EXHIBIT (E)(2)
UNDERWRITING AGREEMENT
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This Agreement made as of this day of , 1998, by and between
The Jefferson Fund Group Trust, a Delaware 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 Jefferson
REIT Fund and the Jefferson Regional Bank Fund (each a "Fund"; collectively, the
"Funds"); and
WHEREAS, the Trust 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 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
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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.
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(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 Funds 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 their 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
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number of Shares. Underwriter, as agent for the Funds, undertakes to sell
Shares on a best efforts basis only against orders therefor.
4. RULES OF NASD, ETC.
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(a) Underwriter will conform in all material respects to the Conduct
Rules 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
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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 State of Delaware 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 FUNDS. Each Fund covenants and agrees with
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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 filing of notices of sale or
qualification of the Shares for offering and sale under the securities or
Blue Sky laws of such jurisdictions in which the Shares will be offered or
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.
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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.
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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 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 NASD
Conduct Rules 2210, 2730 and 2740.
(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.
(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
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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
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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.
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(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 notice or 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 indemnify Underwriter and each related person from and against 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 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 (each a
"controlling person") 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; and
Underwriter will indemnify the Funds, the Trust, and any such trustee,
officer or controlling person from and against 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 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. Each Fund shall furnish to
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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) Preparation and filing of notices of sale or 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 distribution and servicing
-------------------
plans with respect to Class A Shares and Class B Shares pursuant to Rule
12b-1 under the Act (collectively, the "Plans") which provide 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 Plans with respect to Class A Shares and Class B
Shares a fee not to exceed 0.25% and 1.00% 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.
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, postage prepaid, to the following
addresses:
If to the Trust or a Fund:
Jefferson Fund Group Trust
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
If to the Underwriter:
Adviser Dealer Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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.
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:
JEFFERSON FUND GROUP TRUST
--------------------------------- BY:----------------------------
--------------------------------- ITS:---------------------------
ATTEST: UNDERWRITER:
ADVISER DEALER SERVICES, INC.
--------------------------------- BY:----------------------------
--------------------------------- ITS:---------------------------