U.S. Global Investors Funds
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 3rd day of September 1998 between U.S. Global
Investors Funds, a Massachusetts business trust (the "Trust"), having its
principal place of business in San Antonio, Texas, and U.S. Global Brokerage,
Inc. a corporation organized under the laws of the State of Texas (the
"Distributor"), having its principal place of business in San Antonio, Texas.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and is
authorized (i) to issue shares of beneficial interest in separate series, with
the shares of each such series representing the interests in a separate
portfolio of securities and other assets, and (ii) to divide such shares of
beneficial interest of each such series into two or more classes; and
WHEREAS, the Trust wishes to employ the services of the Distributor with
respect to the distribution of shares of beneficial interest of the Trust
("Shares") and classes thereof representing interests in each portfolio series
thereof identified from time to time on Schedule A hereto (each such portfolio
series being referred to herein as a "Fund"); and
WHEREAS, the Distributor wishes to provide distribution services to the
Trust with respect to the Shares.
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. SALE OF SHARES BY THE DISTRIBUTOR. The Trust grants to the Distributor
the right to sell Shares during the term of this Agreement and subject
to the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), under the following terms and conditions:
(i) the Distributor, as agent for the Trust, shall sell Shares
authorized for issue and registered under the 1933 Act; and (ii) the
Distributor shall sell such Shares only in compliance with the terms
set forth in the Trust's currently effective registration statement,
as may be in effect from time to time, and any further limitations the
Trustees of the Trust may impose. The Distributor may enter into
selling agreements with selected dealers and others for the sale of
Shares and will act only on its behalf as principal in entering into
such selling agreements.
2. SALE OF SHARES BY THE TRUST. THe Trust reserves the right to issue
Shares in connection with (i) the merger or consolidation of the
assets of, or acquisition by the Trust through purchase or otherwise,
with any other investment company, trust or personal holding company;
(ii) a pro rata distribution directly to the holders of Shares in the
nature of a stock dividend or split-up; and (iii) as otherwise may be
provided in the then current registration statement of the Trust.
3. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to issued
Shares, Shares held in its treasury in the event that in the
discretion of the Trust treasury Shares shall be sold, and Shares
repurchased for resale.
4. PUBLIC OFFERING PRICE. Except as otherwise noted in the Trust's
prospectus for any Fund (the "Prospectus") or Statement of Additional
Information for any Fund (the "SAI"), as amended or supplemented from
time to time, all Shares sold by the Distributor or the Trust will be
sold at the public offering price plus any applicable sales charge
described therein. The public offering price for all accepted
subscriptions will be the net asset value per share, determined in the
manner described in the Trust's then current Prospectus and SAI with
respect to the applicable Fund. The Trust shall in all cases receive
the net asset value per Share on
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Distribution Agreement
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all sales and the Distributor shall be entitled to retain the
applicable sales charges, if any, subject to any reallowance
obligations of the Distributor as set forth in any selling agreements
with selected dealers and others for the sale of Shares and/or as set
forth in the Prospectus and/or SAI of the Trust with respect to
Shares.
5. SUSPENSION OF SALES. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for Shares shall be processed by the Distributor, except such
unconditional orders placed with the Distributor before it had
knowledge of the suspension. In addition, the Trust reserves the right
to suspend sales of Shares and the Distributor's authority to sell
Shares if, in the judgement of the Trust, it is in the best interest
of the Trust to do so. Suspension will continue for such period as may
be determined by the Trust. In addition, the Trust and Distributor
reserve the right to reject any purchase order.
6. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for Shares of
the Trust. This shall not prevent the Distributor from entering into
like arrangements (including arrangements involving the payment of
underwriting commissions) with other issuers. Distributor agrees to
use all reasonable efforts to ensure that taxpayer identification
numbers provided for holders of Shares of the Trust are correct. In
addition, Distributor (in coordination with investment advisers
retained by the Trust) will be responsible for the production of
marketing and advertising materials for the sale of Shares of the
Trust and the review thereof for compliance with applicable regulatory
requirements, entering into other agreements with broker-dealers, if
any, to sell Shares of the Trust and monitoring their financial
strength and contractual compliance.
7. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized by the
Trust to give any information or to make any representations other
than those contained in the appropriate registration statements,
Prospectuses or SAIs filed with the Securities and Exchange Commission
under the 1933 Act (as those registration statements, Prospectuses and
SAIs may be amended from time to time), or contained in shareholder
reports or other material that may be prepared by or on behalf of the
Trust for the Distributor's use. This shall not be construed to
prevent the Distributor from preparing and distributing, in compliance
with applicable laws and regulations, sales literature or other
material as it may deem appropriate. Distributor will furnish or cause
to be furnished copies of such sales literature or other material to
the Trust. Distributor agrees to take appropriate action to cease
using such sales literature or other material to which the Trust
reasonably objects as promptly as practicable after receipt of the
objection. Distributor further agrees that, in connection with the
offer and sale of Shares, Distributor shall comply with all applicable
securities laws of the United States and each state thereof in which
Shares are offered and/or sold (including without limitation, the
maintenance of effective federal and state broker-dealer
registrations, as required).
8. REGISTRATION OF SHARES. The Trust agrees that it will use its best
efforts to register Shares under the 1933 Act (subject to the
necessary approval, if any, of its shareholders) and to qualify and
maintain the registration and qualification of an appropriate number
of shares under the 1933 Act so that there will be available for sale
the number of Sales the Distributor may reasonably be expected to
sell. Distributor shall furnish such information and other materials
relating to its affairs and activities as shall be required by the
Trust in connection with such registration and qualification. The
Distributor agrees that it will not offer or sell Shares in any
jurisdiction unless the offer or sale of Shares has been so qualified
or registered or is otherwise exempt from such registration or
qualification. The Trust 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 each series of the Trust.
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Distribution Agreement
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9. EXPENSES, COMPENSATION AND REIMBURSEMENT.
(a) The Trust shall pay all fees and expenses:
(i) in connection with the preparation, setting in type and
filing of any registration statement, Prospectus and SAI
under the 1933 Act, and any amendments thereto, for the
issue of its Shares;
(ii) in connection with the registration and qualification of
Shares for sale in states in which the Board of Trustees
(the "Trustees") of the Trust shall determine it advisable
to qualify such Shares for sale (including registering the
Trust as a broker or dealer or any officer of the Trust as
agent or salesperson in any such location);
(iii)of preparing, setting in type, printing and mailing any
report or other communication to holders of Shares of the
Trust in their capacity as such; and
(iv) of preparing, setting in type, printing and mailing
Prospectuses, SAIs, and any supplements thereto, sent to
existing holders of Shares.
(b) The Distributor shall pay cost of:
(i) printing and distributing Prospectuses, SAIs and reports
prepared for its use in connection with the offering of the
Shares for sale to the public;
(ii) any other literature used in connection with such offering;
(iii)advertising in connection with such offering including, but
not limited to the following: public relations services,
sales presentations, media charges, preparation, printing
and mailing of advertising and sales literature, data
processing necessary to distribution effort, printing and
mailing of prospectuses; and
(iv) any additional out-of-pocket expenses incurred in connection
with these costs.
10. INDEMNIFICATION.
(a) The Trust agrees to indemnify and hold harmless the Distributor
and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of
the 1933 Act against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damage or expense
and reasonable counsel fees incurred in connection therewith)
arising out of or based upon: (i) any violation of the Trust's
representations or covenants herein contained; (ii) any wrongful
act of the Trust or any of its representatives (other than the
Distributor or any of its employees or representatives
(regardless of the capacity in which such employee or
representative is acting) or any other person for whose acts the
Distributor is responsible or is alleged to be responsible
(including any selected dealer or person through whom sales are
made pursuant to an agreement with the Distributor)); (iii) any
untrue statement of a material fact contained in a registration
statement, Prospectus, SAI or shareholder report of any Fund or
any omission to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, except to the extent the statement or omission
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Distribution Agreement
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was made in reliance upon, and in conformity with, information
furnished in writing to the Trust by or on behalf of the
Distributor; or (iv) any untrue statement of a material fact
contained in any advertising material of a Fund or any omission
to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading,
to the extent that such statement or omission was made in
reliance upon, and in conformity with, information furnished to
the Distributor by the Trust. In no case (x) is the indemnity by
the Trust in favor of the Distributor or any person indemnified
to be deemed to protect the Distributor or any person against any
liability to the Trust or its security holders to which the
Distributor or such person would otherwise be subject by reason
or willful misfeasance, bad faith or ordinary negligence in the
performance of its duties or by reason of its reckless disregard
of its obligations and duties under this agreement, or (y) is the
Trust to be liable under its indemnity agreements contained in
the Section 10(a) with respect to any claim made against the
Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Trust in
writing of the claim within a reasonable time after the summons
or other first written notification giving information of the
nature of the claim shall have been served upon the Distributor
or any such person or after the Distributor or such person shall
have received notice of service on any designated agent. However,
except to the extent the Trust is harmed thereby, failure to
notify the Trust of any claim shall not relieve the Trust from
any liability which it may have to the Distributor or any person
against whom such action is brought other than on account of its
indemnity agreement contained in this Section 10(a). The Trust
shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit
brought to enforce any claims, but if the Trust elects to assume
the defense, the defense shall be conducted by counsel chosen by
it and satisfactory to the Distributor, or person or persons,
defendant or defendants in the suit. In the event the Trust
elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person(s) or
defendant(s) in the suit, shall bear the fees and expenses of any
additional counsel retained by, them. If the Trust does not elect
to assume the defense of any suit, it will reimburse the
Distributor, officers or directors or controlling person(s) or
defendant(s) in the suit, for the reasonable fees and expenses of
any counsel retained by them. The Trust agrees to notify the
Distributor promptly of the commencement of any litigation or
proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of the Shares.
(b) The Distributor agrees to indemnify and hold harmless the Trust
and each of its Trustees and officers and each person, if any,
who controls the Trust within the meaning of Section 15 of the
1933 Act, against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damage or expense and reasonable
counsel fees incurred in connection therewith) arising out of or
based upon: (i) any violation of the Distributor's
representations or covenants herein contained; (ii) any wrongful
act of the Distributor or any of its employees or representatives
or any other person for whose acts the Distributor is responsible
or is alleged to be responsible (including any selected dealer or
person through whom sales are made pursuant to an agreement with
the Distributor); (iii) any untrue statement of a material fact
contained in a registration statement, Prospectus, SAI or
shareholder report of any Fund or any omission to state a
material fact required to be stated therein or necessary in order
to make the statements therein not misleading, to the extent the
statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Trust by
or on behalf of the Distributor; or (iv) any untrue statement of
a material fact contained in any advertising material of a Fund
or any omission to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, except to the extent that such statement or omission
was made in reliance upon, and in conformity with, information
furnished to the Distributor by the Trust. In no case (x) is the
indemnity by the Distributor in favor of the Trust or any person
indemnified to be deemed to protect the Trust or any person
against any liability to the Distributor or its security holders
to which the Trust or such person would otherwise be subject by
reason or
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Distribution Agreement
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willful misfeasance, bad faith or ordinary negligence in the
performance of its duties or by reason of its reckless disregard
of its obligations and duties under this agreement, or (y) is the
Distributor to be liable under its indemnity agreements contained
in the Section 10(b) with respect to any claim made against the
Trust or any person indemnified unless the Trust or person, as
the case may be, shall have notified the Distributor in writing
of the claim within a reasonable time after the summons or other
first written notification giving information of the nature of
the claim shall have been served upon the Distributor or any such
person or after the Distributor or such person shall have
received notice of service on any designated agent. However,
except to the extent the Distributor is harmed thereby, failure
to notify the Distributor of any claim shall not relieve the
Distributor from any liability which it may have to the Trust or
any person against whom such action is brought other than on
account of its indemnity agreement contained in this Section
10(b). The Distributor shall be entitled to participate at its
own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the
Distributor elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Trust,
or person or persons, defendant or defendants in the suit. In the
event the Distributor elects to assume the defense of any suit
and retain counsel, the Trust, officers or Trustees or
controlling person(s) or defendant(s) in the suit, shall bear the
fees and expenses of any additional counsel retained by, them. If
the Distributor does not elect to assume the defense of any suit,
it will reimburse the Trust, officers or Trustees or controlling
person(s) or defendant(s) in the suit, for the reasonable fees
and expenses of any counsel retained by them. The Distributor
agrees to notify the Trust promptly of the commencement of any
litigation or proceedings against it or any of its officers or
directors in connection with the issuance or sale of any of the
Shares.
(c) The indemnification obligations of the parties in this Section 10
shall survive the termination of this Agreement.
11. EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become effective
as follows: (i) with respect to the Shares of each Fund (or class
thereof) identified on Schedule A hereto on the date hereof, as of the
date hereof, and (ii) with respect to the Shares of any Fund (or class
thereof) added to Schedule A hereto, subsequent hereto, as of the date
Schedule A is amended to add such Fund or class of Shares. Unless
terminated as provided herein, the Agreement shall continue in force
for two (2) years from the date of its execution and thereafter from
year to year, provided continuance is approved at least annually by
either (i) the vote of a majority of the Trustees of the Trust, or by
the vote of a majority of the outstanding voting securities of the
Trust, and (ii) the vote of a majority of those Trustees of the Trust
who are not interested persons of the Trust and who are not parties to
this Agreement or interested persons of any party, cast in person at a
meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its
assignment. In addition to termination by failure to approve
continuance or by assignment, this Agreement may at time be terminated
without the payment of any penalty with respect to any Fund or class
of Shares thereof by vote of a majority of the Trustees of the Trust
who are not interested persons of the Trust, or by vote of a majority
of the outstanding voting securities of the Trust, on not more than
sixty (60) days written notice by the Trust. This Agreement may be
terminated by the Distributor upon not less than sixty (60) days prior
written notice to the Trust. As used in this Section 11, the terms
"vote of a majority of the outstanding voting securities,"
"assignment" and "interested person" shall have the respective
meanings specified in the 1940 Act and the rules enacted thereunder as
now in effect or as hereafter amended.
12. NOTICE. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail,
postage prepaid, to the other party to this Agreement at its principal
place of business.
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Distribution Agreement
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13. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
14. GOVERNING LAW. To the extent that state law has not been preempted by
the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the State of Texas.
15. LIMITATION OF LIABILITY. The Distributor acknowledges that it has
received notice of and accepts the limitations set forth in the
Trust's Amended and Restated Master Trust Agreement. The Distributor
agrees that the Trust's obligations hereunder shall be limited to the
Trust, and that the Distributor shall have recourse solely against the
assets of the Fund with respect to which the Trust's obligations
hereunder relate and shall have no recourse against the assets of any
other Fund or against any shareholder, Trustee, officer, employee or
agent of the Trust.
16. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed in two counterparts, each of
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
U.S. GLOBAL INVESTORS FUNDS U.S. GLOBAL BROKERAGE, INC.
By: By:
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxx, III
President President
Chief Executive Officer
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Distribution Agreement
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SCHEDULE A
U.S. Global Investors Funds
Portfolios and Fee Schedule
Portfolios covered by Distribution Agreement:
Gold Shares Fund
World Gold Fund
Global Resources Fund
China Region Opportunity Fund
All American Equity Fund
Income Fund
Real Estate Fund
Tax Free Fund
Near-Term Tax-Free Fund
U.S. Government Securities Savings Fund
U.S. Treasury Securities Cash Fund
Fees for distribution and distribution support services on behalf of the
Portfolios:
Annual Fee: $24,000
This fee shall be paid in monthly installments of $2,000.00 each.
September 3, 1998
U.S. GLOBAL INVESTORS FUNDS U.S. GLOBAL BROKERAGE, INC.
By: By:
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxx, III
President President
Chief Executive Officer