Exhibit (m)(7)
SERVICES AGREEMENT
This Agreement is made as of the __th day of _______, 2___ between: (1) the
Fidelity Brokerage Services LLC ("FBS") and National Financial Services LLC
("NFS") (together "Fidelity"), (2) Xxxxxxxx Advisors, Inc ("Fund/Agent"); and
(3) Xxxxxxxx Data Corporation ("SDC").
RECITALS
A. Fund/Agent is the principal distributor of several open-end investment
companies with one or more series or classes of shares (each such series or
class of shares a "Fund").
B. SDC is the recordkeeping servicing agent for the Funds.
C. Fund/Agent and SDC wish to have Fidelity provide to Fund/Agent and SDC or
on their behalf certain administrative services with respect to beneficial
owners of shares ("Shareholder(s)") of such Funds which Fidelity makes
available to Shareholders through securities brokerage accounts carried by
NFS on behalf of FBS or Correspondents of NFS ("Correspondents").
D. Fidelity agrees to provide such services on the terms and conditions set
forth herein.
AGREEMENT
THEREFORE, in consideration of the mutual promises set forth herein, the parties
agree as follows:
I. Shareholder Services
A. Shareholder Account Set-Up and Maintenance - Fidelity shall maintain and
provide to FBS and Correspondents adequate facilities and procedures to: (1)
establish and maintain Fund investments on behalf of Shareholders within a
consolidated brokerage account(s) on the Fidelity transaction processing and
recordkeeping system, and (2) access Shareholders' current Fund information
including, but not limited to, share balances, dividend information and
transaction history.
B. Shareholder Assistance - Fidelity shall make available to FBS and
Correspondents any information maintained by Fidelity as may be necessary for
Correspondents to support and resolve Shareholder servicing inquiries. Fidelity
personnel will assist FBS in the investigation of Shareholder inquiries when
necessary. FBS will support Shareholder service inquiries from Shareholders who
maintain brokerage accounts with FBS.
C. Transaction Processing and Settlement - The Fidelity transaction processing
system shall enable Shareholders to purchase, redeem and exchange shares of
Funds available through Fidelity. NFS shall facilitate settlement with each Fund
of Shareholder transactions in such Fund insofar as such transactions are
transmitted to NFS by FBS or Correspondents on behalf of Shareholders.
Fund/Agent and SDC agree that it shall either: (1) make arrangements for all
transactions processed pursuant to this Agreement to be processed through the
National Securities Clearing
1
Corporation Fund/SERV system, or (2) obtain proper authority for NFS to transmit
to the Fund or its Agent daily manual trades until 5:00 p.m. Eastern Time, or
such other times as set forth on Exhibit B, which trades shall remain eligible
for that day's public offering price provided Fidelity received the order by the
close of trading that day.
D. Shareholder Account Statement Preparation and Distribution - With respect to
each Shareholder holding Fund investments through Fidelity, Fidelity shall
deliver or cause to be delivered to such Shareholder monthly statements when
there has been activity in such Shareholder's brokerage account during such
month, or quarterly statements during periods when there has been no monthly
account activity. Statements will include transaction detail for the statement
period for each Fund in which shares were purchased, redeemed or exchanged, and
a summary of the number of Fund shares owned and share value thereof as of the
statement date to the extent such value is provided by the Fund.
E. Confirmation Preparation and Distribution - Fidelity shall generate a written
confirmation for each purchase, redemption and exchange transaction affecting
each Shareholder's Fund investments held through Fidelity to the extent such
confirmation is required, and such confirmation shall be distributed to
Shareholders through or on behalf of FBS or Correspondents.
F. Payment of Fund Distributions - NFS shall distribute to Shareholders all
dividend, capital gain or other payments authorized by the Fund and distributed
to and received by NFS, and such distributions shall be credited to Shareholders
in accordance with the instructions provided by each Shareholder, including but
not limited to dividend reinvestment into the Fund, or cash payments of
distributions.
G. Prospectus Fulfillment - Subsequent to any Shareholder's acquisition of
shares of a Fund by purchase or exchange, Fidelity shall provide to such
Shareholder, within such times as required by applicable law, a confirming
prospectus for such Fund to the extent such prospectus is required with respect
to such acquisition and is provided by the Fund to Fidelity or its designee.
Fund/Agent and SDC acknowledge and agree that Fidelity is not responsible for
(i) the compliance of any prospectus or supplement thereto, annual report, proxy
statement or item of advertising or marketing material of or relating to any
Fund, with any applicable laws, rules or regulations, (ii) the registration or
qualification of any shares of any Fund under any federal or applicable state
laws or (iii) the compliance by any Fund, or Fund/Agent, SDC or any "affiliated
person" (as that term is defined in the rules under the Investment Company Act
of 1940, as amended), with any applicable federal or state law, rule, or
regulation or the rules and regulations of any self-regulatory organization with
jurisdiction over such Fund, Fund/Agent, SDC or affiliated person.
H. Account Level Tax Reporting - NFS shall provide to Shareholders through FBS
or Correspondents such reports and information as may be required by the
then-prevailing laws and regulations under the Internal Revenue Code for
non-retirement accounts and qualified and non-qualified retirement plan
accounts.
II. Representations and Warranties
A. Fund/Agent represents and warrants that:
(1) it has the requisite authority to enter into this agreement on its own
behalf and on behalf of the Fund(s), and
(2) that the payment to NFS of any fees pursuant hereto:
2
(a) has been duly authorized by the Fund(s), the Board of
Directors/Trustees of the Fund(s), or any other persons to the
extent such authorization is required to properly make such
payment;
(b) is properly disclosed in the relevant Fund prospectus to the
extent such disclosure may be required, and
(c) is in material conformity with all federal, state and industry
laws or regulations to which the Fund/Agent is subject.
B. SDC represents and warrants that:
(1) it has the requisite authority to enter into this agreement on its own
behalf; and
(2) that the payment to NFS of any fees pursuant hereto:
(a) has been authorized by any person to the extent such
authorization is required to properly make such payment,
(b) is in material conformity with all federal, state and industry
laws or regulations to which SDC is subject
C. FBS and NFS each represent and warrant that:
(1) it is a corporation duly organized under the laws of the Commonwealth
of Massachusetts and is duly registered and/or qualified as a broker/dealer
with the SEC, NASD and in every state or territory of the United States of
America (including the District of Columbia) where such registration or
qualification is required and has the requisite authority to enter into
this Agreement and to carry out the services contemplated herein;
(2) the execution and delivery of this Agreement and the performance of the
services contemplated herein have been duly authorized by all necessary
corporate action in its part, and this Agreement constitutes the valid and
binding obligations of FBS and NFS; and
(3) it is in material conformity with all federal, state and industry laws
or regulations to which it is subject.
(4) it will make shares available to Shareholders in accordance with the
terms and conditions described in each Funds' effective prospectus and
statement of additional information provided that Fund/Agent communicates
such terms and conditions to Fidelity.
D. Each party hereto represents and warrants that it shall provide to the others
such information or documentation necessary for such party to fulfill its
obligations hereunder, such other information or documentation as any party may
reasonably request, and that it shall comply with such operating policies and
procedures as the parties may adopt by mutual agreement from time to time.
III. Fees
A. Start Up Fee
Fund/Agent shall pay to NFS a one-time start up fee ("Start Up Fee") for
Fidelity's initial set up and preparation to support a new group or family of
Funds. The amount of the Start Up Fee is set forth on Exhibit A and shall be due
and payable to NFS the earlier of 30 days from the execution of this Agreement
or the availability of any such Fund to Fidelity customers. The identity and
description
3
of each Fund which is subject to this Agreement shall be set forth on Exhibit B,
as amended from time to time.
B. CUSIP Fee
Fund/Agent shall pay to NFS a fee ("CUSIP Fee") to add any Fund to Fidelity's
computer system in order to make such Fund available to Fidelity's customers.
The amount of the CUSIP Fee is set forth on Exhibit A, and shall be due and
payable to NFS upon the earlier of the addition of the Fund to Exhibit B, or the
availability of such Fund to Fidelity's customers.
C. Asset Based Fee
For the services provided by Fidelity hereunder, Fund/Agent shall pay to NFS a
fee with respect to each Fund, which fee shall be based upon a percentage per
annum of the average daily value of the aggregate number of shares of the Fund
held by NFS for the accounts of customers of FBS and Correspondents. Such fee
shall be calculated and paid in accordance with Exhibit A hereto.
D. Maintenance Fee
SDC shall pay to NFS an annual maintenance fee ("Maintenance Fee") with respect
to certain Funds as set forth on Exhibit A.
In the event the parties agree to material changes to the scope of services
provided hereunder, the parties agree to negotiate in good faith as to the
appropriate amendment to the fees due NFS.
IV. Indemnification
Fund/Agent shall indemnify and hold harmless Fidelity and each officer, employee
and agent of Fidelity, each a "Fidelity Indemnified Party", from and against any
and all claims, demands, actions, losses, damages, liabilities, or costs,
charges, counsel fees, and expenses of any nature ("Losses") arising out of (i)
any inaccuracy or omission in any prospectus or supplement thereto, registration
statement, annual report or proxy statement, of any Fund or Fund/Agent or any
advertising or promotional material generated by any Fund or Fund/Agent, (ii)
any material breach by Fund/Agent of any representation, warranty, covenant, or
agreement contained in this Agreement and (iii) any willful misconduct or
negligence by Fund/Agent in the performance of, or failure to perform its
obligations under this Agreement, except to the extent such Losses result from
Fidelity's breach of this Agreement, willful misconduct, or gross negligence.
SDC shall indemnify and hold harmless each Fidelity Indemnified Party from and
against any and all Losses arising out of (i) any material breach by SDC of any
representation, warranty, covenant, or agreement contained in this Agreement;
and (ii) any willful misconduct or negligence by SDC in the performance of, or
failure to perform its obligation under this Agreement, except to the extent
such Losses result from Fidelity's breach of this Agreement, willful misconduct
or gross negligence.
Fidelity shall indemnify and hold harmless Fund/Agent, SDC and each officer,
employee and agent of Fund/Agent and SDC from and against any Losses arising out
of (i) the dissemination by Fidelity or any persons or entities affiliated with
Fidelity of information regarding any Fund that is materially incorrect and that
is not provided to Fidelity by a known fund information provider (such as Lipper
or Morningstar) or approved by Fund/Agent (ii) any breach by Fidelity of any
representation, warranty, covenant, or agreement contained in this Agreement and
(iii any willful misconduct or negligence by Fidelity in the performance of, or
failure to perform its obligations under this Agreement, except to the extent
such Losses result from Fund/Agent's or SDC's breach of this Agreement, willful
misconduct, or gross negligence.
4
V. Confidentiality
Each party acknowledges and understands that any and all technical, trade
secret, or business information, including, without limitation, financial
information, business or marketing strategies or plans, product development or
customer information, which is disclosed to the other or is otherwise obtained
by the other, its affiliates, agent or representatives during the term of this
Agreement (the "Proprietary Information") is confidential and proprietary,
constitutes trade secrets of the owner, and is of great value and importance to
the success of the owner's business. Each party agrees to use its best efforts
(the same being not less than that employed to protect his own proprietary
information) to safeguard the Proprietary Information and to prevent the
unauthorized, negligent or inadvertent use or disclosure thereof. No party
shall, without the prior written approval of any officer of the other, directly
or indirectly, disclose the Proprietary Information to any person or business
entity except for a limited number of employees, attorneys, accountants and
other advisors of the other on a need-to-know basis or as may be required by law
or regulation. 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 to the other for
any use or disclosure in violation of this Agreement by its employees,
attorneys, accountants, or other advisors or agents. This Section V shall
continue in full force and effect notwithstanding the termination of this
Agreement.
VI. Duration and Termination of Agreement
With respect to any Fund, this Agreement shall become effective upon the date
such Fund is identified on Exhibit B, and this Agreement is approved by the Fund
or its Board of Directors/Trustees is required, and shall continue in force for
one year, and shall thereafter continue automatically for successive annual
periods only so long as such continuance is specifically approved at least
annually by a vote of the Board of Directors/Trustees of each Fund, and of the
Directors/Trustees who are not interested persons of the Funds and have no
direct or indirect financial interest in the operation of each Funds' plan for
distribution adopted pursuant to Rule 12b-1 (each, a "12b-1 Plan") under the
Investment Company Act of 1940 or, an agreement related to the 12b-1 Plan. This
Agreement is terminable as to any Fund by any party upon 90 days written notice
thereof to the other parties or upon default hereof provided that such default
shall not terminate this Agreement to the extent the defaulting party has been
notified of such default by the non-defaulting party and the defaulting party
cures such default within 10 business days of notice of such default.
This agreement is also terminable as to any Fund at any time by vote of a
majority of such Fund's Board of Directors/Trustees who are not interested
persons of such Fund and have no direct or indirect financial interest in the
operation of the Fund's 12b-1 Plan, or in any agreements related to the 12b-1
Plan, or by vote of a majority of the outstanding voting securities of such
Fund.
After the date of termination as to any Fund, no fee will be due with respect to
any shares of such Fund that are first placed or purchased in FBS or
Correspondents customer accounts after the date of such termination. However,
notwithstanding any such termination, Fund/Agent and SDC will remain obligated
to pay NFS the fee as to each share of such Fund that was considered in the
calculation of the fee as of the date of such termination, for so long as such
share is held in the FBS or Correspondents account and Fidelity continues to
provide the services under this Agreement. This Agreement, or any provision
hereof, shall survive termination to the extent necessary for each party to
perform its obligations with respect to shares for which a fee continues to be
due subsequent to such termination.
5
VII. Miscellaneous
A. Custody - Fund/Agent and SDC acknowledge that Fund shares maintained by the
Fund for Shareholders hereunder are held in custody for the exclusive benefit of
customers of NFS and shall be held free of any right, charge, security interest,
lien or claim against NFS in favor of the Fund or its agents acting on behalf of
the Fund.
B. Transaction Charges - During the term of this Agreement. FBS shall not assess
against or collect from its brokerage customers any transaction fee upon the
purchase or redemption of any Fund's shares that are considered in calculating
the fee due pursuant to Section III hereof. The parties acknowledge and agree
that FBS reserves the right to collect such transaction fees from certain
customers (including "Short-Term Traders," as FBS may define that term) for
certain special trading services and from other customers upon such other
customers' redemption of certain shares.
C. Use of Fidelity Investments Name - Fund/Agent and SDC will not, nor will
Fund/Agent or SDC cause or permit any Fund to, describe or refer to the name
"Fidelity Investments" or any derivation thereof, or to FMR Corp. or any
affiliate thereof, or to the services or relationship contemplated by this
Agreement in any advertisement or promotional materials or activities without
the prior written consent of an authorized officer of Fidelity.
D. Nonexclusivity - Fund/Agent and SDC acknowledge that Fidelity 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.
E. Force Majeure - Neither Fidelity nor its affiliates shall be liable to
Fund/Agent, SDC or any Fund for any damage, claim or other loss whatsoever
caused by circumstances or events beyond its reasonable control.
6
F. Notices - All notices and communications required or permitted by this
Agreement shall be in writing and delivered personally or sent by first class
mail unless otherwise agreed. All such notices and other communications shall be
made:
if to Fidelity, to: Fidelity Investments
00 Xxxxxxxxxx Xxxxxx, X0X
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
if to Fund/Agent to: Xxxxxxxx Advisors Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX, 00000
Attn: General Counsel
if to SDC, to: Xxxxxxxx Data Corp.
000 Xxxx Xxxxxx
Xxx Xxxx, XX, 00000
Attn: General Counsel
G. This Agreement and any Exhibits hereto may be amended only upon the written
agreement of the parties.
H. This Agreement shall inure to the parties' successors (whether by merger,
consolidation or otherwise) and may not be transferred or assigned by
Fund/Agent, SDC or Fidelity, provided however, that either party may assign the
Agreement to an affiliate without the consent of the other party. This Agreement
shall be construed in accordance with the laws of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first written above
Fund/Agent Fidelity Brokerage Services LLC
(By) (By)
-------------------------------- -------------------------------
(Name) (Name)
(Title) (Title)
(Fund or Company) Xxxxxxxx Advisors
SDC National Financial Services LLC
(By) (By)
-------------------------------- -------------------------------
(Name) (Name)
(Title) (Title)
(Fund or Company) Xxxxxxxx Data Corp.
7
EXHIBIT A
FEE SCHEDULE
8
EXHIBIT B
FUNDS PARTICIPATING IN SERVICES AGREEMENT
Fund Name CUSIP Trading Symbol
--------- --------- --------------
Xxxxxxxx Capital CL A 816326102 SCFIX
Xxxxxxxx Common Stock CL A 816332100 SCSFX
Xxxxxxxx Comm & Information CL A 816333108 SLMCX
Xxxxxxxx Frontier CL A 816334106 SLFRX
Xxxxxxxx Growth CL A 816335103 SGRFX
Seligman US Government Secs CL A 816336101 SUSGX
Xxxxxxxx High Yield Bd CL A 816336309 SHYBX
Xxxxxxxx Income CL A 816338107 SINFX
Xxxxxxxx Xxxx International CL A 00000X000 SHIFX
Xxxxxxxx Xxxx GIbI Smaller Co CL A 00000X000 SHGAX
Xxxxxxxx Xxxx GIbI Technology CL A 00000X000 SHGTX
Xxxxxxxx Xxxx GlbI Emerg Mkts Grwth CL A 00000X000 SHEMX
Xxxxxxxx Xxxx GIbI Growth Oppty CL A 00000X000 SHGOX
Xxxxxxxx Municipal NJ CL A 816340103 SNJTX
Xxxxxxxx Municipal PA CL A 816342109 SPTEX
Xxxxxxxx Municipal National CL A 816346100 SNXEX
Xxxxxxxx Municipal MA CL A 816346209 SMATX
Xxxxxxxx Municipal MN CL A 816346308 SMNNX
Xxxxxxxx Municipal NY CL A 816346407 SNYTX
Xxxxxxxx Municipal OH CL A 816346506 SOTEX
Xxxxxxxx Municipal MI CL A 816346605 STEMX
Xxxxxxxx Municipal LA CL A 816346704 SLOTX
Xxxxxxxx Municipal MD CL A 816346803 STXMX
Xxxxxxxx Municipal SC CL A 816346811 SXSCX
Xxxxxxxx Municipal GA CL A 816346829 SXGAX
Xxxxxxxx Municipal OR CL A 816346860 SLORX
Seligman Municipal MO CL A 816346878 SXFMX
Seligman Municipal CO CL A 816346886 SCOEX
Xxxxxxxx Municipal Quality CA CL A 816351209 SCTQX
Xxxxxxxx Municipal High Yield CA CL A 816351308 SCHYX
Xxxxxxxx Municipal NC CL A 816351407 SNCTX
Xxxxxxxx Municipal FL CL A 816351506 SFLEX
Xxxxxxxx Time Horizon 30 CL A 816352108 STHAX
Xxxxxxxx Time Horizon 20 CL A 816352504 SATWX
Xxxxxxxx Time Horizon 10 CL A 816352819 QBYGQ
Xxxxxxxx Harvest CL A 816352850 SATVX
Xxxxxxxx Large-Cap Value CL A 816356109 SLVAX
Xxxxxxxx Small-Cap Value CL A 816356406 SSCVX
9
