UNDERWRITING AGREEMENT
THIS
AGREEMENT
is made
as of July 14, 2006, by and between Monteagle Funds (formerly the Memorial
Funds) (the “Trust”), a Delaware Business Trust, and Citco Mutual Fund
Distributors, Inc., a Delaware corporation (“Underwriter”).
WHEREAS,
the
Trust is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS,
the
Trust is authorized by its Certificate of Trust and Trust Instrument to issue
separate Funds of shares representing interests in separate investment
portfolios (the “Funds”), and
WHEREAS,
The Trust
has
authorized the issuance of shares of beneficial interest (“Shares”) in the Funds
which are identified on Exhibit A attached hereto, and
WHEREAS,
Underwriter is a broker-dealer registered with the Securities and Exchange
Commission and a member in good standing of the National Association of
Securities Dealers, Inc., (the “NASD”); and
NOW,
THEREFORE,
in
consideration of the promises and agreements of the parties contained herein
and
contingent upon the successful completion of the merger between Monteagle Funds
and Memorial Funds, the parties hereto, intending to be legally bound, agree
as
follows:
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1.
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Appointment.
The
Trust hereby appoints Underwriter as exclusive agent for the distribution
of Shares of the Funds listed in Exhibit A hereto which may be amended
from time to time by mutual agreement of the Trust and Underwriter,
and
Underwriter hereby accepts such appointment under the terms of this
Agreement,
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Notwithstanding
any other provision hereof, the Trust may terminate, suspend or withdraw the
offering of Shares of any Fund whenever, in its sole discretion, it deems such
action to be desirable.
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2.
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Sale
and Repurchase of Shares.
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| (a) |
Underwriter,
as agent for the Trust, will sell Shares to the public against orders
therefor at the public offering price, all such sales to comply with
the
provisions of the 1940 Act and the rules and regulations of the Securities
and Exchange Commission and other applicable regulatory authorities
promulgated thereunder.
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| (b) |
Underwriter
will also have the right to take, as agent for the Trust, all actions,
which, in Underwriter’s judgment, are reasonably necessary and proper to
carry into effect the distribution of the Shares, but at no time shall
have the authority to bind Fund assets or settle Trust
disputes.
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| (c) |
The
net asset value of the Shares of each Fund (or Class of Shares of a
Fund)
shall be determined in the manner provided in the Trust’s then current
Registration Statement, and when determined shall be applicable to
transactions as provided for in the Registration Statement. The net
asset
value of the Shares of each Fund (or each Class of Shares of a Fund)
shall
be calculated by the Trust or by another entity on behalf of the Trust.
Underwriter shall have no duty to inquire into nor shall it have any
liability for the accuracy of the net asset value per share as
calculated.
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| On every sale of Shares, the Trust shall receive the applicable net asset value of the Shares promptly, but in no event later than the first business day following the date on which Underwriter shall have received an order for the purchase of the Shares. |
| (d) |
Upon
receipt of purchase instructions, Underwriter will transmit such
instructions to the Trust or its transfer agent for registration of
the
Shares purchased.
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| (e) |
Nothing
in this Agreement shall prevent Underwriter or any affiliated person
(as
defined in the 0000 Xxx) of Underwriter from acting as underwriter
or
distributor for any other person, firm or corporation (including other
investment companies) or in any way limit or restrict Underwriter or
any
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 Underwriter expressly represents
that it will undertake no activities which, in its judgment, will
adversely affect the performance of its obligations to the Trust under
this Agreement or applicable law.
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| (f) |
Underwriter,
as agent of the Trust and for the account of the Fund(s), may repurchase
the Shares at such prices and upon such terms and conditions as shall
be
specified in the Trust’s then current Registration Statement. All accounts
shall be handled in an appropriate manner and at all times in accordance
with the procedures and forms set forth in the respective prospectus.
At
the end of each business day, the Underwriter shall notify the Trust
and
the Trust’s transfer agent of the number of Shares redeemed for each Fund,
and the identity of the shareholders or dealers offering Shares for
repurchase. Upon such notice and acceptance by the Trust, the Trust
shall
pay the Underwriter the net asset value of the redeemed shares in cash
or
in the form of a credit against monies due the Trust from the Underwriter
as proceeds from the sale of Shares. The Trust reserves the right to
suspend such repurchase right upon written notice to the Underwriter.
The
Underwriter further agrees to act as agent for the Trust to receive
and
transmit promptly to the Trust’s transfer agent, shareholder and dealer
requests for redemption of Shares in the
Porfolio(s).
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3.
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Sales
of Shares by the Trust.
The Trust reserves the right to issue or sell Shares of the Fund(s)
directly to the public at any time.
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4.
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Basis
of Sale of Shares.
Underwriter does not agree to sell any specific number of Shares.
Underwriter, as agent for the Trust, undertakes to sell Shares of
the
Fund(s) on a best effort basis only against orders
therefor.
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2
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5.
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Compliance
with NASD and Government Rules.
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| (a) |
Underwriter
will conform to the Rules of Fair Practice of the NASD and the securities
laws of any jurisdiction in which it sells Shares of the
Fund(s).
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| (b) |
The
Trust agrees to furnish to the Underwriter sufficient copies of any
agreements, plans or other materials it intends to use in connection
with
sales of Shares in adequate time for the Underwriter to file and clear
them with the proper authorities before they are put in use, and not
to
use them until so filed and cleared.
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| (c) |
Underwriter,
at its own expense, will qualify as dealer, broker, or otherwise, under
all applicable State or federal laws in order that Shares may be sold
in
such States as may be mutually agreed upon by the parties, except for
expenses described in Section 7 hereto, which will be paid by the Trust
or
the Adviser to the Trust, as appropriate.
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| (d) |
Underwriter
shall not make, in connection with any sale or solicitation of a sale
of
the Shares, any representations concerning the Shares except those
contained in the Trust’s then current prospectus and statement of
additional information covering the Shares and in printed information
approved by the Trust as information supplemental to such prospectus
and
statement of additional information. Copies of the Trust’s then effective
prospectus and statement of additional information and any such printed
supplemental information will be supplied to Underwriter in reasonable
quantities upon request.
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6.
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Records
to be Supplied by Trust.
The Trust shall furnish to Underwriter copies of all information,
financial statements and other papers which Underwriter may reasonably
request for use in connection with the distribution of Shares of
the
Fund(s).
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7.
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Expenses
to be Borne by Trust.
The Trust will bear the following
expenses:
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(a)
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preparation,
setting in type, and printing of sufficient copies of the prospectus
and
statement of additional information for distribution to shareholders,
and
the distribution to shareholders of the prospectus and statement
of
additional information;
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(b)
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preparation,
printing and distribution of reports and other communications to
shareholders;
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| (c) |
registration
of the Shares under the federal securities
law;
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| (d) |
qualification
of the Shares for sale in the jurisdictions designated by Trust and
Underwriter;
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| (e) |
maintaining
facilities for the issue and transfer of the
Shares;
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| (f) |
supplying
information, prices and other data to be furnished by the Trust under
this
Agreement; and
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3
| (g) |
any
original issue taxes or transfer taxes applicable to the sale or delivery
of the Shares of certificates therefor.
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8.
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Indemnification.
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| (a) |
The
Trust agrees to indemnify, defend and hold the Underwriter, its officers,
and Trustees, and any person who controls the Underwriter within the
meaning of Section 15 of the Securities Act of 1933 (the “1933 Act”) or
Section 20 of the Securities Exchange Act of 1934, as amended (the
“1934
Act”), free and harmless from and against any and all claims, demands or
liabilities and expenses (including the cost of investigating or defending
such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which the Underwriter, its officers, Trustees
or any
such controlling persons may incur under the 1933 Act, the 1934 Act,
or
under common law or otherwise, arising out of or based upon any untrue
statement of a material fact contained in the Trust’s Registration
Statement or Prospectus or arising out of or based upon any alleged
omission to state a material fact required to be stated in either thereof
or necessary to make the statements in either thereof 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 the Underwriter to the Trust for
use
in the Registration Statement. The Underwriter agrees to comply with
all
of the applicable terms and provisions of the 0000
Xxx.
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| (b) |
The
Underwriter agrees to indemnify, defend, and hold the Trust, its officers,
Trustees, employees shareholders and agents, and any person who controls
the Trust within the meaning of Section 15 of the 1933 Act of Section
20
of the 1934 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 Trust, its Trustees, officers,
employees, shareholders and agents, or any such controlling person
may
incur under the 1933 Act, the 1934 Act or under common law or otherwise
arising out of or based upon Underwriter’s failure to comply with its
regulatory obligations in connection with the offering of shares, any
untrue statement of a material fact contained in information furnished
in
writing by the Underwriter to the Trust for use in the Registration
Statement, or arising out of or based upon any omission or 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.
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| (c) |
A
party seeking indemnification hereunder (the “Indemnitee”) shall give
prompt written notice to the party from whom indemnification is sought
(“Indemnitor”) of a written assertion or claim of any threatened or
pending legal proceeding which may be subject to indemnity under this
Section; provided, however, that failure to notify the Indemnitor of
such
written assertion or claim shall not relieve the indemnitor of any
liability arising from this Section. The Indemnitor shall be entitled,
if
it so elects, to assume the defense of any suit brought to enforce
a claim
subject to this Agreement and such defense shall be conducted by counsel
chosen by the Indemnitor and satisfactory to the Indemnitee; provided,
however, that if the defendants include both the Indemnitee and the
Indemnitor, and the Indemnitee shall have reasonably concluded that
there
may be one or more legal defenses available to it which are different
from
or additional to those available to the Indemnitor (“conflict of
interest”), the Indemnitor shall have the right to select separate counsel
to defend such claim on behalf of the Indemnitee. In the event that
the
Indemnitor elects to assume the defense of any suit pursuant to the
preceding sentence and retains counsel satisfactory to the Indemnitee,
the
Indemnitee shall bear the fees and expenses of additional counsel retained
by it except for reasonable investigation costs which shall be borne
by
the Indemnitor.
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4
| (d) |
It
is understood that indemnification may be limited by interpretations
under
the 1933 Act, 1934 Act and other laws. It is also understood that the
obligation to indemnify pursuant to this section does not extend to
situations where the Indemnitee has been found to or has engaged in
wrongful conduct.
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9
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Termination
and Amendment of this Agreement.
This Agreement shall automatically terminate, without the payment
of any
penalty, in the event of its assignment. This Agreement may be amended
only if such amendment is approved (i) by Underwriter, (ii) either
by
action of the Board of Trustees of the Trust or at a meeting of the
Shareholders of the Trust by the affirmative vote of a majority of
the
outstanding Shares, and (iii) by a majority of the Trustees of the
Trust
who are not interested persons of the Trust or of Underwriter, by
vote
cast in person at a meeting called for the purpose of voting on such
approval. Either the Trust or Underwriter may terminate this Agreement
at
any time on thirty (30) days’ written notice delivered via facsimile or
overnight courier or mailed by registered mail, postage prepaid,
to the
other party.
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10.
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Effective
Period of This Agreement.
Unless terminated automatically as set forth in Section 10 of this
Agreement, this Agreement shall take effect upon its execution and
shall
remain in full force and effect for a period of three(3) years
from that date, and shall remain in full force and effect from year
to
year thereafter, subject to annual approval (i) by Underwriter, (ii)
by
the Board of Trustees of the Trust or by vote of a majority of the
outstanding Shares, and in either case (iii) by a majority of the
Trustees
of the Trust who are not interested persons of the Trust or of
Underwriter, by vote cast in person at a meeting called for the purpose
of
voting on such approval.
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11.
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Limitation
of Trust’s Liability.
The Term “Monteagle Trusts” means and refers to the Trustees and officers
from time to time serving under the Trust’s Articles of Incorporation and
by-laws as the same may subsequently thereto have been, or subsequently
hereto be, amended. It is expressly agreed that the obligations of
the
Trust hereunder shall not be binding upon any of the Trustees,
Shareholders, nominees, officers, agents or employees of the Trust
personally, but bind only the property of the Trust, as provided
in
Trust’s Master Trust Agreement and by-laws. The execution and delivery
of
this Agreement have been authorized by the Trustees of the Trust
and
signed by the officers of the Trust, acting as such, and neither
such
authorization by such Trustees, nor such execution and delivery by
such
officers shall be deemed to have been made by any of them individually
or
to impose any liability on them personally, but shall bind only the
property of the Trust as provided in its Master Trust Agreement.
A copy of
the Certificate of Trust of the Trust is on file with the Secretary
of
State of Delaware.
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5
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12.
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Successor
Investment Company.
Unless this Agreement has been terminated in accordance with Paragraph
10,
the terms and provisions of this Agreement shall become automatically
applicable to any investment company which is a successor to the
Trust as
a result of a reorganization, recapitalization or change of
domicile.
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13.
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Severability.
In the event any provision of this Agreement is determined to be
void or
unenforceable, such determination shall not affect the remainder
of this
Agreement, which shall remain in full force and
effect.
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14.
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Questions
of Interpretation.
|
| (a) |
This
Agreement shall be governed by the laws of the State of
Delaware.
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| (b) |
Any
question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision
of
the 1933 Act, 1934 Act or 1940 Acts shall be resolved by reference
to such
term or provision of these Acts and interpretation thereof, if any,
by the
United States courts; or in the absence of any controlling decision
of any
such court, by rules, regulations or orders of the Securities and Exchange
Commission issued pursuant to said Act. In addition, where the effect
of a
requirement of these Acts, reflected in any provision of this Agreement
is
revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect
of
such rule, regulation or order.
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15.
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Notices.
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address
as
such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that for this purpose
the
address of the Trust is 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx, 00000,
Attn: Xxxx X. Xxxxxxxx, President; and of the Underwriter shall be
83
General Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxx 00000,
Attn:
Xxxxxx Xxxxxxxxxxx, President.
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16.
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Counterparts.
This Agreement may be executed in one or more counterparts, each
of which
shall be deemed an original but all of which together shall constitute
one
and the same instrument.
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17.
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Binding
Effect.
Each of the undersigned expressly warrants and represents that he
has the
full power and authority to sign this Agreement on behalf of the
party
indicated, and that his signature will operate to bind the party
indicated
to the foregoing terms.
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18.
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Force
Majeure.
If a party shall be delayed in the performance of its services or
prevented entirely or in part from performing services due to causes
or
events beyond its control, including and without limitation, acts
of God,
interruption of power or other utility, transportation or communication
services, acts of civil or military authority, sabotages, national
emergencies, explosion, flood, accident, earthquake or other catastrophe,
fire, strike or other labor problems, legal action, present or future
law,
governmental order, rule or regulation, or shortages of suitable
parts,
materials, labor or transportation, such delay or non-performance
shall be
excused and a reasonable time, subject to restrictions and requirements
of
performance as may be established by federal or state
law.
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6
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19.
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Compensation.
The Trust shall pay for the services to be provided by Underwriter
under
this Agreement in accordance with, and in the manner set forth in,
Schedule B attached hereto, as such Schedule B may be amended from
time to
time by agreement of the parties.
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If
this
Agreement becomes effective subsequent to the first day of a month or terminates
before the last day of a month, Underwriter’s compensation for that part of the
month in which this Agreement is in effect shall be prorated in a manner
consistent with the calculation of the fees as set forth above. Payment of
Underwriter’s compensation for the preceding month shall be made
promptly.
IN
WITNESS WHEREOF,
the
Trust and Underwriter have each caused this Agreement to be signed on its
behalf, all as of the day and year first above.
| ATTEST: | MONTEAGLE FUNDS |
| ______/s/_______________ | By: _____/s/____________________ |
| Name: Xxxx X. Xxxxxxx |
Name:
Xxxx X. Xxxxxxxx
|
| Title: Secretary |
Title:
President
|
| ATTEST | CITCO MUTUAL FUND DISTRIBUTORS, INC. |
| ______/s/______________ | By: _______/s/________________ |
| Name: Xxxx Xxxx | Name: Xxxxxx Xxxxxxxxxxx, Xx. |
| Title: Secretary | Title: President |
7
EXHIBIT
A
The
following Funds and share classes thereof are hereby made subject to the
underwriting Agreement dated July 1, 2006 and successful completion of the
Funds
merger, with Citco Mutual Fund Distributors, Inc. ("Underwriter") and Monteagle
Funds (the “Trust”), and each agree to be bound by all the terms and conditions
contained in said Agreement:
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FUNDS
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Class
A
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Class
B
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No-Load
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Monteagle
Fixed Income Fund
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X
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Monteagle
Large-Cap Growth Fund
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X
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Monteagle
Value Fund
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X
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Monteagle
Select Value Fund
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X
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Monteagle
Quality Growth Fund
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X
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8
EXHIBIT
B
The
following fees are hereby made subject to the underwriting Agreement dated
July
14, 2006, with Citco Mutual Fund Distributors, Inc. ("Underwriter") and
Monteagle Funds (the “Trust”), and each agree to be bound by all the terms and
conditions contained in said Agreement:
Underwriter
shall receive an annual fee of $5,000 as full compensation for underwriting
services provided for Funds of the Trust. Should the Trust determine to offer
load shares or to use a 12b-1 fee to enhance distribution options, the Parties
will renegotiate the compensation due to underwriter.
9
