6(d) Form of Underwriting Agreement to be between
Registrant and Fund/Plan Broker Services, Inc.
UNDERWRITING AGREEMENT
This Agreement, dated as of the 1st day of February , 1996, made
by and between The Milestone Funds, a business trust (the "Trust")
operating as a registered investment company under the Investment Company
Act of 1940, as amended (the "Act"), duly organized and existing under the
laws of the State of Delaware; Milestone Capital Management, L.P. (the
"Adviser"), a registered investment adviser existing as a limited
partnership duly organized and existing under the laws of the State of New
York; and Fund/Plan Broker Services, Inc. ("Fund/Plan"), a corporation duly
organized and existing under the laws of the State of Delaware
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue
separate series of shares representing interests in separate investment
portfolios (the "Series"), which Series may in turn offer multiple Classes
of Shares ("Classes") which Series and Classes are identified on Schedule
"C" attached hereto, and which Schedule "C" may be amended from time to
time by mutual agreement among the Parties; and
WHEREAS, the Adviser has been appointed investment adviser to the
Trust; and
WHEREAS, Fund/Plan is a broker-dealer registered with the U.S.
Securities and Exchange Commission and a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Parties are desirous of entering into an agreement
providing that, among other things Fund/Plan serves as statutory
Underwriter of shares of the Series and Classes of the Trust (the
"Shares"), and that Fund/Plan be compensated by the Adviser for providing
such services.
NOW, THEREFORE, in consideration of the promises and agreements of
the Parties contained herein, the Parties agree as follows:
1. Appointment.
The Trust hereby appoints Fund/Plan as statutory Underwriter of the
Shares, and Fund/Plan hereby accepts such appointment under the
terms of this Agreement. The Trust agrees that it will not sell
any shares to any person except to fill orders for the shares
received through Fund/Plan; provided, however, that the foregoing
exclusive right shall not apply: (a) to shares issued or sold in
connection with the merger or
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 1 of 9 pages.
consolidation of any other investment company with the Trust or the
acquisition by purchase or 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 Trust; (b) to shares
which may be offered by the Trust to its stockholders for
reinvestment of cash distributed from capital gains or net
investment income of the Trust; or (c) to shares which may be
issued to shareholders of other funds who exercise any exchange
privilege set forth in the Trust's Prospectus. Notwithstanding any
other provision hereof, the Trust may terminate, suspend, or
withdraw the offering of the Shares whenever in its sole discretion,
it deems such action to be desirable.
2. Sale and Repurchase of Shares.
(a) Fund/Plan is hereby granted the right as agent for the
Trust, to sell Shares to the public against orders therefor
at the public offering price (as defined in sub-paragraph
2.(c) hereof).
(b) Fund/Plan will also have the right to take, as agent
for the Trust, all actions which, in Fund/Plan's
judgment, are necessary to carry into effect the
Underwriting of the Shares.
(c) The public offering price shall be the net asset
value of the Shares then in effect.
(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 Trust or by
another entity on behalf of the Trust. Fund/Plan
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 Trust shall receive the
applicable net asset value of the Shares promptly.
(f) Upon receipt of purchase instructions, Fund/Plan
will transmit such instructions to the Trust or its
transfer agent for registration of the Shares
purchased.
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 2 of 9 pages.
(g) Nothing in this Agreement shall prevent Fund/Plan or
any affiliated person (as defined in the Act) of
Fund/Plan from acting as underwriter for any other
person, firm or corporation (including other
investment companies) or in any way limit or
restrict Fund/Plan or such affiliated person from
buying, selling or trading any securities for its or
their own account or for the accounts of others for
whom it or they may be acting; provided, however,
that Fund/Plan expressly agrees that it will not for
its own account purchase any shares of the Trust
except for investment purposes and that it will not
for its own account sell any such shares except by
redemption of such shares by the Trust, and that it
will not undertake in any activities which, in its
judgment, will adversely affect the performance of
its obligations to the Trust under this Agreement.
(h) Fund/Plan may repurchase Shares at such prices and
upon such terms and conditions as shall be specified
in the Prospectus.
3. Rules of Sale of Shares.
Fund/Plan does not agree to sell any specific number of
Shares. Fund/Plan, as Underwriter for the Trust, undertakes to
sell Shares on a best efforts basis and only against orders
received therefor.
The Trust reserves the right to terminate, suspend or
withdraw the sale of its Shares for any reason deemed adequate by
it and the Trust 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 NASD.
(a) Fund/Plan will conform to the Rules of Fair Practice
of the NASD and the securities laws of any
jurisdiction in which it directly or indirectly
sells any Shares.
(b) Fund/Plan will require each dealer with whom
Fund/Plan has a selling agreement to conform to the
applicable provisions of the Prospectus, with
respect to the public offering price of the Shares,
and Fund/Plan shall not cause the Trust to withhold
the placing of purchase orders so as to make a
profit thereby.
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 3 of 9 pages.
(c) The Trust agrees to furnish to Fund/Plan sufficient
copies of any agreements, plans, communications with
the public or other materials it intends to use in
connection with any sales of Shares in adequate time
for Fund/Plan to file and clear (unless Fund/Plan
and the Trust agree that any such material may be
filed subsequent to its use) such materials with the
proper authorities before they are put in use unless
Fund/Plan and the Trust agree that any such material
may be filed subsequent to its use. In addition,
the Trust agrees not to use any such materials until
so filed and cleared for use by appropriate
authorities and Fund/Plan.
(d) Fund/Plan, 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) Fund/Plan shall remain registered with the U.S.
Securities and Exchange Commission and a member of
the National Association of Securities Dealers for
the term of this Agreement.
(f) Fund/Plan 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 covering the Shares and in communications
with the public or sales materials approved by
Fund/Plan and the Trust as information supplemental
to such Prospectus. Copies of the Prospectus will
be supplied by the Trust to Fund/Plan in reasonable
quantities upon request.
5. Records to be Supplied by the Trust.
The Trust shall furnish to Fund/Plan copies of all
information, financial statements and other papers which Fund/Plan
may reasonably request for use in connection with the Underwriting
of the Shares including, but not be limited to, one certified copy
of all financial statements prepared for the Trust by its
independent public accountants.
6. Expenses.
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 4 of 9 pages.
(a) The Trust will bear the following expenses:
(i) preparation, setting in type, and printing of
sufficient copies of the prospectuses and
statements of additional information for
distribution to shareholders, and the 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 mutually agreed upon by the Trust and
Fund/Plan;
(v) maintaining facilities for the issue and transfer
of the Shares;
(vi) supplying information, prices and other data to be
furnished by the Trust 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 Advisor will pay all other expenses incident to the sale
and distribution of the Shares sold hereunder.
7. Term and Compensation.
(a) This Agreement shall commence on the date herein stated
above ("Effective Date").
(b) This Agreement shall remain in effect for eighteen (18)
months from the Effective Date and 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 Trustees of the Trust including the majority
of the Trustees 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
such approval.
(c) Fees payable to Fund/Plan shall by paid by the Adviser and
are set forth in Schedule "B" attached. Such fees shall be
fixed for eighteen (18) months commencing on the Effective
Date of this Agreement. Thereafter, the fee schedule will
be subject to review and adjustment.
(d) This Agreement (i) may at any time be terminated without the
payment of any
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 5 of 9 pages.
penalty, either by a vote of the Trustees of the Trust 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 Fund/Plan; and (ii) may be terminated by Fund/Plan on
sixty (60) days' written notice to the Trust with respect to
any Series.
(e) This Agreement shall automatically terminate in the event of
its assignment.
8. Indemnification of Fund/Plan by Adviser and Trust.
(a) The Adviser will indemnify and hold Fund/Plan harmless for
the actions of its employees and any persons affiliated with
the Advisor, as that term is defined in the Act, who are
also registered with the NASD as registered Representatives
of Fund/Plan. Further the Adviser undertakes to maintain
compliance with all rules and regulations concerning any and
all sales presentations made by such employees and
affiliated persons.
(b) The Trust and the Adviser warrant that the Shares shall only
be offered in those jurisdictions in which the Shares are
registered for such offering (or which Shares qualify for an
exemption from registration) by personnel duly licensed to
make such an offering. In the event such warranty is
violated, the Trust and the Adviser, jointly and severally,
shall fully indemnify and hold Fund/Plan harmless against
any and all matters and for any and all expenses arising
there from.
9. Liability of Fund/Plan.
(a) Fund/Plan, 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 Trust in
connection with the performance of this Agreement, except a
loss resulting from a breach of Fund/Plan's obligation
pursuant to Section 4 of this Agreement, a breach of
fiduciary duty with respect to the receipt of compensation
for services or a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of Fund/Plan in
the performance of its obligations and duties or by reason
of its reckless disregard of its obligations and duties
under this Agreement.
(b) The Trust agrees to indemnify and hold harmless Fund/Plan
against any and all
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 6 of 9 pages.
liability, loss, damages, costs or expenses (including
reasonable counsel fees) which Fund/Plan 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 Fund/Plan
may be involved as a party or otherwise or with which Fund/Plan
may be threatened, by reason of the offer or sale of the Trust
shares by persons other that Fund/Plan, prior to the execution
of this Agreement.
(c) Any person, even though also a director, officer, employee,
shareholder or agent of Fund/Plan, who may be or become an
officer, director, trustee, employee or agent of the Trust,
shall be deemed, when rendering services to the Trust or
acting on any business of the Trust (other than services or
business in connection with Fund/Plan's duties hereunder),
to be rendering such services to or acting solely for the
Trust and not as a director, officer, employee, shareholder
or agent, or one under the control or direction of Fund/Plan
even though receiving a salary from Fund/Plan.
(d) The Trust agrees to indemnify and hold harmless Fund/Plan,
and each person, who controls Fund/Plan 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 regulation, 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 Trust and
furnished by the Trust to Fund/Plan for Fund/Plan's use
hereunder, disseminated by the Trust or arise out of or are
based upon any omission or alleged omission to state therein
a material fact required to be stated therein or
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 7 of 9 pages.
necessary to make the statements therein not misleading. Such
indemnity shall not, however, inure to the benefit of Fund/Plan
(or any person controlling Fund/Plan) 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 Trust to any person by Fund/Plan
(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 Trust by Fund/Plan
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
Fund/Plan and a copy of the corrected prospectus was not
delivered to such person at or before the confirmation of
the sale to such person.
10. 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.
11. Section Headings.
Section and Paragraph headings are for convenience only and
shall not be construed as part of this Agreement.
12. Reports.
Fund/Plan shall prepare reports for the Board of Trustees of
the Trust on a quarterly basis showing such information as from
time to time shall be reasonably requested by such Board.
13. 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
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 8 of 9 pages.
particular part, term or provision held to be illegal or invalid
provided that the basic agreement is not thereby substantially
impaired.
14. Governing Law.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania and the venue of any action arising under this
Agreement shall be Xxxxxxxxxx County, Commonwealth of Pennsylvania
if the suit is instituted by the Trust or the Adviser. If a suit
is instituted by Fund/Plan, the venue of such action arising under
this Agreement shall be Yonkers, New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of nine typewritten pages, together with Schedules "A", "B" and
"C", to be signed by their duly authorized officers, as of the day and year
first above written.
Milestone Capital Management, L.P. Fund/Plan Broker Services, Inc.
____________________________________ ____________________________________
By: Xxxxx Xxxxxxx Xxxxxx, President By: Xxxxxxx X. Xxxxx, President
The Milestone Funds
______________________________________
By: Xxxxxxx X. Xxxxxx, Chief Operating
Officer
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Page 9 of 9 pages.
Schedule "A"
Underwriter Services
for
The Milestone Funds
I. Underwriter Services
A) Act as statutory Underwriter to the Trust.
B) Literature review, recommendations and submission to the NASD
C) Maintain all NASD required files and bookkeeping
D) Initial NASD Licensing and Transfers of Registered
Representatives
This includes: U-4 Form and Fingerprint Submission to NASD
Supplying Series 6 and 63 written study material
Registration for Exam Preparation classes
Renewals and Terminations of Representatives
E) Written supervisory procedures and manuals for Registered
Representatives
F) Ongoing compliance and updates for Representatives regarding
sales practices, written correspondence and other
communications with the public.
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Schedule "A"
Schedule "B"
Underwriter and Distribution Fee Schedule
for
The Milestone Funds
This Fee Schedule is fixed for a period of eighteen (18) months from the
Effective Date as that term is defined in the Agreement.
I. FPBS will maintain annual NASD and state license renewals and the
monitoring required of representative activities as follows:
Up to 2 States - $1,500 per Representative per Year
3 to 30 States - $2,500 per Representative per Year
31 to 50 States - $3,500 per Representative per Year
II. Out-of-Pocket Expenses
The Adviser will reimburse Fund/Plan Services monthly for all
out-of-pocket expenses, including postage, telecommunications
(telephone and fax), special reports, record retention, special
transportation costs as incurred.
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Schedule "B"
Schedule "C"
Identification of Series
Below are listed the "Series" to which services under this Agreement are to
be performed as of the execution date of the Agreement:
"The Milestone Funds"
Treasury Obligations Portfolio - Institutional Class
Treasury Obligations Portfolio - Investor Class
This Schedule "C" may be amended from time to time by agreement of the
Parties.
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Underwriting Agreement between The Milestone Funds, Milestone Capital
Management, L.P. and Fund/Plan Broker Services, Inc.
Schedule "C"
