EX-99.e.2.
DEALER AGREEMENT
AGREEMENT, made as of this ____ th day of ________, 20__, by and between
Aberdeen Fund Distributors LLC ("Distributor") and [_________________]
("Dealer") whereby Dealer agrees to participate in the distribution of the
shares ("Shares") of the series and classes of Aberdeen Funds (the "Trust") as
are listed on Exhibit A, and as may be amended from time to time (each, a
"Fund"). Dealer also agrees to provide distribution and shareholder services to
the Funds subject to the following terms and conditions.
1. Dealer Authority. With respect to the distribution and sales of Shares,
Dealer shall have authority to act as limited agent of a Fund, Distributor
or any other dealer only with respect to facilitating the purchase and sale
of Shares as described herein. All orders are subject to acceptance or
rejection by Distributor or a Fund in its sole discretion, and if accepted
become effective only upon confirmation by Distributor. Dealer shall have
no authority to make any representations concerning the Shares of a Fund
except such representations as may be contained in a Fund's then current
prospectus, in its then current Statement of Additional Information
(collectively, the prospectus and Statement of Additional Information for
each Fund are the "Prospectus"), and in such other printed information as a
Fund or Distributor may subsequently prepare or distribute to Dealer for
purposes of selling the Shares. Dealer shall have no authority to
distribute any other sales material relating to a Fund or any of its Shares
without the prior written approval of Distributor. Dealer agrees to follow
any written guidelines or standards relating to the sale or distribution of
the Shares as may be provided to Dealer by Distributor including the
provisions outlined in Exhibit B, as well as to follow any applicable
federal and/or state securities laws, rules or regulations affecting the
sale or distribution of shares of investment companies offering multiple
classes of shares.
Dealer agrees to take full responsibility for the suitability and proper
supervision of mutual fund recommendations to its customers and to ensure
that, to the extent customers request a class of shares in a Fund different
from what they already hold in the Fund, such customers are aware of the
advantages and disadvantages of selecting one class of shares over other
classes of shares and are aware of the available methods of mutual fund
financing.
2. Sales and Pricing of Shares. Dealer shall offer and sell Shares only at
their respective public offering prices, or the net asset values if
applicable, in accordance with Rule 22c-1 of the Investment Company Act of
1940, as amended, and the terms and conditions of the Prospectus of a Fund
whose Shares Dealer offers. An order for the purchase of Shares shall be
accepted at the time such order is received by Distributor and at the price
next determined unless the order is otherwise rejected in accordance with
Section 1 above. In addition, Distributor will not accept any order from
Dealer which is placed on a conditional basis or subject to any delay or
contingency prior to execution. Dealer shall place orders for Shares only
with Distributor, shall date and time stamp all orders received by Dealer
and promptly shall transmit all orders to Distributor in time for
processing at the price next determined after receipt of the order by
Dealer, in accordance with the Prospectus of the Fund whose Shares are
being sold. Dealer shall not aggregate orders to purchase or redeem Shares
received after close of the New York Stock Exchange (generally, 4:00 p.m.
Eastern Time) ("Market Close") with orders received before Market Close,
and warrants that its internal control structure concerning the processing
and transmission of orders is suitably designed to prevent or detect on a
timely basis orders received after Market Close from being aggregated with
orders received before Market Close and to minimize errors that could
result in late transmission of orders. Orders received by Dealer before
Market Close will receive that day's public offering price or net asset
value, as applicable, and orders received by Dealer after Market Close will
receive the next day's public offering price or net asset value, as
applicable. Dealer shall confirm the transaction with its customer
(hereinafter "Client-shareholder") at the price confirmed in writing by the
Distributor. In the event of differences between verbal and written price,
written confirmations shall be considered final. Prices of the Shares are
computed by a Fund in accordance with its Prospectus.
3. Services to be Provided by Dealer. Dealer or its affiliates/designees will
maintain records of sales, redemptions and repurchases of Shares and will
furnish Distributor with such records on request. Dealer will also
distribute Prospectuses and reports to the Client-shareholder as described
below, in compliance with applicable legal requirements unless the parties
expressly agree that Distributor will do so on Dealer's behalf.
Client-shareholders means those customers of the Dealer who have entered
into an agreement with Dealer for brokerage, investment advisory, trust, or
shareholder services and who maintain an interest in an account with the
Funds registered in the name of Dealer.
With respect to shareholder services, Distributor hereby appoints Dealer to
render shareholder services to each of the 12b-1 Funds (as defined below).
Shareholder services may include, but are not limited to, answering routine
shareholder inquiries regarding the 12b-1 Funds; providing information to
shareholders on their investments in the 12b-1 Funds; providing personnel
and communication equipment used in connection therewith; and providing
such other services as Distributor may reasonably request. Dealer shall
prepare such quarterly reports for Distributor as shall reasonably be
required by Distributor. Fees paid under this Agreement for such
shareholder services for the 12b-1 Funds are in addition to, and not
duplicative of, any fees paid for similar services under a separate
administrative servicing agreement for the Funds.
Distributor reserves the right to reject any purchase orders, including
exchanges, for any reason and without notice to Dealer, including if
Distributor, in its sole opinion, believes Dealer's customer(s) is engaging
in short-term or excessive trading into and out of a Fund or otherwise
engaging in trading that may be disruptive to a Fund ("Market Timing").
Dealer agrees to cooperate with Distributor to monitor for Market Timing by
Dealer's customers, to provide such relevant information about Market
Timers to Distributor as it may reasonably request and to prevent Market
Timing from occurring by or because of Dealer's customers. Failure of
Distributor to reject any purchase orders that might be deemed to be Market
Timing shall not constitute a waiver of Distributor's rights under this
section.
4. Dealer Compensation.
(a) So long as this Agreement is in effect, on purchases from Distributor
of Shares of a Fund sold with a sales charge, Dealer shall receive a
discount from the public offering price (a "Dealer Concession") at the
specified percentages of the public offering price set forth in
Exhibit A and which may be modified from time to time by a Fund.
Dealer shall not receive any Dealer Concession with respect to certain
transactions which are exempt from sales charges and will receive the
reduced Dealer Concessions which correspond to the reduced sales
charges applicable to certain types of transactions (e.g.,
transactions involving letters of intent or rights of accumulation),
as set forth in a Fund's Prospectus, which are hereby incorporated
herein by reference and which may be modified from time to time by a
Fund. Dealer shall not share or rebate any portion of such Dealer
Concessions or otherwise grant any concessions, discounts or other
allowances to any person who is not a broker or dealer actually
engaged in the investment banking or securities business and is not a
member in good standing of the Financial Industry Regulatory Authority
("FINRA"). Dealer will receive Dealer Concessions as described above
on all purchase transactions in Client-shareholder accounts (excluding
reinvestment of income dividends and capital gains distributions) for
which Dealer is designated as Dealer of Record except where
Distributor determines that any such purchase was made with the
proceeds of a redemption or repurchase of Shares of a Fund whether or
not the transaction constitutes the exercise of the exchange or
conversion privilege.
(b) In addition to the compensation described in Section 4(a) above and
subject to any limitations set forth in the FINRA's Rules of Conduct,
including without limitation Rule 2830, Distributor will pay Dealer,
with respect to each of the Funds for which a Distribution Plan
pursuant to Rule 12b-1 of the Investment Company Act of 1940, as
amended (the "1940 Act"), is in place for such Shares and under which
a fee may be paid to broker-dealers for providing distribution or
shareholder services ("12b-1 Funds"), a monthly fee computed at the
annual rate as described in Exhibit A. The fee will be paid for the
period Shares of the 12b-1 Funds are held in accounts for which Dealer
provides services as described in Section 3 above; provided, however,
that any waiver of such fee by Distributor will apply likewise to
Dealer and Distributor is obligated to pay such fee to Dealer only so
long as the Distributor is reimbursed by such 12b-1 Funds for such
fees.
If any Shares sold to Dealer under the terms of this Agreement are
repurchased by a Fund, or are tendered for redemption, within seven
business days after the date of Distributor's confirmation of the
original purchase by Dealer, Dealer shall promptly refund to
Distributor the full Dealer Concession received by Dealer pursuant to
Section 4(a) above or Distributor reserves the right to deduct such
amount from any current or future compensation due Dealer.
5. Dealer Authorization. Dealer hereby authorizes Distributor to act as its
agent in connection with all transactions in Client-shareholder accounts
for which Dealer is designated as Dealer of Record. All designations of
Dealer of Record and all authorizations of Distributor to act as Dealer's
agent shall cease upon the termination of this Agreement or upon the
Client-shareholders' instructions to transfer his or her account to another
Dealer of Record.
6. Payment for Shares. Payment for all Fund Shares purchased from Distributor
by Dealer shall be received by Distributor within the time period defined
by agreed-upon normal settlement procedure after acceptance of Dealer's
order. If such payment is not so received by Distributor, Distributor and
the Fund(s) reserve the right, without notice, to immediately cancel the
sale, or, at Distributor's option, to sell the Shares ordered by Dealer
back to the Fund in which latter case, Distributor may hold Dealer
responsible for any loss, suffered by Distributor or by the Fund resulting
from Dealer's failure to make payment as described above.
7. Purchase of Shares. Dealer shall purchase Shares of the Fund only through
Distributor or from the Client-shareholders. If Dealer purchases Shares
from Distributor, Dealer agrees that all such purchases shall be made only
to cover orders already received by Dealer from the Client-shareholders, or
for Dealer's own bona fide investment without a view to resale. If Dealer
purchases Shares from the Client-shareholders, Dealer agrees to pay such
Client-shareholders the applicable net asset value per share less any
contingent deferred sales charge or redemption fee that would be applicable
if such Shares were then tendered for redemption in accordance with the
applicable Prospectus ("Repurchase Price").
8. Limitation on Sale of Shares. Dealer shall sell Shares only:
(a) to the Client-shareholders at the prices described in Section 2 above;
or
(b) to Distributor as agent for the Fund at the Repurchase Price. In such
a sale to Distributor, Dealer may act either as principal for Dealer's
own account or as agent for the Client-shareholder. If Dealer acts as
principal for its own account in purchasing Shares for resale to
Distributor, Dealer agrees to pay Client-shareholder not less than nor
more than the Repurchase Price which Dealer received from Distributor.
If Dealer acts as agent for the Client-shareholder in selling Shares
to Distributor, Dealer agrees not to charge the Client-shareholder
more than a fair commission for handling the transaction.
9. Dealer's Representations and Warranties. Dealer hereby represents and
warrants to Distributor that:
(a) Dealer is willing and possesses the legal authority to provide the
services contemplated by this Agreement without violation of
applicable laws;
(b) Dealer is and shall remain throughout the term of this Agreement a
member in good standing of the FINRA and shall immediately notify
Distributor should it cease to be a member of the FINRA;
(c) Dealer is and shall remain throughout the term of this Agreement a
broker-dealer and thus a "Financial Institution" as defined by Title
III of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act (USA Patriot)
of 2001 (the "Act"), duly and properly registered and qualified under
all applicable laws, rules and regulations, including, but not limited
to, all state and federal securities laws, rules and regulations, as
may be necessary or appropriate for Dealer to perform and observe all
of its duties, obligations and covenants set forth or contemplated by
this Agreement;
(d) Dealer shall throughout the term of this Agreement comply with the
requirements of all applicable laws, rules and regulations, including,
but not limited to, federal and state securities laws, the rules,
regulations and orders of the Securities and Exchange Commission and
the FINRA, in performing and observing all of its duties, obligations
and covenants set forth or contemplated by this Agreement;
(e) Dealer shall not withhold placing with Distributor orders received
from the Client-shareholders so as to profit from such withholding;
(f) Dealer shall not offer Shares of any Fund in any state where such
Shares are not qualified for sale under the Blue Sky Laws and
Regulations of such state or where Dealer is not qualified to act as a
dealer, except in appropriate circumstances when under state laws and
regulations the Share or the sales transactions are exempt from
qualification or dealer registration is not required; and
(g) Dealer shall give Distributor at least 30 days advance written notice
of any event which will cause an assignment of this Agreement (as
defined in the 0000 Xxx) by Dealer or its affiliates.
10. Indemnification. Dealer shall indemnify and hold harmless Distributor, its
affiliates and the Fund against any losses, claims, damages, liabilities or
expenses (including reasonable attorneys' fees and expenses) resulting from
(a) any negligence or misfeasance of Dealer or any of its officers,
directors, employees or registered representatives; or (b) any violation of
any law including Title III of the ACT, rule or regulation or any failure
to perform or observe any obligations of Dealer set forth in this Agreement
by Dealer or any of its officers, directors, employees or registered
representatives.
Distributor shall indemnify and hold harmless Dealer and its affiliates
against any losses, claims, damages, liabilities or expenses (including
reasonable attorneys' fees and expenses) resulting from (a) any negligence
or misfeasance of the Funds, Distributor or any of its officers, directors,
employees or registered representatives; or (b) any violation of any law,
rule or regulation or any failure to perform or observe any obligations of
Distributor or the Funds set forth in this Agreement by the Funds,
Distributor or any of its officers, directors, employees or registered
representatives.
11. Provision of Sales Material. Distributor shall deliver to Dealer without
charge reasonable quantities of each Fund's Prospectuses with any
supplements thereto currently in effect, copies of current shareholder
reports of the Fund, proxy materials, and sales material issued by
Distributor from time to time.
12. Rule 12b-1 Agreement; Termination. This Agreement is a related agreement
under the Distribution Plan ("Rule 12b-1 Plan"), applicable for the 12b-1
Funds, as adopted pursuant to Rule 12b-1 under the 1940 Act. This Agreement
may be terminated as to the payments made by the 12b-1 Funds under the Rule
12b-1 Plan at any time, without the payment of any penalty, by the vote of
a majority of the members of the Board of Trustees of the Trust who are not
interested persons of the Trust and who have no direct or indirect
financial interest in the operation of the Rule 12b-1 Plan or in any
related agreements to the Rule 12b-1 Plan ("Disinterested Trustees") or by
a majority of the outstanding Shares, each with respect to a class of a
12b-1 Fund, upon delivery of written notice thereof to the parties to this
Agreement.
This Agreement will terminate automatically in the event of its assignment
as defined in the 1940 Act or upon termination of the Distributor
underwriting agreement with the Fund. In addition, either the Distributor
or Dealer may terminate this Agreement upon at least 90 days written notice
to the other party.
13. Complete Agreement. This Agreement constitutes the entire agreement of the
parties with respect to the matters covered by this Agreement. This
Agreement supersedes any and all prior understandings, written or oral
between the parties and may be amended at any time and from time to time by
written agreement of the parties hereto, subject to the approval of the
Board of Trustees of the Trust when applicable. Notwithstanding the
foregoing, Distributor may amend or modify the Exhibits incorporated
herein, as provided throughout this Agreement, by providing new exhibits to
Dealer. However, such amendment shall only become effective and part of
this Agreement and be considered binding upon Dealer upon Dealer's first
sale of Shares under the new Exhibits.
14. Choice of Law. This Agreement shall be governed by and construed to be in
accordance with substantive laws of the State of Delaware without reference
to choice of law principles thereof and in accordance with the 1940 Act. In
the case of any conflict, the 1940 Act shall control. Each party represents
that the undersigned has authority to act, and to execute this Agreement,
on behalf of such party.
15. Notices. All communications and notices to Distributor should be sent to
the address below. Any communications or notice to Dealer shall be duly
given if mailed or delivered to Dealer at the address specified by Dealer
below.
16. Non-Exclusivity. Each of the parties acknowledges and agrees that this
Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities.
17. Privacy Program. Each party to this Agreement agrees to protect Customer
Information (defined below) and to comply as may be necessary with
requirements of the Xxxxx-Xxxxx-Xxxxxx Act, the relevant state and federal
regulations pursuant thereto, including Regulation S-P, and state privacy
laws.
(a) Customer Information. "Customer Information" means any information
contained on an application of a customer ("Customer") or other form
and all nonpublic personal information about a Customer that a party
receives from the other party. "Customer Information" includes, by way
of example and not limitation, name, address, telephone number, social
security number, and personal financial information.
(b) Safeguarding Customer Information. The parties shall establish and
maintain safeguards against the unauthorized access, destruction,
loss, or alteration of Customer Information in their control, which
are no less rigorous than those maintained by a party for its own
information of a similar nature. In the event of any improper
disclosure of any Customer Information, the party responsible for the
disclosure will immediately notify the other party.
(c) Survivability. The provisions of this Privacy Program Section shall
survive the termination of the Agreement.
18. Anti-Money Laundering Program.
(a) Distributor will rely upon Dealer to establish a written Anti-Money
Laundering Program (the "Program") to include policies, procedures,
and controls that comply with the Act and the Bank Secrecy Act of 1970
("BSA"). Each party to this Agreement acknowledges, represents, and
warrants that each party has adopted and implemented an Anti-Money
Laundering Program that complies and will continue to comply with all
aspects and requirements of the Act, the BSA, and all other applicable
anti-money laundering laws and regulations.
Upon request, Dealer shall promptly certify to having such Program
that complies with and continues to comply with all aspects and
requirements to the Act, the BSA, and all other applicable federal,
state and local anti-money laundering laws and regulations.
(b) Dealer's program shall include, and Distributor shall rely upon,
Dealer's policies, procedures and controls to, among other things, (i)
verify the identity (due diligence) of Dealer's customers, (ii)
maintain records of the information used to identify Dealer's
customer, (iii) determine if any of Dealer's customer(s) appears on
lists of known or suspected terrorists or associated with known or
terrorist organizations (said customer hereinafter referred to as a
"Prohibited Customer(s)"), and (iv) to ensure that Prohibited
Customer(s) and foreign shell banks do not maintain investments in any
Fund.
(c) Dealer's Program shall also comply with the Customer Identification
Program ("CIP") for customers who open accounts on or after October 1,
2003, and as such, shall among other matters provide for the release
of customer information to law enforcement agencies, and the filing of
Suspicious Activity Reports ("SARs"), as and if applicable, and in
accordance with the Act. In addition, the Dealer's Program also shall
include procedures for fulfilling the currency reporting requirements
of the Act and the BSA, as and if applicable.
(d) The provisions of this Anti-Money Laundering section shall survive the
termination of the Agreement.
19. Shareholder Information
19.1 Agreement to Provide Information. Dealer agrees to provide the Fund,
upon written request, the taxpayer identification number ("TIN"), if known,
of any or all Shareholder(s) of the account and the amount, date, name or
other identifier of any registered representative(s) associated with the
Shareholder(s) or account (if known), and transaction type (purchase,
redemption, transfer, or exchange) of every purchase, redemption, transfer,
or exchange of Shares held through an account maintained by the Dealer
during the period covered by the request.
19.1.1 Period Covered by Request. Requests must set forth a specific
period, not to exceed 12 months from the date of the request, for which
transaction information is sought. A Fund may request transaction
information older than 12 months from the date of the request as it deems
necessary to investigate compliance with policies established by the Fund
for the purpose of eliminating or reducing any dilution of the value of the
outstanding shares issued by the Fund.
19.1.2 Form and Timing of Response. Dealer agrees to transmit the requested
information that is on its books and records to the Fund or its designee
promptly, but in any event not later than five (5) business days, after
receipt of a request. If the requested information is not on the Dealer's
books and records, Dealer agrees to: (i) provide or arrange to provide the
requested information from Shareholders who hold an account with an
indirect intermediary; or (ii) if directed by the Fund, block further
purchases of Fund Shares from such indirect intermediary. In such instance,
Dealer agrees to inform the Fund whether it plans to perform (i) or (ii).
Responses required by this paragraph must be communicated in writing and in
a format mutually agreed upon by the parties. To the extent practicable,
the format for any transaction information provided to a Fund should be
consistent with the NSCC Standardized Data Reporting Format. For purposes
of this provision, an "indirect intermediary" has the same meaning as in
SEC Rule 22c-2 under the Investment Company Act of 1940.
19.1.3 Limitations on Use of Information. The Fund agrees not to use the
information received for marketing or any other similar purpose without the
prior written consent of the Dealer.
19.2 Agreement to Restrict Trading. Dealer agrees to execute written
instructions from a Fund to restrict or prohibit further purchases or
exchanges of Shares by a Shareholder that has been identified by such Fund
as having engaged in transactions of the Fund's Shares (directly or
indirectly through the Dealer's account) that violate policies established
by the Fund for the purpose of eliminating or reducing any dilution of the
value of the outstanding Shares issued by the Fund.
19.2.1 Form of Instructions. Instructions must include the TIN, if known,
and the specific restriction(s) to be executed. If the TIN is not known,
the instructions must include an equivalent identifying number of the
Shareholder(s) or account(s) or other agreed upon information to which the
instruction relates.
19.2.2 Timing of Response. Dealer agrees to execute instructions as soon as
reasonably practicable, but not later than five business days after receipt
of the instructions by the Dealer.
19.2.3 Confirmation by Dealer. Dealer must provide written confirmation to
the Fund that instructions have been executed. Dealer agrees to provide
confirmation as soon as reasonably practicable, but not later than ten
business days after the instructions have been executed.
19.3 Definitions. For purposes of this paragraph 19:
19.3.1 The term "Fund" includes the Distributor and a Fund's transfer
agent. The term does not include any "excepted funds" as defined in SEC
Rule 22c-2(b) under the 0000 Xxx.
19.3.2 The term "Shares" means the interest of Shareholders corresponding
to the redeemable securities of record issued by a Fund under the 1940 Act
that are held by the Dealer.
20. Termination and Survival. In the event that this Agreement is terminated
under the terms and conditions described in such Agreement, the
indemnification provision contained in this Agreement shall continue until
the possibilities for damages or loss have expired.
21. Acceptance of Agreement. The parties may enter into this Amendment by
executing this document. In addition, Dealer's placement of an order or
acceptance of payments of any kind after Dealer's receipt of this Amendment
shall constitute Dealer's acceptance of this Amendment and, therefore,
after such placement of an order or acceptance of payment, this Amendment
shall be binding as between the parties as of the date of such order or
payment.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers as of the day and year first written above.
DISTRIBUTOR, DEALER,
Aberdeen Fund Distributors LLC __________________________
By:________________________ By:________________________
Name: Name:
Title: Title:
Exhibit A
Fund Class
Aberdeen Select Equity Fund A, B, C, R
Aberdeen Select Mid Cap Growth Fund A, B, C, R
Aberdeen Select Small Cap Fund A, B, C, R
Aberdeen Select Growth Fund A, B, C, R
Aberdeen Select Worldwide Fund A, B, C, R
Aberdeen China Opportunities Fund A, B, C, R
Aberdeen Developing Markets Fund A, B, C, R
Aberdeen International Equity Fund A, B, C, R
Aberdeen Hedged Core Equity Fund A, B, C, R
Aberdeen Market Neutral Fund A, B, C, R
Aberdeen Equity Long-Short Fund A, B, C, R
Aberdeen Global Financial Services Fund A, B, C, R
Aberdeen Health Sciences Fund A, B, C, R
Aberdeen Natural Resources Fund A, B, C, R
Aberdeen Technology and Communications Fund A, B, C, R
Aberdeen Global Utilities Fund A, B, C, R
Aberdeen Optimal Allocations Fund: Growth A, B, C, R
Aberdeen Optimal Allocations Fund: Moderate Growth A, B, C, R
Aberdeen Optimal Allocations Fund: Moderate A, B, C, R
Aberdeen Optimal Allocations Fund: Defensive A, B, C, R
Aberdeen Optimal Allocations Fund: Specialty A, B, C, R
Aberdeen Small Cap Fund A, B, C, R
Aberdeen Small Cap Opportunities Fund A, B, C, R
Aberdeen Small Cap Growth Fund A, B, C, R
Aberdeen Small Cap Value Fund A, B, C, R
Aberdeen Tax-Free Income Fund A, B, C, X, Y
Any and all Aberdeen Funds' funds are available for sale. The Broker/ Dealer
will receive the applicable 12b-1 fees and Dealer Concession based on funds sold
and class purchased as described in the fund's prospectus.
Exhibit B
FUND/SERV PROCESSING PROCEDURES
AND
MANUAL PROCESSING PROCEDURES
The purchase, redemption and settlement of Shares of a Fund will normally follow
the Fund/SERV-Defined Contribution Clearance and Settlement Service ("DCCS")
Processing Procedures below and the rules and procedures of the SCC Division of
the National Securities Clearing Corporation ("NSCC") shall govern the purchase,
redemption and settlement of Shares of the Funds through NSCC by the Dealer. In
the event of equipment failure or technical malfunctions or the parties'
inability to otherwise perform transactions pursuant to the FUND/SERV Processing
Procedures, or the parties' mutual consent to use manual processing, the Manual
Processing Procedures below will apply.
It is understood and agreed that, in the context of Section 22 of the 1940 Act
and the rules and public interpretations thereunder by the staff of the
Securities and Exchange Commission (SEC Staff), receipt by the Dealer of any
Instructions from the Client-shareholder prior to the Close of Trade on any
Business Day shall be deemed to be receipt by the Funds of such Instructions
solely for pricing purposes and shall cause purchases and sales to be deemed to
occur at the Share Price for such Business Day, except as provided in 4(c) of
the Manual Processing Procedures. Each Instruction shall be deemed to be
accompanied by a representation by the Dealer that it has received proper
authorization from each Client-shareholder whose purchase, redemption, account
transfer or exchange transaction is effected as a result of such Instruction.
Fund/SERV-DCCS Processing Procedures
1. On each business day that the New York Stock Exchange (the "Exchange") is
open for business on which the Funds determine their net asset values
("Business Day"), the Distributor shall accept, and effect changes in its
records upon receipt of purchase, redemption, exchanges, account transfers
and registration instructions from the Dealer electronically through
Fund/SERV ("Instructions") without supporting documentation from the
Client-shareholder. On each Business Day, the Distributor shall accept for
processing any Instructions from the Dealer and shall process such
Instructions in a timely manner.
2. The Distributor shall perform any and all duties, functions, procedures and
responsibilities assigned to it under this Agreement and as otherwise
established by the NSCC. The Distributor shall conduct each of the
foregoing activities in a competent manner and in compliance with (a) all
applicable laws, rules and regulations, including NSCC Fund/SERV-DCCS rules
and procedures relating to Fund/SERV; (b) the then-current Prospectus of a
Fund; and (c) any provision relating to Fund/SERV in any other agreement of
the Distributor that would affect its duties and obligations pursuant to
this Agreement.
3. Confirmed trades and any other information provided by the Distributor to
the Dealer through Fund/SERV and pursuant to this Agreement shall be
accurate, complete, and in the format prescribed by the NSCC.
4. Trade, registration, and broker/dealer information provided by the Dealer
to the Distributor through Fund/SERV and pursuant to this Agreement shall
be accurate, complete and, in the format prescribed by the NSCC. All
Instructions by the Dealer regarding each Fund/SERV Account shall be true
and correct and will have been duly authorized by the registered holder.
5. For each Fund/SERV transaction, including transactions establishing a
Client-shareholder account with the Distributor, the Dealer shall provide
the Funds and the Distributor with all information necessary or appropriate
to establish and maintain each Fund/SERV transaction (and any subsequent
changes to such information), which the Dealer hereby certifies is and
shall remain true and correct. The Dealer shall maintain documents required
by the Funds to effect Fund/SERV transactions. The Dealer certifies that
all Instructions delivered to the Distributor on any Business Day shall
have been received by the Dealer from the Client-shareholder by the close
of trading (generally 4:00 p.m. Eastern Time ("ET")) on the Exchange (the
"Close of Trading") on such Business Day and that any Instructions received
by it after the Close of Trading on any given Business Day will be
transmitted to the Distributor on the next Business Day.
Manual Processing Procedures
1. On each Business Day, the Dealer may receive Instructions from the
Client-shareholder for the purchase or redemption of shares of the Funds
based solely upon receipt of such Instructions prior to the Close of
Trading on that Business Day. Instructions in good order received by the
Dealer prior to the close of trading on any given Business Day (generally,
4:00 p.m. ET (the "Trade Date") and transmitted to the Distributor by no
later than 9:30 a.m. ET the Business Day following the Trade Date ("Trade
Date plus One" or "TD+1"), will be executed at the NAV ("Share Price") of
each applicable Fund, determined as of the Close of Trading on the Trade
Date.
2. By no later than 6:00 p.m. ET on each Trade Date ("Price Communication
Time"), the Distributor will use its best efforts to communicate to the
Dealer via electronic transmission acceptable to both parties, the Share
Price of each applicable Fund, as well as dividend and capital gain
information and, in the case of funds that credit a daily dividend, the
daily accrual for interest rate factor (mil rate), determined at the Close
of Trading on that Trade Date.
3. As noted in Paragraph 1 above, by 9:30 a.m. ET on TD+1 ("Instruction Cutoff
Time") and after the Dealer has processed all approved transactions, the
Dealer will transmit to the Distributor via facsimile, telefax or
electronic transmission or system-to-system, or by a method acceptable to
the Dealer and the Distributor, a report (the "Instruction Report")
detailing the Instructions that were received by the Dealer prior to the
Funds' daily determination of Share Price for each Fund (i.e., the Close of
Trading) on Trade Date.
(a) It is understood by the parties that all Instructions from the
Client-shareholder shall be received and processed by the Dealer in
accordance with its standard transaction processing procedures. The
Dealer or its designees shall maintain records sufficient to identify
the date and time of receipt of all Client-shareholder transactions
involving the Funds and shall make or cause to be made such records
available upon reasonable request for examination by the Funds or its
designated representative or, at the request of the Funds, by
appropriate governmental authorities. Under no circumstances shall the
Dealer change, alter or modify any Instructions received by it in good
order.
(b) Following the completion of the transmission of any Instructions by
the Dealer to the Distributor by the Instruction Cutoff Time, the
Dealer will verify that the Instruction was received by the
Distributor and trades are pending by utilizing a remote terminal or
such other method acceptable to the Distributor.
(c) In the event that an Instruction transmitted by the Dealer on any
Business Day is not received by the Distributor by the Instruction
Cutoff Time, due to mechanical difficulties or for any other reason
beyond the Dealer's reasonable control, such Instruction shall
nonetheless be treated by the Distributor as if it had been received
by the Instruction Cutoff Time, provided that the Dealer retransmits
such Instruction by facsimile transmission to the Distributor and such
Instruction is received by the Distributor's financial control
representative no later than 9:30 a.m. ET on TD+1. In addition, the
Dealer will place a phone call to a financial control representative
of the Distributor prior to 9:00 a.m. ET on TD+1 to advise the
Distributor that a facsimile transmission concerning the Instruction
is being sent.
(d) With respect to all Instructions, the Distributor's financial control
representative will manually adjust a Fund's records for the Trade
Date to reflect any Instructions sent by the Dealer.
(e) By no later than 4:00 p.m. ET on TD+1, and based on the information
transmitted to the Distributor pursuant to Paragraph 3(c) above, the
Dealer will use its best efforts to verify that all Instructions
provided to the Distributor on TD+1 were accurately received and that
the trades for each Account were accurately completed and the Dealer
will use its best efforts to notify Distributor of any discrepancies.
4. As set forth below, upon the timely receipt from the Dealer of the
Instructions, the Fund will execute the purchase or redemption transactions
(as the case may be) at the Share Price for each Fund computed as of the
Close of Trading on the Trade Date.
(a) Except as otherwise provided herein, all purchase and redemption
transactions will settle on TD+1. Settlements will be through net
Federal Wire transfers to an account designated by a Fund. In the case
of Instructions which constitute a net purchase order, settlement
shall occur by the Dealer instructing the trustee or custodian for the
Plans to initiate a wire transfer by 1:00 p.m. ET on TD+1 to the
custodian for the Fund for receipt by the Funds' custodian by no later
than the Close of Business at the New York Federal Reserve Bank on
TD+1, causing the remittance of the requisite funds to the Distributor
to cover such net purchase order. In the case of Instructions which
constitute a net redemption order, settlement shall occur by the
Distributor causing the remittance of the requisite funds to cover
such net redemption order by Federal Funds Wire by 1:00 p.m. ET on
TD+1, provided that the Fund reserves the right to (i) delay
settlement of redemptions for up to seven (7) Business Days after
receiving a net redemption order in accordance with Section 22 of the
1940 Act and Rule 22c-1 thereunder, or (iii) suspend redemptions
pursuant to the 1940 Act or as otherwise required by law. Settlements
shall be in U.S. dollars and a Fund may pay redemption proceeds in
whole or in part by a distribution in-kind of readily marketable
securities that it holds in lieu of cash in conformity with applicable
law or regulations.
(b) The Dealer or such other party as may be designated, as record owner
of each account ("Record Owner") will be provided with all written
confirmations required under federal and state securities laws.
(c) On any Business Day when the Federal Reserve Wire Transfer System is
closed, all communication and processing rules will be suspended for
the settlement of Instructions. Instructions will be settled on the
next Business Day on which the Federal Reserve Wire Transfer System is
open. The original TD+1 Settlement Date will not apply. Rather, for
purposes of this Paragraph 4(c) only, the Settlement Date will be the
date on which the Instruction settles.
(d) The Dealer shall, upon receipt of any confirmation or statement
concerning the accounts, promptly verify by use of the terminal or by
such other method acceptable to the Distributor and the Dealer the
accuracy of the information contained therein against the information
contained in the Dealer's internal record-keeping system and shall
promptly, but in no event not more than seven days, advise the
Distributor in writing of any discrepancies between such information.
The Distributor and the Dealer shall cooperate to resolve any such
discrepancies as soon as reasonably practicable.
Indemnification
In the event of any error or delay with respect to both the Fund/SERV Processing
Procedures and the Manual Processing Procedures outlined in Exhibit B herein:
(i) which is caused by the Funds or the Distributor, the Distributor shall make
any adjustments on the Funds' accounting system necessary to correct such error
or delay and the responsible party or parties shall reimburse the
Client-shareholder and the Dealer, as appropriate, for any losses or reasonable
costs incurred directly as a result of the error or delay but specifically
excluding any and all consequential punitive or other indirect damages or (ii)
which is caused by the Dealer or by any Client-shareholder, the Distributor
shall make any adjustment on the Funds' accounting system necessary to correct
such error or delay and the affected party or parties shall be reimbursed by the
Dealer for any losses or reasonable costs incurred directly as a result of the
error or delay, but specifically excluding any and all consequential punitive or
other indirect damages. In the event of any such adjustments on the Funds'
accounting system, Dealer shall make the corresponding adjustments on its
internal record-keeping system. In the event that errors or delays with respect
to the Procedures are contributed to by more than one party hereto, each party
shall be responsible for that portion of the loss or reasonable cost which
results from its error or delay. All parties agree to provide the other parties
prompt notice of any errors or delays of the type referred to herein and to use
reasonable efforts to take such action as may be appropriate to avoid or
mitigate any such costs or losses.
