Exhibit 23 (m) (ii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Mutual Funds
SALES AND SERVICE
AGREEMENT
This Agreement is entered into among the financial institution executing
this Agreement ("Financial Institution") and Edgewood Services, Inc.
("Distributor") acting as principal underwriter with respect to those series or
portfolios listed on the Exhibit hereto (referred to individually as the "Fund"
and collectively as the "Funds").
This Agreement contemplates that Distributor may make one or more of the
following payments to Financial Institution: (a) payment for sales commissions
as described in Section II and listed in the Exhibit; (b) payment for
distribution services as described in Section III and listed in the Exhibit; (c)
payment for shareholder services as described in Section IV and listed in the
Exhibit; and/or (d) supplemental payments as described in Section V and listed
in the Exhibit. SECTION I - FINANCIAL INSTITUTION.
1. Status of Financial Institution as "Bank" or Registered Broker-Dealer.
Financial Institution represents and warrants to Distributor:
(a)(i)that it is a broker or dealer as defined in Section 3(a)(4) or
3(a)(5) of the Securities Exchange Act of 1934 ("Exchange Act");
that it is registered with the Securities and Exchange Commission
pursuant to Section 15 of the Exchange Act; that it is a member in
good standing of the National Association of Securities Dealers,
Inc. ("NASD"); that its customers' accounts are insured by the
Securities Investors Protection Corporation ("SIPC"); and that,
during the term of this Agreement, it will abide by all of the rules
and regulations of the NASD including, without limitation, the NASD
Rules of Conduct. Financial Institution agrees to notify Distributor
immediately in the event of (1) the termination of its coverage by
the SIPC; (2) its expulsion or suspension from the NASD, or (3) its
being found to have violated any applicable federal or state law,
rule or regulation arising out of its activities as a broker-dealer
or in connection with this Agreement, or which may otherwise affect
in any material way its ability to act in accordance with the terms
of this Agreement. Financial Institution's expulsion from the NASD
will automatically terminate this Agreement immediately without
notice. Suspension of Financial Institution from the NASD for
violation of any applicable federal or state law, rule or regulation
will terminate this Agreement effective immediately upon
Distributor's written notice of termination to Financial
Institution; or
(a)(ii) that it is a "bank," as that term is defined in Section 3(a)(6) of
the Exchange Act and that, during the term of this Agreement, it
will abide by the rules and regulations of those state and federal
banking authorities with appropriate jurisdiction over the Financial
Institution, especially those regulations dealing with the
activities of the Institution as described under this Agreement.
Financial Institution agrees to notify Distributor immediately of
any action by or communication from state or federal banking
authorities, state securities authorities, the Securities and
Exchange Commission, or any other party which may affect its status
as a bank, or which may otherwise affect in any material way its
ability to act in accordance with the terms of this Agreement. Any
action or decision of any of the foregoing regulatory authorities or
any court of appropriate jurisdiction which affects Financial
Institution's ability to act in accordance with the terms of this
agreement, including the loss of its exemption from registration as
a broker or dealer, will terminate this Agreement effective upon
Distributor's written notice of termination to Financial
Institution; AND
(b) that Financial Institution is registered with the appropriate
securities authorities in all states in which its activities make
such registration necessary.
2. Financial Institution Acts as Agent for its Customers.
The parties agree that in each transaction in the shares of beneficial
interest or capital stock of any Fund ("Shares") and with regard to any services
rendered pursuant to this Agreement: (a) Financial Institution is acting as
agent for the customer; (b) each transaction is initiated solely upon the order
of the customer; (c) as between Financial Institution and its customer, the
customer will have full beneficial ownership of all Shares; (d) each transaction
shall be for the account of the customer and not for Financial Institution's
account; and (e) each transaction shall be without recourse to Financial
Institution provided that Financial Institution acts in accordance with the
terms of this Agreement. Financial Institution shall not have any authority in
any transaction to act as Distributor's agent or as agent for any Fund.
SECTION II - AGREEMENT FOR SALES OF FUND SHARES.
3. Execution of Orders for Purchase and Redemption of Shares.
(a) All orders for the purchase of any Shares shall be executed at the
then-current public offering price per share (i.e., the net asset value per
share plus the applicable initial sales load, if any) and all orders for the
redemption of any Shares shall be executed at the net asset value per share
of the applicable Class, in each case as described in the prospectus of the
Fund. Any applicable redemption fee or deferred sales charge will be
deducted by the Fund prior to the transmission of the redemption proceeds to
Financial Institution or its customer. Distributor and the Funds reserve the
right to reject any purchase request in their sole discretion. If required
by law, each transaction shall be confirmed in writing on a fully disclosed
basis and, if confirmed by Distributor, a copy of each confirmation shall be
sent simultaneously to Financial Institution if Financial Institution so
requests.
(b) The procedures relating to all orders will be subject to the terms of the
prospectus (as used herein, references to the Fund's prospectus shall also
include the Fund's statement of additional information ("SAI"), which is
incorporated by reference into the prospectus) of each Fund and
Distributor's written instructions to Financial Institution from time to
time.
(c) Payments for Shares shall be made as specified in the applicable Fund
prospectus. If payment for any purchase order is not received in accordance
with the terms of the applicable Fund prospectus, Distributor reserves the
right, without notice, to cancel the sale and to hold Financial Institution
responsible for any loss sustained as a result thereof.
4. Initial Sales Loads Payable to Financial Institution.
(a) On each order accepted by Distributor, in exchange for the performance of
sales services and/or distribution services, Financial Institution will be
entitled to receive the applicable dealer concession set forth in the then
current prospectus of the applicable Fund or the Exhibit, whichever contains
more recent information, subject to any adjustment in the rate of such
concession referred to below, from the amount paid by Financial
Institution's customer. The initial sales loads for any Fund shall be those
set forth in its prospectus. The rate of the dealer concession payable to
Financial Institution may be changed at any time at Distributor's sole
discretion upon written notice to Financial Institution.
(b) Transactions may be settled by Financial Institution: (1) by payment of the
full purchase price less an amount equal to Financial Institution's
applicable percentage of the initial sales load, or (2) by payment of the
full purchase price, in which case Financial Institution shall receive, not
less frequently than monthly, the aggregate fees due it on orders received
and settled. Upon request, Financial Institution shall provide Distributor
with a report detailing the amounts retained by Financial Institution under
subparagraph (b)(1).
(c) It shall be the obligation of the Financial Institution either: (i) to
provide Distributor with all necessary information regarding the application
of the appropriate initial sales load to each transaction, or (ii) to assess
the appropriate initial sales load for each transaction and to forward the
public offering price, net of the amount of the initial sales load to be
reallowed to the Financial Institution, to the appropriate Fund. Neither the
Fund nor Distributor shall have any responsibility to correct the payment or
assessment of an incorrect initial sales load due to the failure of the
Financial Institution to fulfill the foregoing obligation.
5. Advance Commissions Payable to Financial Institution.
Upon the purchase of certain Shares, as described in the applicable
prospectus, the Financial Institution may be entitled to receive an advance
commission from the Distributor as set forth on each Exhibit (or the Fund's
current prospectus, if it contains more recent information). This amount is not
to be considered an initial sales load and should not be deducted from the
public offering price of the Shares which shall be forwarded to the Fund.
Generally, a contingent deferred sales charge ("CDSC") will be assessed upon the
redemption of Shares with regard to which an advance commission is paid by
Distributor. In the event that Financial Institution notifies Distributor in
writing that Financial Institution elects to waive such advance commission, and
if the Fund's prospectus or SAI permits such a waiver, the CDSC will not be
charged upon the redemption of the relevant Shares. To receive advance
commission from Distributor on Shares that are subject to a CDSC, Financial
Institution must open investor accounts with the Fund on a fully-disclosed basis
or be able to account for share ownership periods used in calculating the CDSC.
Furthermore, should the custody (or record ownership) of the shares of the
investor account(s) be transferred during the applicable CDSC holding period (as
described in the Fund prospectus or SAI) to a financial institution which does
not maintain investor accounts on a fully disclosed basis and does not account
for share ownership periods, the Financial Institution agrees to reimburse
Distributor prior to such transfer for advance commissions paid to it by
Distributor.
6. Delivery of Prospectuses to Customers.
Financial Institution will deliver or cause to be delivered to each
customer, at or prior to the time of any purchase of Shares, a copy of the
current prospectus of the applicable Fund and, upon request by a customer or
shareholder, a copy of the applicable Fund's current SAI and any annual or
semi-annual report ("Financial Report(s)"). Financial Institution shall not make
any representations concerning any Shares other than those contained in the
prospectus, SAI or Financial Report of the Fund or in any promotional materials
or sales literature furnished to Financial Institution by Distributor or the
Fund.
7. Indemnification.
(a) Financial Institution shall indemnify and hold harmless Distributor, each
Fund, the transfer agent of any Fund, and each of their respective
subsidiaries, affiliates, officers, directors, agents and employees from all
direct or indirect liabilities, losses or costs (including attorneys fees)
arising from, related to or otherwise connected with: (1) any breach by
Financial Institution of any provision of this Agreement; or (2) any actions
or omissions of Distributor, any Fund, the transfer agent, and each of their
subsidiaries, affiliates, officers, directors, agents and employees in
reliance upon any oral, written or computer or electronically transmitted
instructions believed to be genuine and to have been given by or on behalf
of Financial Institution.
(b)The Distributor shall indemnify and hold harmless Financial Institution and
its respective subsidiaries, affiliates, officers, directors, agents and
employees from all direct or indirect liabilities, losses or costs (including
attorneys fees) arising from, related to or otherwise connected with: (1) any
breach by Distributor of any provision of this Agreement; or (2) any actions
or omissions of Financial Institution and its subsidiaries, affiliates,
officers, directors, agents and employees in reliance upon any oral, written
or computer or electronically transmitted instructions believed to be genuine
and to have been given by or on behalf of the Distributor.
(c) The Distributor agrees to indemnify and hold harmless any Fund for which
Distributor is principal underwriter, each of its Directors, each of its
officers who have signed the Registration Statement and each other person,
if any, who controls such Fund within the meaning of Section 15 of the
Securities Act of 1933, as amended, but only with respect to statements or
omissions, if any, made in the Registration Statement, or any prospectus,
SAI, or any amendment or supplement thereof (the "Filing(s)") in reliance
upon, and in conformity with, information furnished to such Fund about
Distributor by or on behalf of Distributor expressly for the use in the
Filing(s). In case any action shall be brought against any Fund or any other
person so indemnified based on the Filing(s), and with respect to which
indemnity may be sought against Distributor, Distributor shall have the
rights and duties given to such Fund to the extent that Distributor is
distributor to that Fund, and such Fund and each other person so indemnified
shall have the rights and duties given to Distributor by the provisions of
subsection (a) above.
(d)The agreement of the parties in this Paragraph to indemnify each other is
conditioned upon the party entitled to indemnification (Indemnified Party)
giving notice to the party required to provide indemnification (Indemnifying
Party) promptly after the summons or other first legal process for any claim
as to which indemnity may be sought is served on the Indemnified Party. The
Indemnified Party shall permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting from it, provided that counsel
for the Indemnifying Party who shall conduct the defense of such claim or
litigation shall be approved by the Indemnified Party (which approval shall
not unreasonably be withheld), and that the Indemnified Party may participate
in such defense at its expense. The failure of the Indemnified Party to give
notice as provided in this subparagraph (c) shall not relieve the
Indemnifying Party from any liability other than its indemnity obligation
under this Paragraph. No Indemnifying Party, in the defense of any such claim
or litigation, shall, without the consent of the Indemnified Party, consent
to entry of any judgment or enter into any settlement that does not include
as an unconditional term the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(e) The provisions of this Paragraph shall survive the termination of this
Agreement. SECTION III - AGREEMENT TO PROVIDE DISTRIBUTION-RELATED ACTIVITIES.
8. Agreement under Rule 12b-1.
Financial Institution acknowledges that this Section III, together with
the Introduction to this Agreement, constitute a form of "Related Agreement"
under a plan ("Plan") adopted by a Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940 ("1940 Act"). Financial Institution agrees to
furnish such information to Distributor as necessary to comply with the Plan and
Rule 12b-1.
9. Distribution-Related Activities.
Certain Funds pay distribution fees under a Plan or Plans adopted under Rule
12b-1 under the 1940 Act, as noted on the Exhibit to this Agreement (or the
Fund's current prospectus if it contains more recent information). Distributor
hereby appoints Financial Institution to render or cause to be performed one or
more of the distribution-related activities and, to the extent covered under the
Plans, shareholder services referred to in Section IV, as outlined on such
Exhibit, to those Funds and their shareholders.
10. Distribution Fees Payable to Financial Institution.
During the term of this Section III, Distributor will pay Financial
Institution distribution fees for each class of shares ("Class") of a Fund as
set forth in the Exhibit to this Agreement (or the Fund's current prospectus if
it contains more recent information).
11. TERM OF AGREEMENT.
This Related Agreement shall continue in effect for one year from the date of
its execution, and thereafter for successive periods of one year provided the
form of this Related Agreement is approved with respect to each Class or Fund
(as the case may be) at least annually by the Board of the Fund, including a
majority of the members of the Fund Board who are not interested persons of the
Fund and have no direct or indirect financial interest in the operation of any
Plan or in any related agreements to such Plan ("Independent Board Members"),
cast in person at a meeting called for that purpose.
SECTION IV - AGREEMENT TO PROVIDE SHAREHOLDER SERVICES.
12. Shareholder Services.
Certain Funds pay a Shareholder Services Fee as noted on the Exhibit to
this Agreement (or the Fund's current prospectus if it contains more recent
information). Financial Institution agrees to render or cause to be rendered one
or more of the personal services to shareholders of the Funds and/or the
maintenance of accounts of shareholders of the Funds ("Shareholder Services") as
outlined on such Exhibit. Financial Institution further agrees to provide, upon
request, a written description of the Shareholder Services which Financial
Institution is providing hereunder.
13. Shareholder Service Fees Payable to Financial Institution.
During the term of this Agreement, Distributor will pay Financial
Institution Shareholder Service Fees as set forth in the Exhibit to this
Agreement (or the Fund's current prospectus if it contains more recent
information).
14. ACKNOWLEDGMENT BY FINANCIAL INSTITUTION.
Financial Institution acknowledges that, to the extent a Fund's Plan
covers Shareholder Services and Shareholder Services Fees, such services and
fees are also subject to the terms of Section III of this Agreement.
SECTION V - SUPPLEMENTAL PAYMENTS.
15. Supplemental Payments to Financial Institution.
During the term of this Agreement, Distributor or their affiliates may
make Supplemental Payments to Financial Institution if and as set forth in the
Exhibit to this Agreement (or the Fund's current prospectus if it contains more
recent information) as additional compensation for services described in
Sections II, III or IV. Such payments will be made from the assets, reasonable
profits and/or resources of Distributor, the adviser to the Fund, or the
affiliates of either, and not from assets of the Funds nor from fees payable
under applicable Plans. SECTION VI - MISCELLANEOUS.
16. PRORATION OF PAYMENTS.
For the payment period in which this Agreement becomes effective or
terminates, there shall be an appropriate proration of the payments referenced
in Sections III, IV and V, on the basis of the number of days that this
Agreement is in effect during the quarter.
17. ERISA Assets.
(a)Financial Institution understands that the Department of Labor views ERISA
as prohibiting fiduciaries of discretionary ERISA assets from receiving
certain fees or other compensation from Funds in which the fiduciary's
discretionary ERISA assets are invested. Similar, the common law of trusts in
certain states prohibit fiduciaries from receiving distribution-related
compensation from funds in which the fiduciary's discretionary trust assets
are invested. Receipt of such compensation could violate such provisions
against fiduciary self-dealing and conflict of interest and could subject the
fiduciary to penalties.
18. Customer Names Proprietary to Financial Institution.
(a) The names of Financial Institution's customers are and shall remain
Financial Institution's sole property and shall not be used by Distributor
or its affiliates for any purpose except the performance of their respective
duties and responsibilities under this Agreement and except for servicing
and informational mailings relating to the Funds. Notwithstanding the
foregoing, this Paragraph shall not prohibit Distributor or any of its
affiliates from utilizing the names of Financial Institution's customers for
any purpose if the names are obtained in any manner other than from
Financial Institution pursuant to this Agreement.
(b) Neither party shall use the name of the other party in any manner without
the other party's written consent, except as required by any applicable
federal or state law, rule or regulation, and except pursuant to any
mutually agreed upon promotional programs.
(c) The provisions of this Paragraph shall survive the termination of this
Agreement.
19. Security Against Unauthorized Use of Funds' Recordkeeping Systems.
Financial Institution agrees to provide such security as is necessary to
prevent any unauthorized use of the Funds' recordkeeping system, accessed via
any computer hardware or software provided to Financial Institution by
Distributor.
20. Solicitation of Proxies.
Financial Institution agrees not to solicit or cause to be solicited
directly, or indirectly, at any time in the future, any proxies from the
shareholders of any or all of the Funds in opposition to proxies solicited by
management of any Fund, unless a court of competent jurisdiction shall have
determined that the conduct of a majority of the Board of the Fund constitutes
willful misfeasance, bad faith, gross negligence or reckless disregard of their
duties. This Paragraph will survive the term of this Agreement.
21. Certification of Customers' Taxpayer Identification Numbers.
Financial Institution agrees to obtain any taxpayer identification number
certification from its customers required under Section 3406 of the Internal
Revenue Code, and any applicable Treasury regulations, and to provide
Distributor or their respective designee 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.
22. Notices.
Except as otherwise specifically provided in this Agreement, all notices
required or permitted to be given pursuant to this Agreement shall be given in
writing and delivered by personal delivery or by postage prepaid, registered or
certified United States first class mail, return receipt requested, overnight
courier services, or by facsimile or similar electronic means of delivery (with
a confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to Distributor shall be given or sent to it at Federated
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, Attention: Secretary, Fax:
000-000-0000 (Phone: 000-000-0000). All notices to Financial Institution shall
be given or sent to it at its address, fax number or e-mail address shown below.
23. Termination and Amendment.
(a) This Agreement shall become effective in this form as of the date set forth
below or as of the first date thereafter upon which Financial Institution
executes any transaction, performs any service, or receives any payment
pursuant hereto. This Agreement supersedes any prior sales, distribution,
shareholder service, or administrative service agreements between the
parties with respect to the Funds.
(b) This Agreement, including the Exhibit hereto, may be amended by Distributor
from time to time by the following procedure. Distributor will mail a copy
of the amendment to Financial Institution's address, as shown below. Subject
to any requirements imposed by any Plan, and subject to any requirements
imposed by Rule 12b-1, if Financial Institution does not object to the
amendment within thirty (30) days after its receipt, or, regardless of any
objection, as of the first date thereafter upon which Financial Institution
executes any transaction, performs any service, or receives any payment
pursuant hereto, the amendment will become part of the Agreement. Financial
Institution's objection must be in writing and be received by Distributor
within such thirty days.
(c) In addition to the ability to amend or terminate this Agreement under the
provisions set forth in Paragraphs 1(a) and 23(b), Section III and Section
IV (to the extent Section IV is covered under a Plan) of this Agreement may
be terminated with respect to each Class or Fund, as the case may be, as
follows:
(i) at any time, without the payment of any penalty, by the vote of a
majority of the Independent Board Members of the Fund or by a "vote of a
majority of the outstanding voting securities" of such Class or Fund, as
the case may be, as defined in the 1940 Act on not more than sixty (60)
days' written notice to the parties to this Agreement;
(ii) automatically in the event of the Agreement's assignment as defined in
the 1940 Act, upon the termination of the "Distributor's Contract"
entered into between the Fund and Distributor under Section 15(b) and
(c) of the 1940 Act, or upon the termination of the Plan relating to
such Class or Fund, as the case may be, covered under this Agreement;
(iii)by any party to the Agreement without cause by giving the other party at
least sixty (60) days' written notice of its intention to terminate; and
(iv) at such other time as may be mutually agreed to in writing by each party to
this Agreement.
(d) The termination of this Agreement with respect to any one Class or Fund will
not cause the Agreement's termination with respect to any other Class or
Fund.
24. Severability.
If any provision or portion of this Agreement is at any time determined to
be invalid or unenforceable for any reason, the remaining provisions and
portions of this Agreement will be unaffected thereby and will remain in full
force and effect to the fullest extent permitted by law.
25. Governing Law.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania, without regard to conflict of laws principles
thereof. Financial Institution agrees that it shall bring any action or
proceeding against Distributor arising out of or related in any way to this
Agreement solely in a court of competition jurisdiction sitting in Allegheny
County or the Western District of Pennsylvania, and otherwise consents to the
jurisdiction of either court.
EDGEWOOD SERVICES, INC.
By: __________________________
Name: __________________________
Title: __________________________
Date: __________________________
(Please Print or Type)
Financial Institution: ______________________________
By: __________________________
Name: __________________________
Title: __________________________
Date: __________________________
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Address
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City State Zip Code
Phone number: ______________________________
Fax number: ______________________________
E-mail address: ______________________________
[Name of FINANCIAL INSTITUTION]
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EXHIBIT FOR
STRATEVEST FUNDS
EDGEWOOD SERVICES, INC. - DISTRIBUTOR
For purposes of this Exhibit, any "Initial Sales Load" shall be paid
subject to the terms of Section II of the Agreement; any "Advance Commissions"
shall be paid subject to the terms of Section II of the Agreement; any
"Distribution Fees" shall be paid subject to Section III of the Agreement; any
"Shareholder Service Fees" shall be paid subject to Section IV of the Agreement
and any "Supplemental Payments" shall be paid subject to Section V of the
Agreement. Initial Sales Loads and Advance Commissions shall be paid as a
percentage of the public offering price of the Fund shares next determined after
the purchase order is accepted. Distribution Fees, Shareholder Service Fees, and
Supplemental Payments shall be paid at an annual rate on the average net asset
value of shares held in each of the Funds attributable to the specified Class
during the period in accounts for which the Financial Institution provides
services under the Agreement. Such amounts shall be accrued daily and paid at
least quarterly. All fees stated herein are valid as of the date stated below.
Fees are subject to change pursuant to Paragraphs 22 and 23 of the Agreement.
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STRATEVEST FUNDS INITIAL DISTRIBUTION SHAREHOLDER SUPPLEMENTAL
SALES LOAD FEE* SERVICES PAYMENT
FEE#
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Stratevest Large Cap Value
Fund
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Stratevest Large Cap Growth
Fund
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Stratevest Large Cap Core
Fund
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Stratevest Mid Cap Core Fund
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Stratevest Vermont
Municipal Bond Fund
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Stratevest Intermediate
Bond Fund
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* Financial Institution receives a Distribution Fee in return for performing one
or more of the following Distribution-Related Activities under the Plan for
[Fund/Class __] Shares:
[List Services from Plan].
# Financial Institution receives a Shareholder Services Fee in return for
rendering one or more of the following Shareholder Services for [Fund/Class __]
Shares:
[List Services from Plan or other applicable documentation].
Dated:
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