UNDERWRITING AGREEMENT
XXXX XXXXX INVESTORS TRUST, INC.
XXXX XXXXX FINANCIAL SERVICES FUND
This UNDERWRITING AGREEMENT, made this 5th day of October, 1999 by
and between Xxxx Xxxxx Investors Trust, Inc., a Maryland corporation
("Corporation"), on behalf of Xxxx Xxxxx Financial Services Fund ("Fund"), and
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, a Maryland corporation ("Distributor").
WHEREAS, the Corporation 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 shares of
common stock of the Fund for sale to the public under the Securities Act of 1933
(the "1933 Act") and filed appropriate notices under various state securities
laws; and
WHEREAS, the Corporation wishes to retain the Distributor as the
principal underwriter in connection with the offering and sale of the shares of
common stock of the Fund ("Shares") and to furnish certain other services to the
Corporation as specified in this Agreement; and
WHEREAS, this Agreement has been approved by separate votes of the
Corporation's Board of Directors and of certain disinterested directors 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 Corporation hereby appoints the Distributor as principal
underwriter in connection with the offering and sale of Shares of the Fund, and
the Distributor accepts the appointment. The Distributor, as exclusive agent for
the Corporation, upon the commencement of operations of the Fund and subject to
applicable federal and state law and the Articles of Incorporation and By-Laws
of the Corporation, shall: (i) promote the Fund; (ii) solicit orders for the
purchase of the Shares subject to such terms and conditions as the Corporation
may specify; and (iii) accept orders for the purchase of the Shares on behalf of
the Corporation (collectively, "Distribution Services"). The Distributor shall
comply with all applicable federal and state laws and offer the Shares of the
Fund on an agency or "best efforts" basis under which the Corporation shall
issue only such Shares as are actually sold. The Distributor shall have the
right to use any list of shareholders of the Corporation or the Fund 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 Corporation's Board of Directors.
(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
Conduct Rule 2830 of the National Association of Securities Dealers, Inc.
("NASD") (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, as well as Shareholder Services, the form of such
agreements to be as mutually agreed upon and approved by the Corporation and the
Distributor. In making such arrangements, the Distributor shall act only as
principal and not as agent for the Corporation. No such dealer or other entity
is authorized to act as agent for the Corporation in connection with the
offering or sale of Shares to the public or otherwise, except for the limited
purpose of determining the time as of which Shares are to be priced, and then
only if the agreement expressly provides in writing that it shall so act.
3. The public offering price of the Shares of the Fund shall be the
net asset value per share (as determined by the Corporation) of the outstanding
Shares of the Fund plus any applicable sales charge as described in the
Registration Statement of the Corporation. The Corporation 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 Corporation upon receipt of the
proceeds and retain the sales charge, if any. The Distributor shall receive from
the Fund a distribution fee and a service fee at the rates and under the terms
and conditions of the Distribution Plans ("Plans") adopted by the Corporation
with respect to the Fund, as such Plans are in effect from time to time, and
subject to any further limitations on such fees as the Corporation's Board of
Directors 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 unless permitted under the rules of the NASD,
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 Corporation
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 the Fund filed by the Corporation as part
of the Registration Statement, or as they may be amended from time to time.
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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 Corporation, and the Corporation 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
representative or agents. Except as specifically provided in this Agreement, the
Corporation shall bear none of the expenses of the Distributor in connection
with its offer and sale of the Shares.
7. The Corporation 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. The Fund shall bear all
expenses related to preparing and typesetting such Prospectuses, Statements of
Additional Information, and other materials required by law and such other
expenses, including printing and mailing expenses, related to the Fund's
communications with persons who are shareholders of the Fund.
8. The Corporation agrees to indemnify, defend and hold the
Distributor, its several officers and directors, 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 directors, 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 Corporation 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 Corporation shall not indemnify the Distributor for
conduct as set forth in paragraph 9. The Distributor agrees that it shall look
only to assets of the Fund, and not to any other series of the Corporation, for
satisfaction of any obligation created by this paragraph or otherwise arising
under this Agreement.
9. The Distributor agrees to indemnify, defend and hold the
Corporation, its several officers and directors, and any person who controls the
Corporation within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
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(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Corporation, its officers or directors, 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 Corporation 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 Corporation or any
series, or any employee of such a corporate entity, unless such person is
otherwise an employee of the Corporation.
10. The Corporation reserves the right at any time to withdraw all
offerings of the Shares of the Fund, or limit the offering of Shares, by written
notice to the Distributor at its principal office.
11. The Corporation shall not issue certificates representing
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
Corporation and State Street Bank and Trust Company, the Corporation'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 Corporation 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 Corporation from the Distributor as proceeds from the
sale of Shares. The Corporation reserves the right to suspend such repurchase
right upon written notice to the Distributor. The Distributor further agrees to
act as agent for the Corporation to receive and transmit promptly to the
Corporation's transfer agent shareholder and dealer requests for redemption of
Shares.
13. The Distributor is an independent contractor and shall be agent
for the Corporation only in respect to the sale and redemption of the Shares.
14. The services of the Distributor to the Corporation 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 Corporation's
Board of Directors 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 Directors.
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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 or other modifications 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 the Fund 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 the Fund
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
Corporation's Board of Directors or (ii) by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act), provided
that in either event the continuance is also approved by a majority of the
Corporation's Directors 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, without penalty by the
Corporation's Board of Directors, by vote of a majority of the outstanding
voting securities of the Fund (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
Corporation. 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 Corporation hereby
agrees that it will eliminate from its corporate name any reference to the name
of "Xxxx Xxxxx." The Corporation 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 INVESTORS TRUST, INC.
By: /s/ Wm. Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
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Wm. Xxxxx Xxxxxx Xxxxx X. Xxxxxxxxx
Secretary Vice President and Treasurer
Attest: XXXX XXXXX XXXX XXXXXX, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President
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