DISTRIBUTION AGREEMENT
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THIS AGREEMENT made as of the 30th day of July, 1985 by and between XXX XXX
FUNDS (the "Trust"), a business trust established and existing under the laws of
the Commonwealth of Massachusetts and XXX XXX SECURITIES CORPORATION (the
"Distributor"), a corporation organized and existing under the laws of the State
of Delaware.
WHEREAS, the Trust proposes to offer shares of beneficial interest in the
World Trends Fund series of the Trust and from time to time hereafter establish
additional different series representing interests in different portfolios of
assets (each series being referred to herein as a "Fund" or collectively as the
"Funds").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained,
the parties hereto agree as follows:
Section 1. Appointment of the Distributor. The Trust hereby appoints the
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Distributor as its exclusive agent to sell and distribute shares of each Fund of
the Trust then in existence (the "Shares") for the account and risk of the Trust
during the continuous offering of such Shares, on the terms and for the period
set forth in this Agreement, and the Distributor hereby accepts such appointment
and agrees to act hereunder. It is understood that purchases of Shares of any
Fund may be made through other broker-dealers who are members in good standing
of the National Association of Securities Dealers, Inc. in connection with the
offering and sale of the Shares, in which case the Distributor shall enter into
Selling Group Agreements ("Selling Group Agreements") in substantially the form
attached hereto or amend existing Selling Group Agreements with such broker-
dealers to conform therewith and directly through the Trust's Transfer Agent in
the manner set forth in a Fund's Prospectus.
Section 2. Services and Duties of the Distributor.
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(a) The Distributor agrees to arrange to sell, as exclusive agent for
the Trust, from time to time during the term of this Agreement, Shares of any
Fund upon the terms described in a Fund's Prospectus. As used in this Agreement,
the term "Prospectus" shall mean a prospectus and the term "Statement of
Additional Information" shall mean the statement of additional information
included in the Trust's Registration Statement and the term "Registration
Statement" shall mean the Registration Statement, including exhibits and
financial statements, most recently filed by the Trust with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended (the
"1940 Act"), as such Registration Statement is amended by any amendments thereto
at the time in effect.
(b) Upon commencement of the continuous public offering of Shares of
any Fund of the Trust, the Distributor will hold itself available to receive
orders, satisfactory to the Distributor, for the purchase of Shares of that Fund
and will accept such orders on behalf of the Trust as of the time of receipt of
such orders and will transmit such orders as are so accepted to the Trust's
Transfer Agent as promptly as practicable. Purchase orders shall be deemed
effective at the time and in the manner set forth in a Fund's Prospectus.
(c) The Distributor, as agent for the Trust and in its discretion,
may enter into Selling Group Agreements (or amend existing Selling Group
Agreements to conform therewith) with such registered and qualified retail
broker-dealers as it may select pursuant to which such broker-dealers may also
arrange for the sale or sell Shares of any Fund.
(d) The offering price of the Shares of a Fund shall be the net asset
value (as described in the Master Trust Agreement of the Trust, as amended from
time to time and determined as set forth in the Prospectus of such Fund and the
Statement of Additional Information) per Share for that Fund next determined
following receipt of an order plus the maximum sales charge, if any, calculated
in the manner set forth in the Fund's Prospectus. The Distributor shall receive
the entire amount of the sales charge, if any, as compensation for its services
under this Agreement; however, the Distributor may reallow all or any portion of
such sales charge to broker-dealers entering into Selling Group Agreements (or
amending existing Selling Group Agreements) with the Distributor to sell Shares
of such Fund. Shares of a Fund may be sold at prices that reflect scheduled
variations in, or elimination of, the sales charge to particular classes of
investors or transactions in accordance with a Fund's Prospectus and the
Statement of Additional Information. The Trust shall furnish the Distributor,
with all possible promptness, advice of each computation of the net asset value
of a Fund. The Distributor shall also be entitled, subject to the terms and
conditions of the Trust's Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940 to amounts payable by a Fund thereunder.
(e) The Distributor shall use its best efforts and shall not be
obligated to arrange for sales of any certain number of Shares of a Fund and the
services of the Distributor to the Trust hereunder shall not be deemed to be
exclusive, and the Distributor shall be free to (i) render similar services to,
and act as underwriter or distributor in connection with the distribution of
shares of other investment companies, and (ii) engage in any other businesses
and activities from time to time.
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(f) The Distributor is authorized on behalf of the Trust to
repurchase Shares of a Fund presented to it by dealers at the price determined
in accordance with, and in the manner set forth in, the Prospectus of such Fund.
Section 3. Duties of the Trust.
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(a) The Trust agrees to sell Shares of its Funds so long as it has
Shares available for sale and to cause its Transfer Agent to issue, if requested
by the purchaser, certificates for Shares of its Funds, registered in such names
and amounts as promptly as practicable after receipt by the Trust of the net
asset value thereof.
(b) The Trust shall keep the Distributor fully informed with regard
to its affairs and shall furnish to the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Shares of the Funds. This
shall include, without limitation, one certified copy of all financial
statements of the Funds prepared by independent accountants and such reasonable
number of copies of a Fund's most current Prospectus, the Statement of
Additional Information and annual and interim reports as the Distributor may
request. The Trust shall cooperate fully in the efforts of the Distributor to
arrange for the sale of Shares of the Funds and in the performance of the
Distributor under this Agreement.
(c) The Trust shall take, from time to time, all necessary action to
register the Shares of the Funds under the 1933 Act, including payments of the
related filing fees, so that there will be available for sale such number of
Shares of the Funds as the Distributor may be expected to sell. The Trust agrees
to file from time to time such amendments, reports and other documents as may be
necessary in order that there may be no untrue statement of a material fact in
the Registration Statement or Prospectus of a Fund, or necessary in order that
there may be no omission to state a material fact in the Registration Statement
or Prospectus of a Fund which omission would make the statements therein, in
light of the circumstances under which they were made, misleading.
(d) The Trust shall use its best efforts to qualify and maintain the
registration and qualification of an appropriate number of Shares of the Funds
and the Trust for sale under the securities laws of such states as the
Distributor shall designate, and, if necessary or appropriate in connection
therewith, to qualify and maintain the qualification of the Trust as a broker-
dealer in such states. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be requested by the Trust
in connection with such qualifications.
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Section 4. Expenses.
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(a) The Trust shall bear all costs and expenses of the continuous
offering of Shares of the Funds in connection with: (i) fees and disbursements
of its counsel and auditors, (ii) the preparation, filing and printing of any
registration statements and/or Prospectuses and Statements of Additional
Information required by and under federal and state securities laws, (iii) the
preparation and mailing of annual and interim reports and proxy materials, if
any, to shareholders and (iv) the qualification of the Shares of the Funds for
sale and of the Trust as a broker-dealer under the securities laws of such
states or other jurisdictions as shall be selected by the Distributor pursuant
to Section 3(d) hereof and the cost and expenses payable to each such state for
continuing qualification therein.
(b) The Distributor shall bear (i) the costs and expenses of
preparing, printing and distributing any materials not prepared by the Trust and
other materials used by the Distributor in connection with its offering of
Shares of the Funds for sale to the public (including the additional cost of
printing copies of the Prospectus and of annual and interim reports) to
shareholders other than copies thereof required for distribution to existing
shareholders or for filing with any federal and state securities authorities,
(ii) any expenses of advertising incurred by the Distributor in connection with
such offering and (iii) the expenses of registration or qualification of the
Distributor as a broker-dealer under federal or state laws, if necessary, and
the expenses of continuing such registration or qualification. It is understood
and agreed that so long as the Trust's Plan of Distribution as to a Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940 continues in
effect, any expenses incurred by the Distributor hereunder may be paid from
amounts received by it from a Fund under such Plan.
Section 5. Indemnification. The Trust agrees to indemnify, defend and hold
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the Distributor, its officers, directors, employees and agents and any person
who controls the Distributor within the meaning of Section 15 of 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 losses, claims, damages,
liabilities and expenses (including the cost of investigating or defending such
claims, damages or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers, directors, employees 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
or alleged untrue statement of a material fact contained in the Registration
Statement, a Prospectus, or the Statement of Additional Information or arising
out of or based upon the omission or any alleged omission to state a
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material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such claims, damages, 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 Distributor to the Trust for use in
the Registration Statement, a Prospectus or the Statement of Additional
Information. The Distributor agrees to promptly notify the Trust of any event
giving rise to rights of indemnification hereunder, including any action brought
against the Distributor, its officers, directors, employees and agents or any
such controlling person, such notification to be given by letter or telegram
addressed to the Trust at its principal business office, but the Distributor's
failure so to notify the Trust shall not relieve the Trust from any obligation
it may have to indemnify the Distributor hereunder or otherwise.
The Distributor agrees to indemnify, defend and hold the Trust, its
Trustees and officers and any person who controls the Trust, if any, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, free and
harmless from and against any and all losses, claims, damages, liabilities and
expenses (including the cost of investigating or defending such claims, damages
or liabilities and any counsel fees incurred in connection therewith) which the
Trust, its Trustees or officers or any such controlling person may incur under
the 1933 Act, the 1934 Act, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Trust, its Trustees or
officers or such controlling person arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Trust for use in the
Registration Statement, a Prospectus or the Statement of Additional Information.
The Trust agrees to promptly notify the Distributor of any event giving rise to
rights of indemnification hereunder, including any action brought against the
Trust, its Trustees or officers or any such controlling person, such
notification being given to the Distributor at its principal business office,
but the Trust's failure so to notify the Distributor shall not relieve the
Distributor from any obligation it may have to indemnify the Trust hereunder or
otherwise.
Section 6. Contribution. In order to provide for just and equitable
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contribution in circumstances in which the indemnification provided for in the
first paragraph of Section 5 is for any reason held to be unavailable from the
Trust, the Trust and the Distributor shall contribute to the aggregate losses,
claims, damages, liabilities or expenses (including the reasonable costs of
investigating or defending such claims, damages or liabilities but after
deducting any contribution received by the Trust from persons other than
Distributor who may also be liable for contribution, such as persons who control
the Trust within the meaning
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of the 1933 Act, officers of the Trust who signed the Registration Statement and
Trustees) to which the Trust and the Distributor may be subject in such
proportion so that the Distributor is responsible for that portion represented
by the percentage that the Sales Charge appearing in the Prospectus of the Fund
bears to the public offering price appearing therein and the Trust is
responsible for the balance; provided, however, that (i) in no case shall the
Distributor be responsible for any amount in excess of the portion of the Sales
Charge received and retained by it in respect of the Shares of a Fund purchased
through it hereunder and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Distributor. Each party who may seek contribution under this Section 6 shall,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 6, give written
notice of the commencement of such action, suit or proceeding to the party or
parties from whom such contribution may be sought, but the omission so to notify
such contributing party or parties shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have
otherwise than on account of this Section 6.
Section 7. Compliance with Securities Laws. The Trust represents that it
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is registered as a diversified, open-end management investment company under the
1940 Act, and agrees that it will comply with all of the provisions of the 1940
Act and of the rules and regulations thereunder. The Trust and the Distributor
each agree to comply with all of the applicable terms and provisions of the 1940
Act, the 1933 Act and, subject to the provisions of Section 3(d), all applicable
state "Blue Sky" laws. The Distributor agrees to comply with all of the
applicable terms and provisions of the 1934 Act.
Section 8. Term of Contract. This Agreement shall go into effect on the
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date hereof and shall continue in effect until July 30, 1986, and thereafter for
successive periods of one year each if such continuance is approved at least
annually thereafter (i) either by an affirmative vote of a majority of the
outstanding shares of the Trust or by the Board of Trustees of the Trust, and
(ii) in either case by a majority of the Trustees of the Trust who are not
interested persons of the Distributor or (otherwise than as Trustees) of the
Trust, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated at any time by one party hereto to
the other on sixty (60) days' written notice to the other party.
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Section 9. Assignment. This Agreement may not be assigned by the
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Distributor and shall automatically terminate in the event of an attempted
assignment by the Distributor; provided, however, that the Distributor may
employ or enter into agreements with such other person, persons, corporation, or
corporations, as it shall determine in order to assist it in carrying out this
Agreement.
Section 10. Amendment. This Agreement may be amended at any time by
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mutual agreement in writing of the parties hereto, provided that any such
amendment is approved by a majority of the Trustees of the Trust who are not
interested persons of the Distributor or by the holders of a majority of the
outstanding shares of the Trust.
Section 11. Governing Law. This Agreement shall be governed and construed
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in accordance with the laws of the State of New York.
Section 12. Non-Liability of Shareholders, Trustees, Officers, Employees,
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Representatives and Agents. Copies of the Master Trust Agreement, as amended,
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establishing the Trust are on file with the Secretary of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trust by officers of the Trust as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the Trustees, officers, shareholders, employees or agents of the
Trust individually but are binding only upon the assets and property of the
Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
XXX XXX FUNDS
By_________________________________
XXX XXX SECURITIES CORPORATION
By_________________________________
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