue in effect for
six months from the date hereof. Thereafter, if not terminated, this Agreement
shall continue automatically in effect as to each Fund, provided such
continuance is specifically approved at least annually by (i) the Company's
Board or (ii) the vote of a "majority of the outstanding voting securities" of a
Fund, and provided that in either event the continuance is also approved at
least annually by a majority of the Company's Board who are not "interested
persons" of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval.
B. Subject to the foregoing, this Agreement may be terminated, without the
payment of any penalty, with respect to a particular Fund (i) through the
Company's Board's failure to renew this Agreement on an annual basis, (ii) upon
mutual consent of the parties, or (iii) upon no less than 30 days' written
notice, by either the Company through a vote of a majority of the members of the
Board who are not "interested persons" of the Company and have no direct or
indirect financial interest in the operation of this Agreement or by vote of a
"majority of the outstanding voting securities" of a Fund, or by the
Underwriter. The terms of this Agreement shall not be waived, altered, modified,
amended or supplemented in any manner whatsoever except by a written instrument
signed by the Underwriter and the Company. If required under the 1940 Act, any
such amendment must be approved by the Company's Board, including a majority of
the Company's Board who are not "interested persons" of any party to this
Agreement, by vote cast in person at a meeting for the purpose of voting on such
amendment. This Agreement will automatically terminate in the event of its
assignment.
9. Confidentiality
The Underwriter agrees on behalf of its employees to treat all records
relative to the Company and prior, present or potential shareholders of the
Company as confidential, and not to use such records for any purpose other than
performance of the Underwriter's responsibilities and duties under this
Agreement, except after notification and prior approval by the Company, which
approval shall not be unreasonably withheld, and may not be withheld where the
Underwriter may be exposed to civil or criminal proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, when subject to governmental or regulatory audit or investigation,
or when so requested by the Company. Records and information which have become
known to the public through no wrongful act of the Underwriter or any of its
employees, agents or representatives shall not be subject to this paragraph.
10. Miscellaneous
The captions in this Agreement 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. Any provision of this Agreement which may
be determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, 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.
11. Notices
Any notice required or permitted to be given by any party to the others
shall be in writing and shall be deemed to have been given on the date delivered
personally or by courier service or 3 days after sent by registered or certified
mail, postage prepaid, return receipt requested or on the date sent and
confirmed received by facsimile transmission to the other party's address set
forth below:
Notice to the Underwriter shall be sent to:
T. O. Xxxxxxxxxx Securities, Inc.
Attn: President
Two Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
notice to the Company shall be sent to:
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
[COMPANY] T. O. XXXXXXXXXX SECURITIES, INC.
By: __________________________ By: ______________________________
Title: _________________________ Title: _____________________________
Exhibit A
to the
Principal Underwriter Agreement
Fund Names
Separate Series of _______________
Name of Series Date Added
