EXHIBIT(E)(1)
DISTRIBUTION AGREEMENT
AGREEMENT made as of this 1st day of June, 2000 between ISLAMIA GROUP
OF FUNDS, a business trust organized under the laws of the Commonwealth of
Massachusetts (the "FUND"), and INCOME ACHIEVERS, INC., a Delaware corporation
(the "UNDERWRITER").
W I T N E S S E T H
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for
the distribution of shares of beneficial interest, par value $.01 per
share, including such series or classes of shares as may now or
hereafter be authorized (the "SHARES") in jurisdictions wherein Shares
may legally be offered for sale; PROVIDED, HOWEVER, that the Fund, in
its absolute discretion, may: (a) issue or sell Shares directly to
holders of Shares of the Fund upon such terms and conditions and for
such consideration, if any, as it may determine, whether in connection
with the distribution of subscription or purchase rights, the payment
or reinvestment of dividends or distributions, or otherwise; and (b)
issue or sell Shares at net asset value in connection with merger or
consolidation with, or acquisition of the assets of, other investment
companies or similar companies.
2. The Underwriter hereby accepts appointment as agent for
the distribution of the Shares and agrees that it will use its best
efforts to sell such part of the authorized Shares remaining unissued
as from time to time shall be effectively registered under the
Securities Act of 1933 ("SECURITIES ACT"), at prices determined as
hereinafter provided and on terms hereinafter set forth, all subject to
applicable Federal and State laws and regulations and to the
Declaration of Trust of the Fund.
3. The Fund agrees that it will use its best efforts to keep
effectively registered under the Securities Act for sale, as herein
contemplated, such Shares as the Underwriter shall reasonably request
and as the Securities and Exchange Commission shall permit to be so
registered.
4. Notwithstanding any other provision hereof, the Fund may
terminate, suspend, or withdraw the offering of the Shares, or Shares
of any series or class, whenever, in its sole discretion, it deems such
action to be desirable.
5. The Underwriter shall sell Shares directly to retail
customers or, to or through, brokers, dealers, banks or other qualified
financial intermediaries (hereinafter referred to as "dealers"), in
such manner not inconsistent with the provisions hereof and the then
effective Registration Statement of the Fund under the Securities Act
(and related Prospectus and Statement of Additional Information) as the
<PAGE>
Underwriter may determine from time to time, PROVIDED that no dealer,
or other person, shall be appointed or authorized to act as agent of
the Fund without the prior consent of the Fund. The Underwriter shall
have the right to enter into agreements with dealers of its choice for
the sale of Shares and fix therein the portion of the sales charge
which may be allocated to such dealers; PROVIDED that the Fund shall
approve the form of such agreements and shall evidence such approval by
filing said form and any amendments thereto as attachments to this
Agreement, which shall be filed as an exhibit to the Fund's currently
effective registration statement under the Securities Act. Shares sold
to dealers shall be for resale by such dealers only at the public
offering price(s) set forth in the Fund's then current Prospectus. The
current form of such agreements are attached hereto as Exhibit 1.
6. Shares offered for sale, or sold by the Underwriter,
shall be so offered or sold at a price per Share determined in
accordance with the then current Prospectus relating to the sale of
Shares except as departure from such prices shall be permitted by the
rules and regulations of the Securities and Exchange Commission. Any
public offering price shall be the net asset value per Share plus a
sales charge of not more than the percentage of such public offering
price set forth in attached Schedule A (as may be amended from time to
time). Shares may be sold at net asset value without a sales charge to
such class or classes of investors or in such class or classes of
transactions as may be permitted under applicable rules of the
Securities and Exchange Commission and as described in the then current
Prospectus of the Fund. The net asset value per Share of each series or
class shall be calculated in accordance with the Declaration of Trust
of the Fund and shall be determined in the manner, and at the time, set
forth in the then current Prospectus of the Fund relating to such
Shares.
7. The price the Fund shall receive for all Shares purchased
from the Fund shall be the net asset value used in determining the
public offering price applicable to the sale of such Shares. The
excess, if any, of the sales price over the net asset value of Shares
sold by the Underwriter as agent shall be retained by the Underwriter
as a commission for its services hereunder. Out of such commission, the
Underwriter may allow commissions or concessions to dealers in such
amounts as the Underwriter shall determine from time to time. Except as
may be otherwise determined by the Underwriter and the Fund from time
to time, such commissions or concessions shall be uniform to all
dealers.
8. The Underwriter shall issue and deliver, or cause to be
issued and delivered, on behalf of the Fund such confirmations of sales
made by it as agent, pursuant to this Agreement, as may be required.
At, or prior to, the time of issuance of Shares, the Underwriter will
pay, or cause to be paid, to the Fund the amount due the Fund for the
sale of such Shares. Certificates shall not be issued. Shares, however,
will be registered on the transfer books of the Fund, in such names and
denominations as the Underwriter may specify.
9. The Fund will execute any and all documents, and furnish
any and all information, which may be reasonably necessary in
connection with the qualification of the Shares for sale (including the
qualification of the Fund as a dealer, where necessary or advisable) in
such states as the Underwriter may reasonably request (it being
understood that the Fund shall not be required, without its consent, to
comply with any requirement which, in its opinion, is unduly
burdensome).
-2-
<PAGE>
10. The Fund will furnish to the Underwriter, from time to
time, such information with respect to the Fund and the Shares as the
Underwriter may reasonably request for use in connection with the sale
of Shares. The Underwriter agrees that it will not use or distribute,
nor will it authorize dealers or others to use, distribute or
disseminate, in connection with the sale of such Shares, any statements
other than those contained in the Fund's current Prospectus and
Statement of Additional Information, except such supplemental
literature or advertising as shall be lawful under Federal and State
securities laws and regulations, and that it will furnish the Fund with
copies of all such material.
11. The Underwriter shall order Shares from the Fund only to
the extent that it shall have received purchase orders therefor. The
Underwriter will not make, nor authorize any dealers or others, to
make: (a) any short sale of Shares; or (b) any sale of Shares to any
officer or trustee of the Fund, nor to any officer or trustee of the
Underwriter, or of any corporation or association furnishing investment
advisory, managerial, or supervisory services to the Fund, nor to any
such corporation or association, unless such sales are made in
accordance with the then current Prospectus relating to the sale of
such Shares.
12. In selling Shares for the account of the Fund, the
Underwriter will in all respects conform to the requirements of all
Federal and State laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. relating to such sales, and
will indemnify and save harmless the Fund from any damage or expense on
account of any wrongful act by the Underwriter or any employee,
representative, or agent of the Underwriter. The Underwriter will
observe and be bound by all the provisions of the Declaration of Trust
of the Fund (and of any fundamental policies adopted by the Fund
pursuant to the Investment Company Act of 1940, notice of which shall
have been given by the Fund to the Underwriter) which at the time in
any way require, limit, restrict, prohibit or otherwise regulate any
action on the part of the Underwriter.
13. The Underwriter will require each dealer to conform to
the provisions hereof and of the Registration Statement (and related
Prospectus) at the time in effect under the Securities Act with respect
to the public offering price of the Shares, and neither the Underwriter
nor any such dealer shall withhold the placing of purchase orders so as
to make a profit thereby.
14. The Fund will pay, or cause to be paid, expenses
(including the fees and disbursements of its own counsel) of any
registration of Shares under the federal securities laws, expenses of
qualifying or continuing the qualification of the Shares for sale and,
in connection therewith, of qualifying or continuing the qualification
of the Fund as a dealer or broker under the laws of such states as may
-3-
<PAGE>
be designated by the Underwriter under the conditions herein specified,
and expenses incident to the issuance of the Shares such as issue
taxes, and fees of the transfer and shareholder service agent. The
Underwriter will pay, or cause to be paid, all expenses (other than
expenses which any dealer may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the Shares issued
or sold hereunder, including, without limiting the generality of the
foregoing, all: (a) expenses of printing and distributing any
Prospectus and Statement of Additional Information and of preparing,
printing and distributing or disseminating any other literature,
advertising and selling aids in connection with such offering of the
Shares for sale (except that such expenses need not include expenses
incurred by the Fund in connection with the preparation, printing and
distribution of any report or other communication to holders of Shares
in their capacity as such), and (b) expenses of advertising in
connection with such offering. No transfer taxes, if any, which may be
payable in connection with the issue or delivery of Shares sold as
herein contemplated shall be borne by the Fund, and the Underwriter
will indemnify and hold harmless the Fund against liability for all
such transfer taxes.
15. This agreement shall continue in effect until June 1,
2002, unless and until terminated by either party as hereinafter
provided, and will continue from year to year thereafter, but only so
long as such continuance is specifically approved, at least annually,
in the manner required by the Investment Company Act of 1940. Either
party hereto may terminate this agreement on any date by giving the
other party at least six months' prior written notice of such
termination, specifying the date fixed therefor. Without prejudice to
any other remedies of the Fund in any such event, the Fund may
terminate this agreement at any time immediately upon any failure of
fulfillment of any of the obligations of the Underwriter hereunder.
16. This agreement shall automatically terminate in the event
of its assignment.
17. Any notice under this agreement shall be in writing,
addressed, and delivered or mailed, postage prepaid, to the other party
at such address as such other party may designate for the receipt of
such notice.
18. The Declaration of Trust of the Fund on file with the
Secretary of State of the Commonwealth of Massachusetts was executed on
behalf of the Fund by the initial trustees of the Fund and not
individually, and any obligation of the Fund shall be binding only upon
the assets of the Fund (or applicable series thereof) and shall not be
binding upon any trustee, officer or shareholder of the Fund. Neither
the authorization of any action by the trustees or shareholders of the
Fund nor the execution of this agreement on behalf of the Fund shall
impose any liability upon any trustee, officer or shareholder of the
Fund.
-4-
<PAGE>
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
agreement to be executed on its behalf as of the day and year first above
written.
ISLAMIA GROUP OF FUNDS
By /S/ Q.A. KHAN
-------------
President
Attest:
/S/ SABINA ABDUL QADIR
----------------------
Secretary
INCOME ACHIEVERS INC.
By /S/ Q.A. KHAN
-------------
President
Attest:
/S/ SABINA ABDUL QADIR
----------------------
Secretary
-5-
<PAGE>
Schedule A
Sales charge: maximum of 3.00% of the public offering price.
-6-
<PAGE>
