UNDERWRITING AGREEMENT
THIS AGREEMENT is made as of April 26, 1998, by and between Empirical
Investment Funds, a Delaware business trust (the "Trust"), and Maxus Securities
Corp., an Ohio corporation ("Underwriter").
WHEREAS, the Trust is an investment company registered under the
Investment Company Act of 1940, as amended (the "Act"); 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
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 the Empirical Growth Fund series of shares of the
Trust (the "Series") in certain states.
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 Underwriter as its exclusive
agent for the distribution of the Shares in the states listed in Exhibit A
hereto, and Underwriter hereby accepts such appointment under the terms of this
Agreement, which shall apply only with respect to the states listed in Exhibit
A. Notwithstanding any other provision hereof, the Trust may terminate, suspend
or withdraw the offering of Shares of any Series whenever, in its sole
discretion, it deems such action to be desirable.
2. Sale and Repurchase of Shares.
(a) Underwriter, as agent for the Fund, will sell Shares to
the public against orders therefor at the net asset value, all such sales to
comply with the provisions of the Act and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
(b) 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.
(c) The net asset value of the Shares of each Series (or Class
of a 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 (or each Class of a 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.
(d) 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.
(e) Upon receipt of purchase instructions, Underwriter will
transmit such instructions to the Trust or its transfer agent for registration
of the Shares purchased.
(f) 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, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
(g) Underwriter, as agent of and for the account of the Trust,
may repurchase the Shares at such prices and upon such terms and conditions as
shall be specified in the Registration Statement. At the end of each business
day, the Underwriter shall notify the Trust and the Trust's transfer agent of
the number of shares redeemed, and the identity of the shareholders or dealers
offering Shares for repurchase. Upon such notice, the Trust shall pay the
Underwriter the net asset value of the redeemed shares in cash or in the form of
a credit against monies due the Trust from the Underwriter as proceeds from the
sale of Shares. The Trust reserves the right to suspend such repurchase right
upon written notice to the Underwriter. The Underwriter further agrees to act as
agent for the Trust to receive and transmit promptly to the Trust's transfer
agent, shareholder and dealer requests for redemption of Shares.
3. Sales of Shares by the Trust. The Trust reserves the right to
issue or sell any Shares directly to the public at any time.
4. Basis of Sale of Shares. 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. Compliance with NASD and Government Rules.
(a) Underwriter will conform to the Rules of Fair Practice of
the NASD and the securities laws of any jurisdiction in which it sells, directly
or indirectly, any Shares.
(b) 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 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.
(c) 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, provided however, that the expenses described in Exhibit A hereto
will be paid by the Trust.
(d) 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.
6. Records to be Supplied by Trust. 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.
7. Expenses to be Borne by Trust. The Trust will bear the following
expenses:
(a) preparation, setting in type, printing of sufficient
copies of the prospectus and statement of additional information for
distribution to shareholders, and the distribution to shareholders of the
prospectus and statement of additional information;
(b) preparation, printing and distribution of reports and
other communications to shareholders;
(c) registration of the Shares under the federal securities
law;
(d) qualification of the Shares for sale in the jurisdictions
designated by Underwriter;
(e) maintaining facilities for the issue and transfer of the
Shares;
(f) supplying information, prices and other data to be
furnished by the Trust under this Agreement; and
(g) any original issue taxes or transfer taxes applicable to
the sale or delivery of the Shares of certificates therefor.
8. Indemnification.
(a) The Trust agrees to indemnify, defend and hold the
Underwriter, its officers, and directors, and any person who controls the
Underwriter within the meaning of Section 15 of the 1933 Act (the "1933 Act") or
Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
free and harmless from and against any and all claims, demands or liabilities
and expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection therewith)
which the Underwriter, its officers, directors or any such controlling persons
may incur under the 1933 Act, the 1934 Act, or under common law or otherwise,
arising out of or based upon any untrue statement of a material fact contained
in the Registration Statement or Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading,
except insofar as such claims, demands, liabilities or expenses arise out of or
are based upon any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information furnished
in writing by the Underwriter to the Trust for use in the Registration
Statement. The Underwriter agrees to comply with all of the applicable terms and
provisions of the 0000 Xxx.
(b) The Underwriter agrees to indemnify, defend, and hold the
Trust, its officers, trustees, employees, shareholders and agents, and any
person who controls the Trust within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of investigating
or defending against such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which the Trust, its trustees, officers,
employees, shareholders and agents, or any such controlling person may incur
under the 1933 Act, the 1934 Act or under common law or otherwise arising out of
or based upon any untrue statement of a material fact or alleged untrue
statement of a material fact contained in information furnished in writing by
the Underwriter to the Trust for use in the Registration Statement, or arising
out of or based upon any omission or alleged omission to state a material fact
in connection with such information required to be stated in the Registration
Statement necessary to make such information not misleading.
(c) A party seeking indemnification hereunder (the
"Indemnitee") shall give prompt written notice to the party from whom
indemnification is sought ("Indemnitor") of a written assertion or claim of any
threatened or pending legal proceeding which may be subject to indemnity under
this Section; provided, however, that failure to notify the Indemnitor of such
written assertion or claim shall not relieve the Indemnitor of any liability
arising from this Section. The Indemnitor shall be entitled, if it so elects, to
assume the defense of any suit brought to enforce a claim subject to this
Agreement and such defense shall be conducted by counsel chosen by the
Indemnitor and satisfactory to the Indemnitee; provided, however, that if the
defendants include both the Indemnitee and the Indemnitor, and the Indemnitee
shall have reasonably concluded that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Indemnitor ("conflict of interest"), the Indemnitor shall not have the right to
elect to defend such claim on behalf of the Indemnitee, and the Indemnitee shall
have the right to select separate counsel to defend such claim on behalf of the
Indemnitee. In the event that the Indemnitor elects to assume the defense of any
suit pursuant to the preceding sentence and retains counsel satisfactory to the
Indemnitee, the Indemnitee shall bear the fees and expenses of additional
counsel retained by it except for reasonable investigation costs which shall be
borne by the Indemnitor. If the Indemnitor (i) does not elect to assume the
defense of a claim, (ii) elects to assume the defense of a claim but chooses
counsel that is not satisfactory to the Indemnitee or (iii) has no right to
assume the defense of a claim because of a conflict of interest, the Indemnitor
shall advance or reimburse the Indemnitee, at the election of the Indemnitee,
reasonable fees and disbursements of any counsel retained by Indemnitee,
including reasonable investigation costs.
9. Advances of Expenses. The Trust shall advance attorneys' fees or
other expenses incurred by a Covered Person in defending a proceeding only to
the extent permitted by the 1933 Act and the Act.
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.
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 years from the date of its execution (unless terminated automatically as
set forth in Paragraph 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. Limitation of Trust's Liability. The term "Empirical Investment
Funds" means and refers to the Trustees from time to time serving under the
Trust's Amended and Restated Declaration of Trust as the same may subsequently
thereto have been, or subsequently hereto be, amended. 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, as provided in the
Amended and Restated Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the Trustees and Shareholders
of the Trust and signed by the officers of the Trust, acting as such, and
neither such authorization by such Trustees and Shareholders nor such execution
and delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on them personally, but shall bind only
the trust property of the Trust as provided in its Amended and Restated
Declaration of Trust. A copy of the Amended and Restated Declaration of Trust of
the Trust is on file with the Secretary of State of Delaware.
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 a reorganization, recapitalization or
change of domicile.
14. Severability. 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.
15. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(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 1933 Act or the 1934 Act shall be resolved by reference to such
term or provision of the applicable 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 the applicable Act. In addition, where the effect
of a requirement of the applicable 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.
16. Notices. 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 agreed that for this purpose the
address of the Trust shall be 0000 Xxxxx Xx., Xxxxx 000, Xxxxx Xxxxx, Xxxxxxx
00000 and of the Underwriter shall be 0000 Xxxx 0xx Xx., Xxxxx 000, Xxxxxxxxx,
Xxxx 00000.
17. Counterparts. This Agreement may be in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
18. Binding Effect. Each of the undersigned expressly warrants and
represents that he has the full power and authority to sign this Agreement on
behalf of the party indicated, and that his signature will operate to bind the
party indicated to the foregoing terms.
19. Force Majeure. If Underwriter shall be delayed in its performance
of services or prevented entirely or in part from performing services due to
causes or events beyond its control, including and without limitation, acts of
God, interruption of power or other utility, transportation or communication
services, acts of civil or military authority, sabotages, national emergencies,
explosion, flood, accident, earthquake or other catastrophe, fire, strike or
other labor problems, legal action, present or future law, governmental order,
rule or regulation, or shortages of suitable parts, materials, labor or
transportation, such delay or non-performance shall be excused and a reasonable
time for performance in connection with this Agreement shall be extended to
include the period of such delay or non-performance.
IN WITNESS WHEREOF, the Trust and Underwriter have each caused this
Agreement to be signed on its behalf, all as of the day and year first above
written.
ATTEST: Empirical Investment Funds
_____________________________ By:_/s/_____________________________
Xxxx Xxxxxxxx-Xxxx, President
ATTEST: Maxus Securities Corp.
____________________________ By:_/s/_____________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
