UNDERWRITING AGREEMENT
This Agreement, dated as of December 31, 2000, is made by and between
Xxxxxxxx Growth Fund, Inc. a Maryland corporation (the "Fund") operating as an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "Act"), and PFPC Distributors, Inc. ("PFPC
Distributors"), a corporation duly organized and existing under the laws of the
Commonwealth of Massachusetts (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, PFPC Distributors is a broker-dealer registered with the U.S.
Securities and Exchange Commission (the "SEC") 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 PFPC Distributors of the shares of the Fund (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
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The Fund hereby appoints PFPC Distributors as its principal agent for the
distribution of the Shares, and PFPC Distributors hereby accepts such
appointment under the terms of this Agreement. The Fund agrees that it will
not sell any Shares to any person except to fill orders for the Shares
received through PFPC Distributors, provided, however, that the foregoing
exclusive right shall not apply to: (a) Shares issued or sold in connection
with the merger or consolidation of any other investment company with the
Fund or the acquisition by purchase of 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 Fund; (b) Shares which may be
offered by the Fund to its stockholders for reinvestment of cash
distributed from capital gains or net investment income of the Fund; or (c)
Shares which may be issued to shareholders of other funds who exercise any
exchange privilege set forth in the Fund's Prospectus. Notwithstanding any
other provision hereof, the Fund may terminate, suspend, or withdraw the
offering of the Shares whenever, in their sole discretion, they deem such
action to be desirable.
2. Sale and Repurchase of Shares
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(a) PFPC Distributors is hereby granted the right, as agent for the Fund,
to sell Shares to the public against orders received at the public
offering price as defined in the Fund's Prospectus and Statement of
Additional Information.
(b) PFPC Distributors will also have the right to take, as agent for the
Fund, all actions which, in PFPC Distributors' judgment, and subject
to the Fund's reasonable approval, are necessary to carry into effect
the distribution of the Shares.
(c) PFPC Distributors will act as agent for the Fund in connection with
the repurchase of Shares by the Fund upon the terms set forth in the
Fund's Prospectus and Statement of Additional Information.
(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 Fund or by
another entity on behalf of the Fund. PFPC Distributors 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, PFPC Distributors shall promptly pay to the Fund the
applicable net asset value of the Shares.
(f) Upon receipt of purchase instructions, PFPC Distributors will transmit
such instructions to the Fund or its transfer agent for registration
of the Shares purchased.
(g) Nothing in this Agreement shall prevent PFPC Distributors or any
affiliated person (as defined in the Act) of PFPC Distributors from
acting as underwriter for any other person, firm or corporation
(including other investment companies), or in any way limit or
restrict PFPC Distributors or such affiliated person from buying,
selling or trading any securities for its or their own account or for
the account of others for whom it or they may be acting, provided,
however, that PFPC Distributors expressly agrees that it will not for
its own account purchase any Shares of the Fund except for investment
purposes, and that it will not for its own account dispose of any such
Shares except by redemption of such Shares with the Fund, and that it
will not undertake in any activities which will adversely affect the
performance of its obligations to the Fund under this Agreement.
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3. Rules of Sale of Shares
-----------------------
PFPC Distributors does not agree to sell any specific number of Shares and
serves only in the capacity of Statutory Underwriter. The Fund reserves the
right to terminate, suspend or withdraw the sale of its Shares for any
reason deemed adequate by it, and the Fund 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, etc.
-------------------
(a) PFPC Distributors will conform to the Conduct Rules of the NASD and
the securities laws of any jurisdiction in which it directly or
indirectly sells any Shares.
(b) PFPC Distributors will require each dealer with whom PFPC Distributors
has a selling agreement to conform to the applicable provisions of the
Prospectus, with respect to the public offering price of the Shares,
and PFPC Distributors shall not withhold the placing of purchase
orders so as to make a profit thereby.
(c) The Fund agrees to furnish PFPC Distributors sufficient copies of any
and all: agreements, plans, communications with the public or other
materials which the Fund intends to use in connection with any sales
of Shares, in adequate time for PFPC Distributors to file and clear
such materials with the proper authorities before they are put in use.
PFPC Distributors and the Fund may agree that any such material does
not need to be filed subsequent to distribution. In addition, the Fund
agrees not to use any such materials until so filed and cleared for
use, if required, by appropriate authorities as well as by PFPC
Distributors.
(d) PFPC Distributors, 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) PFPC Distributors shall remain registered with the SEC and a member of
the NASD for the term of this Agreement.
(f) PFPC Distributors 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 offering the Shares and in communications with the public
or sales materials approved by PFPC Distributors as information
supplemental to such Prospectus. Copies of
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the Prospectus will be supplied by the Fund to PFPC Distributors in
reasonable quantities upon request.
(g) PFPC Distributors shall only be authorized to make representations in
respect of the Fund consistent with the then current Prospectus,
Statement of Additional Information, and other written information
provided by the Fund or its agents to be used explicitly with respect
to the sale of Shares.
5. Records to be Supplied by the Fund
----------------------------------
The Fund shall furnish to PFPC Distributors copies of all information,
financial statements and other papers which PFPC Distributors may
reasonably request for use in connection with the underwriting of the
Shares including, but not limited to, one certified copy of all financial
statements prepared for the Fund by its independent public accountants.
6. Expenses
--------
(a) The Fund will bear the following expenses:
(i) preparation, setting in type, and printing of sufficient copies
of the Prospectus and Statement of Additional Information for
distribution to existing shareholders, and the cost of
distribution of same to the existing shareholders;
(ii) preparation, printing and distribution of reports and other
communications to existing 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 Fund;
(v) maintaining facilities for the issue and transfer of the Shares;
(vi) supplying information, prices and other data to be furnished by
the Fund 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) PFPC Distributors agrees to pay all of its own expenses in performing
its obligations hereunder.
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7. Term
----
(a) The term of this Agreement shall commence immediately upon the
consummation of the acquisition of Provident Distributors, Inc. by
PFPC Inc. (or a substantially similar transaction), which the parties
anticipate to occur on or about December 31, 2000, (the "Effective
Date").
(b) This Agreement shall remain in effect for one (1) year 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 the Fund,
or (ii) by a vote of a majority of the Board Members of the Fund who
are not parties to this Agreement (other than as Board Members of the
Fund) or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(c) This Agreement (i) may be terminated at any time without the payment
of any penalty, either by a vote of the Directors of the Fund or by a
vote of a majority of the outstanding voting securities of the Fund
with respect to the Fund, on sixty (60) days' written notice to PFPC
Distributors; and (ii) may be terminated by PFPC Distributors on sixty
(60) days' written notice to the Fund with respect to the Fund.
(d) This Agreement shall automatically terminate in the event of its
assignment, as defined in the Act.
8. Liability of PFPC Distributors
------------------------------
(a) PFPC Distributors, its directors, officers, employees, shareholders
and agents shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the
performance of this Agreement, except a loss resulting from a breach
of PFPC Distributors' obligations pursuant to Section 4 of this
Agreement (including breach of the 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
gross negligence on the part of PFPC Distributors in the performance
of its obligations and duties or by reason of its reckless disregard
of its obligations and duties under this Agreement. PFPC Distributors
agrees to indemnify and hold harmless the Fund and each person who has
been, is, or may hereafter be a Director, officer, or employee of the
Fund against expenses, including reasonable counsel fees, reasonably
incurred by any of them in connection with any claim or in connection
with any action, suit, or proceeding to which any of them may be a
party, which arises out of or is alleged to arise out of any
misrepresentation or omission to state a material fact, on the part of
PFPC
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Distributors or any agent of employee of PFPC Distributors or any of
the persons for whose acts PFPC Distributors is responsible or is
alleged to be responsible unless such misrepresentation or omission
was made in reliance upon written information furnished to PFPC
Distributors by the Fund. PFPC Distributors also agrees to indemnify
and hold harmless the Fund and each such person in connection with any
claim or in connection with any action, suit, or proceeding which
arises out of or is alleged to arise out of PFPC Distributors' failure
to exercise reasonable care and diligence with respect to its services
rendered in connection with the purchase and sale of Shares. With
respect to the foregoing, the Fund shall have the right to participate
in the defense of any action, suit or proceeding and to retain its own
counsel, and the reasonable fees and expenses of such counsel shall be
borne by PFPC Distributors, which shall pay such fees, costs and
expenses at least quarterly. The foregoing rights of indemnification
shall be in addition to any other rights to which the Fund or any such
person shall be entitled to as a matter of law.
(b) The Fund agrees to indemnify and hold harmless PFPC Distributors
against any and all liability, loss, damages, costs of expenses
(including reasonable counsel fees) which PFPC Distributors 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 PFPC Distributors may be
involved as a party or otherwise or with which PFPC Distributors may
be threatened, by reason of the offer or sale of the Fund's Shares by
persons other than PFPC Distributors or its representatives, prior to
the execution of this Agreement. If a claim is made against PFPC
Distributors as to which PFPC Distributors may seek indemnity under
the Section, PFPC Distributors shall notify the Fund promptly after
any written assertion of such claim threatening to institute an action
or proceeding with respect thereto and shall notify the Fund promptly
of any action commenced against PFPC Distributors within 10 days time
after PFPC Distributors 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 Fund shall not, however, relieve the Fund
from any liability which it may have on account of the indemnity under
this Section 8(b) if the Fund has not been prejudiced in any material
respect by such failure. The Fund shall have the sole right to control
the settlement of any such action, suit or proceeding subject to PFPC
Distributors approval, which shall not be unreasonably withheld. PFPC
Distributors 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 Fund (which
shall pay such fees, costs and expenses at least quarterly) if:
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(i) PFPC Distributors has received an opinion of counsel stating
that the use of counsel chosen by the Fund to represent PFPC
Distributors would present such counsel with a conflict of
interest;
(ii) the defendants in, or targets of, any such action or proceeding
include both PFPC Distributors and the Fund, and legal counsel
to PFPC Distributors shall have reasonably concluded that there
are legal defenses available to it which are different from or
additional to those available to the Fund or which may be
adverse to or inconsistent with defenses available to the Fund
(in which case the Fund shall not have the right to direct the
defense of such action on behalf of PFPC Distributors); or
(iii) the Fund shall authorize PFPC Distributors to employ separate
counsel at the expense of the Fund.
(c) Any person, even though also a director, officer, employee,
shareholder or agent of PFPC Distributors who may be or become an
officer, director, trustee, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any business
of the Fund (other than services or business in connection with PFPC
Distributors' duties hereunder), to be rendering such services to or
acting solely for the Fund and not as a director, officer, employee,
shareholder or agent, or one under the control or direction of PFPC
Distributors even though receiving a salary from PFPC Distributors.
(d) The Fund agrees to indemnify and hold harmless PFPC Distributors, and
each person who controls PFPC Distributors 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 regulations, 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 Fund
and furnished by the Fund to PFPC Distributors for PFPC Distributors'
use hereunder, disseminated by the Fund or which arise out of or are
based upon any omission or alleged omission to state therein a
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material fact required to be stated therein or necessary to make the
statements therein not misleading.
Such indemnity, and any indemnity provided by Section 8(b) above,
shall not, however, inure to the benefit of PFPC Distributors (or any
person controlling PFPC Distributors) 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 Fund to
any person by PFPC Distributors (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 Fund by PFPC Distributors
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 PFPC Distributors 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) PFPC Distributors shall not be responsible for any damages,
consequential or otherwise, which the Fund may experience, due to the
disruption of the distribution of Shares caused by any action or
inaction of any registered representative or affiliate of PFPC
Distributors or of PFPC Distributors itself.
(f) Notwithstanding anything in this Agreement to the contrary, in no
event shall any party to this Agreement, its affiliates or any of its
or their directors, trustees, officers, employees, agents or
subcontractors be liable for lost profits, exemplary, punitive,
special, incidental, indirect or consequential damages.
9. Amendments
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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.
10. Section Headings
----------------
Section and paragraph headings are for convenience only and shall not be
construed as part of this Agreement.
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11. Reports
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PFPC Distributors shall prepare reports for the Board of the Fund, on a
quarterly basis, showing such information as, from time to time, shall be
reasonably requested by the Board.
12. 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.
13. Governing Law
-------------
This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts and the exclusive venue of any action arising under this
Agreement shall be the City of Boston, Commonwealth of Massachusetts.
14. 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.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed
by their duly authorized officer, of the day and year first above written.
PFPC DISTRIBUTORS, INC.
/s/ Xxxxx XxXxxxxxx
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By: Xxxxx XxXxxxxxx
Title: Vice President
XXXXXXXX GROWTH FUND, INC.
/s/ Xxxxx X. Xxxxx
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By: Xxxxx X. Xxxxx
Title: Vice President
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