DISTRIBUTION SERVICES AGREEMENT (RULE 12B-1 PLAN)
This Distribution Services Agreement (the "Plan") is adopted by The HomeState
Group (the "Fund"), a Pennsylvania Common Law Trust organized under the
Investment Company Act of 1940 (the "Act") as an open-end mutual fund, with
respect to the distribution of its shares of the Emerald National Small-Cap
Equity Fund - Class A shares(the "Shares") by Xxxxxxxx Capital Markets, Inc.,
the principal underwriter and distributor for the Fund (the "Distributor").
WITNESSETH:
WHEREAS, the Fund is an open-end management company,
and WHEREAS, it has been proposed that the Fund make payments to the Distributor
out of the Fund's net assets for distribution services rendered to the Fund;
and WHEREAS, the Fund intends to distribute its Shares in accordance with Rule
12b-1 under the Act and desires to adopt a distribution plan pursuant to such
rule;
and WHEREAS, the Fund's Board of Trustees at a meeting held on May 11, 2000, in
considering whether the Fund should adopt and implement a written plan, has
evaluated such information as it deemed necessary to make an informed
determination as to whether a written plan should be adopted and implemented and
has considered such pertinent factors as it deemed necessary to form the basis
for a decision to use assets of the Fund for such purposes and has determined
that there is a reasonable likelihood that adoption and implementation of a plan
will benefit the Fund and is shareholders.
NOW, THEREFORE, the Fund hereby adopts a distribution plan in accordance with
Rule 12b-1 under the Act, having the following terms and conditions:
1. The Distributor shall pay all costs and expenses incurred in connection
with (i) advertising and marketing the Shares; (ii) payments of
servicing fees to one or more securities dealers (which may include the
Distributor itself but only to the extent necessary to reimburse the
Distributor for its costs and expenses incurred in connection with such
servicing), financial institutions or other industry professionals,
such as investment advisers, accountants, and estate planning firms
(individually, a "Service Organization"), in respect of the average
daily net asset value of the Shares owned by shareholders for whom the
Service Organization is the dealer of record or holder of record and
with whom the Service Organization has a servicing relationship
pursuant to the Fund's related Rule 12b-1 Service Agreement; (iii)
printing any Prospectuses, Statements of Additional Information, or
reports prepared for the Distributor's use in connection with the
offering of the Fund's Shares (except those used for regulatory
purposes or for distribution to existing shareholders); and (iv) with
implementing and operating this Plan.
2. Each of the Fund's respective series will reimburse the Distributor as
appropriate for its out-of-pocket costs and expenses described in
Section (1) on a monthly basis at an annual rate of not more than .35%
of such Series net assets as of the close of the last business day of
the month. To determine the maximum amount of the costs and expenses
reimbursable hereunder, the value of the Fund's net assets shall be
computed in the manner specified in the Fund's Prospectus and/or
Statement of Additional Information for the determination of the net
asset value of the Shares. The Distributor may incur additional
unreimbursed costs and expense in connection with the distribution of
Shares and may utilize its capital or any other resources to pay for
such costs and expenses.
3. The Fund shall, from time to time, furnish or otherwise make available
to the Distributor such financial reports, proxy statements, and other
information relating to the business and affairs of the Fund as the
Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
4. Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Declaration of Trust, or any applicable
statutory or regulatory requirement to which it is subject or by which
it is bound, or relieve or deprive the Board of Trustees of the Fund of
the responsibility for and control of the conduct of the affairs of the
Fund.
5. This Plan shall become effective when executed following approval by a
vote of at least a majority of the outstanding voting securities of the
Fund and by a vote of the Trustees of the Fund and of those Trustees
who are not interested persons of the Fund and who have no direct or
indirect financial interest in the Plan or in any agreements relating
to the Plan(the "Independent Trustees), cast in person at a meeting
called for the purpose of voting on the Plan.
6. This Plan shall remain in effect until December 31, 2001 and for
successive annual periods of twelve months each thereafter; provided,
however, that such continuance is subject to approval annually by a
vote of the Trustees of the Fund and of the Independent Trustees cast
in person at a meeting called for the purpose of voting on this Plan.
If such annual approval is not obtained, the Plan shall expire twelve
months after the date of the last approval. This Plan may be amended at
any time by the Board of Trustees; provided that (a) any amendment to
increase materially the amount to be spent for the services described
herein shall be effective only upon approval by a vote of a majority of
the outstanding Shares, and (b) any material amendment of this Plan
shall be effective only upon approval in the manner provided in the
first sentence of this paragraph.
7. This Plan may be terminated as to any Series at any time, without the
payment of any penalty, by a vote of a majority of the Independent
Trustees or by a vote of a majority of the outstanding voting
securities of such Series, and shall automatically terminate in the
event of its assignment.
8. Nothing herein contained shall prohibit the Distributor or any
"affiliated person" of the Distributor to act as distributor for other
persons, firms, or corporations or to engage in other business
activities.
9. Neither the Distributor nor any of its employees or agents is
authorized to make any representations concerning the Shares except
those contained in the Prospectus, Statement of Additional Information,
or such supplemental sales literature as the Fund may approve.
10. The Distributor shall be required to use its best efforts in rendering
distribution services but shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Fund's distribution agreement with the
Distributor relates except a loss resulting from willful misfeasance,
bad faith, or gross negligence on the part of the Distributor in the
performance of its duties as Distributor or from reckless disregard by
the Distributor of its obligations and duties under such distribution
agreement.
11. The Distributor shall provide the Fund, for review by the Fund's Board
of Trustees, and the Directors shall review, at least quarterly, a
written report of the amounts expended pursuant to this Plan and the
purposes for which such expenditures were made. Such written report
shall be in a form satisfactory to the Fund and shall supply all
information necessary for the Board to discharge its responsibilities,
including its responsibilities pursuant to Rule 12b-1.
12. While this Plan is in effect, the selection and nomination of
Independent Trustees shall be committed to the discretion of such
Independent Trustees.
13. The Fund shall preserve copies of this Plan, any related agreements,
and all reports made pursuant to Section 11 hereof for a period of not
less than six years from the date of this Plan, or any such agreement
or report, as the case may be, the first two years, in an easily
accessible place.
14. Payments made by a series to the Distributor pursuant to this Plan must
be to reimburse the Distributor for reimbursable costs and expenses
incurred in connection with the distribution of such series shares
only.
15. If any provision of this Plan shall be held or made invalid by a court
decision statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.
16. For the purposes of this Plan, the terms "interested persons,"
"assignment," "affiliated person" and "majority of the outstanding
voting securities" are used as defined in the Act.
IN WITNESS WHEREOF, this Plan has been executed by the Fund effective as of May
11, 2000.
THE HOMESTATE GROUP
By: /s/ XXXXX X. XXXX
-------------
President
Attest: /s/ XXXXXX X. XXXXX XX
------------------
Secretary
