EXHIBIT 6
UNDERWRITING AGREEMENT
This Agreement made as of this 1 day of March, 1997, by and between The
Flex-Partners, a Massachusetts business trust (the "Trust"), and Adviser Dealer
Services, Inc., an Ohio corporation ("Underwriter").
WHEREAS, the Trust is authorized to issue shares in separate series
representing interests in separate portfolios of securities and other assets;
and
WHEREAS, two such series of shares represent interests in The TAA Fund and
The BTB Fund (each a "Fund"; collectively, the "Funds"); and
WHEREAS, the Funds are investment companies registered under the Investment
Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the Securities and
Exchange Commission (the "Commission") and a member of the National Association
of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Funds and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of the Funds
(the "Shares");
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. APPOINTMENT. The Funds hereby appoint Underwriter as their
exclusive agent for the distribution of the Shares, and Underwriter
hereby accepts such appointment under the terms of this Agreement.
Notwithstanding any other provision hereof, a Fund may terminate,
suspend or withdraw the offering of its Shares whenever, in its sole
discretion, it deems such action to be desirable.
2. SALE AND REPURCHASE OF SHARES.
(a) Underwriter will have the right, as agent for a 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 paragraph 2(d) hereof) less a
discount determined by Underwriter, which discount shall not exceed
the amount of the sales charge stated in the Fund's then current
Prospectus (as defined in paragraph 5(a) hereof) and statement of
additional information. At the request of a Fund (which request shall
not be more frequent than quarterly), Underwriter shall furnish a list
of broker-dealers with whom Underwriter has entered into a dealer
agreement. A Fund shall have the right to delete from such list any
broker-dealer from whom the Fund chooses not to accept sales orders.
Upon receipt of an order to purchase Shares from a dealer with whom
Underwriter has a dealer agreement, Underwriter will promptly cause
such order to be filled by the Fund. Underwriter shall have no
obligation to accept monies or Shares, or establish customer accounts.
All sales of Shares shall be conducted strictly through other
registered broker/dealers with Underwriter acting in the role of
wholesaler. The right granted to the Underwriter to sell Shares to
such investment dealers against orders therefor shall not apply to
Shares issued in the event that an investment company (whether a
regulated or private investment company or a personal holding company)
is merged with and into or consolidated with a Fund or in the event
that a Fund acquires by purchase or otherwise, all or substantially
all of the assets or the outstanding shares of any such company. Such
right shall also not apply to Shares issued by a Fund as a dividend or
stock split.
(b) Underwriter will also have the right, as agent for the Funds,
to sell Shares to the public against orders therefor at the public
offering price (as defined in paragraph 2(d) hereof).
(c) Underwriter will also have the right, as agent for the Funds,
to sell Shares at their net asset value to such persons as may be
approved by the Board of Trustees of the Trust and provided in the
Prospectus, all such sales to comply with the provisions of the Act,
the rules and regulations of the Commission promulgated thereunder and
all other federal and state securities laws, rules and regulations.
(d) The public offering price shall be the net asset value of
Shares then in effect, plus any applicable sales charge determined in
the manner set forth in the Prospectus or as permitted by the Act and
the rules and regulations of the Commission promulgated thereunder. In
no event shall any applicable sales charge exceed the maximum sales
charge permitted by the rules and regulations of the NASD.
(e) The net asset value of the Shares shall be determined in the
manner provided in the Prospectus, and when determined shall be
applicable to transactions as provided for in the Prospectus. The net
asset value of the Shares shall be calculated by the Funds or by
another entity on behalf of the Funds. Underwriter shall have no duty
to inquire into or liability for the accuracy of the net asset value
per Share as calculated pursuant to paragraph (d) above.
(f) The Fund shall receive the applicable net asset value of
their Shares promptly, but in no event later than the third (3rd)
business day following the date on which Underwriter shall have
received an order for the purchase of Shares. Underwriter shall have
the right to retain the sales charge less any applicable dealer
discount.
(g) Upon receipt of purchase instructions, Underwriter will
transmit such instructions to the Funds or its transfer agent for
registration of the Shares purchased. Sales of the Shares of the Funds
shall be deemed to be made when and where accepted by the Funds'
transfer agent.
(h) If Underwriter is not registered as a broker-dealer in any
state or an exemption for sales of Shares by Underwriter in such state
is not otherwise available, the Funds shall not be permitted to sell
Shares in the state until Underwriter is so registered or such
exemption is available.
(i) Nothing in this Agreement shall prevent Underwriter or any
affiliated person (as defined in the Act) of Underwriter from acting
as underwriter or distributor for any other person, firm or
corporation (including other investment companies) or in any way limit
or restrict Underwriter or such affiliated person from buying, selling
or trading any securities for its or their own account or for the
accounts of others for whom it or they may be acting; provided,
however, that Underwriter expressly agrees that it will undertake no
activities which will, in its judgment, adversely affect the
performance of its obligations to the Funds under this Agreement.
(j) Underwriter may repurchase Shares at such prices and upon
such terms and conditions as shall be specified in the Prospectus.
3. SALES OF SHARES. Underwriter does not agree to sell any specific
number of Shares. Underwriter, as agent for the Funds, undertakes to
sell Shares on a best efforts basis only against orders therefor.
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4. RULES OF NASD, ETC.
(a) Underwriter will conform in all material respects to the
Rules of Fair Practice of the NASD and the securities laws of any
jurisdiction in which it sells any Shares.
(b) Underwriter will require each dealer with whom Underwriter
has a dealer agreement to conform to the applicable provisions of the
Prospectus, with respect to the public offering price of the Shares,
and Underwriter shall not withhold the placing of purchase orders so
as to make a profit thereby.
(c) Underwriter agrees to obtain the prior written approval of
the Funds (which approval shall not be unreasonably withheld or
delayed) with regard to, and file and clear with the proper
authorities copies of, any agreements, plans or other materials it
intends to use in connection with any sales of Shares. Copies of such
materials and evidence of filing with the proper authorities shall be
furnished to the Funds. To the extent the Funds have created any such
sales materials, the Funds shall not use such materials until
Underwriter has approved of such materials and filed them with the
proper authorities.
(d) Underwriter shall not make, or authorize any registered
representative, broker or dealer to make, in connection with any sales
or solicitation of a sale of the Shares, any representations
concerning the Shares except those contained in the Prospectus
covering the Shares and in sales materials approved by the Underwriter
and the Funds as information supplemental to such Prospectus. Copies
of the Prospectus will be supplied by the Funds to Underwriter in
reasonable quantities upon request.
5. REPRESENTATIONS AND WARRANTIES OF THE FUNDS. Each Fund represents
and warrants to, and agrees with Underwriter that:
(a) A registration statement on Form N-1A with respect to its
Shares has been prepared and filed by the Fund with the Commission
under and in all material respects in conformity with the requirements
of the Securities Act of 1933, as amended (the "33 Act"), and the Act
and the Rules and Regulations (as defined hereinbelow); such
registration statement is currently effective. As used in this
Agreement, the term "Registration Statement" means such registration
statement, including all exhibits thereto, as amended from time to
time; and the term "Prospectus" means the prospectus and statement of
additional information, as amended from time to time, constituting a
part of the Registration Statement, in the form filed with the
Commission.
(b) Neither the Commission nor any state has issued any order
preventing or suspending the use of any Prospectus, and each
Prospectus complies in all material respects with the requirements of
the 33 Act and Act (together the "Acts") and the rules and regulations
(the "Rules and Regulations") promulgated by the Commission under the
Acts and the Securities Exchange Act of 1934 as amended (the "34
Act"), and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
Registration Statement and the Prospectus and any amendments or
supplements thereto contain all statements which are required to be
stated therein in accordance with the Acts and the Rules and
Regulations and comply in all material respects with the requirements
of the Acts and the Rules and Regulations; and neither the
Registration Statement nor the Prospectus nor any amendment or
supplement thereto includes any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(c) The Fund is a series fund of a business trust which is
validly existing and in good standing under the laws of the
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Commonwealth of Massachusetts with full power and authority to own its
properties and conduct its business as now conducted; and its Shares
have been duly authorized and when issued will be validly issued,
fully paid and nonassessable.
(d) The Shares conform in all material respects to the
description thereof contained in the Prospectus.
(e) The Fund has full legal right, power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to be
sold by it to Underwriter as provided herein, and this Agreement has
been duly authorized, executed and delivered by the Fund as required
by the Act.
(f) The Fund is not in violation of the Trust's Declaration of
Trust or By-laws or in default under any agreement, indenture or
instrument, the effect of which violation or default would be material
to the Fund. No consent, approval, authorization or order of any court
or governmental agency or body or securities exchange is required for
the consummation of the transactions contemplated by this Agreement
except such as have been obtained and such as may be required under
the Acts and the Rules and Regulations and such as may be required
under state securities laws or Blue Sky Laws in connection with the
purchase and distribution of the Shares by Underwriter. The
consummation by the Fund of the transactions contemplated by this
Agreement will not conflict with, result in the creation or imposition
of any lien, charge or encumbrance upon the assets of the Fund
pursuant to the terms of, result in a breach or violation by the Fund
of any of the terms or provisions of, or constitute a default by the
Fund under, any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which the Fund is a party or
to which it or its property is subject, the Declaration of Trust or
By-laws of the Trust, any statute, or any judgment, decree, order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Fund or any of its property.
(g) The financial statements and the related notes included in
the Registration Statement and Prospectus present fairly the financial
position, results of operations and changes in financial position of
the Fund at the dates and for the periods to which they relate and
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated
therein.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, the Fund has not
incurred any material liabilities or obligations, direct or
contingent, or entered into any material transaction, whether or not
in the ordinary course of business, and there has not been any
material change in the capital stock, or any material adverse change,
in the business, condition (financial or other), key personnel,
properties, results of operations or assets of the Fund except in each
case as disclosed in or contemplated by the Prospectus.
(i) There is not pending, or to the knowledge of the Fund,
contemplated or threatened, any action, suit, proceeding, inquiry or
investigation, to which the Fund is a party, or to which the property
of the Fund is subject, before or brought by any court or governmental
agency or body, or any arbitrator, which, if determined adversely to
the Fund might result in any material adverse change in the business,
condition (financial or other), net asset value or results of
operations, or materially adversely affect the properties or assets of
the Fund.
(j) The Fund is not in violation of any law, ordinance,
governmental rule or regulation or court decree to which it may be
subject or has not failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of its
property or to the conduct of its business, which violation or failure
to obtain is likely to have any material adverse effect on the
condition (financial or other), properties, prospective results of
operations or net asset value of the Fund.
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(k) There are no contracts or other documents required to be
described in the Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement by the Acts or by the Rules
and Regulations which have not been described or filed as required.
(l) The Fund has timely filed all necessary federal income tax
returns and all necessary state and foreign income, excise, state and
franchise tax returns, has paid all taxes shown as due thereon and has
made adequate reserves for future tax liabilities, and, except as
described in the Prospectus, there is no tax deficiency that has been
asserted against the Fund that would materially and adversely affect
the business of the Fund.
(m) The Fund maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific
authorizations, (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability of
assets, (C) access to assets is permitted only in accordance with
management's general or specific authorization, and (D) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
6. COVENANTS OF THE FUNDS. Each Fund covenants and agrees with
Underwriter that:
(a) The Fund will cause any subsequent amendments to the
Registration Statement to become effective as promptly as practicable
and will not file any amendment to the Registration Statement or any
supplement to the Prospectus of which Underwriter shall not previously
have been furnished with a copy a reasonable time prior to the
proposed filing. Except as otherwise provided in Section 1 hereof, the
Fund will maintain an effective Registration Statement as required by
the Acts at all times during the term of this Agreement. Except as
otherwise provided in Section 1 hereof, the Fund will comply so far as
it is able with all requirements imposed upon it by the Acts and the
Rules and Regulations to the extent necessary to permit the
continuance of sales of the Shares in accordance with the provisions
hereof and of the Prospectus and the Fund will prepare and file with
the Commission any amendments to the Registration Statement or
supplements to the Prospectus which it deems necessary or advisable in
connection with the distribution of the Shares by Underwriter, and
will use its best efforts to cause the same to become effective as
promptly as practicable.
(b) The Fund will advise Underwriter promptly after it receives
notice or obtains knowledge thereof, of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of the
Prospectus, or of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, or of the institution or
threatening of any proceeding for any such purpose, or of any request
made by the Commission for amending the Registration Statement, for
supplementing the Prospectus or for additional information, and the
Fund will use its best efforts to prevent the issuance of any such
order and, if any such order is issued to obtain the lifting thereof
as promptly as practicable.
(c) The Fund will arrange for the qualification of the Shares for
offering and sale under the securities or Blue Sky laws of such
jurisdictions in which the Shares will be sold.
(d) The Fund will furnish to Underwriter copies of the
Registration Statement, the Prospectus, and all amendments and
supplements thereto, in each case as soon as available, and in such
quantities as Underwriter may reasonably request.
(e) The Fund will furnish to its shareholders semi-annual and
annual reports including such information and within the time
requirements prescribed by the Act.
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(f) If sales of the Fund's Shares are facilitated through the use
of a clearing agency (e.g., National Securities Clearing Corporation),
the Fund shall direct its transfer agent to settle all clearing agency
transactions promptly according to the rules and regulations of such
clearing agency.
7. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER.
The Underwriter represents and warrants to, and agrees with the Funds,
that:
(a) Underwriter has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio, with all requisite corporate power and authority to conduct
its business and to perform its obligations contemplated herein.
(b) This Agreement has been duly and validly authorized, executed
and delivered by Underwriter and constitutes Underwriter's valid,
binding and enforceable agreement.
(c) Underwriter's execution and delivery of this Agreement, and
the performance of Underwriter's obligations hereunder, will not
result in a violation of, be in conflict with or constitute a default
under any agreement or instrument to which Underwriter is a party or
by which Underwriter or Underwriter's properties are bound, or any
judgment, decree, order, statute, rule or regulation applicable to
Underwriter.
(d) The information supplied by Underwriter for inclusion in the
Prospectus and Registration Statement relating to Underwriter is
complete and correct and does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein not misleading.
(e) Underwriter is (i) a broker-dealer duly registered pursuant
to the provisions of the 34 Act, (ii) a member in good standing of the
NASD, and (iii) duly registered as a broker-dealer under the
applicable laws and regulations of each state in which Underwriter
will offer and sell the Shares, except such states in which
Underwriter is exempt from registration or such registration is not
otherwise required. Underwriter will maintain its registration in good
standing, or its exemption from such registration, throughout the term
of this Agreement and Underwriter will comply with all statutes and
other requirements applicable to Underwriter with respect to
Underwriter's brokerage activities within those jurisdictions.
Underwriter, its affiliates, officers and directors have not taken or
failed to take any act, and are not subject to any order or
proceeding, that would prevent the registration of the Shares with any
state securities commission, or which will result in the issuance of
any stop order on the sale of the Shares.
(f) Underwriter is a member of National Securities Clearing
Corporation and has been assigned a fund distributor clearing number
by Fund/Serv.
8. COVENANTS OF THE UNDERWRITER.
The Underwriter covenants and agrees with the Funds that:
(a) In offering and selling the Shares, Underwriter will comply
with all applicable requirements of the Acts, the 34 Act and the Rules
and Regulations.
(b) Subject to valid exemption(s) from the requirement to
register as a broker-dealer under any of the Blue Sky Laws,
Underwriter will comply with all applicable requirements of the Blue
Sky Laws applicable to Underwriter as a broker-dealer. Underwriter
will not offer or sell any of the Shares in any jurisdiction prior to
6
receiving instructions (oral or written) from the Funds that offers
may be made in such jurisdiction.
(c) Underwriter will abide by, and take reasonable precautions to
insure compliance with, all provisions contained in the Prospectus and
this Agreement regulating the terms and manner of conducting the
offering of the Shares. Underwriter will not use any offering or
selling material other than materials furnished or approved in writing
by the Funds. Neither Underwriter nor any of its agents will give any
information or make any representation with respect to the Funds other
than the information or representations contained in the Prospectus or
any sales literature authorized by the Funds for use in connection
with the offering of the Shares, or such other information as is
specifically authorized by the Funds.
(d) In offering and selling the Shares, Underwriter will comply
in all material respects with all applicable rules of the NASD,
including Sections 8, 24, and 36 of Article III of the Rules of Fair
Practice.
(e) Neither Underwriter nor any of its directors or officers (nor
any other person serving in a similar capacity):
(i) Has been convicted within ten years of date hereof of
any crime or offense involving the purchase or sale of any
security, involving the making of a false statement to the
Commission, or arising out of such person's conduct as an
underwriter, broker, dealer, municipal securities dealer or
investment advisor.
(ii) Is subject to any order, judgment or decree of any
court of competent jurisdiction temporarily or preliminarily
enjoining or restraining, or is subject to any order, judgment or
decree of any court of competent jurisdiction, entered into
within five years prior to the date hereof, permanently enjoining
or restraining such person from engaging in or continuing any
conduct or practice in connection with the purchase or sale of
any security, involving the making of a false filing with the
Commission, or arising out of the conduct of the business of an
underwriter, broker, dealer, municipal securities dealer or
investment advisor;
(iii) Is subject to an order of the Commission entered
pursuant to section 15(b), 15B(a), or 15B(c) of the 34 Act; or is
subject to an order of the Commission entered pursuant to section
203(e) or (f) of the Investment Advisers Act of 1940;
(iv) Is suspended or expelled from membership in, or
suspended or barred from association with a member of, an
exchange registered as a national securities exchange pursuant to
section 6 of the 34 Act, an association registered as a national
securities association under section 15A of the 34 Act, or a
Canadian securities exchange or association for any act or
omission constituting conduct inconsistent with just and
equitable principles of trade;
(v) Is subject to a United States Postal Service false
representation order entered within five years of the date
hereof; or is subject to a restraining order or preliminary
injunction entered under section 3007 of title 39, United States
Code, with respect to any conduct alleged to constitute postal
fraud;
(vi) Has been or has been named as an underwriter of any
securities covered by any registration statement which is the
subject of any pending proceeding or examination under section 8
of the 33 Act, or is the subject of any refusal order or stop
order entered thereunder within five years prior to the date
hereof;
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(vii) Has been or has been named as an underwriter of any
securities covered by any filing which is subject to any pending
proceeding under Rule 261 or any similar Rule adopted under
section 3(b) of the 33 Act, or to an order entered thereunder
within five years prior to the date hereof; and
(viii) Has taken or failed to take any other act, or is
subject to any other order or proceeding, that would make
unavailable any registration or qualification requirements of the
Acts, the 34 Act, the Rules and Regulations or the Blue Sky Laws.
(f) Underwriter shall maintain its membership with National
Securities Clearing Corporation in good standing throughout the term
of this Agreement and Underwriter shall comply with all articles,
bylaws, rules and other requirements applicable to Underwriter's
activities with National Securities Clearing Corporation and
Fund/Serv. Underwriter shall promptly submit a letter to National
Securities Clearing Corporation on behalf of the Funds for an
additional member agreement for mutual fund settlement.
(g) Neither Underwriter nor any of its directors, officers,
employees, or members of an advisory board is (i) ineligible, by
reason of subsection (a) of Section 9 of the Act to serve or act in
such capacities or (ii) subject to an order of the Commission entered
pursuant to subsections (b) or (f) of Section 9 of the Act.
9. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations of
Underwriter hereunder shall be subject, in its discretion, to the
accuracy of the representations and warranties of the Funds herein and
to the performance by the Funds of their covenants and agreements
hereunder.
10. CONDITIONS OF THE FUNDS' OBLIGATIONS. The obligations of the Funds
hereunder shall be subject, in their discretion, to the accuracy of
the representations and warranties of Underwriter herein and to the
performance by Underwriter of its covenants and agreements hereunder.
11. INDEMNIFICATION.
(a) Each Fund agrees to indemnify and hold harmless the
Underwriter, each person, if any, who controls Underwriter and the
directors, officers and employees of Underwriter (each, including any
such controlling person, is referred to herein as a "related person")
within the meaning of the Acts or Section 20 of the 34 Act, from and
against any losses, claims, damages, fines and liabilities, joint or
several, to which Underwriter or a related person may become subject
under the Acts or otherwise insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any
material fact contained (A) in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or (B) in any Blue
Sky Application or other document executed by the Fund specifically
for that purpose or based upon written information furnished by the
Fund filed in any state or other jurisdiction in order to qualify any
or all of the Shares under the securities laws thereof (any such
application, document or information being hereinafter called a "Blue
Sky Application"), (ii) the omission or alleged omission to state in
the Registration Statement, the Prospectus, any amendment or
supplement thereof, any Blue Sky Application, or any sales material, a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse Underwriter and
each related person for any legal or other expenses reasonably
incurred by Underwriter or such related person in connection with
investigating or defending any such loss, claim, damage, liability or
action, or (iii) the failure of the Fund's transfer agent to remit
appropriate amounts to or properly settle with any clearing agency
(e.g., National Securities Clearing Corporation) in accordance with
such agency's rules and regulations; provided, however, that the Fund
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will not be liable in any such case to the extent, but only to the
extent, that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, or any sales material, the Prospectus or any amendment or
supplement thereto, or any Blue Sky Application, in reliance upon and
in conformity with written information furnished to the Fund by
Underwriter expressly for use therein. This indemnity shall not apply
to any loss, claim, liability or action resulting from willful
misfeasance, bad faith or gross negligence on the part of Underwriter
or a related person. This indemnity agreement will be in addition to
any liability which the Fund may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the
Trust, the Funds, the trustees and officers of the Funds and Trust,
and any person who controls the Funds or Trust within the meaning of
the 33 Act from and against any losses, claims, damages or liabilities
to which the Trust, the Funds or any such trustee, officer or
controlling person may become subject, under the Acts or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement made by the Underwriter (A) in
the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or (B) in any Blue Sky Application, or (ii) the
omission or the alleged omission to state therein made by Underwriter
of a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Funds or
the Trust by the Underwriter expressly for use therein; Underwriter
will reimburse any legal or other expenses reasonably incurred by the
Funds or the Trust or any such trustee, officer or controlling person
in connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in
addition to any liability which the Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to paragraphs (a) or (b) of
this Section 11, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing (but the omission so to notify the
indemnifying party will not relieve it from any other liability which
it may have to any indemnified party), and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate (including
the indemnifying party) in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention
of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential
conflicts of interest between them, in which case the fees and
disbursements of such counsel related to such proceeding shall be paid
by the indemnifying party. It is understood that the indemnifying
party shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for (a) the reasonable
fees and expenses of more than one separate firm (in addition to any
local counsel) for Underwriter and all persons, if any, who control
Underwriter within the meaning of either the Acts or Section 20 of the
34 Act, and (b) the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for the Funds, the
Trust or their trustees or officers. It is further understood that all
such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for Underwriter and such control
persons of Underwriter, such firm shall be designated in writing by
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Underwriter. In the case of any such separate firm for the Funds and
Trust, and such trustees or officers of the Trust or Funds, such firm
shall be designated in writing by the Trust or Funds. The indemnifying
party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) Each Fund and the Underwriter each agree to notify the other
promptly of the commencement of any litigation or proceeding against
it in connection with the issuance and sale of any of the Shares.
12. RECORDS TO BE SUPPLIED BY THE FUNDS. A Fund shall furnish to
Underwriter copies of all information, financial statements and other
papers which Underwriter may reasonably request for use in connection
with the distribution of its Shares, and this shall include, but shall
not be limited to, one certified copy, upon request by Underwriter, of
all financial statements prepared for the Fund by independent public
accountants.
13. EXPENSES.
(a) Except as otherwise provided herein, each Fund will bear all
costs and expenses incurred under this Agreement including but not
limited to:
(i) Preparation, setting in type, and printing of sufficient
copies of prospectuses and statements of additional information
for distribution to existing shareholders.
(ii) Preparation, printing and distribution of reports and
other communications to existing shareholders.
(iii) Registration of its Shares under the Acts.
(iv) Qualification of its Shares for sale in the various
States.
(v) Qualification of the Fund as a dealer or broker under
the laws of any jurisdiction as well as qualification of the Fund
to do business in any jurisdiction, if such qualification is
necessary for the purpose of selling the Shares.
(vi) Maintaining facilities for the issue and transfer of
the Shares.
(vii) Supplying information, prices and other data to be
furnished by the Fund under this Agreement.
(viii) Any original issue taxes or transfer taxes applicable
to the sale of delivery of the Shares or certificates therefor.
(b) Except as otherwise agreed to by the parties or as otherwise
provided herein, Underwriter will pay all other expenses (other than
expenses which one or more dealers may bear pursuant to any agreement
with Underwriter) incident to the sale and distribution of the Shares
sold hereunder.
14. DISTRIBUTION PLANS. Each Fund has adopted a distribution plan with
respect to Class A Shares and Class C Shares pursuant to Rule 12b-1
under the Act (the "Plan") which provides that the Fund may incur
expenses to finance any activity which is primarily intended to result
in the sale of Shares. Such activities may include, but are not
limited to, advertising, salaries and other expenses of Underwriter
relating to selling efforts, seminars, printing of prospectuses,
10
statements of additional information and reports for other than
existing shareholders, preparation and distribution of advertising
material and sales literature, and supplemental payments to dealers.
Underwriter shall be paid by the Fund pursuant to the Plan with
respect to Class A Shares and Class C Shares a fee not to exceed 0.25%
and 0.75% per annum, respectively, of their average daily net assets
as may be determined by the Trust's Board of Trustees from time to
time for expenses incurred by Underwriter in connection with this
Agreement.
15. LIABILITY OF UNDERWRITER.
(a) Underwriter, its directors, officers, employees, shareholders
and agents shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Funds in connection with the
performance of this Agreement, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of Underwriter in the performance of its
obligations and duties under this Agreement.
(b) Any person, even though also a director, officer, employee,
shareholder or agent of Underwriter, who may be or become an officer,
trustee, employee or agent of the Trust, shall be deemed, when
rendering services to the Funds or acting on any business of the Funds
(other than services or business in connection with Underwriter's
duties hereunder), to be rendering such services to or acting solely
for the Funds and not as a director, officer, employee, shareholder or
agent, or one under the control or direction of Underwriter even
though paid by it.
16. TERMINATION OF THIS AGREEMENT.
(a) This Agreement may be terminated, with respect to a Fund at
any time, without payment of any penalty, by vote of a majority of the
members of the Board of Trustees of the Trust who are not interested
persons of the Fund and who have no direct or indirect financial
interest in the preparation of the Plan or in any agreement relating
to the Plan or by vote of a majority of the outstanding voting
securities of the Fund on not more than ninety (90) days' written
notice to the other party. This Agreement shall automatically
terminate in the event of its assignment.
(b) The Underwriter may terminate this Agreement by giving the
Fund written notice of its intention to terminate this Agreement at
the expiration of ninety (90) days from the date of delivery of such
written notice of intention to the Fund.
17. EFFECTIVE PERIOD OF THIS AGREEMENT.
The provisions of paragraph 11 hereof shall survive the
termination of this Agreement. The remaining provisions of this
Agreement shall be effective on the date first above written and shall
remain in full force and effect for a period of two (2) years
thereafter (unless terminated as set forth in Paragraph 16), and from
year to year thereafter, but only so long as such continuance is
specifically approved at least annually by (i) the Board of Trustees
of the Trust or by a vote of the majority of the outstanding voting
securities of the Funds and (ii) by a majority of the Trustees of the
Trust who are not parties to this Agreement or interested persons of
any such party by vote cast in person at a meeting called for the
purpose of voting on such approval.
18. REPORTS.
Underwriter shall prepare reports for the Board of Trustees of
the Trust on a quarterly basis showing such information as from time
to time shall be reasonably requested by such Board and necessary for
an informed determination as to whether this Agreement shall continue.
The Underwriter shall provide a written report, on a quarterly basis,
of the amounts expended, the purposes for which such expenditures were
made and any other information reasonably requested by the Board of
Trustees of the Trust to enable it to fulfill its responsibilities
under paragraph (d) of Rule 12b-1 under the Act and to make findings
required by paragraph (e) of Rule 12b-1.
11
19. 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.
20. QUESTIONS OF INTERPRETATION.
This Agreement shall be governed by the laws of the State of
Ohio, without reference to its choice of law rules.
21. NOTICES.
Any notices required or permitted to be given hereunder shall be
sufficient if in writing, and if delivered by hand, or sent by
certified mail, return receipt requested, to the following addresses:
If to the Trust or a Fund:
The Flex-Partners
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: President
If to the Underwriter:
Adviser Dealer Services, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: President
or such other address as either party may from time to time designate
in writing to the other, and shall be deemed given as of the date of
the delivery or mailing.
22. ARBITRATION.
Any dispute, controversy or claim arising out of or in connection
with this Agreement will be settled by binding arbitration in
accordance with the applicable rules for expedited review of (and by
an independent arbitrator selected by) the American Arbitration
Association, and the decision of such arbitrator, including any award
of attorneys' fees and costs, may be entered into any court with
jurisdiction.
23. ATTORNEYS' FEES.
If any legal action or any arbitration or other proceeding is
brought to enforce the provisions of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection
with any of the provisions of this Agreement, the successful or
prevailing party or parties, whether such party or parties have
instituted the action, shall be entitled to recover reasonable
attorneys' fees and other costs incurred in such action or proceeding,
in addition to any other relief to which the Funds, the Trust or
Underwriter may be entitled.
12
24. ENTIRE AGREEMENT AND BINDING EFFECT.
This Agreement contains the entire agreement between the parties
hereto with respect to the subject matter hereof and shall be binding
upon and inure to the benefit of the parties hereto and their
respective legal representatives, heirs, distributees, successors and
permitted assigns.
25. AMENDMENTS.
This Agreement may not be amended except by a writing signed by
all of the parties hereto.
IN WITNESS WHEREOF, the Trust and Underwriter have each caused this
Agreement to be signed in duplicate, as of the day and year first above written.
ATTEST: TRUST:
THE FLEX-PARTNERS
/s/ Xxxx X. Xxxxxxx BY: /s/ Xxxxxx X. Xxxx
----------------------- ------------------------
Xxxx X. Xxxxxxx Xxxxxx X. Xxxx
/s/ Xxxx Xxxxxxxxxxx ITS: Vice President
-----------------------
Xxxx Xxxxxxxxxxx
ATTEST: UNDERWRITER:
ADVISER DEALER SERVICES, INC.
/s/ Xxxx X. Xxxxxxx BY: /s/ Xxx X. Xxxxxx
----------------------- ------------------------
Xxxx X. Xxxxxxx Xxx X. Xxxxxx
/s/ Xxxx Xxxxxxxxxxx ITS: President
-----------------------
Xxxx Xxxxxxxxxxx
13
EXHIBIT 6
ADVISER DEALER SERVICES, INC.
0000 XXXXXXXX XXXXX
XXXXXX, XXXX 00000
000-000-0000
000-000-0000
DEALER'S AGREEMENT
Adviser Dealer 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 and Statement of Additional Information 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. The Underwriter reserves the right, in its 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 their
transfer agent within three (3) 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 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 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 schedules, 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 particular classes of Shares 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 subparagraph 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' custodian 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.
2
15. All communications to Underwriter shall be sent to Adviser Dealer
Services, Inc., 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000, or at such other
address as Underwriter may designate in writing. Any notice to you shall be duly
given if mailed or transmitted by facsimile with original to follow by mail 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
Dublin, 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 one copy of this Agreement to the Underwriter.
ACCEPTED BY DEALER ADVISER DEALER SERVICES, INC.
By: By:
---------------------------------- -------------------------------
Authorized Signature, Position
------------------------------------- ----------------------------------
Type or Print Name Date
Dealer Name:
Address:
Address:
Phone:
------------------------------------
Date
3
SCHEDULE A
COMMISSION SCHEDULE
TACTICAL ASSET ALLOCATION FUND - CLASS A
UTILITY GROWTH FUND - CLASS A
------------------------------- --------------------- ----------------------
Dollar amount of Purchase Total Dealer
(At Offering Price) Sales Concession
Charge*
------------------------------- --------------------- ----------------------
------------------------------- --------------------- ----------------------
Up to $100,000 4.00% 3.50%
------------------------------- --------------------- ----------------------
------------------------------- --------------------- ----------------------
$100,000 to $249,999 3.50% 3.00%
------------------------------- --------------------- ----------------------
------------------------------- --------------------- ----------------------
$250,000 to $499,999 3.00% 2.50%
------------------------------- --------------------- ----------------------
------------------------------- --------------------- ----------------------
$500,000 to $999,999 2.50% 2.00%
------------------------------- --------------------- ----------------------
------------------------------- --------------------- ----------------------
$1,000,000 or more None None
------------------------------- --------------------- ----------------------
Payment to broker/dealer, paid quarterly, based on assets of each registered
representative as follows:
----------------------------- ----------------- ----------- -----------
Dollar amount Shareholder 12b-1 Total
in Fund Servicing Fee
----------------------------- ----------------- ----------- -----------
----------------------------- ----------------- ----------- -----------
Under $3,000,000 25bp 5bp 30bp
$3,000,001 up to $5,000,000 25bp 10bp 35bp
Over $5,000,001 25bp 15bp 40bp
----------------------------- ----------------- ----------- -----------
TACTICAL ASSET ALLOCATION FUND - CLASS C
UTILITY GROWTH 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:
------------------------- -------------------------
Up to 18 months 1.50%
18 to 24 month 0.75%
------------------------- -------------------------
Paid to broker/dealer, paid quarterly, based on assets of each registered
representative as follows:
----------------------------- ----------------- ------------- ---------------
Dollar amount Shareholder 12b-1 Total
in Fund Servicing Fee
----------------------------- ----------------- ------------- ---------------
----------------------------- ----------------- ------------- ---------------
Under $3,000,000 25bp 5bp 30bp
$3,000,001 up to $5,000,000 25bp 10bp 35bp
Over $5,000,001 25bp 15bp 40bp
----------------------------- ----------------- ------------- ---------------
Trailing commission will be paid quarterly beginning in the thirteenth month as
described above.
Brokers may invest for their own account at NAV.
4
SCHEDULE B
POLICIES AND PROCEDURES
WITH RESPECT TO SALES
OF DUAL PRICING FUND
As certain Funds distributed by Adviser Dealer Services, Inc. (the
"Multiple Pricing Funds") offer more than one class of Shares subject to
different levels of 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 sufficient to qualify for the elimination of a
front-end sales charge must be for Class A Shares.
2. Any purchase order for $100,000 or greater is subject to approval by a
registered principal of the Underwriter, who must approve the purchase
order for the proper class of 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 Multiple Pricing Fund (or
Shares of another Fund having a maximum sales load equal to or greater
than Class A Shares of the Multiple Pricing Funds) for Shares of
another Multiple Pricing Fund will be for Class A Shares only. Other
classes of a Multiple Pricing Fund may be exchanged for another class
of a different Multiple Pricing Fund, provided that the multiple
exchange 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 other classes of 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 other classes of
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 other classes of Shares.
The appropriate supervisor must ensure that all employees receiving
investor inquiries about the purchase of Shares of Multiple 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 Multiple Pricing Funds. Questions relating to this
policy should be directed to Xxxxx Xxxxxx of the Underwriter, at 000-000-0000.
5
