SALES AGREEMENT
BETWEEN
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AND
INLAND SECURITIES CORPORATION
THIS AGREEMENT is entered into between ("Broker") and Inland Securities
Corporation ("Inland") for the sale of shares (the "Shares) of the Inland Real
Estate Income and Growth Fund and all other funds that are or may become a
series of The Jefferson Fund Group Trust (together, the "Funds" and each, a
"Fund") for which Inland serves as distributor.
1. STATUS OF BROKER AS "REGISTERED BROKER-DEALER."
Broker represents and warrants to Inland that it is a broker-dealer
registered with the Securities and Exchange Commission and a member of the
National Association of Securities Dealers, Inc. ("NASD"). It agrees to abide by
all of the rules and regulations of the NASD including, without limitation, the
NASD's Conduct rules. Broker agrees to notify Inland immediately in the event of
(i) its expulsion or suspension from the NASD, or (ii) its being found to have
violated any applicable federal or state law, rule or regulation arising out of
its activities as a broker-dealer or in connection with this Agreement, or which
may otherwise affect in any material way its ability to act in accordance with
the terms of this Agreement. Broker's expulsion from the NASD will automatically
terminate this Agreement immediately without notice, Suspension of Broker from
the NASD for violation of any applicable federal or state law, rule or
regulation will terminate this Agreement effective immediately upon Inland's
written notice of termination to Broker.
2. BROKER ACTS AS AGENT FOR ITS CUSTOMERS.
The parties agree that in each transaction in the Shares: (a) Broker is
acting as agent for the customer; (b) each transaction is initiated solely upon
the order of the customer; (c) as between Broker and its customer, the customer
will have full beneficial ownership of all Shares; (d) each transaction shall be
for the account of the customer and not for Broker's account; and (e) each
transaction shall be without recourse to Broker provided that Broker acts in
accordance with the terms of this Agreement. Broker shall not have any authority
in any transaction to act as Inland's agent or as agent for the Funds.
3. EXECUTION OF ORDERS FOR PURCHASE AND REDEMPTION OF SHARES.
(a) All orders for the purchase of any Shares shall be
executed at the then-current public offering price per share (i.e., the
net asset value per share plus the applicable sales load, if any) and
all orders for the redemption of any Shares shall be executed at the
net asset value per share, plus any applicable contingent deferred
sales load, in each case as described in the then-current
prospectus(es), including any supplements or amendments thereto, of the
Funds (the "Prospectus"), Inland and the Funds reserve the right to
reject any purchase request at their sole discretion. If required by
law, each transaction shall be confirmed in writing on a fully
disclosed basis and, if confirmed by Inland, a copy of each
confirmation shall be sent simultaneously to Broker if Broker so
requests.
(b) The procedures relating to all orders and the handling of
them will be subject to the terms of the Prospectus of the Funds' and
Inland's written instructions to Broker from time to time.
(c) Payments for Shares shall be made as specified in the
Funds' Prospectus. If payment for any purchase order is not received in
accordance with the terms of the Funds' Prospectus, Inland reserves the
right, without notice, to cancel the sale and to hold Broker
responsible for any loss sustained as a result thereof.
(d) Broker agrees to provide such security as is necessary to
prevent any unauthorized use of the Funds' record keeping system,
accessed via any computer hardware or software provided to Broker by
Inland.
4. PAYMENT OF DEALER COMMISSION TO BROKER.
Inland agrees to pay to Broker commissions on sales of Shares as set
forth in a written schedule delivered to Broker pursuant to this Agreement.
These fees may be changed at any time at Inland's sole discretion upon thirty
(30) days written notice to Broker.
5. PAYMENT OF RULE 12B-1 FEES TO BROKER.
(a) Subject to and in accordance with the terms of the Funds'
Prospectus and the Rule l2b-1 Plan adopted by resolution of the Board
of Trustees and the shareholders of the Funds pursuant to Rule l2b-1
under the Investment Company Act of 0000, Xxxxxx may pay fees to
securities dealers providing services intended to result in sales of
Shares. The services to be provided may include, but are not limited
to, the following:
(i) communicating account openings through computer
terminals located on the Broker's premises ("computer
terminals"), through a toll-free telephone number or
otherwise;
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(ii) communicating account closings through the
computer terminals, through a toll-free telephone number or
otherwise;
(iii) entering purchase transactions through the
computer terminals, through a toll-free telephone number or
otherwise;
(iv) entering redemption transactions through the
computer terminals, through a toll-free telephone number or
otherwise;
(v) electronically transferring and receiving funds
for Fund Share purchases and redemptions, and confirming and
reconciling all such transactions;
(vi) reviewing the activity in Fund accounts;
(vii) providing training and supervision of its
personnel;
(viii) maintaining and distributing current copies of
Prospectuses and shareholder reports;
(ix) communicating with shareholders;
(x) advertising the availability of its services and
products;
(xi) providing record keeping and accounting
services;
(xii) providing assistance and review in designing
materials to send to customers and potential customers and
developing methods of making such materials accessible to
customers and potential customers; and
(xiii) responding to customers' and potential
customers' questions about the Fund.
The services listed above are illustrative. Broker is not required to perform
each service and may at any time perform either more or fewer services than
described above.
(b) During the term of the Agreement, Inland will pay Broker
12b-1 fees as set forth in a written schedule delivered to Broker
pursuant to this Agreement. Inland's fee schedule for Broker may be
changed by Inland sending a new fee schedule to Broker. For the payment
period in which this Agreement becomes effective or terminates, there
shall be an appropriate prorating of the fee on the basis of the number
of days that this Agreement is in effect during the period.
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(c) Broker will not perform or provide any duties which would
cause it to be a fiduciary under Section 4975 of the Internal Revenue
Code, as amended. For purposes of that Section, Broker understands that
any person who exercises any discretionary authority or discretionary
control with respect to any individual retirement account or its
assets, or who renders investment advice for a fee, or has any
authority or responsibility to do so, or has any discretionary
authority or discretionary responsibility in the administration of such
an account, is a fiduciary.
(d) Broker understands that the Department of Labor views
ERISA as prohibiting fiduciaries of discretionary ERISA assets from
receiving compensation from funds in which the fiduciary's
discretionary ERISA assets are invested. To date, the Department of
Labor has not issued any exempting order or advisory opinion that would
exempt fiduciaries from this interpretation. Without specific
authorization from the Department of Labor, fiduciaries should
carefully avoid investing discretionary assets in any fund pursuant to
an arrangement where the fiduciary is to be compensated by the fund for
such investment. Receipt of such compensation could violate ERISA
provisions against fiduciary self-dealing and conflict of interest and
could subject the fiduciary to substantial penalties.
6. DELIVERY OF PROSPECTUS TO CUSTOMERS.
Broker will deliver or cause to be delivered to each customer, at or
prior to the time of any purchase of Shares, a copy of the Prospectus for the
applicable Fund. Broker shall not make any representation concerning any Shares
other than those contained in the Prospectus of the Funds or in any promotional
materials or sales literature furnished to Broker by Inland or the Funds.
7. INDEMNIFICATION.
(a) Broker shall indemnify and hold harmless Inland, the
Funds, the transfer agent of the Funds, and their respective
subsidiaries, affiliates, officers, members, directors, agents and
employees from all direct or indirect liabilities, losses or costs
(including attorney's fees) arising from, related to or otherwise
connected with: (1) any breach by Broker of any provision of this
Agreement; or (2) any actions or omissions of Inland, any Fund, the
transfer agent of the Funds, and their subsidiaries, affiliates,
officers, members, directors, agents and employees in reliance upon any
oral, written or computer or electronically transmitted instructions
believed to be genuine and to have been given by or on behalf of
Broker.
(b) Inland shall indemnify and hold harmless Broker and its
subsidiaries, affiliates, officers, directors, agents and employees
from and against any and all direct or indirect liabilities, losses or
costs (including attorney's fees) arising from, related to or otherwise
connected with: (1) any breach by Inland of any provision of this
Agreement; or (2) any alleged or untrue statement of a material fact
contained in the Funds' registration
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statement or Prospectus, or as a result of or based upon any alleged
omission to state a material fact required to be stated, or necessary
to make the statements not misleading.
(c) The agreement of the parties' in this paragraph to
indemnify each other is conditioned upon the party entitled to
indemnification (Indemnified Party) giving notice to the party required
to provide indemnification (Indemnifying Party) promptly after the
summons or other first legal process for any claim as to which
indemnity may be sought is served on the Indemnified Party. The
Indemnified Party shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting from it, provided
that counsel for the Indemnifying Party who shall conduct the defense
of such claim or litigation shall be approved by the Indemnified Party
(which approval shall not unreasonably be withheld), and that the
Indemnified Party may participate in such defense at its expense. The
failure of the Indemnified Party to give notice as provided in this
subparagraph (c) shall not relieve the Indemnifying Party from any
liability other than its indemnity obligation under this paragraph. No
Indemnifying Party, in the defense of any such claim or litigation,
shall, without the consent of the Indemnified Party, consent to entry
of any judgment or enter into any settlement that does not include as
an unconditional term the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect to such
claim or litigation.
(d) The provisions of this paragraph 7 shall survive the
termination of this Agreement.
8. CUSTOMER NAMES PROPRIETARY TO BROKER.
(a) The names of Broker's customers are and shall remain
Broker's sole property and shall not be used by Inland or its
affiliates for any purpose except the performance of its duties and
responsibilities under this Agreement and except for servicing and
informational mailings relating to the Fund. Notwithstanding the
foregoing, this paragraph 8 shall not prohibit Inland or any of its
affiliates from utilizing the names of Broker's customers for any
purpose if the names are obtained in any manner other than from Broker
pursuant to this Agreement.
(b) Neither party shall use the name of the other party in any
manner without the other party's written consent, except as required by
any applicable federal or state law, rule or regulation, and except
pursuant to any mutually agreed upon promotional programs.
(c) The provisions of this paragraph 8 shall survive the
termination of this Agreement.
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9. SOLICITATION OF PROXIES.
Broker agrees not to solicit or cause to be solicited directly, or
indirectly, at any time in the future, any proxies from the shareholders of the
Funds in opposition to proxies solicited by management of the Funds, unless a
court of competent jurisdiction shall have determined that the conduct of a
majority of the Trustees of the Funds constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard of their duties. This paragraph 9
will survive the term of this Agreement.
10. CERTIFICATION OF CUSTOMER'S TAXPAYER IDENTIFICATION NUMBERS.
Broker agrees to obtain any taxpayer identification number
certification from its customers required under Section 3406 of the Internal
Revenue Code, and any applicable Treasury regulations, and to provide Inland or
its designee with timely written notice of any failure to obtain such taxpayer
identification number certification in order to enable the implementation of any
required backup withholding.
11. NOTICES.
Except as otherwise specifically provided in this Agreement, all
notices required or permitted to be given pursuant to this Agreement shall be
given in writing and delivered by personal delivery or by postage prepaid,
registered or certified United States first class mail, return receipt
requested, or the telex, telegram or similar means of same day delivery (with a
confirming copy by mail as provided herein). Unless otherwise, notified in
writing, all notices to Inland shall be given or sent to Inland at its offices
located at 0000 Xxxxxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxx 00000, and all notices to
Broker shall be given or sent to it at its address shown below.
12. TERMINATION AND AMENDMENT.
(a) This Agreement shall continue in effect for one year from
the date of its execution, and thereafter for successive periods of one
year if the form of this Agreement is approved at least annually by the
Trustees of the Funds including a majority of the Trustees who are not
interested persons of the Funds and have no direct or indirect
financial interest in the operation of the Fund's l2b-1 Plan or in any
related documents to the 12b-1 Plan ("Disinterested Trustees") cast in
person at a meeting called for that purpose.
(b) Notwithstanding subparagraph (a), this Agreement may be
terminated as follows:
(i) at any time, without the payment of any penalty,
by the vote of a majority of the Disinterested Trustees of the
Trust or by a vote of a majority of the outstanding voting
securities of the Funds as defined in the Investment Company
Act of 1940 on not more than sixty (60) days' written notice
to the parties to this Agreement;
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(ii) automatically in the event of the Agreement's
assignment as defined in the Investment Company Act of 1940 or
upon the termination of any Underwriting Agreement between any
Fund and Inland; and
(iii) by either party to the Agreement without cause
by giving the other party at least sixty (60) days' written
notice of its intention to terminate.
(c) This Agreement may be amended by Inland from time to time
by the following procedure. Inland will mail a copy of the amendment to
Broker's address, as shown below. If Broker does not object to the
amendment within thirty (30) days after its receipt, the amendment will
become part of the Agreement, Broker's objection must be in writing and
be received by Inland within such thirty (30) days.
13. PRIOR AGREEMENTS.
This Agreement supersedes any prior service agreements between the
parties for the Fund.
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15. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of Illinois.
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Broker Name
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Address
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City State Zip Code
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By: Date:
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Authorized Signature
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Title
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Please Print or Type Name
INLAND SECURITIES CORPORATION
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By: Xxxxxx X. Xxxxxx, President
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1. Commission. In connection with original purchases of Shares,
Distributor will pay Broker commissions as follows:
(a) For sales of Class A Shares, Broker shall receive a
one-time fee, based on the value of an individual sale, in accordance
with the following table:
Sales Dealer Concession*
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less than $50,000 5.00%
$50,000 to $99,999 4.25%
$100,000 to $249,999 3.25%
$250,000 to $499,999 2.50%
$500,000 to $999,999 2.25%
1,000,000 and greater 1.00%
* As a percentage of the public offering price,
(b) For sales of Class C Shares, Broker shall receive a
one-time fee of __% of the original offering price of such shares.
(c) The fees described in (a) and (b) above shall only be
payable with respect to the original purchase of Shares and shall not
be paid for Shares acquired through dividend reinvestment. The fee will
be paid by Distributor by the tenth business day of the month following
the month in which the Shares are purchased.
2. Trailer. Distributor will pay Broker an annual fee calculated at the
annual rate of .25% of the aggregate daily net asset value of Class A Shares and
1.00% of the aggregate daily net asset value of Class C Shares held in an
individually titled account that have been so held for a minimum of 365 days
after the settlement date of the purchase of such Shares. The first installment
of the annual fee shall be payable by the tenth business day of the calendar
quarter end following the month in which the Shares shall have been so held for
365 days. For purposes of determining the annual fee payable pursuant to this
paragraph 2, "Shares held in an individually titled account that have been so
held for a minimum of 365 days" shall include all Shares originally purchased
plus Shares acquired through the reinvestment of dividends paid with respect to
such Shares. For the month in which payments pursuant to this paragraph 2
commence, there shall be an appropriate prorating of the fee on the basis of the
number of days in the month following the aforesaid 365th day or on the basis of
the number of days that the account or Sales Agreement is in effect during the
month, as the case may be. No fee will be paid to the Broker in the month in
which the account or Sales Agreement terminates.
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