DREYFUS FOUNDERS FUNDS, INC.
UNDERWRITING AGREEMENT
This Agreement made as of the 22nd day of March, 2000, by and between
Dreyfus Service Corporation, a New York corporation (the "Underwriter"), and
Dreyfus Founders Funds, Inc., a Maryland corporation (the "Company"), on behalf
of any series of its shares, or classes thereof, which may now exist or
hereafter be created (the "Funds").
WITNESSETH:
That in consideration of the mutual covenants herein contained and for
other good and valuable consideration the parties hereto, intending to be
legally bound hereby, agree as follows:
1. APPOINTMENT OF UNDERWRITER. Except as otherwise provided herein, the
Company hereby appoints the Underwriter its exclusive agent to sell and
distribute shares of the Funds without compensation at the public offering price
thereof, calculated as described in Section 3. The Company agrees that it will
deliver such shares as the Underwriter may sell. The Underwriter agrees to use
its best efforts to promote the sale of shares of the Funds, but is not
obligated to sell any specific number of shares.
2. INDEPENDENT CONTRACTOR. The Underwriter will undertake and discharge its
obligations hereunder as an independent contractor and shall have no authority
or power to obligate or bind the Company by its actions, conduct or contracts
except that it may be authorized to accept orders for the sale or repurchase of
shares of the Funds as the Company's agent. The Underwriter may appoint
subagents or distribute shares of the Funds through dealers or otherwise as it
may determine from time to time including, without limitation, appointing
subagents for the purpose of accepting orders for the sale or repurchase of Fund
shares, provided that no such appointment shall relieve the
1
Underwriter of its responsibility for the proper performance of this Agreement
by the Underwriter or, where applicable, its subagents.
3. OFFERING PRICE. Shares of any class of a Fund offered for sale by the
Underwriter shall be offered at a price per share (the "public offering price")
approximately equal to (a) the net asset value (determined in the manner set
forth in the Funds' charter documents and then current prospectus) plus (b) a
sales charge, if any, and except to those persons set forth in the then current
prospectus, which shall be the percentage of the public offering price of such
shares as set forth in the Funds' then current prospectus. The public offering
price, if not an exact multiple of one cent, shall be adjusted to the nearest
cent. In addition, shares of any class of the Funds offered for sale by the
Underwriter may be subject to a contingent deferred sales charge ("CDSC") as set
forth in the Funds' then current prospectus. The Underwriter shall be entitled
to receive any sales charge or CDSC in respect of the shares. Any payments to
dealers shall be governed by a separate agreement between the Underwriter and
such dealer and the Funds' then current prospectus. The Underwriter also shall
be entitled to compensation for the Underwriter's services as provided in any
Distribution Plan adopted as to any class of a Fund's shares pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act").
4. PAYMENT FOR SHARES AND SHARE REGISTRATION. The Underwriter shall notify
the Company or cause the Company to be notified by the Company's Transfer Agent,
at the end of each business day, or as soon thereafter as orders placed during
such day have been compiled, of the number of shares and the prices thereof
which the Underwriter shall have sold on behalf of each Fund. The Underwriter
shall use its best efforts to cause the sums due for shares ordered from a Fund
to be collected or to be advanced to that Fund by the Company's Transfer Agent
on behalf of purchasers on or before the third business day after the shares
have been so ordered. The Underwriter shall issue and deliver on behalf of the
Company or cause to be issued and delivered by the Company's Transfer Agent all
confirmations of transactions effected hereunder for the
2
account of a Fund. The Company will provide for the recording of share purchases
in "book accounts;" provided, however, that upon receipt of a written request
from a purchaser, the Company's Transfer Agent may, but is not required to,
deliver a certificate of shares in such names and amount as the purchaser shall
specify in writing, such delivery to be made as soon as practicable after
payment therefor and their registration on the books of the Company.
5. SUSPENSION OF SALES. The sale of shares of the Funds may be suspended
with or without prior notice whenever in the judgment of the Company it is in
its best interests to do so.
6. REPURCHASE OF SHARES. As the Company's agent, the Underwriter may buy
shares of a Fund offered for repurchase at the next effective net asset value
per share calculated and effective as set forth in Paragraphs 1 and 3 above,
minus any applicable CDSC as set forth in the Funds' then current prospectus.
Whenever the officers of the Company deem it advisable, for the protection of
the shareholders of a Fund, they may suspend or cancel such authority. The
Underwriter will pay all expenses in connection with the repurchase of shares.
7. CONDUCT OF BUSINESS. Neither the Underwriter nor any other person is
authorized by the Company or any Fund to give any information or make any
representation relative to the Company or any Fund's shares other than those
contained in the registration statement or prospectus filed with the Securities
and Exchange Commission as the same may be amended from time to time or in any
supplemental information to said prospectus approved by the Company. The
Underwriter agrees that any information or representation other than that
specified above which it or any dealer or other person who purchases shares
through the Underwriter may make in connection with the offer or sale of shares
shall be made entirely without liability on the part of the Company or any Fund.
The Underwriter agrees that in offering or selling shares as agent of the
Company, it will in all respects duly conform to all applicable state and
federal
3
laws. The Underwriter will submit to the Company copies of all sales literature
before using the same and will not use such literature if disapproved by the
Company.
8. ALLOCATION OF EXPENSES. In connection with the sale and distribution of
shares pursuant to this Agreement, the Underwriter shall pay all of its own
expenses and such other expenses as are not specifically assumed by the Company
as hereinafter provided.
The Company specifically assumes and shall pay all fees and expenses,
including legal fees, incurred in (a) the preparation of audited financial
statements for the Company; (b) the preparation and initial printing of all
post-effective amendments, supplements and revisions of its registration
statements; (c) printing and distributing copies of any prospectus to its
shareholders; (d) the preparation and initial printing of shareholder reports
and communications and distributing copies thereof to its shareholders; (e) the
registration of the Company and its shares with the Securities and Exchange
Commission; and (f) the qualification of the Company and its shares in each
state in which its shares will be qualified for sale. Nothing contained herein
shall be deemed to require the Company to pay any of the costs of advertising
the sale of Company shares.
9. PROVISION OF INFORMATION. The Company shall furnish the Underwriter from
time to time, for use in connection with the sale of shares of the Funds, such
information with respect to the Company or any relevant Fund and the shares as
the Underwriter may reasonably request, all of which shall be signed by one or
more of the Company's duly authorized officers; and the Company warrants that
the statements contained in any such information, when so signed by the
Company's officers, shall be true and correct. The Company also shall furnish
the Underwriter upon request with: (a) semi-annual reports and annual audited
reports of the Company's books and accounts made by independent public
accountants regularly retained by the Company, (b) a monthly itemized list of
the securities in the Company's or, if applicable, each
4
Fund's portfolio, and (c) from time to time such additional information
regarding the Company's financial condition as the Underwriter may reasonably
request.
10. REGISTRATIONS AND QUALIFICATIONS; REPRESENTATIONS AND WARRANTIES.
(a) The Company agrees to execute any and all documents and to furnish any and
all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Company's officers in connection with the
qualification of shares of the Funds for sale in such states as the Underwriter
may designate to the Company and the Company may approve. The Underwriter shall
pay all expenses connected with its own qualification as a dealer under state or
Federal laws and, except as otherwise specifically provided in this Agreement,
all other expenses incurred by it in connection with the sale of Shares as
contemplated in this Agreement.
(b) The Company represents to the Underwriter that all registration
statements and prospectuses filed by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
1940 Act with respect to the shares have been carefully prepared in conformity
with the requirements of said Acts and rules and regulations of the Securities
and Exchange Commission thereunder. As used in this agreement the terms
"registration statement" and "prospectus" shall mean any registration statement
and prospectus, including the statement of additional information incorporated
by reference therein, filed with the Securities and Exchange Commission and any
amendments and supplements thereto which at any time shall have been filed with
said Commission. The Company represents and warrants to the Underwriter that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of said Commission; that
all statements of fact contained in any such registration statement and
prospectus will be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any prospectus when
such registration statement becomes
5
effective will include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Company may, but shall not be obligated to, propose
from time to time such amendment or amendments to any registration statement and
such supplement or supplements to any prospectus as, in the light of future
developments, may, in the opinion of the Company's counsel, be necessary or
advisable. If the Company shall not propose such amendment or amendments and/or
supplement or supplements within fifteen days after receipt by the Company of a
written request from the Underwriter to do so, the Underwriter may, at its
option, terminate this agreement or decline to make offers of the Company's
securities until such amendments are made if, in the Underwriter's reasonable
opinion, the failure to make such amendments could have a material adverse
effect upon the Underwriter. The Company shall not file any amendment to any
registration statement or supplement to any prospectus without giving the
Underwriter reasonable notice thereof in advance, if possible; provided,
however, that nothing contained in this agreement shall in any way limit the
Company's right to file at any time such amendments to any registration
statement and/or supplements to any prospectus, of whatever character, as the
Company may deem advisable, such right being in all respects absolute and
unconditional.
(c) The Underwriter shall comply with all applicable federal and state
laws, rules and regulations, the rules and regulations of any self-regulatory
organization with jurisdiction over the Underwriter and/or the Company, and the
provisions of the Company's prospectus and statement of additional information
(the foregoing laws, rules, regulations and provisions are collectively referred
to herein as "Applicable Law") relating to the services the Underwriter provides
pursuant to this Agreement. The Underwriter hereby represents and warrants to
the Company that:
(i) It has the corporate power and the authority to enter
into and perform all of its duties and obligations under this Agreement;
6
(ii) This Agreement constitutes its legal, valid and
binding obligation and is enforceable against it in accordance with its
terms;
(iii) No consent or authorization of, filing with, or other
act by or in respect of any governmental authority is required in
connection with the execution, delivery, performance, validity or
enforceability of this Agreement;
(iv) The execution, performance and delivery of this Agreement
by the Underwriter will not result in its violating any Applicable Law or
breaching or otherwise impairing any of its contractual obligations; and
(v) The Underwriter has obtained, and will maintain in
effect, all registrations under Applicable Law that are necessary to
enable it to perform its obligations under this Agreement.
11. INDEMNIFICATION. (a) The Company authorizes the Underwriter to use any
current prospectus in the form furnished by the Company to the Underwriter from
time to time, in connection with the sale of shares of the Funds. The Company
agrees to indemnify, defend and hold the Underwriter, its several officers and
directors, and any person who controls the Underwriter within the meaning of
Section 15 of the Securities Act of 1933, as amended, 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 Underwriter, its
officers and directors, or any such controlling persons, may incur under the
Securities Act of 1933, as amended, or under common law or otherwise, arising
out of or based upon any omission, or alleged omission, to state a material fact
required to be stated in either any registration statement or any prospectus or
necessary to make the statements in either thereof not misleading; provided,
however, that the Company's agreement to indemnify the Underwriter, its officers
or directors, and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of any
7
untrue statement or alleged untrue statement or omission or alleged omission
made in any registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
specifically for use in the preparation thereof. The Company's agreement to
indemnify the Underwriter, its officers and directors, and any such controlling
person, as aforesaid, is expressly conditioned upon the Company's being notified
of any action brought against the Underwriter, its officers or directors, or any
such controlling person, such notification to be given by letter or by telegram
addressed to the Company at its address set forth above within ten days after
the summons or other first legal process shall have been served. The failure so
to notify the Company of any such action shall not relieve the Company from any
liability which the Company may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Company's indemnity
agreement contained in this paragraph 11(a). The Company will be entitled to
assume the defense of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be conducted by counsel of good
standing chosen by the Company and approved by the Underwriter, acting in good
faith. In the event the Company elects to assume the defense of any such suit
and retain counsel of good standing approved by the Underwriter, the defendant
or defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Company does not elect to
assume the defense of any such suit, or in case the Underwriter does not approve
of counsel chosen by the Company, the Company will reimburse the Underwriter,
its officers and directors, or the controlling person or persons named as
defendant or defendants in such suit, for the reasonable fees and expenses of
any counsel retained by the Underwriter or them. The Company's indemnification
agreement contained in this paragraph 11(a) and the Company's representations
and warranties in this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the
8
Underwriter, its officers and directors, or any controlling person, and shall
survive the delivery of any shares of the Funds. This agreement of indemnity
will inure exclusively to the Underwriter's benefit, to the benefit of its
several officers and directors, and their respective estates, and to the benefit
of any controlling persons and their successors. The Company agrees promptly to
notify the Underwriter of the commencement of any litigation or proceedings
against the Company or any of its officers or Board members in connection with
the issue and sale of shares of the Funds.
(b) The Underwriter agrees to indemnify, defend and hold the Company, its
several officers and Board members, and any person who controls the Company
within the meaning of Section 15 of the Securities Act of 1933, as amended, 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
Company, its officers or Board members, or any such controlling person, may
incur under the Securities Act of 1933, as amended, or under common law or
otherwise, arising out of or based upon: (i) the Underwriter's negligence or
willful misconduct in the performance of its duties and obligations under this
Agreement; (ii) the Underwriter's violation of Applicable Law in connection with
the performance of its duties and obligations under this Agreement; (iii) any
breach by the Underwriter of any provision of this Agreement, including any
representation, warranty or covenant made in the Agreement; and (iv) any untrue,
or alleged untrue, statement of a material fact contained in information
furnished in writing by the Underwriter to the Company specifically for use in
the Company's registration statement and used in the answers to any of the items
of the registration statement or in the corresponding statements made in the
prospectus, or any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by the Underwriter to the
Company and required to be stated in such answers or necessary to make such
information not misleading. The Underwriter's
9
agreement to indemnify the Company, its officers and Board members, and any such
controlling person, as aforesaid, is expressly conditioned upon its being
notified of any action brought against the Company, its officers or Board
members, or any such controlling person, such notification to be given by letter
or telegram addressed to the Underwriter at its address set forth above within
ten days after the summons or other first legal process shall have been served.
The failure so to notify the Underwriter of any such action shall not relieve
the Underwriter from any liability which the Underwriter may have to the
Company, its officers or Board members, or to such controlling person by reason
of any such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of its indemnity agreement contained in this
paragraph 11(b). The Underwriter will be entitled to assume the defense of any
suit brought to enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing chosen by the
Underwriter and approved by the Company, acting in good faith. In the event the
Underwriter elects to assume the defense of any such suit and retain counsel of
good standing approved by the Company, the defendant or defendants in such suit
shall bear the fees and expenses of any additional counsel retained by any of
them; but in case the Underwriter does not elect to assume the defense of any
such suit, or in case the Company does not approve of counsel chosen by the
Underwriter, the Underwriter will reimburse the Company, its officers and Board
members, or the controlling person or persons named as defendant or defendants
in such suit, for the reasonable fees and expenses of any counsel retained by
the Company or them. The Underwriter's indemnification agreement contained in
this paragraph 11(b) and the Underwriter's representations and warranties in
this Agreement shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Company, its officers and Board
members, or any controlling person, and shall survive the delivery of any shares
of the Funds. This agreement of indemnity will inure exclusively to the
Company's benefit, to the benefit of the Company's officers and Board
10
members, and their respective estates, and to the benefit of any controlling
persons and their successors. The Underwriter agrees promptly to notify the
Company of the commencement of any litigation or proceedings against the
Underwriter or any of its officers or directors in connection with the issue and
sale of shares of the Funds.
12. SUSPENSION OF REGISTRATION. No shares of the Funds shall be offered by
either the Underwriter or the Company under any of the provisions of this
Agreement, and no orders for the purchase or sale of such shares hereunder shall
be accepted by the Company, if and so long as the effectiveness of the
registration statement then in effect or any necessary amendments thereto shall
be suspended under any of the provisions of the Securities Act of 1933, as
amended, or if and so long as a current prospectus as required by Section 10 of
said Act, as amended, is not on file with the Securities and Exchange
Commission; provided, however, that nothing contained in this paragraph 12 shall
in any way restrict or have any application to or bearing upon the Company's
obligation to repurchase any shares of the Funds from any shareholder in
accordance with the provisions of the Company's prospectus or charter documents.
13. REQUIRED NOTIFICATIONS. The Company agrees to advise the Underwriter
promptly in writing:
(a) of any request by the Securities and Exchange Commission for
amendments to the registration statement or prospectus then in effect or for
additional information;
(b) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of the registration
statement or prospectus then in effect or the initiation of any proceeding for
that purpose;
(c) of the happening of any event which makes untrue any statement
of a material fact made in the registration statement or prospectus then in
effect or which requires the making of a change in such registration
11
statement or prospectus in order to make the statements therein not misleading;
and
(d) of all actions of the Securities and Exchange Commission with
respect to any amendments to any registration statement or prospectus which may
from time to time be filed with the Securities and Exchange Commission.
14. OTHER ACTIVITIES; USE OF DREYFUS NAME. The Company recognizes that from
time to time the directors, officers, and employees of the Underwriter may serve
as trustees, directors, partners, officers, and employees of other business
trusts, corporations, partnerships, or other entities (including other
investment companies) and that such other entities may include the name
"Dreyfus" as part of their name, and that the Underwriter or its affiliates may
enter into distribution or other agreements with such other entities. If the
Underwriter ceases to act as the distributor of the Company's shares or if
Founders Asset Management LLC or any of its affiliates ceases to act as the
Company's investment adviser, the Company agrees that, at the request of the
Underwriter, the Company will take all necessary action to change the names of
the Company and the Funds to names not including "Dreyfus" in any form or
combination of words.
15. TERM OF AGREEMENT. This Agreement shall become effective upon the date
first above written. This Agreement shall continue in effect through May 31,
2000, and thereafter for successive annual periods, provided that its
continuance is specifically approved at least annually by the Company's
directors or, with respect to any Fund, by vote of a majority of that Fund's
outstanding voting securities and, in any event, by a majority of those
directors who are not parties to this Agreement or interested persons of any
party to this Agreement (other than as directors of the Company) at a meeting
called for the purpose of voting on such approval.
This Agreement shall automatically terminate in the event of its
assignment (within the meaning of the 1940 Act): provided, however, that the
Underwriter may employ such other person, persons, corporation or
12
corporations, as it shall determine, in order to assist it in carrying out the
provisions of this Agreement.
This Agreement may be terminated at any time by either party hereto by
giving 60 days' written notice to the other party, or at any time by mutual
consent of the parties hereto. Such notice shall be sent by certified mail.
Until further notice, the mailing address of Company shall be:
Founders Financial Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Until further notice, the mailing address of Underwriter shall be:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
16. MISCELLANEOUS. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Colorado and shall be
interpreted and construed to further and promote the operation of the Company as
an open-end investment company. As used herein, the terms "Net Asset Value,"
"Offering Price," "Investment Company," and "Interested Persons" shall have the
meanings set forth in the 1940 Act and the Rules, Regulations, Orders, and Forms
thereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the Underwriter and
the Company as of the day and year first above written.
DREYFUS FOUNDERS FUNDS, INC.
ATTEST: By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx, President
/s/ Xxxxxxx X. Xxxxxxxxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxxxxxxxx,
Secretary
DREYFUS SERVICE CORPORATION
ATTEST: By: /s/ Xxxxxx Xxxx
-----------------------------------
Xxxxxx Xxxx, Senior Vice President
/s/ Xxxx Xxxxxxxxx
-------------------------------
Xxxx Xxxxxxxxx
13
