Exhibit 15(iv) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
SHAREHOLDER SERVICES AGREEMENT
This Agreement, dated October 1, 1996, is made between the Financial
Institution executing this Agreement ("Provider") and Federated Shareholder
Services ("FSS") for Tower Mutual Funds (the "Trust"), on behalf of the
portfolios listed in Exhibit A hereto (the "Funds"), who have approved this form
of Agreement. In consideration of the mutual covenants hereinafter contained, it
is hereby agreed by and between the parties hereto as follows:
1. FSS hereby appoints Provider to render or cause to be rendered personal
services to shareholders of the Funds and/or the maintenance of accounts of
shareholders of the Funds ("Services"). Provider agrees to provide Services
which, in its best judgment, are necessary or desirable for its customers who
are investors in the Funds. Provider further agrees to provide FSS, upon
request, a written description of the Services which Provider is providing
hereunder.
2. The Services to be provided under Paragraph 1 may include, but are not
limited to, the following:
(a) communicating account openings through computer terminals located on
the Provider's premises ("computer terminals"), through a toll-free telephone
number or otherwise;
(b) communicating account closings via the computer terminals, through a
toll-free telephone number or otherwise;
(c) entering purchase transactions through the computer terminals,
through a toll-free telephone number or otherwise;
(d) entering redemption transactions through the computer terminals,
through a toll-free telephone number or otherwise;
(e) electronically transferring and receiving funds for Fund Share
purchases and redemptions, and confirming and reconciling all such transactions;
(f) reviewing the activity in Fund accounts;
(g) providing training and supervision of its personnel; and
(h) responding to customers' and potential customers' questions about
the Funds.
The Services listed above are illustrative. The Provider is not required to
perform each Service and may at any time perform either more or fewer Services
than described above.
3. During the term of this Agreement, the Funds will pay the Provider fees
as set forth in a written schedule delivered to the Provider pursuant to this
Agreement. The fee schedule for Provider may be changed by FSS sending a new fee
schedule to Provider pursuant to Paragraph 10 of this Agreement. For the payment
period in which this Agreement becomes effective or terminates, there shall be
an appropriate proration of the fee on the basis of the number of days that this
Agreement is in effect during the quarter.
4. The Provider understands that the Department of Labor views ERISA as
prohibiting fiduciaries of discretionary ERISA assets from receiving
administrative service fees or other compensation from funds in which the
fiduciary's discretionary ERISA assets are invested. To date, the Department of
Labor has not issued any exemptive order or advisory opinion that would exempt
fiduciaries from this interpretation. Without specific authorization from the
Department of Labor, fiduciaries should carefully avoid investing discretionary
assets in any fund pursuant to an arrangement where the fiduciary is to be
compensated by the fund for such investment. Receipt of such compensation could
violate ERISA provisions against fiduciary self-dealing and conflict of interest
and could subject the fiduciary to substantial penalties.
5. The Provider agrees not to solicit or cause to be solicited directly, or
indirectly at any time in the future, any proxies from the shareholders of a
Fund in opposition to proxies solicited by management of the Trust, unless a
court of competent jurisdiction shall have determined that the conduct of a
majority of the Board of Trustees of the Trust constitutes willful misfeasance,
bad faith, gross negligence or reckless disregard of their duties. This
Paragraph 5 will survive the term of this Agreement.
6. This Agreement shall continue in effect for one year from the date of its
execution, and thereafter for successive periods of one year if the form of this
Agreement is approved at least annually by the Board of the Trust, including a
majority of the members of the Board of the Trust who are not interested persons
of the Funds and have no direct or indirect financial interest in the operation
of this Agreement or in any related documents to this Agreement ("Disinterested
Board Members") cast in person at a meeting called for that purpose.
7. Notwithstanding Paragraph 6, this Agreement may be terminated as follows:
(a) at any time, without the payment of any penalty, by the vote of a
majority of the Disinterested Board Members of the Trust or by a
vote of a majority of the outstanding voting securities of a Fund as
defined in the Investment Company Act of 1940 on not more than sixty
(60) days' written notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment as defined
in the Investment Company Act of 1940; and
(c) by either party to the Agreement without cause by giving the other
party at least sixty (60) days' written notice of its intention to
terminate.
8. The Provider 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 the Funds
or their 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.
9. This Agreement supersedes any prior service agreements between the
parties for the Funds.
10. This Agreement may be amended by FSS from time to time by the following
procedure. FSS will mail a copy of the amendment to the Provider's address, as
shown below. If the Provider does not object to the amendment within thirty (30)
days after its receipt, the amendment will become part of this Agreement. The
Provider's objection must be in writing and be received by FSS within such
thirty days.
11. The Provider acknowledges and agrees that FSS has entered into this
Agreement solely in the capacity of agent for the Funds. The Provider agrees not
to claim that FSS is liable for any responsibilities or amounts due by the Funds
hereunder.
12. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania.
Provider
Address
City, State, Zip Code
Date
Authorized Signature
Title
Print Name of Authorized Signature
FEDERATED SHAREHOLDER SERVICES
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
By: /s/ Xxxxxx X. Xxxxx
Vice President
EXHIBIT A
TO THE
SHAREHOLDER SERVICES AGREEMENT
Tower Capital Appreciation Fund
Class B Shares
Shareholder Service Fees
1. During the term of this Agreement, the Funds will pay Provider a
quarterly fee. This fee will be computed at the annual rate of 0.25 of 1% of the
average net asset value of shares of the Funds held during the quarter in
accounts for which the Provider provides Services under this Agreement, so long
as the average net asset value of Shares in the Funds during the quarter equals
or exceeds such minimum amount as the Funds shall from time to time determine
and communicate in writing to the Provider.
2. For the quarterly period in which the Shareholder Services Agreement
becomes effective or terminates, there shall be an appropriate proration of any
fee payable on the basis of the number of days that this Agreement is in effect
during the quarter.
