EXHIBIT 23(e)
UNDERWRITING AGREEMENT
THIS AGREEMENT is made as of July 1, 2002, by and between Henssler Funds,
Inc. (the "Fund"), Henssler Asset Management, LLC, (the "Adviser"), and
Citco-Quaker Fund Distributors, Inc., a Delaware corporation ("Underwriter").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser is an investment adviser registered with the
Securities and Exchange Commission, and serves as investment adviser to the
Fund: and
WHEREAS, the Fund is authorized by its Articles of Incorporation and
by-laws to issue separate Portfolios of shares representing interests in
separate investment portfolios (the "Portfolios"), and
WHEREAS, The Fund has authorized the issuance of shares of common stock
("Shares") in the Portfolios which are identified on Exhibit A attached hereto,
which Exhibit A 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 in good standing 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 hereto, intending to be legally bound,
agree as follows:
1. APPOINTMENT. The Fund and Adviser hereby appoint Underwriter as exclusive
agent for the distribution of Shares of the Portfolios 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 therefore at the public offering price, all such sales
to comply with the provisions of the 1940 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 reasonably
necessary and proper 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 Fund's then current 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 nor shall it have any liability for
the accuracy of the net asset value per share as calculated.
On every sale of Shares, 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.
(d) Upon receipt of purchase instructions, Underwriter will transmit such
instructions to the Fund or its transfer agent for registration of the
Shares purchased.
(e) Nothing in this Agreement shall prevent Underwriter or any affiliated
person (as defined in the 0000 Xxx) 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.
(f) 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 then current
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 and acceptance by the Fund, 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 Portfolio(s).
2
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
therefore.
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 agrees 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. Underwriter agrees to act
promptly to file and obtain clearance of such materials.
(c) Underwriter, at its own expense, will qualify as dealer, broker, or
otherwise, under all State or federal laws in order that Shares may be
sold in any and all States, except for expenses described in Section 7
hereto, which will be paid by the Fund or the Adviser to the Fund, as
appropriate.
(d) Underwriter shall not 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 to Underwriter in reasonable quantities
upon request.
(e) Underwriter has adopted appropriate policies and procedures sufficient
to ensure compliance with federal anti-money laundering laws and
regulations and will make such policies and procedures available for
inspection by the Fund 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, and printing of sufficient copies of the
prospectus and statement of additional information for distribution to
3
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 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 therefore.
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 (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 Fund's 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
4
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 1940 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
5
called for the purpose of voting on such approval and (iv) the Adviser.
Either the Fund, Adviser or Underwriter may terminate this Agreement at any
time on sixty (60) days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party.
11. EFFECTIVE PERIOD OF THIS AGREEMENT. Unless terminated automatically as set
forth in Section 10 of this Agreement, this Agreement shall take effect
upon its execution and shall remain in full force and effect for a period
of TWO years from that date, and shall remain in full force and effect from
year to year thereafter, subject to annual approval (i) by Underwriter,
(ii) by the Board of Directors of the Fund or by vote of a majority of the
outstanding Shares, and in either case (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 "Henssler Funds" means and refers
to the Directors and officers from time to time serving under the Fund's
Articles of Incorporation and by-laws 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 Declaration of Trust and by-laws. The execution and delivery of this
Agreement have been authorized by the Directors of the Fund and signed by
the officers of the Fund, acting as such, and neither such authorization by
such Directors, 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 property of the Fund
as provided in its Declaration of Trust. 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 remain in full force and effect.
15. QUESTIONS OF INTERPRETATION.
---------------------------
(a) This Agreement shall be governed by the laws of the State of
Pennsylvania.
(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 1940 Act shall be resolved by reference to such term
or provision of the 1940 Act and its interpretation thereof, if any,
by the United States courts; or in the absence of any controlling
decision of any such court, by rules,
6
regulations or orders of the Securities and Exchange Commission issued
pursuant to said Act. In addition, where the effect of a requirement
of the 1940 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 is 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX
00000, Attn: Xx. Xxxx Xxxxxxxx, and of the Underwriter shall be 0000 Xxxxxx
Xxxxx Xxxx, Xxxxx 00, Xxxxxx Xxxxx, XX 00000, Attn: Xx. Xxxxx X. Xxxxx.
17. COUNTERPARTS. This Agreement may be executed 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 the performance of its
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 of
suitable parts, materials, labor or transportation, such delay or
non-performance shall be excused and a reasonable time, subject to
restrictions and requirements of performance as may be established by
federal or state law.
20. COMPENSATION. The Adviser or Fund, as applicable, shall pay for the
services to be provided by Underwriter under this Agreement in accordance
with, and in the manner set forth in, Schedule B attached hereto, as such
Schedule B may be amended from time to time by agreement of the parties.
If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, Underwriter's compensation
for that part of the month in which this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of Underwriter's compensation for the preceding month
shall be made promptly.
7
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: HENSSLER FUNDS, INC.
____________________ By: _________________________
Name: Xx. Xxxx Xxxxxxxx
Title: President
ATTEST CITCO-QUAKER FUND DISTRIBUTORS, INC.
____________________ By: _________________________
Name: Xxxxx Xxxxx
Title: President
ATTEST: HENSSLER ASSET MANAGEMENT, LLC
____________________ By: _________________________
Name: Xx. Xxxx Xxxxxxxx
Title: Member
8
UNDERWRITING AGREEMENT
----------------------
EXHIBIT A
The following Portfolios and share classes thereof are hereby made subject
to the underwriting Agreement dated July 1, 2002, with Citco-Quaker Fund
Distributors, Inc. ("Underwriter") and Henssler Funds, Inc. (the "Fund"), and
each agree to be bound by all the terms and conditions contained in said
Agreement:
--------------------------------------------------------------------------------
PORTFOLIOS CLASS A CLASS B NO-LOAD
--------------------------------------------------------------------------------
The Henssler Equity Fund X
--------------------------------------------------------------------------------
X
--------------------------------------------------------------------------------
X
--------------------------------------------------------------------------------
UNDERWRITING AGREEMENT
----------------------
EXHIBIT B
---------
The following fees are hereby made subject to the underwriting Agreement
dated July 1, 2002, with Citco-Quaker Fund Distributors, Inc. ("Underwriter")
and Henssler Funds, Inc. (the "Fund"), and each agree to be bound by all the
terms and conditions contained in said Agreement:
Underwriter will charge a flat fee of $12,000 per year for underwriting services
provided for Portfolios of the Fund that offer No-Load Shares only; provided
that Underwriter will charge a flat fee of $6000 per year for such services
during the first year of this agreement.
Underwriter will receive the difference between the front end sales charge and
the dealer reallowance set forth in the Fund's current prospectus and/or
statement of additional information as full compensation for underwriting
services provided for Portfolios of the Fund that offer Share Classes that
charge sales loads.
9
