UNDERWRITING AGREEMENT
THIS AGREEMENT is made as of May 1, 1997, by and between The BSG
Funds, an Ohio business trust (the "Trust"), and Banc Stock Financial Services,
Inc., an Ohio corporation ("Underwriter").
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 and a member of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of beneficial
interest (the "Shares") of the First American Bancshares Fund series of shares
of the Trust (the "Series").
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment. The Trust 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. While this Agreement is in force,
the Trust shall not sell any Shares except on the terms set forth in this
Agreement. Notwithstanding any other provision hereof, the Trust may terminate,
suspend or withdraw the offering of Shares of any Series 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 Trust,
to enter into dealer agreements with registered and qualified dealers, and to
sell Shares to such dealers against orders therefor at the public offering price
(as defined in subparagraph 2(e) hereof) less a discount determined by
Underwriter, which discount shall not exceed the amount of the sales charge
stated in the Trust's effective Registration Statement on Form N-1A under the
Securities Act of 1933, as amended, including the then current prospectus and
statement of additional information (the "Registration Statement"). 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 Trust.
(b) Underwriter will have the right, as agent for the Trust,
to sell such Shares to the public against orders therefor at the public offering
price.
(c) Underwriter will also have the right, as agent for the
Trust, to sell Shares at their net asset value to such persons as may be
approved by the Trustees of the Trust, all such sales to comply with the
provisions of the Act and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
(d) Underwriter will also have the right to take, as agent for
the Trust, all actions which, in Underwriter's judgment, are necessary to carry
into effect the distribution of the Shares.
(e) The public offering price for the Shares of each Series
(and, with respect to each Series offering multiple classes of Shares, the
Shares of each Class of such Series) shall be the respective net asset value of
the Shares of that Series (or Class of that Series) then in effect, plus any
applicable sales charge determined in the manner set forth in the Registration
Statement or as permitted by the Act and the rules and regulations of the
Securities and Exchange Commission
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promulgated thereunder. In no event shall any applicable sales charge
exceed the maximum sales charge permitted by the Rules of Fair Practice of the
NASD.
(f) The net asset value of the Shares of each Series (or Class
of a Series) shall be determined in the manner provided in the Registration
Statement, and when determined shall be applicable to transactions as provided
for in the Registration Statement. The net asset value of the Shares of each
Series (or each Class of a Series) shall be calculated by the Trust or by
another entity on behalf of the Trust. Underwriter shall have no duty to inquire
into or liability for the accuracy of the net asset value per share as
calculated.
(g) On every sale, the Trust shall receive the applicable net
asset value of the Shares promptly, but in no event later than the third
business day following the date on which Underwriter shall have received an
order for the purchase of the Shares. Underwriter shall have the right to retain
the sales charge less any applicable dealer discount.
(h) Upon receipt of purchase instructions, Underwriter will
transmit such instructions to the Trust or its transfer agent for registration
of the Shares purchased.
(i) As additional compensation for its activities under this
Agreement, the Underwriter shall receive all contingent deferred sales charges
imposed on redemptions, if any. Whether and at what rate a contingent deferred
sales charge will be imposed with respect to a redemption shall be determined in
accordance with, and in the manner set forth in, the Registration Statement.
(j) 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 any
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,
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however, that Underwriter expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the performance of its
obligations to the Trust under this Agreement.
(k) Underwriter, as agent of and for the account of the Trust,
may repurchase the Shares at such prices and upon such terms and conditions as
shall be specified in the Registration Statement. Such price shall reflect the
subtraction of the contingent deferred sales charge, if any, computed in
accordance with and in the manner set forth in the Registration Statement. At
the end of each business day, the Underwriter shall notify the Trust and the
Trust's transfer agent of the number of shares redeemed, and the identity of the
shareholders or dealers offering Shares for repurchase. Upon such notice, the
Trust shall pay the Underwriter the net asset value of the redeemed shares in
cash or in the form of a credit against monies due the Trust from the
Underwriter as proceeds from the sale of Shares. The Trust reserves the right to
suspend such repurchase right upon written notice to the Underwriter. The
Underwriter further agrees to act as agent for the Trust to receive and transmit
promptly to the Trust's transfer agent, shareholder and dealer requests for
redemption of Shares.
3. Sales of Shares by the Trust. The Trust reserves the right to issue
any Shares at any time directly to the holders of Shares ("Shareholders"), to
sell Shares to its Shareholders or to other persons approved by Underwriter at
not less than net asset value and to issue Shares in exchange for substantially
all the assets of any corporation or trust or for the shares of any corporation
or trust.
4. Basis of Sale of Shares. Underwriter does not agree to sell any
specific number of Shares. Underwriter, as agent for the Trust, undertakes to
sell Shares on a best efforts basis only against orders therefor.
5. Compliance with NASD and Government Rules.
(a) Underwriter will conform to the Rules of Fair Practice of
the NASD and the securities laws of any jurisdiction in which it sells, directly
or indirectly, any Shares.
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(b) Underwriter, at its own expense, will pay the costs
incurred in establishing and maintaining its relationship with the dealers
selling the Shares. Underwriter will require each dealer with whom Underwriter
has a dealer agreement to conform to the applicable provisions hereof and the
Registration Statement, and neither Underwriter nor any such dealers shall
withhold the placing of purchase orders so as to make a profit thereby.
(c) Underwriter agrees to furnish to the Trust sufficient
copies of any agreements, plans or other materials it intends to use in
connection with any sales of Shares in adequate time for the Trust to file and
clear them with the proper authorities before they are put in use, and not to
use them until so filed and cleared.
(d) Underwriter, at its own expense, will qualify as dealer or
broker, or otherwise, under all applicable State or federal laws required in
order that Shares may be sold in such States as may be mutually agreed upon by
the parties.
(e) Underwriter shall not make, or permit any representative,
broker or dealer to make, in connection with any sale or solicitation of a sale
of the Shares, any representations concerning the Shares except those contained
in the then current prospectus and statement of additional information covering
the Shares and in printed information approved by the Trust as information
supplemental to such prospectus and statement of additional information. Copies
of the then effective prospectus and statement of additional information and any
such printed supplemental information will be supplied by the Trust to
Underwriter in reasonable quantities upon request.
6. Records to be Supplied by Trust. The Trust 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 the 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 Trust by independent public accountants.
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7. Expenses to be Borne by Trust. The Trust will bear the following
expenses:
(a) preparation, setting in type, printing of sufficient
copies of the prospectus and statement of additional information for
distribution to shareholders, and the distribution to shareholders of the
prospectus and statement of additional information;
(b) preparation, printing and distribution of reports and
other communications to shareholders;
(c) registration of the Shares under the federal securities
law;
(d) qualification of the Shares for sale in the
jurisdictions designated byU nderwriter;
(e) qualification of the Trust as a dealer or broker under
the laws of jurisdictions designated by Underwriter as well as qualification of
the Trust to do business in any jurisdiction, if Underwriter determines that
such qualification is necessary or desirable for the purpose of facilitating
sales of the Shares;
(f) maintaining facilities for the issue and transfer of the
Shares;
(g) supplying information, prices and other data to be
furnished by the Trust under this Agreement; and
(h) any original issue taxes or transfer taxes applicable to
the sale or delivery of the Shares of certificates therefor.
8. Services to and Actions for Trust, Not Underwriter. 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 Trust or acting on any
business of the Trust (other than services or business in connection with
Underwriter's duties hereunder), to be rendering such services to or acting
solely for the Trust and not as a
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director, officer, employee, shareholder or agent, or one under the control or
direction of Underwriter, even though paid by it.
9. Indemnification.
(a) The Trust agrees to indemnify, defend and hold the
Underwriter, its officers, directors, employees, shareholders and agents, and
any person who controls the Underwriter within the meaning of Section 15 of the
1933 Act (hereinafter referred to as "Covered Person"), free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which a Covered Person may incur
under the 1933 Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact or alleged untrue statement of a
material fact contained in the Registration Statement or arising out of or based
upon any omission or alleged omission to state a material fact required to be
stated in the Registration Statement or necessary to make the statements therein
not misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Underwriter to the Trust for use in the
Registration Statement; provided, however, that this indemnity agreement shall
not inure to the benefit of any person who is also an officer or trustee of the
Trust or who controls the Trust within the meaning of Section 15 of the 1933
Act, unless a court of competent jurisdiction shall determine, or it shall have
been determined by controlling precedent, that such result would not be against
public policy as expressed in the 1933 Act; and further provided, that in no
event shall anything contained herein be so construed as to protect the
Underwriter against any liability to the Trust or to the shareholders of any
Series to which the Underwriter would otherwise be subject by reason of willful
misfeasance,
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bad faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations under this Agreement.
(b) The Underwriter agrees to indemnify, defend, and hold the
Trust, its officers, trustees, employees, shareholders and agents, and any
person who controls the Trust within the meaning of Section 15 of the 1933 Act,
free and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending against such claims,
demands or liabilities and any counsel fees incurred in connection therewith)
which the Trust, its trustees, officers, employees, shareholders and agents, or
any such controlling person may incur under the 1933 Act or under common law or
otherwise arising out of or based upon any untrue statement of a material fact
or alleged untrue statement of a material fact contained in information
furnished in writing by the Underwriter to the Trust for use in the Registration
Statement, or arising out of or based upon any omission or alleged omission to
state a material fact in connection with such information required to be stated
in the Registration Statement necessary to make such information not misleading.
(c) A party seeking indemnification hereunder (the
"Indemnitee") shall give prompt written notice to the party from whom
indemnification is sought ("Indemnitor") of a written assertion or claim of any
threatened or pending legal proceeding which may be subject to indemnity under
this Section; provided, however, that failure to notify the Indemnitor of such
written assertion or claim shall not relieve the Indemnitor of any liability
arising from this Section. The Indemnitor shall be entitled, if it so elects, to
assume the defense of any suit brought to enforce a claim subject to this
Agreement and such defense shall be conducted by counsel chosen by the
Indemnitor and satisfactory to the Indemnitee; provided, however, that if the
defendants include both the Indemnitee and the Indemnitor, and the Indemnitee
shall have reasonably concluded that there
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may be one or more legal defenses available to it which are different from or
additional to those available to the Indemnitor ("conflict of interest"), the
Indemnitor shall not have the right to elect to defend such claim on behalf of
the Indemnitee, and the Indemnitee shall have the right to select separate
counsel to defend such claim on behalf of the Indemnitee. In the event that the
Indemnitor elects to assume the defense of any suit pursuant to the preceding
sentence and retains counsel satisfactory to the Indemnitee, the Indemnitee
shall bear the fees and expenses of additional counsel retained by it except for
reasonable investigation costs which shall be borne by the Indemnitor. If the
Indemnitor (i) does not elect to assume the defense of a claim, (ii) elects to
assume the defense of a claim but chooses counsel that is not satisfactory to
the Indemnitee or (iii) has no right to assume the defense of a claim because of
a conflict of interest, the Indemnitor shall advance or reimburse the
Indemnitee, at the election of the Indemnitee, reasonable fees and disbursements
of any counsel retained by Indemnitee, including reasonable investigation costs.
10. Advances of Expenses. The Trust shall advance attorneys' fees or
other expenses incurred by a Covered Person in defending a proceeding only to
the extent permitted by the 1933 Act and the Act.
11. Termination and Amendment of this Agreement. This Agreement shall
automatically terminate, without the payment of any penalty, in the event of its
assignment. This Agreement may be amended only if such amendment is approved (i)
by Underwriter, (ii) either by action of the Board of Trustees of the Trust or
at a meeting of the Shareholders of the Trust by the affirmative vote of a
majority of the outstanding Shares, and (iii) by a majority of the Trustees of
the Trust who are not interested persons of the Trust or of Underwriter, by vote
cast in person at a meeting called for the purpose of voting on such approval.
Either the Trust or Underwriter may at any time terminate this Agreement on
sixty (60) days' written notice delivered or mailed by registered mail, postage
prepaid, to the other party.
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12. Effective Period of this Agreement. This Agreement shall take
effect upon its execution and shall remain in full force and effect for a period
of two years from the date of its execution (unless terminated automatically as
set forth in Paragraph 11, and from year to year thereafter), subject to annual
approval (i) by Underwriter, (ii) by the Board of Trustees of the Trust or a
vote of a majority of the outstanding Shares, and (iii) by a majority of the
Trustees of the Trust who are not interested persons of the Trust or of
Underwriter, by vote cast in person at a meeting called for the purpose of
voting on such approval.
13. Limitation of Trust's Liability. The term "The BSG Funds" means
and refers to the Trustees from time to time serving under the Trust's
Declaration of Trust as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any of the Trustees, Shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind only
the trust property of the Trust, as provided in the Declaration of Trust of the
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees and Shareholders of the Trust and signed by the officers of the Trust,
acting as such, and neither such authorization by such Trustees and Shareholders
nor such execution and delivery by such officers shall be deemed to have been
made by any of them individually or to impose any liability on them personally,
but shall bind only the trust property of the Trust as provided in its
Declaration of Trust. A copy of the Agreement and Declaration of Trust of the
Trust is on file with the Secretary of State of Ohio.
14. New Series. The terms and provisions of this Agreement shall
become automatically applicable to any additional series of the Trust
established during the initial or renewal term of this Agreement.
15. Successor Investment Company. Unless this Agreement has been
terminated in accordance with Paragraph 11, the terms and provisions of this
Agreement shall become
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automatically applicable to any investment company which is a successor to the
Trust as a result of a reorganization, recapitalization or change of domicile.
16. 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.
17. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of the
State of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Act shall be resolved by reference to such term or provision of
the Act and to interpretation thereof, if any, by the United States courts or in
the absence of any controlling decision of any such court, by rules, regulations
or orders of the Securities and Exchange Commission issued pursuant to said Act.
In addition, where the effect of a requirement of the Act, reflected in any
provision of this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
18. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that for this purpose the
address of the Trust shall be 0000 Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxx
00000 and of the Underwriter shall be 0000 Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxx 00000.
19. Counterparts. This Agreement may be in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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20. Binding Effect. Each of the undersigned expressly warrants and
represents that he has the full power and authority to sign this Agreement on
behalf of the party indicated, and that his signature will operate to bind the
party indicated to the foregoing terms.
21. Force Majeure. If Underwriter shall be delayed in its performance
of services or prevented entirely or in part from performing services due to
causes or events beyond its control, including and without limitation, acts of
God, interruption of power or other utility, transportation or communication
services, acts of civil or military authority, sabotages, national emergencies,
explosion, flood, accident, earthquake or other catastrophe, fire, strike or
other labor problems, legal action, present or future law, governmental order,
rule or regulation, or shortages of suitable parts, materials, labor or
transportation, such delay or non-performance shall be excused and a reasonable
time for performance in connection with this Agreement shall be extended to
include the period of such delay or non-performance.
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IN WITNESS WHEREOF, the Trust and Underwriter have each caused this
Agreement to be signed on its behalf, all as of the day and year first above
written.
ATTEST: The BSG Funds
/s/ Xxxx X. Xxxxxx, Secretary By: /s/ Xxxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxx, Secretary President
Xxxxxxx X. Xxxxxxxxxx, President
ATTEST: BANC STOCK FINANCIAL SERVICES, INC.
/s/ Xxxxxx X. Xxxxx, Secretary By: /s/ Xxxxxxx X. Xxxxxxxxxx,
Xxxxxx X. Xxxxx, Secretary Vice President
Xxxxxxx X. Xxxxxxxxxx,
Vice President
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