Exhibit (m)(3)
SERVICES AGREEMENT
XXXX XXXXXX PROGRAM
This Agreement is made as of the day of between (i) Xxxx
Xxxxxx Xxxxxxxx Inc. ("Xxxx Xxxxxx") and (ii) XXXXXXXX FINANCIAL SERVICES, INC.
("Fund Party").
W I T N E S S E T H
WHEREAS, Fund Party is either (i) an investment adviser to or administrator
for one or more open-end investment companies with one or more series or classes
of shares (each such series or class of shares identified on Schedule I hereto,
as amended from time to time, being referred to as a "Fund"), or (ii) the
principal underwriter or distributor for a Fund; and
WHEREAS, Xxxx Xxxxxx, broker-dealers which clear securities transactions
through Xxxx Xxxxxx, banks and other intermediaries are offering to its or their
clients one or more programs pursuant to which such clients will (i) purchase
shares of mutual funds at net asset value without the imposition of initial or
contingent deferred sales charges and (ii) pay account management fees on all
assets invested (each, a "Program", and together, the "Programs"); and
WHEREAS, Xxxx Xxxxxx will perform shareholder servicing and/or account
maintenance, and certain recordkeeping, shareholder communication, and other
services for clients who invest in Funds through one or more of the Programs
("Clients"); and
WHEREAS, Xxxx Xxxxxx is willing to perform such services on the terms and
conditions set forth herein: and
WHEREAS, Fund Party desires to compensate Xxxx Xxxxxx for providing certain
of such services.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services. During the term of this Agreement, Xxxx Xxxxxx shall perform
the services set forth on Exhibit A hereon, as such exhibit may be amended from
time to time (the "Services").
2. Fees.
a. Xxxx Xxxxxx shall receive a fee (the "Fee") at the annual rate of
% of the aggregate average daily net asset value of shares of the Funds held
by or on behalf of Clients. The Fee shall be paid to Xxxx Xxxxxx by Fund Party.
To the extent the Fee is paid with funds paid to Fund Party pursuant to a plan
of distribution adopted pursuant to Rule 12b-I under the Investment Company Act
of 1940 (the "1940 Act"), such fee shall be paid to Xxxx Xxxxxx in respect of
its provision of shareholder servicing and/or account maintenance. The average
daily net asset value of the shares of each Fund will be based on the net asset
values reported by Fund Party to Xxxx Xxxxxx. The Fee shall be computed daily
and paid quarterly in arrears by Fund Party to Xxxx Xxxxxx. Fund Party and Xxxx
Xxxxxx shall be solely responsible for the payment of their respective fees and
expenses due to National Securities Clearing Corporation ("NSCC") including,
without limitation, Fund/SERV membership and transaction fees.
b. Within 15 business days after the end of each quarter, for each
Fund, Fund Party shall send Xxxx Xxxxxx a statement of the average daily net
asset value for the preceding quarter of shares of such Fund as to which the Fee
is calculated, together with a statement of the amount of such fee.
c. Fund Party shall pay Xxxx Xxxxxx such Fee within 30 days after the
end of each quarter. Such payment shall be by wire transfer or via the NSCC
Fund/SERV commission settlement system. Wire transfers shall be sent to the
accounts and in the manner specified in Exhibit B hereto.
3. Operating Procedures. During the term of this Agreement, in connection
with performance of the Services, Xxxx Xxxxxx and each Fund Party will follow
the operating procedures set forth in Exhibit B hereto. In the event of any
inconsistency between this Agreement and Exhibit B hereto, this Agreement shall
control.
4. Effectiveness of Agreement; Term.
a. This Agreement will become effective as to any particular Fund as
of the later of (i) the date set forth on Schedule I opposite the name of such
Fund or (ii) such later date as Xxxx Xxxxxx may, in its discretion, designate in
writing, but in no event, with respect to any Fund that offers to the public
more than one class of shares, before the effective time of all agreements and
other documents containing such representations, warranties, covenants, and
agreements as may be required by any order of the Securities and Exchange
Commission relating to the offer and sale of such multiple classes of shares.
b. This Agreement may be terminated by either party as to any Fund
upon 45 days' written notice, or upon such shorter notice as is required by law,
order, or instruction by a court of competent jurisdiction or a regulatory body
or self-regulatory organization with jurisdiction over the terminating party.
This Agreement shall automatically terminate as to any Fund (i) upon the
termination of Fund Party's engagement as the distributor, investment adviser or
administrator, as the case may be, to such Fund (except in connection with any
assignment of this Agreement approved by Xxxx Xxxxxx pursuant to Section 15
hereof), or (ii) upon the termination of any plan of distribution (a "Rule 12b-1
Plan") adopted and maintained pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act") by any Fund that has a Rule
12b-1 Plan in effect as of the effective date of this Agreement, provided that a
portion of the Fee is paid pursuant to the Rule 12b-1 Plan. If at any time, as
to any particular Fund, neither Fund Party nor any person controlling,
controlled by, or under common control with Fund Party continues to be engaged
by a Fund in any capacity, then Fund Party shall be relieved of its obligation
to continue to pay the Fee beginning at the time that this Agreement is assigned
to and Fund Party's obligations hereunder are assumed by a successor approved by
Xxxx Xxxxxx in accordance with Section 15 hereof.
c. After the date of termination as to any Fund, Fund Party will not
be obligated to pay the Fee with respect to any shares of that Fund that are
first purchased by Clients after the date of termination. The parties agree that
they will negotiate in good faith to reach agreement as to an appropriate fee
reasonable to both parties with respect to any share of that Fund that was
considered in the calculation of the Fee as of the date of the termination is
held by a Client (a "Pre-Termination Share"), and that, Fund Party will remain
obligated to pay Xxxx Xxxxxx such negotiated fee as to each Pre-Termination
Share. For so long as Fund Party or some other person or entity continues to
pay a fee, Xxxx Xxxxxx will continue to perform the Services hereunder with
respect to each such Pre-Termination Share and the agreements between the
parties set forth in this Agreement will remain in full force and effect, to the
extent applicable, as to such Pre-Termination Shares.
d. Upon being presented with an invoice, Fund Party shall reimburse
Xxxx Xxxxxx promptly for any reasonable out-of-pocket expenses Xxxx Xxxxxx
actually incurs, at the request of Fund Party, in effecting any termination of
this Agreement, including delivery to any Fund or Fund Party of any records,
instruments, or documents, if such termination is by Fund Party.
5. Operational Matters. In processing purchase and redemption orders placed
by Xxxx Xxxxxx on behalf of Clients, and in order to facilitate Xxxx Xxxxxx'x
performance of the Services, Fund Party agrees to follow and comply with, and
use its reasonable best efforts to cause each Fund to follow and comply with,
the procedures, terms and conditions set forth in the operating procedures set
forth in Exhibit B hereto (the "Operating Procedures"). Other procedures
relating to the Funds shall be in accordance with the Prospectus and Statement
of the relevant Fund. The terms "Prospectus" and "Statement" as used herein
refer respectively to the then current prospectus and statement of additional
information relating to the Shares forming parts of the Registration Statement
on Form NIA of a Fund under the Securities Act of 1933, as amended (the "1933
Act").
6. Transaction Charges. Except as set forth in this Agreement, Xxxx Xxxxxx
shall not, during the term of this Agreement, assess against or collect from its
Clients any transaction fee upon the purchase or redemption of any Fund shares
that are considered in calculating the Fee. Notwithstanding the foregoing, the
parties acknowledge and agree that Xxxx Xxxxxx may collect such transaction fees
from certain Clients (including "Active Traders." as Xxxx Xxxxxx may define that
term) for certain special trading services and from other Clients upon such
other Clients'
2
redemption of certain shares. The value of the shares as to which such
transaction fees are charged will not be included in the calculation of the Fee.
7. Representations, Warranties and Covenants.
a. Fund Party represents and warrants to Xxxx Xxxxxx that Fund Party
and the persons executing this Agreement on its behalf, are duly authorized and
empowered to execute and deliver this Agreement on behalf of Fund Party and,
when executed and delivered, shall constitute the legal, valid and binding
obligation of Fund Party, enforceable in accordance with its terms. Fund Party
further represents and warrants to Xxxx Xxxxxx that the Board of
Directors/Trustees of the Fund(s) have approved this Agreement as a "related
agreement" of the Fund(s) as such term is defined in Rule 12b-1, and that the
payment to Xxxx Xxxxxx of any Fees pursuant hereto (i) has been duly authorized
by any other person to the extent such authorization is required to make such
payment; (ii) is properly disclosed in the relevant Fund prospectus to the
extent such disclosure may be required; and (iii) is in conformity with all
federal and state securities laws or regulations to which the Fund(s) or its
agents are subject.
b. Xxxx Xxxxxx represents and warrants that: (i) it and the persons
executing this Agreement on its behalf are duly authorized and empowered to
enter into this agreement and, when executed and delivered, shall constitute the
legal, valid and binding obligation of Xxxx Xxxxxx, enforceable in accordance
with its terms; (ii) the activities of Xxxx Xxxxxx contemplated by this
Agreement comply with all provisions of federal and state securities laws
applicable to such activities; (iii) Xxxx Xxxxxx has obtained and shall maintain
such registrations and qualifications as are necessary to permit it to perform
its obligations hereunder; and (iv) the arrangements provided for in this
Agreement will be disclosed to Xxxx Xxxxxx'x Clients, to the extent required by
law.
c. Xxxx Xxxxxx agrees to comply with all provisions of federal and
state laws, rules and regulations, including the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), applicable to its respective
activities under this Agreement. The receipt of compensation under this
Agreement by Xxxx Xxxxxx will not violate any federal or state laws, rules or
regulations, including ERISA.
8. Compliance Responsibilities Uncontrollable Events; Indemnification.
a. Fund Party acknowledges and agrees that Xxxx Xxxxxx is not
responsible for: (i) any information contained in any prospectus, registration
statement, annual report, proxy statement, or item of advertising or marketing
material (including profile information) of or relating to any Fund or Fund
Party (except for advertising or marketing materials prepared by Xxxx Xxxxxx
which are the responsibility of Xxxx Xxxxxx except that Fund Party shall be
responsible for any information provided to Xxxx Xxxxxx by Fund Party or any
Affiliate (as defined below) for use in any advertising or marketing material);
(ii) the tabulation of returned proxies; (iii) the registration or qualification
of any shares of any Fund under any federal or applicable state laws; or (iv)
the compliance or failure to comply by any Fund or Fund Party, or any
"affiliated person" (as that term is defined in the rules under the 0000 Xxx) of
any of them (each, an "Affiliate"), with any applicable federal or state law,
rule, or regulation (including the 1940 Act, the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and the rules and regulations thereunder)
or the rules and regulations of any self-regulatory organization with
jurisdiction over Fund Party or such Fund or Affiliate, except to the extent the
failure so to comply by Fund Party or any Fund or Affiliate is caused by Xxxx
Xxxxxx'x failure to comply with any of the applicable foregoing laws, rules, or
regulations or its breach of this Agreement
b. Xxxx Xxxxxx acknowledges and agrees that neither Fund Party nor any
Fund or Affiliate is responsible for Xxxx Xxxxxx'x compliance or failure to
comply with any applicable law, rule, or regulation governing Xxxx Xxxxxx'x
performance of the Services, except to the extent that Xxxx Xxxxxx'x failure to
comply with any such law, rule, or regulation is caused by the failure of Fund
Party, any Fund, or any Affiliate to comply with any applicable law, rule, or
regulation or Fund Party's breach of this Agreement
c. In providing the Services, Xxxx Xxxxxx is entitled to rely on any
written records or instructions provided to it by Fund Party or any Fund, by
their authorized employees, officers, or agents, or by Clients.
3
d. Fund Party has full authority to take such action as Fund Party may
deem advisable in respect of all matters pertaining to the continuous offering
of shares. Fund Party reserves the right in its sole discretion to suspend sales
or withdraw the offering of shares of any Fund at any time after Xxxx Xxxxxx has
received reasonable notice that such shares will no longer be available to the
public, provided, however, that in the event that Fund Party, or a Fund, is
required by law or regulation to suspend sales or withdraw the offering of
shares of any Fund, Fund Party may immediately suspend sales or withdraw the
offering of such shares and will use its best efforts to notify Xxxx Xxxxxx
prior to such suspension or withdrawal.
e. Except to the extent specifically set forth in this Agreement or in
the Operating Procedures, neither party assumes any responsibility hereunder,
and will not be liable to the other (and Xxxx Xxxxxx will not be liable to any
Fund or any Affiliate) for any damage, loss of data, delay, or any other loss
whatsoever caused by events beyond its reasonable control.
f. Fund Party shall indemnify, defend and protect Xxxx Xxxxxx and each
director, officer, employee, shareholder and agent of Xxxx Xxxxxx and hold Xxxx
Xxxxxx and each such director, officer, employee, shareholder and agent harmless
from and against any and all claims, demands, actions, losses, damages,
liabilities, costs, charges, reasonable counsel fees, and expenses of any nature
it or they incur ("Losses") arising out of (i) any inaccuracy or omission in any
Prospectus, Statement, registration statement, annual report or proxy statement,
of any Fund or any advertising or promotional material generated by any Fund or
Fund Party, (ii) any breach by Fund Party of any representation, warranty,
covenant, or agreement contained in this Agreement or the Operating Procedures,
except to the extent such Losses result from Xxxx Xxxxxx'x breach of this
Agreement willful misconduct, or negligence.
g. Xxxx Xxxxxx shall indemnify, defend, and protect Fund Party, each
Fund, each trust or corporation of which a Fund is a series and each of their
respective directors, trustees, controlling persons, officers, employees, and
agents, and hold each Fund, Fund Party, each such trust or corporation, and each
such director, trustee, controlling person, officer, employee, and agent
harmless from and against any and all Losses arising out of Xxxx Xxxxxx'x
willful misconduct or gross negligence in the performance of, or failure to
perform, its obligations under this Agreement, except to the extent such Losses
result from Fund Party's breach of this Agreement or Fund Party's or such Fund's
willful misconduct or negligence.
h. Neither party hereto shall be liable for any special, consequential
or incidental damages.
9. Role and Relationship of Xxxx Xxxxxx.
a. The parties acknowledge and agree that the Services are shareholder
services and/or account maintenance, recordkeeping, shareholder communication
and related services only and are not the services of any underwriter or a
principal underwriter of any Fund within the meaning of the 1933 Act or the 0000
Xxx.
b. Purchase and redemption orders, and payment for shares of a Fund
ordered from Fund Party, must be received at the time, and in the manner, set
forth in the Operating Procedures and consistent with the Prospectus and
Statement. All orders are subject to acceptance or rejection by Fund Party or
the relevant Fund in the sole discretion of either, or by the relevant Fund's
transfer agent acting on the Fund Party's or Fund's behalf, and orders shall be
effective only upon receipt in proper form. The Funds may, if necessary, delay
redemption of shares of a Fund to the extent permitted by the 1940 Act.
10. Use of Other Party's Name.
a. Fund Party or Fund may describe or refer to Xxxx Xxxxxx or the
Services or the relationship contemplated by this Agreement in any advertisement
or promotional materials or activities, provided that the description or
reference is provided in writing to Xxxx Xxxxxx at least five business days in
advance of their use and Xxxx Xxxxxx does not object thereto.
b. Xxxx Xxxxxx may describe or refer to Fund Party or any Fund or the
relationship contemplated by this Agreement in any advertisement or promotional
materials or activities, provided that the
4
description or reference is provided in writing to Fund Party at least five
business days in advance of their use and Fund Party does not object thereto.
11. Proprietary Information. Xxxx Xxxxxx, on the one hand, and Fund Party,
on the other hand, acknowledge that the identities of the other party's
customers (other than such information as may be independently developed or
compiled by a party from information supplied to it by the other party's
customers who also maintain accounts directly with it outside the Programs or
from information which is otherwise publicly available), as well as information
maintained by such other party regarding those customers, and all computer
programs, technical, trade secret, or business information, including, without
limitation, financial information, business or marketing strategies or plans,
product development and procedures developed by such other party or such other
party's agents in connection with this arrangement which is disclosed to the
other party hereto or otherwise obtained by the other party, its Affiliates,
agents or representatives during the term of this Agreement, constitute the
valuable property of such other party ("Proprietary Information"). Xxxx Xxxxxx
and Fund Party agree that should any party be furnished any Proprietary
Information, the party who acquired such Proprietary Information shall use its
best efforts to hold such information or property in confidence and refrain from
using, disclosing, or distributing any of such information or other property
except (i) with the other party's prior written consent, (ii) as required by law
or judicial process, or (iii) upon request of any regulatory agency. The parties
acknowledge that any breach of the foregoing agreements as to the other party
would result in immediate and irreparable harm to such other party for which
there would be no adequate remedy at law and agree that in the event of such a
breach such other party will be entitled to equitable relief by way of temporary
and permanent injunctions, as well as such other relief as any court of
competent jurisdiction deems appropriate. Each party shall promptly notify the
other in writing of any unauthorized, negligent or inadvertent use or disclosure
of Proprietary Information. Each party shall be liable under this Agreement for
any use or disclosure in violation of this Agreement by its employees,
attorneys, accountants, or other advisors or agents. This Section 11 shall
continue in full force and effect notwithstanding the termination of this
Agreement.
12. Information to be Provided. Fund Party has provided to Xxxx Xxxxxx and,
as to each Fund added to Schedule I after the date hereof, shall provide to Xxxx
Xxxxxx prior to the effectiveness of this Agreement as to such Fund, at the
address listed in Section 16 hereto, the following information and documents (in
addition to the information and documents required by the Operating Procedures):
a. A list of the officers or other representatives of Fund Party who
are authorized to instruct Xxxx Xxxxxx in connection with the Services with
respect to such Fund, together with specimen signatures of those persons;
b. Two copies of the then-current Prospectus and Statement for each
such Fund. Fund Party shall furnish Xxxx Xxxxxx with written copies of any
amendments or supplements to or changes in any of the documents referred to in
this Section 12 as soon as practicable after such amendments or changes become
available; and
c. (i) Within five business days of the end of each calendar quarter,
(A) information concerning the performance of each Fund for the most recent
calendar quarter for the year-to-date and for the one-, five- and ten-year
periods (and for the life of the Fund if one or more of the aforementioned
periods are not applicable) for the period ended the most recent calendar
quarter, to be prepared in accordance with the performance calculation
methodology required by Form N-1A under the 1940 Act, as such methodology is
amended from time to time, (B) a description of changes to the Fund's investment
objectives, policies and restrictions during the quarter, and (C) notice of any
change in the persons responsible for day-to-day management of the Fund; and
(ii) as soon as practicable following the end of each calendar quarter,
agreed-upon data such as representative holdings and portfolio characteristics
as of the end of that quarter.
13. Sales Support and Training. Fund Party agrees to provide a sales
support contact at Fund Party to respond to questions from Xxxx Xxxxxx'x
Investment Consulting Services ("ICS") staff and Account Executives. Fund Party
also agrees to make itself reasonably available to Xxxx Xxxxxx for marketing
support and training with the understanding that the time and place of such
activities will be subject to prior approval by Xxxx Xxxxxx.
5
14. Nonexclusivity.
a. Fund Party acknowledges that Xxxx Xxxxxx may perform services
similar to those to be provided under this Agreement to other investment
companies, investment company sponsors, or service providers to investment
companies, and that it may make the Programs available to clients of
broker-dealers, banks and other intermediaries which clear securities
transactions through Xxxx Xxxxxx so long as Fund shares are offered pursuant to
the Funds' prospectuses.
b. Xxxx Xxxxxx acknowledges that the Fund Party may enter into similar
agreements with other service providers or other third parties.
15. Assignability. This Agreement is not assignable by either party without
the other party's prior written consent; provided that Xxxx Xxxxxx may, without
Fund Party's consent, assign its rights and obligations under this Agreement to
any Affiliate and to any corporation that: (i) succeeds to its business as
investment advisor and/or broker-dealer or controls, is controlled by, or is
under common control with Xxxx Xxxxxx, (ii) is registered as a transfer agent
under Section 17A(c) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or (iii) is otherwise capable of performing the obligations and
making the representations and warranties of Xxxx Xxxxxx hereunder.
16. Notices. All notices required by this Agreement stall be in writing and
delivered personally or sent by first class mail, overnight courier or by
facsimile that is promptly followed in writing. All notices and other
communications concerning this Agreement will be deemed to have been received as
of the earlier of actual physical receipt or three days after deposit, first
class postage prepaid, in the United States Mail. All such notices and other
communications shall be made:
if to Xxxx Xxxxxx, to:
if to Fund Party, to the address given below in the signature block with a
copy to the attention of:
Senior Vice President, Law and Regulation, at the same address.
17. Exhibits. All Exhibits and Schedules (including the Operating
Procedures) attached to this Agreement, as they may be amended from time to
time, are by this reference incorporated into and made a part of this Agreement.
18. Entire Agreement; Amendment. This Agreement, as well as the Exhibits
and Schedules hereto, constitutes the entire agreement between the parties as to
the Programs and supersede any and all agreements, representations, and
warranties, written or oral, regarding such subject matter made prior to the
time at which this Agreement has been executed and delivered by Xxxx Xxxxxx and
Fund Party; provided, however, that this Agreement shall not supersede or in any
way affect any dealer or other agreement between Xxxx Xxxxxx and Fund Party
relating to Xxxx Xxxxxx'x serving as a dealer in Fund shares and shall not
supersede any Rule 12b-1 related agreement between Xxxx Xxxxxx and Fund Party to
the extent such agreement relates to shares of the Fund(s) held outside of the
Programs. This Agreement and the Exhibits and Schedules hereto may be amended
only by a writing executed by each party hereto that is to be bound by such
amendment.
19. Maintenance of Records. Xxxx Xxxxxx will maintain all records required
by law, including records detailing the services it provides in return for the
fees to which it is entitled under this Agreement. Such records shall be
preserved, maintained and made available to the extent required and in
accordance with the 1940 Act and the rules thereunder. Upon the request of Fund
Party, Xxxx Xxxxxx shall make copies or originals (if required) of such of these
records available to the Fund Party. Xxxx Xxxxxx agrees that it will permit Fund
Party or its designees to have reasonable access to its personnel and records in
order to facilitate the monitoring of the quality of the services
6
provided under this Agreement. Xxxx Xxxxxx shall have the right to delete
customer names from the records produced. Xxxx Xxxxxx also agrees to notify
promptly the Fund or Fund Party if Xxxx Xxxxxx experiences any difficulty in
maintaining the records described in this Section in an accurate and complete
manner. This provision shall survive the termination of this Agreement.
20. Governing Law. This Agreement will be governed by and interpreted under
the laws of the State of New York as applied to contracts entered into and to be
performed entirely within that state (without reference to conflict of laws
provisions thereof).
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
22. Limitation of Liability. Any printed information that is furnished by
Fund Party other than the Prospectus, the Statement, information supplemental to
the Prospectus and the Statement, periodic reports and proxy solicitation
materials are the sole responsibility of Fund Party, and not the responsibility
of any Fund, and Xxxx Xxxxxx agrees that the Fund, the shareholders of the Fund
and the officers and governing Boards of the Fund shall have no liability or
responsibility to Xxxx Xxxxxx in these respects. Xxxx Xxxxxx also agrees that
the payment of the Fee is solely the responsibility of Fund Party and not that
of any Fund, and Xxxx Xxxxxx agrees that the Fund, the shareholders of the Fund
and the officers and governing Boards of the Fund shall have no liability or
responsibility to Xxxx Xxxxxx with respect to any indebtedness, liability or
obligation hereunder. Further, it is understood, in the case of each Fund that
it is organized as a Massachusetts business trust or series thereof, that the
declarations of trust for each trust refers to the trustees collectively as
trustees and not as individuals personally, and that the declaration of trust
provides that no shareholder, trustee, officer, employee or agent of the trust
shall be subject to claims against or obligations of the trust to any extent
whatsoever, but that the trust estate only shall be liable. No Fund shall be
liable for the obligations or liabilities of any other Fund. No series of any
Fund, if any, shall be liable for obligations of any other series.
23. Rule 12b-1 Related Agreement. The parties acknowledge and agree that it
is contemplated that Fund Party will pay Xxxx Xxxxxx the fees contemplated by
Section 2.a with fees received from the Funds pursuant to duly adopted Rule
l2b-1 plans and that this Section of the Agreement is a "related agreement" as
such term is used in Rule 12b-1. In accordance with Rule 12b-1, for so long as
this Section is in effect in respect of a Fund any person authorized to direct
the disposition of monies paid or payable by the Fund pursuant to this Agreement
shall provide the Fund's Board of Directors/Trustees, and the Directors/Trustees
shall review, at least quarterly, a written report of the amounts so expended
and the purposes for which such expenditures were made. For so long as this
Section is in effect in respect of a Fund, any fees paid by Fund Party to Xxxx
Xxxxxx pursuant to Section 2.a in respect of shares of the Fund shall be made
solely for personal services and/or the maintenance of shareholder accounts. For
greater certainty, for so long as this Section is in effect in respect of a
Fund, no part of such fee shall be paid for subtransfer agency services,
subaccounting services, or administrative services provided by Xxxx Xxxxxx. The
provisions of this Section applicable to a Fund will remain in effect for not
more than a year and thereafter for successive annual periods only so long as
such continuance is specifically approved at least annually in conformity with
Rule 12b-1 and the 1940 Act. Notwithstanding anything else in this Agreement,
the provisions of this Section shall automatically terminate with respect to a
Fund in the event of assignment, (as defined by the 0000 Xxx) of this Agreement.
From and after the date this Section is no longer in effect in respect of a
Fund. Fund Party will not make any payments to Xxxx Xxxxxx pursuant to Section
2.a from 12b-1 fees received from such Fund (except those relating to
obligations that had accrued through to the date that this Section is no longer
effective in respect of the Fund).
7
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
XXXX XXXXXX XXXXXXXX INC.
By:
---------------------------
Its:
XXXXXXXX FUNDING SERVICES, INC.
[FUND PARTY]
By:
---------------------------
Its:
Address:
000 XXXX XXX
XXX XXXX, XX 00000
8
SCHEDULE I
(List of Funds/Portfolios/Classes
to which fees are applicable)
Fund Date
---- -------
9
EXHIBIT A
SERVICES
Capitalized terms used in this Exhibit have the meanings given them in the
agreement to which this Exhibit is attached (the "Agreement").
1. Record Maintenance. Fund Party or its agents shall establish an account
and maintain records for each Client who holds shares of any Fund, which records
shall include:
a. Number of shares;
b. Date and price of purchases and redemptions (including dividend
reinvestments) and dates and amounts of dividends paid available on-line the
next business day after effected and for at least the twelve month period;
available thereafter in accordance with the record retention requirements of the
1940 Act and the 1934 Act;
c. Client identification information, in conformity with the
requirements of NSCC's Matrix Level 3 (broker-controlled);
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. Fund Communications. Fund Party shall prepare a quarterly report of the
number of shares held by each Client for each business day on which the Fee is
to be paid pursuant to the Agreement. Such quarterly reports shall be expressed
in both share and dollar amounts, and shall be subject to verification by Xxxx
Xxxxxx based on such reports of Fund Party that shall be made available to Xxxx
Xxxxxx at reasonable times and as reasonably necessary for such verification.
3. Shareholder Communications. Xxxx Xxxxxx or its agents shall:
a. Mail Fund Prospectuses, Statements, and any supplements thereto,
upon Client request and, as applicable, with confirmation statements;
b. As to each Fund, at the expense of such Fund, provide for the
mailing of updated Prospectuses, annual and semiannual reports, proxy
statements, and other appropriate shareholder communications;
c. Mail statements to Client on a monthly basis (or, as to accounts in
which there has been no activity in a particular month, no less frequently than
quarterly), showing, among other things, the number of shares of each Fund owned
by such Client and the net asset values of such Funds as of a recent date;
d. Produce and mail to Client confirmation statements reflecting
purchases and redemptions of shares of each Fund in the Client's accounts; and
e. Respond to Client inquiries regarding, among other things, share
prices, account balances and dividend amounts.
4. Transactional Services. Xxxx Xxxxxx or its agents shall communicate, as
to shares of each Fund, purchase, redemption and exchange orders reflecting the
orders it receives from its Clients, in accordance with the procedures
contemplated in the Agreement.
A-1
5. Tax Information Returns and Reports. Xxxx Xxxxxx or its agents shall
prepare and file with the appropriate governmental agencies such information,
returns and reports as are required to be so filed for reporting (i) dividends
and other distributions made, (ii) amounts withheld on dividends and other
distributions and payments under applicable federal and state laws, rules and
regulations, and (iii) gross proceeds of sales transactions as required. Fund
Party shall provide to Xxxx Xxxxxx in a timely manner the information regarding
the Fund to be included in shareholder tax statements during the year.
6. Other Services.
a. Xxxx Xxxxxx and Fund Party shall each perform any and all duties,
functions, procedures and responsibilities assigned to it and as otherwise
established by the NSCC applicable to Fund/SERV and NETWORKING Matrix Level 3
(broker-controlled).
b. NSCC rules and procedures relating to Fund/SERV and NETWORKING, as
applicable, shall govern any matter in which any provision of this Agreement
conflicts with such NSCC rule or procedure; provided, however, that this
sentence shall not prohibit modifications to the NSCC's standard Matrix Levels
that are agreed to by the parties hereto.
A-2
EXHIBIT B
OPERATING PROCEDURES
Capitalized terms used in this Exhibit have the meanings given them in the
agreement to which this Exhibit is attached (the "Agreement").
1. Operating Procedures.
a. The Fund Party agrees to comply with all the terms, conditions,
agreements, and obligations contained herein, and to cause any of their
respective agents performing services related to the Agreement to comply with
those respective obligations.
b. Xxxx Xxxxxx will open accounts with a Fund party on behalf of each
Client that selects such Fund as an investment alternative under the Programs.
Fund Party shall maintain an account for each such Client as is customary in
NSCC's Matrix Level 3 (broker-controlled). Without limiting the generality of
the foregoing, Fund Party and each Fund will process purchase and redemption
transactions placed by Xxxx Xxxxxx on behalf of Clients, and pay dividends to
Clients at the times and in the manner provided in the rules and procedures
relating to Matrix Level 3.
c. Xxxx Xxxxxx may submit a purchase, exchange or redemption order (an
"Order") for shares of a Fund on behalf of a Client to such Fund Party's
designated contact ("Fund Contact") by telephone, by fax or, where feasible, by
direct systems access via NSCC Fund/SERV and NETWORKING Systems. Orders received
by Xxxx Xxxxxx prior to 4:00 p.m. Eastern time (the "Close of Business") on any
given business day ("Trade Date") and transmitted to the Fund Party by 5:00 p.m.
Eastern Time on that Trade Date shall be executed by Fund Party at the net asset
value determined as of Close of Business on the Trade Date. Orders received by
Xxxx Xxxxxx after the Close of Business on a Trade Date, whether transmitted to
the Fund Party prior to or after 5:00 p.m. Eastern Time on that Trade Date,
shall be executed by Fund Party at the net asset value determined as of the
Close of Business on the business day after the Trade Date.
d. Xxxx Xxxxxx will transmit the dollar amount of each purchase order
to the relevant Fund or its agent and in accordance with written instructions as
provided to Xxxx Xxxxxx by the Fund Party for the applicable Fund by wire
transfer. Anything in this Agreement to the contrary notwithstanding. Orders
shall be placed and settlement shall be made at the time and in the manner
provided in the rules and procedures relating to Fund/SERV and NETWORKING where
a Fund participates in those systems.
2. Pricing. As to each Fund, every business day prior to 7 p.m., Eastern
Time, the Fund Party will use its best reasonable efforts to provide Xxxx Xxxxxx
such Fund's closing net asset value for that day and/or notification of no price
for that day via fax, or direct systems access acceptable to Xxxx Xxxxxx. If by
fax, send to:
Fax to: Xxx Xxxxx - 000-000-0000
3. Price Errors.
a. In the event a Fund determines that a pricing error is material
and, therefore, that adjustments are required to correct the net asset value or
public offering price ("price") of Fund shares or to make NSCC adjustments, Fund
Party shall notify Xxxx Xxxxxx as soon as possible after discovering the need
for such adjustments. Notification can be made verbally but must be confirmed in
writing. The letter shall be written on Fund Party or Fund letterhead and must
state for each day for which an error occurred the incorrect price, the correct
price, and the reason for the price change. The Fund Party agrees that Xxxx
Xxxxxx may send this writing, or derivation thereof, to Clients whose accounts
are affected by the price change. In determining materiality for the purpose of
this Section 3, Xxxx Xxxxxx agrees that the Fund Party may follow the pricing
error guidelines that the accounting staff of the Division of Investment
Management of the Securities and Exchange Commission has suggested.
B-1
b. The Fund Party or a Fund shall reimburse Xxxx Xxxxxx for all
reasonable out-of-pocket expenses incurred by Xxxx Xxxxxx in effecting such
adjustments upon submission of any expense accounting Fund Party reasonably may
require. Expenses to be reimbursed may include, but are not limited to, the
costs of performing additional reconciliations, canceling and rebilling, sending
notifications of the error to Clients, requesting remittance and pursuing
collection of amounts received (through redemptions or otherwise) in excess of
the amount to which such Clients would otherwise have been entitled, and all
reasonable expenses related to personnel in connection therewith, but shall not
include Xxxx Xxxxxx overhead expenses. Xxxx Xxxxxx shall use its reasonable best
efforts to use the least costly method to correct pricing errors.
c. If Clients have received amounts in excess of the amounts to which
they otherwise would have been entitled prior to an adjustment for an error,
Xxxx Xxxxxx, unless Fund Party and a Fund otherwise agree, will make a good
faith attempt to collect such excess amounts from those Clients. In no event,
however, shall Xxxx Xxxxxx be liable to Fund or Fund Party for any such amounts
provided the overpayment was not caused by Xxxx Xxxxxx.
d. If an adjustment is necessary to correct an error made by Fund
Party or a Fund which has caused Clients to receive amounts less than amounts to
which they are entitled, the Fund, by utilizing NSCC procedures, shall make all
necessary adjustments to the number of shares owned by these Clients, and
distribute to these Clients any and all amounts of the underpayment.
4. Shareholder Communication.
a. The Fund Party and each Fund shall provide the following
shareholder communications material to Xxxx Xxxxxx or to its mailing agent in
quantities sufficient to allow mailing thereof to all Clients which are
beneficial owners of the Fund's shares.
(1) All proxy statements prepared for circulation to a Fund's
record shareholders.
(2) Annual reports, semi-annual reports and other periodic
reports.
(3) All updated Prospectuses, supplements and amendments
thereto.
(4) Corporate actions.
b. The Fund Party or Fund shall provide without charge the
above-mentioned materials to Xxxx Xxxxxx or to its mailing agent. Xxxx Xxxxxx
will distribute all materials to Clients and will xxxx the applicable Fund or
Fund Party as Fund Party directs. Xxxx Xxxxxx has no responsibility to pay for
these charges.
c. In addition to the materials listed above, the Fund Party and each
Fund agree to provide without charge directly to Xxxx Xxxxxx or its mailing
agent certain materials, including sales materials, reasonably requested by Xxxx
Xxxxxx and readily available from Fund Party or a Fund for distribution to
Clients. Neither Fund Party nor a Fund has responsibility to pay for charges to
mail these materials to Clients.
5. Registration Requirements. Xxxx Xxxxxx will only place purchase orders
for shares of a Fund on behalf of its Clients whose addresses recorded on Xxxx
Xxxxxx'x books are in states or other jurisdictions in which such Fund is
registered or qualified for sale or exempt from registration and qualification
under applicable law as confirmed in writing to Xxxx Xxxxxx by a Fund. Fund
Party and each Fund shall advise Xxxx Xxxxxx immediately or as soon as
reasonably practicable if any such registration or qualification is terminated
or if the Fund wishes to prevent Xxxx Xxxxxx from placing or continuing to place
purchase orders on behalf of Clients who reside in a particular state or other
jurisdiction. Xxxx Xxxxxx may in the future elect to develop a system that will,
on a daily basis, transmit to an electronic database provider with whom Xxxx
Xxxxxx has established effective systems interfaces information regarding the
number of shares of each Fund sold in each state for retrieval by Fund Party or
a Fund. If such a system is developed, the parties will mutually agree upon who
is to be responsible for all fees and other charges of such database provider in
connection with Xxxx Xxxxxx'x transmission of such information to and Fund
Party's or Fund's retrieval of such information from such database provider.
Fund Party shall indemnify Xxxx Xxxxxx and each officer,
B-2
director, employee, and agent of Xxxx Xxxxxx, and hold Xxxx Xxxxxx and each such
officer, director, employee, shareholder and agent harmless, from and against
any and all losses, claims, damages, liabilities, costs, and expenses (including
reasonable attorneys' fees) arising out of any violation of any law, rule, or
regulation relating to the registration or qualification of shares of any Fund
except to the extent such violation results from Xxxx Xxxxxx'x sale or offering
of shares of any Fund in a state or jurisdiction other than those in which Fund
Party or the Fund has indicated that shares of such Fund are registered or
qualified for sale. Xxxx Xxxxxx shall indemnify fund Party, its agents, and each
officer, director, employee of Fund Party and its agents from and against any
and all losses, claims, damages, liabilities, costs and expenses (including
reasonable attorneys' fees) arising out of any law, rule, or regulation relating
to the registration or qualification of shares of any Fund to the extent such
violation results from Xxxx Xxxxxx'x sale or offering of shares of any Fund in a
state or jurisdiction other than those in which Fund Party or the Fund has
indicated that shares of such Fund are registered or qualified for sale.
6. Fund Contacts. Inquiries and contacts to the Fund Party and any Fund can
be made to the following individuals, departments or groups. Contacts for any
particular Fund, which may be different from those listed below, shall be noted
accordingly.
B-3
