Ex - 99.(h)(5)
Administrative and Shareholder Services Agreement
THIS AGREEMENT dated ____________, 2005, is by and among Xxxxx Fargo Funds
Management, LLC, a Delaware limited liability company ("WFFM"), Xxxxx Fargo
Funds Distributor, LLC, a Delaware limited liability company ("WFFD"), and
__________, a __________ corporation ("Company").
WITNESSETH:
WHEREAS, Company has agreed to provide accounting, record-keeping, and other
administrative and shareholder services for their brokerage clients who
beneficially owns shares of the Funds (as defined below) (each, a "Client," and
collectively, the "Clients");
WHEREAS, WFFD is the principal underwriter of certain open-end investment
companies (and series/portfolios thereof) listed on Exhibit A (hereinafter
individually, a "Fund" or collectively, the "Funds"), on behalf of which WFFD
is authorized pursuant to each Fund's respective Service Plan to enter into
shareholder service agreements and to pay third parties for providing
shareholder services;
WHEREAS, WFFM serves as investment adviser and administrator for the Funds;
WHEREAS, it is intended that WFFM will establish one or more master accounts
(each, an "Account") in such classes of shares of the Funds ("Shares") as set
forth on Exhibit A, on the mutual fund shareholder accounting system of each
Fund, reflecting the aggregate ownership by all Clients of Shares of each Fund
and aggregate Share transactions as requested by Company on behalf of the
Clients;
WHEREAS, it is intended that Company will establish individual accounts on
its record-keeping system reflecting all transactions by or on behalf of each
Client, which result in purchases or redemptions by that Client of Shares;
WHEREAS, it is intended that Company will act as an agent solely for the
limited purpose of receiving orders of the Clients for purchases and
redemptions of Shares resulting from transactions by or on behalf of the
Clients and recording such purchases and redemptions and making and maintaining
records concerning the Clients' interests in the Funds on Company's
record-keeping system; and
WHEREAS, it is intended that WFFM will furnish Company prospectuses,
shareholder reports and other information as required with respect to each
Fund, which the Company will, in turn, furnish to Clients.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereto, intending to be legally bound, hereby agree and
declare as follows:
Section 1. Appointment as Agent
Company is hereby appointed as an agent solely for the limited purpose of
receiving Instructions (as defined below), in accordance with the procedures
outlined in Exhibit B (the "Procedures"), for purchases and redemptions by the
Clients of Shares. Such purchases and redemptions will be based on Client-level
transactions made by or on behalf of Clients, which are recorded on Company's
record-keeping system. For purposes of this Agreement, "Client-level
transactions" will include:
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
1
(a) Any authorized direction to invest contributions, including new
account establishments, by or on behalf of any Client in a Fund in
accordance with the terms and conditions established by the Company
and each Fund's then current prospectus (each, a "Prospectus" and
collectively, the "Prospectuses");
(b) Any authorized direction to transfer or exchange existing amounts
invested in a Fund on behalf of any Client to any other investment
option, including exchanges between Funds, in accordance with the
terms and conditions established by the Company and the Funds'
Prospectuses; and
(c) Any authorized direction to pay loan, withdrawal or distribution
proceeds from the Company to a Client, which results in a redemption
of Shares in accordance with the terms and conditions established by
the Company and the Fund's Prospectuses.
Company will maintain records on behalf of each Fund for each Client
reflecting all Shares purchased and redeemed by the Client based on
Client-level transactions (including the date and price for all transactions
and Share balances) and all reinvestments by the Client of dividends and
capital gains distributions paid by the Fund. Company will reconcile on each
Business Day (defined below) (i) all transactions by each Client involving
Shares (including purchases, redemptions and reinvestments of dividends and
capital gains distributions) with the corresponding Client-level transactions
on Company's record-keeping system; and (ii) the aggregate position of each
Client on Company's record-keeping system with the corresponding balance in an
Account as reflected in statements provided by WFFM for that Business Day.
Company will immediately advise WFFM by telephone, facsimile or electronic mail
of any discrepancies between Company's records and the balances in the Account
and will promptly follow up with written notice of any notice provided by
telephone. Notwithstanding Company's appointment under this Agreement as an
agent to receive Instructions (as defined below), Company will have no
authority under this Agreement or otherwise to act as an agent with respect to
or in connection with the distribution of Shares. For purposes of this
Agreement, with respect to each Fund, a "Business Day" refers to any day that a
particular Fund is open for business, determined in accordance with that Fund's
Prospectus.
Section 2. Administrative Services Procedures
The Procedures governing the parties' responsibilities under this Agreement
with respect to instructions for the purchase or redemption of Shares
("Instructions") and communications of the net asset values of each Fund are
set forth in Exhibit B of this Agreement. (All terms defined in Exhibit B will
have the same meaning when used in this Agreement.) The Procedures will be
consistent in all material respects with the terms of each Fund's Prospectus,
applicable requirements of the Investment Company Act of 1940, as amended
("1940 Act") and the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and any other applicable laws, rules and regulations. In the event of a
discrepancy between the terms of a Fund's Prospectus and the Procedures, the
particular Fund's Prospectus will govern.
Section 3. Compensation
In consideration for the services provided by Company under this Agreement,
Company shall be entitled to receive compensation as described in Exhibit D
hereof.
Section 4. Shareholder Services
Company shall provide to holders of Shares in an Account such services and
other assistance as may from time to time be reasonably requested by WFFD or
its affiliates, including but not limited to answering inquiries regarding the
Funds, providing information programs regarding the Funds, assisting in
selected dividend payment options, account designations and addresses and
maintaining the investment of such customer or client in the Funds; provided,
however, Company shall not provide distribution services primarily intended to
result in the sale of Shares, unless Company is a
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
2
broker-dealer registered with the National Association of Securities Dealers or
a "bank" as defined in the Exchange Act.
Section 5. Representations and Warranties
(a) Representations and Warranties of WFFM and WFFD - WFFM and WFFD
represent and warrant that (i) this Agreement has been duly authorized
by WFFM and WFFD, and when executed and delivered, will constitute the
valid, legal and binding obligations, enforceable in accordance with
its terms; and (ii) the Shares are registered or otherwise authorized
for issuance and sale in the jurisdictions set forth on Exhibit C.
(b) Representations and Warranties of Company - Company represents and
warrants that (i) this Agreement has been duly authorized by Company
and, when executed and delivered, will constitute the valid, legal and
binding obligation of Company, enforceable in accordance with its
terms; (ii) it has all licenses, registrations, or other governmental
or regulatory approvals required to perform the services to be
performed by it or them hereunder and that all such services will be
performed in conformity with all federal and state laws, rules and
regulations; (iii) it has and will continue to have the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement; and (iv) to the extent that Company
transmits purchase and redemption instructions using Fund/SERV as
provided in Option B of the Procedures, it is a member in good
standing of the National Securities Clearing Corporation and will
abide by its rules and regulations.
(c) Notification - WFFM, WFFD and Company each agrees to promptly notify
the other parties of any facts or circumstances that may cause any of
the representations and warranties under this Section 5 to no longer
be valid.
Section 6. Instructions
All Instructions communicated by Company to WFFM with respect to the Clients
on any Business Day in accordance with the Procedures will be based on
Instructions that Company received and accepted as being in good order from
persons authorized to give such Instructions for or on behalf of a Client no
later than the time as of which net asset value is determined for each Fund as
specified in such Fund's Prospectus ("Close of Trading") on the trade date.
Such receipt by Company will be deemed to be receipt of the same by the Fund.
Under no circumstances will Company change, alter or manipulate any Instruction
received by it in good order.
Section 7. Covenants
Company covenants that (i) it will not make Shares of a Fund available in
those jurisdictions in which such Shares are not registered or otherwise
authorized for sale and will facilitate the availability of such Shares for
Clients that are located in those jurisdictions in which such Shares are
registered or otherwise authorized for issuance and sale (as set forth on
Exhibit C); (ii) it is and will be responsible for preparing and submitting all
necessary reports to each Client whether daily, periodic, year-end, annual
and/or special basis, and will assist the Clients in reporting to applicable
federal and state regulatory authorities; (iii) it is and will be solely
responsible for the actual delivery to the Clients all proceeds of, and the
collection of all required withholding taxes from, all redemptions and the
payment of all sums withheld from such redemptions to the applicable federal or
state taxation authority; (iv) it will transmit Instructions for a Business
Day, in accordance with the Procedures that are based only on those
Instructions and Client-level transactions that Company received and accepted
as being in good order (from persons authorized to give such Instructions for
or on behalf of the Clients) no later than the Close of Trading for that
Business Day; (v) it will promptly review all Account information provided to
it or made available by WFFM in accordance with the Procedures and will
immediately notify WFFM in writing of any discrepancies between the records it
maintains and the balances in an Account; (vi) it will not make any
representations to Clients concerning Shares other than those contained in the
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
3
applicable Fund's Prospectus or any supplemental material to such Prospectus
provided or approved in writing by WFFD or its designee; (vii) it will, upon
request, provide WFFM with information about each Client that beneficially owns
more than five percent (5%) of a Fund's then-outstanding Shares; (viii) it will
notify WFFM or WFFD within seven days of becoming aware of any actual or
threatened regulatory, civil, criminal or other proceeding, or any other event
that is subject to disclosure in any regulatory filing or may materially effect
its ability to perform under this Agreement; and (ix) it will abide by all
present and future anti-money laundering and anti-terrorist financing laws,
regulations, related Securities and Exchange Commission ("SEC") rules and
government guidance, including, but not limited to the USA Patriot Act of 2001.
Section 8. Payment for Orders
(a) Payment for Net Purchases - Payment for net purchases of Shares will
be wired in accordance with the Procedures by the Company's custodian
or other designated agent to a custodial account designated by WFFM.
(b) Payment for Net Redemptions - Payment for net redemptions of Shares
will be wired in accordance with the Procedures from a Fund's
custodial account to the Company's custodian or other designated agent.
Section 9. Fund Communications
WFFM will supply or cause to be supplied to Company the following materials
and information with respect to the Funds, which Company will furnish to the
Clients where appropriate and as required by applicable law:
(a) Fund Prospectuses, Annual Reports, Proxies and Related Materials -
Company will be responsible for the timely delivery of all
prospectuses, shareholder reports, proxies, and related materials,
provided to it by WFFM, to each Client to the extent required by
applicable law.
(b) Notice of Dividends and Other Distribution Reports - WFFM shall
furnish Company notice of any dividends or other distributions payable
on the Shares in accordance with the Procedures. Dividends and
distributions shall be automatically reinvested in additional Shares
held by the Clients, and WFFM shall notify Company as to the number of
Shares so issued. Company will be responsible for providing such
information to the Clients.
(c) Review of Client Communications Materials - Company may prepare
communications or disclosure materials, based on a Fund's Prospectus
and information supplied by WFFM under Section 9(a) above, for Clients
that describe such Fund in the same format as that used for the other
investment options offered by the Company. Company will supply WFFM
with copies of such materials within a reasonable period of time in
advance of their intended distribution to Clients. Company agrees not
to use any such materials without prior written approval from WFFM and
will be responsible for filing such materials with, and obtaining any
necessary approvals from, all appropriate regulatory authorities in
connection with such use.
(d) Client Communications - Company will be responsible for maintaining
and responding to all Client communications and inquiries.
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
4
Section 10. Records of Company
(a) Maintenance of Records - Company will maintain records sufficient to
identify the date and time of receipt of all Instructions and
Client-level transactions involving a Fund. Company will also maintain
records for each Client reflecting all Shares purchased and redeemed
by the Client based on Client-level transactions (including the date
and price for all transactions and share balances) and all
reinvestments by the Client of dividends and capital gain
distributions paid by a Fund. Company will maintain records sufficient
to demonstrate that each Client-level transaction was received in good
order, was placed by a person authorized to do so, and, when
applicable, was accompanied by required supporting documentation and
payment. Company will maintain records sufficient to demonstrate that
purchases and redemptions have been made in accordance with the
policies in the applicable Fund Prospectus.
(b) Access to Company Records - At the request of WFFM or the Funds, and
subject to any confidentiality obligations of Company, Company will
make available copies of all records of Client-level transactions
maintained by Company as may be reasonably requested by WFFM or the
Funds to ensure compliance with applicable law and the provisions of
this Agreement. Company agrees that such records will be made
available to the SEC in accordance with the requirements of Rule
17Ad-7(g) under the Exchange Act or to any other regulatory authority
requesting such information.
(c) Access to WFFM Records - At the request of Company, and subject to any
confidentiality obligations of WFFM, WFFM will make available copies
of records maintained by it relating to investment in the Funds by the
Clients as may be reasonably requested by Company to ensure compliance
with applicable law.
Section 11. Reporting Obligations of Company
For reports, Company shall maintain all Clients accounts, prepare meeting,
proxy, and mailing lists, withhold taxes on U.S. resident and non-resident
alien accounts, prepare and file U.S. Treasury Department reports required with
respect to interest, dividends and distributions by federal authorities for all
Clients, prepare confirmation forms and statements of account to the Clients
for all purchases and redemptions of Shares and other confirmable transactions
in the Client accounts.
Section 12. Expenses
Company shall be responsible for paying any expenses it incurs in connection
with the performance of its obligations under this Agreement. The costs will
include, but are not limited to, transaction processing and any requested and
required corrections thereto. The costs of distributing proxy materials,
shareholder reports and other materials provided to Company pursuant to
Section 9 of this Agreement will be paid by Company and not by WFFM.
Section 13. Cross Indemnification of Parties
WFFM and WFFD, their affiliates, the Funds, and their officers, directors,
trustees, employees, agents and persons, if any, who control them within the
meaning of the Securities Act of 1933, as amended, ("Indemnified Persons") will
not be held responsible for, and Company will indemnify and hold the
Indemnified Persons harmless from and against, any and all losses, damages,
costs, charges, counsel fees, payments, expenses, and liabilities directly or
indirectly arising out of or relating to: (i) Company's lack of good faith,
negligence, or willful misconduct in carrying out its duties and
responsibilities under this Agreement; (ii) any breach by Company of this
Agreement; (iii) the failure of Company or the Clients to comply with any
applicable law, rule or regulation in connection with the discharge of duties
under this Agreement; (iv) any breach by Company of any obligation to a Client;
(v) any failure by
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
5
Company to communicate Instructions within the time period set forth in the
Procedures or to comply with any obligations or duties imposed by the
Procedures; (vi) any communications of Instructions by Company, which has not
been, or is claimed not to have been, authorized by or on behalf of a Client;
or (vii) any error or omission in, or cancellation of, any Instruction
communicated by Company to WFFM, including any error resulting from erroneous
Instructions communicated by or on behalf of a Client to Company. Company, its
affiliates, and their officers, directors, employees, and agents ("Company
Indemnified Persons") will not be held responsible for, and WFFD and WFFM will
indemnify and hold Company Indemnified Persons harmless from and against, any
and all losses, damages, costs, charges, counsel fees, payments, expenses, and
liabilities directly or indirectly arising out of or attributable to: (i) their
respective lack of good faith, gross negligence, or willful misconduct in
carrying out its duties and responsibilities under this Agreement; (ii) their
respective breach of this Agreement; or (iii) their respective failure to
comply with any applicable law, rule or regulation in connection with the
discharge of its duties under this Agreement.
Section 14. Confidentiality and Proprietary Information
(a) All books, records, information and data pertaining to the business of
the other party that are exchanged or received in connection with this
Agreement, unless publicly available, shall be kept confidential and
shall not be voluntarily disclosed to any other person, except as may
be required hereunder or by law or court order.
(b) All information relating to past, present and prospective "consumers"
and "customers" as such terms are defined in the SEC's Regulation S-P
("Customers") must be maintained in strict confidence. Each party
covenants and agrees that it will neither use nor disclose any
information about the other's Customers except as necessary to fulfill
its obligations under this Agreement or as otherwise permitted by law;
provided however, the forgoing reciprocal promises to safeguard
Customer information shall not apply to information about a party's
own Customers, which information shall be subject only to that party's
obligations under applicable laws.
(c) Each party hereto acknowledges that the databases, computer programs,
screen formats, report formats, interactive design techniques, and
documentation manuals furnished to it by the other party hereto are
the proprietary information of such other party and are of a
confidential nature, except to the extent that such information is
(a) proprietary information of the receiving party or its affiliates,
(b) in the public domain, or (c) already in the possession of the
receiving party at the time of receipt. The receiving party shall use
commercially reasonable measures to prevent unauthorized persons from
gaining access to, distributing, or otherwise using such proprietary
information.
(d) Each party shall use commercially reasonable measures to advise its
employees of their obligations in connection with this Section 14.
(e) The parties acknowledge that a breach of the provisions of this
Section 14 may cause irreparable harm for which money damages would
not be adequate compensation, and the parties agree that injunctive
relief will be appropriate for redress of any such breach. The
provisions of this Section 14 shall survive termination of this
Agreement.
Section 15. Insurance
Company agrees to maintain errors and omissions or other professional
liability insurance coverage with coverage limits in amounts standard in the
industry, covering its activities as contemplated by this Agreement. Company
shall provide WFFM with a certificate of insurance evidencing said coverage at
the inception of operations and prior to expiration of any insurance. The mere
purchase and existence of insurance does not reduce or release Company from
liability incurred and/or assumed within the scope of this Agreement. Company's
failure to maintain insurance shall not relieve it of liability under this
Agreement.
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
6
Section 16. Audit and Regulatory Reports
Company will annually obtain and provide to WFFM within 30 days of receipt a
copy of: (i) a SAS-70 or other comparable audit or report on its management,
policies and procedures governing the services to be provided under this
Agreement, produced by an independent public accounting firm; (ii) a copy of
certified financial statements showing the financial condition of Company; and
(iii) copies of all regulatory filings.
Section 17. Due Diligence
Company acknowledges that it has provided certain information to WFFM
regarding, among other things, its financial condition and ability to perform
the services described herein. Company agrees that during the term of this
Agreement, Company will, upon application by WFFM, verify the continued
accuracy of such information originally provided and, to the extent such
information is no longer accurate, to provide WFFM with revised information
within 30 days of WFFM' request. Within seven days of WFFM' written request
(due to adverse events disclosed pursuant to Section 7 or 15, or otherwise),
Company shall provide a written explanation and assurances to WFFM. In any
event, without application by WFFM, Company agrees to promptly notify WFFM of
any material adverse change in any of the information previously provided or
requested by WFFM.
Section 18. Notices
Every notice required by this Agreement will be deemed given when sent in
accordance with the Procedures or, as to any matter not addressed by the
Procedures, (i) the next Business Day if sent by a nationally recognized
overnight courier service that provides evidence of receipt, or (ii) on the
third Business Day if sent by certified mail, return receipt requested. Notices
required by the Agreement should be sent as follows:
If to Company: ______________________________________________
Attn: ________________________________________
Company Phone: ______________________________
Company Facsimile: __________________________
If to WFFM: Xxxxx Fargo Funds Management, LLC
[Address]
[Address]
Attn: President
If to WFFD: Xxxxx Fargo Funds Distributor, LLC
[Address]
[Address]
Attn: President
Section 19. Delegation and Assignment
(a) Each party hereto may delegate any of its rights, powers or duties
under this Agreement to any person; provided that such person is
qualified and able to provide the services contemplated herein.
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
7
Delegation by any party shall not relieve such party from any
obligation or duty under this Agreement.
(b) Company may not assign any of its rights, powers or duties under this
Agreement without WFFD's and WFFM' written consent and any purported
assignment in violation of this Agreement shall be void.
Section 20. Amendment or Termination of Agreement
(a) The parties to this Agreement may agree in writing to amend this
Agreement at any time in whole or in part, provided, however, that
WFFM or WFFD may unilaterally amend Exhibit A to add Funds or change
the names of Funds, without notice to Company.
(b) Either party may terminate this Agreement at any time on 30 days'
written notice to the other party (which notice may be waived by the
other party).
(c) Notwithstanding the 30 day notice requirement of paragraph (b) of this
Section 20, either party may terminate this Agreement effective
immediately on written notice to the other party (the "Breaching
Party") in the event of any material violation or material breach of
any of the provisions of this Agreement by the Breaching Party which
is not cured within thirty (30) days after written notice has been
given to the Breaching Party specifying the nature of the material
violation or material breach.
(d) Notwithstanding anything to the contrary in this Agreement, WFFM or
WFFD may in its sole discretion terminate this Agreement effective
immediately if it determines that Company is unable to fulfill its
obligations hereunder (based on information received pursuant to
Sections 7, 15 or 16, or otherwise), regardless of whether or not
Company has given assurances to the contrary.
(e) [Notwithstanding anything to the contrary in this Agreement, WFFM or
WFFD may in its sole discretion terminate this Agreement effective
immediately if by [Insert Agreed Upon Date] Company does not have the
necessary facilities or equipment to or refuses to transmit
Instructions to WFFM in accordance with the Procedures.]
(f) This Agreement will automatically terminate (i) upon the
discontinuance of the Funds as an investment option offered by the
Company; (ii) if, at any time, the authorizations, licenses,
qualifications or registrations required to be maintained by any of
the parties to this Agreement in connection with the performance of
their respective duties under this Agreement lapse or cease to remain
in full force and effect; (iii) if, due to changes in the laws or for
other reasons, any action to be taken or service to be provided under
this Agreement should become unlawful; or (iv) if the continuation of
this Agreement results in a material adverse effect upon WFFM or WFFD.
(g) [Upon termination of this Agreement for any reason, Shares will no
longer be permitted to be purchased pursuant to this Agreement, but
Shares may continue to be redeemed pursuant to this Agreement. In such
event, Company shall continue to serve as an agent for the limited
purpose of receiving redemption Instructions for Shares and
transmitting such Instructions in accordance with the Procedures.]
(h) WFFM may also terminate this Agreement as described in Exhibit B,
paragraph (c).
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
8
Section 21. Force Majeure
In the event a party is unable to perform its obligations under the terms of
this Agreement because of acts of God, strikes, equipment failure or damage
reasonably beyond its control, or other causes reasonably beyond its control,
such party shall not be liable for damages resulting from such failure to
perform or otherwise from such causes.
Section 22. Survival
If any provision of this Agreement is or becomes inconsistent with any
applicable law, rule or regulation, the provisions will be deemed rescinded or
modified to the extent necessary to comply with such law or rule. In all other
respects this Agreement will continue in full force and effect.
Section 23. Waiver
Except as provided in Section 20, no term of this Agreement may be waived or
changed except in writing signed by both parties. Failure to insist on strict
compliance with this Agreement or with any of its terms or any continued
conduct will not be considered a waiver by either party of its rights under
this Agreement. This Agreement contains the entire understanding between the
parties.
Section 24. Counterparts
This Agreement may be executed in one or more counterparts, each of which
will be an original and all of which together will be deemed one and the same
document.
Section 25. Exhibits
All Exhibits to this Agreement, as they may be amended or included from time
to time, are by this reference incorporated into and made a part of this
Agreement.
Section 26. Governing Law
This Agreement will be governed exclusively by the laws of the State of
Delaware, without reference to the conflicts of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on their behalf by duly authorized officers as of the day and year
first above written.
COMPANY:
-----------------------------
----------------------------- -----------------------------
Authorized Signature Title
----------------------------- -----------------------------
Printed Name Date
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
9
XXXXX FARGO FUNDS MANAGEMENT, LLC
----------------------------- -----------------------------
Authorized Signature Title
----------------------------- -----------------------------
Printed Name Date
XXXXX FARGO FUNDS DISTRIBUTOR, LLC
----------------------------- -----------------------------
Authorized Signature Title
----------------------------- -----------------------------
Printed Name Date
Consolidated TPA Agreement - 7-25-02
(including A and R class shares)
10
EXHIBIT A
FUNDS PARTICIPATING
[ ] Class Shares
Dividend
Fund Name: Frequency Fund # Symbol CUSIP
---------- --------- ------ ------ -----
[ ] Class Shares
Dividend
Fund Name: Frequency Fund # Symbol CUSIP
---------- --------- ------ ------ -----
A-1
EXHIBIT B
OPERATING PROCEDURES
[Subject to Section 20(e) of the Agreement,] WFFM understands and agrees
that orders for purchases and redemptions pursuant to this Agreement may be
placed by use of the National Securities Clearing Corporation's ("NSCC")
NSCC-Fund/SERV system. The procedures to be followed by the Company are as set
forth below. Unless otherwise defined below, all capitalized terms have the
meanings specified in the Agreement of which this Exhibit is a part.
Procedures for Transactions Conducted via NSCC-Fund/SERV: Unless other
arrangements have been made by the parties, Company may transmit operating
information and instructions as permitted in this Exhibit B to [number]
(facsimile) or [number] (phone).
(a) On each Business Day, Company will receive Instructions from Clients
for the purchase, redemption and exchange of Shares. Instructions
received by Company after Close of Trading on any Business Day will be
treated as if received on the next following Business Day.
(b) By 6:00 p.m. Eastern Time on each Business Day, Company will use its
best efforts to notify WFFM, either verbally or by facsimile, of
aggregate purchases and redemptions of $1,000,000 or more for the
Clients.
(c) On each Business Day on which Company receives Instructions, Company
shall transmit to WFFM via the NSCC Fund/SERV system prior to the
NSCC's trade cutoff time (currently 8:00 p.m. Eastern Time on trade
date) purchase and redemption Instructions for all Clients of each
registered representative of the Company. In situations where the
Company is unable to meet that cutoff time due to system malfunctions,
the Company may call in the Instructions by no later than 8:00 a.m.
Eastern Time on the Business Day following the trade date for such
orders, such Instructions will still be effected at the net asset
value for the previous Business Day on an "as of" basis. In such
cases, Company agrees to reimburse each Fund for any loss incurred by
that Fund or dilution caused to that Fund promptly upon demand. If
Company utilizes the extension permitted by this paragraph more than
twice in any three month period, WFFM reserves the right to terminate
this Agreement and revoke the trading arrangements described herein.
(d) The Fund reserves the right, in its sole discretion, to reject,
reverse or reprice the orders (notwithstanding that Company may have
received Fund/SERV confirmation of the orders) and Company will be
responsible for reimbursement of any loss sustained by the Fund that
may arise out of the improper transmittal of such orders.
(e) With respect to purchase Instructions, such Instructions should be
segregated by sales charge discount category consistent with the terms
of the Funds' Prospectuses. In applying sales charges, the Company
shall take into account other assets eligible for linking pursuant to
rights of accumulation, concurrent purchases, aggregating accounts and
statement of intention, each as described in the Funds' Prospectuses.
In the case of redemption Instructions, Company shall transmit to
WFFM, in accordance with the above, one aggregate Instruction
reflecting all redemption orders received on behalf of all Clients.
The Company shall disburse or credit to Clients all proceeds of
redemptions of Shares of each Fund and all dividends and other
distributions not reinvested in Shares of each Fund.
(f) Purchase and redemption transactions will be settled on the next
Business Day following the trade date in accordance with NSCC
Fund/SERV schedules and methods; provided, however, that in the event
redemption transactions exceed 1% of net asset value of a Fund on the
date of the redemption
B-1
and for which WFFM has not received six days' notice given by
facsimile (number above) or in accordance with Section 18 of the
Agreement, WFFM reserves the right to postpone payment for up to seven
days from the date of the initial redemption request in any manner
WFFM deems appropriate, including conducting the transaction outside
of the NSCC's Fund/SERV system. Further, WFFM reserves the right to
suspend the rights of redemption as provided by the rules of the SEC
and as disclosed in the Funds' Prospectuses
(e) Upon aggregating orders, deliver to WFFD the trade detail file (SuRPAS
"PR3", or other similar file) by 2:00 a.m. Eastern Time on the
Business Day following trade date for activity processed on trade date.
(f) Prepare and transmit to WFFD a monthly position file (SuRPAS "BalOut",
or other similar file) containing BIN, CUSIP, month-end shares,
month-end value, branch, representative number, representative name,
and account type code.
(g) Perform all applicable CDSC tracking, collection, and reporting (e.g.,
Distributor Liability Reports) and provide that information to WFFM on
a monthly basis.
(i) Perform the necessary 12b-1 calculations, using the WFFM-specified
method of aging for transfers and dividends, and shall invoice the
payable amount to WFFM for each three-month period ending
January 31, April 30, July 31, and October 31.
As a post-conversion initiative, the Company and WFFM agree to negotiate in
good faith to develop procedures addressing trade aggregation of purchases.
B-2
EXHIBIT C
Shares of each Fund identified on Exhibit A are registered or otherwise
authorized for sale in the following jurisdictions:
[Insert Registration]
EXHIBIT D - COMPENSATION
For the services provided by Company to Clients, WFFD shall pay to Dealer an
annual fee equal to [0.xxx]% of the average daily net assets of each account
holding Fund shares maintained by Dealer.
