UNDERWRITING AGREEMENT
This UNDERWRITING AGREEMENT, made this 7th day of February, 1996, by
and between Xxxx Xxxxx Tax-Free Income Fund, a Massachusetts business trust
("Trust"), and Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, a Maryland Trust (the
"Distributor").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission as an open-end investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and has registered its shares of beneficial
interest for sale to the public under the Securities Act of 1933 (the "1933
Act") and various state securities laws; and
WHEREAS, the Trust intends to offer for public sale distinct series of
shares of beneficial interest, each corresponding to a distinct portfolio
("Series"); and
WHEREAS, the Trust wishes to retain the Distributor as the principal
underwriter in connection with the offering and sale of the shares of beneficial
interest of each Series as now exists and as hereafter may be established
("Shares") and to furnish certain other services to the Trust as specified in
this Agreement; and
WHEREAS, this Agreement has been approved by separate votes of the
Trust's Board of Trustees and of certain disinterested Trustees in conformity
with Section 15 of, and paragraph (b)(2) of Rule 12b-1 under, the 1940 Act; and
WHEREAS, the Distributor is willing to act as principal underwriter and
to furnish such services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. (a) The Trust hereby appoints the Distributor as principal
underwriter in connection with the offering and sale of each Series. The
Distributor, as exclusive agent for the Trust, upon the commencement of
operations of any Series and subject to applicable federal and state law and the
Articles of InTrust and By-Laws of the Trust, shall: (i) promote the Series;
(ii) solicit orders for the purchase of the Shares subject to such terms and
conditions as the Trust may specify; and (iii) accept orders for the purchase of
the Shares on behalf of the Trust (collectively, "Distribution Services").
The Distributor shall comply with all applicable federal and state laws and
offer the Shares of each Series on an agency or "best efforts" basis under which
the Trust shall issue only such Shares as are actually sold. The Distributor
shall have the right to use any list of shareholders of the Trust or any Series
or any other list of investors which it obtains in connection with its provision
of services under this Agreement; provided, however, that the Distributor shall
not sell or knowingly provide such list or lists to any unaffiliated person
without the consent of the Trust's Board of Trustees.
(b) The Distributor shall provide ongoing shareholder liaison
services, including responding to shareholder inquiries, providing shareholders
with information on their investments, and any other services now or hereafter
deemed to be appropriate subjects for the payments of "service fees" under
Article III, Section 26 of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. (collectively, "Shareholder Services").
2. The Distributor may enter into dealer agreements with registered and
qualified securities dealers it may select for the performance of Distribution
and Shareholder Services, and may enter into agreements with qualified dealers
and other qualified entities to perform recordkeeping and sub-accounting
services, the form of such agreements to be as mutually agreed upon and approved
by the Trust and the Distributor. In making such arrangements, the Distributor
shall act only as principal and not as agent for the Trust. No such dealer or
other entity is authorized to act as agent for the Trust in connection with the
offering or sale of Shares to the public or otherwise.
3. The public offering price of the Shares of each Series shall be the
net asset value per share (as determined by the Trust) of the outstanding Shares
of the Series plus any applicable sales charge as described in the Registration
Statement of the Trust. The Trust shall furnish the Distributor with a statement
of each computation of public offering price and of the details entering into
such computation.
4. As compensation for providing Distribution Services under this
Agreement, the Distributor shall retain the sales charge, if any, on purchases
of Shares as set forth in the Registration Statement. The Distributor is
authorized to collect the gross proceeds derived from the sale of the Shares,
remit the net asset value thereof to the Trust upon receipt of the proceeds and
retain the sales charge, if any. The Distributor shall receive from each Series
a distribution fee and a service fee at the rates and under the terms and
conditions of the Plan of Distribution ("Plan") adopted by the Trust with
respect
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to the Series, as such Plan is in effect from time to time, and subject to any
further limitations on such fees as the Trust's Board of Trustees may impose.
The Distributor may reallow any or all of the sales charge, distribution fee and
service fee that it has received under this Agreement to such dealers or
sub-accountants as it may from time to time determine; provided, however, that
the Distributor may not reallow to any dealer for Shareholder Services an amount
in excess of .25% of the average annual net asset value of the shares with
respect to which said dealer provides Shareholder Services.
5. As used in this Agreement, the term "Registration Statement" shall
mean the registration statement most recently filed by the Trust with the
Securities and Exchange Commission and effective under the 1940 Act and 1933
Act, as such Registration Statement is amended by any amendments thereto at the
time in effect, and the terms "Prospectus" and "Statement of Additional
Information" shall mean, respectively, the form of prospectus and statement of
additional information with respect to each Series filed by the Trust as part of
the Registration Statement, or as they may be amended from time to time.
6. The Distributor shall print and distribute to prospective investors
Prospectuses, and shall print and distribute, upon request, to prospective
investors Statements of Additional Information, and may print and distribute
such other sales literature, reports, forms and advertisements in connection
with the sale of the Shares as comply with the applicable provisions of federal
and state law. In connection with such sales and offers of sale, the Distributor
and any dealer or sub-accountant shall give only such information and make only
such statements or representations as are contained in the Prospectus, Statement
of Additional Information, or in information furnished in writing to the
Distributor by the Trust, and the Trust shall not be responsible in any way for
any other information, statements or representations given or made by the
Distributor, any dealer or sub-accountant, or their representatives or agents.
Except as specifically provided in this Agreement, the Trust shall bear none of
the expenses of the Distributor in connection with its offer and sale of the
Shares.
7. The Trust agrees at its own expense to register the Shares with the
Securities and Exchange Commission, state and other regulatory bodies, and to
prepare and file from time to time such Prospectuses, Statements of Additional
Information, amendments, reports and other documents as may be necessary to
maintain the Registration Statement. Each Series shall bear all expenses related
to preparing and typesetting such Prospectuses, Statements of Additional
Information, and other materials required by law and such
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other expenses, including printing and mailing expenses, related to such Series'
communications with persons who are shareholders of that Series.
8. The Trust agrees to indemnify, defend and hold the Distributor, its
several officers and Trustees, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demands, 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 Distributor, its
officers or Trustees, or any such controlling person may incur, under the 1933
Act or under common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in the Registration Statement or
arising out of or based upon any alleged omission to state a material fact
required to be stated or necessary to make the Registration Statement not
misleading, provided that in no event shall anything contained in this Agreement
be construed so as to protect the Distributor against any liability to the Trust
or its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations and
duties under this Agreement, and further provided that the Trust shall not
indemnify the Distributor for conduct set forth in paragraph 9.
9. The Distributor agrees to indemnify, defend and hold the Trust, its
several officers and Trustees, and any person who controls the Trust within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, 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 Trust, its officers or
Trustees, or any such controlling person may incur, under the 1933 Act or under
common law or otherwise, on account of any wrongful act of the Distributor or
any of its employees or arising out of or based upon any alleged untrue
statement of a material fact contained in information furnished in writing by
the Distributor to the Trust for use in the Registration Statement or arising
out of or based upon any alleged omission to state a material fact in connection
with such information required to be stated in the Registration Statement or
necessary to make such information not misleading. As used in this paragraph,
the term "employee" shall not include a corporate entity under contract to
provide services to the Trust or any Series, or any employee of such a corporate
entity, unless such person is otherwise an employee of the Trust.
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10. The Trust reserves the right at any time to withdraw all offerings
of the Shares of any or all Series by written notice to the Distributor at its
principal office.
11. The Trust shall not issue certificates representing Shares unless
requested by a shareholder. If such request is transmitted through the
Distributor, the Trust will cause certificates evidencing the Shares owned to be
issued in such names and denominations as the Distributor shall from time to
time direct, provided that no certificates shall be issued for fractional
Shares.
12. The Distributor may at its sole discretion, directly or through
dealers, repurchase Shares offered for sale by the shareholders or dealers.
Repurchase of Shares by the Distributor shall be at the net asset value next
determined after a repurchase order has been received. The Distributor will
receive no commission or other remuneration for repurchasing Shares. At the end
of each business day, the Distributor shall notify by telex or in writing, the
Trust and State Street Bank and Trust Company, the Trust's transfer agent, of
the orders for repurchase of Shares received by the Distributor since the last
such report, the amount to be paid for such Shares, and the identity of the
shareholders or dealers offering Shares for repurchase. Upon such notice, the
Trust shall pay the Distributor such amounts as are required by the Distributor
for the repurchase of such Shares in cash or in the form of a credit against
moneys due the Trust from the Distributor as proceeds from the sale of Shares.
The Trust reserves the right to suspend such repurchase right upon written
notice to the Distributor. The Distributor 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.
13. The Distributor is an independent contractor and shall be agent for
the Trust only in respect to the sale and redemption of the Shares.
14. The services of the Distributor to the Trust under this Agreement
are not to be deemed exclusive, and the Distributor shall be free to render
similar services or other services to others so long as its services hereunder
are not impaired thereby.
15. The Distributor shall prepare reports for the Trust's Board of
Trustees on a quarterly basis showing such information concerning expenditures
related to this Agreement as from time to time shall be reasonably requested by
the Board of Trustees.
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16. As used in this Agreement, the terms "assignment", "interested
person", and "majority of the outstanding voting securities" shall have the
meanings given to them by Section 2(a) of the 1940 Act, subject to such
exemptions as may be granted by the Securities and Exchange Commission by any
rule, regulation or order.
17. This Agreement will become effective with respect to each Series on
the date first written above and, unless sooner terminated as provided herein,
will continue in effect for one year from the above written date. Thereafter, if
not terminated, this Agreement shall continue in effect with respect to each
Series for successive annual periods ending on the same date of each year,
provided that such continuance is specifically approved at least annually (i) by
the Trust's Board of Trustees or (ii) by a vote of a majority of the outstanding
voting securities of the Series (as defined in the 1940 Act), provided that in
either event the continuance is also approved by a majority of the Trust's
Trustees who are not interested persons (as defined in the 0000 Xxx) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval.
18. This Agreement is terminable with respect to any Series or in its
entirety without penalty by the Trust's Board of Trustees, by vote of a majority
of the outstanding voting securities of each affected Series (as defined in the
1940 Act), or by the Distributor, on not less than 60 days' notice to the other
party and will be terminated upon the mutual written consent of the Distributor
and the Trust. This Agreement will also automatically and immediately terminate
in the event of its assignment.
19. No provision of this Agreement may be changed, waived, discharged
or terminated orally, except by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
20. In the event this Agreement is terminated by either party or upon
written notice from the Distributor at any time, the Trust hereby agrees that it
will eliminate from its corporate name any reference to the name of "Xxxx
Xxxxx." The Trust shall have the non-exclusive use of the name "Xxxx Xxxxx" in
whole or in part only so long as this Agreement is effective or until such
notice is given.
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IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXX XXXXX TAX-FREE INCOME FUND
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxxxx
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Attest: XXXX XXXXX XXXX XXXXXX, INCORPORATED
By: /s/ Xxx Xxxxxx By: /s/ Xxxx X. Xxxxxx
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