UNDERWRITING AGREEMENT
This Agreement, dated as of the 5th day of March, 1997,
made by and between The Bjurman Funds, (the "Trust") a
Delaware business trust operating as an open-end management
investment company registered under the Investment Company Act of
1940, as amended (the "Act"); Xxxxxx X. Xxxxxxx and Associates
("Bjurman"), a registered investment adviser existing as corporation
duly organized and existing under the laws of the State of
California; and FPS Broker Services, Inc. ("FPSB"), a corporation
duly organized and existing under the laws of the State of Delaware
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument 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;
WHEREAS, Bjurman has been appointed investment adviser to the
Trust;
WHEREAS, FPSB is a broker-dealer registered with the U.S.
Securities and Exchange Commission 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 FPSB of the shares of the Trust
(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 Trust hereby appoints FPSB as its exclusive agent for the
distribution of the Shares in the fifty United States of
America, the District of Columbia and Commonwealth of Puerto
Rico, and FPSB hereby accepts such appointment under the terms
of this Agreement. The Trust agrees that it will not sell any
shares to any person except to fill orders for the shares
received through FPSB; provided, however, that the foregoing
exclusive right shall not apply: (a) to shares issued or sold
in connection with the merger or consolidation of any other
investment company with the Trust 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 Trust; (b) to
shares which may be offered by the Trust to its stockholders
for reinvestment of cash distributed from capital gains or net
investment income of the Trust; or (c) to shares which may be
issued to shareholders of other funds who exercise any exchange
privilege set forth in the Trust's Prospectus. Notwithstanding
any other provision hereof, the Trust may terminate, suspend,
or withdraw the offering of the Shares whenever, in its sole
discretion, it deems such action to be desirable.
2. Sale and Repurchase of Shares.
FPSB agrees to provide the services contemplated hereby, and
(a) FPSB is hereby granted the right, as agent for the Trust,
to sell Shares to the public against orders therefor at
the public offering price (as defined in sub-paragraph
2.(c) below).
(b) FPSB will also have the right to take, as agent for
the Trust, all actions which, in FPSB's judgement,
and subject to the Trust's reasonable approval, are
necessary to carry into effect the distribution of
the Shares.
(c) The public offering price for Class D Shares shall
be the net asset value per Share then in effect,
and the public offering price for Class A Shares
shall be the net asset value per Share plus a sales
charge, if applicable.
(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 Trust or
by another entity on behalf of the Trust. FPSB
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, the Distributor shall promptly pay
to the Trust the applicable net asset value of the
Shares.
(f) Upon receipt of purchase instructions, FPSB will
transmit such instructions to the Trust or its
transfer agent for registration of the Shares
purchased.
(g) Nothing in this Agreement shall prevent FPSB or any
affiliated person (as defined in the Act) of FPSB
from acting as underwriter or distributor for any
other person, firm or corporation (including other
investment companies), or in any way limit or
restrict FPSB or 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 FPSB expressly agrees that it will
not for its own account purchase any Shares of the
Trust except for investment purposes, and that it
will not for its own account sell any such Shares
except by redemption of such Shares by the Trust,
and that it will not undertake in any activities
which, in its judgement, will adversely affect the
performance of its obligations to the Trust under
this Agreement.
(h) FPSB may repurchase Shares at such prices and upon
such terms and conditions as shall be specified in
the Prospectus.
3. Rules of Sale of Shares.
FPSB does not agree to sell any specific number of Shares.
FPSB, as Underwriter for the Trust, undertakes to sell Shares
on a best efforts basis and only against orders received
therefor. The Trust reserves the right to terminate, suspend
or withdraw the sale of its Shares for any reason deemed
adequate by it, and the Trust 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.
(a) FPSB will conform to the Rules of Fair Practice of
the NASD and the securities laws of any
jurisdiction in which it directly or indirectly
sells any Shares.
(b) FPSB will require each dealer with whom FPSB has a
selling agreement to conform to the applicable
provisions of the Prospectus, with respect to the
public offering price of the Shares, and FPSB shall
not cause the Trust to withhold the placing of
purchase orders so as to make a profit thereby.
(c) The Trust and Bjurman agree to furnish to FPSB
sufficient copies of any and all: agreements,
plans, communications with the public or other
materials which the Trust or Bjurman intends to use
in connection with any sales of Shares, in adequate
time for FPSB to file and clear such materials with
the proper authorities before they are put in use.
FPSB and the Trust or Bjurman may agree that any
such material does not need to be filed subsequent
to distribution. In addition, the Trust and
Bjurman agree not to use any such materials until
so filed and cleared for use by appropriate
authorities as well as by FPSB.
(d) FPSB, 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) FPSB shall remain registered with the U.S.
Securities and Exchange Commission and a member of
the National Association of Securities Dealers for
the term of this Agreement.
(f) FPSB 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 covering the Shares and in
communications with the public or sales materials
approved by FPSB as information supplemental to
such Prospectus. Copies of the Prospectus will be
supplied by the Trust or Bjurman to FPSB in
reasonable quantities upon request.
5. Records to be Supplied by the Trust.
The Trust shall furnish to FPSB copies of all information,
financial statements and other papers which FPSB may reasonably
request for use in connection with the distribution of the
Shares including, but not limited to, one certified copy of all
financial statements prepared for the Trust by its independent
public accountants.
6. Expenses.
(a) The Trust will bear the following expenses:
(i) preparation, setting in type, and printing of
sufficient copies of the Prospectuses and
Statements 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 Trust;
(v) maintaining facilities for the issue and transfer
of the Shares;
(vi) supplying information, prices and other data to be
furnished by the Trust 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) Bjurman will pay all other expenses incident to the sale
and distribution of the Shares sold hereunder.
7. Term and Compensation.
(a) The term of this Agreement shall commence on the date on
which the Trust's registration statement is declared
effective by the U.S. Securities and Exchange Commission
("Effective Date").
(b) This Agreement shall remain in effect for two (2) years
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 Trustees of the Trust who
are not parties to this Agreement (other than as Trustees
of the Trust) 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 FPSB shall be paid by Bjurman as set
forth in Schedule "B" attached and shall be fixed for the
two (2) 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 at any time be terminated without
the payment of any penalty, either by a vote of the
Trustees of the Trust 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
FPSB; and (ii) may be terminated by FPSB on sixty (60)
days written notice to the Trust with respect to any
Series.
(e) This Agreement shall automatically terminate in the event
of its assignment.
8. Indemnification of FPSB by Bjurman.
Bjurman and the Trust will indemnify and hold FPSB harmless for
the actions of Bjurman employees registered with the NASD as
FPSB representatives, and hereby undertakes to maintain
compliance with all rules and regulations concerning any and
all sales presentations made by such employees.
9. Liability of FPSB.
(a) FPSB, its directors, officers, employees, shareholders
and agents shall not be liable for any error of judgement
or mistake of law or for any loss suffered by the Trust
in connection with the performance of this Agreement,
except a loss resulting from a breach of FPSB's
obligation 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 negligence
on the part of FPSB in the performance of its obligations
and duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(b) The Trust agrees to indemnify and hold harmless FPSB
against any and all liability, loss, damages, costs or
expenses (including reasonable counsel fees) which FPSB
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 FPSB may be involved as a
party or otherwise or with which FPSB may be threatened,
by reason of the offer or sale of the Trust Shares by
persons other than FPSB or its representatives, prior to
the execution of this Agreement. Indemnification under this
paragraph shall not apply to actions or ommissions of FPSB, or
its directors, officers, employees, shareholders and agents
in cases of its or their willful misfeasance, bad faith, negligence
or reckless disregard of its or their duties thereunder. If a claim
is made against FPSB as to which FPSB may seek indemnity under
this Section, FPSB shall notify the Trust promptly after
any written assertion of such claim threatening to
institute an action or proceeding with respect thereto
and shall notify the Trust promptly of any action
commenced against FPSB within 10 days time after FPSB
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 Trust shall not,
however, relieve the Trust from any liability which it
may have on account of the indemnity under this Section
9(b) if the Trust has not been prejudiced in any material
respect by such failure. The Trust may negotiate the
settlement of any such action, suit or proceeding subject
to FPSB's approval, which shall not be unreasonably
withheld. FPSB 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 Trust (which shall pay such
fees, costs and expenses at least quarterly) if:
(i) FPSB has received an opinion of counsel
stating that the use of counsel chosen by the
Trust to represent FPSB would present such counsel
with a conflict of interest;
(ii) the defendants in, or targets of, any such
action or proceeding include both FPSB and the
Trust, and legal counsel to FPSB 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 Trust (in which case the
Trust shall not have the right to direct the
defense of such action on behalf of FPSB); or
(iii) the Trust shall authorize FPSB to employ
separate counsel at the expense of the Trust.
(c) Any person, even though also a director, officer,
employee, shareholder or agent of FPSB, who may be or
become an officer, director, trustee, employee or agent
of the Trust, shall be deemed, when rendering services to
the Trust or acting on any business of the Trust (other
than services or business in connection with FPSB's
duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director,
officer, employee, shareholder or agent, or one under the
control or direction of FPSB even though receiving a
salary from FPSB.
(d) The Trust agrees to indemnify and hold harmless FPSB, and
each person who controls FPSB 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 regulation,
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
Trust and furnished by the Trust to FPSB for FPSB'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 FPSB (or any person controlling FPSB) 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 Trust to any person by FPSB (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 Trust by
FPSB 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 FPSB and a copy of the corrected
Prospectus was not delivered to such person at or before
the confirmation of the sale to such person.
(e) FPSB shall not be responsible for any damages,
consequential or otherwise, which Bjurman or the Trust
may experience, due to the disruption of the distribution
of Shares caused by any action or inaction of any
registered representative or affiliate of FPSB or of FPSB
itself.
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.
FPSB shall prepare reports for the Board of Trustees of the
Trust, on a quarterly basis, showing such information as, from
time to time, shall be reasonably requested by such 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 State of
California and the exclusive venue of any action arising under
this Agreement shall be Xxxxxxxxxx County, Commonwealth of
Pennsylvania.
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.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
consisting of ten type written pages, together with Schedule "A" and
Schedule "B", to be signed by their duly authorized officers, as of
the day and year first above written.
Xxxxxx X. Xxxxxxx and Associates
/s/ G. Xxxxxx Xxxxxxx
__________________________________
By: G. Xxxxxx Xxxxxxx, President
The Bjurman Funds
/s/ G. Xxxxxx Xxxxxxx
____________________________________
By: G. Xxxxxx Xxxxxxx, Co-President
/s/ O. Xxxxxx Xxxxx, III
By: O. Xxxxxx Xxxxx, III, Co-President
FPS Broker Services, Inc.
/s/ Xxxxxxx Xxxxx
______________________________
By: Xxxxxxx X. Xxxxx, President
Schedule "A"
Underwriter/Sponsor Services
for
The Bjurman Funds
I. Underwriter/Sponsor services include:
A) Preparation and execution of Underwriter and 12b-1 Plan
Agreements
- Monitoring accruals
- Monitoring expenses
- Disbursements for expenses and trail commissions
B) Quarterly 12b-1 Reports to Board of Trustees
C) Literature review, recommendations and submission to the
NASD
D) Initial NASD Licensing and Transfers of Registered
Representatives
- U-4 Form and Fingerprint Submission to NASD
- Supplying Series 6 and 63 written study material
- Registration for Exam Preparation classes
- Renewals and Terminations of Representatives
E) Written supervisory procedures and manuals for Registered
Representatives
F) Ongoing compliance updates for Representatives regarding
sales practices,
written correspondence and other communications with the public.
G) NASD Continuing Education Requirement
II. Sales Support
FPBS offers additional optional sales support including Inbound
Telemarketing and Literature Fulfillment.
III. Inbound Telemarketing Services
A) Install an 800 line for prospective shareholders, and
track the number of inbound calls. An existing 800 line
can be moved to FPBS.
B) Calls answered with the name of your Fund Group by FPS
Broker Services' registered representatives
C) Utilize pre-approved scripts provided by Trust Management
D) Respond to Trust inquiries as your Trust's Marketing
Department
- Requests for Literature/Prospectuses
- Yields, Distribution Rates
- Performance
- Adviser/Management experience
- Dividends
- Portfolio Holdings
- Account Attributes
E) Input marketing inquiries on a confidential database for
Fund Management review.
F) Written Call reports which include the following
information.
- Number received
- Alphabetical list
- Regional Response List
- Source List
- Match calls with new accounts on Transfer Agent
files
G) Prepare Quarterly Report that matches calls with new
accounts in our Transfer Agent files.
IV. Literature Fulfillment
A) Receive requests from the Trust for literature
fulfillment
B) Record requests on confidential database for Trust
reporting
C) Prepare, package and forward customized requests
D) Assist with special direct mail programs
V. Management Consulting
A) Strategic Insight
B) Consulting Services
Schedule "B"
Underwriter and Distribution Fee Schedule
for
The Bjurman Funds
This Fee Schedule is fixed for a period of two (2) years from the
Effective Date as that term is defined in the Agreement.
I. A) Underwriter/Sponsor Services
The annual fee to FPS Broker Services (FPSB) of $25,000
per year for the initial portfolio or class of shares and
$2,500 per year for each additional portfolio or class of
shares for services rendered as primary
Underwriter/Sponsor of the Trust, including primary
licensing/regulatory agent for Trust personnel.
The fee for representing the Trust as primary Distributor
includes the expenses and personnel required to maintain
the various regulatory books and records of the
Broker/Dealer and maintenance of shareholder files and
records for all transactions processed on behalf of the
Trust. These fees also include the regulatory
requirements of all marketing related and distribution
reports including maintenance of records regarding
individual transaction activities of the Trust's
registered representatives.
B) FPBS will maintain annual NASD and state license renewals
and the monitoring required of representative activities
as follows:
Up to 10 States - $2,000 per Representative per Year
All 50 States - $4,000 per Representative per Year
II. Literature Fulfillment Services
$2.00 per inquiry and fulfillment request
$2,000 per month minimum fee
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 Bjurman Funds"
1. Bjurman Micro-Cap Fund
This Schedule "C" may be amended from time to time by agreement of
the Parties.
