Exhibit 99.B.23.(e)
UNDERWRITING AGREEMENT
This Agreement, dated as of November 22, 1999, 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 Provident Distributors, Inc. ("PDI"), a
corporation duly organized and existing under the laws of the State of Delaware
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Fund is authorized to issue separate series of shares
representing 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, PDI 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, Inc. (the "NASDR"); and
WHEREAS, the Parties are desirous of entering into an agreement
providing for the distribution by PDI 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
The Fund hereby appoints PDI as its principal agent for the distribution of
the Shares, and PDI 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 PDI, 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
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offering of the Shares whenever, in its sole discretion, it deems such action
to be desirable.
2. Sale and Repurchase of Shares
(a) PDI 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) PDI will also have the right to take, as agent for the Fund, all actions
which, in PDI's judgment, and subject to the Fund's reasonable approval,
are necessary to carry into effect the distribution of the Shares.
(c) PDI 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. PDI 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, PDI shall promptly pay to the Fund the applicable net
asset value of the Shares.
(f) Upon receipt of purchase instructions, PDI will transmit such
instructions to the Fund or its transfer agent for registration of the
Shares purchased.
(g) Nothing in this Agreement shall prevent PDI or any affiliated person (as
defined in the Act) of PDI from acting as underwriter for any other
person, firm or corporation (including other investment companies), or in
any way limit or restrict PDI 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 PDI 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
PDI 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.
(a) PDI 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) PDI will require each dealer with whom PDI has a selling agreement to
conform to the applicable provisions of the Prospectus, with respect to
the public offering price of the Shares, and PDI 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 PDI 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 PDI to file and clear such materials with the proper
authorities before they are put in use. PDI 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 PDI.
(d) PDI, 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) PDI shall remain registered with the SEC and a member of the NASDR for
the term of this Agreement.
(f) PDI 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 offering the Shares and in
communications with the public or sales materials approved by PDI as
information supplemental to such Prospectus. Copies of the Prospectus
will be supplied by the Fund to PDI in reasonable quantities upon
request.
(g) PDI 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.
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5. Records to be Supplied by the Fund
The Fund shall furnish to PDI copies of all information, financial statements
and other papers which PDI 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
(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 as
directed by the Fund;
(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) PDI agrees to pay all of its own expenses in performing its obligations
hereunder.
7. Term
(a) The term of this Agreement shall commence immediately upon the
consummation of the acquisition of First Data Investor Services Group,
Inc. by a subsidiary of PNC Bank Corp., which the parties anticipate to
occur on or about December 1, 1999 (the "Effective Date").
(b) This Agreement shall remain in effect for one (1) year from the Effective
Date. This Agreement shall continue thereafter for periods not exceeding
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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 Members of the Fund who are not parties to this
Agreement (other than as Board Members 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.
(c) 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 PDI; and
(ii) may be terminated by PDI on sixty (60) days' written notice to the
Fund with respect to any Series.
(d) This Agreement shall automatically terminate in the event of its
assignment, as defined in the Act.
8. Liability of PDI
(a) PDI, 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 Fund in connection with the performance of this
Agreement, except a loss resulting from a breach of PDI's obligations
pursuant to Section 4 of this Agreement (Rules of NASDR), 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 PDI in the performance of its obligations and duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement. PDI agrees to indemnify and hold harmless the Fund and each
person who has been, is, or may hereafter be a Trustee, officer, or
employee of the Fund against expenses reasonably incurred by any of them
in connection with any claim or in connection with any action, suit, or
proceeding to which any of them may be a party, which arises out of or is
alleged to arise out of any misrepresentation or omission to state a
material fact, on the part of PDI or any agent of employee of PDI or any
of the persons for whose acts PDI is responsible or is alleged to be
responsible unless such misrepresentation or omission was made in
reliance upon written information furnished to PDI by the Fund. PDI also
agrees to indemnify and hold harmless the Fund and each such person in
connection with any claim or in connection with any action, suit, or
proceeding which arises out of or is alleged to arise out of PDI's
failure to exercise reasonable care and diligence with respect to its
services rendered in connection with the purchase and sale of Shares. The
foregoing rights of indemnification shall be in addition to any other
rights to which the Fund or any such person shall be entitled to as a
matter of law.
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(b) The Fund agrees to indemnify and hold harmless PDI against any and all
liability, loss, damages, costs of expenses (including reasonable counsel
fees) which PDI 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 PDI may
be involved as a party or otherwise or with which PDI may be threatened,
by reason of the offer or sale of the Fund's Shares by persons other than
PDI or its representatives, (except for actions of FPS Broker Services,
Inc. or its representatives) to the Fund's indemnification of PDI for
actions prior to the execution of this Agreement. If a claim is made
against PDI as to which PDI may seek indemnity under the Section, PDI
shall notify the Fund promptly after any written assertion of such claim
threatening to institute an action or proceeding with respect thereto and
shall notify the Fund promptly of any action commenced against PDI within
10 days time after PDI shall have been served with a summons or other
legal process, giving information as to the nature and basis of the
claim. Failure to notify the Fund shall not, however, relieve the Fund
from any liability which it may have on account of the indemnity under
this Section 8(b) if the Fund has not been prejudiced in any material
respect by such failure. The Fund shall have the sole right to control
the settlement of any such action, suit or proceeding subject to PDI
approval, which shall not be unreasonably withheld. PDI shall have the
right to participate in the defense of an action or proceeding and to
retain its own counsel, and the reasonable fees and expenses of such
counsel shall be borne by the Fund (which shall pay such fees, costs and
expenses at least quarterly) if:
(i) PDI has received an opinion of counsel stating that the use of
counsel chosen by the Fund to represent PDI would present such
counsel with a conflict of interest:
(ii) the defendants in, or targets of, any such action or proceeding
include both PDI and the Fund, and legal counsel to PDI shall have
reasonably concluded that there are legal defenses available to it
which are different from or additional to those available to the
trust or which may be adverse to or inconsistent with defenses
available to the Fund (in which case the Fund shall not have the
right to direct the defense of such action on behalf of PDI); or
(iii) the Fund shall authorize PDI to employ separate counsel at the
expense of the Fund.
(c) Any person, even though also a director, officer, employee, shareholder
or agent of PDI who may be or become an officer, director, trustee,
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employee or agent of the Fund, shall be deemed, when rendering services
to the Fund or acting on any business of the Fund (other than services or
business in connection with PDI's duties hereunder), to be rendering such
services to or acting solely for the Fund and not as a director, officer,
employee, shareholder or agent, or one under the control or direction of
PDI even though receiving a salary from PDI.
(d) The Fund agrees to indemnify and hold harmless PDI, and each person who
controls PDI 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 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 regulations, 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 Fund and furnished by the
Fund to PDI for PDI's use hereunder, disseminated by the trust or which
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 PDI (or any
person controlling PDI) 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 Fund to any person by PDI (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 Fund by PDI 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 PDI and a copy of
the corrected Prospectus was not delivered to such person at or before
the confirmation of the sale to such person
(e) PDI shall not be responsible for any damages, consequential or otherwise,
which the Company or the Fund may experience, due to the disruption of
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the distribution of Shares caused by any action or inaction of any
registered representative or affiliate of PDI or of PDI itself.
(f) Notwithstanding anything in this Agreement to the contrary, in no event
shall any party to this Agreement, its affiliates or any of its or their
directors, trustees, officers, employees, agents or subcontractors be
liable for lost profits, exemplary, punitive, special, incidental,
indirect or consequential damages.
9. 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.
10. Section Headings
Section and paragraph headings are for convenience only and shall not be
construed as part of this Agreement.
11. Reports
PDI 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
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.
13. Governing Law
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
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.
PROVIDENT DISTRIBUTORS, INC.
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------
By: Xxxxxx X. Xxxxxxxxx
Title: President
MCM FUNDS
/s/ Xxxxx X. Xxxxxx
--------------------------
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
S&P 500 Index Fund
This Schedule "A" may be amended from time to time by agreement of the Parties.
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