EXHIBIT 6(b)
Composite Funds Distributor, Inc.
000 Xxxx Xxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
SELECTED DEALER AGREEMENT
(Proposed)
Dear Sirs:
As the principal underwriter of shares in regulated investment companies
managed by Composite Research and Management Co. which are distributed by us at
their respective net asset values plus any sales charges pursuant to each Fund's
prospectus, we invite you to participate as principal in the distribution of
shares of any of the Funds upon the following terms:
1. You are to offer and sell the Shares only at the public offering price
(current net asset value plus any applicable sales charge) described in the
applicable current prospectus of the Funds, as supplemented or amended from time
to time and in full accord with all Securities Exchange Commission ("SEC") and
National Association of Securities Dealers ("NASD") securities regulations. You
agree to act only as principal in such transactions or as agent for your
customer, and you shall not have authority to act as agent for the Funds, the
Fund Group or for us in any respect. All orders for Shares are subject to
acceptance by us and become effective only upon confirmation by the applicable
Fund or its shareholder servicing agent (the "Transfer and Shareholder Services
Agent"). No conditional orders for Shares will be accepted. The procedures
Page 2
relating to orders for Shares and the handling thereof will be subject to the
Funds' description thereof set forth in the Prospectus and Statement of
Additional Information (defined below) and to written instructions released by
us from time to time.
2. Remittance for each such order, if made by check, should be payable to
the applicable Fund and promptly delivered to the Transfer and Shareholder
Services Agent at the address appearing on the face of the confirmation of such
order. Remittance for orders for Shares to be purchased through an individual
retirement account, as described in each Prospectus, should be payable by check
to "Investors Fiduciary Trust Company, Custodian." Payment must be received by
the Transfer and Shareholder Services Agent within five business days (or such
shorter period as may hereafter be required by law or regulation) after
acceptance and confirmation of your order; otherwise we reserve the right,
without notice, to cancel the sale, in which event you will be held responsible
for any loss to the applicable Fund, or to us. You agree to provide us with
written notice of any application by you to any regulatory authority for any
extension of the time for such payment prior to your submission of such
application.
3. As a selected dealer, you are hereby authorized to place orders
directly with the Funds for their shares to be resold by us
Page 3
to you subject to the applicable terms and conditions governing the placement of
orders by us set forth in the Distribution Contract with each Fund and subject
to the applicable compensation provisions set forth in each Fund's then current
prospectus. You may tender shares directly to the Funds or their transfer
agent, Xxxxxxx Xxxxx Securities Services, Inc., for redemption. Redemption and
repurchases of shares will be made at the net asset value of such shares in
accordance with the then current prospectuses of the Funds.
4. (a) For your services hereunder, you will receive a dealer concession
("Dealer Concession") from us equal to the following percentages
of the public offering price of the Shares:
There is no Dealer Concession on Shares purchased through the
reinvestment of dividends or distributions or on Shares purchased
at net asset value. The Dealer Concession is subject to change
from time to time, and orders placed after the date of any such
change shall be subject to the Dealer Concession in effect at the
time the order is
Page 4
received by the Transfer and Shareholder Services Agent. Upon the
purchase of Shares pursuant to a Letter of Intent or Right of
Accumulation (as set forth in the Prospectus and Statement of
Additional Information), you will promptly return to us any
excess of the Dealer Concession previously allowed or paid to you
over that allowable with respect to such later purchase. Unless
you advise us to the contrary at the time of transmitting a
purchase order, we will consider that the investor owns no other
Shares and is not entitled to any lower sales charge than that
accorded to a single transaction in the amount of the purchase
order.
(b) To the extent you provide distribution, marketing, and other
services to the Funds which have distribution plans (as described
in the Prospectus or Statement of Additional Information) in
effect pursuant to the provisions of Rule 12b-1 (the "12b-1
Plan") promulgated pursuant to the provisions of the Investment
Company Act of 1940 (the "1940 Act"), in connection with the
promotion of the sale of Shares and the retention of assets
Page 5
by such Funds, including furnishing services and assistance to
your customers who invest in or own Shares of such Funds and
including, but not limited to, answering routine inquiries
regarding such Funds and assisting in changing distribution
options, account designations and addresses, we shall pay you
quarterly, in accordance with the then prevailing guidelines, a
portion of the fee ("Distribution Fee") paid by such Fund to us
pursuant to its 12b-1 Plan, as set forth below as Additional
Compensation. Such Additional Compensation shall be payable only
with respect to Shares which are owned of record by your firm as
nominee of your customers or which are owned by those customers
of your firm whose records, as maintained by the Funds or their
agents, designate your firm as the customer's dealer of record.
Subject to the provisions of the 12b-1 Plan, as in effect from
time to time, the Additional Compensation shall be computed at
the following rates, and for each calendar quarter shall be based
on the average daily net asset value of the Shares
Page 6
of each Fund that remain outstanding during such period, subject
to such computation and accrual:
Payment of such Additional Compensation to you shall be made
within 30 days after the close of each quarter for which such
Additional Compensation is payable. If the amount of the
Additional Compensation based upon the value of any customer's
account is less than $1.00 for any Fund for any quarter, such
Additional Compensation will not be paid. If the aggregate
Additional Compensation exclusive of Additional Compensation not
paid under the preceding sentence for all your customer accounts
is less than $15.00 for all Funds for any quarter, such
Additional Compensation will not be paid. In addition (i) you
shall not be paid such Additional Compensation until we are in
receipt of the Distribution Fee described in that Fund's
Prospectus for the period in which you provide the services
described above; and (ii) our liability to
Page 7
you for the payment of such quarterly Additional Compensation is
limited solely to your pro rata proceeds of that Fund's
Distribution Fee. The provisions of this paragraph may be
terminated with respect to any Fund in accordance with the
provisions of Rule 12b-1 under the 1940 Act, and thereafter no
such Additional Compensation will be paid to you.
Where payment is due hereunder, we agree to send checks for
the Dealer Concession and Additional Compensation to your address
as it appears on our records. You must notify us of address
changes and promptly negotiate such checks. Any such check that
remains outstanding for 12 months shall be void and the
obligation represented thereby shall be extinguished.
5. You represent that you are a member in good standing of the National
Association of Securities Dealers, Inc., you further agree that this Agreement
shall terminate automatically on the date you cease to be a member of the NASD.
It is further agreed that all rules or regulations of the NASD now in effect or
hereafter adopted, which are binding upon underwriters and dealers in the
Page 8
distribution of the securities of open-end investment companies, shall be deemed
to be part of this Agreement to the same extent as if set forth in full herein.
6. You agree:
(a) To purchase shares from us only for the purpose of covering purchase
orders already received or for your own bona fide investment.
(b) That you will not purchase any shares from your customers at prices
lower than the redemption or purchase prices then quoted by the Funds.
You shall, however, be permitted to sell shares for the account of
their record owners to the Funds at the repurchase prices currently
established for such shares and may charge the owner a fair commission
for handling the transaction.
(c) That you will not withhold placing customers' orders for shares solely
for the purpose of increasing your profit as a result of such
withholding.
(d) That if any shares confirmed to you hereunder are redeemed or
repurchased by any of the Funds within seven business days after such
confirmation of your original order, you shall forthwith refund to us
the full discount reallowed to you on such sales. We shall forthwith
pay
Page 9
to the appropriate Funds our share of the "charge" on the original
sale, and shall also pay to such Fund the refund from you as herein
provided. We shall notify you of such redemption or repurchase within
ten days from the date of delivery of the certificate or certificates
to us or such Fund. Termination or cancellation of this Agreement
shall not relieve you or us from the requirements of this
subparagraph.
7. We shall not accept from you any conditional order for shares.
Delivery of certificates for shares purchased (if requested) shall be made by
the Funds only against receipt of the purchase price, subject to deduction for
the discount reallowed to you and our portion of the sales charge on such sale.
If payment for the shares purchased is not received within the time customary
for such payments, the sale may be cancelled without any responsibility or
liability on our part or on the part of the Funds (in which case you will be
responsible for any loss, including loss of profit, suited by the Funds
resulting from your failure to make payment as aforesaid), or at our option, we
may sell the shares ordered back to the Funds (in which case we may hold you
responsible for any loss, including loss of profit suffered by us resulting from
your failure to make payment as aforesaid).
Page 10
8. You will not offer or sell any of the shares except under
circumstances that will result in compliance with the applicable Federal and
State securities laws and, in connection with sales and offers to sell shares,
you will furnish to each person to whom any such sale or offer is made a copy of
the applicable then current prospectus. We shall be under no liability to you
except for obligations expressly assumed by us herein. Nothing herein contained,
however, shall be deemed to be a condition, stipulation or provision binding any
persons acquiring any security to waive compliance with any provision of the
Securities Act of 1933, or of the regulations of the SEC or NASD or to relieve
the parties hereto from any liability arising under the Securities Act of 1993
or the 1940 Act.
9. No person is authorized to make any representations concerning shares
of the Funds except those contained in the current prospectus and printed
information issued by each Fund or by us as information supplemental to each
prospectus. We shall supply prospectuses, reasonable quantities of supplemental
sales literature, and additional information as issued. You agree not to use
other advertising or sales material relating to the Funds unless approved in
writing by us in advance of such use. Any printed information furnished by us
other than the then current
Page 11
prospectus for each Fund, periodic reports and proxy solicitation materials are
our sole responsibility and not responsibility of the Funds, and you agree that
the Funds shall have no liability or responsibility to you in these respects
unless expressly assumed in connection therewith.
10. You agree that, to the maximum extent permitted by applicable law, you
will indemnify and hold harmless Composite Funds Distribution, Inc., each Fund,
the Fund Group, and the officers, directors, employees, agents and affiliates
thereof of Composite Funds Distribution, Inc. from any liability, claims, loss,
damage, costs, settlements and expenses on account of any act or omission by
you, your representatives, agents or subagents in connection with any orders or
solicitation of orders of Shares of the Funds by you, your representatives,
agents or subagents. You agree to offer and sell Shares only in the states and
other jurisdictions in which we have indicated in writing that such offers and
sales can be made and in which you are legally qualified and permitted to so
act. If you effect a telephone redemption or telephone exchange of any Shares
on behalf of your customer, you hereby indemnify each Fund, the Fund Group,
Composite Funds Distributor, Inc., and the Transfer and Shareholder Services
Agent against any loss, injury, damage, expense, or liability as a result
Page 12
of acting or relying upon your telephone instructions and information.
We agree to indemnify and hold harmless you and your 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 negligence,
recklessness or intentional conduct of us or our 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 us in this
Agreement or in any way connected with any untrue statement or alleged untrue
statement of a material fact contained in the registration statement or
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 to make
the statements therein not misleading. Our indemnification obligations to you
hereunder shall survive the termination of this Agreement for any reason.
11. You acknowledge by your execution hereof that all payments by any Fund
to us under its 12b-1 Plan and all payments by Fund shareholders of sales
charges shall be paid in accordance with Article III, Section 26 of the Rules of
Fair Practice of the NASD, as such Section may change from time to time
("Section 26"),
Page 13
including, without limitation, the limitations set forth in Section 26 on the
maximum asset-based sales charges (as defined in Section 26) payable with
respect to a Fund's Shares. Accordingly, it is agreed that to the extent the
fees payable to us under a 12b-1 Plan with respect to a Fund or the sales
charges payable by a Fund shareholder for the purchase of Fund shares are
reduced or prohibited by the operation of Section 26, our payments to you
hereunder of the Dealer Concession or Additional Compensation, as the case may
be, will likewise be reduced or will cease. You further agree that we shall be
obligated to pay you a Dealer Concession or Additional Compensation hereunder
only if and to the extent we actually receive a fee from such Fund pursuant to
its 12b-1 Plan or a sales charge from such shareholder, as the case may be. You
also agree to remit promptly to us any dealer Concession or Additional
Compensation paid to you that we subsequently determine was paid in connection
with 12b-1 Plan fees or sales charges paid to us in violation of Section 26.
12. All notices, requests, demands and other communications required by,
or made in connection with this Agreement shall be in writing and shall be
deemed to have been duly given on the date of delivery, if delivered in person,
or three days after mailing if mailed by certified or registered mail, postage
prepaid, return
Page 14
receipt requested, addressed, if to you, as set forth on the signature page of
this Agreement, or, if to us, as follows:
Composite Funds Distributor, Inc.
000 Xxxx Xxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: President
13. Either party to this Agreement may cancel this Agreement by giving
written notice to the other. Such notice shall be deemed to have been given on
the date on which it was either delivered personally to the other party or any
officer or member thereof, or was mailed postpaid or delivered to a telegraph
office for transmission to the other party at his or its address as shown below.
This Agreement may be amended by us at any time and your placing of an order
after the effective date of any such amendment shall constitute you acceptance
thereof.
14. This Agreement shall be construed in accordance with the laws of the
State of Washington and shall be binding upon both parties hereto when signed by
us and accepted by you in the space provided.
Very truly yours,
COMPOSITE FUNDS DISTRIBUTOR, INC.
By:
---------------------------------------
Xxxxxxx X. Xxxxxx, President
Page 15
Firm Name
------------------------------------------------------------
Address
--------------------------------------------------------------
City State Zip Code
------------------------------- ------- --------------
ACCEPTED BY (signature)
----------------------------------------------
Name (print) Title
---------------------------- ------------------------
Date 19
------------------------ ---
Please return two signed copies of this Agreement (one of which will be signed
by us and thereafter returned to you).
Composite Funds Distributor, Inc.
000 Xxxx Xxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
