EXHIBIT 99.(e)
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FOURTH AMENDED AND RESTATED
UNDERWRITING AGREEMENT
E*TRADE FUNDS
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
As of August 25, 2004
E*TRADE Securities, LLC
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Re: Fourth Amended and Restated Underwriting Agreement ("Agreement")
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Ladies and Gentlemen:
E*TRADE Funds ("Trust"), on behalf of each of it series (each a "Fund") and
E*TRADE Securities, LLC ("E*TRADE Securities") entered into this Fourth Amended
and Restated Underwriting Agreement dated as of August 25, 2004, pursuant to
which E*TRADE Securities acts as the exclusive selling agent and principal
underwriter for the shares of the series and classes of the Trust, as set forth
on Schedule A, as amended from time to time.
The Trust is a Delaware statutory trust operating as an open-end
management investment company. The Trust is registered as such under the
Investment Company Act of 1940, as amended ("1940 Act"), and interests in the
Trust ("Shares") are registered under the Securities Act of 1933, as amended
("1933 Act"). The Trust currently consists of the series listed on the attached
Schedule A, each of which is subject to this Agreement. The Trust, on behalf of
each Fund, desires to offer and sell the authorized but unissued Shares of each
Fund to the public in accordance with applicable federal and state securities
laws.
You have informed us that E*TRADE Securities, LLC is registered as a
broker-dealer under the provisions of the Securities Exchange Act of 1934 and is
a member in good standing of the National Association of Securities Dealers,
Inc. You have indicated your desire to act as the exclusive selling agent and
principal underwriter for the Shares of each Fund and for such other series of
the Trust hereinafter established as agreed to from time to time and evidenced
by the addition of such series to Schedule A of this Agreement. We have been
authorized by the Trust to execute and deliver this Agreement to you by a
resolution of our Board adopted at a meeting of the Trustees, at which a
majority of Trustees, including a majority of our Trustees who are not otherwise
interested persons of our investment manager or its related organizations, were
present and voted in favor of the said resolution approving this Underwriting
Agreement. This Underwriting Agreement is intended to apply to all Shares of
each Fund issued before or after this Agreement.
APPOINTMENT OF UNDERWRITER. Upon the execution of this Agreement and in
consideration of the agreements on your part herein expressed and upon the terms
and conditions set forth herein, we hereby appoint you as the exclusive sales
agent for distribution of the Shares and agree that we will deliver to you such
Shares as you may sell. You agree to use your best efforts to promote the sale
of the Shares, but you are not obligated to sell any specific number of the
Shares.
INDEPENDENT CONTRACTOR. You will undertake and discharge your obligations
hereunder as an independent contractor and shall have no authority or power to
obligate or bind the Trust or each Fund by your actions, conduct or contracts,
except that you are authorized to accept orders for the purchase or repurchase
of the Shares as our agent. You may appoint sub-agents or distribute the Shares
through dealers (or otherwise) as you may determine necessary or desirable from
time to time. This Agreement shall not, however, be construed as authorizing any
dealer or other person to accept orders for sale or repurchase on our behalf or
to otherwise act as our agent for any purpose.
OFFERING PRICE. Shares of each Fund shall be offered at a price equivalent to
their net asset value as set forth in each Fund's Prospectus. On each business
day on which the New York Stock Exchange is open for business, we will furnish
you with the net asset value of the Shares, which shall be determined and become
effective as of the close of business of the New York Stock Exchange on that
day. The net asset value so determined shall apply to all orders for the
purchase of the Shares received by dealers prior to such determination, and you
are authorized in your capacity as our agent to accept orders and confirm sales
at such net asset value; provided that, such dealers notify you of the time when
they received the particular order and that the order is placed with you prior
to your close of business on the day on which the applicable net asset value is
determined. To the extent that our Fund Sub-Administrator, Fund Accounting
Agent, Transfer Agent and Dividend Disbursing Agent (collectively, "Agent") and
the Custodian(s) for any pension, profit-sharing, employer or self-employed plan
receive payments on behalf of the investors, such Agent and Custodian(s) shall
be required to record the time of such receipt with respect to each payment, and
the applicable net asset value shall be that which is next determined and
effective after the time of receipt by them. In all events, you shall forthwith
notify all of the dealers comprising your selling group and the Agent and
Custodian(s) of the effective net asset value as received from us. Should we at
any time calculate our net asset value more frequently than once each business
day, you and we will follow procedures with respect to such additional price or
prices comparable to those set forth above in this Section 3.
PAYMENT OF SHARES. At or prior to the time of delivery of any of the Shares you
will pay or cause to be paid to the Custodian, for our account, an amount in
cash equal to the net asset value of such Shares. In the event that you pay for
Shares sold by you prior to your receipt of payment from purchasers, you are
authorized to reimburse yourself for the net asset value of such Shares from the
offering price of such Shares when received by you.
REGISTRATION OF SHARES. No Shares shall be registered on our books until (i)
receipt by us of your written request therefor; (ii) receipt by the Custodian
and Agent of a certificate signed by an officer of the Trust stating the amount
to be received therefor; and (iii) receipt of payment of that amount by the
Custodian. We will provide for the recording of all Shares purchased in unissued
form in "book accounts", unless a request in writing for certificates is
received by the Agent, in which case certificates for shares in such names and
amounts as is specified in such writing will be delivered by the Agent, as soon
as practicable after registration thereof on the books.
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PURCHASES FOR YOUR OWN ACCOUNT. You shall not purchase Shares for your own
account for purposes of resale to the public, but you may purchase Shares for
your own investment account upon your written assurance that the purchase is for
investment purposes only and that the Shares will not be resold except through
redemption by us.
PAYMENT OF EXPENSES.
If and to the extent that such payments may be made consistently with Rule 12b-1
or any plan adopted thereunder by the Fund, each Fund shall assume and pay for
the following expenses: (i) costs of preparing, printing and distributing
reports, Prospectuses and Statements of Information used by it in connection
with the sale or offering of its Shares and all advertising and sales literature
relating to it printed at your instruction; and (ii) counsel fees and expenses
in connection with the foregoing.
You shall pay all of your own costs and expenses connected with the sale of
Shares.
FURNISHING OF INFORMATION. We will furnish to you such information with respect
to our company and its Shares, in such form and signed by such of our officers
as you may reasonably request, and we warrant that the statements therein
contained when so signed will be true and correct. We will also furnish you with
such information and will take such action as you may reasonably request in
order to qualify our Shares for sale to the public under the Blue Sky Laws or in
jurisdictions in which you may wish to offer them. We will furnish you at least
annually with audited financial statements of our books and accounts certified
by independent public accountants, and with such additional information
regarding our financial condition, as you may reasonably request from time to
time.
CONDUCT OF BUSINESS. Other than the currently effective Prospectus and Statement
of Additional Information, you will not issue any sales material or statements
except literature or advertising which conforms to the requirements of federal
and state securities laws and regulations and which have been filed, where
necessary, with the appropriate regulatory authorities. You will furnish us with
copies of all such material prior to their use and no such material shall be
published if we shall reasonably and promptly object.
You shall comply with the applicable federal and state laws and
regulations where our Shares are offered for sale and conduct your affairs with
us and with dealers, brokers or investors in accordance with the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
REDEMPTION. You are authorized as our agent and subject to our direction, to
redeem outstanding Shares of each Fund when properly tendered by shareholders
pursuant to the redemption right granted to the shareholders by the Trust
Instrument of the Trust, as from time to time in effect, at a redemption price
equal to the NAV per Share of each Fund next determined after proper tender and
acceptance. The Trust has delivered to you a copy of its Trust Instrument as
currently in effect and agrees to deliver to you any amendments thereto.
OTHER ACTIVITIES. Your services pursuant to this Agreement shall not be deemed
to be exclusive, and you may render similar services and act as an underwriter,
distributor or dealer for other investment companies in the offering of their
Shares.
TERM OF THE AGREEMENT. This Agreement shall continue in effect with respect to
each Fund as indicated on Schedule B hereto. The Agreement shall continue
annually thereafter for successive
3
one (1) year periods if approved at least annually for a Fund (i) by a vote of a
majority of the outstanding voting securities of the respective Fund or by a
vote of the Trustees of the Trust, and (ii) by a vote of a majority of the
Trustees of the Trust who are not interested persons or parties to this
Agreement (other than as Trustees of the Trust), cast in person at a meeting
called for the purpose of voting on this Agreement.
TERMINATION. Either party may terminate this Agreement without the payment of
any penalty, upon not more than sixty days' nor less than thirty days' written
notice delivered personally or mailed by registered mail, postage prepaid, to
the other party; provided, that in the case of termination by any series of the
Trust, such action shall have been authorized (i) by resolution of the Trustees,
or (ii) by vote of a majority of the outstanding voting securities of the
respective series, or (iii) by written consent of a majority of the
disinterested Trustees. The Agreement shall automatically terminate if it is
assigned by you.
SUSPENSION OF SALES. We reserve the right at all times to suspend or limit the
public offering of the Shares upon written notice to you, and to reject any
order in whole or in part.
MISCELLANEOUS.
This Agreement shall be subject to the laws of the State of Delaware and shall
be interpreted and construed to further and promote the operation of the Trust
as an open-end investment company.
As used herein, the terms "Net Asset Value," "Offering Price," "Investment
Company," "Open-End Investment Company," "Assignment," "Principal Underwriter,"
"Interested Person," "Parents," and "Majority of the Outstanding Voting
Securities," shall have the meanings set forth in the 1933 Act and the 1940 Act,
as applicable, and the rules and regulations promulgated thereunder. Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a provision of the 1940 Act shall be
resolved by reference to such term or provision of the 1940 Act and to
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 SEC validly issued pursuant to the 1940 Act. In addition, when the effect
of a requirement of the 1940 Act reflected in any provision of this Agreement is
modified, interpreted or relaxed by a rule, regulation or order of the SEC,
whether of special or of general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. The Trust and you may
from time to time agree on such provisions interpreting or clarifying the
provisions of this Agreement as, in our joint opinion, are consistent with the
general tenor of this Agreement and with the specific provisions of this Section
15(b). Any such interpretations or clarification shall be in writing signed by
the parties and annexed hereto, but no such interpretation or clarification
shall be effected if in contravention of any applicable federal or state law or
regulations, and no such interpretation or clarification shall be deemed to be
an amendment of this Agreement.
LIABILITY.
Nothing contained herein shall be deemed to protect you against any liability to
us or to our shareholders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of your
duties hereunder, or by reason of your reckless disregard of your obligations
and duties hereunder.
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You shall look only to the assets of a series for the performance of this
Agreement by the Trust on behalf of such series and neither the Trustees nor any
of the Trust's officers, employees or agents, whether past, present or future,
shall be personally liable therefor.
17. COMPENSATION. Pursuant to a Distribution Plan adopted in accordance with
Rule 12b-1 under the 1940 Act ("Rule 12b-1 Plan") by each fund or class listed
in Schedule C ("Rule 12b-1 Fund"), E*TRADE Securities shall be compensated by
each such Rule 12b-1 Fund through the payment a monthly fee (payable on or
before the fifth (5th) business day of the following month) computed daily at
the annual rate for each Rule 12b-1 Fund as specified in Schedule C.
18. QUARTERLY REPORTING. E*TRADE Securities shall furnish to the Trust, at least
quarterly, reports as to the sales of each Rule 12b-1 Fund's shares made with
respect to which E*TRADE Securities provides services and/or assumes expenses
under the Rule 12b-1 Plan as well as information as to the distribution
activities and services provided to each such
Rule 12b-1 Fund by E*TRADE Securities and others under the Rule 12b-1 Plan.
These reports may be combined with any similar report prepared by E*TRADE
Securities.
If the foregoing meets with your approval, please acknowledge your
acceptance by signing each of the enclosed counterparts hereof and returning
such counterparts to us, whereupon this shall constitute a binding agreement as
of the date first above written.
Very truly yours,
E*TRADE FUNDS
(on behalf of each Fund listed in the
attached Schedule A)
By: /s/ Xxxxxx Xxxx
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Title: President, E*TRADE Funds
Agreed to and Accepted:
E*TRADE SECURITIES, LLC
By: /s/ Xxxxx Mulroon
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Title: Chief Financial Officer, E*TRADE Securities LLC
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SCHEDULE A
TO THE
FOURTH AMENDED AND RESTATED
UNDERWRITING AGREEMENT
The series of E*TRADE Funds currently subject to this Fourth Amended and
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Restated Underwriting Agreement, as amended, are as follows:
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E*TRADE California Municipal Money Market Fund
E*TRADE Government Money Market Fund
E*TRADE International Index Fund
E*TRADE Money Market Fund
E*TRADE Municipal Money Market Fund
E*TRADE New York Municipal Money Market Fund
E*TRADE Xxxxxxx 2000 Index Fund
E*TRADE S&P 500 Index Fund
E*TRADE Technology Index Fund
A-1
SCHEDULE B
TO THE
FOURTH AMENDED AND RESTATED
UNDERWRITING AGREEMENT
FUND END OF INITIAL TERM
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E*TRADE California Municipal Money Market Fund
Sweep Class October 7, 2004
E*TRADE Government Money Market Fund
Sweep Class October 7, 2004
E*TRADE International Index Fund October 22, 2001
E*TRADE Money Market Fund
Premier Class November 8, 2005
Sweep Class October 7, 2004
E*TRADE Municipal Money Market Fund
Premier Class May 1, 2005
Sweep Class October 7, 2004
E*TRADE New York Municipal Money Market Fund
Sweep Class October 7, 2004
E*TRADE Xxxxxxx 2000 Index Fund December 26, 2002
E*TRADE S&P 500 Index Fund February 3, 2001
E*TRADE Technology Index Fund August 12, 2001
B-1
SCHEDULE C
TO THE
FOURTH AMENDED AND RESTATED
UNDERWRITING AGREEMENT
FUND/CLASS RULE 12B-1 FEE
E*TRADE Money Market Fund
Sweep Class 0.45% of the Fund's average daily net
assets, calculated as described in
Section 17 of the Agreement.
Premier Class N/A
E*TRADE Government Money Market Fund
Sweep Class 0.45% of the Fund's average daily net
assets, calculated as described in
Section 17 of the Agreement.
E*TRADE Municipal Money Market Fund
Sweep Class 0.40% of the Fund's average daily net
assets, calculated as described in
Section 17 of the Agreement.
Premier Class N/A
E*TRADE California Municipal Money Market Fund
Sweep Class 0.40% of the Fund's average daily net
assets, calculated as described in
Section 17 of the Agreement.
E*TRADE New York Municipal Money Market Fund
Sweep Class 0.40% of the Fund's average daily net
assets, calculated as described in
Section 17 of the Agreement.
C-1
