WCT Funds September 1, 1997
Exhibit 6(iii)
FORM OF
SALES AGREEMENT WITH EDGEWOOD SERVICES, INC.
This Agreement is entered into between the financial institution
executing this Agreement ("Financial Institution") and Edgewood Services, Inc.
("ESI") for WCT Funds (the "Trust"), which may be offered in one or more series
(the "Funds") and classes (the "Classes") of shares ("Shares"), for which ESI
serves as Distributor of shares of beneficial interest or capital stock. The
Funds or Classes to which this Agreement applies are set forth in Schedule A
hereto.
1. Status of Financial Institution as "Bank" or Registered Broker-Dealer.
The Financial Institution represents and warrants to ESI that:
(a) It is either a "bank" as that term is defined in Section 3(a)(6) of
the Securities Exchange Act of 1934 ("Exchange Act") or a
broker-dealer registered with the Securities and Exchange Commission.
(b) If the Financial Institution is a "bank", it is a duly organized
and validly existing bank in good standing under the laws of the
jurisdiction in which it is organized. The Financial Institution
agrees to give written notice to ESI promptly in the event that it
shall cease to be a "bank" as defined in Section 3(a)(6) of the
Exchange Act. In that event, this Agreement shall be automatically
terminated upon such written notice.
(c) If the Financial Institution is a registered broker-dealer, it is
a member of the NASD and it agrees to abide by all of the rules
and regulations of the NASD including, without limitation, the
NASD Rules of Fair Practice. The Financial Institution agrees to
notify ESI immediately in the event of (1) its expulsion or
suspension from the NASD, or (2) 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.
The Financial Institution's expulsion from the NASD will
automatically terminate this Agreement immediately without notice.
Suspension of the Financial Institution from the NASD for
violation of any applicable federal or state law, rule or
regulation will terminate this Agreement effective immediately
upon ESI's written notice of termination to the Financial
Institution.
2. Financial Institution Acts as Agent for its Customers.
The parties agree that in each transaction in the Shares of the Trust:
(a) the Financial Institution is acting as agent for the customer; (b) each
transaction is initiated solely upon the order of the customer; (c) as between
the Financial Institution and its customer, the customer will have full
beneficial ownership of all Shares of the Trust to which this Agreement applies;
(d) each transaction shall be for the account of the customer and not for the
Financial Institution's account; and (e) each transaction shall be without
recourse to the Financial Institution provided that the Financial Institution
acts in accordance with the terms of this Agreement. The Financial Institution
shall not have any authority in any transaction to act as ESI's agent or as
agent for the Trust.
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 sales load, if any) and all
orders for the redemption of any Shares shall be executed at the
net asset value per share, plus any applicable redemption charge,
in each case as described in the prospectus of the Fund or Class.
ESI and the Trust reserve the right to reject any purchase request
at their sole discretion. If required by law, each transaction
shall be confirmed in writing on a fully disclosed basis and, if
confirmed by ESI, a copy of each confirmation shall be sent
simultaneously to the Financial Institution if the Financial
Institution so requests.
(b) The procedures relating to all orders and the handling of them will be
subject to the terms of the prospectus of each Fund or Class and ESI's
written instructions to the Financial Institution from time to time.
(c) Payments for Shares shall be made as specified in the applicable
Fund or Class prospectus. If payment for any purchase order is not
received in accordance with the terms of the applicable Fund or
Class prospectus, ESI reserves the right, without notice, to
cancel the sale and to hold the Financial Institution responsible
for any loss sustained as a result thereof.
(d) The Financial Institution agrees to provide such security as is
necessary to prevent any unauthorized use of the Trust's
recordkeeping system, accessed via any computer hardware or
software provided to the Financial Institution by ESI.
4. Fees Payable to the Financial Institution from Sales Loads.
(a) On each order accepted by ESI, in exchange for the performance of
sales and/or administrative services, the Financial Institution
will be entitled to receive from the amount paid by the Financial
Institution's customer the applicable percentage of the sales
load, if any, as established by ESI. The sales loads for any Fund
or Class shall be those set forth in its prospectus. The portion
of the sales load payable to the Financial Institution may be
changed at any time at ESI's sole discretion upon thirty (30)
days' written notice to the Financial Institution.
(b) Transactions may be settled by the Financial Institution: (1) by
payment of the full purchase price to ESI less an amount equal to
the Financial Institution's applicable percentage of the sales
load, or (2) by payment of the full purchase price to ESI, in
which case ESI shall pay to the Financial Institution, not less
frequently than monthly, the aggregate fees due it on orders
received and settled.
5. Payment of Rule 12b-1 Fees to the Financial Institution.
Subject to and in accordance with the terms of each Fund or Class
prospectus and the Rule 12b-1 Plan, if any, adopted by resolution of the Board
of Trustees, and the shareholders of any Fund or Class pursuant to Rule 12b-1
under the Investment Company Act of 1940, ESI may pay fees for sales and/or
administrative support services to certain financial institutions (such as banks
and securities dealers). The Financial Institution may serve as an
Administrator, in accordance with the terms of the form of Rule 12b-1 Agreement
attached as Appendix A, for all of its customers who purchase Shares of any
Funds or Classes whose prospectuses provide for the use of Administrators.
6. Delivery of Prospectuses to Customers.
The 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
prospectus of the Fund or Class. The Financial Institution shall not make any
representations concerning any Shares other than those contained in the
prospectus of the Fund or Class or in any promotional materials or sales
literature furnished to the Financial Institution by ESI or the Fund or Class.
7. Indemnification.
(a) The Financial Institution shall indemnify and hold harmless ESI,
the Trust, the transfer agents of the Trust, and 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 the Financial Institution of any
provision of this Agreement; or (2) any actions or omissions of
ESI, the Trust, the transfer agents of the Trust, and 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 the Financial Institution.
(b) ESI shall indemnify and hold harmless the Financial Institution
and its subsidiaries, affiliates, officers, directors, agents and
employees from and against any and all direct or indirect
liabilities, losses or costs (including attorneys fees) arising
from, related to or otherwise connected with: (1) any breach by
ESI of any provision of this Agreement; or (2) any alleged untrue
statement of a material fact contained in the Trust's Registration
Statement or Prospectuses, or as a result of or based upon any
alleged omission to state a material fact required to be stated,
or necessary to make the statements not misleading.
(c) 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.
(d) The provisions of this Paragraph 7 shall survive the termination of
this Agreement.
8. Customer Names Proprietary to the Financial Institution.
(a) The names of the Financial Institution's customers are and shall
remain the Financial Institution's sole property and shall not be
used by ESI or its affiliates for any purpose except the
performance of its duties and responsibilities under this
Agreement and except for servicing and informational mailings
relating to the Trust. Notwithstanding the foregoing, this
Paragraph 8 shall not prohibit ESI or any of its affiliates from
utilizing the names of the Financial Institution's customers for
any purpose if the names are obtained in any manner other than
from the 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 8 shall survive the termination of
this Agreement.
9. Solicitation of Proxies.
The 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 the Trust 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 9 will survive the term of this Agreement.
10. Certification of Customers' Taxpayer Identification Numbers.
The 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
ESI or its 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.
11. 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, or by telex, telegram or similar means of same day delivery (with a
confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to ESI shall be given or sent to ESI at its offices located
at Federated Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000-0000, and all notices to the
Financial Institution shall be given or sent to it at its address shown below.
12. Termination and Amendment.
(a) This Agreement shall become effective in this form as of the date set
forth below and may be terminated at any time by either party upon
thirty (30) days' prior notice to the other party. This Agreement
supersedes any prior sales agreements between the parties.
(b) This Agreement may be amended by ESI from time to time by the
following procedure. ESI will mail a xxx of the amendment to the
Financial Institution's address, as shown below. If the Financial
Institution does not object to the amendment within thirty (30)
days after its receipt, the amendment will become part of the
Agreement. The Financial Institution's objection must be in
writing and be received by ESI within such thirty (30) days.
13. Governing Law.
This Agreement shall be construed in accordance with the laws of
the Commonwealth of Pennsylvania.
[Financial Institution Name]
(Please Print or Type)
Address
City State Zip Code
Dated: By:
Authorized Signature
Title
Print Name or Type Name
EDGEWOOD SERVICES, INC.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
By:
APPENDIX A
RULE 12b-1 AGREEMENT
This Agreement is made between the Financial Institution executing this
Agreement ("Administrator") and Edgewood Services, Inc. ("ESI") for the mutual
funds (referred to individually as the "Fund" and collectively as the "Funds")
for which ESI serves as Distributor of shares of beneficial interest or capital
stock ("Shares") and which have adopted a Rule 12b-1 Plan ("Plan") and approved
this form of agreement pursuant to Rule 12b-1 under the Investment Company Act
of 1940. In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. ESI hereby appoints Administrator to render or cause to be rendered
sales and administrative support services to the Funds and their shareholders.
2. The services to be provided under Paragraph 1 may include, but are
not limited to advertising, compensation of sales personnel, mailing of
prospectuses, providing assistance and review in designing materials to send to
potential customers, and such other services as are primarily intended to result
in sales of Shares by the Funds.
3. During the term of this Agreement, ESI will pay the Administrator
fees for each Fund as set forth in a written schedule delivered to the
Administrator pursuant to this Agreement. ESI's fee schedule for Administrator
may be changed by ESI sending a new fee schedule to Administrator pursuant to
Paragraph 12 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 the Rule 12b-1 Agreement is in
effect during the quarter.
4. The Administrator will not perform or provide any duties which would
cause it to be a fiduciary under Section 4975 of the Internal Revenue Code, as
amended. For purposes of that Section, the Administrator understands that any
person who exercises any discretionary authority or discretionary control with
respect to any individual retirement account or its assets, or who renders
investment advice for a fee, or has any authority or responsibility to do so, or
has any discretionary authority or discretionary responsibility in the
administration of such an account, is a fiduciary.
5. The Administrator 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.
6. The Administrator 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 the Fund or Funds, unless a court of competent jurisdiction shall
have determined that the conduct of a majority of the Board of Directors or
Trustees of the Fund or Funds constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties. This paragraph 6 will survive
the term of this Agreement.
7. With respect to each Fund, 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 Directors or Trustees of the Fund, including a majority of the members of
the Board of Directors or Trustees of the Fund who are not interested persons of
the Fund and have no direct or indirect financial interest in the operation of
the Fund's Plan or in any related documents to the Plan ("Disinterested
Directors or Trustees") cast in person at a meeting called for that purpose.
8. Notwithstanding paragraph 7, 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 Directors or Trustees of the Fund or
by a vote of a majority of the outstanding voting securities of the
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 or upon the termination of the
"Administrative Support and Distributor's Contract" or
"Distributor's Contract" between the Fund and ESI; 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.
9. The termination of this Agreement with respect to any one Fund will
not cause the Agreement's termination with respect to any other Fund.
10. The Administrator 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
ESI or its 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.
11. This Agreement supersedes any prior service agreements between the
parties for the Funds.
12. This Agreement may be amended by ESI from time to time by the
following procedure. ESI will mail a copy of the amendment to the
Administrator's address, as shown below. If the Administrator does not object to
the amendment within thirty (30) days after its receipt, the amendment will
become part of the Agreement. The Administrator's objection must be in writing
and be received by ESI within such thirty days.
13. This Agreement shall be construed in accordance with the Laws of
the Commonwealth of Pennsylvania.
Administrator
Address
CityState Zip Code
Dated: By:
Authorized Signature
Title
Print Name of Authorized Signature
EDGEWOOD SERVICES, INC.
Federated Investors Tower
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
By:
