DISTRIBUTION AGREEMENT
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This Agreement, made as of June 7, 2004, by and among American Pension
Investors Trust, a Massachusetts business trust (the "Fund"), Yorktown
Management & Research Company, Inc., a Maryland Corporation (the "Adviser"), and
Unified Financial Securities, Inc., an Indiana corporation (the "Distributor").
WHEREAS, the Fund is registered as an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, the Adviser serves as the investment adviser to the Fund; and
WHEREAS, the Distributor is a broker-dealer registered with the Securities
and Exchange Commission (the "SEC") and a member of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Fund, the Adviser and the Distributor are desirous of entering
into an agreement providing for the distribution by the Distributor of shares of
beneficial interest (the "Shares") of each series or share class of shares of
the Fund (the "Series");
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment.
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(a) The Fund hereby appoints the Distributor as its exclusive agent for
the distribution of the Shares, and the Distributor hereby accepts
such appointment under the terms of this Agreement. While this
Agreement is in force, the Fund shall not sell any Shares except on
the terms set forth in this Agreement. Notwithstanding any other
provision hereof, the Fund may terminate, suspend or withdraw the
offering of Shares whenever, in its sole discretion, it deems such
action to be desirable.
2. Sale and Repurchase of Shares.
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(a) The Distributor will have the right, as agent for the Fund, to enter
into dealer agreements with responsible investment dealers, and to
sell Shares to such investment dealers against orders therefor at the
public offering price (as defined in subparagraph 2(d) hereof) stated
in the Fund's effective Registration Statement on Form N-1A under the
Act and the Securities Act of 1933, as amended, including the then
current prospectus and statement of additional information (the
"Registration Statement"). Upon receipt of an order to purchase Shares
from a dealer with whom the Distributor has a dealer agreement, the
Distributor will promptly cause such order to be filled by the Fund.
(b) The Distributor will also have the right, as agent for the Fund, to
sell such Shares to the public against orders therefor at the public
offering price.
(c) The Distributor will also have the right to take, as agent for the
Fund, all actions which, in the Distributor's reasonable judgment, are
necessary to carry into effect the distribution of the Shares.
(d) The public offering price for the Shares of each Series shall be the
respective net asset value of the Shares of that Series then in
effect, plus any applicable sales charge determined in the manner set
forth in the Registration Statement or as permitted by the Act and the
rules and regulations of the SEC promulgated thereunder. In no event
shall any applicable sales charge exceed the maximum sales charge
permitted by the Rules of the NASD.
(e) The net asset value of the Shares of each Series shall be determined
in the manner provided in the Registration Statement, and when
determined shall be applicable to transactions as provided for in the
Registration Statement. The net asset value of the Shares of each
Series shall be calculated by the Fund or by another entity on behalf
Unified Financial Securities, Inc. 3/19/2004 API Trust - 1
of the Fund. The Distributor shall have no duty to inquire into or
liability for the accuracy of the net asset value per Share as
calculated.
(f) On every sale, the Fund shall receive the applicable net asset value
of the Shares promptly, but in no event later than the third business
day following the date on which the Distributor shall have received an
order for the purchase of the Shares.
(g) Upon receipt of purchase instructions, the Distributor will transmit
such instructions to the Fund or its transfer agent for registration
of the Shares purchased.
(h) Nothing in this Agreement shall prevent the Distributor or any
affiliated person (as defined in the Act) of the Distributor from
acting as the Distributor or distributor for any other person, firm or
corporation (including other investment companies) or in any way limit
or restrict the Distributor or any such affiliated person from buying,
selling or trading any securities for its or their own account or for
the accounts of others from whom it or they may be acting; provided,
however, that the Distributor expressly represents that it will
undertake no activities which, in its reasonable judgment, will
adversely affect the performance of its obligations to the Fund under
this Agreement.
(i) The Distributor, as agent of and for the account of the Fund, may
repurchase the Shares at such prices and upon such terms and
conditions as shall be specified in the Registration Statement.
3. Sale of Shares by the Fund.
--------------------------
The Fund reserves the right to issue any Shares at any time directly to the
holders of Shares ("Shareholders"), to sell Shares to its Shareholders or
to other persons at not less than net asset value and to issue Shares in
exchange for substantially all the assets of any corporation or trust or
for the shares of any corporation or trust.
4. Basis of Sale of Shares.
-----------------------
The Distributor does not agree to sell any specific number of Shares. The
Distributor, as agent for the Fund, undertakes to sell Shares on a best
efforts basis only against orders therefor.
5. Rules of NASD, etc.
------------------
(a) The Distributor will conform to the Rules of the NASD and the
securities laws of any jurisdiction in which it sells, directly or
indirectly, any Shares.
(b) The Distributor will require each dealer with whom the Distributor has
a dealer agreement to conform to the applicable provisions hereof and
the Registration Statement with respect to the public offering price
of the Shares, and neither the Distributor nor any such dealers shall
withhold the placing of purchase orders so as to make a profit
thereby.
(c) The Fund agrees to furnish to the Distributor sufficient copies of any
agreements, plans or other materials it intends to use in connection
with any sales of Shares in reasonably adequate time for the
Distributor, on behalf of the Fund, to file and clear them with the
proper authorities before they are put in use, and not to use them
until so filed and cleared.
(d) The Distributor, at its own expense, will qualify as dealer or broker,
or otherwise, under all applicable state or federal laws required in
order that Shares may be sold in such States as may be mutually agreed
upon by the parties.
(e) The Distributor shall not make, or permit any representative, broker
or dealer to make, in connection with any sale or solicitation of a
sale of the Shares, any representations concerning the Shares except
those contained in the then current prospectus and statement of
additional information covering the Shares and in printed information
approved by the Fund as information supplemental to such prospectus
and statement of additional information. Copies of the then effective
prospectus and statement of additional information and any such
Unified Financial Securities, Inc. 3/19/2004 API Trust - 2
printed supplemental information will be supplied by the Fund to the
Distributor in reasonable quantities upon request.
6. Records to be Supplied by the Fund.
-----------------------------------
The Fund shall furnish to the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of the Shares, and this
shall include, but shall not be limited to, one certified copy, upon
request by the Distributor, of all financial statements prepared for the
Fund by independent public accountants.
7. Fees and Expenses.
-----------------
(a) The Fund will not bear any costs or expenses incurred with respect to
distribution of shares except to the extent the Fund is permitted to
do so by applicable law. As compensation for the services rendered to
the Fund pursuant to this Agreement the Adviser shall pay the
Distributor fees determined as set forth on Exhibit A to this
Agreement. Such fees are to be billed monthly and shall be due and
payable upon receipt of the invoice. Upon any termination of this
Agreement and before the end of any month, the fee for the part of the
month before such termination shall be equal to the fee normally due
for the full monthly period and shall be payable upon the date of
termination of this Agreement.
(b) In the performance of its obligations under this Agreement, the
Distributor will pay only the costs incurred in qualifying as a broker
or dealer under state and federal laws and in establishing and
maintaining relationships with the dealers selling the Shares. All
other costs in connection with the offering of the Shares will be paid
by the Adviser (except to the extent the Fund is permitted to do so by
applicable law, in which case such costs will be paid by the Fund to
the extent so permitted) in accordance with agreements between the
Fund and the Distributor as permitted by applicable laws, including
the Act and rules and regulations promulgated thereunder.
(c) The Distributor may from time to time employ or associate with such
person or persons as may be appropriate to assist the Distributor in
the performance of this Agreement. Such person or persons may be
officers and employees who are employed or designated as officers by
both the Distributor and the Fund. The Distributor shall pay the
compensation of such person or persons for such employment and no
obligation will be incurred by or on behalf of the Fund in such
respect.
(d) The Distributor will render, after the close of each month in which
services have been furnished, a statement reflecting all of the
charges for such month payable by the Adviser or the Fund hereunder.
Charges remaining unpaid after thirty (30) days shall bear interest in
finance charges equivalent to, in the aggregate, the Prime Rate (as
publicly announced by U.S. Bank, N.A., from time to time) plus 2.00%
per year and all costs and expenses of effecting collection of any
such sums, including reasonable attorney's fees, shall be paid to the
Distributor by the party responsible for payment of such charges.
8. Indemnification of the Fund.
---------------------------
The Distributor agrees to indemnify and hold harmless the Fund and each
person who has been, is, or may hereafter be a trustee, director, officer,
employee, shareholder or control person of the Fund against any loss,
damage or expense (including the reasonable costs of investigation)
reasonably incurred by any of them in connection with any claim or in
connection with any action, suit or proceeding to which any of them may be
a party, which arises out of or is alleged to arise out of or is based upon
any untrue statement or alleged untrue statement of a material fact, or the
omission or alleged omission to state a material fact necessary to make the
statements not misleading, on the part of the Distributor or any agent or
employee of the Distributor or any other person for whose acts the
Distributor is responsible, unless such statement or omission was made in
reliance upon written information furnished by the Fund. The Distributor
likewise agrees to indemnify and hold harmless the Fund and each such
Unified Financial Securities, Inc. 3/19/2004 API Trust - 3
person in connection with any claim or in connection with any action, suit
or proceeding which arises out of or is alleged to arise out of the
Distributor's failure to exercise reasonable care and diligence with
respect to its services, if any, rendered in connection with investment,
reinvestment, automatic withdrawal and other plans for Shares. The term
"expenses" for purposes of this and the next paragraph includes amounts
paid in satisfaction of judgments or in settlements which are made with the
Distributor's consent. The foregoing rights of indemnification shall be in
addition to any other rights to which the Fund or each such person may be
entitled as a matter of law.
9. Indemnification of the Distributor.
----------------------------------
The Fund agrees to indemnify and hold harmless the Distributor and each
person who has been, is, or may hereafter be a director, officer, employee,
shareholder or control person of the Distributor against any loss, damage
or expense (including the reasonable costs of investigation) reasonably
incurred by any of them in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad
faith or negligence, including clerical errors and mechanical failures, on
the part of any of such persons in the performance of the Distributor's
duties or from the reckless disregard by any of such persons of the
Distributor's obligations and duties under this Agreement, for all of which
exceptions the Distributor shall be liable to the Fund. The Fund will
advance attorneys' fees or other expenses incurred by any such person in
defending a proceeding, upon the undertaking by or on behalf of such person
to repay the advance if it is ultimately determined that such person is not
entitled to indemnification.
In order that the indemnification provisions contained in this Paragraph 9
shall apply, it is understood that if in any case the Fund may be asked to
indemnify the Distributor or any other person or hold the Distributor or
any other person harmless, the Fund shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it is further
understood that the Distributor will use all reasonable care to identify
and notify the Fund promptly concerning any situation which presents or
appears likely to present the probability of such a claim for
indemnification against the Fund. The Fund shall have the option to defend
the Distributor and any such person against any claim which may be the
subject of this indemnification, and in the event that the Fund so elects
it will so notify the Distributor, and thereupon the Fund shall take over
complete defense of the claim, and neither the Distributor nor any such
person shall in such situation initiate further legal or other expenses for
which it shall seek indemnification under this Paragraph 9. The Distributor
shall in no case confess any claim or make any compromise in any case in
which the Fund will be asked to indemnify the Distributor or any such
person except with the Fund's written consent.
Notwithstanding any other provision of this Agreement, the Distributor
shall be entitled to receive and act upon advice of counsel (who may be
counsel for the Fund or its own counsel) and shall be without liability for
any action reasonably taken or thing reasonably done pursuant to such
advice, provided that such action is not in violation of applicable federal
or state laws or regulations.
10. Termination and Amendment of this Agreement.
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This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment. This Agreement may be amended only
if such amendment is approved (i) by the Distributor, (ii) by the Adviser,
(iii) either by action of the Board of Trustees of the Fund or at a meeting
of the Shareholders of the Fund by the affirmative vote of a majority of
the outstanding Shares, and (iv) by a majority of the Trustees of the Fund
who are not interested persons of the Fund, of the Adviser or of the
Distributor by vote cast in person at a meeting called for the purpose of
voting on such approval.
Any of the Fund, the Adviser or the Distributor may at any time terminate
this Agreement on sixty (60) days written notice delivered or mailed by
registered mail, postage prepaid, to the other parties.
11. Effective Period of this Agreement.
----------------------------------
This Agreement shall take effect on the date referenced above, and shall
remain in full force and effect for a period of two (2) years from the date
of its effectiveness (unless terminated automatically as set forth in
Paragraph 10), and from year to year thereafter, subject to annual approval
(i) by the Distributor, (ii) by the Adviser, (iii) by the Board of Trustees
Unified Financial Securities, Inc. 3/19/2004 API Trust - 4
of the Fund or a vote of a majority of the outstanding Shares, and (iv) by
a majority of the Trustees of the Fund who are not interested persons of
the Fund, of the Adviser, or of the Distributor by vote cast in person at a
meeting called for the purpose of voting on such approval.
12. New Series.
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The terms and provisions of this Agreement shall become automatically
applicable to any additional series of the Fund established during the
initial or renewal term of this Agreement.
13. Successor Investment Fund.
-------------------------
Unless this Agreement has been terminated in accordance with Paragraph 10,
the terms and provisions of this Agreement shall become automatically
applicable to any investment company which is a successor to the Fund as a
result of reorganization, recapitalization or change of domicile.
14. Limitation of Liability.
-----------------------
It is expressly agreed that the obligations of the Fund hereunder shall not
be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Fund, personally, but bind only the trust
property of the Fund. The execution and delivery of this Agreement have
been authorized by the Trustees of the Fund and signed by an officer of the
Fund, acting as such, and neither such authorization by such Trustees nor
such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Fund.
15. Severability.
------------
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
16. Questions of Interpretation.
---------------------------
(a) This Agreement shall be governed by the laws of the State of Indiana.
(b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or
provision of the Act shall be resolved by reference to such term or
provision of the Act and to interpretation thereof, if any, by the
United States courts or in the absence of any controlling decision of
any such court, by rules, regulations or orders of the SEC issued
pursuant to said Act. In addition, where the effect of a requirement
of the Act, reflected in any provision of this Agreement is revised by
rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
17. Notices.
-------
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other parties, with a copy to the
Fund's counsel, at such address as such other parties may designate for the
receipt of such notice. Such notice will be effective upon receipt. Until
further notice to the other parties, it is agreed that the address of each
party for this purpose shall be:
(a) If to the Fund, to:
American Pension Investors Trust
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
(b) If to the Adviser, to:
Unified Financial Securities, Inc. 3/19/2004 API Trust - 5
Yorktown Management & Research Company, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
(c) If to the Distributor, to:
Unified Financial Securities, Inc.
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: President
18. Execution
---------
This Agreement may be executed by one or more counterparts, each of which
shall be deemed an original, but all of which together will constitute one
in the same instrument.
Unified Financial Securities, Inc. 3/19/2004 API Trust - 6
IN WITNESS WHEREOF, the Fund, the Adviser and the Distributor have each caused
this Agreement to be signed in triplicate on their behalf, all as of the day and
year first above written.
AMERICAN PENSION INVESTORS TRUST
By: Date
----------------------------------------------- ----------------
Print Name:
---------------------------------------
Title:
--------------------------------------------
Attest:
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YORKTOWN MANAGEMENT & RESEARCH COMPANY, INC.
By: Date
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Print Name:
---------------------------------------
Title:
--------------------------------------------
Attest:
-------------------------------------------
UNIFIED FINANCIAL SECURITIES, INC.
By: Date
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Print Name:
---------------------------------------
Title:
--------------------------------------------
Attest:
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Unified Financial Securities, Inc. 3/19/2004 API Trust - 7
EXHIBIT A
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DISTRIBUTION FEE SCHEDULE
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The prices contained herein are effective for twelve months from the execution
date of the Distribution Agreement.
I STANDARD FEES
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0.01% of average daily Fund net assets subject to an annual minimum fee of
$15,000. Fees are billed on a monthly basis.
II ADDITIONAL SERVICES
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o Sales literature and document review - $75 per hour, plus NASD
(including websites) filing fees.
o NASD and other filing fees - Pass thru
o Travel Expenses and Out-of-Pockets - Pass thru
o Other duties as agreed upon - Negotiable
Unified Financial Securities, Inc. 3/19/2004 API Trust - 8
