EXHIBIT 6
UNDERWRITING AGREEMENT
This Agreement made as of this ___ day of ___________, 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, one such series of shares represent interests in The CEF
Fund (the "Fund"); and
WHEREAS, the Fund is an investment company 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 Fund and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of the Fund
(the "Shares");
NOW, THEREFORE, in consideration of the promises and agreements of
the parties contained herein, the parties agree as follows:
1. APPOINTMENT. The Fund hereby appoints Underwriter as its 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, the 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 the 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 the 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. The 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 the Fund or in the event that the 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 the
Fund as a dividend or stock split.
(b) Underwriter will also have the right, as agent for the
Fund, 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
Fund, 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 Fund or by
another entity on behalf of the Fund. 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 Fund or its transfer agent for
registration of the Shares purchased. Sales of the Shares of the Fund
shall be deemed to be made when and where accepted by the Fund's
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 Fund 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 Fund 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 Fund,
undertakes to sell Shares on a best efforts basis only against
orders therefor.
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 Fund (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 Fund. To the extent the Fund has created any such
sales materials, the Fund 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 Fund as information supplemental to such
Prospectus. Copies of the Prospectus will be supplied by the Fund to
Underwriter in reasonable quantities upon request.
5. REPRESENTATIONS AND WARRANTIES OF THE FUND. The 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
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.
(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 FUND. The 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.
(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 Fund,
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 Fund 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
receiving instructions (oral or written) from the Fund 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 Fund. Neither Underwriter nor any of its
agents will give any information or make any representation with
respect to the Fund other than the information or representations
contained in the Prospectus or any sales literature authorized by the
Fund for use in connection with the offering of the Shares, or such
other information as is specifically authorized by the Fund.
(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;
(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 Fund of their covenants and agreements
hereunder.
10. CONDITIONS OF THE FUNDS' OBLIGATIONS. The obligations of the
Fund 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) The 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 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 Fund, the trustees and officers of the Fund and Trust,
and any person who controls the Fund or Trust within the meaning of
the 33 Act from and against any losses, claims, damages or
liabilities to which the Trust, the Fund 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 Fund or the Trust by the Underwriter expressly for use therein;
Underwriter will reimburse any legal or other expenses reasonably
incurred by the Fund 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 Fund, 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 Underwriter.
In the case of any such separate firm for the Fund and Trust, and
such trustees or officers of the Trust or Fund, such firm shall be
designated in writing by the Trust or the Fund. 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) The 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 FUND. The 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, the 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. The 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, 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 Fund 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 Fund or acting on any business of the
Fund (other than services or business in connection with
Underwriter's duties hereunder), to be rendering such services to or
acting solely for the Fund 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 the
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 Fund 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.
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 the 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 Fund, the
Trust or Underwriter may be entitled.
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
__________________________________ BY:_______________________
__________________________________ ITS:______________________
ATTEST: UNDERWRITER:
ADVISER DEALER SERVICES, INC.
__________________________________ BY:__________________________
__________________________________ ITS:_________________________
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.
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
Revised 1/27/97
SCHEDULE A
MUTUAL FUNDS SUBJECT
TO DEALERS AGREEMENT
The Core Equity Fund
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
614-766-7000.
Revised 1/27/97
SCHEDULE A
COMMISSION SCHEDULE
THE CORE EQUITY FUND - CLASS A
-------------------------------------------- --------------------- ----------------------
Dollar amount of Purchase Total Deale
(At Offering Price) Sales Concess
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
---------------------------------- ------------------- -------------------------- ------------------
THE CORE EQUITY 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.
