e(2)
BROKER-DEALER AGREEMENT
February __, 2006
This Broker-Dealer Agreement (the "Agreement") is made and entered into
between WM Funds Distributor, Inc. ("WMFD"), a Washington corporation having its
principal business offices at 0000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xx Xxxxxx Xxxxx,
Xxxxxxxxxx 00000, and the undersigned broker-dealer ("Selling Broker-Dealer").
WITNESSETH:
WHEREAS, the investment companies identified on Schedule A (each a "Trust"
and jointly the "Trusts") for which WMFD, WM Advisors, Inc. ("WMA") or any other
entity controlling, controlled by, under common control with or affiliated with
WMFD acts as investment adviser, administrator or distributor, each of which is
a management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), offers units of beneficial interest
("shares") of a number of the Trusts' series (each a "Fund"), each with its own
investment objective and strategies;
WHEREAS, each Fund offers one or more classes of shares which may include
Class A shares ("Class A Shares"), Class B shares ("Class B Shares") and Class C
shares ("Class C Shares") (collectively referred to from time to time as the
"Shares) subject to distribution plans (the "Class A, Class B and Class C
Distribution Plans") adopted pursuant to Rule 12b-1 under the Investment Company
Act of 1940;
WHEREAS, each Fund has entered into one or more distribution agreements
with WMFD (the "Distribution Agreement") for the distribution by WMFD of the
Class A Shares and, for certain Funds, Class B and Class C Shares;
WHEREAS, Selling Broker-Dealer desires to agree with WMFD to sell Shares to
the customers of the Selling Broker-Dealer;
WHEREAS, WMFD and the Selling Broker-Dealer desire to provide for the
payment of sales loads, commissions, distribution fees and/or shareholder
service fees to Selling Broker-Dealer with respect to sales of Shares and
related shareholder services;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
it is hereby agreed by and between the parties hereto as follows:
1. Definition of Terms. As used herein, the term "Prospectus" means the
prospectuses and, unless the context otherwise requires, related statements
of additional information incorporated therein by reference, as the same
are amended and supplemented from time to time, of each of the respective
Funds and each of
the respective classes of Shares of the respective Funds; the term
"Business Day" means any day on which the New York Stock Exchange is open;
and the term "principal underwriter" has the definition provided in the
1940 Act.
2. Selling Broker-Dealer shall use its best efforts to sell Shares that are
now or hereafter available for sale to customers of Selling Broker-Dealer.
Selling Broker-Dealer shall be responsible for opening, approving and
monitoring accounts for its customers that purchase Shares (the
"Customers") and for the review and supervision of these accounts, all in
accordance with the rules of the Securities and Exchange Commission ("SEC")
and the Conduct Rules of the National Association of Securities Dealers,
Inc. (the "NASD Conduct Rules"). In no transaction involving Shares shall
Selling Broker-Dealer have any authority to act as agent for the Funds or
WMFD.
3. All orders for the purchase of Class A Shares of the Funds shall be
executed at the then current public offering price per Share (i.e., the net
asset value per Share plus the applicable sales charge, determined in
accordance with the provisions of the Prospectus) and all orders for the
redemption of Class A Shares of the Funds shall be executed at the net
asset value per Share less any applicable contingent deferred sales charge
determined in accordance with the provisions of the Prospectus. All orders
for the purchase of Class B Shares shall be at net asset value and all
orders for the redemption of Class B Shares shall be executed at the net
asset value per Share less any applicable contingent deferred sales charge
determined in accordance with the provisions of the Prospectus. All orders
for the purchase of Class C Shares shall be at the applicable public
offering price per Share and all orders for the redemption of Class C
Shares shall be executed at the net asset value per Share less any
applicable contingent deferred sales charge determined in accordance with
the provisions of the Prospectus. The minimum initial purchase order shall
be as set forth in the appropriate Prospectus. Unless otherwise mutually
agreed in writing between WMFD and Selling Broker-Dealer, each transaction
for Shares shall be promptly confirmed in writing to the Customer on a
fully disclosed basis and a copy of each confirmation shall be sent
simultaneously to Selling Broker-Dealer. Selling Broker-Dealer agrees that
upon receipt of such duplicate confirmations, Selling Broker-Dealer shall
examine the same and promptly notify the Transfer Agent and WMFD of any
errors or discrepancies that Selling Broker-Dealer discovers and shall
promptly bring to the attention of the Transfer Agent and WMFD any errors
in such confirmations claimed by any Customers.
4. The Funds and WMFD have each reserved the right to refuse at any time or
times to sell any of the Shares for any reason, and the Funds and WMFD have
each reserved the right to refuse at any time to accept an order for
purchase of Shares for any reason. In ordering Shares, Selling
Broker-Dealer shall rely solely and conclusively on the representations
contained in the Prospectus of the relevant Fund. Selling Broker-Dealer
agrees that Selling Broker-Dealer shall not offer or sell any Shares,
except in compliance with the NASD Conduct Rules and all
applicable federal and state laws and the rules and regulations of
applicable regulatory agencies or authorities (including, in the case of
offers made to or through plans qualified under Section 403(b) or Section
401(a) of the Internal Revenue Code of 1986 (the "Code"), as amended, any
written directives of the sponsor of such plan, and in the case of an
account intended to qualify under Section 408 of the Code, any written
directives of the owner or beneficiary of such account, and in the case of
an account intended to qualify under Section 530 of the Code or Section 220
of the Code, the individual designated in the agreement as responsible for
investment decisions). In connection with offers to sell, and sales of,
Shares, Selling Broker-Dealer agrees to deliver or cause to be delivered to
each person to whom any such offer or sale is made, at or prior to the time
of such offer or sale, a copy of the relevant prospectus, and upon request,
the relevant statement of additional information.
Selling Broker-Dealer further agrees to obtain for each Customer to whom
Selling Broker-Dealer sells Shares any taxpayer identification number
certification required under Section 3406 of the Internal Revenue Code of
1986, as amended (the "Code") or any successor provision, and the
regulations thereunder, and to provide WMFD or WMFD's designated agent with
timely written notice of any failure to obtain such taxpayer identification
number certification in order to enable the implementation of any required
backup withholding in accordance with Section 3406 of the Code or any
successor provision and the regulations thereunder.
Unless otherwise mutually agreed in writing between WMFD and Selling
Broker-Dealer, WMFD shall deliver or cause to be delivered to each Customer
that purchases Shares through Selling Broker-Dealer copies of all annual
and interim reports, proxy solicitation materials and any such other
information and materials relating to the relevant Fund or class of Shares
thereof and prepared by or on behalf of WMFD, a Fund, its investment
adviser, investment sub-adviser, custodian, transfer agent or dividend
disbursing agent for the purpose of distribution to such Customer. WMFD
agrees to supply Selling Broker-Dealer with copies of the Prospectus,
annual reports, interim reports, proxy solicitation materials and any such
other information and materials relating to each Fund and each class of
Shares in reasonable quantities upon request. Selling Broker-Dealer
acknowledges that any materials or information that WMFD furnishes to
Selling Broker-Dealer, other than Prospectuses, annual and interim reports
to shareholders and proxy solicitation materials prepared by the Fund, are
the sole responsibility of WMFD and not the responsibility of the Fund.
5. Selling Broker-Dealer shall not make any representation concerning any
Shares or class of Shares other than those contained in the relevant
Prospectus or in any promotional materials or sales literature furnished to
Selling Broker-Dealer by WMFD. Selling Broker-Dealer shall not furnish, or
cause to be furnished, to any person, or display or publish, or cause to be
displayed or published, any information or materials relating to any Fund
or class of Shares (including,
without limitation, promotional materials and sales literature,
advertisements, press releases, announcements, statements, posters, signs
or other similar materials), except such information and materials as may
be furnished to Selling Broker-Dealer by WMFD and such other information
and materials as may be approved in writing by WMFD. Selling Broker-Dealer
acknowledges that customers choosing between classes should carefully
consider the fee structures of the classes in order to determine the most
appropriate investment class. In many cases, customers planning to purchase
$250,000 or more of Shares will pay lower aggregate charges and expenses by
purchasing Class A Shares. In accordance with the NASD Conduct Rules,
Selling Broker-Dealer shall have reasonable grounds for believing that the
recommendation of Shares is suitable based upon reasonable efforts to
obtain appropriate suitability information from the Customer.
6. In determining the amount of any dealer allowance or sales commission
payable to Selling Broker-Dealer hereunder, WMFD reserves the right to
exclude any sales which WMFD reasonably determines are not made in
accordance with the terms of the applicable Prospectus and the provisions
of this Agreement. Unless, at the time of transmitting an order, Selling
Broker-Dealer advises WMFD or the Transfer Agent to the contrary, the
Shares ordered will be deemed to be the total holdings of the Customer for
whom the order is transmitted.
7. (a) In accordance with the terms of the applicable Prospectus, a
reduced sales charge may be available to Customers that purchase Class A
Shares based on the total value (determined using current net asset value)
of (i) current purchases plus (ii) Shares that are already beneficially
owned at the time of purchase by the Customer and which were purchased
subject to an initial or contingent deferred sales charge. Certain
purchases made by a Customer and certain other persons (for example, a
Customer's spouse and minor children), as set forth from time to time in
the applicable Prospectus, may be combined for purposes of qualifying for a
reduced sales charge on Class A Shares purchased. In each case where a
reduced sales charge is applicable, Selling Broker-Dealer agrees to furnish
to the Transfer Agent sufficient information to permit confirmation of
qualification for the reduced sales charge, and acceptance of the purchase
order is subject to such confirmation. The foregoing sales charge
reductions may be modified or terminated at any time at the sole discretion
of each Fund.
(b) Selling Broker-Dealer acknowledges that certain classes of
investors may be entitled to purchase Class A Shares at net asset value,
without a sales charge, as from time to time provided in the applicable
Prospectus.
(c) Selling Broker-Dealer agrees, with respect to the Class A Shares,
to advise WMFD promptly at WMFD's request as to the amount of any and all
sales by Selling Broker-Dealer qualifying for a reduced sales charge or no
sales charge.
(d) Each exchange of Shares (the investment of the proceeds from the
redemption of Shares of one class of a Fund in the Shares of another class
of Shares of the same Fund or the same or Shares of another Fund) shall,
where available, be made in accordance with, and subject to, the terms of
the Prospectus, including the right of a Fund to suspend sales.
8. The procedures relating to orders and the handling thereof will be subject
to the terms of the Prospectus and to instructions received by Selling
Broker-Dealer from WMFD or the Transfer Agent from time to time. No
conditional orders will be accepted. Selling Broker-Dealer agrees that
purchase orders placed by Selling Broker-Dealer will be made only for the
purpose of covering purchase orders already received from Customers and
that Selling Broker-Dealer will not make purchases of Shares for any other
securities dealer or broker. Selling Broker-Dealer shall place purchase
orders from Customers with WMFD or the Transfer Agent immediately and shall
not withhold the placement of such orders so as to profit Selling
Broker-Dealer; provided, however, that the foregoing shall not prevent the
purchase of Shares by Selling Broker-Dealer for bona fide investment by
Selling Broker-Dealer itself. Selling Broker-Dealer agrees that Selling
Broker-Dealer shall not effect any transactions (including, without
limitation, any purchases and redemptions) in any Shares registered in the
name of, or beneficially owned by, any Customer unless such Customer has
granted Selling Broker-Dealer full right, power and authority to effect
such transactions on behalf of such Customer.
9. To the maximum extent permitted by applicable law, WMFD, the Funds, the
Transfer Agent and the respective officers, directors or trustees, agents,
employees and affiliates of WMFD, the Funds and the Transfer Agent
(collectively the "indemnified persons") shall not be liable for and shall
be fully indemnified and held harmless by Selling Broker-Dealer from and
against any and all liabilities, claims, losses, damages, costs,
settlements and expenses in any way arising out of or connected with any
failure by Selling Broker-Dealer to comply with the terms of this Agreement
or any act or omission, including, without limitation, any material
misstatement, by Selling Broker-Dealer in connection with any orders or
solicitation of orders of or transactions in Shares that may be incurred by
any indemnified person. Shares shall be offered and sold only in the states
and other jurisdictions in which WMFD has indicated in writing that such
offers and sales can be made and in which Selling Broker-Dealer is legally
qualified and permitted to so act.
WMFD agrees to indemnify and hold harmless Selling Broker-Dealer, its
respective officers, employees and directors from and against any and all
claims, liabilities, expenses or losses in any way arising out of or
connected with the negligent, reckless or intentional conduct of WMFD or
its affiliates, officers, representatives or employees or in any way
arising out of or connected with any breach of any representation,
warranty, covenant or agreement made by WMFD
in this Agreement or in any way connected with any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus of
any Fund or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated in order for the
statements made therein not to be misleading.
The indemnification obligations contained in this Section 9 shall survive
the termination of this Agreement.
10. (a) Selling Broker-Dealer agrees that payment for orders from Selling
Broker-Dealer for the purchase of Shares will be made in accordance with
the terms of the Prospectus.
(b) On or before the settlement date of each purchase order for Class
A or Class C Shares, Selling Broker-Dealer shall either (i) remit to an
account designated by WMFD with the Transfer Agent an amount equal to the
then current public offering price of such Class A or Class C Shares being
purchased, less the dealer allowance, if any, that shall be payable by WMFD
to Selling Broker-Dealer with respect to such purchase order as determined
by WMFD in accordance with the terms of the applicable Prospectus, or (ii)
remit to an account designated by WMFD with the Transfer Agent an amount
equal to the then-current public offering price of such Class A or Class C
Shares as determined by WMFD in accordance with the terms of the applicable
Prospectus, in which case Selling Broker-Dealer's dealer allowance, if any,
with respect to such purchase order, as determined by WMFD in accordance
with the terms of the applicable Prospectus, shall be payable to Selling
Broker-Dealer within one month. If payment for any purchase order for Class
A or Class C Shares is not received in accordance with the terms of the
applicable Prospectus, WMFD reserves the right, without notice, to cancel
the sale, and Selling Broker-Dealer shall be responsible for any loss
sustained as a result thereof.
(c) On or before the settlement date of each purchase order for Class
B Shares, Selling Broker-Dealer shall either (1) remit to an account
designated by WMFD with the Transfer Agent an amount equal to (i) the net
asset value of such Class B Shares being purchased, less (ii) a Sales
Commission (as defined below) that shall be payable by WMFD to Selling
Broker-Dealer with respect to such purchase order, or (2) remit to an
account designated by WMFD with the Transfer Agent an amount equal to the
net asset value of such Class B Shares, in which case the Sales Commission
with respect to such purchase order shall be payable to Selling
Broker-Dealer by WMFD within one month. Until changed by notice from WMFD,
"Sales Commission" shall mean an amount equal to (1) 4.0% of the net asset
value of Shares being purchased subject to a contingent deferred sales
charge payable at any time during the five-year period following purchase,
or (2) 3.0% of the net asset value of Shares being purchased subject to a
contingent deferred sales charge payable at any time during the four-year
period following purchase. WMFD will pay or cause to be paid to the Funds
the net asset value of
such Shares being purchased. If payment for any purchase order for Class B
Shares is not received in accordance with the terms of the applicable Fund
Prospectus, WMFD reserves the right, without notice, to cancel the sale and
Selling Broker-Dealer shall be responsible for any loss sustained as a
result thereof.
(d) If any Shares sold under the terms of this Agreement are tendered
for redemption within seven (7) Business Days after confirmation of Selling
Broker-Dealer's purchase order for such Shares, Selling Broker-Dealer shall
forthwith refund to WMFD the full dealer allowance or Sales Commission
received by Selling Broker-Dealer on the sale.
(e) In addition to the fees set forth above in this paragraph 10, WMFD
agrees, subject to the other terms and conditions of this Agreement, to pay
Selling Broker-Dealer a service fee, and Selling Broker-Dealer agrees to
accept the same as full payment for the services described in Section 11
hereof, accrued daily and payable monthly at the annual rate of 0.25% of
the average daily net assets of Shares of the Customers for which Selling
Broker-Dealer is designated as the dealer of record. WMFD reserves the
right to change the rate at which such service fee is paid upon fifteen
(15) days prior written notice to Selling Broker-Dealer. Accrual of such
service fee will commence after such Shares are held for three months (for
Class A Shares) or thirteen months (for Class B and Class C Shares) and
average daily net assets of all Shares of Customers are at a level of
$100,000. Selling Broker-Dealer acknowledges that such fee will be paid
solely from monies received by WMFD under the Distribution Agreement
entered into pursuant to the Class A, Class B and Class C Distribution
Plans; accordingly, any obligation of WMFD to pay Selling Broker-Dealer any
service fee shall not arise unless and until WMFD receives from the
relevant Fund monies intended to be used by WMFD for such purpose and in
amounts sufficient for such purpose. Under the Class A, Class B and Class C
Distribution Plans, each Fund is authorized to make expenditures of Fund
assets for various distribution and support services. Selling Broker-Dealer
understands and agrees that (i) all service fees are subject to the
limitations contained in the Distribution Agreement and the Class A, Class
B and Class C Distribution Plans, which may be amended or terminated at any
time, and (ii) Selling Broker-Dealer's failure to provide services as
agreed in Section 11 hereof will render Selling Broker-Dealer ineligible to
receive service fees.
11. Selling Broker-Dealer will provide shareholder servicing, such as, but not
limited to, responding to Customer inquiries and providing account
information. WMFD will provide personnel during normal business hours to
provide information about the Funds in response to Customer inquiries.
12. Selling Broker-Dealer hereby represents and warrants that: (a) Selling
Broker-Dealer is a corporation, partnership or other entity duly organized
and validly existing in good standing under the laws of the jurisdiction in
which Selling
Broker-Dealer is organized; (b) the execution and delivery of this
Agreement and the performance of the transactions contemplated hereby have
been duly authorized by all necessary action and all other authorizations
and approvals (if any) required for Selling Broker-Dealer's lawful
execution and delivery of this Agreement and Selling Broker-Dealer's
performance hereunder have been obtained; and (c) upon execution and
delivery by Selling Broker-Dealer, and assuming due and valid execution and
delivery by WMFD, this Agreement will constitute a valid and binding
agreement, enforceable against Selling Broker-Dealer in accordance with its
terms.
13. Selling Broker-Dealer further represents and warrants that Selling
Broker-Dealer is a registered broker-dealer and a member of the NASD and,
with respect to any sales in the United States, Selling Broker-Dealer
agrees to abide by the NASD Conduct Rules. Selling Broker-Dealer agrees to
comply with all applicable federal and state laws, rules and regulations.
WMFD agrees to inform Selling Broker-Dealer, upon request, as to the states
in which WMFD believes the Shares have been registered or qualified for
sale under, or are exempt from the requirements of, the respective
securities laws of such states, but WMFD shall have no obligation or
responsibility to make Shares available for sale to Customers in any
jurisdiction. Selling Broker-Dealer agrees to notify WMFD immediately in
the event of Selling Broker-Dealer's expulsion or suspension from the NASD.
Selling Broker-Dealer's expulsion from the NASD will automatically
terminate this Agreement immediately without notice. Selling Broker-Dealer'
suspension from the NASD will terminate this Agreement effective
immediately upon written notice of termination to Selling Broker-Dealer.
14. "Confidential Information" of any party shall mean such party's ideas,
expressions, trade secrets, customer lists, products, policies, forms,
business methods, business plans, software and information from third
parties (such as software and its related documentation) in respect of
which such party has a duty of confidentiality, "nonpublic personal
information" of such party's "customers" (each as defined in Rule 3 of
Regulation S-P), as well as information which from all relevant
circumstances should reasonably be assumed by a party to be confidential
information of the other party, whether or not marked "Confidential
Information." Each party will make reasonable effort to advise the other
party when information disclosed to the other party is Confidential
Information. Confidential Information of a party shall be held in
confidence by the other party to the same extent and in at least the same
manner as such party protects its own Confidential Information, but in no
case to a lesser extent or manner than a reasonable degree of care under
the circumstances. Confidential Information shall not be disclosed to third
parties without specific written permission of the protected party. Each
party shall, however, be permitted to disclose relevant aspects of the
other party's Confidential Information to its officers, agents,
subcontractors and employees to the extent that such disclosure is
reasonably necessary for the performance of its duties and obligations
under this Agreement; provided, however, that such party shall take all
reasonable measures to ensure
that Confidential Information of the other party is not disclosed or
duplicated in contravention of the provisions of the Agreement by such
officers, agents, sub contractors, and employees.
The obligations in this Section 14 shall not restrict any disclosure by
either party pursuant to any applicable state or federal laws, or by order
of any court or government agency (provided that the disclosing party shall
give prompt notice to the non-disclosing party of such order) and shall not
apply with respect to information which (1) is independently developed by
the other party without violating the disclosing party's proprietary
rights, (2) is or becomes publicly known (other than through unauthorized
disclosure), (3) is intentionally disclosed by the owner of such
information to a third party free of any obligation of confidentiality, (4)
is already known by such party without an obligation of confidentiality
other than pursuant to this Agreement or of any confidentiality agreements
entered into before the effective date of this Agreement as evidenced by
the written records of such party, or (5) is rightfully received by a party
free of any obligation of confidentiality.
The parties agree that they shall abide by the provisions of the
Xxxxx-Xxxxx-Xxxxxx Act ("GLB") and other applicable privacy laws and shall
each establish commercially reasonable controls to ensure the
confidentiality of the Confidential Information and to ensure that the
Confidential Information is not disclosed contrary to the provisions of
this Agreement, GLB or any other applicable privacy laws and regulations.
Without limiting the foregoing, each party shall implement such physical
and other security measures as are necessary to (i) ensure the security and
confidentiality of the Confidential Information (ii) protect against any
threats or hazards to the security and integrity of the Confidential
Information and (iii) protect against any unauthorized access to or use of
the Confidential Information. In addition, each party shall use the
Confidential Information of the other party solely for the purpose of
providing services to Customers investing in one or more Funds. The parties
shall, at a minimum, establish and maintain such data security program as
is necessary to meet the objectives of the Interagency Guidelines
Establishing Standards for Safeguarding Customer Information as set forth
in the Code of Federal Regulations at 12 C.F.R. Parts 30, 208, 211, 225,
263, 308, 364, 568 and 570. To the extent that any duties and
responsibilities under the Agreement are delegated to an agent or other
subcontractor, the party shall take reasonable steps to ensure that such
agents and subcontractor adhere to the same requirements. Each party shall
have the right, during regular office hours and upon reasonable notice, to
audit the other party to ensure compliance with the terms of this
Agreement, GLB and other privacy laws and regulations. The provisions of
this Section 14 shall survive the termination of this Agreement.
15. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an exclusive
arrangement, or to create a partnership, association or joint venture
between WMFD and Selling Broker-Dealer. Neither party hereto shall be, act
as, or represent itself as, the
agent or representative of the other party hereto, nor shall either party
hereto have the right or authority to assume, create or incur any liability
or any obligation of any kind, express or implied, against or in the name
of, or on behalf of, the other party hereto. This Agreement is not intended
to, and shall not, create any rights against either party hereto by any
third party solely on account of this Agreement. Neither party hereto shall
use the name of any of the other party hereto in any manner without the
other party's prior written consent, except as required by any applicable
federal or state law, rule or regulation, and except pursuant to any
promotional programs mutually agreed upon in writing by the parties hereto.
16. Except as otherwise specifically provided herein, all notices required or
permitted to be given pursuant to this Agreement shall be given in writing
and delivered by personal or overnight delivery or facsimile (with
confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to WMFD shall be given or sent to WMFD at its office,
located at 0000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xx Xxxxxx Xxxxx, Xxxxxxxxxx
00000; and all notices to Selling Broker-Dealer shall be given or sent to
Selling Broker-Dealer at Selling Broker-Dealer's address shown below.
17. This Agreement shall become effective upon written acceptance by WMFD and
may be terminated at any time by either party hereto upon fifteen (15) days
prior written notice to the other parties hereto. To the extent permitted
by law, this Agreement, including any schedules hereto, shall be deemed
amended as provided in any written notice delivered by WMFD to Selling
Broker-Dealer and otherwise may be amended only by a written instrument
signed by both of the parties hereto. This Agreement may not be assigned by
either party without the prior written consent of the other party hereto.
This Agreement constitutes the entire agreement and understanding between
the parties hereto relating to the subject matter hereof and supersedes any
and all prior agreements between the parties relating to said subject
matter, and Selling Broker-Dealer agrees that WMFD shall have no
obligations to Selling Broker-Dealer other than those expressly provided
herein.
18. This Agreement shall apply to all Shares that are currently outstanding or
being offered and that are offered and sold in the future, including the
Shares of all of the classes of all Funds, whether such Funds or classes
are currently established or are established hereafter. Any classes of
Shares in addition to the Class A, Class B and Class C Shares that are
established hereafter shall be treated hereunder for all intents and
purposes as Class A Shares if the newly established class has a front-end
sales charge and/or a contingent deferred sales charge that may be deferred
for no more than two years and shall be treated for all intents and
purposes as Class B Shares if the newly established class has a contingent
deferred sales charge that may be deferred for more than two years.
19. Selling Broker-Dealer agrees to provide to WMFD and each Trust each
calendar quarter such information as shall reasonably be requested by WMFD
or a Trust
with respect to the service fees paid to Selling Broker-Dealer under this
Agreement. Selling Broker-Dealer will permit representatives of WMFD and
each Trust reasonable access to its personnel and records to monitor the
quality of services being provided by Selling Broker-Dealer pursuant to
this Agreement. Selling Broker-Dealer shall promptly deliver to each Trust
such information as shall reasonably be necessary to permit the Trustees of
each Trust to make an informed determination to continue the Class A, Class
B and Class C Distribution Plans.
20. Selling Broker-Dealer agrees that, in the event that it should come to the
attention of Selling Broker-Dealer that any of its Customers is engaging in
a pattern of purchases, redemptions and/or exchanges of Shares that appears
to evidence "market timing," Selling Broker-Dealer shall notify WMFD of
such pattern and shall cooperate fully with WMFD in investigation and, if
deemed necessary or appropriate by WMFD, terminating any such pattern of
trading, including, without limitation, by refusing such Customer's orders
to purchase or exchange Shares.
21. This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of Washington, without giving effect to
principles of conflict of laws.
22. Selling Broker-Dealer hereby represents and certifies to WMFD that it is
aware of, and in compliance with, all applicable anti-money laundering
laws, regulations, rules and government guidance, including the reporting,
recordkeeping and compliance requirements of the Bank Secrecy Act ("BSA"),
as amended by the USA PATRIOT Act of 2001 (the "Patriot Act"), its
implementing regulations, and related Securities and Exchange Commission
and self-regulatory organization rules and regulations. Selling
Broker-Dealer hereby certifies to WMFD that, as required by the Patriot
Act, it has a comprehensive anti-money laundering compliance program that
includes: internal policies, procedures and controls for complying with the
Patriot Act; a designated compliance officer or officers; an ongoing
training program for appropriate employees; and an independent audit
function.
Selling Broker-Dealer also hereby certifies to WMFD that it is in
compliance with the economic sanctions programs administered by the U.S.
Treasury Department's Office of Foreign Assets Control ("OFAC"), and has an
OFAC compliance program that satisfies all applicable laws and regulations.
Except to the extent restricted by applicable law, Selling Broker-Dealer
hereby agrees to notify the Funds (WM Group of Funds, c/o WM Advisors,
Inc., 0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attn:
Anti-Money Laundering Compliance Officer) promptly whenever questionable
activity or potential indications of suspicious activity or OFAC matches
are detected with respect to the Funds.
Selling Broker-Dealer understands that WMFD will be relying on the
foregoing certifications in administering the Funds' anti-money laundering
compliance program. Selling Broker-Dealer hereby undertakes to notify WMFD
promptly if any of the foregoing certifications cease to be true and
correct for any reason.
IN WITNESS WHEREOF the parties hereto have caused the Agreement to be duly
executed as of the date first written above.
WM FUNDS DISTRIBUTOR, INC. XXXX XXXXXXXX & CO., INC.
By: By:
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Name: Xxxxx X. Xxxxxx Name:
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Title: President Title:
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Date: Address:
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Tel.#:
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Fax #:
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Date:
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Whereas WM Advisors, Inc. recognizes that it will benefit from the sale of
Shares of WM Strategic Asset Management Portfolios, LLC, WM Advisors, Inc.
hereby agrees to pay to Selling Broker-Dealer, with respect to Shares of WM
Strategic Asset Management Portfolios, LLC, a fee accrued daily and payable
monthly at the annual rate of 0.50% (0.25% for Class C Shares) of the average
daily net assets of such Shares held by Customers for whom Selling Broker-Dealer
is the dealer of record, which fee is in addition to any dealer allowance, Sales
Commissions and/or service fees payable by WMFD as set forth above. WM Advisors
reserves the right to change the amount of, or to cease paying, this fee upon
fifteen (15) days prior written notice to Selling Broker-Dealer.
WM ADVISORS, INC.
By:
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Name: Xxxxx X. Xxxxxx
Title: Sr. Vice President
Date:
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Schedule A
to the
Broker-Dealer Agreement
between
WM Funds Distributor, Inc.
and
Selling Broker-Dealer
WM Group of Funds
WM Trust I
WM Trust II
WM Strategic Asset Management Portfolios, LLC
AMENDMENT TO BROKER/DEALER, TRUST, OR REGISTERED INVESTMENT ADVISOR AGREEMENT
FEBRUARY 10, 2006
This Amendment amends and supersedes certain provisions in the most recent
Broker/Dealer, Trust, or Registered Investment Advisor Agreement ("Agreement")
among your firm ("Counterparty"),WM Funds Distributor, Inc. ("WMFD"), and WM
Advisors, Inc. ("WMA"). The provisions herein amend and update the Agreement. To
the extent that terms and provisions of this Amendment differ or conflict with
provisions of the Agreement, the terms of this Amendment shall control. All
other provisions of the Agreement remain in effect.
Unless otherwise defined herein, capitalized terms used in this Amendment shall
have the meanings set forth in the Agreement.
STRATEGIC ASSET MANAGEMENT PORTFOLIOS, LLC
WMA (or WMFD on WMA's behalf) will not make revenue sharing payments (payments
in addition to the dealer allowance, sales commissions, and/or service fees)
payable under the Agreement to Counterparty with respect to shares of WM
Strategic Asset Management Portfolios, LLC, sold on or after March 1, 2006. WMA
(or WMFD on WMA's behalf) will continue to make such payments with respect to
Shares continuously held since before March 1, 2006. WMA reserves the right to
change the rate at which such payment is made, or terminate such payment upon
fifteen (15) days prior written notice to Counterparty.
Counterparty understands and agrees that Counterparty's failure to provide the
services required under the Agreement will render Counterparty ineligible to
receive payments thereunder.
CLASS R-1 AND CLASS R-2 SHARES (EFFECTIVE MARCH 1, 2006)
Settlement. On or before the settlement date of each purchase order for Class
R-1 and R-2 shares, Counterparty shall remit to an account designated by WMFD
with the Transfer Agent an amount equal to the net asset value of such Class R-1
or R-2 shares being purchased. WMFD will pay or cause to be paid to the Funds
the net asset value of such Class R-1 and Class R-2 shares being purchased. If
payment for any purchase order for Class R-1 or Class R-2 shares is not received
in accordance with the terms of the applicable Fund prospectus, WMFD reserves
the right, without notice, to cancel the sale and Counterparty shall be
responsible for any loss sustained as a result thereof.
Distribution and Service Fees. WMFD agrees, subject to the other terms and
conditions of this Agreement, to pay Counterparty a distribution fee, accrued
daily and payable monthly at the annual rate of 0.50% of the average daily net
assets attributable to Class R-1 shares, and 0.25% of the average daily net
assets attributable to Class R-2 shares, of the Customers who have identified
themselves to WMFD as customers of Counterparty. WMFD agrees, subject to the
other terms and conditions of this Agreement, to pay Counterparty a service fee,
and Counterparty agrees to accept the same as full payment for the services to
be provided by under this Agreement, accrued daily and payable monthly at the
annual rate of 0.25% of the average
daily net assets attributable to Class R-1 or Class R-2 shares of the Customers
who have identified themselves to WMFD as customers of Counterparty. WMFD
reserves the right to change the rate at which such service fee is paid upon
fifteen (15) days prior written notice. Counterparty acknowledges that such fee
will be paid solely from monies received by WMFD under the Distribution Plans
applicable to Class R-1 and Class R-2 shares; accordingly, any obligation of
WMFD to pay Counterparty any service fee shall not arise unless and until WMFD
receives from the relevant Fund monies intended to be used by WMFD for such
purpose and in amounts sufficient for such purpose. Under the Class R-1 and
Class R-2 Distribution Plans, each Fund is authorized to make expenditures of
Fund assets for various distribution and support services. Counterparty
understands and agrees that (i) all service fees are subject to the limitations
contained in the Class R-1 and Class R-2 Distribution Plans, which may be
amended or terminated at any time, (ii) the service fee represents payment for
shareholder services, and not for distribution of Shares and (iii)
Counterparty's failure to the provide services described in the Agreement will
render Counterparty ineligible to receive distribution or service fees. To
receive distribution or service fees from WMFD, Counterparty must be the dealer
or adviser of record for shares with average daily net assets of at least
$100,000.
WM Funds Distributor, Inc.
By:
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Name: Xxxxx Xxxxxx
Title: President
WM Advisors, Inc.
By:
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Name: Xxxxx Xxxxxx
Title: Senior Vice President
The WM Group of mutual funds is advised by WM Advisors, Inc., distributed by WM
Funds Distributor, Inc., and sold through WM Financial Services, Inc. (all
affiliates of Washington Mutual, Inc.) and independent broker/dealers.
