Exhibit 6
DISTRIBUTION CONTRACT
THIS DISTRIBUTION CONTRACT (this "Agreement"), dated this 20th day of
March, 1998, between the WM Trust II, a Massachusetts business trust (the
"Trust"), on behalf of each of its series which are listed on the signature page
of this Agreement (each a "Fund"), and WM Funds Distributor, Inc., a Washington
corporation doing business at Spokane, Washington, herein sometimes referred to
as the "Distributor."
RECITALS
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WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and the Funds are separate series of the Trust;
WHEREAS, each Fund and the Distributor desire to enter into an agreement
that sets forth standard terms and conditions for distribution and other
services for Class A, Class B and Class S shares of each Fund;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
APPOINTMENT. The Trust hereby affirms the appointment of WM Funds
Distributor, Inc. as the agent for distribution of shares for each Fund and
grants Distributor the right to sell Class A, Class B and Class S shares on
behalf of the Fund and on terms set forth in this Agreement. The
Distributor accepts such appointment and agrees to render the services
herein set forth for the payments herein provided (including reimbursement
of expenses).
DELIVERY OF DOCUMENTS. The Trust and/or each Fund has furnished the
Distributor with copies of:
Agreement and Declaration of Trust and all amendments thereto for
the Trust (as amended from time to time, the "Declaration of Trust");
Bylaws and all amendments thereto for the Trust (as amended from
time to time, the "Bylaws"); and
Each Fund's registration statement, prospectus and statement of
additional information, then in effect (the "Registration Statement")
under the Securities Act of 1933, as amended (the "1933 Act") and the
1940 Act.
From time to time, each Fund will furnish the Distributor with current
copies of all amendments or supplements to the foregoing, if any, and all
documents, notices and reports filed with the Securities and Exchange Commission
(the "SEC") and will make available, upon request, evidence of payment of
registration fees imposed from time to time by the States in which securities of
each Fund are sold by the Distributor.
DUTIES OF THE DISTRIBUTOR. The Distributor shall provide each Fund
with the benefit of its best judgment, efforts and facilities in rendering its
services as Distributor. The Distributor will act as the exclusive Distributor
of the Class A, Class B and Class S shares of each Fund, subject to the
supervision of the Trust's Board of Trustees and the following understandings:
the Trust's Board of Trustees shall be responsible for and control the conduct
of each Fund's affairs; in all matters relating to the performance of this
Agreement, the Distributor will act in conformity with the Declaration of Trust
and Bylaws of the Trust and the Registration Statement of each Fund and with the
instructions and directions of the Trust's Board of Trustees; the Distributor
will conform to and comply with applicable requirements of the 1940 Act, the
1933 Act and all other applicable federal or state laws and regulations. In
carrying out its obligations hereunder, the Distributor shall:
Provide to the Trust's Board of Trustees, at least quarterly, a
written report of the amounts expended in connection with all
distribution services rendered pursuant to this Agreement, including
an explanation of the purposes for which such expenditures were made;
and
Take, on behalf of each Fund, all actions which appear to be
necessary to carry into effect the distribution of each Fund's shares
as provided in paragraph 4.
DISTRIBUTION OF SHARES. It is mutually understood and agreed that the
Distributor does not undertake to sell all or any specific portion of the Class
A, Class B or Class S shares of any Fund. Distributor shall have the right to
enter into sales agreements with dealers of its choice for the sale of the Class
A, Class B or Class S shares of each Fund to the public at the public offering
price. Distributor shall set forth in such agreements the portion of the sales
charge which may be retained by such dealers. If any Fund determines that it is
necessary to file the form of dealer agreement and amendments thereto as an
exhibit to its currently effective Registration Statement under the 1933 Act,
then the Distributor shall provide the Fund with currently effective documents.
A Fund shall not sell
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any of its Class A, Class B or Class S shares except through the Distributor.
Notwithstanding the provisions of the foregoing sentence:
A Fund may issue its Class A, Class B or Class S shares at their
net asset value to any shareholder of the Fund purchasing such shares
with dividends or other cash distributions received from the Fund
pursuant to any special or continuing offer made to shareholders;
The Distributor may, and when requested by a Fund, shall, suspend
its efforts to effectuate sales of the Class A, Class B or Class S
shares of a Fund at any time when in the opinion of the Distributor or
of the Fund no sales should be made because of a need to revise a
Registration Statement, or because of market or other economic
considerations or abnormal circumstances of any kind. Either party in
its sole discretion may reject orders for the purchase of such shares;
A Fund may withdraw the offering of its Class A, Class B or Class
S shares at any time with the consent of the Distributor or without
such consent when so required by the provisions of any statute or of
any order, rule or regulation of any governmental body having
jurisdiction;
The price at which the Class A, Class B or Class S shares will be
sold to investors (the "offering price") shall be the net asset value
per share, determined in accordance with the provisions of the Fund's
current Registration Statement, plus a sales charge determined in the
amount and manner established from time to time by the Distributor and
set forth in a Fund's current prospectus. The Fund shall receive the
net asset value per share for the sale of its Class A, Class B or
Class S shares;
If a sales charge is in effect, the Distributor shall have the
right, subject to such rules or regulations of the Securities and
Exchange Commission as may then be in effect pursuant to Section 22 of
the 1940 Act, to pay a portion of the sales charge to dealers who have
sold Class A, Class B or Class S shares of the Fund in accordance with
provisions of dealer agreements; and
The Distributor is not authorized by any Fund to provide any
information or to make any representations other than those contained
in the appropriate Registration Statements, or contained in
shareholder reports or other material that may be prepared by or on
behalf of a Fund for Distributor's use. This shall not be construed to
prevent the Distributor
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from preparing and distributing sales literature or other material as
it may deem appropriate.
COMPENSATION FOR SERVICING SHAREHOLDER ACCOUNTS. As compensation for
its services hereunder, the Distributor shall be entitled to receive all front-
end loads and contingent deferred sales charges as may be described from time to
time in the Registration Statement. The Fund also shall pay a distribution fee
to the Distributor at an annual rate as shall be authorized by the shareholders
and further set by the Board of Trustees pursuant to the provisions of the
Trust's Distribution Plans for Class A, Class B and Class S shares, then in
effect, in accordance with Rule 12b-1 under the 1940 Act (the "Distribution
Plans"). The Trust acknowledges that the Distributor and its dealers may
compensate their investment representatives for opening accounts, processing
investors' purchase and redemption orders, responding to inquiries from Fund
shareholders concerning the status of their accounts and the operations of a
Fund, and communicating with a Fund and its transfer agent on behalf of Fund
shareholders in such manner and amount as the Distributor may deem appropriate.
EXPENSES. The expenses connected with distribution shall be allocable
between the Funds and the Distributor as follows:
The Distributor shall furnish the services of personnel to the
extent that such services are required to carry out its obligations
under this Agreement.
Each Fund assumes and shall pay or cause to be paid the following
expenses incurred on its behalf:
Registration of shares including the expense of printing and
distributing prospectuses to existing shareholders; expenses incurred
for maintaining the Trust's or Fund's existence, taxes and expenses
related to portfolio transactions; charges and expenses of any
registrar, custodian or depository for portfolio securities and other
property, and any stock transfer, dividend or account agent or agents;
all taxes, including securities issuance and transfer taxes, and fees
payable to federal, state or other governmental agencies; costs and
expenses in connection with the registration and maintenance of
registration of a Fund and its shares with the SEC and various states
and other jurisdictions (including filing fees, legal fees and
disbursements of counsel); expenses of shareholders' and directors'
meetings and preparing, printing, and mailing of proxy statements and
reports to shareholders; fees and travel expenses of directors who are
not "interested persons" as that term is defined in the 1940 Act;
expenses incident to the payment of any dividend, distribution,
withdrawal
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or redemption, whether in shares or in cash; charges and
expenses of any outside service used for pricing of a Fund's shares;
fees and expenses of legal counsel and of independent accountants;
membership dues of industry associations; postage (excluding postage
for promotional and sales literature); insurance premiums on property
of personnel (including, but not limited to legal claims and
liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of a Fund's operation unless
otherwise explicitly provided herein.
The Distributor will bear all expenses incurred in connection
with its performance of the services described herein and the
incurring of distribution expenses under this Agreement. For purposes
of this Agreement, "distribution expenses" of the Distributor shall
mean all expenses borne by the Distributor which represent payment for
activities primarily intended to result in the sale of Class A, Class
B, or Class S shares, including, but not limited to, the expenses of
distribution that are described in the Distribution Plans.
The Distributor will furnish the Board of Trustees statements of
distribution revenues and expenditures at least quarterly with respect
to the Class A, Class B and Class S shares of each Fund as required by
the Distribution Plans for each respective Class.
NON-EXCLUSIVITY. The services of the Distributor are not exclusive and
the Distributor shall be entitled to render distribution or other services to
others (including other investment companies) and to engage in other activities.
It is understood and agreed that officers of the Distributor may serve as
officers or trustees of the Trust, and that officers or trustees of the Trust
may serve as officers of the Distributor to the extent permitted by law; and
that officers of the Distributor are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers or directors of any other firm or corporation,
including other investment companies and broker/dealers.
TERM AND APPROVAL. This Agreement shall become effective as of the
date first above written for an initial period of two years, and shall continue
in force and effect from year to year thereafter, provided that, with respect to
any Fund or Class, such continuance is specifically approved at least annually:
By the Trust's Board of Trustees, including the affirmative vote
of a majority of the Board of Trustees of the Trust who are not (i)
parties to this Agreement, (ii) interested persons of any such party
(as
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defined in Section 2(a)(19) of the 1940 Act), or (iii) persons
having a direct or indirect financial interest in the operation of
this Agreement or any agreement related to this Agreement (the
"Qualified Trustees") by votes cast in person at a meeting called for
the purpose of voting on such approval, or
By the vote of a majority of the outstanding voting securities of
the Fund (as defined in Section 2(a)(42) of the 1940 Act).
TERMINATION. This Agreement may be terminated, with respect to any
Fund or Class, at any time, without the payment of any penalty, on sixty (60)
days' written notice, by vote of the Board of Trustees of the Trust, or by a
vote of a majority of the Qualified Trustees, or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in Section 2(a)(42) of the
1940 Act), or by the Distributor on sixty (60) days' written notice to the Fund.
The notice provided for herein may be waived by either party. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for this purpose having the meaning set forth in Section (a)(4) of
the 1940 Act.
REPRESENTATIONS AND WARRANTIES. The Trust represents and warrants to
the Distributor that any registration statement, prospectus and statement of
additional information, when such Registration Statement becomes effective, will
include all statements required to be contained therein in conformity with the
1933 Act, the 1940 Act and the rules and regulations of the SEC; that all
statements of fact contained in any registration statement, prospectus or
statement of additional information will be true and correct when such
Registration Statement becomes effective; and that neither any registration
statement nor any prospectus or statement of additional information when such
Registration Statement becomes effective will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of
shares. The Distributor may, but shall not be obligated to, propose from time
to time such amendment or amendments to any registration statement and such
supplement or supplements to any prospectus or statement of additional
information as, in the light of future developments, may, in the opinion of the
Distributor's counsel, be necessary or advisable. If the Trust shall not
propose such amendment or amendments and/or supplement or supplements within
fifteen (15) days after receipt by the Trust of a written request from the
Distributor to do so, the Distributor may, at its option, terminate this
Agreement. The Trust shall not file any amendment to any registration statement
or supplement to any prospectus or statement of additional information without
giving the Distributor reasonable notice thereof in advance; provided, however,
that nothing contained in this Agreement shall in any way limit the Trust's
right to file at any time such amendments to any registration statement and/or
supplements
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to any prospectus or statement of additional information, of whatever character,
as the Trust may deem advisable, such right being in all respects absolute and
unconditional.
AMENDMENTS. This Agreement may be amended, with respect to any Fund
or Class, by the parties hereto only if such amendment is specifically approved
by the Board of Trustees of the Trust or by the vote of majority of outstanding
voting securities of the Fund, and by a majority of the Qualified Trustees,
which vote must be cast in person at a meeting called for the purpose of voting
on such approval; provided, however, that any such amendment that constitutes an
amendment of the Distribution Plans for any Class of shares of the Fund shall be
approved by shareholders pursuant to Rule 12b-1 to the extent required by
applicable law.
INDEMNIFICATION.
12.1 The Trust authorizes the Distributor and any dealers with
whom Distributor has entered into dealer agreements to use any
prospectus or statement of additional information furnished by the
Trust from time to time, in connection with the sale of shares of each
Fund. The Trust agrees to indemnify, defend and hold Distributor, its
several officers and directors, and any person who controls
Distributor 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 such
claims, demands or liabilities and any counsel fees incurred in
connection therewith) which Distributor, its officers and directors,
or any such controlling person, may incur under the 1933 Act, the 1940
Act or common law or otherwise, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement, any prospectus or any
statement of additional information, or arising out of or based upon
any omission or alleged omission to state a material fact required to
be stated in any registration statement, any prospectus or any
statement of additional information, or necessary to make the
statements in any of them not misleading; provided, however, that the
Trust's agreement to indemnify the Distributor, its officers or
directors, and any such controlling person shall not be deemed to
cover any claims, demands, liabilities or expenses arising out of or
based upon any statements or representations made by Distributor or
its representatives or agents other than such statements and
representations as are contained in any registration statement,
prospectus or statement of additional information and in such
financial and other statements as are furnished to the Distributor
pursuant to paragraph 2 hereof; and further provided that the Trust's
agreement to indemnify the Distributor and the
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Trust's representations and warranties shall not be deemed to cover
any liability to the Trust or its shareholders to which Distributor
would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties, or by reason of
Distributor' reckless disregard of its obligations and duties under
this Agreement. The Trust's agreement to indemnify Distributor, its
officers and directors, and any such controlling person, as aforesaid,
is expressly conditioned upon the Trust's being notified of any action
brought against Distributor, its officers or directors, or any such
controlling person, such notification to be given by letter or by
telegram addressed to the Trust at its principal office stated herein
and sent to the Trust by the person against whom such action is
brought, within ten (10) days after the summons or other first legal
process shall have been served. The failure so to notify the Trust of
any such action shall not relieve the Trust from any liability that
the Trust may have to the person against whom such action is brought
by reason of any such untrue or alleged untrue statement or omission
or alleged omission otherwise than on account of the Trust's indemnity
agreement contained in this paragraph 12.1. The Trust's
indemnification agreement contained in this paragraph 12.1 and the
Trust's representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of Distributor, its officers and directors, or
any controlling person, and shall survive the delivery of any shares.
This agreement of indemnity will inure exclusively to Distributor's
benefit, to the benefit of its several officers and directors and
their respective estates, and to the benefit of the controlling
persons and their successors. The Trust agrees to notify Distributor
promptly of the commencement of any litigation or proceedings against
the Trust or any of its officers or trustees in connection with the
issuance and sale of any shares.
12.2 Distributor agrees to indemnify, defend and hold the Trust,
its several officers and trustees, 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 costs of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in
connection therewith) that the Trust, its officers or trustees or any
such controlling person may incur under the 1933 Act, the 1940 Act or
common law or otherwise, but only to the extent that such liability or
expense incurred by the Trust, its officers or trustees or such
controlling person resulting from such claims or demands shall arise
out of or be based upon (a) any unauthorized sales literature,
advertisements, information, statements or representations or (b) any
untrue or allegedly untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Trust and
used in the answers
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to any of the items of the Registration Statement or in the
corresponding statements made in the prospectus or statement of
additional information, or shall arise out of or be based upon any
omission or alleged omission to state a material fact in connection
with such information furnished in writing by Distributor to the Trust
and required to be stated in such answers or necessary to make such
information not misleading. Distributor's agreement to indemnify the
Trust, its officers and trustees, and any such controlling person, as
aforesaid, is expressly conditioned upon Distributor being notified of
any action brought against the Trust, its officers or trustees, or any
such controlling person, such notification to be given by letter or
telegram addressed to Distributor at its principal office as stated
herein and sent to Distributor by the person against whom such action
is brought, within ten days after the summons or other first legal
process shall have been served. The failure so to notify the
Distributor of any such action shall not relieve Distributor from any
liability that the Distributor may have to the Trust, its officers or
trustees, or to such controlling person by reason of any such untrue
or alleged untrue statement or omission or alleged omission otherwise
than on account of Distributor's indemnity agreement contained in this
paragraph 12.2. The Distributor agrees to notify the Trust promptly of
the commencement of any litigation or proceedings against Distributor
or any of its officers or directors in connection with the issuance
and sale of any shares.
12.3 In case any action shall be brought against any indemnified
party under paragraph 12.1 or 12.2, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall
wish to do so, to assume the defense thereof with counsel satisfactory
to such indemnified party. If the indemnifying party opts to assume
the defense of such action, the indemnifying party will not be liable
to the indemnified party for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense
thereof other than (a) reasonable costs of investigation or the
furnishing of documents or witnesses and (b) all reasonable fees and
expenses of separate counsel to such indemnified party if (i) the
indemnifying party and the indemnified party shall have agreed to the
retention of such counsel or (ii) the indemnified party shall have
concluded reasonably that representation of the indemnifying party and
the indemnified party by the same counsel would be inappropriate due
to actual or potential differing interests between them in the conduct
of the defense of such action.
LIABILITY OF THE DISTRIBUTOR. In the performance of its duties
hereunder, the Distributor shall be obligated to exercise care and diligence
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and to act in good faith and to use its best efforts within reasonable limits to
insure the accuracy of all services performed under this Agreement, but the
Distributor shall not be liable for any act or omission which does not
constitute willful misfeasance, bad faith or gross negligence on the part of the
Distributor or reckless disregard by the Distributor of its duties under this
Agreement.
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 the address of each Fund
shall be 000 Xxxx Xxxx Xxxxxx, Xxxxxxx, XX 00000, and the address of the
Distributor shall be 000 Xxxx Xxxx Xxxxxx, Xxxxxxx, XX 00000.
DECLARATION OF TRUST AND LIMITATION OF LIABILITY. A copy of the
Declaration of Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice is hereby given that this Agreement is
executed by an officer of the Trust on behalf of the trustees of the Trust, as
trustees and not individually, on further behalf of each Fund, and that the
obligations of this Agreement with respect to each Fund shall be binding upon
the assets and properties of the Fund only and shall not be binding upon the
assets and properties of any other Fund or series of the Trust or upon any of
the trustees, officers, employees, agents or shareholders of the Fund or the
Trust individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
WM TRUST II, on behalf of its series
SHORT TERM HIGH QUALITY BOND FUND,
GROWTH FUND,
EMERGING GROWTH FUND,
INTERNATIONAL GROWTH FUND,
CALIFORNIA MUNICIPAL FUND,
CALIFORNIA INSURED INTERMEDIATE FUND,
MUNICIPAL FUND,
CALIFORNIA MONEY FUND,
FLORIDA INSURED MUNICIPAL FUND, and
TARGET MATURITY 2002 FUND
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
President
Attest:
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Secretary
WM FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President
Attest:
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
Secretary
