UNDERWRITING AGREEMENT BETWEEN
XXXXX XXX ADVISOR FLOATING RATE FUND
AND LIBERTY FUNDS DISTRIBUTOR, INC.
THIS UNDERWRITING AGREEMENT ("Agreement"), made as of the 3rd
day of August, 1999 by and between Xxxxx Xxx Advisor Floating Rate
Fund, a business trust organized and existing under the laws of
the Commonwealth of Massachusetts (hereinafter called the "Fund"),
and Liberty Funds Distributor, Inc., a corporation organized and
existing under the laws of the Commonwealth of Massachusetts
(hereinafter called the "Distributor").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end
management investment company registered under the Investment
Company Act of 1940, as amended ("ICA-40"); and
WHEREAS, the Distributor is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended ("SEA-34")
and the laws of each state (including the District of Columbia and
Puerto Rico) in which it engages in business to the extent such
law requires, and is a member of the National Association of
Securities Dealers ("NASD") (such registrations and membership are
referred to collectively as the "Registrations"); and
WHEREAS, the Fund desires the Distributor to act as the
distributor in the public offering of its Shares of beneficial
interest (hereinafter called "Shares");
WHEREAS, the Fund shall pay all charges of its transfer,
shareholder recordkeeping, dividend disbursing and redemption
agents, if any; all expenses of notices, proxy solicitation
material and reports to shareholders; all expenses of preparation
of annual or more frequent revisions of the Fund's Prospectus and
Statement of Additional Information ("SAI") and of supplying
copies thereof to shareholders; all expenses of registering and
maintaining the registration of the Fund under ICA-40 and of the
Fund's Shares under the Securities Act of 1933, as amended ("SA-
33"); all expenses of qualifying and maintaining qualification of
such Fund and of the Fund's Shares for sale under securities laws
of various states or other jurisdictions and of registration and
qualification of the Fund under all laws applicable to the Fund or
its business activities; and
WHEREAS, Xxxxx Xxx & Xxxxxxx Incorporated, investment adviser
to the Funds, or its affiliates, may pay expenses incurred in the
sale and promotion of the Fund except as provided in the Fund's
12b-1 plan;
NOW, THEREFORE, in consideration of the premises and the
mutual promises hereinafter set forth, the parties hereto agree as
follows:
1. Appointment. The Fund appoints Distributor to act as
principal underwriter (as such term is defined in Sections
2(a)(29) of ICA-40) of its Shares for each series or class of the
Fund set forth on Schedule A hereto.
2. Delivery of Fund Documents. The Fund has furnished
Distributor with properly certified or authenticated copies of
each of the following in effect on the date hereof and shall
furnish Distributor from time to time properly certified or
authenticated copies of all amendments or supplements thereto:
(a) Agreement and Declaration of Trust;
(b) By-Laws;
(c) Resolutions of the Board of Trustees of the Fund
(hereinafter referred to as the "Board") selecting
Distributor as distributor and approving this form of
agreement and authorizing its execution.
The Fund shall furnish Distributor promptly with copies of
any registration statements filed by it with the Securities and
Exchange Commission ("SEC") under SA-33 or ICA-40, together with
any financial statements and exhibits included therein, and all
amendments or supplements thereto hereafter filed.
The Fund also shall furnish Distributor such other
certificates or documents which Distributor may from time to time,
in its discretion, reasonably deem necessary or appropriate in the
proper performance of its duties.
3. Distribution of Shares.
(a) Subject to the provisions of Paragraphs 6, 7, 10, 11,
12, 13 and 14 hereof, and to such minimum purchase
and other requirements as may from time to time be
indicated in the Fund's Prospectus, Distributor,
acting as principal for its own account and not as
agent for the Fund, shall have the right to purchase
Shares from the Fund. Distributor shall sell Shares
only in accordance with the Fund's Prospectus, on a
"best efforts" basis. Distributor shall purchase
Shares from the Fund at a price equal to the net
asset value, shall sell Shares at the public offering
price as defined in Paragraph 8, and shall retain all
sales charges.
(b) The Fund shall pay all expenses associated with
notices, proxy solicitation material, the preparation
of annual or more frequent revisions to the Fund's
Prospectus and SAI and of printing and supplying the
currently effective Prospectus and SAI to
shareholders, other than those necessitated by
Distributor's activities or rules and regulations
related to Distributor's activities where such
amendments or supplements result in expenses which
the Fund would not otherwise have incurred.
(c) The Distributor (or its affiliates) shall pay the
costs of printing and supplying all copies of the
Prospectus and SAI that it may reasonably request for
use in connection with the distribution of Shares.
The Distributor will also pay the expenses of the
preparation, excluding legal fees, and printing of
all amendments and supplements to the Fund's
Prospectus and SAI if the amendment or supplement
arises from Distributor's activities or rules and
regulations related to Distributor's activities and
those expenses would not otherwise have been incurred
by the Fund. Distributor will pay all expenses
incurred by Distributor in advertising, promoting and
selling Fund Shares.
(d) Prior to the continuous offering of any Fund Shares,
commencing on a date agreed upon by the Fund and the
Distributor, it is contemplated that the Distributor
may solicit subscriptions for such Shares during a
subscription period which shall last for such period
as may be agreed upon by the parties hereto. The
subscriptions will be payable within three business
days after the termination of the subscription
period, at which time the Fund will commence
operations.
4. Selling Agreements. Distributor is authorized to enter
into agreements with other broker-dealers providing for the
solicitation of unconditional orders for purchases of the Fund's
Shares authorized for issuance and registered under SA-33 and fix
therein the portion of the sales charge which may be reallowed to
the selected dealers, as permitted under that Fund's prospectus.
All such agreements shall be either in the form of agreement
attached hereto or in such other form as may be approved by the
officers of the Fund ("Selling Agreement"). Within the United
States, the Distributor shall offer and sell Shares to such
selected dealers as are members in good standing of the NASD;
"banks" as such term is defined in Section 3(a)(6) of the Exchange
Act or a "bank holding company" as such term is defined in the
Bank Holding Company Act of 1956, as amended, duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it was organized; and such other entities or
purchasers as otherwise mutually agreed in writing.
5. Conduct of Business. Other than as set forth in the
Fund's currently effective prospectus, Distributor will not
distribute any sales material or statements except literature or
advertising which conforms to the requirements of federal and
state securities laws and regulations which have been filed, where
necessary, with the appropriate regulatory authorities. Upon the
Fund's request, Distributor will furnish the Fund with copies of
all such materials prior to their use. Any sales material or
statements the substance of which is not included in the
Prospectus or SAI shall be submitted for advance approval by the
Fund.
6. Solicitation of Orders to Purchase Shares by Fund. The
rights granted to the Distributor shall be non-exclusive in that
the Fund reserves the right to solicit purchases from, and sell
its Shares to, investors. Further, the Fund reserves the right to
issue Shares in connection with the merger or consolidation of any
other investment company, trust or personal holding company with
the Fund, or the Fund's acquisition, by the purchase or otherwise,
of all or substantially all of the assets of an investment
company, trust or personal holding company, or substantially all
of the outstanding Shares or interests of any such entity. Any
right granted to Distributor to solicit purchases of Shares will
not apply to Shares that may be offered by the Fund to
shareholders by virtue of their being shareholders of the Fund.
7. Shares Covered by this Agreement. This Agreement relates
to the solicitation of orders to purchase Shares that are duly
authorized and registered and available for sale by the Fund,
including redeemed or repurchased Shares if and to the extent that
they may be legally sold and if, but only if, the Fund authorizes
the Distributor to sell them.
8. Public Offering Price. The public offering price for the
Fund's Shares will be the net asset value per Share next
determined by the Fund after the Distributor or its appointed
agent receives the order plus any sales charge as set forth in the
Fund's Prospectus. The net asset value per Share shall be
determined in the manner provided in the Fund's Agreement and
Declaration of Trust as now in effect or as they may be amended,
and as reflected in the Fund's then current Prospectus and SAI.
9. Compensation.
(a) Sales Charge. Distributor shall be entitled to charge
a sales charge on the sale or redemption, as
appropriate, of each series and class of each Fund's
Shares as set forth in the Fund's then current
Prospectus. Distributor may allow any dealers with
which it has signed selling agreements such
commissions or discounts from and not exceeding the
total sales charge as Distributor shall deem
advisable, so long as any such commissions or
discounts are set forth in the Fund's current
Prospectus to the extent required by the applicable
federal and state securities laws. Distributor may
also make payments to dealers from Distributor's own
resources, subject to the following conditions: (a)
any such payments shall not create any obligation for
or recourse against the Fund or any series or class,
and (b) the terms and conditions of any such payments
are consistent with the Fund's Prospectus and
applicable federal and state securities laws and are
disclosed in the Prospectus or SAI to the extent such
laws may require.
(b) Distribution Plans. Distributor shall also be
entitled to compensation for its services as provided
in any Distribution Plan adopted as to any series and
class of any Fund's Shares pursuant to Rule 12b-1
under the 1940 Act.
10. Suspension of Sales. If and whenever the determination
of the Fund's net asset value is suspended and until such
suspension is terminated, the Distributor shall not accept orders
for Shares except for unconditional orders placed before the
suspension. In addition, the Fund reserves the right to suspend
sales of Shares if, in the judgment of the Board of the Fund, it
is in the best interest of the Fund to do so, such suspension to
continue for such period as may be determined by the Board of the
Fund; and in that event, (i) at the direction of the Fund,
Distributor shall suspend receipt and acceptance of orders to
purchase Shares of the Fund until otherwise instructed by the Fund
and (ii) the Distributor shall not accept orders to purchase
Shares while such suspension remains in effect unless otherwise
directed by the Board.
11. Orders and Payment for Shares.
(a) Distributor shall direct orders for the purchase of
Shares of any series to the Fund's transfer agent.
At or prior to the time of delivery of any Shares the
Distributor will pay or cause to be paid to the
custodian of the Fund's assets, for the account of
such series, an amount in cash equal to the purchase
price of such Shares. The Fund's custodian and
transfer agent shall be identified in its Prospectus.
(b) The Fund, or any agent of the Fund designated in
writing by the Fund, shall be promptly advised of all
purchase orders for Fund Shares received by the
Distributor. Any order may be rejected by the Fund;
provided, however, that the Fund will not arbitrarily
or without reasonable cause refuse to accept or
confirm orders for the purchase of Fund Shares from
eligible investors.
12. Repurchase or Redemption of Shares by the Fund.
(a) Any of the outstanding Fund Shares may be tendered to
the transfer agent for redemption at any time, other
than when the Fund suspends redemptions as permitted
by the Prospectus or applicable law, and the Fund
agrees to repurchase or redeem the Shares so tendered
in accordance with its obligations as set forth in
its Agreement and Declaration of Trust, as amended
from time to time, and in accordance with the
applicable provisions set forth in the Prospectus and
SAI. The price to be paid to redeem or repurchase
the Shares shall be equal to the net asset value
calculated in accordance with the provisions of the
Fund's Prospectus and SAI, less any contingent
deferred sales charge ("CDSC"), redemption fee or
other charge(s), if any, set forth in the Prospectus
or SAI of the Fund. All payments by the Fund
hereunder shall be made in the manner set forth
below.
(b) If Shares are tendered to the transfer agent for
redemption or repurchase by the Fund within seven
business days after Distributor's acceptance of the
original purchase order for such Shares, Distributor
will immediately refund to the Fund the full sales
commission (net of allowances to dealers or brokers)
allowed to Distributor on the original sale, and will
promptly, upon receipt thereof, pay to the Fund any
refunds from dealers or brokers of the balance of
sales commissions reallowed by Distributor. The
transfer agent shall notify Distributor of such
tender for redemption within ten days of the day on
which notice of such tender for redemption is
received by the transfer agent.
(c) The transfer agent shall pay the total amount of the
redemption price as defined in the above paragraph
12(a), pursuant to the instructions of the
Distributor in Federal Funds on or before the seventh
business day subsequent to its having received the
notice of redemption in proper form except as
otherwise provided in the Prospectus or SAI of the
Fund. The proceeds of any redemption of Shares shall
be paid by the transfer agent as follows: (i) any
applicable CDSC shall be paid to the Distributor, and
(ii) the balance shall be paid to or for the account
of the shareholder, in each case in accordance with
the applicable provision of the Prospectus and SAI.
13. Purchases for your own Account. Distributor may
purchase Shares for its own investment account upon Distributor's
written assurance that the purchase is for investment purposes and
that the Shares will not be resold except through redemption by
the Fund.
14. Xxxxx Xxx & Xxxxxxx Incorporated Investment Programs.
In connection with any program under which Xxxxx Xxx & Farnham
Incorporated or one of its affiliates offers investment advice to
shareholders, the Distributor is authorized to offer and sell
Shares of the Fund, as principal, to participants in such program.
The terms of this Agreement shall apply to such sales, including
terms as to the offering price of Shares, the proceeds to be paid
to the Fund, the duties of the Distributor, the payment of
expenses and indemnification obligations of the Fund and the
Distributor.
15. Authorized Representations. No Fund is authorized by
the Distributor to give on behalf of the Distributor any
information or to make any representations other than the
information and representations contained in the Fund's
registration statement filed with the SEC under SA-33 and/or ICA-
40 as it may be amended from time to time.
16. Registration of Additional Shares. The Fund hereby
agrees to register an indefinite number of Shares pursuant to Rule
24f-2 under ICA-40, as amended. The Fund will, in cooperation
with the Distributor, take such action as may be necessary from
time to time to qualify the Shares (so registered or otherwise
qualified for sale under SA-33), in any state mutually agreeable
to the Distributor and the Fund, and to maintain such
qualification; provided, however, that nothing herein shall be
deemed to prevent the Fund from registering its Shares without
approval of the Distributor in any state it deems appropriate.
17. Conformity With Law. Distributor agrees that in
soliciting orders to purchase Shares it shall duly conform in all
respects with applicable federal and state laws and the rules and
regulations of the NASD. Distributor will use its best efforts to
maintain its registrations in good standing during the term of
this Agreement and will promptly notify the Fund and Xxxxx Xxx &
Xxxxxxx Incorporated in the event of the suspension or termination
of any of the registrations.
18. Independent Contractor. Distributor shall be an
independent contractor and neither the Distributor, nor any of its
officers, directors, employees, or representatives is or shall be
an employee of the Fund in the performance of Distributor's duties
hereunder. Distributor shall be responsible for its own conduct
and the employment, control, and conduct of its agents and
employees and for injury to such agents or employees or to others
through its agents and employees and agrees to pay all employee
taxes thereunder. Distributor may appoint sub-agents or
distribute through dealers or otherwise as Distributor may
determine from time to time, but this Agreement shall not be
construed as authorizing any dealer or other person to accept
orders for sale or repurchase on the Fund's behalf or otherwise
act as the Fund's agent for any purpose.
19. Indemnification. Distributor agrees to indemnify and
hold harmless the Fund and each of the members of its Board and
its officers, employees and representatives and each person, if
any, who controls the Fund within the meaning of Section 15 of SA-
33 against any and all losses, liabilities, damages, claims and
expenses (including the reasonable costs of investigating or
defending any alleged loss, liability, damage, claim or expense
and reasonable legal counsel fees incurred in connection
therewith) to which the Fund or such of the members of its Board
and of its officers, employees, representatives, or controlling
person or persons may become subject under SA-33, under any other
statute, at common law, or otherwise, arising out of or based upon
(i) any violation of an applicable law, rule or regulation or
wrongful act by Distributor or any of Distributor's directors,
officers, employees or representatives, or (ii) any untrue
statement or alleged untrue statement of a material fact contained
in a registration statement, Prospectus, SAI, shareholder report
or other information covering Shares of the Fund filed or made
public by the Fund or any amendment thereof or supplement thereto
or the 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 such statement or omission
was made in reliance upon information furnished to the Fund by
Distributor in writing. In no case (i) is Distributor's indemnity
in favor of the Fund, or any person indemnified, to be deemed to
protect the Fund or such indemnified person against any liability
to which the Fund or such person would otherwise be subject by
reason of willful misfeasance, bad faith, or negligence in the
performance of its or his duties or by reason of its or his
reckless disregard of its or his obligations and duties under this
Agreement or (ii) is Distributor to be liable under its indemnity
agreement contained in this paragraph with respect to any claim
made against the Fund or any person indemnified unless the Fund or
such person, as the case may be, shall have notified Distributor
in writing of the claim within a reasonable time after the
summons, or other first written notification, giving information
of the nature of the claim served upon the Fund or upon such
person (or after the Fund or such person shall have received
notice of such service on any designated agent). However, failure
to notify Distributor of any such claim shall not relieve
Distributor from any liability which Distributor may have to the
Fund or any person against whom such action is brought otherwise
than on account of Distributor's indemnity agreement contained in
this Paragraph.
Distributor shall be entitled to participate, at its own
expense, in the defense, or, if Distributor so elects, to assume
the defense of any suit brought to enforce any such claim but, if
Distributor elects to assume the defense, such defense shall be
conducted by legal counsel chosen by Distributor and satisfactory
to the persons indemnified who are defendants in the suit. In the
event that Distributor elects to assume the defense of any such
suit and retain such legal counsel, persons indemnified who are
defendants in the suit shall bear the fees and expenses of any
additional legal counsel retained by them. If Distributor does
not elect to assume the defense of any such suit, Distributor will
reimburse persons indemnified who are defendants in such suit for
the reasonable fees of any legal counsel retained by them in such
litigation.
The Fund agrees to indemnify and hold harmless Distributor
and each of its directors, officers, employees, and
representatives and each person, if any, who controls Distributor
within the meaning of Section 15 of SA-33 against any and all
losses, liabilities, damages, claims or expenses (including the
damage, claim or expense and reasonable legal counsel fees
incurred in connection therewith) to which Distributor or such of
its directors, officers, employees, representatives or controlling
person or persons may become subject under SA-33, under any other
statute, at common law, or otherwise arising out of or based upon
(i) any violation of applicable law, rule or regulation or
wrongful act by the Fund or any of the members of the Fund's
Board, or the Fund's officers, employees or representatives other
than Distributor, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, Prospectus, SAI, shareholder report or other
information covering Shares filed or made public by the Fund or
any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading unless such statement or omission was made in reliance
upon information furnished by Distributor to the Fund. In no case
(i) is the Fund's indemnity in favor of the Distributor or any
person indemnified to be deemed to protect the Distributor or such
indemnified person against any liability to which Distributor or
such indemnified person would otherwise be subject by reason of
willful misfeasance, bad faith, or negligence in the performance
of its or his duties or by reason of its or his reckless disregard
of its or his obligations and duties under this Agreement, or (ii)
is the Fund to be liable under its indemnity agreement contained
in this Paragraph with respect to any claim made against
Distributor or any person indemnified unless Distributor, or such
person, as the case may be, shall have notified the Fund in
writing of the claim within a reasonable time after the summons,
or other first written notification, giving information of the
nature of the claim served upon Distributor or upon such person
(or after Distributor or such person shall have received notice of
such service on any designated agent). However, failure to notify
a Fund of any such claim shall not relieve the Fund from any
liability which the Fund may have to Distributor or any person
against whom such action is brought otherwise than on account of
the Fund's indemnity agreement contained in this Paragraph.
The Fund shall be entitled to participate, at its own
expense, in the defense or, if the Fund so elects, to assume the
defense of any suit brought to enforce such claim but, if the Fund
elects to assume the defense, such defense shall be conducted by
legal counsel chosen by the Fund and satisfactory to the persons
indemnified who are defendants in the suit. In the event that the
Fund elects to assume the defense of any such suit and retain such
legal counsel, the persons indemnified who are defendants in the
suit shall bear the fees and expenses of any additional legal
counsel retained by them. If the Fund does not elect to assume
the defense of any such suit, the Fund will reimburse the persons
indemnified who are defendants in such suit for the reasonable
fees and expenses of any legal counsel retained by them in such
litigation.
20. Duration and Termination of this Agreement. With
respect to the Fund and the Distributor, this Agreement shall
become effective upon its execution ("Effective Date") and unless
terminated as provided herein, shall remain in effect through June
30, 1998, and from year to year thereafter, but only so long as
such continuance is specifically approved at least annually (a) by
a vote of majority of the members of the Board of the Fund who are
not interested persons of the Distributor or of the Fund, voting
in person at a meeting called for the purpose of voting on such
approval, and (b) by the vote of either the Board of the Fund or a
majority of the outstanding Shares of the Fund. This Agreement
may be terminated by and between an individual Fund and
Distributor at any time, without the payment of any penalty (a) on
60 days' written notice, by the Board of the Fund or by a vote of
a majority of the outstanding Shares of the Fund, or by
Distributor, or (b) immediately, on written notice by the Board of
the Fund, in the event of termination or suspension of any of the
Registrations. This Agreement will automatically terminate in the
event of its assignment. In interpreting the provisions of this
Paragraph 20 the definitions contained in Section 2(a) of ICA-40
(particularly the definitions of "interested person",
"assignment", and "majority of the outstanding Shares") shall be
applied.
21. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged, or terminated
orally, but only by an instrument in writing signed by each party
against which enforcement of the change, waiver, discharge, or
termination is sought. If the Fund should at any time deem it
necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the
recommendations or requirements of the SEC or any other
governmental authority or to obtain any advantage under state or
Federal tax laws and notifies Distributor of the form of such
amendment, and the reasons therefor, and if Distributor should
decline to assent to such amendment, the Fund may terminate this
Agreement forthwith. If Distributor should at any time request
that a change be made in the Fund's Agreement and Declaration of
Trust or By-Laws or in its methods of doing business, in order to
comply with any requirements of Federal law or regulations of the
SEC, or of a national securities association of which Distributor
is or may be a member, relating to the sale of Shares, and the
Fund should not make such necessary changes within a reasonable
time, Distributor may terminate this Agreement forthwith.
22. Liability. It is understood and expressly stipulated
that neither the shareholders of the Fund nor the members of the
Board of the Fund shall be personally liable hereunder. The
obligations of the Fund are not personally binding upon, nor shall
resort to the private property of, any of the members of the Board
of the Fund, nor of the shareholders, officers, employees or
agents of the Fund, but only the Fund's property shall be bound.
A copy of the Declaration of Trust and of each amendment thereto
has been filed by the Trust with the Secretary of State of The
Commonwealth of Massachusetts and with the Clerk of the City of
Boston, as well as any other governmental office where such filing
may from time to time be required.
23. Miscellaneous. The captions in this Agreement are
included for convenience or reference only, and in no way define
or limit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument.
24. Notice. Any notice required or permitted to be given by
a party to this Agreement or to any other party hereunder shall be
deemed sufficient if delivered in person or sent by registered or
certified mail, postage prepaid, addressed by the party giving
notice to each such other party at the address provided below or
to the last address furnished by each such other party to the
party giving notice.
If to the Fund: Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Secretary
If to Distributor: Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Secretary
LIBERTY FUNDS DISTRIBUTOR, INC.
By:_____________________________
ATTEST:
__________________________
XXXXX XXX ADVISOR FLOATING RATE FUND
By: XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
President
ATTEST:
XXXXXXXXX X. XXXXXXX
Xxxxxxxxx X. Xxxxxxx
Assistant Secretary
Schedule A to Underwriting Agreement
Between Xxxxx Xxx Advisor Floating Rate Fund and
Liberty Funds Distributor, Inc.
The classes of the Fund covered by this agreement are:
Name of Class Effective Date
Xxxxx Xxx Advisor Floating Rate Fund
Class A August 3, 1999
Class B August 3, 1999
Class C August 3, 1999
Class Z August 3, 1999
Dated: August 3, 1999
