UNDERWRITING AGREEMENT
This Agreement, dated as of January 1, 1999, is made by and
between The Xxxxx Xxxxxxx Trust, a Massachusetts business trust (the
"Fund") operating as an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the
"Act"), Xxxxx Xxxxxxx Associates, Inc. (the "Company"), a registered
investment advisor duly organized and existing as a corporation under
the laws of the State of Kansas, and First Data Distributors, Inc.
("FDDI"), a corporation duly organized and existing under the laws of
the Commonwealth of Massachusetts (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Fund is authorized to issue separate series of
shares representing interests in separate investment portfolios (the
"Series"), which Series 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 Company has been appointed investment advisor to
the Fund; and
WHEREAS, FDDI is a broker-dealer registered with the U.S.
Securities and Exchange Commission (the "SEC") 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 for the distribution by FDDI of the shares of the Fund (the
"Shares").
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, and in exchange of good and valuable
consideration, the sufficiency and receipt of which is hereby
acknowledged, the Parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Appointment
The Fund hereby appoints FDDI as its principal agent for the
distribution of the Shares, and FDDI hereby accepts such
appointment under the terms of this Agreement. The Fund agrees
that it will not sell any Shares to any person except to fill
orders for the Shares received through FDDI, provided, however,
that the foregoing exclusive right shall not apply to: (a)
Shares issued or sold in connection with the merger or
consolidation of any other investment company with the Fund 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 Fund; (b) Shares which may be offered by the Fund to its
stockholders for reinvestment of cash distributed from capital
gains or net investment income of the Fund; or (c) Shares which
may be issued to shareholders of other funds who exercise any
exchange privilege set forth in the Fund's Prospectus.
Notwithstanding any other provision hereof, the Fund may
terminate, suspend, or withdraw the offering of the Shares
whenever, in their sole discretion, they deem such action to be
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desirable.
2. Sale and Repurchase of Shares
(a) FDDI is hereby granted the right, as agent for the Fund,
to sell Shares to the public against orders received at
the public offering price as defined in the Fund's
Prospectus and Statement of Additional Information.
(b) FDDI will also have the right to take, as agent for the
Fund, all actions which, in FDDI's judgment, and subject
to the Fund's reasonable approval, are necessary to carry
into effect the distribution of the Shares.
(c) FDDI will act as agent for the Fund in connection with
the repurchase of Shares by the Fund upon the terms set
forth in the Fund's Prospectus and Statement of
Additional Information.
(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 Fund
or by another entity on behalf of the Fund. FDDI 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, FDDI shall promptly pay to the Fund the
applicable net asset value of the Shares.
(f) Upon receipt of purchase instructions, FDDI will transmit
such instructions to the Fund or its transfer agent for
registration of the Shares purchased.
(g) Nothing in this Agreement shall prevent FDDI or any
affiliated person (as defined in the Act) of FDDI from
acting as underwriter for any other person, firm or
corporation (including other investment companies), or in
any way limit or restrict FDDI or such affiliated person
from buying, selling or trading any securities for its or
their own account or for the account of others for whom
it or they may be acting, provided, however, that FDDI
expressly agrees that it will not for its own account
purchase any Shares of the Fund except for investment
purposes, and that it will not for its own account
dispose of any such Shares except by redemption of such
Shares with the Fund, and that it will not undertake in
any activities which, in its judgment, will adversely
affect the performance of its obligations to the Fund
under this Agreement.
3. Rules of Sale of Shares
FDDI does not agree to sell any specific number of Shares and
serves only in the capacity of Statutory Underwriter. The Fund
reserves the right to terminate, suspend or withdraw the sale
of its Shares for any reason deemed adequate by it, and the
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Fund 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, etc.
(a) FDDI will conform to the Conduct Rules of the NASD and
the securities laws of any jurisdiction in which it
directly or indirectly sells any Shares.
(b) FDDI will require each dealer with whom FDDI has a
selling agreement to conform to the applicable provisions
of the Prospectus, with respect to the public offering
price of the Shares, and FDDI shall not cause the Fund to
withhold the placing of purchase orders so as to make a
profit thereby.
(c) The Fund and the Company agree to furnish FDDI sufficient
copies of any and all: agreements, plans, communications
with the public or other materials which the Fund or the
Company intend to use in connection with any sales of
Shares, in adequate time for FDDI to file and clear such
materials with the proper authorities before they are put
in use. FDDI and the Fund or the Company may agree that
any such material does not need to be filed subsequent to
distribution. In addition, the Fund and the Company
agree not to use any such materials until so filed and
cleared for use, if required, by appropriate authorities
as well as by FDDI.
(d) FDDI, 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) FDDI shall remain registered with the SEC and a member of
the NASD for the term of this Agreement.
(f) FDDI 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 offering the
Shares and in communications with the public or sales
materials approved by FDDI as information supplemental to
such Prospectus. Copies of the Prospectus will be
supplied by the Fund or the Company to FDDI in reasonable
quantities upon request.
(g) FDDI shall only be authorized to make representations in
respect of the Fund consistent with the then current
Prospectus, Statement of Additional Information, and
other written information provided by the Fund or its
agents to be used explicitly with respect to the sale of
Shares.
5. Records to be Supplied by the Fund
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The Fund shall furnish to FDDI copies of all information,
financial statements and other papers which FDDI may reasonably
request for use in connection with the underwriting of the
Shares including, but not limited to, one certified copy of all
financial statements prepared for the Fund by its independent
public accountants.
6. Expenses
(a) The Fund will bear the following expenses:
(i) preparation, setting in type, and printing of
sufficient copies of the Prospectus and Statement
of Additional Information for distribution to
shareholders, and the cost of 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 as directed by the Fund;
(v) maintaining facilities for the issue and transfer
of the Shares;
(vi) supplying information, prices and other data to be
furnished by the Fund 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 Company will pay all other expenses incident to the
sale and distribution of the Shares sold hereunder.
(c) FDDI agrees to pay all of its own expenses in performing
its obligations hereunder.
7. Term and Compensation
(a) The term of this Agreement shall commence on the date on
hereinabove first written (the "Effective Date").
(b) This Agreement shall remain in effect for one (1) year
from the Effective Date. This Agreement 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 Board Members of the Fund
who are not parties to this Agreement (other than as
Board Members of the Fund) or interested persons of any
such party, cast in person at a meeting called for the
purpose of voting on such approval.
(c) Fees payable to FDDI shall be paid by the Company as set
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forth in Schedule "B" attached and shall be fixed for the
one (1) year period commencing on the Effective Date of
this Agreement. Thereafter, the fee schedule will be
subject to annual review and adjustment.
(d) This Agreement (i) may be terminated at any time without
the payment of any penalty, either by a vote of the
Trustees of the Fund 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
FDDI; and (ii) may be terminated by FDDI on sixty (60)
days' written notice to the Fund with respect to any
Series.
(e) This Agreement shall automatically terminate in the event
of its assignment, as defined in the Act.
8. Indemnification of FDDI by the Company and the Fund
FDDI is responsible for its own conduct and the employment,
control, and conduct of its agents and employees and for injury
to such agents or employees or to others caused by it, its
agents or employees. Notwithstanding the above, the Company
and the Fund will indemnify and hold FDDI harmless for the
actions of the Company's employees registered with the NASD as
registered representatives of FDDI, and the Company hereby
undertakes to maintain compliance with all NASD and SEC rules
and regulations concerning any activities of such employees.
FDDI shall have the right, in its reasonable discretion, to
refuse to register any individual as its representative.
9. Liability of FDDI
(a) FDDI, 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 Fund in
connection with the performance of this Agreement, except
a loss resulting from a breach of FDDI's obligations
pursuant to Section 4 of this Agreement (Rules of NASD),
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 FDDI in the performance of its obligations and
duties or by reason of its reckless disregard of its
obligations and duties under this Agreement. FDDI agrees
to indemnify and hold harmless the Fund and each person
who has been, is, or may hereafter be a Trustee, officer,
or employee of the Fund against expenses reasonably
incurred by any of them in connection with any claim or
in connection with any action, suit, or proceeding to
which any of them may be a party, which arises out of or
is alleged to arise out of any misrepresentation or
omission to state a material fact, or out of any alleged
misrepresentation or omission to state a material fact,
on the part of FDDI or any agent of employee of FDDI or
any of the persons for whose acts FDDI is responsible or
is alleged to be responsible unless such
misrepresentation or omission was made in reliance upon
written information furnished to FDDI by the Fund. FDDI
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also agrees to indemnify and hold harmless the Fund and
each such person in connection with any claim or in
connection with any action, suit, or proceeding which
arises out of or is alleged to arise out of FDDI's
failure to exercise reasonable care and diligence with
respect to its services rendered in connection with the
purchase and sale of Shares. The foregoing rights of
indemnification shall be in addition to any other rights
to which the Fund or any such person shall be entitled to
as a matter of law.
(b) The Fund agrees to indemnify and hold harmless FDDI
against any and all liability, loss, damages, costs or
expenses (including reasonable counsel fees) which FDDI
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 FDDI may be involved as a
party or otherwise or with which FDDI may be threatened,
by reason of the offer or sale of the Fund's Shares by
persons other than FDDI or its representatives, prior to
the execution of this Agreement. If a claim is made
against FDDI as to which FDDI may seek indemnity under
the Section, FDDI shall notify the Fund promptly after
any written assertion of such claim threatening to
institute an action or proceeding with respect thereto
and shall notify the Fund promptly of any action
commenced against FDDI within 10 days time after FDDI
shall have been served with a summons or other legal
process, giving information as to the nature and basis of
the claim. Failure to notify the Fund shall not,
however, relieve the Fund from any liability which it may
have on account of the indemnity under this Section 9(b)
if the Fund has not been prejudiced in any material
respect by such failure. The Fund shall have the sole
right to control the settlement of any such action, suit
or proceeding subject to FDDI approval, which shall not
be unreasonably withheld. FDDI shall have the right to
participate in the defense of an action or proceeding and
to retain its own counsel, and the reasonable fees and
expenses of such counsel shall be borne by the Fund
(which shall pay such fees, costs and expenses at least
quarterly) if:
(i) FDDI has received an opinion of counsel
stating that the use of counsel chosen by the
Fund to represent FDDI would present such
counsel with a conflict of interest:
(ii) the defendants in, or targets of, any such
action or proceeding include both FDDI and
the Fund, and legal counsel to FDDI shall
have reasonably concluded that there are
legal defenses available to it which are
different from or additional to those
available to the trust or which may be
adverse to or inconsistent with defenses
available to the Fund (in which case the Fund
shall not have the right to direct the
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defense of such action on behalf of FDDI); or
(iii) the Fund shall authorize FDDI to employ
separate counsel at the expense of the Fund.
(c) Any person, even though also a director, officer,
employee, shareholder or agent of FDDI who may be or
become an officer, director, trustee, employee or agent
of the Fund, shall be deemed, when rendering services to
the Fund or acting on any business of the Fund (other
than services or business in connection with FDDI's
duties hereunder), to be rendering such services to or
acting solely for the Fund and not as a director,
officer, employee, shareholder or agent, or one under the
control or direction of FDDI even though receiving a
salary from FDDI.
(d) The Fund agrees to indemnify and hold harmless FDDI, and
each person who controls FDDI 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
regulations, 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 Fund and furnished by the Fund to FDDI for FDDI's
use hereunder, disseminated by the trust or which arise
out of or are based upon any omission or alleged omission
to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
Such indemnity shall not, however, inure to the benefit
of FDDI (or any person controlling FDDI) 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 Fund to any person by FDDI (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 Fund by FDDI
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 FDDI and a copy of the corrected
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Prospectus was not delivered to such person at or before
the confirmation of the sale to such person
(e) FDDI shall not be responsible for any damages,
consequential or otherwise, which the Company or the Fund
may experience, due to the disruption of the distribution
of Shares caused by any action or inaction of any
registered representative or affiliate of FDDI or of FDDI
itself.
(f) Notwithstanding anything in this Agreement to the
contrary, in no event shall any party to this Agreement,
its affiliates or any of its or their directors,
trustees, officers, employees, agents or subcontractors
be liable for consequential damages.
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
FDDI shall prepare reports for the Board of the Fund, on a
quarterly basis, showing such information as, from time to
time, shall be reasonably requested by the 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 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 Massachusetts and the exclusive venue of any
action arising under this Agreement shall be the City of
Boston, Commonwealth of Massachusetts.
15. Authority to Execute
The Parties represent and warrant to each other that the
execution and delivery of this Agreement by the undersigned
officer of each Party has been duly and validly authorized;
and, when duly executed, this Agreement will constitute a valid
and legally binding and enforceable obligation of each Party.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be signed by their duly authorized officer, of the day and year first
above written.
FIRST DATA DISTRIBUTORS, INC.
_____________________________
By:
Title:
THE XXXXX XXXXXXX TRUST
_____________________________
By:
Title:
XXXXX XXXXXXX ASSOCIATES, INC.
_____________________________
By:
Title:
SCHEDULE A
UNDERWRITER SERVICES
1. Underwriter services include:
A) Preparation and execution of Underwriter and 12b-1 Plan
Agreements
? Monitoring accruals
? Monitoring expenses
? Disbursements for expenses and tail commissions
B) Quarterly 12b-1 Reports to Board
C) Literature review, recommendations and submission to the
NASD
D) Initial NASD Licensing and Transfers of Registered
Representatives
? U-4 Form and Fingerprinting Submission to NASD
? Supplying Series 6 and 63 written study material
? Registration for Exam Preparation classes
? Renewals and Termination of Representatives
E) Written supervisory procedures and manuals for Registered
Representatives
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F) Ongoing compliance updates for Representatives regarding
sales practices, written correspondence and other
communications with the public.
G) NASD Continuing Education Requirement
SCHEDULE B
FEE SCHEDULE
This Fee Schedule is fixed for a period of one (1) year from the
Effective Date as that term is defined in the Agreement.
1. Statutory Underwriter Services
A) The Trust agrees to pay First Data Distributors, Inc.
(FDDI) $15,000 for the services performed under this Agreement.
B) The Trust agrees to pay FDDI an additional $5,000 per
Series above the initial two Series beginning in the first quarter
that the Series first offers shares to the public.
C) FDDI agrees register certain employees of Xxxxx Xxxxxxx
Associates, Inc., as its representatives as follows:
Up to 10 States $2,000 per Representative per
Year
All 50 States $4,000 per Representative
per Year
SCHEDULE C
IDENTIFICATION OF SERIES
Below are listed the Series and Classes of Shares to which services
under this Agreement are to be performed as of the Effective Date of
this Agreement:
"The Xxxxx Xxxxxxx Trust"
*Xxxxx Xxxxxxx Equity Market Plus Fund
*Xxxxx Xxxxxxx Financial Services Fund
Xxxxx Xxxxxxx High Yield Bond Fund
Xxxxx Xxxxxxx Asian/Pacific Equity Market Fund
Xxxxx Xxxxxxx European Equity Market Fund
This Schedule "C" may be amended from time to time by agreement of
the Parties.
*Indicates initial two (2) Series.
Dated: January 1, 1999
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