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EXHIBIT 5(b)
CLASS A SHARES
DISTRIBUTION AGREEMENT
AGREEMENT made as of ____, 1998 between MERCURY ASSET
MANAGEMENT FUNDS, INC., a Maryland corporation (the "Corporation"), on behalf
of its series Mercury International Fund (the "Fund") and MERCURY FUNDS
DISTRIBUTOR, a division of PRINCETON FUNDS DISTRIBUTOR, INC., a Delaware
corporation (the "Distributor").
W I T N E S S E T H :
WHEREAS, the Directors of the Corporation (the "Directors")
are authorized to establish separate series relating to separate portfolios of
securities, each of which may offer separate classes of shares of common stock,
par value $0.0001 per share; and
WHEREAS, the Directors have established and designated the
Fund as a series of the Corporation, offering separate classes of shares of
common stock, as described above; and
WHEREAS, the Corporation is registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), as an open-end
investment company, and it is affirmatively in the interest of the Fund to
offer its shares for sale continuously; and
WHEREAS, the Distributor is a securities firm engaged in the
business of selling shares of investment companies either directly to
purchasers or through other securities dealers; and
WHEREAS, the Corporation and the Distributor wish to enter
into an agreement with each other with respect to the continuous offering of
Class A shares of common stock in the Fund;
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NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor. The Corporation
hereby appoints the Distributor as the Fund's principal underwriter and
distributor to sell the Class A shares of common stock in the Fund (sometimes
herein referred to as "Class A Shares") to the public and hereby agrees during
the term of this Agreement to sell the Class A Shares to the Distributor upon
the terms and conditions herein set forth.
Section 2. Exclusive Nature of Duties. The Distributor shall
be the Fund's exclusive representative to act as principal underwriter and
distributor of the Class A Shares, except that:
a. The Corporation may, upon written notice to the
Distributor, from time to time designate other principal underwriters and
distributors of the Class A Shares with respect to areas other than the United
States as to which the Distributor may have expressly waived in writing its
right to act as such. If such designation is deemed exclusive, the right of
the Distributor under this Agreement to sell the Class A Shares in the areas so
designated shall terminate, but this Agreement shall remain otherwise in full
effect until terminated in accordance with the other provisions hereof.
b. The exclusive rights granted to the Distributor to
purchase Class A Shares from the Fund shall not apply to Class A Shares issued
in connection with the merger or consolidation of any other investment company
or personal holding company with the Fund or the Fund's acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding Class
A shares of any such company.
c. Such exclusive rights also shall not apply to Class A
Shares issued by the Fund pursuant to reinvestment of dividends or capital
gains distributions.
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d. Such exclusive rights also shall not apply to Class A
Shares issued by the Fund pursuant to any conversion, exchange or reinstatement
privilege afforded redeeming shareholders or to any other Class A Shares as
shall be agreed between the Corporation and the Distributor from time to time.
Section 3. Purchase of Class A Shares from the Corporation.
a. Prior to the continuous offering of the Class A Shares,
commencing on a date agreed upon by the Corporation and the Distributor, it is
contemplated that the Distributor will solicit subscriptions for Class A Shares
during a subscription period which shall last for such period as may be agreed
upon by the parties hereto. The subscriptions will be payable within three
business days after the termination of the subscription period, at which time
the Fund will commence operations.
b. After the Fund commences operations, the Fund will
commence an offering of Class A Shares and thereafter the Distributor shall
have the right to buy from the Corporation the Class A Shares needed, but not
more than the Class A Shares needed (except for clerical errors in
transmission) to fill unconditional orders for Class A Shares placed with the
Distributor by eligible investors or securities dealers. Investors eligible to
purchase Class A Shares shall be those persons so identified in the currently
effective prospectus and statement of additional information of the Fund (the
"prospectus" and "statement of additional information," respectively) under the
Securities Act of 1933, as amended (the "Securities Act"), relating to such
Class A Shares. The price that the Distributor shall pay for the Class A
Shares so purchased from the Fund shall be the net asset value, determined as
set forth in Section 3(e) hereof, used in determining the public offering price
on which such orders were based.
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c. The Class A Shares are to be resold by the Distributor to
investors at the public offering price, as set forth in Section 3(d) hereof, or
to securities dealers having agreements with the Distributor upon the terms and
conditions set forth in Section 7 hereof.
d. The public offering price(s) of the Class A Shares, i.e.,
the price per share at which the Distributor or selected dealers may sell Class
A Shares to the public shall be the public offering price as set forth in the
prospectus and statement of additional information relating to such Class A
Shares, but not to exceed the net asset value at which the Distributor is to
purchase the Class A Shares, plus a sales charge not to exceed 5.25% of the
public offering price (5.54% of the net amount invested), subject to reductions
for volume purchases. Class A Shares may be sold to certain Directors,
officers and employees of the Corporation, directors and employees of Xxxxxxx
Xxxxx & Co., Inc. and its subsidiaries, and to certain other persons described
in the prospectus and statement of additional information, without a sales
charge or at a reduced sales charge, upon terms and conditions set forth in the
prospectus and statement of additional information. If the public offering
price does not equal an even cent, the public offering price may be adjusted to
the nearest cent. All payments to the Fund hereunder shall be made in the
manner set forth in Section 3(g).
e. The net asset value of the Class A Shares shall be
determined by the Corporation or any agent of the Corporation in accordance
with the method set forth in the Fund's prospectus and statement of additional
information and guidelines established by the Directors.
f. The Corporation shall have the right to suspend the sale
of Class A Shares at times when redemption is suspended pursuant to the
conditions set forth in Section 4(b) hereof. The Corporation shall also have
the right to suspend the sale of Class A Shares if trading on the New
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York Stock Exchange shall have been suspended, if a banking moratorium shall
have been declared by Federal or New York authorities, or if there shall have
been some other event that, in the judgment of the Corporation, makes it
impracticable or inadvisable to sell the Class A Shares.
g. The Corporation, or any agent of the Corporation
designated in writing by the Corporation, shall be promptly advised of all
purchase orders for Class A Shares received by the Distributor. Any order may
be rejected by the Corporation; provided, however, that the Corporation will
not arbitrarily or without reasonable cause refuse to accept or confirm orders
for the purchase of Class A Shares. The Corporation (or its agent) will
confirm orders upon their receipt, will make appropriate book entries and, upon
receipt by the Corporation (or its agent) of payment therefor, will deliver
deposit receipts or certificates for such Class A Shares pursuant to the
instructions of the Distributor. Payment shall be made to the Corporation in
New York Clearing House funds. The Distributor agrees to cause such payment
and such instructions to be delivered promptly to the Corporation (or its
agent).
Section 4. Repurchase or Redemption of Class A Shares by the
Corporation.
a. Any of the outstanding Class A Shares may be tendered for
redemption at any time, and the Fund agrees to repurchase or redeem the Class A
Shares so tendered in accordance with its obligations as set forth in Article
VI of the Corporation's Articles of Incorporation, as amended from time to
time, and in accordance with the applicable provisions set forth in the
prospectus and statement of additional information relating to the Fund. The
price to be paid to redeem or repurchase the Class A Shares shall be equal to
the net asset value calculated in accordance with the provisions of Section
3(e) hereof, less any contingent deferred sales charge ("CDSC"), redemption fee
or other charge(s), if any, set forth in the prospectus and statement of
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additional information relating to the Fund. All payments by the Fund
hereunder shall be made in the manner set forth below. The redemption or
repurchase by the Fund of any of the Class A Shares purchased by or through the
Distributor will not affect the sales charge secured by the Distributor or any
selected dealer in the course of the original sale, except that if any Class A
Shares are tendered for redemption or repurchase within seven business days
after the date of the confirmation of the original purchase, the right to the
sales charge shall be forfeited by the Distributor and the selected dealer that
sold such Class A Shares.
The Fund shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of the Distributor
in New York Clearing House funds on or before the seventh business day
subsequent to its having received the notice of redemption in proper form. The
proceeds of any redemption of Class A Shares shall be paid by the Fund as
follows: (i) any applicable CDSC shall be paid to the Distributor, and (ii)
the balance shall be paid to or for the account of the shareholder, in each
case in accordance with the applicable provisions of the prospectus and
statement of additional information.
b. Redemption of Class A Shares or payment may be suspended
at times when the New York Stock Exchange is closed, when trading on said
Exchange is closed, when trading on said Exchange is suspended, when trading on
said Exchange is restricted, when an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably practicable or
it is not reasonably practicable for the Corporation fairly to determine the
value of the net assets of the Fund, or during any other period when the
Securities and Exchange Commission, by order, so permits.
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Section 5. Duties of the Corporation.
a. The Corporation shall furnish to the Distributor copies of
all information, financial statements and other papers that the Distributor may
reasonably request for use in connection with the distribution of Class A
Shares, and this shall include, upon request by the Distributor, one certified
copy of all financial statements prepared for the Corporation by independent
public accountants. The Corporation shall make available to the Distributor
such number of copies of the Fund's prospectus and statement of additional
information as the Distributor shall reasonably request.
b. The Corporation shall take, from time to time, but subject
to any necessary approval of the Fund's Class A shareholders, all necessary
action to fix the number of authorized Class A Shares and such steps as may be
necessary to register the same under the Securities Act to the end that there
will be available for sale such number of Class A Shares as the Distributor
reasonably may be expected to sell.
c. The Corporation shall use its best efforts to qualify and
maintain the qualification of an appropriate number of the Class A Shares for
sale under the securities laws of such states as the Distributor and the
Corporation may approve. Any such qualification may be withheld, terminated or
withdrawn by the Corporation at any time in its discretion. As provided in
Section 8(c) hereof, the expense of qualification and maintenance of
qualification shall be borne by the Fund. The Distributor shall furnish such
information and other material relating to its affairs and activities as may be
required by the Corporation in connection with such qualification.
d. The Corporation will furnish, in reasonable quantities
upon request by the Distributor, copies of the Fund's annual and interim
reports.
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Section 6. Duties of the Distributor.
a. The Distributor shall devote reasonable time and effort to
effect sales of Class A Shares but shall not be obligated to sell any specific
number of Class A Shares. The services of the Distributor to the Corporation
hereunder are not to be deemed exclusive and nothing herein contained shall
prevent the Distributor from entering into like arrangements with other
investment companies so long as the performance of its obligations hereunder is
not impaired thereby.
b. In selling the Class A Shares, the Distributor shall use
its best efforts in all respects duly to conform with the requirements of all
Federal and state laws relating to the sale of such securities. Neither the
Distributor nor any selected dealer, as defined in Section 7 hereof, nor any
other person is authorized by Corporation to give any information or to make
any representations, other than those contained in the registration statement
or related prospectus and statement of additional information and any sales
literature specifically approved by the Corporation.
c. The Distributor shall adopt and follow procedures, as
approved by the officers of the Corporation, for the confirmation of sales to
investors and selected dealers, the collection of amounts payable by investors
and selected dealers on such sales, and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of the
National Association of Securities Dealers, Inc. (the "NASD"), as such
requirements may from time to time exist.
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Section 7. Selected Dealer Agreements.
a. The Distributor shall have the right to enter into
selected dealer agreements with securities dealers of its choice ("selected
dealers") for the sale of Class A Shares and fix therein the portion of the
sales charge that may be allocated to the selected dealers; provided, that the
Corporation shall approve the forms of agreements with dealers and the dealer
compensation set forth therein. Class A Shares sold to selected dealers shall
be for resale by such dealers only at the public offering price(s) set forth in
the prospectus and statement of additional information. The form of agreement
with selected dealers to be used during the subscription period described in
Section 3(a) is attached hereto as Exhibit A and the form of agreement with
selected dealers to be used in the continuous offering of the Class A Shares is
attached hereto as Exhibit B.
b. Within the United States, the Distributor shall offer and
sell Class A Shares only to such selected dealers as are members in good
standing of the NASD.
Section 8. Payment of Expenses.
a. The Fund shall bear all costs and expenses of the Fund, as
incurred, including fees and disbursements of its counsel and auditors, in
connection with the preparation and filing of any required registration
statements and/or prospectuses and statements of additional information under
the Investment Company Act, the Securities Act, and all amendments and
supplements thereto, and preparing and mailing annual and interim reports and
proxy materials to Class A shareholders (including but not limited to the
expense of setting in type any such registration statements, prospectuses,
statements of additional information, annual or interim reports or proxy
materials).
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b. The Distributor shall be responsible for any payments made
to selected dealers as reimbursement for their expenses associated with
payments of sales commissions to financial consultants. In addition, after the
prospectuses, statements of additional information and annual and interim
reports have been prepared and set in type, the Distributor shall bear the
costs and expenses of printing and distributing any copies thereof to be used
in connection with the offering of Class A Shares to selected dealers or
investors pursuant to this Agreement. The Distributor shall bear the costs and
expenses of preparing, printing and distributing any other literature used by
the Distributor or furnished by it for use by selected dealers in connection
with the offering of the Class A Shares for sale to the public and any expenses
of advertising incurred by the Distributor in connection with such offering.
It is understood and agreed that so long as the Class A Shares Distribution
Plan pursuant to Rule 12b-1 under the Investment Company Act remains in effect,
any expenses incurred by the Distributor hereunder in connection with account
maintenance activities may be paid from amounts recovered by it from the Fund
under such plan.
c. The Fund shall bear the cost and expenses of qualification
of the Class A Shares for sale pursuant to this Agreement and, if necessary or
advisable in connection therewith, of qualifying the Corporation as a broker or
dealer in such states of the United States or other jurisdictions as shall be
selected by the Corporation and the Distributor pursuant to Section 5(c) hereof
and the cost and expenses payable to each such state for continuing
qualification therein until the Fund decides to discontinue such qualification
pursuant to Section 5(c) hereof.
Section 9. Indemnification.
a. The Fund shall indemnify and hold harmless the Distributor
and each person, if any, who controls the Distributor against any loss,
liability, claim, damage or expense (including the
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reasonable cost of investigating or defending any alleged loss, liability,
claim, damage or expense and reasonable counsel fees incurred in connection
therewith), as incurred, arising by reason of any person acquiring any Class A
Shares, which may be based upon the Securities Act, or on any other statute or
at common law, on the ground that the registration statement or related
prospectus and statement of additional information, as from time to time
amended and supplemented, or an annual or interim report to the Fund's Class A
shareholders, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission was made
in reliance upon, and in conformity with, information furnished to the Fund in
connection therewith by or on behalf of the Distributor; provided, however,
that in no case (i) is the indemnity of the Fund in favor of the Distributor
and any such controlling persons to be deemed to protect such Distributor or
any such controlling persons thereof against any liability to the Fund or its
security holders to which the Distributor or any such controlling persons would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of their duties or by reason of the reckless
disregard of their obligations and duties under this Agreement; or (ii) is the
Fund to be liable under its indemnity agreement contained in this paragraph
with respect to any claim made against the Distributor or any such controlling
persons, unless the Distributor or such controlling persons, as the case may
be, shall have notified the Fund in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Distributor or such controlling persons
(or after the Distributor or such controlling persons shall have received
notice of such service on any designated agent), but failure to notify the Fund
of any
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such claim shall not relieve it from any liability that it may have to the
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Fund will 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 such liability, but if the Fund
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Distributor or such controlling person or
persons, defendant or defendants in the suit. In the event the Fund elects to
assume the defense of any such suit and retain such counsel, the Distributor or
such controlling person or persons, defendant or defendants in the suit shall
bear the fees and expenses, as incurred, of any additional counsel retained by
them, but in case the Fund does not elect to assume the defense of any such
suit, it will reimburse the Distributor or such controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses, as
incurred, of any counsel retained by them. The Fund shall promptly notify the
Distributor 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 Class A Shares.
b. The Distributor shall indemnify and hold harmless the
Corporation and each of its Directors and officers, the Fund, and each person,
if any, who controls the Corporation against any loss, liability, claim, damage
or expense, as incurred, described in the foregoing indemnity contained in
subsection (a) of this Section, but only with respect to statements or
omissions made in reliance upon, and in conformity with, information furnished
to the Fund in writing by or on behalf of the Distributor for use in connection
with the registration statement or related prospectus and statement of
additional information, as from time to time amended, or the annual
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or interim reports to Class A shareholders. In case any action shall be
brought against the Corporation or any person so indemnified, in respect of
which indemnity may be sought against the Distributor, the Distributor shall
have the rights and duties given to the Corporation, and the Corporation and
each person so indemnified shall have the rights and duties given to the
Distributor by the provisions of subsection (a) of this Section 9.
Section 10. Fee-Based Programs Offered by the Fund's
Investment Adviser or Its Affiliates. In connection with certain fee-based
programs offered by the Fund's investment adviser or its affiliates, the
Distributor and its affiliates are authorized to offer and sell shares of the
Fund, as agent for the Corporation, to participants in such program. The terms
of this Agreement shall apply to such sales, including terms as to the offering
price of Class I Shares, the proceeds to be paid to the Fund, the duties of the
Distributor, the payment of expenses and indemnification obligations of the
Fund and the Distributor.
Section 11. Duration and Termination of this Agreement.
This Agreement shall become effective as of the date first above written and
shall remain in force for two years and thereafter, but only for so long as
such continuance is specifically approved at least annually by (i) the
Directors or by the vote of a majority of the outstanding Class A voting
securities of the Fund and (ii) by the vote of a majority of those Directors
who are not parties to this Agreement or interested persons of any such party
cast in person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the
payment of any penalty, by the Directors or by vote of a majority of the
outstanding Class A voting securities of the Fund, or
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by the Distributor, on sixty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.
The terms "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person" and "interested person," when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act.
Section 12. Amendments of this Agreement. This Agreement may
be amended by the parties only if such amendment is specifically approved by
(i) the Directors or by the vote of a majority of outstanding Class A voting
securities of the Fund and (ii) by the vote of a majority of those Directors
who are not parties to this Agreement or interested persons of any such party
cast in person at a meeting called for the purpose of voting on such approval.
Section 13. Governing Law. The provisions of this Agreement
shall be construed and interpreted in accordance with the laws of the State of
New York as at the time in effect and the applicable provisions of the
Investment Company Act. To the extent that the applicable law of the State of
New York, or any of the provisions herein, conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
MERCURY ASSET MANAGEMENT FUNDS, INC.
on behalf of its series,
MERCURY INTERNATIONAL FUND
By
------------------------
Title:
MERCURY FUNDS DISTRIBUTOR, a division of
PRINCETON FUNDS DISTRIBUTOR, INC.
By
-----------------------
Title:
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EXHIBIT A
MERCURY ASSET MANAGEMENT FUNDS, INC.
ON BEHALF OF ITS SERIES,
MERCURY INTERNATIONAL FUND
CLASS A SHARES OF COMMON STOCK
SELECTED DEALER AGREEMENT
FOR SUBSCRIPTION PERIOD
Ladies and Gentlemen:
Mercury Funds Distributor, a division of Princeton
Funds Distributor, Inc. (the "Distributor") has an agreement with Mercury Asset
Management Funds, Inc., a Maryland corporation (the "Corporation"), on behalf
of its series, Mercury International Fund (the "Fund"), pursuant to which it
acts as the distributor for the sale of Class A shares of common stock of the
Fund, par value $0.0001 per share (herein referred to as "Class A Shares"), and
as such has the right to distribute Class A Shares for resale. The Corporation
is an open-end investment company registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act"), and its Class A Shares
being offered to the public are registered under the Securities Act of 1933, as
amended (the "Securities Act"). Such Class A Shares and certain of the terms
on which they are being offered are more fully described in the enclosed
Prospectus and Statement of Additional Information. You, [name of selected
dealer], have received a copy of the Class A Shares Distribution Agreement
(the "Distribution Agreement") between ourself and the Corporation and
reference is made herein to certain provisions of such Distribution Agreement.
This Agreement relates solely to the subscription period described in Section
3(a) of such Distribution Agreement. Subject to the foregoing, as principal,
we offer to sell to you, as a member of the Selected Dealers Group, Class A
Shares upon the following terms and conditions:
1. The subscription period referred to in Section 3(a)
of the Distribution Agreement will continue through ________ __, 19__. The
subscription period may be extended upon agreement between the Fund and the
Distributor. Subject to the provisions of such Section and the conditions
contained herein, we will sell to you on the third business day following the
termination of the subscription period, or such other date as we may advise
(the "Closing Date"), such number of Class A Shares as to which you have placed
orders with us not later than 5:00 P.M. on the second full business day
preceding the Closing Date.
2. In all sales of these Class A Shares to the public
you shall act as dealer for your own account, and in no transaction shall you
have any authority to act as agent for the Corporation, the Fund, for us or for
any other member of the Selected Dealers Group, except in connection with the
Xxxxxxx Xxxxx Mutual Fund Adviser program and such other special
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programs as we from time to time agree in which case you shall have authority
to offer and sell Class A Shares, as agent for the Corporation, to participants
in such program.
3. Except as provided in Paragraph 4, below, the public
offering prices, sales charges and the related Selected Dealers' concession are
as follows:
Subscription Period
-------------------
Securities Dealers'
Sales Charge Concession
------------ ----------
Percentage* Percentage*
Public of Public of Public
Offering Dollar Offering Dollar Offering
Price Amount Price Amount Price
----- ------ ----- ------ -----
[Less than $25,000. . . . . . . . . . . . $10.554 $.554 5.25% $.554 5.25%
$25,000 but less than $50,000 . . . . . . 10.499 .499 4.75 .499 4.75
$50,000 but less than $100,000. . . . . . 10.417 .417 4.00 .417 4.00
$100,000 but less than $250,000 . . . . . 10.309 .309 3.00 .309 3.00
$250,000 but less than $1,000,000 . . . . 10.204 .204 2.00 .204 2.00
$1,000,000 and over** 10.000 .000 0.00 .000 0.00 ]
------------------
* Rounded to the nearest one-hundredth percent.
** Initial sales charges may be waived for certain classes of offers as set
forth in the Prospectus and Statement of Additional Information of the Fund.
Such purchases may be subject to a contingent deferred sales charge as set
forth in the Prospectus and Statement of Additional Information.
The proceeds per Class A Share to the Fund from the sale of all shares sold
during the subscription period will be $10.00.
The term "purchase" refers to a single purchase by an
individual, or to concurrent purchases, which in the aggregate are at least
equal to the prescribed amounts, by an individual, his spouse and their
children under the age of 21 years purchasing Class A Shares for his or their
own account and to single purchases by a trustee or other fiduciary purchasing
Class A Shares for a single trust estate or single fiduciary account although
more than one beneficiary is involved. The term "purchase" also includes
purchases by any "company" as that term is defined in the Investment Company
Act, but does not include purchases by any such company that has not been in
existence for at least six months or has no purpose other than the purchase of
Class A Shares or shares of the registered investment companies at a discount;
provided, however, that it shall not include purchases by any group of
individuals whose sole organizational nexus is that the participants therein
are credit cardholders of a company, policyholders of an insurance company,
customers of either a bank or broker-dealer or clients of an investment
adviser.
The reduced sales charges are applicable through a right of
accumulation under which certain eligible investors are permitted to purchase
Class A Shares at the offering price applicable to the total of (a) the dollar
amount then being purchased plus (b) an amount equal to the then current net
asset value or cost, whichever is higher, of the purchaser's combined holdings
of the Class I, Class A, Class B and Class C shares of the Fund and of any
other series of the
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Corporation (each, a "Mercury Fund"). For any such right of accumulation to be
made available, the Distributor must be provided at the time of purchase, by
the purchaser or you, with sufficient information to permit confirmation of
qualification, and acceptance of the purchase order is subject to such
confirmation.
The reduced sales charges are applicable to purchases
aggregating $25,000 or more of Class I shares or of Class A shares or of shares
of any other Mercury Fund made through you within a thirteen-month period
starting with the first purchase pursuant to a Letter of Intent in the form
provided in the Prospectus. A purchase not originally made pursuant to a
Letter of Intent may be included under a subsequent letter executed within 90
days of such purchase if the Distributor is informed in writing of this intent
within such 90-day period. If the intended amount of shares is not purchased
within the thirteen-month period, an appropriate price adjustment will be made
pursuant to the terms of the Letter of Intent.
You agree to advise us promptly at our request as to amounts
of any sales made by you to eligible investors qualifying for reduced sales
charges. Further information as to the reduced sales charges pursuant to the
right of accumulation or a Letter of Intent is set forth in the Prospectus and
Statement of Additional Information.
4. You shall not place orders for any of the Class A
Shares unless you have already received purchase orders for such Class A Shares
at the applicable public offering prices and subject to the terms hereof and of
the Distribution Agreement. All orders are subject to acceptance by the
Distributor or the Corporation in the sole discretion of either. The minimum
initial and subsequent purchase requirements are as set forth in the
Prospectus, as amended from time to time. You agree that you will not offer or
sell any of the Class A Shares except under circumstances that will result in
compliance with the applicable Federal and state securities laws and that in
connection with sales and offers to sell Class A Shares you will furnish to
each person to whom any such sale or offer is made a copy of the Prospectus
and, if requested, the Statement of Additional Information (as then amended or
supplemented) within three business days of receipt of request and will not
furnish to any person any information relating to the Class A Shares that is
inconsistent in any respect with the information contained in the Prospectus
and Statement of Additional Information (as then amended or supplemented) or
cause any advertisement to be published in any newspaper or posted in any
public place without our consent and the consent of the Corporation.
5. All Class A Shares purchased by Selected Dealers will
be delivered in the first instance at a settlement price computed on the basis
of all sales having been made in a purchase (as such term is defined above)
involving a public offering price of less than $25,000. All sales to you will
be deemed to have been made in such a transaction unless within 30 days after
the Closing Date you furnish to us, on forms supplied by us for the purpose, a
statement acceptable to us setting forth sales in purchases involving a public
offering price of $25,000 or more, in which case we will compute such Selected
Dealers' concessions on the basis of the information set forth in such
statement.
3
19
6. Payment for Class A Shares purchased by you is to be
made by certified or official bank check at the office of Xxxxxxx Xxxxx Funds
Distributor, Inc., X.X. Xxx 0000, Xxxxxxxxx, Xxx Xxxxxx 00000-0000, on such
date as we may advise, in New York Clearing House funds payable to the order of
Xxxxxxx Xxxxx Funds Distributor, Inc., or by federal funds wire transfer,
against delivery by us of non-negotiable share deposit receipts ("Receipts")
issued by Xxxxxxx Xxxxx Financial Data Services, Inc., as shareholder servicing
agent, acknowledging the deposit with it of the Class A Shares so purchased by
you. You agree that as promptly as practicable after the delivery of such
Class A Shares you will issue appropriate written transfer instructions to the
Corporation or to the shareholder servicing agent as to the purchasers to whom
you sold the Class A Shares.
7. If any Class A Shares sold to you under the terms of
this Agreement are repurchased by the Corporation or by us for the account of
the Corporation or are tendered for redemption within seven business days after
the Closing Date, it is agreed that you shall forfeit your right to, and refund
to us, any discount received by you on such Class A Shares.
8. No person is authorized to make any representations
concerning Class A Shares except those contained in the current Prospectus and
Statement of Additional Information of the Fund and in such printed information
subsequently issued by us or the Fund as information supplemental to such
Prospectus and Statement of Additional Information. In purchasing Class A
Shares through us you shall rely solely on the representations contained in the
Prospectus and Statement of Additional Information and supplemental information
above mentioned. Any printed information that we furnish you other than the
Fund's Prospectus and Statement of Additional Information, periodic reports
and proxy solicitation material are our sole responsibility and not the
responsibility of the Corporation or the Fund, and you agree that the
Corporation and the Fund shall have no liability or responsibility to you in
these respects unless expressly assumed in connection therewith.
9. You agree to deliver to each of the purchasers making
purchases from you a copy of the then current Prospectus at or prior to the
time of offering or sale and, if requested, the Statement of Additional
Information within three business days of receipt of request, and you agree
thereafter to deliver to such purchasers copies of the annual and interim
reports and proxy solicitation materials of the Fund. You further agree to
endeavor to obtain proxies from such purchasers. Additional copies of the
Prospectus and Statement of Additional Information, annual or interim reports
and proxy solicitation materials of the Fund will be supplied to you in
reasonable quantities upon request.
10. We reserve the right in our discretion, without
notice, to suspend sales or withdraw the offering of Class A Shares entirely.
Each party hereto has the right to cancel this Agreement upon notice to the
other party.
11. We shall have full authority to take such action as
we may deem advisable in respect of all matters pertaining to the subscription
offering. We shall be under no liability to
4
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you except for lack of good faith and for obligations expressly assumed by us
herein. Nothing contained in this paragraph is intended to operate as, and the
provisions of this paragraph shall not in any way whatsoever constitute, a
waiver by you of compliance with any provision of the Securities Act, or of the
rules and regulations of the Securities and Exchange Commission issued
thereunder.
12. You represent that you are a member of the National
Association of Securities Dealers, Inc. and, with respect to any sales in the
United States, we both hereby agree to abide by the Conduct Rules of such
Association.
13. Upon application to us, we will inform you as to the
states in which we believe the Class A Shares have been qualified for sale
under, or are exempt from the requirements of, the respective securities laws
of such states, but we assume no responsibility or obligation as to your right
to sell Class A Shares in any jurisdiction. We will file with the Department
of State in New York a Further State Notice with respect to the Class A Shares,
if necessary.
14. All communications to us should be sent to the
address below. Any notice to you shall be duly given if mailed or telegraphed
to you at the address specified by you below.
15. You agree that you will not sell any Class A Shares
to any account over which you exercise discretionary authority.
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21
16. This Agreement shall terminate at the close of
business on the Closing Date, unless earlier terminated, provided, however,
this Agreement shall continue after termination for the purpose of Section 7
hereof and for the purpose of settlement of accounts hereunder.
MERCURY FUNDS DISTRIBUTOR, a division of
PRINCETON FUNDS DISTRIBUTOR, INC.
By
----------------------------------
Title:
Please return one signed copy
of this Agreement to:
MERCURY FUNDS DISTRIBUTOR, a division of
PRINCETON FUNDS DISTRIBUTOR, INC.
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Accepted:
------------------------------------------
(Authorized Signature)
Firm Name:
--------------------------------
By:
---------------------------------------
Title:
------------------------------------
Address:
----------------------------------
------------------------------------------
Date:
-------------------------------------
6
22
EXHIBIT B
MERCURY ASSET MANAGEMENT FUNDS, INC.
ON BEHALF OF ITS SERIES,
MERCURY INTERNATIONAL FUND
CLASS A SHARES OF COMMON STOCK
SELECTED DEALER AGREEMENT
Ladies and Gentlemen:
Mercury Funds Distributor, a division of Princeton
Funds Distributor, Inc. (the "Distributor") has an agreement with Mercury Asset
Management Funds, Inc., a Maryland corporation (the "Corporation"), on behalf
of its series, Mercury International Fund (the "Fund"), pursuant to which it
acts as the distributor for the sale of Class A shares of common stock of the
Fund, par value $0.0001 per share (herein referred to as "Class A Shares") and
as such has the right to distribute Class A Shares for resale. The Corporation
is an open-end investment company registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act"), and the Class A Shares are
registered under the Securities Act of 1933, as amended (the "Securities Act").
You, [name of selected dealer], have received a copy of the Class A Shares
Distribution Agreement (the "Distribution Agreement") between ourself and the
Corporation and reference is made herein to certain provisions of such
Distribution Agreement. The terms "Prospectus" and "Statement of Additional
Information" used herein refer to the prospectus and statement of additional
information, respectively, on file with the Securities and Exchange Commission
(the "Commission") which is part of the most recent effective registration
statement pursuant to the Securities Act. We offer to sell to you, as a member
of the Selected Dealers Group, Class A Shares upon the following terms and
conditions:
1. In all sales of Class A Shares to the public, you
shall act as dealer for your own account and in no transaction shall you have
any authority to act as agent for the Corporation, the Fund, for us or for any
other member of the Selected Dealers Group, except in connection with the
Xxxxxxx Xxxxx Mutual Fund Adviser program and such other special programs as we
from time to time agree, in which case you shall have authority to offer and
sell Class A Shares, as agent for the Corporation, to participants in such
program.
2. Orders received from you will be accepted through us
only at the public offering price applicable to each order, as set forth in the
current Prospectus and Statement of Additional Information of the Fund. The
procedure relating to the handling of orders shall be subject to Section 5
hereof and instructions that we or the Corporation shall forward from time to
time to you. All orders are subject to acceptance or rejection by the
Distributor or the Corporation in the sole discretion of either. The minimum
initial and subsequent purchase requirements are as set forth in the current
Prospectus and Statement of Additional Information of the Fund.
23
3. The sales charges for sales to eligible investors,
computed as percentages of the public offering price and the amount invested,
and the related discount to Selected Dealers are as follows:
Sales Charge as Sales Charge as Discount to
Percentage* of Percentage* of the Selected Dealers as
the Offering Net Amount Percentage of the
Price Invested Offering Price
Amount of Purchase
------------------
Less than $25,000.................... 5.25% 5.54% 5.00%
$25,000 but less
than $50,000........................ 4.75 4.99 4.50
$50,000 but less
than $100,000....................... 4.00 4.17 3.75
$100,000 but less
than $250,000....................... 3.00 3.09 2.75
$250,000 but less
than $1,000,000..................... 2.00 2.04 1.80
$1,000,000 and over**................ 0.00 0.00 0.00
---------------------
* Rounded to the nearest one-hundredth percent.
** Initial sales charges will be waived for certain classes of offerees as set
forth in the current Prospectus and Statement of Additional Information of the
Fund. Such purchases may be subject to a contingent deferred sales charge as
set forth in the current Prospectus and Statement of Additional Information.
The term "purchase" refers to a single purchase by an
individual, or to concurrent purchases, that in the aggregate are at least
equal to the prescribed amounts, by an individual, his spouse and their
children under the age of 21 years purchasing Class A Shares for his or their
own account and to single purchases by a trustee or other fiduciary purchasing
Class A Shares for a single trust estate or single fiduciary account although
more than one beneficiary is involved. The term "purchase" also includes
purchases by any "company" as that term is defined in the Investment Company
Act but does not include purchases by any such company that has not been in
existence for at least six months or has no purpose other than the purchase of
Class A Shares of the Fund or Class A shares of other registered investment
companies at a discount; provided, however, that it shall not include purchases
by any group of individuals whose sole organizational nexus is that the
participants therein are credit cardholders of a company, policyholders of an
insurance company, customers of either a bank or broker-dealer or clients of an
investment adviser.
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The reduced sales charges are applicable through a right of
accumulation under which certain eligible investors are permitted to purchase
Class A Shares at the offering price applicable to the total of (a) the dollar
amount then being purchased plus (b) an amount equal to the then current net
asset value or cost, whichever is higher, of the purchaser's combined holdings
of Class I, Class A, Class B and Class C shares of the Fund and of any other
series of the Corporation (each, a "Mercury Fund"). For any such right of
accumulation to be made available, the Distributor must be provided at the time
of purchase, by the purchaser or you, with sufficient information to permit
confirmation of qualification, and acceptance of the purchase order is subject
to such confirmation.
The reduced sales charges are applicable to purchases
aggregating $25,000 or more of Class I shares or of Class A shares of any other
Mercury Fund made through you within a thirteen-month period starting with the
first purchase pursuant to a Letter of Intent in the form provided in the
Prospectus. A purchase not originally made pursuant to a Letter of Intent may
be included under a subsequent letter executed within 90 days of such purchase
if the Distributor is informed in writing of this intent within such 90-day
period. If the intended amount of shares is not purchased within the
thirteen-month period, an appropriate price adjustment will be made pursuant to
the terms of the Letter of Intent.
You agree to advise us promptly at our request as to amounts
of any sales made by you to eligible investors qualifying for reduced sales
charges. Further information as to the reduced sales charges pursuant to the
right of accumulation or a Letter of Intent is set forth in the Prospectus and
Statement of Additional Information.
4. You shall not place orders for any of the Class A
Shares unless you have already received purchase orders for such Class A Shares
at the applicable public offering prices and subject to the terms hereof and of
the Distribution Agreement. You agree that you will not offer or sell any of
the Class A Shares except under circumstances that will result in compliance
with the applicable Federal and state securities laws and that in connection
with sales and offers to sell Class A Shares you will furnish to each person to
whom any such sale or offer is made a copy of the Prospectus and, if requested,
the Statement of Additional Information (as then amended or supplemented)
within three business days of receipt of request and will not furnish to any
person any information relating to the Class A Shares that is inconsistent in
any respect with the information contained in the Prospectus and Statement of
Additional Information (as then amended or supplemented) or cause any
advertisement to be published in any newspaper or posted in any public place
without our consent and the consent of the Corporation.
5. As a selected dealer, you are hereby authorized (i)
to place orders directly with the Corporation for Class A Shares to be resold
by us to you subject to the applicable terms and conditions governing the
placement of orders by us set forth in Section 3 of the Distribution Agreement
and subject to the compensation provisions of Section 3 hereof and (ii) to
tender Class A Shares directly to the Corporation or its agent for redemption
subject to the applicable terms and conditions set forth in Section 4 of the
Distribution Agreement.
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6. You shall not withhold placing orders received from
your customers so as to profit yourself as a result of such withholding, e.g.,
by a change in the "net asset value" from that used in determining the offering
price to your customers.
7. If any Class A Shares sold to you under the terms of
this Agreement are repurchased by the Corporation or by us for the account of
the Corporation or are tendered for redemption within seven business days after
the date of the confirmation of the original purchase by you, it is agreed that
you shall forfeit your right to, and refund to us, any discount received by you
on such Class A Shares.
8. No person is authorized to make any representations
concerning Class A Shares except those contained in the current Prospectus and
Statement of Additional Information of the Fund and in such printed information
subsequently issued by us or the Fund as information supplemental to such
Prospectus and Statement of Additional Information. In purchasing Class A
Shares through us you shall rely solely on the representations contained in the
Prospectus and Statement of Additional Information and supplemental information
above mentioned. Any printed information that we furnish you other than the
Fund's Prospectus, Statement of Additional Information, periodic reports and
proxy solicitation material is our sole responsibility and not the
responsibility of the Corporation or the Fund, and you agree that the
Corporation and the Fund shall have no liability or responsibility to you in
these respects unless expressly assumed in connection therewith.
9. You agree to deliver to each of the purchasers making
purchases from you a copy of the then current Prospectus at or prior to the
time of offering or sale and, if requested, the Statement of Additional
Information within three business days of receipt of request, and you agree
thereafter to deliver to such purchasers copies of the annual and interim
reports and proxy solicitation materials of the Fund. You further agree to
endeavor to obtain proxies from such purchasers. Additional copies of the
Prospectus and Statement of Additional Information, annual or interim reports
and proxy solicitation materials of the Fund will be supplied to you in
reasonable quantities upon request.
10. We reserve the right in our discretion, without
notice, to suspend sales or withdraw the offering of Class A Shares entirely or
to certain persons or entities in a class or classes specified by us. Each
party hereto has the right to cancel this agreement upon notice to the other
party.
11. We shall have full authority to take such action as
we may deem advisable in respect of all matters pertaining to the continuous
offering. We shall be under no liability to you except for lack of good faith
and for obligations expressly assumed by us herein. Nothing contained in this
paragraph is intended to operate as, and the provisions of this paragraph shall
not in any way whatsoever constitute, a waiver by you of compliance with any
provision of the Securities Act, or of the rules and regulations of the
Commission issued thereunder.
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12. You represent that you are a member of the National
Association of Securities Dealers, Inc. and, with respect to any sales in the
United States, we both hereby agree to abide by the Conduct Rules of such
Association.
13. Upon application to us, we will inform you as to the
states in which we believe the Class A Shares have been qualified for sale
under, or are exempt from the requirements of, the respective securities laws
of such states, but we assume no responsibility or obligation as to your right
to sell Class A Shares in any jurisdiction. We will file with the Department
of State in New York a Further State Notice with respect to the Class A Shares,
if necessary.
14. All communications to us should be sent to the
address below. Any notice to you shall be duly given if mailed or telegraphed
to you at the address specified by you below.
15. Your first order placed pursuant to this Agreement
for the purchase of Class A Shares will represent your acceptance of this
Agreement.
MERCURY FUNDS DISTRIBUTOR, a division of
PRINCETON FUNDS DISTRIBUTOR, INC.
By:
---------------------------------------
Title:
--------------------------------------
Please return one signed copy
of this agreement to:
MERCURY FUNDS DISTRIBUTOR, a division of
PRINCETON FUNDS DISTRIBUTOR, INC.
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Accepted:
-----------------------------
(Authorized Signature)
Firm Name:
---------------------------------------
By:
---------------------------------------
Title:
---------------------------------------
Address:
---------------------------------------
Date:
---------------------------------------
5
