Dealer #_______
TOUCHSTONE
INVESTMENTS
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800.638.8194
DEALER'S AGREEMENT
Touchstone Securities, Inc., as the exclusive distributor for the Touchstone
Family of Mutual Funds (the "Funds") 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. Distributor 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
price or, if you so notify us, at net asset value, and shall be subject to the
conditions of offering, set forth in the then current Prospectus 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 Distributor, Distributor will inform you as
to the states or other jurisdictions in which Distributor believes the Shares
may legally be sold.
2. (a) Unless a purchase of Shares qualifies as a purchase at net asset value,
you will receive a discount from the public offering price ("concession") on all
Shares purchased by you from Distributor as indicated on Schedule A, as it may
be amended by Distributor from time to time. You as Dealer hereby agree to waive
payment of any and all 12b-1 fees ("fees") or other amounts payable until
Distributor shall have received and collected the fees or other amounts payable
to Distributor.
(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 Distributor 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 Distributor 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 Distributor of the Shares, Distributor 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. Distributor 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 net asset values determined by, or for, the Funds.
5. All orders are subject to acceptance or rejection by Distributor in its sole
discretion. The Distributor 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 its 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
Distributor all of your right, title and interest in such Shares to secure
payment therefore. You appoint Distributor 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,
Distributor 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 Distributor may hold you responsible for any loss,
including loss of profit, suffered by the Funds or its Transfer Agent, 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
Distributor supplemental to such Prospectus. Distributor will furnish additional
copies of the current Prospectus and Statement of Additional Information and
such sales literature and other releases and information issued by Distributor
in reasonable quantities upon request.
8. Under this Agreement, you act as principal and are not employed by
Distributor as broker, agent or employee. You are not authorized to act for
Distributor 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 Distributor from time to
time and upon such written representations as may hereafter be made by
Distributor 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 Distributor, or the request of the Funds,
promptly make such records available to Distributor or to the Funds as are
requested, and (b) promptly notify Distributor 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 Distributor and by the Funds, to
enable the parties hereto and the Funds to identify all accounts opened and
maintained by your customers.
11. Distributor has adopted compliance standards, attached hereto as Schedule B,
as to when Class A, Class B and Class C Shares of the Funds 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 agree to follow any written guidelines or standards relating to
the sale or distribution of the Shares as may be provided to you by
the Distributor including the provisions outlined in exhibits B and C
as well as to follow any applicable federal and/or state securities
laws, rules or regulations affecting the sale or distribution of
Shares of investment companies offering multiple classes of shares.
(b) 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 Distributor other than for investment,
except for the purpose of covering purchase orders already received.
(c) All conditional orders received by Distributor must be at a specified
definite price.
(d) If any Shares purchased by you are repurchased by the Funds (or by
Distributor 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
Distributor the full concession allowed to you on the original sale,
such refund to be paid by Distributor to the Funds, and (2)
Distributor shall forthwith pay to the Funds that part of the
discount retained by Distributor 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.
(e) Neither Distributor, as exclusive Distributor 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 sub-paragraph shall prevent you from selling
Shares for the account of a record holder to Distributor 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.
(f) 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, defend and protect the Distributor, the
Funds, the Funds' transfer agent and the Funds' custodians and each trustee,
director, officer, employee and agent of such persons (collectively, the "Fund
Parties") and shall hold the Fund Parties harmless from and against any and all
claims, demands actions, losses, damages, liabilities, costs, charges,
reasonable counsel fees and expenses of any nature the Funds or they incur
("Losses") to the extent such Losses arise out of (i) the dissemination by you
or any persons or entities affiliated with you of information regarding the
Funds that is materially incorrect and that is not provided to you or approved
by the Funds, or (ii) the willful misconduct or negligence by you or any persons
or entities affiliated with you in the performance of, or failure to perform
your obligations under this Agreement or (iii) any violation of law related to
or resulting from your participation in this Agreement and the activities
contemplated hereby; except to the extent such Losses result from the
Distributor's willful misconduct or negligence.
Distributor shall indemnify you and each of your directors, officers, employees
and agents and hold you and any such director, officer, employee and agent
harmless from and against any and all Losses arising out of (i) any inaccuracy
or omission in any prospectus, registration statement, annual report or proxy
statement of the funds or any advertising or promotional material generated by
the Fund (ii) any breach by Distributor of any representation contained in this
Agreement, and (iii) any action taken or omitted to be taken pursuant to this
Agreement, except to the extent such Losses result from your breach of this
Agreement, or your willful misconduct, or negligence.
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
pursuant to Rule 12b-1 under the Investment Company Act of 1940 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 Distributor should be sent to Touchstone Securities,
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as Distributor may designate in writing. All communications to you should be
sent to the address of your principal office, as indicated below in your
acceptance of this Agreement, or at such other address as you designate in
writing. Any notice to either party shall be duly given if mailed, telegraphed
sent by facsimile transmission, or sent by express mail service.
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
Distributor for the purchase of Shares, or (ii) upon receipt by Distributor in
Cincinnati, 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. You represent that you have adopted and implemented procedures to safeguard
customer information and records that are reasonably designed to: (1) insure the
security and confidentiality of your customer records and information; (2)
protect against any anticipated threats or hazards to the security or integrity
of customer records and information; (3) protect against unauthorized access to
or use of your customer records or information that could result in substantial
harm or inconvenience to any customer; (4) protect against unauthorized
disclosure of non-public personal information to unaffiliated third parties; and
(5) otherwise ensure your compliance with the Securities and Exchange
Commission's Regulation S-P. You agree to indemnify us against any and all
claims, liability, expense or loss in any way arising out of your failure to
adopt and implement these and such other privacy or confidentiality procedures
that may in the future be required by law or regulation.
19. You represent and warrant that you have in place and will maintain suitable
and adequate know your customer policies and procedures and that you shall
comply with all applicable laws and regulations regarding anti-money laundering
activity and will provide such documentation to us upon our request.
20. By signing this Agreement, you certify that you have implemented procedures
in accordance with the USA Patriot Act to verify the identity of any person
seeking to open an account, that you maintain records of the information used to
verify the person's identity, and you have taken steps to determine whether the
person appears on any lists of known or suspected terrorists or terrorist
organizations provided to investment companies by any government agency.
21. 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 all copies of this Agreement to the Distributor.
Accepted by Dealer Touchstone Securities, Inc.
By:_______________________________ By:____________________________
Authorized Signature Authorized Signature
________________________________ ____________________________
Type or Print Name, Position Type or Print Name, Position
_______________________________ ___________________________
Dealer Name Date
_______________________________
Address
_______________________________
City/State/Zip
_______________________________
Phone
_______________________________
Date
SCHEDULE A
TOUCHSTONE FUNDS
BROKER-DEALER AGREEMENT EXHIBIT A- COMMISSION SCHEDULE
A SHARES - EQUITY FUNDS A SHARES - BOND FUNDS
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TOTAL SALES DEALER TOTAL SALES DEALER
CHARGE1 CONCESSION CHARGE1 CONCESSION
Under $50,000 5.75% 5.00% Under $50,000 4.75% 4.00%
$50,000 but less than $100,000 4.50% 3.75% $50,000 but less than $100,000 4.50% 3.75%
$100,000 but less than $250,000 3.50% 2.75% $100,000 but less than $250,000 3.50% 2.75%
$250,000 but less than $500,000 2.95% 2.25% $250,000 but less than $500,000 2.95% 2.25%
$500,000 but less than $1,000,000 2.25% 1.75% $500,000 but less than $1,000,000 2.25% 1.75%
$1,000,000 or more NAV2 0.00% $1,000,000 or more NAV2 0.00%
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1 Expressed as a percentage of the offering price.
2 There is no initial sales charge on any purchase of $1,000,000 or more, however, a 1% contingent deferred sales charge may be
assessed if redemption occurs within one year of purchase.
Class B Shares or Class C Shares may not be used in combination with Class A Shares to meet Right of Accumulation (ROA)
requirements.
12(b)-1 payment on A Shares/Equity and Bond Funds is 0.25% of its average daily net assets annually, (paid quarterly) beginning
immediately.
B SHARES - EQUITY/BOND FUNDS3
CLASS B* SHARES OF THE FUNDS ARE SOLD AT NAV WITHOUT AN INITIAL
SALES CHARGE. SHARES REDEEMED WITHIN THE FIRST SIX YEARS OF
PURCHASE MAY BE SUBJECT TO A CDSC IMPOSED ACCORDING TO
THE FOLLOWING SCHEDULE:
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Year Since Purchase Contingent Deferred
Payment Made Sales Charge
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First 5.00%
Second 4.00%
Third 3.00%
Fourth 2.00%
Fifth 1.00%
Sixth 1.00%
Seventh and thereafter4 None
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12(b)-1 Payment 0.25% annually (paid quarterly)
beginning in the 13th month
Dealer Concession 4.00%
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3Including Money Market Fund Class B Shares.
4Class B Shares will automatically convert to Class A Shares after eight years.
*Not all Touchstone Funds offer Class B Shares. Please see a performance fact
sheet or visit ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ to distinguish which funds do and
do not offer Class B shares.
C SHARES - EQUITY/BOND FUNDS
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Dealer Concession 1.00%
Contingent Deferred Sales Charge5 1.00%
12(b)-1 Payment 1.00 annually (paid quarterly)
beginning in the 13th month
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5 Assessed if redemption occurs within one year of purchase.
MONEY MARKET FUNDS
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12(b)-1 Payment6 0.25% annually (paid quarterly)
beginning immediately
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6 Excludes Institutional share class.
QUARTERLY TRAIL PAYMENTS ARE RELEASED ONLY WHEN THE PAYMENT FOR THE FIRM EXCEEDS
$50.00 IN ANY GIVEN QUARTER. UNPAID TRAILS DO NOT ACCUMULATE.
STOCK FUNDS BOND FUNDS MONEY MARKET FUNDS
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Small Cap Growth Fund High Yield Fund Money Market Fund
Emerging Growth Fund Core Bond Fund U.S. Government Money Market Fund
Growth Opportunities Fund Ohio Insured Tax-Free Fund Tax-Free Money Market Fund
Large Cap Growth Fund Ohio Tax-Free Money Market Fund - R
Enhanced 30 Fund California Tax-Free Money Market Fund
Value Plus Fund Florida Tax-Free Money Fund
Micro Cap Growth Fund
Touchstone Funds are distributed by Touchstone Securities, Inc.*
*A registered broker/dealer and member NASD and SIPC
A Member of Western & Southern Financial Group(R)
EXHIBIT B
POLICIES AND PROCEDURES WITH
RESPECT TO SALES OF MULTIPLE CLASS FUND SHARES
The Touchstone Family of Mutual Funds (the "Funds") are available to the public
in three series:(1)shares subject to a front-end sales charge ("Class A shares")
(2)shares subject to a contingent deferred sales charge if the redemption occurs
within six years of the purchase date. The contingent deferred sales charge
decreases from a maximum of 5%, which is applicable if the redemption occurs
within the first year of the purchase date, to 0%, if the redemption occurs
after the sixth year from the purchase date ("Class B shares") and (3) shares
subject to a 1% contingent deferred sales charge if the redemption occurs
within one year of purchase ("Class C shares"). It is important for an investor
to choose not only 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 policies:
1. Any purchase order is subject to approval by a registered principal of
the Dealer, who must approve the purchase order for either Class A
shares, Class B shares or Class C 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.
2. Any purchase order for $250,000 or more in Class B shares will usually
be considered as a purchase request for Class A shares or declined
because it is ordinarily more advantageous for an investor to purchase
Class A shares.
3. Any purchase order for $1 million or more in Class C shares will
usually be considered as a purchase request for Class A shares or
declined because it is ordinarily more advantageous for an investor to
purchase Class A shares.
There are instances when one financing method may be more appropriate than the
other. For example, investors whose order 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 fees applicable to Class B and Class C shares. On
the other hand, an investor whose order would not qualify for such a discount
may wish to pay no front-end sales charge and have all of his funds invested in
Class B or Class C shares. The investment return may partially or wholly offset
the higher annual expenses; however, because the Fund's or Funds' future
return(s) cannot be predicted, there can be no assurance that this would be the
case. In addition, an investor that anticipates that he will redeem his shares
within a short period of time, may, depending on the amount of purchase, choose
to bear higher distribution fees associated with Class C shares. On the other
hand, Class B shares may be more attractive than Class C shares if an investor
has a longer term investment outlook and is interested in the conversion
feature. Class B shares automatically convert to Class A shares after eight
years.
In addition, an investor who intends to hold his shares for a significantly long
time may wish to purchase Class A shares in order to avoid the higher ongoing
distribution fees of Class B and Class C shares.
The appropriate principal must ensure that all employees of the Broker/Dealer
receiving investor inquiries about the purchase of Fund shares advise an
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
principal to discuss the purchase with an investor.
These policies are effective May 1, 2001 with respect to any order for the
purchase of shares. Questions relating to these policies should be directed to
Touchstone's appropriate senior management personnel.
EXHIBIT C
TOUCHSTONE SECURITIES, INC.
AS-OF PROCESSING POLICY
Touchstone Securities, Inc. will employ, through its Transfer Agent, As-Of
policies that are consistent with those adopted by the Touchstone Family of
Funds Board of Trustees. This policy shall be effective on May 1, 2001.
An "as-of" trade occurs whenever a current shareholder trade is processed at a
previously issued public offering price. In order to not disadvantage existing
shareholders from the possible losses to a fund (each portfolio treated
separately) generated by such trades, the policy outlined below is to be
followed.
1. No "as-of" trades will be accepted from a broker-dealer or service
agents without prior receipt of signature guaranteed indemnification
against any losses to the fund signed by the broker-dealer or service
agent placing the trade. (See attached "Letter of Indemnity")
2. Broker-dealers and service agents will be billed for any loss of $50 or
more resulting from a single transaction. Broker-dealers will not be
able to use any prior gains to the fund generated by their "as-of"
transactions to offset transaction losses. Invoices for losses
are due and payable upon receipt.
3. Immediate payment is to be made to the fund by the responsible
broker-dealer or service agent at anytime in which the impact of an
As-Of trade results in a material loss to the fund or more than $.005
per share of the fund's net asset value.
4. The Fund's Transfer Agent shall reserve the right to refuse any
request to process any As-Of transaction requested by a broker/dealer
or service agent.
5. The Fund's Transfer Agent may at its discretion reduce commissions or
12b-1 payments due to a broker/dealer or service agent by an amount
equal to losses invoiced to the broker/dealer or service agent for
failure to pay invoices for losses caused by requested As-Of
trades.
