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DRAFT - 1/28/96
THE COUNTRYBASKETS INDEX FUND, INC.
SOLICITING DEALER AGREEMENT
Date: _______ __, 1996
______________________
______________________
______________________
Ladies and Gentlemen:
The CountryBaskets Index Fund, Inc. (the "Fund") is an open-end
management investment company registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), organized as a series fund and formed
as a corporation under the laws of the State of Maryland. The Fund will
consist initially of nine series (each a "Series"),1 and will issue shares
of common stock, par value $.001, of each series (the "Shares"). The Fund
will only sell and redeem Shares in aggregations of a specified number of
Shares (each a "Creation Unit") depending on the Series as set forth in
Annex I hereto. Pursuant to a Distribution Agreement between the Fund and
us (the "Distribution Agreement"), we will act as distributor (the
"Distributor") and principal underwriter of Creation Units of Shares of the
Series listed on Annex I as exclusive agent on behalf of the Fund.
Capitalized terms not defined herein shall have the meanings attributed to
them in the current prospectus and statement of additional information of
the Fund relating to the Shares.
Creation Units of Shares of each Series will be sold at net
asset value, without a sales charge, in exchange for the Fund Basket
designated for delivery on a subsequent business day for a Series and the
Cash Component. A purchase order must be preceded by a notice of intention
as provided in the Fund's current prospectus and statement of additional
information.
________________
1 Australia Index Series, France Index Series, Germany
Index Series, Hong Kong Index Series, Italy Index
Series, Japan Index Series, South Africa Index Series,
UK Index Series and US Index Series.
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In consideration of the mutual covenants contained herein, it
is hereby agreed that our respective rights and obligations shall be as
follows:
1. Role of Distributor. Pursuant to and in accordance with
the provisions of the Distribution Agreement, we will make arrangements for
securities dealers which can make the representations set forth in Section
4 of this Agreement to solicit from the public orders to purchase Creation
Units of Shares of each Series. You are hereby invited to become one of
the securities dealers referred to herein as a "Soliciting Dealer". This
will confirm our mutual agreement as to the terms and conditions applicable
to your participation as a Soliciting Dealer, such agreement to be
effective on your confirmation hereof. You understand that we are seeking
to enter into this Agreement in counterparts with you and other firms which
also may act as Soliciting Dealers. All purchases of Creation Units of
Shares from the Fund shall be effected through us in our capacity as
principal underwriter and distributor acting as agent on behalf of the
Fund. You understand that we shall have no obligation to you hereunder at
such times as we are not acting as distributor and principal underwriter
for the sale of Shares in Creation Unit aggregations.
2. Role of Soliciting Dealers. (a) As a Soliciting Dealer,
you shall offer and solicit purchase orders for Creation Units of Shares.
As, when and if you generate a customer request for the purchase of
Creation Units of Shares of any Series and you determine to transmit such
request to us, you shall comply with the procedures for the purchase of
Creation Units of Shares set forth in the then current prospectus and
statement of additional information of the Fund. You shall be responsible
for opening, approving and monitoring customer accounts and for the review
and supervision of these accounts, all in accordance with the rules of the
Securities and Exchange Commission ("SEC") and the National Association of
Securities Dealers, Inc. (the "NASD"). You understand that all orders for
the purchase of Creation Units of Shares of each Series must be placed with
us and may be placed only through an Authorized Participant that has
entered into an Authorized Participant Agreement with us and the Fund.
During any period you are an Authorized Participant, you may submit
purchase orders to us in such capacity. Your duties and obligations as an
Authorized Participant are determined by the terms and conditions of the
Authorized Participant Agreement and not pursuant hereto. The procedures
relating to orders and the handling thereof will be subject to the terms of
the then current prospectus and statement of additional information of the
Fund, the Authorized
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Participant Agreement and instructions in writing received by you from us
or the Fund's transfer agent from time to time. No conditional orders will
be accepted. No Creation Units of Shares shall be issued except upon
receipt of the consideration therefor. If payment for any purchase order
is not received in accordance with the terms of the then current prospectus
and statement of additional information, we reserve the right, without
notice, to cancel the sale and to hold you responsible for any loss
sustained as a result thereof. Unless otherwise mutually agreed in
writing, each transaction shall be promptly confirmed in writing to the
customer on a fully disclosed basis and a copy of each confirmation shall
be sent simultaneously to you. You agree that upon receipt of duplicate
confirmations you will examine the same and promptly notify us of any
errors or discrepancies which you discover and shall promptly bring to our
attention and the Fund's any errors in such confirmations claimed by your
customers.
(b) You agree to offer Shares in Creation Unit size
aggregations to the public at the then current public offering price per
Share (i.e. the net asset value per Share) as set forth in the then current
prospectus and statement of additional information for the Shares, as the
same may be amended or supplemented. All orders are subject to acceptance
or rejection by us or the Fund in our or its sole discretion.
(c) Subject to the requirements of applicable law and
regulations, nothing in this Agreement shall be construed to prohibit or
restrict your purchasing or selling for your own account Creation Unit
aggregations of Shares, whether as agent or principal. Nothing herein
shall be deemed to constitute you or any other Soliciting Dealer as agent
for the Fund, for us, or any other Soliciting Dealer. You agree not to act
as our agent and not to claim to act as our agent or as agent of any of the
foregoing.
3. Information.
We will furnish you, without charge, the Fund's current
prospectus and statement of additional information and copies of sales
materials relating to the offer and sale of Creation Units of Shares
approved and filed with the NASD by us ("Fund Sales Materials") in such
quantities as are reasonably requested by you and made available to us by
the Fund or are supplied by us under a marketing agreement between the Fund
and us (the "Marketing Agreement") for use in connection with the offer and
sale of Creation Units of Shares. You agree to the use of your name
therein as a Soliciting Dealer in accordance with Annex II hereto. Such
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Fund Sales Materials, as prepared pursuant to the Marketing Agreement or
otherwise on behalf of the Fund, are expected to include materials suitable
for institutional marketing efforts, including conferences, road shows and
institutional advertisements and/or "tombstones" related to the initial
public offering of Creation Units of Shares. Under this Agreement you will
not act for us, the Fund or the Investment Adviser, nor make any
representation on our behalf or the Fund's, or as authorized by us, the
Fund or the Investment Adviser, and in offering and selling Creation Units
of Shares hereunder you may rely only upon, the Fund's then current
prospectus and statement of additional information and the Fund Sales
Materials, provided that you are authorized to prepare and use at your own
cost and expense other brochures, advertisements (in print or other format)
or similar materials in connection with your solicitation of purchases of
Creation Units of Shares which may constitute "sales literature" within the
meaning of Section 24(b) of the 1940 Act ("Other Soliciting Materials"),
but only if such Other Soliciting Materials (i) are prepared in compliance
with all applicable NASD and SEC rules and regulations, (ii) provided to
us a reasonable time prior to their intended use and (iii) are not used
until approved by us and the Fund and filed by us with the NASD. You
understand that the Fund will not be advertised or marketed as an open-end
investment company, i.e., as a mutual fund, which offers redeemable
securities. Any advertising materials, including the Fund prospectus, will
prominently disclose that the CB Shares(TM) are not redeemable units of
beneficial interest in the Fund. In addition, any advertising material,
including the Fund prospectus, will disclose that the owners of CB
Shares(TM) may acquire and tender those shares for redemption to the Fund
in Creation Unit aggregations only.
4. Representations.
(a) You represent to us as follows, and agree to abide by all
of the rules and regulations of the NASD, including, without limitation,
the following provisions of its Rules of Fair Practice, except as otherwise
permitted by the NASD as set forth in writing, a copy of which shall be
provided to you by us:
(i) you will not withhold placing customers' orders for any
Creation Units of Shares so as to profit yourself as a result of such
withholding;
(ii) you shall not, as principal, purchase any Shares from a
record holder at a price lower than the net asset value next computed
by or for the Fund in
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accordance with the provisions of the 1940 Act; nothing in this
subparagraph shall prevent you from redeeming a Creation Unit
aggregation of Shares for the account of a record holder at the net
asset value then quoted by or for the Fund and charging the investor
a fair commission or administrative fee for handling the transaction;
(iii) you are familiar with Rule 15c2-8 under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), Section 4(3) of
the Securities Act of 1933, as amended (the "1933 Act"), and Section
24(d) of the 1940 Act relating to the distribution and delivery of
preliminary and final prospectuses and agree that you will comply
therewith;
(iv) you are a member in good standing of the NASD or, if you
are not such a member, you are a foreign bank, dealer or institution
not eligible for membership in the NASD which agrees to make no sale
within the United States, its territories or its possessions or to
persons who are citizens thereof or residents therein, and in making
other sales to comply, as though you were a member of NASD, with the
provisions of Sections 8, 24 and 36 of Article III of the Rules of
Fair Practice of the NASD and with Section 25 thereof as that Section
applies to a non-NASD member broker or dealer in a foreign country.
(b) You agree that your expulsion from the NASD will
automatically terminate this Agreement.
(c) You agree to comply with any rules of the New York Stock
Exchange or such other secondary market or markets as has or have been
approved by an order of the SEC for the trading of the Shares. You
acknowledge that you have been provided a copy of the conditions of the SEC
order in accordance with which the Shares are offered.
(d) We represent to you that we are a member in good standing
of the NASD and agree to abide by all of the NASD's rules and regulations.
5. Expenses; No Compensation. Unless otherwise specifically
provided for in this Agreement, you shall bear all of your own costs and
expenses in connection with your acting as a Soliciting Dealer, it being
understood that we and the Fund shall bear our and the Fund's respective
costs and expenses as set forth in the Distribution Agreement. You shall
not be required to bear any of the costs or expenses assumed by us or any
other Soliciting Dealer except
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as provided for herein or as you may have agreed with another Soliciting
Dealer. You shall be obligated to pay for the cost of printing and
delivering all prospectuses requested by you other than as provided
pursuant to Section 3 of this Agreement. No compensation shall be due to
you from us or the Fund hereunder.
6. Compliance.
(a) You agree that your activities pursuant to this Agreement
will be at all times in conformity in all material respects with all
applicable federal and state laws, rules and regulations, including without
limitation, the 1933 Act, the 1934 Act, the 1940 Act and the Rules of Fair
Practice of the NASD (as provided in Section 4 hereof). In connection with
offers to sell and sales of Shares of each Series, you agree to deliver or
cause to be delivered to each person to whom any such offer or sale is
made, at or prior to the time of such offer or sale, a copy of the then
current prospectus and the statement of additional information of the Fund.
(b) We agree to inform you, as the Fund provides or causes to
be provided to us such information, as to the states in which we believe
Shares of the respective Series have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws thereof,
but we shall have no obligation or responsibility to make Shares of any
Series available for sale in any jurisdiction.
7. Term; Termination; Amendment. (a) This Agreement will
become effective on the date a fully executed copy of this Agreement is
received by us, and is subject to approval by the Board of Directors of the
Fund. This Agreement is terminable, without penalty, at any time by us or
by you upon 20 days' prior written notice to the other party hereto. This
Agreement will also terminate automatically in the event of its assignment
(within the meaning of the 0000 Xxx) or, unless we and the Fund consent
thereto in writing, a change in control (within the meaning of the 0000
Xxx) of the undersigned Soliciting Dealer.
(b) This Agreement may be amended in writing by the parties
hereto.
8. Suspension. All sales will be made subject to receipt of
Shares from the Fund. We and the Fund reserve the right, in our sole
discretion, without notice, to suspend sales or withdraw the offering of
sales of Creation Units of Shares of any Series entirely, including the
sale
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of such Shares to you for the account of any client or clients.
9. No Other Agreement. This Agreement shall supersede any
prior agreements between us regarding the sale of Creation Units of Shares.
10. Miscellaneous. (a) Notice. Notice shall have been duly
given if delivered by hand, mail or facsimile transmission to you, at your
address or facsimile number set forth below and (b) if to us, to ALPS
Mutual Funds Services, Inc., 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000, facsimile no. ( ) - , Attention: , or in
each case such other addresses as may be notified to the other party.
(b) Successors. Subject to Section 8 hereof, this Agreement
will inure to the benefit of and be binding upon the parties hereto and
their respective legal successors and the Fund, and no other person will
have any right or obligation hereunder.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
without giving effect to principles of conflicts of law.
Please confirm your agreement by signing and returning to us the
enclosed duplicate copies of this Agreement. Upon our acceptance hereof,
this Agreement shall constitute a valid and binding contract between us.
After our acceptance, we will deliver to you one fully executed copy of
this Agreement.
Very truly yours,
ALPS MUTUAL FUNDS SERVICES, INC.
By_____________________________
Name:
Title:
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Confirmed: ________ __, 1996
_______________________________
(Name of Soliciting Dealer)
By_____________________________
(sign name and print title)
Address: ______________________
______________________
______________________
Facsimile No.: _______________
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Annex I
Soliciting Dealer Agreement
CB Shares(TM) No. of Shares
NYSE per CUSIP
Series Symbol Creation Unit No.
Australia Index Series GXA 100,000 00000X000
France Index Series GXF 100,000 00000X000
Germany Index Series GXG 100,000 00000X000
Hong Kong Index Series GXH 100,000 00000X000
Italy Index Series GXI 100,000 00000X000
Japan Index Series GXJ 250,000 00000X000
South Africa Index GXR 100,000 00000X000
Series
UK Index Series GXK 100,000 00000X000
US Index Series GXU 100,000 00000X000
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Annex II
As a Soliciting Dealer, you agree that you may be named as such
in sales materials and presentations as follows:
Yes No
1. Institutional marketing efforts, _____ _____
including conferences, road shows and
institutional advertisements.
2. Print advertising related to the initial _____ _____
public offering of Creation Units of
Shares.
