XXXX XXXXXX FINANCIAL SERVICES TRUST
SHARES OF BENEFICIAL INTEREST
$.01 PER VALUE
UNDERWRITING AGREEMENT
December 3, 1996
XXXX XXXXXX DISTRIBUTORS INC.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Xxxx Xxxxxx Financial Services Trust, an unincorporated
business trust organized under the laws of The Commonwealth of Massachusetts
(the "Fund"), proposes to sell, pursuant to the terms of this Agreement, to you
(the "Underwriter") up to 10,000,000 shares of its shares of beneficial
interest, $.01 par value, subject to increase or decrease as provided in this
Agreement. Such shares are hereinafter referred to as the "Shares".
The Underwriter may sell such of the Shares purchased by it, as it may
elect, to dealers chosen by it (the "Selected Dealers"), at their net asset
value, reoffering by the Selected Dealers to the public at net asset value.
It is proposed that Xxxx Xxxxxx InterCapital Inc. (the "Manager") will act
as investment manager for the Fund.
2. Representation and Warranties of the Fund and the Manager. (a) The Fund
represents and warrants to, and agrees with, the Underwriter that:
(i) A registration statement on Form N-1A, including a preliminary
prospectus, copies of which have heretofore been delivered to you, has been
carefully prepared by the Fund in conformity with the requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and the Investment
Company Act of 1940, as amended (the "1940 Act"), and the published rules
and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") under such Acts, and has been filed
with the Commission under both such Acts; and the Fund has so prepared and
proposed so to file prior to the effective date under the 1933 Act of such
registration statement an amendment to such registration statement
including the final form of prospectus and the statement of additional
information. Such registration statement (including all exhibits), as
finally amended and supplemented at the time such registration statement
becomes effective under the 1933 Act, and the prospectus and statement of
additional information forming part of such registration statement, or, if
different in any respect, the prospectus in the form first filed with the
Commission pursuant to Rule 497(c) under the 1933 Act, are herein
respectively referred to as the "Registration Statement" and the
"Prospectus", and each preliminary prospectus is herein referred to as a
"Preliminary Prospectus." Reference to the Prospectus and Preliminary
Prospectus herein shall encompass both the prospectus and statement of
additional information.
(ii) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus, and, at its date of issue, each
Preliminary Prospectus conformed in all material respects with the
requirements of the 1933 Act and the Rules and Regulations thereunder and
did not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made
not misleading; and, when the Registration Statement becomes effective
under the 1933 Act and at all times subsequent thereto up to and including
the Closing Date (as herein defined). The Registration Statement and the
Prospectus and any amendments or supplements thereto, and the Notification
of Registration on Form N-8A will contain all material statements and
information required to be included therein by the 1933 Act, the 1940 Act
and the Rules and Regulations thereunder and will conform in all material
respects to the requirements of the 1933 Act, the 1940 Act and the Rules
and Regulations and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the foregoing representations, warranties and
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agreements shall not apply to information contained in or omitted from any
Preliminary Prospectus or the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon, and in conformity with,
written information furnished to the Fund by or on behalf of the
Underwriter, or by or on behalf of the Manager specifically for use in the
preparation thereof.
(iii) The Statement of Assets and Liabilities of the Fund set forth in the
Statement of Additional Information fairly presents the financial position
of the Fund as of the date indicated and has been prepared in accordance
with generally accepted accounting principles. Price Waterhouse LLP, who
have expressed their opinion on said Statement, are independent accountants
as required by the 1933 Act and Rules and Regulations thereunder.
(iv) Subsequent to the dates as of which information is given in the
Registration Statement and Prospectus, and except as set forth or
contemplated in the Prospectus, the Fund has not incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions not in the ordinary course of business, and there has
not been any material adverse change in the financial position of the Fund,
or any change in the authorized or outstanding shares of beneficial
interest of the Fund or any issuance of options to purchase shares of
beneficial interest of the Fund.
(v) Except as set forth in the Prospectus, there is no action, suit or
proceeding before or by any court or governmental agency or body pending,
or to the knowledge of the Fund threatened, which might result in any
material adverse change in the condition (financial or otherwise), business
or prospects of the Fund, or which would materially and adversely affect
its properties or assets.
(vi) The Fund has been duly established and is validly existing as an
unincorporated business trust under the laws of The Commonwealth of
Massachusetts, with power and authority to own its property and conduct its
business as described in the Prospectus; the Fund is duly qualified to do
business in all jurisdictions in which the conduct of its business requires
such qualification; and the Fund has no subsidiaries.
(vii) The Fund is registered with the Commission under the 1940 Act as an
open-end diversified management investment company.
(viii) The Fund has an authorized capitalization as set forth in the
Registration Statement, and all outstanding shares of beneficial interest
of the Fund conform to the description thereof in the Prospectus and are
duly and validly authorized and issued, fully paid and nonassessable; and
the Shares, upon the issuance thereof in accordance with this Agreement,
will conform to the description thereof contained in the Prospectus, and
will be duly and validly authorized and issued, fully paid and
nonassessable (although shareholders of the Fund may be liable for certain
obligations of the Fund as set forth under the caption "Additional
Information" in the Prospectus).
(ix) The Fund has full legal right, power and authority to enter into this
Agreement, and the execution and delivery of this Agreement by the Fund,
the consummation of the transactions herein contemplated and fulfillment of
the terms hereof by the Fund will be in compliance with all applicable
legal requirements to which the Fund is subject and will not conflict with
the terms or provisions of any order of the Commission, the Declaration of
Trust or By-Laws of the Fund, or any agreement or instrument to which the
Fund is a party or by which it is bound.
(x) The Fund has adopted a Plan of Distribution (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. Pursuant to Rule 12b-1, the Plan has been
approved by the Fund's sole shareholder and by the Trustees of the Fund,
including a majority of the Trustees who are not interested persons of the
Fund and who have no direct or indirect financial interest in the operation
of the Plan, cast in person at a meeting called for the purpose of voting
on such Plan.
(xi) The Fund has full legal right, power and authority to enter into the
Distribution Agreement, the Custodian Agreement, the Transfer Agency and
Service Agreement and the Investment Management Agreement referred to in
the Registration Statement and the execution and delivery of the
Distribution Agreement, Custodian Agreement, the Transfer Agency and
Service Agreement, Management Agreement and the Advisory Agreement, the
consummation of the transactions therein contemplated and fulfillment of
the terms thereof, will be in compliance with all applicable legal
requirements to which the Fund is subject and will not conflict with the
terms or provisions of any order of the Commission, the Declaration of
Trust or By-Laws of the Fund, or any agreement or instrument to which the
Fund is a party or by which it is bound.
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(b) The Manager represents and warrants to, and agrees with, the Fund
that:
(i) The Manager is an investment adviser registered under the Investment
Advisers Act of 1940.
(ii) The Manager has full legal right, power and authority to enter into
this Agreement and the Investment Management Agreement, and the execution
and delivery of this Agreement and the Investment Management Agreement, the
consummation of the transactions herein and therein contemplated and the
fulfillment of the terms hereof and thereof, will be in compliance with all
applicable legal requirements to which it is subject and will not conflict
with the terms or provisions of, or constitute a default under, its
articles of incorporation or by-laws or any agreement or instrument to
which it is a party or by which it is bound.
(iii) The description of the Manager in the Registration Statement is true
and correct and does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; and is hereby deemed to be
furnished in writing to the Fund for the purposes of Section 2(a)(ii)
hereof.
3. Purchase by, and Sale to, the Underwriter. The Fund agrees to sell to the
Underwriter, and upon the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions of this
Agreement, the Underwriter agrees to purchase from the Fund, up to 10,000,000
Shares (which number of Shares may be increased or decreased as provided
below), at a price of $10.00 per Share. It is understood and agreed that the
Underwriter may be compensated by the Fund for its services under this
Agreement in accordance with the provisions of the Plan.
The number of Shares which the Underwriter may purchase pursuant hereto
shall, upon written agreement between the Underwriter and the Fund not later
than 10:00 a.m., New York time, on the third business day preceding the Closing
Date (the "Notification Time"), be increased or decreased to such greater or
lesser number of Shares as the Fund and the Underwriter may agree upon, in
which case the number of Shares set forth in the preceding paragraph shall for
all purposes hereof be increased or decreased to such greater or lesser number
of Shares. The Underwriter shall, in any event, be entitled and obligated to
purchase only the number of shares for which purchase orders have been received
by the Underwriter prior to the Notification Time.
The Fund is advised that the Underwriter proposes to make a public offering
of the Shares as soon after the Registration Statement shall have become
effective under the 1933 Act as it deems advisable, at the public offering
price and upon the terms and conditions set forth in the Prospectus.
4. Delivery and Payment. Delivery of the Shares or, at the election of the
Underwriter, non-negotiable share deposits receipts issued by the Xxxx Xxxxxx
Trust Company as transfer and dividend disbursing agent, acknowledging the
deposit of the Shares ("deposit receipts") and payment therefor, shall be made
at 10:00 a.m., New York time, at the office of Xxxx Xxxxxx Distributors Inc.,
Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on March , 1997 or such
later time and date as may be agreed upon between the Underwriter and the Fund
(such date and time being herein referred to as the "Closing Date"). The place
of delivery of the payment for the shares may be varied by agreement between
the Underwriter and the Fund.
On the Closing Date, the certificates or deposit receipts for the Shares
which are subject to purchase orders received by the Underwriter prior to the
Notification Time (registered in such names and for such denominations as you
shall have requested in writing prior to the Closing Date), shall be delivered
by the Fund to the Underwriter for the account of the Underwriter, against
payment of the purchase price therefor by a wire transfer in federal funds.
Such certificates or deposit receipts shall be made available for checking and
packaging at the New York office of Xxxx Xxxxxx Distributors Inc. on or prior
to the Closing Date.
On the Closing Date, the Underwriter agrees to purchase and pay for the
Shares for which it received purchase orders prior to the Notification Time as
specified above, provided that the Underwriter shall not have any obligation to
purchase and pay for any Shares as to which purchase orders are not in effect
on the Closing Date.
The Fund agrees to calculate and report to the Underwriter daily, upon
request, the net asset value of the Fund during the first 60 days after the
Closing Date.
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5. Covenants and Agreements of the Fund. The Fund agrees with the
Underwriter that:
(i) The Fund will use its best efforts to cause the Registration Statement
to become effective under the 1933 Act, will advise the Underwriter
promptly as to the time at which the Registration Statement becomes so
effective, will advise the Underwriter promptly of the issuance by the
Commission of any stop order suspending such effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible the lifting thereof, if
issued. The Fund will advise the Underwriter promptly of any request by the
Commission for any amendment of or supplement to the Registration Statement
or the Prospectus or for additional information, and will not at any time
file any amendment to the Registration Statement or supplement to the
Prospectus which shall not have been submitted to the Underwriter a
reasonable time prior to the proposed filing thereof and to which the
Underwriter shall reasonably object in writing promptly following receipt
of such amendment or supplement or which is not in compliance with the 1933
Act, the 1940 Act or the Rules and Regulations thereto.
(ii) The Fund will prepare and file with the Commission, promptly upon the
request of the Underwriter, any amendments or supplements to the
Registration Statement which in the opinion of the Underwriter may be
necessary to enable the Underwriter to continue the distribution of the
Shares and will use its best efforts to cause the same to become effective
as promptly as possible.
(iii) If at any time after the effective date under the 1933 Act of the
Registration Statement when a prospectus relating to the Shares is required
to be delivered under the 1933 Act, any event relating to or affecting the
Fund occurs as a result of which the Prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact, or
omit to state any material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or if
it is necessary at any time to amend the Prospectus to comply with the 1933
Act, the Fund will promptly notify the Underwriter thereof and will prepare
an amended or supplemented prospectus which will correct such statement or
omission; and, in case the Underwriter is required to deliver a prospectus
relating to the Shares nine months or more after such effective date of the
Registration Statement, the Fund upon the request of the Underwriter will
prepare promptly such prospectus or prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the 1933
Act.
(iv) The Fund will deliver to the Underwriter, at or before the Closing
Date, two signed copies of the Registration Statement and all amendments
thereto including all financial statements and exhibits thereto, and the
Notification of Registration on Form N-8A filed by the Fund pursuant to the
1940 Act and will deliver to the Underwriter such number of copies of the
Registration Statement, including such financial statements but without
exhibits, and of all amendments thereto, as the Underwriter may reasonably
request. The Fund will deliver or mail to or upon the order of the
Underwriter, from time to time until the effective date under the 1933 Act
of the Registration Statement, as many copies of any Preliminary Prospectus
as the Underwriter may reasonably request. The Fund will deliver or mail to
or upon the order of the Underwriter on the date of the initial public
offering, and thereafter from time to time during the period when delivery
of a prospectus relating to the Shares is required under the 1933 Act, as
many copies of the Prospectus, in final form or as thereafter amended or
supplemented as the Underwriter may reasonably request.
(v) As soon as is practicable after the effective date under the 1933 Act
of the Registration Statement, the Fund will make generally available to
its security holders an earnings statement which will be in reasonable
detail (but which need not be audited) and will comply with Section 11(a)
of the 1933 Act, covering a period of at least twelve months beginning
after such effective date of the Registration Statement.
(vi) The Fund will cooperate with the Underwriter to enable the Shares to
be qualified for sale under the securities laws of such jurisdictions as
the Underwriter may designate and at the request of the Underwriter will
make such applications and furnish such information as may be required of
it as the issuer of the Shares for that purpose; provided, however, that
the Fund shall not be required to qualify to do business or to file a
general consent to service of process in any such jurisdiction. The Fund
will, from time to time, prepare and file such statements and reports as
are or may be required of it as the issuer of the
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Shares to continue such qualifications in effect for so long a period as
the Underwriter may reasonably request for the distribution of the Shares.
(vii) The Fund will furnish to its shareholders annual reports containing
financial statements examined by independent accountants and with
semi-annual summary financial information which may be unaudited. During
the period of one year from the date hereof, the Fund will deliver to the
Underwriter, at Xxxx Xxxxxx Distributors Inc., Xxx Xxxxx Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Law Department, (a) copies of each annual
report of the Fund to its shareholders, (b) as soon as they are available,
copies of any other reports (financial or other) which the Fund shall
publish or otherwise make available to any of its security holders as such,
and (c) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission.
6. Payment of Expenses.
(a) The Fund will pay its organization expenses, which, for purposes of this
Agreement shall include: all costs and expenses in connection with the
establishment of the Fund and its qualification to do business in any state,
the qualification of Shares for sale under the Blue Sky or securities laws of
the several jurisdictions (including, without limitation, filing fees); the
preparation, printing and reproduction of the Declaration of Trust and By-Laws
of the Fund, this Agreement, the Distribution Agreement, the Investment
Management Agreement, the Custodian Agreement, the Transfer Agency and Service
Agreement, the Plan and other documents in quantities sufficient for filing
under the 1933 Act, the 1940 Act and the Blue Sky or securities laws of any
jurisdiction; and filing fees and fees and disbursements of counsel related to
Blue Sky matters; all costs and expenses in connection with printing any
certificates representing the Shares; fees and disbursements of counsel and
independent accountants for the Fund and of counsel for Trustees who are not
interested persons of the Fund or the Manager; registration fees under the 1933
Act and the 1940 Act; any taxes on the issue and delivery of the Shares on the
Closing Date to the Underwriter and the fees of the Fund's transfer agent. The
Manager will pay the organization expenses of the Fund incurred prior to the
closing date of the initial offering of the Fund's shares whether or not the
amount of any such expense is then ascertainable. The Fund will reimburse the
Manager for such expenses not to exceed $200,000. Any balance of organization
expenses not paid by the Fund shall be paid by the Manager. In the event the
transactions contemplated hereunder are not consummated, the Manager will pay
all the organization expenses which the Fund would have paid if such
transactions were consummated. Whether or not the transactions contemplated
hereunder are consummated, the Manager will pay all expenses in connection with
the activity and travel of officers, Trustees and counsel for the Fund and the
cost of preparing and making sales presentations to the personnel of the
Manager, including costs of travel of officers and Trustees of the Fund to
locations where such presentations are made.
(b) Subject to the provisions of the Plan, the Underwriter will pay: its
internal expenses in connection with marketing and meetings, including expenses
of its own personnel and costs of travel of its personnel to the locations
where sales presentations to its personnel and to Selected Dealers are made;
all costs and expenses in connection with printing and distributing the
Registration Statement, the Prospectus and the Blue Sky Surveys in quantities
sufficient for offering and sale of the Shares by the Underwriter; all costs in
connection with the sale of Shares, including costs of preparing, printing and
distributing sales literature relating to the Shares, all advertising and fees
and expenses of public relations counsel; and fees and expenses of legal
counsel for the Underwriter (except in respect of qualification of the Shares
for sale under the Blue Sky or securities laws of any jurisdiction).
7. Indemnification and Contribution.
(a) The Fund shall indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter against any loss, liability,
claim, damage or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damage or expense and reasonable
counsel fees incurred in connection therewith) arising by reason of any person
acquiring any Shares, which may be based upon the 1933 Act, or on any other
statute or at common law, on the ground that the Registration Statement or
related Prospectus and Statement of Additional Information, as from time to
time amended and supplemented, or the annual or interim reports to shareholders
of the Fund, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission was made
in reliance upon, and in conformity with, information
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furnished to the Fund in connection therewith by or on behalf of the
Underwriter; provided, however, that in no case (i) is the indemnity of the
Fund in favor of the Underwriter and any such controlling persons to be deemed
to protect the Underwriter or any such controlling persons thereof against any
liability to the Fund or its security holders to which the Underwriter or any
such controlling persons would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its 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 the
Underwriter or any such controlling persons, unless the Underwriter or any such
controlling persons, as the case may be, shall have notified the Fund in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Underwriter or such controlling persons (or after the Underwriter or such
controlling persons shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve it from any liability which it may have to the person against whom such
action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Fund will be entitled to participate at its
own expense in the defense, or, if it so elects, to assume the defense, of any
suit brought to enforce any such liability, but if the Fund elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Underwriter or such controlling person or persons,
defendant or defendants in the suit. In the event the Fund elects to assume the
defense of any such suit and retain such counsel, the Underwriter or such
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Fund does not elect to assume the defense of any such suit, it will
reimburse the Underwriter or such controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Fund shall promptly notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of the Shares.
(b) (i) The Underwriter shall indemnify and hold harmless the Fund and each
of its Trustees and officers and each person, if any, who controls the Fund,
against any loss, liability, claim, damage, or expense described in the
foregoing indemnity contained in subsection (a) of this Section, but only
with respect to statements or omissions made in reliance upon, and in
conformity with, information furnished to the Fund in writing by or on
behalf of the Underwriter for use in connection with the Registration
Statement or related Prospectus and Statement of Additional Information, as
from time to time amended, or the annual or interim reports to shareholders.
(ii) In case any action shall be brought against the Fund or any person
to be indemnified by this subsection 7(b) in respect of which indemnity may
be sought against the Underwriter, the Underwriter shall have the rights and
duties given to the Fund, and the Fund and each person so indemnified shall
have the rights and duties given to the Underwriter by the provisions of
subsection (a) of this Section 7.
(c) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to herein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Fund on the one hand and the Underwriter on the other
from the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Fund on the one hand and
the Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Fund on the one hand and
the Underwriter on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Fund bear to the total compensation received by the Underwriter, in each
case as set forth in the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Fund or the Underwriter
and the parties'
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relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Fund and the Underwriter agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to above shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such claim.
Notwithstanding the provisions of this subsection (c), the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Shares distributed by it to the public were offered to
the public exceeds the amount of any damages which it has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(d) Nothing contained in this Section 7 shall be construed to provide for
indemnification or contribution in violation of Section 17(i) of the 1940 Act.
8. Survival of Indemnities, Warranties, etc. The respective indemnities,
convenants, agreements, representations, warranties, certificates and other
statements of the Fund, the Manager and the Underwriter, as set forth in this
Agreement or made by them, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter, the Fund, the Manager, or any of their officers or trustees or
directors, or any controlling person, and shall survive delivery of and payment
for the Shares.
9. Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder shall be subject to the accuracy of (except as otherwise
stated herein), as of the date hereof and on and as of the Closing Date (except
with respect to representations and warranties in respect of each Preliminary
Prospectus which are in each case as of its date of issuance), the
representations and warranties of the Manager and the Fund and the compliance
on and as of the Closing Date by the Fund and the Manager with their respective
covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to the Closing Date and to the following additional
conditions:
(i) Prior to the Closing Date the Registration Statement shall have become
effective under the 1933 Act and no stop order suspending the effectiveness
thereof shall have been issued and no proceedings for that purpose shall
have been initiated or, to the knowledge of the Fund or the Underwriter,
threatened by the Commission, and any request for additional information on
the part of the Commission (to be included in the Registration Statement or
the Prospectus or otherwise) shall have been compiled with to the
reasonable satisfaction of the Underwriter.
(ii) Prior to the Closing Date no event shall have occurred to cause the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, to contain an untrue statement of fact which, in the opinion of
the Underwriter, is material, or omit to state a fact which, in the opinion
of the Underwriter, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(iii) The Underwriter shall have received from Price Waterhouse LLP a
letter, dated the Closing Date, confirming that they are independent
accountants within the meaning of the 1933 Act, the 1940 Act and the Rules
and Regulations, and stating in effect that:
(a) In their opinion, the Statement of Assets and Liabilities reported
on by them and included in the Registration Statement complies as to form
in all material respects with the applicable accounting requirements of
the 1933 Act, the 1940 Act and the Rules and Regulations; and
(b) On the basis of the procedures specified in their letter, nothing
has come to their attention which caused them to believe that, except as
set forth in or contemplated by the Prospectus, during the period from
the date on which the Fund's Registration Statement is declared effective
by the Commission under the 1933 Act to a specified date not more than
three business days prior to the delivery of such letter, there was any
change in the authorized or outstanding shares of beneficial
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interest of the Fund or any creation of long-term debt or short-term
notes of the Fund or any decrease in the net asset value per share of
beneficial interest from that set forth in the Prospectus or that the
Fund did not have a net worth of at least $100,000.
(iv) The Underwriter shall have received from Xxxx Xxxxxx & Xxxxx LLP,
Massachusetts counsel for the Fund, an opinion or opinions, dated the
Closing Day, to the following effect:
(a) The Fund has been duly established and is validly existing in
conformity with the laws of The Commonwealth of Massachusetts as an
unincorporated business trust, has made all filings required to be made
by a business trust under the Massachusetts General Laws, and has the
power and authority to own its properties and conduct its business as
described in the Prospectus;
(b) The Fund has authorized shares of beneficial interest as set forth
in the Registration Statement, and all of the issued shares of beneficial
interest of the Fund, including the Shares, have been duly paid and
non-assessable; and the Shares conform to the description of the shares
of beneficial interest contained in the Prospectus; and
(c) As to all matters of Massachusetts law and the documents described
therein, the information set forth under the caption "Additional
Information" in the Prospectus and under the caption "Description of
Shares" in all material respects and fairly presents the information
required to be shown.
(v) The Underwriter shall have received from the General Counsel of the
Fund, an opinion or opinions, dated the Closing Date, to the following
effect:
(a) This Agreement has been duly authorized, executed and delivered by
the Fund;
(b) The Registration Statement has become effective under the 1933 Act;
to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that or a
similar purpose have been instituted or are pending or contemplated by
the Commission;
(c) The notification of registration under the 1940 Act and any
amendments or supplements thereto comply as to form in all material
respects with the requirements of the 1940 Act and the rules and
regulations thereunder;
(d) The Fund is registered with the Commission under the 1940 Act as an
open-end diversified management investment company;
(e) Such counsel is familiar with all contracts filed or incorporated by
reference as exhibits to the Registration Statement and does not know of
any contracts required to be so filed or incorporated which are not so
filed or incorporated;
(f) The issuance of the Shares and the sale of the Shares in accordance
with this Agreement do not result in a breach or violation of any of the
terms or provisions of, or constitute a default under any indenture,
mortgage, deed of trust, note agreement or other agreement or instrument
know to such counsel to which the Fund is a party or by which the Fund is
bound, or the Fund's Declaration of Trust or By-Laws;
(g) The Distribution Agreement, the Custodian Agreement, the Transfer
Agency and Service Agreement, the Plan and the Investment Management
Agreement referred to in the Registration Statement have been duly
authorized, pursuant to the requirements of the laws of The Commonwealth
of Massachusetts and the 1940 Act and executed and delivered by the Fund
and each constitutes the valid and binding obligation of the Fund in
accordance with its terms;
(h) There are pending no legal or governmental proceedings know to such
counsel to which the Fund is a party or to which property of the Fund may
be subject other than as set forth in the Prospectus and, to the best of
the knowledge of such counsel, no such proceedings are contemplated;
(i) No authorization, consent, approval, permit or license of, or filing
with, any governmental or public body is required to authorize, or is
required in connection with, the execution, delivery and performance of
this Agreement or the issuance or sale of the Shares hereunder, except as
has been
8
obtained under the 1933 Act and the 1940 Act or as may be required under
the securities or Blue Sky laws of the several states and;
(j) The Registration Statement and the Prospectus, as of the effective
date of the Registration Statement, appeared on their face to be
appropriately responsive in all material respects to the requirements of
the 1933 Act, the 1940 Act and the applicable Rules and Regulations; such
counsel does not believe that the Registration Statement or the
Prospectus, on such effective date, contained any untrue statement of
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading
(except that such counsel shall express no opinion as to the financial
statements); the description in the Registration Statement and Prospectus
of contracts, other documents, statutes, regulations and governmental
proceeding is accurate in all material respects and fairly present the
information required to be shown.
As to all matters of Massachusetts law, General Counsel of the Fund may rely
upon the opinion or opinions delivered pursuant to paragraph (iv) of this
Section 9.
(vi) The Underwriter shall have received an opinion, dated the Closing
Date, to the following effect:
(a) The Underwriter has been duly organized and is a validly existing
corporation under the laws of the State of Delaware; and
(b) The Underwriting Agreement has been duly authorized, executed and
delivered by the Underwriter and is a valid and legally binding
obligation of the Underwriter;
(vii) The Underwriter shall have received from Counsel of the Manager, an
opinion, dated the Closing Date, to the following effect:
(a) The Adviser has been duly organized and is a validly existing
corporation under the laws of the State of Delaware with full power and
authority to transact business as the Manager of the Fund as contemplated
by the Prospectus;
(b) The Investment Management Agreement has been duly authorized,
executed and delivered by the Manager and is a valid and legally binding
obligation of the Manager;
(c) The Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is registered as an
investment adviser in such states as may be required for operation of the
Fund;
(d) The Manager has full legal right, power and authority to enter into
the Investment Management Agreement, and the execution and delivery of
the Investment Management Agreement, the consummation of the transactions
therein contemplated and fulfillment of the terms thereof will not
conflict with any applicable legal requirement by which the Manager is
bound, nor will they conflict with the terms or provisions of, or
constitute a default under its Certificate of Incorporation or By-Laws or
any agreement or instrument to which it is a party or by which it is
bound; and
(e) The description of the Manager in the Prospectus and Statement of
Additional Information is true and correct and does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statement
therein not misleading.
(viii) The Underwriter shall have received certificates, dated the Closing
Date, of the President or other Executive Officer competent to act on
behalf of the Underwriter and the chief financial or accounting officer of
the Fund to the effect that:
(a) No stop order suspending the effectiveness of the Registration
Statement has been issued, and, to the best of the knowledge of the
signers after reasonable investigation, no proceedings for that purpose
have been instituted or are pending or contemplated under the 1933 Act;
(b) Neither any Preliminary Prospectus, as of its date, nor the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, as of the time when the Registration Statement
9
became effective under the 1933 Act and at all time subsequent thereto up
to the delivery of such certificate, included any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(c) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, the Fund has not
incurred any material liabilities or obligations, direct or contingent,
nor entered into any material transaction, not in the ordinary course of
business, and there has not been any material adverse change in the
condition (financial or otherwise), business, prospects or results of
operations of the Fund, or any change in the capitalization of the Fund;
and
(d) to the best of the knowledge of the signers after reasonable
investigation, the representations and warranties of the Fund and the
Manager, as the case may be, in this Agreement are true and correct at
and as of the Closing Date (except with respect to representations and
warranties in respect of each Preliminary Prospectus which are in each
case as of its date of issuance) and the Fund and the Manager, as the
case may be, have each complied with all the agreements and satisfied all
the conditions on their respective parts to be performed or satisfied at
or prior to the Closing Date.
(ix) The Fund and the Manager shall have furnished to the Underwriter such
additional certificates as the Underwriter may have reasonably requested as
to the accuracy, at and as of the Closing Date, of the representations and
warranties herein, as to the performance of their obligations hereunder and
as to other conditions concurrent and precedent to the obligations of the
Underwriter hereunder.
If any of the conditions hereinabove provided for in this Section shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by the Underwriter by notifying the Fund of such termination in
writing or by telegram at or prior to the Closing Date, but the Underwriter
shall be entitled to waive any of such conditions.
10. Effective Date. This Agreement shall become effective at 11:00 a.m., New
York time, on the first full business day following the effective date under
the 1933 Act of the Registration Statement, or at such earlier time after such
effective date of the Registration Statement as the Underwriter in its
discretion shall first release the Shares for offering to the public; provided,
however, that the provisions of Section 6 and 7 shall at all time be effective.
For the purpose of this Section 10, the Shares shall be deemed to have been
released to the public upon release by the underwriter of the publication of a
newspaper advertisement relating to the Shares or upon release of telegrams or
letters offering the Shares for sale to securities dealers, whichever shall
first occur.
11. Termination. This Agreement may be terminated by the Fund at any time
before it becomes effective in accordance with Section 10 by notice from the
Fund to the Underwriter and may be terminated by the Underwriter at any time
before it becomes effective in accordance with Section 10 by notice from the
Underwriter to the Fund. In the event of any termination of this Agreement
under this or any other provision of this Agreement, there shall be no
liability of any party to this Agreement to any other party, other than as
provided in Sections 6 and 7.
This Agreement may be terminated after it becomes effective by the
Underwriter by notice to the Fund (i) if at or prior to the Closing Date
trading in securities on the New York or American Stock Exchanges shall have
been suspended or minimum or maximum price shall have been established on
either exchange, or a banking moratorium shall have been declared by State of
New York or United States authorities; (ii) if at or prior to the Closing Date
there shall have been an outbreak of hostilities between the United States and
any foreign power, or of any other insurrection or armed conflict involving the
United States which, in the judgment of the Underwriter, makes it impracticable
or inadvisable to offer or sell the Shares; (iii) if there shall have been any
material adverse development or prospective development involving particularly
the business of the Fund or the transactions contemplated by this Agreement,
which in the judgment of the Underwriter, makes it impracticable or inadvisable
to offer or deliver the Shares on the terms contemplated by the Prospectus;
(iv) if there shall be any litigation, pending or threatened, which in the
judgment of the Underwriter makes it impracticable or inadvisable to offer or
deliver the Shares on the terms contemplated by the Prospectus; or (v) if at or
prior to the Closing Date there has been a material adverse change in the
levels of equity securities prices as reflected by the recognized indices of
such prices, as compared with such levels available as of the date of this
Agreement. Any such termination shall be without liability of any party to any
party except as provided in Sections 6 and 7 hereof.
10
12. Notices. All communications hereunder shall be in writing and, if sent
to the Underwriter shall be mailed, delivered or telegraphed and confirmed to
you, at Xxxx Xxxxxx Distributors Inc., Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or, if sent to the Fund, shall be mailed, delivered or telegraphed
and confirmed to Xxxx Xxxxxx Financial Services Trust, Xxx Xxxxx Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel, or, if sent to the
Manager shall be mailed, delivered or telegraphed and confirmed to Xxxx Xxxxxx
InterCapital Inc., Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
General Counsel.
13. Successors. This Agreement shall inure to the benefit of and be binding
upon the Underwriter, the Fund, the Manager and the Adviser and their
respective successors and legal representatives. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person other
than the persons mentioned in the preceding sentence any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties
and indemnities of the Fund, the Manager and the Adviser contained in this
Agreement shall also be for the benefit of the person or persons, if any, who
control the Underwriter within the meaning of Section 15 of the 1933 Act, their
respective successors and legal representatives, and the indemnities of the
Underwriter shall also be for the benefit of each Trustee of the Fund, each of
the officers of the Fund who has signed the Registration Statement and the
Manager and the Adviser and the person or persons, if any, who control the Fund
and the Manager within the meaning of Section 15 of the 1933 Act.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. Personal Liability. The Declaration of Trust establishing Xxxx Xxxxxx
Financial Services Trust, dated November 8, 1996, a copy of which, together
with all other amendments thereto ("Declaration"), is on file in the office of
The Commonwealth of Massachusetts, provides that the name Xxxx Xxxxxx Financial
Services Trust refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally, and not Trustees, shareholder,
officer, employee or agent of Xxxx Xxxxxx Financial Services Trust shall be
held to any personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim or otherwise, in
connection with the affairs of said Xxxx Xxxxxx Financial Services Trust, but
the Trust Estate only shall be liable.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose in a
counterpart of this letter, whereupon this letter and your acceptance in such
counterpart shall constitute a binding agreement between us.
Very truly yours,
XXXX XXXXXX FINANCIAL SERVICES TRUST
By:
................................
XXXX XXXXXX INTERCAPITAL INC.,
as Manager
By:
................................
Accepted and delivered in New York, New York
as of the date first above written.
XXXX XXXXXX DISTRIBUTORS INC.
By:
.........................................
11
