UNDERWRITING AGREEMENT
January 23, 1998
Kokasai Securities Co., Ltd.
Tokyo-Sumitomo Twin Building East
27-1, Shinkawa 2-chome Chuo-ku
Tokyo 104-0033
Gentlemen:
INTRODUCTION
Evergreen Small Company Growth Fund (hereinafter referred to collectively
as the "Fund") invites you ("Kokasai") to act as Underwriter in Japan of the
Class A shares ("Shares") of the Fund, subject to the following terms and
conditions:
1. In the distribution and sale in Japan of Shares, Kokasai agrees to act
as principal. Kokasai shall not have authority to act as agent for the Fund,
Keystone Investment Management Company ("Keystone"), Evergreen Distributor, Inc.
("EDI") or for any other dealer in any respect in such transactions.
CONCERNING THE CONTINUOUS OFFERING
2. Kokasai intends to undertake the continuous offering and sale of Shares
of the "Fund" in Japan to Japanese and non-U.S. nationals (the "Continuous
Offering") and the proposed schedule of sales charges, sub-dealer concessions
and net retention by Kokasai will be as follows:
Kokasai's
Sales Sub-Dealer Net
Amount of Purchase Charge Concession Retention
Y500,000 but less than Y5 million 5.0% 4.0% 1.0%
Y5 million but less than Y10 million 4.0 3.2 0.8
Y10 million but less than Y100 million 3.0 2.4 0.6
Y100 million and over 2.0 1.6 0.4
The minimum unit of sale of Shares shall be Y500,000.
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Kokasai will be entitled to continuing maintenance fees for ser vices
to its customers in accordance with the attached schedule of maintenance fees
which may be modified from time to time. Kokasai shall not have any vested right
to receive any continuing maintenance fees on Shares sold by it.
3. The Continuous Offering will be made on a forward pricing basis, i.e.,
orders accepted by Kokasai prior to the close of business in Tokyo and placed
with the Fund the same day prior to the close of the Fund's business day, 5:00
p.m. Boston, Massachusetts time, shall be confirmed at the closing per share net
asset value, which the Fund agrees to furnish to Kokasai each day by telex, and
which Kokasai agrees to make public each day at its head and branch offices.
Orders taken by Kokasai on days when the New York Stock Exchange is closed will
be priced at the closing price on the next day when the New York Stock Exchange
is open. In the event of differences between verbal and telex orders on the one
hand, and written price confirmations on the other, the written price
confirmations shall be considered final.
4. In connection with sales to sub-dealers, the concession to sub-dealers
and Kokasai's net retention shall be subject to the table set forth above.
Kokasai agrees to furnish the Fund with English cop ies of agreements entered
into between Kokasai and its sub-dealers. Such agreements and sales by
sub-dealers shall conform in all cases with the terms and conditions of this
Agreement.
5. Payment at the appropriate per share net asset value shall be made to
the Fund by Kokasai and shall be received by the Fund within three business days
after its acceptance of Kokasai's order or such shorter time as may be required
by U.S. law.
If such payment is not received by the Fund, it reserves the right without
notice, forthwith to cancel the sale in which case the Fund may hold Kokasai
responsible for any loss to it, provided, however, that this paragraph shall
have no force and effect if Kokasai's failure to pay shall be caused by reason
of force majeure.
6. Kokasai agrees to act as agent of the Fund for the purpose of
facilitating redemptions of Shares of the Fund sold pursuant to the terms of
this Agreement and held by Japanese investors. If Kokasai repurchases Shares
from its customers or customers of sub-dealers, it agrees to pay not less than
the applicable net asset value as in
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effect on the date of such repurchase.
7. The Fund will not accept from Kokasai any conditional orders for sales
of Shares.
8. The Fund agrees that whenever Kokasai places orders for pur chase of
Shares from the Fund or redemption of Shares by the Fund, the Fund shall
unconditionally accept such orders, unless trading on the New York Stock
Exchange has been suspended or there are other reasons, including force majeure,
which prevent such unconditional acceptance. The Fund also agrees to notify
Kokasai promptly by telex after the Fund has executed any such orders from
Kokasai. In the case of sales of Shares to the Fund, the Fund agrees to make
payment to Kokasai within seven days after its acceptance of Kokasai's order or
such shorter time as may be required by U.S. law. Subject to the provisions of
this Paragraph 8, if the Fund fails to make payment to Kokasai as above
provided, the Fund agrees to indemnify and save Kokasai harmless from any loss
resulting therefrom.
9. The Fund will pay all costs and expenses directly attribut able to the
Continuous Offering, excluding costs of advertising, publicity and due diligence
and other meetings, and other sales literature for the Continuous Offering.
10. The Fund agrees that Kokasai, on behalf of the Fund, shall prepare, in
conformance with the rules concerning Foreign Securities Transactions of Japan
Securities Dealers' Association (the "Association's Rules") and applicable
Japanese laws and regulations, the Explanatory Brochure covering the Fund's
Continuous Offering based on prospectuses, securities reports, semi-annual
securities reports and material information furnished from time to time by the
Fund in connection with the Fund (hereinafter collectively referred to as
"Prospectuses-Reports"). In preparing the Explanatory Brochure, Kokasai shall
rely solely on the representations contained in the "Prospectuses-Reports."
Kokasai agrees that it will furnish a draft of the Explanatory Brochure to the
Fund's designated agent in Tokyo to obtain prior approval for the contents
thereof and will also furnish the Fund with the required number of Japanese and
English language translations of the Explanatory Brochure for filing as required
by U.S. law. No person is authorized to make any representations concerning
Shares of the Fund except those contained in the then current applicable
Explanatory Brochure. Kokasai also agrees that it will deliver a copy of the
then current Japanese Explanatory Brochure,
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at or prior to the time of sale, to each of its own purchasers and, in the case
of sale by sub-dealers, it will require that they also deliver a copy of such
Explanatory Brochure to each of their purchasers.
11. The Fund agrees to indemnify and save Kokasai harmless from any damages
which shall have occurred in the sale of Shares of the Fund pursuant to this
Agreement to the extent such damages result from a false statement of a material
fact contained in the "ProspectusesReports" of the Fund, an omission of a
material fact which should be stated therein or an omission of a material fact
necessary to make the statement therein not misleading. If the
"Prospectuses-Reports" or any other material used in connection with the sale of
the Fund Shares contains information furnished by Kokasai which information
contains a false statement of a material fact, an omission of a material fact
which should be stated therein, or an omission of a material fact necessary to
make the statement therein not misleading, Kokasai likewise agrees to indemnify
and save the Fund harmless from any damages it shall have incurred in any sales
of the Shares of the Fund pursuant to the terms of this Agreement.
12. The Fund agrees to designate Kokasai if Kokasai so requests, or such
other representative as shall meet the qualification require ments as set forth
in Section 1 of Article 6 of the Japanese Standard Rules Relating to Selection
of Foreign Investment Company Shares to be Sold in Japan (the "Standard Rules")
as legal agent for service of process against the Fund.
13. The Fund hereby appoints Kokasai as its agent securities company as
defined in Article 13 of the Association's Rules and Kokasai agrees that it will
submit to the Association on the Fund's behalf all such documents as may be
required by the provisions of the Association's Rules.
14. The Fund agrees that all its financial statements which appear in the
Japanese Explanatory Brochure and Registration State ment, or in annual reports
to the Ministry of Finance will be certi fied by independent certified public
accountants who are licensed pub lic accountants under the laws of Japan. Any
such financial state ments submitted to the Ministry of Finance will be manually
signed and certified by such representative. The Fund also agrees to submit
semi-annual reports to the Ministry of Finance which need not be certified.
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15. The Fund hereby represents and warrants that it currently conforms to
the requirements of the Japanese Standard Rules. The Fund understands that if
subsequently it is made aware that it does not so conform, the Fund will advise
Kokasai promptly and Kokasai may suspend further sales of Shares but, even in
such event, the Fund will continue to be obligated to repurchase or redeem
Shares of the Fund from Kokasai as hereinbefore provided.
16. In offering the Shares of the Fund for sale in Japan, Kokasai agrees to
comply with the applicable laws, rules, regulations and criteria of the Ministry
of Finance and Associations' Rules.
Kokasai also agrees that any advertisements used by Kokasai will
in general conform to the Statement of Policy of the United States
Securities and Exchange Commission (U.S. Release No. 40-2621), except
for Paragraph (h) which deals with comparisons.
17. With the consent of the Board of Trustees of the appropriate Evergreen
Fund, Kokasai may also undertake block and/or continuous offerings of the Shares
of such other Evergreen Funds on the terms and conditions herein stated or as
may be contained in any supplemental agreement hereto.
18. This Agreement is, to the extent applicable, governed by the laws of
Japan.
19. This Agreement shall continue in effect as long as permitted under the
U.S. Investment Company Act of 1940, as amended from time to time, the rules
promulgated thereunder or under the Japanese Securities and Exchange Law of
1948, and appropriate exemptions there from. This Agreement may be terminated at
any time by mutual consent or by either party upon thirty days written notice,
and shall terminate automatically in the event of its assignment.
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Evergreen Small Company Growth Fund
D'XXX XXXXX
By D'Xxx Xxxxx
Title: President
KOKASAI SECURITIES CO., LTD.
YU TAKEDA
By Yu Takeda
Title: Managing Director
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SCHEDULE OF MAINTENANCE FEES
Except as otherwise provided for in the Underwriting Agreement, Kokasai
will be entitled to quarterly maintenance fees based on the aggregate net asset
value of Shares of the Fund which Kokasai has sold, which remain issued and
outstanding on the books of the Fund on the last business day of the calendar
quarter and which are registered in the names of clients for whom Kokasai is
broker of record ("Eligible Shares"). Such maintenance fees will be calculated
at the rate of 0.0625% per quarter of the aggregate net asset value of all such
Eligible Shares (approximately 0.25% annually); provided, however, that no
maintenance fees will be paid to Kokasai for any calendar quarter if the
aggregate net asset value of such Eligible Shares on the last business day of
the calendar quarter is less than $1 million. Quarterly maintenance fees shall
be payable within 90 days after the end of the calendar quarter. Such
maintenance fee rate may be modified by the Fund from time to time with prior
notice.
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