EXHIBIT 23E
UNDERWRITING AGREEMENT
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THIS AGREEMENT is made as of February 15, 2001, by and between BRASS Funds,
Inc., a Maryland corporation (the "Fund") and B/D Holdings Inc, a Nevada
corporation ("Underwriter").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Fund is authorized by its Articles of Incorporation and
by-laws to issue separate Portfolio of shares representing interests in separate
investment portfolios (the "Portfolios"), and
WHEREAS, The Fund has authorized the issuance of shares of beneficial
interest ("Shares") in the Portfolios which are identified on Exhibit B attached
hereto, which Exhibit B may be amended from time to time by mutual agreement of
the Fund, Adviser and Underwriter, 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
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. APPOINTMENT. The Fund hereby appoints Underwriter as exclusive agent
for the distribution of Shares of the Portfolio(s) in the states listed in
Exhibit A hereto, and Underwriter hereby accepts such appointment under the
terms of this Agreement. Notwithstanding any other provision hereof, the Fund
may terminate, suspend or withdraw the offering of Shares of any Portfolio
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
Fund, 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 Portfolio (or Class of
Shares of a Portfolio) 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 Portfolio (or each Class of Shares of a Portfolio) shall be calculated
by the Fund or by another entity on behalf of the Fund. Underwriter shall have
no duty to inquire into or liability for the accuracy of the net asset value per
share is calculated.
(d) On every sale, the Fund 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 Fund or its transfer agent for registration of the
Shares purchased.
(f) Nothing in the 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 Fund under this Agreement.
(g) Underwriter, as agent of the Fund and for the account of the
Portfolio(s), may repurchase the Shares at such prices and upon such terms and
conditions as shall be specified in the Fund's Registration Statement. At the
end of each business day, the Underwriter shall notify the Fund and the Fund's
transfer agent of the number of Shares redeemed for each Portfolio, and the
identity of the shareholders or dealers offering Shares for repurchase. Upon
such notice, the Fund 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 Fund
from the Underwriter as proceeds from the sale of Shares. The Fund reserves the
right to suspend such repurchase right upon written notice to the Underwriter.
The Underwriter further agrees to act as agent for the Fund to receive and
transmit promptly to the Fund's transfer agent, shareholder and dealer requests
for redemption of Shares in the Porfolio(s).
3. SALES OF SHARES BY THE FUND. The Fund reserves the right to issue or
sell Shares of the Portfolio(s) 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 Fund, undertakes to
sell Shares of the Portfolio(s) on a best effort 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 Shares of the
Portfolio(s).
(b) The Fund and the Adviser agree to furnish to the Underwriter
sufficient copies of any agreements, plans or other materials it intends to use
in connection with sales of Shares in adequate time for the Underwriter 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, except for expenses described in Exhibit A hereto, which will be
paid by the Adviser.
(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
Fund's then current prospectus and statement of additional information covering
the Shares and in printed information approved by the Fund as information
supplemental to such prospectus and statement of additional information. Copies
of the Fund's then effective prospectus and statement of additional information
and any such printed supplemental information will be supplied by the Adviser to
Underwriter in reasonable quantities upon request.
6. RECORDS TO BE SUPPLIED BY FUND. The Fund 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 Shares of the Portfolio(s).
7. EXPENSES TO BE BORNE BY FUND. The Fund 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 Fund, Adviser and Underwriter;
(e) maintaining facilities for the issue and transfer of the Shares;
(f) supplying information, prices and other data to be furnished by
the Fund 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 Fund 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 Securities Act of 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 Fund 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 Fund,
its officers, directors, employees shareholders and agents, and any person who
controls the Fund within the meaning of Section 15 of the 1933 Act of 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 Fund, its directors, 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 contained in information furnished in
writing by the Underwriter to the Fund 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 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 Fund shall advance attorney's fees or other
expenses incurred by a Covered Person in defending a proceeding only to the
extent permitted by 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 Directors of the Fund or
at a meeting of the Shareholders of the Fund by the affirmative vote of a
majority of the outstanding Shares, and (iii) by a majority of the Directors of
the Fund who are not interested persons of the Fund or of Underwriter, by vote
cast in person at a meeting called for the purpose of voting on such approval.
Either the Fund 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 ONE
year 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 Directors of the Fund or a
vote of a majority of the outstanding Shares, and (iii) by a majority of the
Directors of the Fund who are not interested persons of the Fund or of
Underwriter, by vote cast in person at a meeting called for the purpose of
voting on such approval.
12. LIMITATION OF FUND'S LIABILITY. The Term "BRASS Funds" means and
refers to the directors and officers from time to time serving under the Fund's
Articles of Incorporation as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Fund hereunder shall not be binding upon any of the Directors, Shareholders,
nominees, officers, agents or employees of the Fund personally, but bind only
the property of the Fund, as provided in Fund's Articles of Incorporation. The
execution and delivery of this Agreement have been authorized by the Directors
and Shareholders of the Fund and signed by the officers of the Fund and Adviser,
acting as such, and neither such authorization by such Directors 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 Fund as provided in
its Articles of Incorporation. A copy of the Articles of Incorporation of the
Fund is on file with the Secretary of State of Maryland.
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 Fund 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 Act shall be resolved by reference to
such term or provision of the 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 said Act. In addition, where the effect of a requirement of
the 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 Fund shall be 00000 Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxx
00000 and of the Underwriter shall be 0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000,
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 or suitable parts, materials, labor or
transportation, such delay or non-performance shall be excused and a reasonable
time for performance in connection with the Agreement shall be extended to
include the period of such delay or non-performance.
IN WITNESS WHEREOF, the Fund, and Underwriter have each caused this
Agreement to be signed on its behalf, all as of the day and year first above
written.
ATTEST: B/D HOLDINGS INC
_________________________ By: _________________________
Name: _______________________
Title: ______________________
ATTEST BRASS FUNDS, INC.
__________________________ By: _______________________________
Name: J. Xxxx Xxxxxxxxx
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Title: President, Director
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UNDERWRITING AGREEMENT
EXHIBIT A
The following is a list of the states in which B/D Holdings Inc will act as
underwriter for the Portfolio(s) of the Fund, and the amount of expenses that
the Company will pay on behalf of B/D Holdings Inc.
STATE EXPENSES
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UNDERWRITING AGREEMENT
EXHIBIT B
The following Portfolios are hereby made subject to the underwriting
Agreement dated February 15th, 2001 , with B/D Holdings, Inc. ("Underwriter"),
and Brass Funds, Inc., and each agree to be bound by all the terms and
conditions contained in said Agreement:
THE BRASS HIGH YIELD TAX EXEMPT FUND
BRASS FUNDS, INC.
Attest: By:
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Name: J. Xxxx Xxxxxxxxx
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Title: President, Director
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Date:
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B/D HOLDINGS, INC.
Attest: By:
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Name:
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Title:
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Date:
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