UNDERWRITING AGREEMENT
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This Agreement made as of , 1998 by and between Clearbrook Investment Trust
(the "Trust"), a Delaware business trust, Clearbrook Investments, LLC (the
"Manager"), a Virginia limited liability company, and CW Fund Distributors,
Inc., a Delaware corporation (the "Underwriter").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is employed by the Trust to
provide it with investment advisory and management services; and
WHEREAS, Underwriter is a broker-dealer registered with the Securities and
Exchange Commission and a member of the National Association of Securities
Dealers, Inc. (the "NASD") and is registered with the relevant securities
regulatory agencies in all fifty states, the District of Columbia and Puerto
Rico; and
WHEREAS, the Trust and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of beneficial
interest (the "Shares") of each series of shares of the Trust (the "Series") to
the public in accordance with the applicable federal and state securities laws;
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment.
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The Trust hereby appoints, for the period of this Agreement,
Underwriter as its exclusive agent for the distribution of the Shares, and
Underwriter hereby accepts such appointment under the terms of this Agreement.
While this Agreement is in force, the Trust shall not sell any Shares except on
the terms set forth in this Agreement. Notwithstanding any other provision
hereof, the Trust may terminate, suspend or withdraw the offering of Shares
whenever, in its sole discretion, it deems such action to be desirable.
Underwriter will undertake and discharge its obligations hereunder as an
independent contractor and shall have no authority or power to obligate or bind
the Trust by its actions, conduct or contracts except as described in this
Agreement.
2. Sale And Repurchase of Shares.
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(a) Underwriter will have the right, as agent for the Trust, to enter
into dealer agreements with responsible investment dealers, and to sell Shares
to such investment dealers against orders therefor at the public offering price
(as defined in subparagraph 2(d) hereof) stated in the Trust's effective
Registration Statement on Form N-1A under the Securities Act of 1933, as
amended, including the then current prospectus and statement of additional
information (the "Registration Statement"). Upon receipt of an order to purchase
Shares from a dealer with whom Underwriter has a dealer agreement, Underwriter
will promptly cause such order to be filled by the Trust.
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(b) Underwriter will also have the right, as agent for the Trust, to
sell such Shares to the public against orders therefor at the public offering
price.
(c) Underwriter will also have the right to take, as agent for the
Trust, all actions which, in Underwriter's judgment, are necessary to carry into
effect the distribution of the Shares.
(d) The public offering price for the Shares of each Series shall be
the respective net asset value of the Shares of that Series then in effect, plus
any applicable sales charge determined in the manner set forth in the
Registration Statement or as permitted by the Act and the rules and regulations
of the Securities and Exchange Commission promulgated thereunder. In no event
shall any applicable sales charge exceed the maximum sales charge permitted by
the Rules of the NASD. Any payments to dealers shall be governed by a separate
agreement between Underwriter and such dealer and the Registration Statement.
(e) The net asset value of the Shares of each Series shall be
determined in the manner provided in the Registration Statement, and when
determined shall be applicable to transactions as provided for in the
Registration Statement. The net asset value of the Shares of each Series shall
be calculated by the Trust or by another entity on behalf of the Trust.
Underwriter shall have no duty to inquire into or liability for the accuracy of
the net asset value per Share as calculated.
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(f) On every sale, the Trust shall receive the applicable net asset
value of the Shares promptly, but in no event later than the third business day
following the date on which Underwriter shall have received an order for the
purchase of the Shares.
(g) Upon receipt of purchase instructions, Underwriter will transmit
such instructions to the Trust or its transfer agent for registration of the
Shares purchased.
(h) Exchanges of shares between Series will be effected in the manner
and subject to the restrictions and charges described in the Registration
Statement. The handling of exchanges will be further subject to such other
procedures as may be mutually agreed upon from time to time.
(i) Nothing in this Agreement shall prevent Underwriter or any
affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor for any other person, firm or corporation (including
other investment companies) or in any way limit or restrict Underwriter or any
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 Underwriter expressly represents that it will
undertake no activities which will adversely affect its obligations to the Trust
under this Agreement.
(j) Underwriter, as agent of and for the account of the Trust, may
repurchase the Shares at such prices and upon such
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terms and conditions as shall be specified in the Registration Statement.
3. Sale of Shares by the Trust.
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The Trust reserves the right to issue any Shares at any time directly
to the holders of Shares ("Shareholders"), to sell Shares to its Shareholders or
to other persons approved by Underwriter at not less than net asset value and to
issue Shares in exchange for substantially all the assets of any corporation or
trust or for the shares of any corporation or trust.
4. Basis of Sale of Shares.
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Underwriter does not agree to sell any specific number of Shares.
Underwriter, as agent for the Trust, undertakes to sell Shares on a best efforts
basis only against orders therefor.
5. Rules of NASD, etc.
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(a) Underwriter will conform to the Rules of the NASD and the
securities laws of any jurisdiction in which it sells, directly or indirectly,
any Shares.
(b) Underwriter will require each dealer with whom Underwriter has a
dealer agreement to conform to the applicable provisions hereof and the
Registration Statement with respect to the public offering price of the Shares,
and neither Underwriter nor any such dealers shall withhold the placing of
purchase orders so as to make a profit thereby.
(c) Underwriter agrees to furnish to the Trust sufficient copies of
any agreements, plans or other materials it intends to use in connection with
any sales of Shares in adequate
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time for the Trust to file and clear them with the proper authorities before
they are put in use, and not to use them until so filed and cleared.
(d) Underwriter, at its own expense, will qualify as dealer or broker,
or otherwise, under all applicable State or federal laws required in order that
Shares may be sold in such States as may be mutually agreed upon by the parties.
(e) Underwriter shall not make, or permit any representative, broker
or dealer to make, in connection with any sale or solicitation of a sale of the
Shares, any representations concerning the Shares except those contained in the
then current prospectus and statement of additional information covering the
Shares and in printed information approved by the Trust as information
supplemental to such prospectus and statement of additional information. Copies
of the then effective prospectus and statement of additional information and any
such printed supplemental information will be supplied by the Trust to
Underwriter in reasonable quantities upon request.
(f) Underwriter shall file Trust advertisements, sales literature and
other marketing and sales related materials with the appropriate regulatory
agencies and shall obtain such approvals for their use as may be required by the
Securities and Exchange Commission, the NASD and/or state securities
administrators. Underwriter shall not disseminate to the public any such
materials without prior approval by the Trust.
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6. Records to be Supplied by Trust.
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The Trust shall furnish to Underwriter copies of all information,
financial statements and other papers which Underwriter may reasonably request
for use in connection with the distribution of the Shares, and this shall
include, but shall not be limited to, one certified copy, upon request by
Underwriter, of all financial statements prepared for the Trust by independent
public accountants.
7. Fees and Expenses.
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For performing its services under this Agreement, Underwriter shall
receive from the Manager a fee of $5,000 per year. Fees shall be paid monthly in
arrears. The Manager shall promptly reimburse Underwriter for any expenses which
are to be paid by the Manager in accordance with the following paragraph.
In the performance of its obligations under this Agreement,
Underwriter will pay only the costs incurred in qualifying as a broker or dealer
under state and federal laws and in establishing and maintaining its
relationships with the dealers selling the Shares. All other costs in connection
with the offering of the Shares will be paid by the Manager in accordance with
agreements between them as permitted by applicable law, including the Act and
rules and regulations promulgated thereunder. These costs include, but are not
limited to, licensing fees, filing fees, travel and such other expenses as may
be incurred by Underwriter on behalf of the Trust and the Manager.
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8. Indemnification of Trust and Manager.
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Underwriter shall indemnify and hold harmless the Trust, the Manager,
and each person who has been, is, or may hereafter be a trustee, director,
officer, employee, shareholder or control person of the Trust or the Manager,
from and against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Trust may sustain or incur or
which may be asserted against the Trust by any person arising out of or
attributed to any action taken or omitted to be taken by Underwriter as a result
of Underwriter's refusal or failure to comply with the terms of this Agreement,
or is alleged to arise out of or is based upon any untrue statement or alleged
untrue statement of a material fact, or the omission or alleged omission to
state a material fact necessary to make the statement not misleading that is not
based on written material furnished by the Trust or the Manger, or from bad
faith, gross negligence, or willful misconduct of Underwriter or any of its
employees and agents or other person for whose acts Underwriter is responsible.
The Underwriter will advance attorneys' fees or other expenses incurred by any
such person defending a proceeding, upon the undertaking by or on behalf of such
person to repay the advance if it is ultimately determined that such person is
not entitled to indemnification. The foregoing rights of indemnification shall
be in addition to any
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other rights to which the Trust, the Manager or each such person may be entitled
as a matter of law.
9. Indemnification of Underwriter.
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Underwriter shall exercise reasonable care and act in good faith in
the performance of its duties under this Agreement. The Trust agrees to
indemnify and hold harmless Underwriter and each person who has been, is, or may
hereafter be a director, officer, employee, shareholder or control person of
Underwriter against any loss, damage or expense (including the reasonable costs
of investigation) reasonably incurred by any of them in connection with the
matters to which this Agreement relates, except a loss resulting from any
refusal or failure to comply with the terms of this Agreement or by reason of
willful misfeasance, bad faith or gross negligence on the part of any of such
persons in the performance of Underwriter's duties or from the reckless
disregard by any of such persons of Underwriter's obligations and duties under
this Agreement. The Trust will advance attorneys' fees or other expenses
incurred by any such person in defending a proceeding, upon the undertaking by
or on behalf of such person to repay the advance if it is ultimately determined
that such person is not entitled to indemnification. Any person employed by
Underwriter who may also be or become an officer or employee of the Trust shall
be deemed, when acting within the scope of his employment by the Trust, to be
acting in such employment solely for the Trust and not as an employee or agent
of Underwriter. In the event of a mechanical breakdown or
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failure of communication or power supplies beyond its control, Underwriter shall
take all reasonable steps to minimize service interruptions for any period that
such interruption continues beyond Underwriter's control. Underwriter will make
very reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of Underwriter.
Underwriter agrees that it shall, at all times, have reasonable contingency
plans with appropriate parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate equipment is
available. Representatives of the Trust and Manager shall be entitled to inspect
Underwriter's premises and operating capabilities at any time during regular
business hours of Underwriter, upon reasonable notice to Underwriter.
10. Termination and Amendment of this Agreement.
--------------------------------------------
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment. This Agreement may be amended only
if such amendment is approved (i) by Underwriter, (ii) either by action of the
Board of Trustees of the Trust or at a meeting of the Shareholders of the Trust
by the affirmative vote of a majority of the outstanding Shares, and (iii) by a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of Underwriter by vote cast in person at a meeting called for the
purpose of voting on such approval.
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Either the Trust or Underwriter may at any time terminate this
Agreement on sixty (60) days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party.
11. Effective Period of this Agreement.
-----------------------------------
This Agreement shall take effect upon its execution and shall remain
in full force and effect for a period of two (2) years from the date of its
execution (unless terminated automatically as set forth in Section 10), and from
year to year thereafter, subject to annual approval (i) by Underwriter, (ii) by
the Board of Trustees of the Trust or a vote of a majority of the outstanding
Shares, and (iii) by a majority of the Trustees of the Trust who are not
interested persons of the Trust or of Underwriter by vote cast in person at a
meeting called for the purpose of voting on such approval.
12. New Series.
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The terms and provisions of this Agreement shall become automatically
applicable to any additional series of the Trust established during the initial
or renewal term of this Agreement.
13. Successor Investment Company.
-----------------------------
Unless this Agreement has been terminated in accordance with Paragraph
10, the terms and provisions of this Agreement shall become automatically
applicable to any investment company which is a successor to the Trust as a
result of reorganization, recapitalization or change of domicile.
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14. Limitation of Liability.
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It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust.
15. Confidentiality.
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Underwriter agrees on behalf of itself and its employees and agents to
treat confidentially all information relating to the Trust or Manager's business
which is received by Underwriter during the course of rendering any service
hereunder. Underwriter agrees on behalf of itself and its employees and agents
to treat confidentially all records and other information relative to the
Manger, Trust and its shareholders and shall not disclose to any other party,
except after prior notification to and approval in writing by the Trust or
Manager, which approval shall not be unreasonably withheld and may not be
withheld where Underwriter may be exposed to civil or criminal contempt
proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities.
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16. Severability.
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In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
17. Questions of Interpretation.
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(a) This Agreement shall be governed by the laws of the State of
Delaware.
(b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Act shall be resolved by reference to such term or provision of the Act
and to interpretation thereof, if any, by the United States courts or in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the Securities and Exchange Commission issued pursuant to said Act. In
addition, where the effect of a requirement of the Act, reflected in any
provision of this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
18. Notices.
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Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is
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agreed that the address of the Trust and the Manager for this purpose shall be
0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, and that the
address of Underwriter for this purpose shall be 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxx 00000.
IN WITNESS WHEREOF, the Trust, the Manager and Underwriter have each
caused this Agreement to be signed in duplicate on their behalf, all as of the
day and year first above written.
CLEARBROOK INVESTMENT TRUST
By:________________________________
Its:President
CLEARBROOK INVESTMENTS, LLC
By:________________________________
Its:Officer
CW FUND DISTRIBUTORS, INC.
By:________________________________
Its:President
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