DEALER'S AGREEMENT
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Midwest Group Financial Services, Inc. ("Underwriter")
invites you, as a selected dealer, to participate as principal in the
distribution of shares (the "Shares") of the mutual funds set
forth on Schedule A to this Agreement (the "Funds"), of which it is the
exclusive underwriter. Underwriter agrees to sell to you,
subject to any limitations imposed by the Funds, Shares issued by the
Funds and to promptly confirm each sale to you. All sales will be made
according to the following terms:
1. All offerings of any of the Shares by you must be made
at the public offering prices, and shall be subject to the
conditions of offering, set forth in the then current Prospectus of the
Funds and to the terms and conditions herein set forth, and you agree
to comply with all requirements applicable to you of all applicable
laws, including federal and state securities laws, the rules and
regulations of the Securities and Exchange Commission, and the
Rules of Fair Practice of the National Association of Securities
Dealers, inc. (the "NASD"), including Section 24 of the Rules of
Fair Practice of the NASD. You will not offer the Shares for
sale in any state or other jurisdiction where they are not qualified
for sale under the Blue Sky Laws and regulations of such state or
jurisdiction, or where you are not qualified to act as a dealer.
Upon application to Underwriter, Underwriter will inform you as
to the states or other jurisdictions in which Underwriter believes
the Shares may legally be sold.
2. (a) You will receive a discount from the public
offering price ("concession") on all Shares purchased by you from
Underwriter as indicated on Schedule A, as it may be amended by
Underwriter from time to time.
(b) In all transactions in open accounts in which you
are designated as Dealer of Record, you will receive the
concessions as set forth on Schedule A. You hereby authorize
Underwriter to act as your agent in connection with all
transactions in open accounts in which you are designated as
Dealer of Record. All designations as Dealer of Record, and all
authorizations of Underwriter to act as your Agent pursuant
thereto, shall cease upon the termination of this Agreement or
upon the investor's instructions to transfer his open account to
another Dealer of Record. No dealer concessions will be allowed on
purchases generating less than $1.00 in dealer concessions.
(c) As the exclusive underwriter of the Shares,
Underwriter reserves the privilege of revising the discounts
specified on Schedule A at any time by written notice.
3. Concessions will be paid to you at the address of your
principal office, as indicated below in your acceptance of this
Agreement.
4. Underwriter reserves the right to cancel this Agreement
at any time without notice if any Shares shall be offered for
sale by you at less than the then current public offering prices
determined by, or for, the Funds.
5. All orders are subject to acceptance or rejection by
Underwriter in its sole discretion. We reserve the right, in our
discretion, without notice, to suspend sales or withdraw the
offering of Shares entirely.
6. Payment shall be made to the Funds and shall be
received by its Transfer Agent within five (5) business days after the
acceptance of your order or such shorter time as may be required
by law. With respect to all Shares ordered by you for which payment
has not been received, you hereby assign and pledge to
Underwriter all of your right, title and interest in such Shares to secure
payment therefor. You appoint Underwriter as your agent to
execute and deliver all documents necessary to effectuate any of the
transactions described in this paragraph. If such payment is not
received within the required time period, Underwriter reserves
the right, without notice, and at its option, forthwith (a) to cancel
the sale, (b) to sell the Shares ordered by you back to the
Funds, or (c) to assign your payment obligation, accompanied by all
pledged Shares, to any person. You agree that Underwriter may
hold you responsible for any loss, including loss of profit, suffered
by the Funds, its Transfer Agent or Underwriter, resulting from your
failure to make payment within the required time period.
7. No person is authorized to make any representations
concerning Shares of the Funds except those contained in the
current applicable Prospectus and Statement of Additional
Information and in sales literature issued and furnished by
Underwriter supplemental to such Prospectus. Underwriter will
furnish additional copies of the current Prospectus and Statement
of Additional Information and such sales literature and other
releases and information issued by Underwriter in reasonable
quantities upon request.
8. Under this Agreement, you act as principal and are not
employed by Underwriter as broker, agent or employee. You are
not authorized to act for Underwriter nor to make any representation
on its behalf; and in purchasing or selling Shares hereunder, you
rely only upon the current Prospectus and Statement of Additional
Information furnished to you by Underwriter from time to time and
upon such written representations as may hereafter be made by
Underwriter to you over its signature.
9. You appoint the transfer agent for the Funds as your
agent to execute the purchase transactions of Shares in
accordance with the terms and provisions of any account, program, plan or
service established or used by your customers and to confirm each
purchase to your customers on your behalf, and you guarantee the
legal capacity of your customers so purchasing such Shares and
any co-owners of such Shares.
10. You will (a) maintain all records required by law
relating to transactions in the Shares, and upon the request of
Underwriter, or the request of the Funds, promptly make such of
these records available to Underwriter or to the Funds as are
requested, and (b) promptly notify Underwriter if you experience
any difficulty in maintaining the records required in the
foregoing clause in an accurate and complete manner. In addition, you will
establish appropriate procedures and reporting forms and
schedule, approved by Underwriter and by the Funds, to enable the parties
hereto and the Funds to identify all accounts opened and
maintained by your customers.
11. Underwriter has adopted compliance standards, attached
hereto as Schedule B, as to when Class A and Class C Shares of
the Dual Pricing Funds may appropriately be sold to particular
investors. You agree that all persons associated with you will
conform to such standards when selling Shares.
12. Each party hereto represents that it is presently, and
at all times during the term of this Agreement will be, a member in
good standing of the NASD and agrees to abide by all its Rules of
Fair Practice including, but not limited to, the following
provisions:
(a) You shall not withhold placing customers' orders
for any Shares so as to profit yourself as a result of such
withholding. You shall not purchase any Shares from
Underwriter other than for investment, except for the
purpose of covering purchase orders already received.
(b) All conditional orders received by Underwriter
must be at a specified definite price.
(c) If any Shares purchased by you are repurchased by
the Funds (or by Underwriter for the account of the Funds)
or are tendered for redemption within seven business days after
confirmation of the original sale of such Shares (1) you
agree to forthwith refund to Underwriter the full concession
allowed to you on the original sale, such refund to be paid by
Underwriter to the Funds, and (2) Underwriter shall
forthwith pay to the Funds that part of the discount retained by
Underwriter on the original sale. Notice will be given to
you of any such repurchase or redemption within ten days of the
date on which the repurchase or redemption request is made.
(d) Neither Underwriter, as exclusive underwriter for
the Funds, nor you as principal, shall purchase any Shares
from a record holder at a price lower than the net asset
value then quoted by, or for, the Funds. Nothing in this sub-
paragraph shall prevent you from selling Shares for the
account of a record holder to Underwriter or the Funds at
the net asset value currently quoted by, or for, the Funds and
charging the investor a fair commission for handling the
transaction.
(e) You warrant on behalf of yourself and your
registered representatives and employees that any purchase
of Shares at net asset value by the same pursuant to the terms
of the Prospectus of the applicable Fund is for investment
purposes only and not for purposes of resale. Shares so
purchased may be resold only to the Fund which issued them.
13. You agree that you will indemnify Underwriter, the
Funds, the Funds' transfer agent, the Funds' investment adviser, and the
Funds' custodians and hold such persons harmless from any claims
or assertions relating to the lawfulness of your company's
participation in this Agreement and the transactions contemplated
hereby or relating to any activities of any persons or entities
affiliated with your company which are performed in connection
with the discharge of your responsibilities under this Agreement. If
any such claims are asserted, the indemnified parties shall have
the right to engage in their own defense, including the selection
and engagement of legal counsel of their choosing, and all costs
of such defense shall be borne by you.
14. This Agreement will automatically terminate in the
event of its assignment. Either party hereto may cancel this Agreement
without penalty upon ten days' written notice. This Agreement
may also be terminated as to any Fund at any time without penalty by
the vote of a majority of the members of the Board of Trustees of
the terminating Fund who are not "interested persons" (as such
term is defined in the Investment Company Act of 1940) and who have no
direct or indirect financial interest in the applicable Fund's
Distribution Expense Plan or any agreement relating to such Plan,
including this Agreement, or by a vote of a majority of the
outstanding voting securities of the terminating Fund on ten
days' written notice.
15. All communications to Underwriter should be sent to
Midwest Group Financial Services, Inc., 000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000, or at such other address as Underwriter
may designate in writing. Any notice to you shall be duly given if
mailed or telegraphed to you at the address of your principal
office, as indicated below in your acceptance of this Agreement.
16. This Agreement supersedes any other agreement with you
relating to the offer and sale of the Shares, and relating to any
other matter discussed herein.
17. This Agreement shall be binding (i) upon placing your
first order with Underwriter for the purchase of Shares, or (ii)
upon receipt by Underwriter in Cincinnati, Ohio of a counterpart
of this Agreement duly accepted and signed by you, whichever shall
occur first. This Agreement shall be construed in accordance
with the laws of the State of Ohio.
18. The undersigned, executing this Agreement on behalf of
Dealer, hereby warrants and represents that he is duly authorized
to so execute this Agreement on behalf of Dealer.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us one copy of this
Agreement.
MIDWEST GROUP FINANCIAL
SERVICES, INC.
By: --------------------------
ACCEPTED BY DEALER:
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Firm Name
By:---------------------------
Authorized Signature,
Position
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Type or Print Name
ADDRESS (Principal Office):
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Date:-------------------------
SCHEDULE A
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Midwest Group of Funds Commission Schedule
U.S. Government Securities Fund
Tax-Free Intermediate Term Fund - Class A
Intermediate Term Government Income Fund - Class A
Adjustable Rate U.S. Government Securities Fund - Class A
Total
Dollar Amount of Purchase Sales Dealer
(At Offering Price) Charge* Concession
Less than $100,000 2.00% 1.80%
from $100,000 but under $250,000 1.50% 1.35%
from $250,000 but under $500,000 1.00% .90%
from $500,000 but under $1,000,000 .75% .65%
$1,000,000 and over** None None
25 basis points annual trailing commission effective
immediately, paid quarterly.
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Equity Fund - Class A
Utility Fund - Class A
Global Bond Fund - Class A
Treasury Total Return Fund
Ohio Insured Tax-Free Fund - Class A
Total
Dollar Amount of Purchase Sales Dealer
(At Offering Price) Charge* Concession
Less than $100,000 4.00% 3.60%
from $100,000 but under $250,000 3.50% 3.30%
from $250,000 but under $500,000 2.50% 2.30%
from $500,000 but under $1,000,000 2.00% 1.80%
$1,000,000 and over** None None
25 basis points annual trailing commission effective immediately, paid
quarterly.
* As a percentage of offering price.
** Broker/Dealers are entitled to a commission of 50-75 basis
points at the time the investor purchases Class A shares at
NAV in amounts totaling $1 million or more. However, the
investor is subject to a contingent deferred sales load of
50-75 basis points if a redemption occurs within one year of
purchase. See specific Fund prospectus for details.
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Equity Fund - Class C
Utility Fund - Class C
Global Bond Fund - Class C
Ohio Insured Tax-Free Fund - Class C
Tax-Free Intermediate Term Fund - Class C
Intermediate Term Government Income Fund - Class C
Adjustable Rate U.S. Government Securities Fund - Class C
The Funds will be offered to clients at net asset value. A
commission of 1% of the purchase amount of Class C shares
will be paid to participating brokers at the time of
purchase. Purchases of Class C shares are subject to a
contingent deferred sales load, according to the following
schedule:
Year Since Purchase Contingent Deferred
Payment Was Made Sales Load
First Year 1%
Thereafter None
100 basis points annual trailing commission will be paid
quarterly beginning in the thirteenth month.
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Brokers may invest for their own account at NAV
No trailing commissions will be paid to a dealer for any
calendar quarter in which the average daily balance of all
accounts in the Midwest Group of Funds (including no-load
money market funds) is less than $1,000,000.
SCHEDULE B
Policies and Procedures
With Respect to Sales
Of Dual Pricing Fund
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As certain Funds within the Midwest Group (the "Dual Pricing
Funds") offer two classes of Shares subject to different levels
of
front-end sales charges, it is important for an investor not only
to choose the Fund that best suits his investment objectives, but
also to choose the sales financing method which best suits his
particular situation. To assist investors in these decisions, we
are instituting the following policy:
1. Any purchase order for $1 million or more must be for
Class A Shares.
2. Any purchase order for $100,000 but less than $1
million
is subject to approval by a registered principal of the
Underwriter, who must approve the purchase order for
either Class A Shares or Class C Shares in light of the
relevant facts and circumstances, including:
(a) the specific purchase order dollar amount;
(b) the length of time the investor expects to hold
the Shares; and
(c) any other relevant circumstances, such as the
availability of purchases under a Letter of
Intent.
3. Any order to exchange Class A Shares of a Dual Pricing
Fund (or Shares of another Fund having a maximum sales
load equal to or greater than Class A Shares of the
Dual Pricing Funds) for Shares of another Dual Pricing Fund
will be for Class A Shares only. Class C Shares of a
Dual Pricing Fund may be exchanged for either Class A
or Class C Shares of another Dual Pricing Fund, provided
that an exchange of Class C Shares for Class A Shares
is subject to approval by a registered principal of
Underwriter, who must approve the exchange in light of
the relevant facts and circumstances.
There are instances when one financing method may be more
appropriate than the other. For example, investors who would
qualify for a significant discount from the maximum sales charge
on
Class A Shares may determine that payment of such a reduced
front-
end sales charge is superior to payment of the higher ongoing
distribution fee applicable to Class C Shares. On the other
hand,
an investor whose order would not qualify for such a discount may
wish to pay a lower sales charge and have more of his funds
invested in Class C Shares. If such an investor anticipates that
he will redeem his Shares within a short period of time, the
investor may, depending on the amount of his purchase, choose to
bear higher distribution expenses than if he had purchased Class
A Shares.
In addition, investors who intend to hold their Shares for a
significantly long time may wish to purchase Class A Shares in
order to avoid the higher ongoing distribution expenses of Class
C Shares.
The appropriate supervisor must ensure that all employees
receiving investor inquiries about the purchase of Shares of Dual
Pricing Funds advise the investor of the available financing
methods offered by mutual funds, and the impact of choosing one
method over another. It may be appropriate for the supervisor to
discuss the purchase with the investor.
This policy is effective immediately with respect to any
order
for the purchase of Shares of all Dual Pricing Funds. Questions
relating to this policy should be directed to Xxxxxx Xxxx, Vice
President of the Underwriter, at 513/629-2000.
MIDWEST GROUP FINANCIAL SERVICES, INC.
Addendum to Dealer's Agreement
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In addition to the concessions as indicated in Schedule A to the
Dealer's Agreement, you will receive a trailing commission of
.25% per annum (payable quarterly) of the average balance during each
calendar quarter of all accounts in the Funds (excluding Class C
Shares of the Dual Pricing Funds) for which you are the dealer of
record.
Beginning one year from the date of the purchase of Class C
Shares of the Dual Pricing Funds, a trailing commission (payable
quarterly) is also paid with respect to such accounts (equal to
.75% per annum of the average balance during each calendar
quarter of all accounts in the Ohio Insured Tax-Free Fund, the
Intermediate Term Government Income Fund and the Tax-Free Intermediate
Term Fund and 1.00% per annum of the average balance during each calendar
quarter of all accounts in the Equity Fund, the Utility Fund and
the Global Bond Fund).
However, no trailing commissions will be paid to a dealer for any
calendar quarter in which the average daily balance of all
accounts ---
in the Midwest Group of Funds (including no-load money market
funds) is less than $1,000,000.
