UNDERWRITING AGREEMENT
January 23, 1998
Nomura Securities Co., Ltd.
0-0-0 Xxxxxxxxxx, Xxxx-Xx
Xxxxx, Xxxxx 000-0000
Gentlemen:
INTRODUCTION
Evergreen Small Company Growth Fund (hereinafter referred to collectively
as the "Fund") invites you ("Nomura") to act as Underwriter in Japan of the
Class A shares ("Shares") of the Fund, subject to the following terms and
conditions:
1. In the distribution and sale in Japan of Shares, Nomura agrees to act as
principal. Nomura shall not have authority to act as agent for the Fund,
Keystone Investment Management Company ("Keystone"), Evergreen Distributor, Inc.
("EDI") or for any other
dealer in any respect in such transactions.
CONCERNING THE CONTINUOUS OFFERING
2. Nomura intends to undertake the continuous offering and sale of Shares
of the "Fund" in Japan to Japanese and non-U.S. nationals (the "Continuous
Offering") and the proposed schedule of sales charges, sub-dealer concessions
and net retention by Nomura will be as follows:
Nomura's
Sales Sub-Dealer Net
Amount of Purchase Charge Concession Retention
Y500,000 but less than Y5 million 5.0% 4.0% 1.0%
Y5 million but less than Y10 million 4.0 3.2 0.8
Y10 million but less than Y100 million 3.0 2.4 0.6
Y100 million and over 2.0 1.6 0.4
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The minimum unit of sale of Shares shall be Y500,000.
Nomura will be entitled to continuing maintenance fees for ser vices to
its customers in accordance with the attached schedule of maintenance fees which
may be modified from time to time. Nomura shall not have any vested right to
receive any continuing maintenance fees on Shares sold by it.
3. The Continuous Offering will be made on a forward pricing basis, i.e.,
orders accepted by Nomura prior to the close of business in Tokyo and placed
with the Fund the same day prior to the close of the Fund's business day, 5:00
p.m. Boston, Massachusetts time, shall be confirmed at the closing per share net
asset value, which the Fund agrees to furnish to Nomura each day by telex, and
which Nomura agrees to make public each day at its head and branch offices.
Orders taken by Nomura on days when the New York Stock Exchange is closed will
be priced at the closing price on the next day when the New York Stock Exchange
is open. In the event of differences between verbal and telex orders on the one
hand, and written price confirmations on the other, the written price
confirmations shall be considered final.
4. In connection with sales to sub-dealers, the concession to sub-dealers
and Nomura's net retention shall be subject to the table set forth above. Nomura
agrees to furnish the Fund with English cop ies of agreements entered into
between Nomura and its sub-dealers. Such agreements and sales by sub-dealers
shall conform in all cases with the terms and conditions of this Agreement.
5. Payment at the appropriate per share net asset value shall be made to
the Fund by Nomura and shall be received by the Fund within three business days
after its acceptance of Nomura's order or such shorter time as may be required
by U.S. law.
If such payment is not received by the Fund, it reserves the right without
notice, forthwith to cancel the sale in which case the Fund may hold Nomura
responsible for any loss to it, provided, however, that this paragraph shall
have no force and effect if Nomura's failure to pay shall be caused by reason of
force majeure.
6. Nomura agrees to act as agent of the Fund for the purpose of
facilitating redemptions of Shares of the Fund sold pursuant to the terms of
this Agreement and held by Japanese investors. If Nomura repurchases Shares from
its customers or customers of sub-dealers, it
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agrees to pay not less than the applicable net asset value as in effect on the
date of such repurchase.
7. The Fund will not accept from Nomura any conditional orders for sales of
Shares.
8. The Fund agrees that whenever Nomura places orders for pur chase of
Shares from the Fund or redemption of Shares by the Fund, the Fund shall
unconditionally accept such orders, unless trading on the New York Stock
Exchange has been suspended or there are other reasons, including force majeure,
which prevent such unconditional acceptance. The Fund also agrees to notify
Nomura promptly by telex after the Fund has executed any such orders from
Nomura. In the case of sales of Shares to the Fund, the Fund agrees to make
payment to Nomura within seven days after its acceptance of Nomura's order or
such shorter time as may be required by U.S. law. Subject to the provisions of
this Paragraph 8, if the Fund fails to make payment to Nomura as above provided,
the Fund agrees to indemnify and save Nomura harmless from any loss resulting
therefrom.
9. The Fund will pay all costs and expenses directly attribut able to the
Continuous Offering, excluding costs of advertising, publicity and due diligence
and other meetings, and other sales literature for the Continuous Offering.
10. The Fund agrees and warrants that its agent securities company as
defined in Article 13 of the rules concerning Foreign Securities Transactions of
Japan Securities Dealers Association (the "Association's Rules"), on behalf of
the Fund, shall prepare and furnish Nomura, in conformance with the
Association's Rules and appli cable Japanese laws and regulations, the Japanese
prospectus and explanatory brochure (hereinafter referred to in accordance with
the Association's Rules as the "Explanatory Brochure") covering the Fund's
Continuous Offering based on prospectuses, securities reports, semi-annual
securities reports and material information in connection with the Fund
furnished from time to time by the Fund (hereinafter collectively referred to as
"Prospectuses-Reports").
11. The Fund agrees to indemnify and save Nomura harmless from any damages
which shall have occurred in the sale of Shares of the Fund pursuant to this
Agreement to the extent such damages result from a false statement of a material
fact contained in the "ProspectusesReports" of the Fund, an omission of a
material fact which should be
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stated therein or an omission of a material fact necessary to make the statement
therein not misleading. If the "Prospectuses-Reports" or any other material used
in connection with the sale of the Fund Shares contains information furnished by
Nomura which information contains a false statement of a material fact, an
omission of a material fact which should be stated therein, or an omission of a
material fact necessary to make the statement therein not misleading, Nomura
likewise agrees to indemnify and save the Fund harmless from any damages it
shall have incurred in any sales of the Shares of the Fund pursuant to the terms
of this Agreement.
12. The Fund agrees to designate Nomura if Nomura so requests, or such other
representative as shall meet the qualification requirements as set forth in
Section 1 of Article 6 of the Japanese Standard Rules Relating to Selection of
Foreign Investment Company Shares to be Sold in Japan (the "Standard Rules") as
legal agent for service of process against the Fund.
13. The Fund agrees that all its financial statements which appear in
the Japanese Explanatory Brochure and Registration State ment, or in annual
reports to the Ministry of Finance will be certi fied by independent certified
public accountants who are licensed pub lic accountants under the laws of Japan.
Any such financial state ments submitted to the Ministry of Finance will be
manually signed and certified by such representative. The Fund also agrees to
submit Securities Registration Statements and semi-annual reports to the
Ministry of Finance which need not be certified.
14. The Fund hereby represents and warrants that it currently conforms to
the requirements of the Japanese Standard Rules. The Fund understands that if
subsequently it is made aware that it does not so conform, the Fund will advise
Nomura promptly and Nomura may suspend further sales of Shares but, even in such
event, the Fund will continue to be obligated to repurchase or redeem Shares of
the Fund from Nomura as hereinbefore provided.
15. In offering the Shares of the Fund for sale in Japan, Nomura agrees to
comply with the applicable laws, rules, regulations and criteria of the Ministry
of Finance and Associations' Rules.
Nomura also agrees that any advertisements used by Nomura will in
general conform to the Statement of Policy of the United States
Securities and Exchange Commission (U.S. Release No. 40-2621), except
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for Paragraph (h) which deals with comparisons.
16. With the consent of the Board of Trustees of the appropriate Evergreen
Fund, Nomura may also undertake block and/or continuous offerings of the Shares
of such other Evergreen Funds on the terms and conditions herein stated or as
may be contained in any supplemental agreement hereto.
17. This Agreement is, to the extent applicable, governed by the laws of
Japan.
18. This Agreement shall continue in effect as long as permitted under the
U.S. Investment Company Act of 1940, as amended from time to time, the rules
promulgated thereunder or under the Japanese Securities and Exchange Law of
1948, and appropriate exemptions there from. This Agreement may be terminated at
any time by mutual consent or by either party upon thirty days written notice,
and shall terminate automatically in the event of its assignment.
EVERGREEN SMALL COMPANY GROWTH FUND
/S/ D'XXX XXXXX
By D'Xxx Xxxxx
Title: Secretary
NOMURA SECURITIES CO., LTD.
/S/ XXXXXXXX XXXXXX
By Xxxxxxxx Xxxxxx
Title: Director
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SCHEDULE OF MAINTENANCE FEES
Except as otherwise provided for in the Underwriting Agreement, Nomura
will be entitled to quarterly maintenance fees based on the aggregate net asset
value of Shares of the Fund which Nomura has sold, which remain issued and
outstanding on the books of the Fund on the last business day of the calendar
quarter and which are registered in the names of clients for whom Nomura is
broker of record ("Eligible Shares"). Such maintenance fees will be calculated
at the rate of 0.0625% per quarter of the aggregate net asset value of all such
Eligible Shares (approximately 0.25% annually); provided, however, that no
maintenance fees will be paid to Nomura for any calendar quarter if the
aggregate net asset value of such Eligible Shares on the last business day of
the calendar quarter is less than $1 million. Quarterly maintenance fees shall
be payable within 90 days after the end of the calendar quarter. Such
maintenance fee rate may be modified by the Fund from time to time with prior
notice.
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SUB-TRANSFER AGENCY AGREEMENT
January 23, 1998
Nomura Securities Co., Ltd.
0-0-0 Xxxxxxxxxx, Xxxx-Xx
Xxxxx, Xxxxx 000-0000
Gentlemen:
1. Evergreen Small Company Growth Fund (the "Fund"), hereby invites
you, ("Nomura"), to act as Sub-transfer Agent for those shares of the
Fund sold by Nomura in Japan as a principal underwriter of the Fund.
2. Contemporaneously herewith, the Fund and Nomura have entered into an
Underwriting Agreement under the terms of which Nomura has been
appointed as Underwriter in Japan of the Fund's Class A shares (the
"shares") and has the right thereunder, as principal, to purchase
shares of the Fund at net asset value and to publicly offer and sell
such shares in Japan upon the terms and subject to the conditions
therein stated.
3. Nomura intends to advise Keystone each day by facsimile or telex the
number of shares of the Fund purchased in Japan and the number of such
shares to be redeemed.
4. The Fund also understands that Nomura has entered into a Custodian
Agreement dated January 23, 1998, with State Street Bank and Trust
Company (the "Custodian") of Boston, Massachusetts, USA, under which it
has agreed to act as Nomura's Custodian and as such to hold and
administer in Boston securities and incidental monies accruing
therefrom.
5. Upon its receipt of monies (in U.S. dollars) from the Custodian
arising from the sale of the Fund shares in Japan, the Fund will
forthwith issue and deliver to the Custodian a certificate or
certificates or an open account statement or statements in Nomura's
name representing the number of shares of the Fund then being paid for
pursuant to the Underwriting Agreement.
6. Upon advice from Nomura as to the shares of the Fund tendered for
redemption to the Fund pursuant to the terms of the Underwriting
Agreement, the Fund will, within seven calendar days, transmit to the
Custodian the monies resulting from such redemption required to effect
such repurchases.
7. As Sub-transfer Agent in Japan, Nomura agrees to notify its
customers and the subdealers of the number of shares of the Fund being
held in Nomura's name which they have purchased.
8. Nomura also agrees as such sub-transfer agent, upon receipt of the
redemption monies, to convert the same into yen and to transmit to its
customers or sub-dealers within seven days of the receipt of the
redemption order and upon proper documentation the sums to which they
are respectively entitled upon such repurchases.
9. The Fund agrees that upon the declaration and payment of any income
dividends or capital gains distributions, if any by the Fund, the Fund
will transmit to the Custodian such sums of money as may be required,
calculated on the basis of the number of shares, if any, of the Fund
shown to be outstanding in Nomura's name on the record date, less, in
the case of income dividends, the then appropriate U.S. withholding
tax. As such subtransfer agent, Nomura agrees that upon receipt of such
monies, it will convert the same to yen and distribute same in cash
pro-rata among its customers and sub-dealers according to their
respective holdings.
10. It is the Fund's responsibility to keep records showing the total
number of shares outstanding of the Fund, the names and addresses of
the shareholders of record and the number of shares held by each such
shareholder.
As sub-transfer agent, it will be Nomura's responsibility to
maintain records showing the total number of shares of the Fund for
which Nomura is the shareholder of record outstanding in the names of
Japanese shareholders, the names and addresses of the Japanese
shareholders and the number of shares owned by each such shareholder.
However, solely in connection with the notification of election
by the Fund under Rule 18f-1 promulgated under the Investment Company
Act of 1940, it is understood that the shareholders referred to in the
preceding sentence shall be considered as shareholders of record for
purposes of said Rule, whether they are shareholders of record of
Nomura or of any sub-dealer.
It will be the fund's responsibility to assure that the number
of shares of the Fund outstanding in the name of Nomura as shown in the
Fund's records shall be true and correct at all times.
It will be Nomura's responsibility to assure that the number of
shares of the Fund outstanding as represented in the detailed Japanese
shareholders records as maintained by Nomura agree in total with the
number of shares outstanding in the account of Nomura as shown in the
records of the Fund.
11. Nomura further agrees, as such sub-transfer agent, to issue to
Nomura's customers and sub-dealers safe-keeping receipts indicating the
number of such of the shares of the Fund as may be held by each, to
arrange for the transfer of the holdings of Japanese shareholders of
the Fund as they may request, and to respond to and answer inquiries
from Japanese shareholders and the sub-dealers as to any aspect of
their holdings in the Fund.
12. Nomura also agrees that in the event any of Nomura's customers or
customers of its sub-dealers or its sub-dealers request that
certificates representing the number of Fund shares owned by any such
customer be issued directly to such customer that Nomura will promptly
so inform the Fund and will instruct the Fund to transfer the
appropriate number of shares from the name of Nomura into the name of
such requesting customer. The Custodian will deliver to the Fund
certificates representing the appropriate number of shares as
instructed by Nomura and the Fund will cancel such certificate or
certificates and issue a new certificate in the name of said customer.
In the event the shares registered in the name of Nomura are held in an
open account and no certificates have been issued the Fund will, as
instructed by Nomura, reduce the shares in such open account by the
appropriate number and will issue a certificate in the name of said
customer. The Fund will promptly deliver the certificate registered in
the customer's name to Nomura and Nomura will be responsible for the
prompt delivery of such certificate to its customer or to the customer
of its sub-dealer.
13. The Fund agrees to prepare or cause to be prepared at its own
expense, Japanese language translations of annual an semi-annual
reports of the Fund and to deliver a reasonable number of copies of
same to Nomura for transmittal by Nomura to its customers and
sub-dealers and Nomura agrees to deliver same to its customers and
subdealers.
14. While the shareholders of the Fund do not have general voting
rights, it is understood that if the vote or assent of shareholders
should be required on any matter, Nomura will transmit to its customers
owning shares of the Fund and to sub-dealers all proxy materials and
proxies (previously translated into Japanese at the Fund's expense)
required in connection therewith and as record owners of such shares,
Nomura will vote such shares in accordance with the instructions
received by Nomura from its customers and sub-dealers. Nomura will be
entitled to recover from the Fund its out-of-pocket costs in connection
with the transmission and tabulation of such proxies and the voting
thereon.
15. This Agreement shall become effective on the date first above
written and shall remain effective for one year from that date but may
be terminated by either party on notice in writing within sixty days of
the expiration date, failing which the Agreement shall be extended for
another one-year period and likewise for further extensions.
16. In the event Nomura terminates this Agreement, Nomura will continue
to act as Sub-transfer Agent under all of the terms and conditions
hereof until the Fund has had a reasonable time to make such other
arrangements as it may determine.
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If the foregoing represents your understanding of the Agreement
between us, please so indicate by signing and returning to us one copy
hereof.
Very truly yours,
EVERGREEN SMALL COMPANY GROWTH FUND
/S/ D'XXX XXXXX
By D'Xxx Xxxxx
Title: Secretary
NOMURA SECURITIES CO., LTD.
/S/ XXXXXXXX XXXXXX
By Xxxxxxxx Xxxxxx
Authorized Signature
