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
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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.
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(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.
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(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
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(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.
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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
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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
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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.
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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
By: Xxxx X. Xxxx
-------------------------------------
President
IAA Trust Growth Fund, Inc.
By: Xxxxxxx X. Xxxxxx
---------------------------------------
Vice President
Fund/Plan Broker Services, Inc.
By: Xxxxxxx X. Xxxxx,
-----------------------------
President
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