EXHIBIT (e)(1)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into this __th day of ________, 1999
by and between American Eagle Capital Appreciation Fund (the "Fund"), a
separately managed series of American Eagle Funds, Inc., a Minnesota corporation
(the "Company"), and U.S. Growth Investments, Inc., a Minnesota corporation (the
"Distributor"), which is an affiliate of Xxxxx Associates, Inc., the investment
adviser to the Fund.
W I T N E S S E T H:
1. DISTRIBUTION SERVICES. The Company, on behalf of the Fund, hereby
engages the Distributor, and the Distributor hereby agrees to act, as principal
underwriter for the Fund in the sale and distribution to the public of the
Fund's shares of common stock, $.01 par value (the "Shares"), either through
dealers or otherwise. The Distributor agrees to offer such Shares for sale at
all times when such Shares are available for sale and may lawfully be offered
for sale and sold.
2. SALE OF FUND SHARES. Such Shares are to be sold only on the
following terms:
(a) All subscriptions, offers or sales shall be subject to
acceptance or rejection by the Fund. Any offer or sale shall be
conclusively presumed to have been accepted by the Fund if the Fund
shall fail to notify the Distributor of the rejection of such offer or
sale prior to the computation of the net asset value of the Shares next
following receipt by the Fund of notice of such offer and sale.
(b) No Share shall be sold by the Fund for any consideration
other than cash or for any amount less than the net asset value of such
Share, computed as provided in the currently effective prospectus of
the Fund (the "Net Asset Value"). All Shares sold by the Distributor
shall be sold at the public offering price, as hereinafter defined.
(c) The public offering price of the Shares shall be the Net
Asset Value thereof next determined following receipt of an order by
the Distributor.
3. INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. The Fund may extend to
its shareholders the right to purchase Shares at the Net Asset Value thereof
with the proceeds of any dividend or capital gain distribution paid or payable
with respect to such Shares.
4. REGISTRATION OF SHARES. The Fund agrees to make prompt and
reasonable efforts to effect and keep in effect, at its own expense, the
registration of or notice filings with respect to its Shares so as to permit
their sale in such jurisdictions as the Fund may designate.
5. INFORMATION TO BE FURNISHED TO DISTRIBUTOR. The Fund agrees that it
will furnish the Distributor with such information with respect to the affairs
and accounts of the Fund as the Distributor may from time to time reasonably
require, and further agrees that the Distributor, at all reasonable times, shall
be permitted to inspect the books and records of the Fund.
6. ALLOCATION OF EXPENSES. During the period of this Agreement, the
Fund shall pay or cause to be paid all expenses, costs and fees incurred by the
Fund which are not assumed by the Distributor or Xxxxx Associates, Inc. (the
"Adviser"). The Distributor shall pay all costs of distributing the Shares,
including, but not limited to, (a) any compensation paid to broker-dealers,
including the
Distributor and its registered representatives, for their sales of Shares,
including the payment of trailer commissions and the implementation of various
incentive programs with respect to broker-dealers, banks and other financial
institutions; (b) compensation paid to banks and other institutions for
providing administrative and accounting services with respect to the Fund's
shareholders; and(c) other advertising and promotional expenses in connection
with the distribution of Shares; PROVIDED, HOWEVER, that the Adviser, rather
than the Distributor, may bear the expenses referred to in this sentence, but
the Distributor shall be primarily liable for such expenses until paid.
7. LIMITATION OF DISTRIBUTOR'S AUTHORITY. The Distributor shall be
deemed to be an authorized independent contractor and, except as specifically
provided or authorized herein, shall have no authority to act for or represent
the Fund.
8. SUBSCRIPTION FOR SHARES; REFUND FOR CANCELED ORDERS. The
Distributor shall subscribe for the Shares of the Fund only for the purpose of
covering purchase orders already received by it or for the purpose of investment
for its own account. In the event that an order for the purchase of Shares is
placed with the Distributor by a customer or dealer and subsequently canceled,
the Distributor shall forthwith cancel the subscription for such Shares entered
on the books of the Fund and, if the Distributor has paid the Fund for such
Shares, shall be entitled to receive from the Fund in refund of such payment the
lesser of:
(a) the consideration received by the Fund for such Shares; or
(b) the Net Asset Value of such Shares at the time of cancellation
by the Distributor.
9. INDEMNIFICATION OF FUND. The Distributor agrees to indemnify the
Company and the Fund against any and all litigation and other legal proceedings
of any kind or nature and against any liability, judgment, cost or penalty
imposed as a result of such litigation or proceedings in any way arising out of
or in connection with the sale or distribution of the Shares of the Fund by the
Distributor. In the event of the threat or institution of any such litigation or
legal proceedings against the Company or the Fund, the Distributor shall defend
such action on behalf of the Company and the Fund at its own expense, and shall
pay any such liability, judgment, cost or penalty resulting therefrom, whether
imposed by legal authority or agreed upon by way of compromise and settlement;
PROVIDED, HOWEVER, that the Distributor shall not be required to pay or
reimburse the Company or the Fund for any liability, judgment, cost or penalty
incurred as a result of an omission to supply information by the Company or the
Fund to the Distributor, or to the Distributor by a director, officer or
employee of the Company who is not an Interested Person of the Distributor (as
defined in Section 2(a)(19) of the Investment Company Act), unless the
information so supplied or omitted was available to the Distributor or the
Fund's investment adviser without recourse to the Company or the Fund or any
such Interested Person of the Company or the Fund.
10. FREEDOM TO DEAL WITH THIRD PARTIES. The Distributor shall be free
to render to others services of a nature either similar to or different from
those rendered under this Agreement, except such as may impair its performance
of the services and duties to be rendered by it hereunder.
11. EFFECTIVE DATE. This Agreement shall become effective upon the
initial effective date of the Company's Registration Statement on Form N-1A.
Wherever referred to in this Agreement, the vote or approval of the holders of a
majority of the outstanding Shares of the Fund shall mean the vote of 67% or
more of such Shares if the holders of more than 50% of such Shares are present
in person or by proxy or the vote of more than 50% of such Shares, whichever is
less.
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12. DURATION. Unless sooner terminated as hereinafter provided, this
Agreement shall continue in effect from year to year but only so long as such
continuance is specifically approved at least annually either (a) by the Board
of Directors of the Company, including the specific approval of a majority of
the directors who are not Interested Persons of the Company or of the
Distributor, cast in person at a meeting called for the purpose of voting on
such approval; or (b) by the vote of the holders of a majority of the
outstanding Shares of the Fund.
13. TERMINATION. This Agreement may be terminated at any time without
the payment of any penalty by the vote of a majority of the members of the Board
of Directors of the Company who are not Interested Persons of the Company, or by
the Distributor, upon not more than 60 days' written notice to the other party.
This Agreement may be terminated without the payment of any penalty by the vote
of the holders of a majority of the outstanding Shares of the Fund, upon 60
days' written notice to the Distributor. This Agreement shall automatically
terminate in the event of its assignment.
14. AMENDMENTS TO AGREEMENT. No material amendment to this Agreement
shall be effective until approved by the Distributor and by the vote of a
majority of the Board of Directors of the Company who are not Interested Persons
of the Distributor.
15. NOTICES. Any notices under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for the receipt of such
notice.
IN WITNESS WHEREOF, the Fund and the Distributor have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
AMERICAN EAGLE FUNDS, INC.
By
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Its
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U.S. GROWTH INVESTMENTS, INC.
By
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Its
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