WCT Funds December 1, 1997 Exhibit 6(iii)
under Form N-1A Exhibit 1 under Item
601/Reg.S-K
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 Investors
Tower, Pittsburgh, PA 15222-3779, 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 ▇▇▇ 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
City State Zip Code
Dated: By:
Authorized Signature
Title
Print Name of Authorized Signature
EDGEWOOD SERVICES, INC.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇