TOWER MUTUAL FUNDS
ADMINISTRATIVE SUPPORT AND DISTRIBUTOR'S CONTRACT
AGREEMENT made this 1st day of August, 1989, by and between Tower Mutual
Funds (the "Trust"), a Massachusetts business trust, on behalf of the portfolios
(the "Funds") of the Trust set forth in Exhibit A hereto, and FEDERATED
SECURITIES CORP. ("FSC"), a Pennsylvania Corporation.
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Trust hereby appoints FSC to act as Distributor of the shares
("Shares") and to select a group of brokers ("Brokers") to sell Shares, at the
current offering price thereof as described and set forth in the prospectus of
the each Fund, and to render administrative support services to the Funds and
its shareholders. In addition, the Trust hereby appoints FSC to select a group
of Administrators ("Administrators") to render administrative support services
to the Funds and its shareholders.
2. Administrative support services may include, but are not limited to,
the following eleven functions: (1) account openings: the Broker or
Administrator communicates account openings via computer terminals located on
the Broker or Administrator's premises; 2) account closings: the Broker or
Administrator communicates account closings via computer terminals; 3) enter
purchase transactions: purchase transactions are entered through the Broker or
Administrator's own personal computer or through the use of a toll-free
telephone number; 4) enter redemption transactions: Broker or Administrator
enters redemption transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges to provide accounting
support for all transactions. Broker or Administrator also wires funds and
receives funds for Fund share purchases and redemptions, confirms and reconciles
all transactions, reviews the activity in the Funds accounts, and provides
training and supervision of its personnel; 6) interest posting: Broker or
Administrator posts and reinvests dividends to the Funds accounts; 7) prospectus
and shareholder reports: Broker or Administrator maintains and distributes
current copies of prospectuses and shareholder reports; 8) advertisements: the
Broker or Administrator continuously advertises the availability of its services
and products; 9) customer lists: the Broker or Administrator continuously
provides names of potential customers; 10) design services: the Broker or
Administrator continuously designs material to send to customers and develops
methods of making such materials accessible to customers; and 11) consultation
services: the Broker or Administrator continuously provides information about
the product needs of customers.
3. FSC accepts such appointment and will enter into separate written
agreements with various firms to provide the services set forth in Paragraph 1
herein. The Funds will pay FSC a monthly fee computed at the annual rate of up
to .25% of the average aggregate net asset value of the shares held in the Funds
during the month. Subject to the limitation set forth in the preceding sentence,
such fee shall be in an amount equal to the aggregate amount of periodic fees
paid by FSC to Brokers and Administrators pursuant to Paragraph 4 herein.
4. FSC, in its sole discretion, may pay Brokers and Administrators a
periodic fee in respect of Shares of the Funds owned from time to time by their
clients or customers. The schedules of such fees and the basis upon which such
fees will be paid shall be determined from time to time by the Trust's Board of
Trustees.
5. FSC will prepare reports to the Board of Trustees of the Trust on a
quarterly basis showing amounts paid to the various firms and the purpose for
such payments.
6. The sale of Shares may be suspended without prior notice whenever in the
judgment of the Trust it is in its best interest to do so.
7. Neither FSC nor any other person is authorized by the Trust to give any
information or to make any representation relative to the Shares other than
those contained in the Registration Statement or Prospectus filed with the
Securities and Exchange Commission as the same may be amended from time to time
or in any supplemental information to said Prospectus approved by the Fund. FSC
agrees that any other information or representations other than those specified
above which it or any dealer or other person who purchases Shares through FSC
may make in connection with the offer or sale of Shares, shall be made entirely
without liability on the part of the Trust or Funds. FSC agrees that in offering
or selling Shares as agent of the Funds, it will, in all respects, duly conform
to all applicable State and Federal laws and the rules and regulations of the
National Association of Securities Dealers, Inc., including its Rules of Fair
Practice. FSC will submit to the Trust copies of all sales literature before
using the same and will not use such sales literature if disapproved by the
Trust.
8. This Agreement shall continue in effect for one year from the date of
its execution and thereafter for successive periods of one year if such
continuance is approved at least annually by the Trustees of the Trust including
a majority of the members of the Board of Trustees of the Trust who are not
interested persons of the Trust and have no direct or indirect financial
interest in the operation of the Plan or in any related documents to the Plan
("Disinterested Trustees") cast in person at a meeting for that purpose.
9. This Agreement may be terminated at any time, without the payment of
any penalty by the vote of a majority of the Disinterested Trustees or by a
majority of the outstanding voting securities of the particular Fund on not more
than sixty (60) days' written notice to any other party to this Agreement. This
Agreement may be terminated by FSC on sixty (60) days' written notice to the
particular Fund.
10. This Agreement may not be assigned by FSC and shall automatically
terminate in the event of an assignment by FSC as defined in the Investment
Company Act of 1940, provided, however, that FSC may employ such other person,
persons, corporation or corporations as it shall determine in order to assist it
in carrying out its duties under this Agreement.
11. FSC shall not be liable to the Trust or to any of the Funds or to any
shareholder of the Funds for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed by this Agreement.
12. This Agreement may be amended at any time by mutual agreement in
writing of all the parties hereto, provided that such amendment is approved by
the Trustees of the Trust including a majority of the Disinterested Trustees of
the Trust cast in person at a meeting called for that purpose, and provided
further, that in the event any amendment materially increases the fees set forth
in Paragraph 3, such amendment is also approved by a vote of a majority of the
outstanding voting securities of the particular Fund.
13. This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
14. (a) Subject to the conditions set forth below, the Trust agrees to
indemnify and hold harmless FSC and each person, if any, who controls FSC within
the meaning of Section 15 of the Securities Act of 1933 and Section 20 of the
Securities Act of 1934, as amended, against any and all loss, liability, claim,
damage and expense whatsoever (including but not limited to any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever) arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus (as from time to
time amended and supplemented) or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the Trust
with respect to FSC by or on behalf of FSC expressly for use in the Registration
Statement or Prospectus, or any amendment or supplement thereof.
If any action is brought against FSC or any controlling person thereof in
respect of which indemnity may be sought against the Trust pursuant to the
foregoing paragraph, FSC shall promptly notify the Trust in writing of the
institution of such action and the Trust shall assume the defense of such
action, including the employment of counsel selected by the Fund and payment of
expenses. FSC or any such controlling person thereof shall have the right to
employ separate counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of FSC or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Trust in
connection with the defense of such action or the Trust shall not have employed
counsel to have charge of the defense of such action, in any of which events
such fees and expenses shall be borne by the Trust and allocated to the Funds,
as appropriate. Anything in this paragraph to the contrary notwithstanding, the
Trust or any of the Funds shall not be liable for any settlement of any such
claim of action effected without its written consent. The Trust agrees promptly
to notify FSC of the commencement of any litigation or proceedings against the
Trust or any of its Funds or any of its Officers or Trustees or controlling
persons in connection with the issue and sale of Shares or in connection with
such Registration Statement or Prospectus.
(b) FSC agrees to indemnify and hold harmless the Trust, each of the
Funds, each of its Trustees, each of its Officers who have signed the
Registration Statement and each other person, if any, who controls the Trust
within the meaning of Section 15 of the Securities Act of 1933, but only with
respect to statements or omissions, if any, made in the Registration Statement
or Prospectus or any amendment or supplement thereof in reliance upon, and in
conformity with, information furnished to the Trust with respect to FSC by or on
behalf of FSC expressly for use in the Registration Statement or Prospectus or
any amendment or supplement thereof. In case any action shall be brought against
the Trust or any of the Funds or any other person so indemnified based on the
Registration Statement or Prospectus, or any amendment or supplement thereof,
and in respect of which indemnity may be sought against FSC, FSC shall have the
rights and duties given to the Trust, and the Trust and each other person so
indemnified shall have the rights and duties given to FSC by the provisions of
subsection (a) above.
(c) Nothing herein contained shall be deemed to protect any person against
liability to the Trust or any of the Funds or its shareholders to which such
person would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of the duties of such person or by reason of
the reckless disregard by such person of the obligations and duties of such
person under this Agreement.
(d) Insofar as indemnification for liabilities may be permitted pursuant
to Section 17 of the Investment Company Act of 1940 for Directors, Officers, FSC
and controlling persons of the Trust by the Trust pursuant to this Agreement,
the Trust is aware of the position of the Securities and Exchange Commission as
set forth in the Investment Company Act Release No. IC-11330. Therefore, the
Trust undertakes that in addition to complying with the applicable provisions of
this Agreement, in the absence of a final decision on the merits by a court or
other body before which the proceeding was brought, that an indemnification
payment will not be made unless in the absence of such a decision, a reasonable
determination based upon factual review has been made (i) by a majority vote of
a quorum of non-party directors who are not interested persons of the Trust, or
(ii) by independent legal counsel in a written opinion that the indemnitee was
not liable for an act of willful misfeasance, bad faith, gross negligence or
reckless disregard of duties. The Trust further undertakes that advancement of
expenses incurred in the defense of a proceeding (upon undertaking for repayment
unless it is ultimately determined that indemnification is appropriate) against
an Officer, Trustee, FSC or controlling person of the Trust will not be made
absent the fulfillment of at least one of the following conditions: (i) the
indemnitee provides security for his undertaking; (ii) the Trust is insured
against losses arising by reason of any lawful advances; or (iii) a majority of
a quorum of disinterested non-party directors or independent legal counsel in a
written opinion makes a factual determination that there is reason to believe
the indemnitee will be entitled to indemnification.
15. FSC is hereby expressly put on notice of the limitation of liability
as set forth in Article XI of the Declaration of Trust and agrees that the
obligations assumed by the Trust pursuant to this agreement shall be limited in
any case to the Trust and its assets and FSC shall not seek satisfaction of any
such obligation from the shareholders of the Trust, the Trustees, officers,
employees or agents of the Trust, or any of them.
IN WITNESS WHEREOF, this Agreement has been executed for FSC and the Trust
and their respective seals affixed hereto by their duly authorized officers,
hereto this 1st day of August, 1989.
ATTEST: TOWER MUTUAL FUNDS
/S/ XXXXX X. XXXXXX By:/S/ J. XXXXXXXXXXX XXXXXXX
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/S/ S. XXXXXXX XXXXX By:/S/ XXXXXXX X. XXXXXX
Secretary President
(SEAL)
Exhibit A
PORTFOLIOS OF TOWER MUTUAL FUNDS
Tower Mutual Funds (the "Trust") consists of the following portfolios (the
"Funds") effective as of the dates set forth below:
NAME DATE
Tower Capital Appreciation Fund October 14, 1988
Tower U.S. Government Income Fund October 14, 1988
Tower Louisiana Municipal Income Fund October 14, 1988
Tower Cash Reserve Fund October 14, 1988
Amendment No. 1 to
Exhibit A
PORTFOLIOS OF TOWER MUTUAL FUNDS
Tower Mutual Funds (the "Trust") consists of the following portfolios (the
"Funds") effective as of the dates set forth below:
NAME DATE
Tower Capital Appreciation Fund October 14, 1988
Tower U.S. Government Income Fund October 14, 1988
Tower Louisiana Municipal Income Fund October 14, 1988
Tower Cash Reserve Fund October 14, 1988
Tower Total Return Bond Fund September 15, 1992
Amendment No. 2 to
Exhibit A
PORTFOLIOS OF TOWER MUTUAL FUNDS
Tower Mutual Funds (the "Trust") consists of the following portfolios (the
"Funds") effective as of the dates set forth below:
NAME DATE
Tower Capital Appreciation Fund October 14, 1988
Tower U.S. Government Income Fund October 14, 1988
Tower Louisiana Municipal Income Fund October 14, 1988
Tower Cash Reserve Fund October 14, 1988
Tower Total Return Bond Fund September 15, 1992
Tower U.S. Treasury Money Market Fund June 01, 1993
Amendment No. 3 to
Exhibit A of the
Administrative Support and Distributor's Contract
TOWER MUTUAL FUNDS
Tower Mutual Funds consists of the following, effective as of the dates
set forth below:
Tower Capital Appreciation Fund - Class A Shares* October 14, 1988
Tower Capital Appreciation Fund - Class B Shares November 28, 1996
Tower Cash Reseerve Fund October 14, 1988
Tower Louisiana Municipal Income Fund October 14, 1988
Tower U.S. Government Income Fund October 14, 1988
Tower Total Return Bond Fund September 15, 1992
Tower U.S. Treasury Money Market Fund June 1, 1993
*Existing shares were redesignated as Class A Shares on September 11, 1996
Amendment No. 4 to
Exhibit A of the
Administrative Support and Distributor's Contract
TOWER MUTUAL FUNDS
Tower Mutual Funds consists of the following, effective as of the dates
set forth below:
Tower Capital Appreciation Fund - Class A Shares October 14, 1988
Tower Capital Appreciation Fund - Class B Shares November 28, 1996
Tower Cash Reserve Fund - Class A Shares* October 14, 1988
Tower Cash Reserve Fund - Class B Shares March 10, 1998
Tower Louisiana Municipal Income Fund October 14, 1988
Tower Mid-Cap Equity Fund - Class A Shares March 10, 1998
Tower Mid-Cap Equity Fund - Class B Shares March 10, 1998
Tower U.S. Government Income Fund October 14, 1988
Tower Total Return Bond Fund September 15, 1992
Tower U.S. Treasury Money Market Fund June 1, 1993
*Existing shares were redesignated as Class A Shares on March 10, 1998
Amendment No. 1
dated September 11, 1996
to
Administrative Support and Distributor's Contract
The second sentence of Paragraph 3 of the Administrative Support and
Distributor's Contract, dated August 1, 1989, between Tower Mutual Funds and
Federated Securities Corp. is hereby deleted and replaced with the following:
"The Funds will pay FSC a monthly fee computed at an annual rate as set forth
on Exhibit B of this Agreement."
ATTEST: TOWER MUTUAL FUNDS
/S/ XXXXX X. XXXXXXX By: /S/ XXXXXX X. XXXXXXXX
Secretary President
FEDERATED SECURITIES CORP.
/S/ XXXXX X. XXXXXX By: XXXXXXX X. XXXXXX
Secretary President
Exhibit B
to
Administrative Support and Distributor's Contract
Tower Mutual Funds
Tower Capital Appreciation Fund
Class A Shares
Tower U.S. Government Income Fund
Tower Louisiana Municipal Income Fund
Tower Cash Reserves Fund
Tower Total Return Fund
Tower U.S. Treasury Money Market Fund
In compensation for the services provided pursuant to this Agreement, FSC will
be paid a monthly fee computed at an annual rate of 0.25 of 1% of the average
aggregate net asset value of the above-named fund or class held during the
month.
Tower Capital Appreciation Fund
Class B Shares
In compensation for the services provided pursuant to this Agreement, FSC will
be paid a monthly fee computed at an annual rate of 0.75 of 1% of the average
aggregate net asset value of the above-named class of shares held during the
month.
Exhibit 6(vi) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Amendment #1
to Exhibit B
to
Administrative Support and Distributor's Contract
TOWER MUTUAL FUNDS
Tower Capital Appreciation Fund
Class A Shares
Tower Cash Reserves Fund
Class A Shares
Tower Louisiana Municipal Income Fund
Tower Mid-Cap Equity Fund
Class A Shares
Tower Total Return Fund
Tower U.S. Government Income Fund
Tower U.S. Treasury Money Market Fund
In compensation for the services provided pursuant to this Agreement, FSC will
be paid a monthly fee computed at an annual rate of 0.25 of 1% of the average
aggregate net asset value of the above-named fund or class held during the
month.
Tower Capital Appreciation Fund
Class B Shares
Tower Cash Reserve Fund
Class B Shares
Tower Mid-Cap Equity Fund
Class B Shares
In compensation for the services provided pursuant to this Agreement, FSC will
be paid a monthly fee computed at an annual rate of 0.75 of 1% of the average
aggregate net asset value of the above-named class of shares held during the
month.
Dated: March 10, 1998
