U.S. Global Accolade Funds
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 3rd day of September 1998, between U.S. Global
Accolade 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
U.S. Global Accolade Funds
Distribution Agreement
Page 2 of 8
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 judgment 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) and the rules and regulations of the NASD.
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
U.S. Global Accolade Funds
Distribution Agreement
Page 3 of 8
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.
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) To the extent not covered by any Trust Distribution Plan(s)
adopted pursuant to Rule 12b-1 under the 1940 Act and/or agreements between the
Trust and investment advisers providing services to the Trust, 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.
(c) Compensation. For the distribution support services provided
by the Distributor pursuant to the terms of this Agreement, the Trust shall,
pursuant to the Distribution Plan(s) adopted pursuant to Rule 12b-1 under the
1940 Act, pay the Distributor the compensation set forth in Schedule A attached
hereto, which schedule may be amended from time to time. If this Agreement
becomes effective subsequent to the first day of the month or terminates before
the last day of the month, the Trust shall pay to the Distributor a distribution
fee that is prorated for the part of the month in which the Agreement is in
effect. All rights of compensation and reimbursement under this Agreement for
services performed by the Distributor as of the termination date shall survive
the termination of this Agreement. Subject to and calculated in accordance with
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc., if during any annual period the total of (i) the
U.S. Global Accolade Funds
Distribution Agreement
Page 4 of 8
compensation payable to the Distributor and (ii) amounts payable under the
Trust's Distribution Plan exceeds 0.25% of a Fund's average daily net assets,
the Distributor will rebate that portion of its fee necessary to result in the
total of (i) and (ii) above not exceeding 0.25% of the Fund's average daily net
assets. The payment of compensation and reimbursement of expenditures is
authorized pursuant to the Trust's Distribution Plan adopted pursuant to Rule
12b-1 under the 1940 Act and is contingent upon the continued effectiveness of
the Trust's Distribution Plan.
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 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 of 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 this 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
U.S. Global Accolade Funds
Distribution Agreement
Page 5 of 8
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, but only if 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, but only if
such statement or omission was made in reliance upon, and in conformity with,
information furnished to the Trust by the Distributor. 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 of 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 this
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 Trust or any such person or after the
Trust 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.
U.S. Global Accolade Funds
Distribution Agreement
Page 6 of 8
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 one (1) year 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 any 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.
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; provided, however, Section 15 of this Agreement shall be administered,
construed an d enforced according to the laws of the State of Massachesetts.
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.
U.S. Global Accolade Funds
Distribution Agreement
Page 7 of 8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
U.S. GLOBAL ACCOLADE FUNDS U.S. GLOBAL BROKERAGE, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxx, III
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxx, III
President President
Chief Executive Officer
U.S. Global Accolade Funds
Distribution Agreement
Page 8 of 8
SCHEDULE A
U.S. Global Accolade Funds
Portfolios and Fee Schedule
Portfolios covered by Distribution Agreement:
Bonnel Growth Fund
MegaTrends Fund
Xxxxxx Xxx Global Opportunity Fund
Regent Eastern European 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 ACCOLADE FUNDS U.S. GLOBAL BROKERAGE, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxx, III
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxx, III
President President
Chief Executive Officer
