Exhibit 99.B.23(e)(1)
UNDERWRITING AGREEMENT
This Agreement, dated as of January 1, 2002 ("Effective Date") is made
by and between McM Funds, a Delaware business trust (the "Fund") operating as an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "Act"), and NYLIFE Distributors Inc. (the
"Distributor"), a Delaware corporation (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Fund is authorized to issue separate series of shares
representing beneficial interests in separate investment portfolios (the
"Series"), which Series are identified on Schedule "A" attached hereto, and
which Schedule "A" may be amended from time to time by mutual agreement among
the Parties; and
WHEREAS, The Distributor is a broker-dealer registered with the U.S.
Securities and Exchange Commission (the "SEC") and a member in good standing of
the National Association of Securities Dealers Regulation, Inc. (the "NASDR");
and
WHEREAS, the Parties are desirous of entering into an agreement
providing for the distribution by the Distributor of the shares of the Fund (the
"Shares").
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
1. Appointment
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The Fund hereby appoints the Distributor as its principal agent for the
distribution of the Shares, and the Distributor hereby accepts such
appointment under the terms of this Agreement. The Fund agrees that it
will not sell any Shares to any person except to fill orders for the
Shares received through the Distributor, provided, however, that the
foregoing exclusive right shall not apply to: (a) Shares issued or sold
in connection with the merger or consolidation of any other investment
company with the Fund or the acquisition by purchase of 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
Fund; (b) Shares which may be offered by the Fund to its stockholders
for reinvestment of cash distributed from capital gains or net
investment income of the Fund; or (c) Shares which may be issued to
shareholders of other funds who exercise any exchange privilege set
forth in the Fund's Prospectus. Notwithstanding any other provision
hereof, the Fund may terminate, suspend, or withdraw the offering of
the Shares whenever, in its sole discretion, it deems such action to be
desirable.
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2. Sale and Repurchase of Shares
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(a) The Distributor is hereby granted the right, as agent for the
Fund, to sell Shares to the public against orders received at
the public offering price as defined in the Fund's Prospectus
and Statement of Additional Information.
(b) The Distributor will also have the right to take, as agent for
the Fund, all actions which, in the Distributor' judgment, and
subject to the Fund's reasonable approval, are necessary to
carry into effect the distribution of the Shares.
(c) The Distributor will act as agent for the Fund in connection
with the repurchase of Shares by the Fund upon the terms set
forth in the Fund's Prospectus and Statement of Additional
Information.
(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 Fund or by another entity on behalf of the
Fund. The Distributor 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 Distributor shall promptly pay to the Fund
the applicable net asset value of the Shares.
(f) Upon receipt of purchase instructions, the Distributor will
transmit such instructions to the Fund or its transfer agent
for registration of the Shares purchased.
(g) Nothing in this Agreement shall prevent the Distributor or any
affiliated person (as defined in the Act) of the Distributor
from acting as underwriter for any other person, firm or
corporation (including other investment companies), or in any
way limit or restrict the Distributor or such affiliated
person from buying, selling or trading any securities for its
or their own account or for the account of others for whom it
or they may be acting, provided, however, that the Distributor
expressly agrees that it will not for its own account purchase
any Shares of the Fund except for investment purposes, and
that it will not for its own account dispose of any such
Shares except by redemption of such Shares with the Fund, and
that it will not undertake in any activities which, in its
judgment, will adversely affect the performance of its
obligations to the Fund under this Agreement.
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3. Rules of Sale of Shares
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The Distributor does not agree to sell any specific number of Shares
and serves only in the capacity of Statutory Underwriter. The Fund
reserves the right to terminate, suspend or withdraw the sale of its
Shares for any reason deemed adequate by it, and the 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 NASDR, etc.
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(a) The Distributor will conform to the Conduct Rules of the NASDR
and the securities laws of any jurisdiction in which it
directly or indirectly sells any Shares.
(b) The Distributor will require each dealer with whom the
Distributor has a selling agreement to conform to the
applicable provisions of the Prospectus, with respect to the
public offering price of the Shares, and the Distributor shall
not cause the Fund to withhold the placing of purchase orders
so as to make a profit thereby.
(c) The Fund agrees to furnish the Distributor sufficient copies
of any and all: agreements, plans, communications with the
public or other materials which the Fund intends to use in
connection with any sales of Shares, in adequate time for the
Distributor to file and clear such materials with the proper
authorities before they are put in use. The Distributor and
the Fund may agree that any such material does not need to be
filed subsequent to distribution. In addition, the Fund agrees
not to use any such materials until so filed and cleared for
use, if required, by appropriate authorities as well as by the
Distributor.
(d) the Distributor, 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) The Distributor shall remain registered with the SEC and a
member of the NASDR for the term of this Agreement.
(f) The Distributor 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 or Statement of Additional
Information offering the Shares and in communications with the
public or sales materials approved by the Distributor as
information supplemental to such Prospectus. Copies of the
Prospectus and Statement of Additional Information will be
supplied by the Fund to the Distributor in reasonable
quantities upon request.
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(g) The Distributor shall only be authorized to make
representations in respect of the Fund consistent with the
then current Prospectus, Statement of Additional Information,
and other written information provided by the Fund or its
agents to be used explicitly with respect to the sale of
Shares.
5. Records to be Supplied by the Fund
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The Fund shall furnish to the Distributor copies of all information,
financial statements and other papers which the Distributor may
reasonably request for use in connection with the underwriting of the
Shares including, but not limited to, one certified copy of all
financial statements prepared for the Fund by its independent public
accountants.
6. Expenses and Compensation
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(a) The Fund will bear the following expenses:
(i) preparation, setting in type, and printing of
sufficient copies of the Prospectus and Statement of
Additional Information for distribution to
shareholders, and the cost of 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;
(v) maintaining facilities for the issue and transfer of
the Shares;
(vi) supplying information, prices and other data to be
furnished by the Fund under this Agreement; and
(vii) any original issue taxes or transfer taxes applicable
to the sale or delivery of the Shares or certificates
therefor.
(b) The Distributor agrees to pay all of its own expenses in
performing its obligations hereunder, except those expenses
described in paragraph (c) of this Section 6.
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(c) With respect to those Series listed on Schedule B, as amended
from time to time, Class Z shares of the Trust reimburse the
Distributor, the Trust's investment adviser, and others
pursuant to the Rule 12b-1 Distribution Plan for Class Z
shares (the "Plan"), which has been adopted by the Trust
pursuant to Rule 12b-1 under the Act, for all expenses
incurred by such parties in the promotion and distribution of
the Class Z shares of the Trust, including but not limited to,
the printing of prospectuses and reports used for sales
purposes, expenses of preparation of sales literature and
related expenses, advertisements, and other
distribution-related expenses, as well as any distribution
fees paid to securities dealers or others who have executed a
selling agreement with the Trust on behalf of Class Z shares
or the Distributor.
The amounts paid by those Series listed on Schedule B under
the Plan are paid to the Distributor for its services and
expenses as the principal distributor of the Class Z shares
and shall be used by the Distributor to furnish, or cause or
encourage others to furnish, services and incentives in
connection with the promotion, offering and sale of Class Z
shares, and where suitable and appropriate, the retention of
Class Z shares by shareholders.
7. Term
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(a) This Agreement shall remain in effect for one (1) year 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 (ii) by a vote of a majority of
the Board of Trustees of the Fund who are not parties to this
Agreement (other than as Board of Trustees of the Fund) or
interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(b) This Agreement (i) may be terminated at any time without the
payment of any penalty, either by a vote of the Trustees of
the Fund or by a vote of a majority of the outstanding voting
securities of each Series with respect to such Series, on
sixty (60) days' written notice to the Distributor; and (ii)
may be terminated by the Distributor on sixty (60) days'
written notice to the Fund with respect to any Series.
(c) This Agreement shall automatically terminate in the event of
its assignment, as defined in the Act.
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8. Indemnification
The Fund agrees to indemnify, defend and hold the Distributor,
its officers and directors and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act,
free and harmless from and against any and all claims,
demands, 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 Distributor, its officers, directors or any such
controlling person may incur under the 1933 Act, or under
common law or otherwise, arising out of or based upon any
alleged untrue statement of a material fact contained in the
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
Distributor to the Fund for use in the Registration Statement
or Prospectus; provided, however, that this indemnity
agreement, to the extent that it might require indemnity of
any person who is also an officer or Trustee of the Fund or
who controls the Fund within the meaning of Section 15 of the
1933 Act, shall not inure to the benefit of such officer,
Trustee or controlling person unless a court of competent
jurisdiction shall determine, or it shall have been determined
by controlling precedent, that such result would not be
against public policy as expressed in the 1933 Act; and
further provided, that in no event shall anything contained
herein be so construed as to protect the Distributor against
any liability to the Fund or to its security holders to which
the Distributor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless
disregard of its obligations under this Agreement. The Fund's
agreement to indemnify the Distributor, its officers and
directors and any such controlling person as aforesaid is
expressly conditioned upon the Fund's being promptly notified
of any action brought against the Distributor, its officers or
directors, or any such controlling person, such notification
to be given by letter or telegram addressed to the Fund at its
principal business office. The Fund agrees promptly to notify
the Distributor of the commencement of any litigation or
proceedings against the Fund or any of its officers or
Trustees in connection with the issue and sale of the Shares
of any Series.
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The Distributor agrees to indemnify, defend and hold the Fund,
its officers and Trustees and any person who controls the
Fund, if any, within the meaning of Section 15 of the 1933
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 Fund, its Trustees or officers or any
such controlling person may incur under the 1933 Act or under
common law or otherwise, but only to the extent that such
liability or expense incurred by the Fund, its Trustees or
officers or such controlling person resulting from such claims
or demands shall arise out of or be based upon any alleged
untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Fund for use in
the Registration Statement or Prospectus or shall arise out of
or be based upon any alleged omission to state a material fact
in connection with such information required to be stated in
the Registration Statement or Prospectus or necessary to make
such information not misleading. The Distributor's agreement
to indemnify the Fund, its Trustees and officers, and any such
controlling person as aforesaid is expressly conditioned upon
the Distributor's being promptly notified of any action
brought against the Fund, its officers or Trustees or any such
controlling person, such notification being given to the
Distributor at its principal business office.
9. Amendments
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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.
10. Section Headings
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Section and paragraph headings are for convenience only and shall not
be construed as part of this Agreement.
11. Reports
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The Distributor shall prepare reports for the Board of the Fund, on a
quarterly basis, showing such information as, from time to time, shall
be reasonably requested by the Board.
12. Severability
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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.
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13. Governing Law
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This Agreement shall be governed by the laws of the State of California
and the exclusive venue of any action arising under this Agreement
shall be the City of San Francisco, State of California.
14. Authority to Execute
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The Parties represent and warrant to each other that the execution and
delivery of this Agreement by the undersigned officer of each Party has
been duly and validly authorized; and, when duly executed, this
Agreement will constitute a valid and legally binding and enforceable
obligation of each Party.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed
by their duly authorized officer, of the day and year first above written.
NYLIFE Distributors Inc.
/s/ Xxxxx X. Xxx
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By: Xxxxx X. Xxx
Title: President
MCM FUNDS
/s/ Xxxxx X. Xxxxxx
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By: Xxxxx X. Xxxxxx
Title:Vice President
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SCHEDULE A
IDENTIFICATION OF SERIES
Below are listed the Series and Classes of Shares to which services under this
Agreement are to be performed as of the Effective Date of this Agreement:
Equity Investment Fund
Balanced Fund
Intermediate Fixed Income Fund
Fixed Income Fund
Principal Preservation Fund
This Schedule "A" may be amended from time to time by agreement of the Parties.
SCHEDULE B
SERIES THAT HAVE ADOPTED CLASS Z RULE 12b-1 PLANS
McM Intermediate Fixed Income Fund
McM Fixed Income Fund
McM Balanced Fund
McM Equity Investment Fund
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