EXHIBIT 9(a)
COPY OF THE
ORDER PLACEMENT PROCEDURES
AMENDMENT TO THE
XXXXXXX XXXXXX OPERATING AGREEMENT
ORDER PLACEMENT PROCEDURES AMENDMENT
TO THE OPERATING AGREEMENT
This Order Placement Procedures Amendment ("Amendment") is
made as of December 1, 1997, by and between Xxxxxxx Xxxxxx & Co., Inc.
("Schwab"), a California corporation; and each registered investment company
("Fund Company") executing this Amendment on its own behalf and on behalf of
each of the series or classes of shares ("Fund(s)"), which are parties to an
Operating Agreement with Schwab, made as of September 14, 1993, as amended
thereafter ("Operating Agreement"). This Amendment amends the Operating
Agreement. In the event that there are no Funds, then the term "Fund(s)" shall
mean "Fund Company." Capitalized terms used, but not defined, in this Amendment
shall have the respective meanings given to them in the Operating Agreement.
WHEREAS, Schwab and Fund Company, on its own behalf and on
behalf of the Funds, have entered into the Operating Agreement pursuant to which
shares of the Funds are made available for purchase and redemption by Xxxxxx'x
brokerage customers through Xxxxxx'x Mutual Fund Marketplace ("MFMP"); and
WHEREAS, Schwab and Fund Company desire to amend the
Operating Agreement to authorize Schwab to receive customer orders for purchase
and redemption of Fund shares on each business day up until the time at which
the Fund prices its shares, and to transmit those orders to the Fund or its
transfer agent or another Fund-designated agent (each of the three is
individually referred to herein as the "Order Accepter"), as appropriate, after
the time at which the Fund prices its shares, subject to the terms and
conditions of this Amendment.
NOW THEREFORE, in consideration of the foregoing and the
mutual promises set forth below, the parties hereto agree as follows:
1. Authorization to Receive Orders. Fund Company hereby
designates and authorizes Schwab to receive purchase and redemption orders in
proper form ("Orders") from Schwab customers on the Fund's behalf for purposes
of Rule 22c-1, so that any such Schwab customer will receive the share price
next computed by the Fund after the time at which such customer places its order
with Schwab, as more specifically provided in this Amendment.
2. Sub-Designees of Schwab. Fund Company further agrees
that Schwab may designate and authorize such intermediaries as it deems
necessary, appropriate or desirable, pursuant to such terms as are consistent
with this Amendment ("Sub-Designees"), to receive orders from their customers on
the Fund's behalf for purposes of Rule 22c-1, so that any such customer will
receive the share price next computed by the Fund after the time at which such
customer places its order with the intermediary, as more specifically provided
in this Amendment. Schwab shall be liable to Fund Company and the Funds for
the observance of the terms of this Amendment by the Sub-Designee.
3. Receipt and Transmission of Orders. Schwab agrees that,
except as set forth in Section 4b below, (a) Orders received by Schwab or a Sub-
Designee prior to the close of the New York Stock Exchange (generally, 4:00 p.m.
Eastern Time) ("Market Close") on any Business Day will be transmitted by Schwab
to the Order Accepter by 8:00 p.m. Eastern Time on the same Business Day ("Day 1
Trades"); and (b) Orders received by Schwab or Sub-Designees after Market Close
on any Business Day will be transmitted by Schwab to the Order Accepter by 8:00
p.m. Eastern Time on the next Business Day ("Day 2 Trades").
4. Fund's Pricing of Orders.
a. Fund Company agrees that, except as set forth in Section
4b below, Day 1 Trades will be effected at the net asset value of each Fund's
shares ("Net Asset Value") calculated as of Market Close on Day 1, provided such
trades are received by the Order Acceptor by 8:00 p.m. Eastern Time on Day 1;
and Day 2 Trades will be effected at the Net Asset Value calculated as of Market
Close on Day 2, provided such trades are received by the Order Accepter by 8:00
p.m. Eastern Time on Day 2. Fund Company agrees that, consistent with the
foregoing, Day 1 Trades will have been received by the Fund prior to Market
Close on Day 1, and Day 2 Trades will have been received by the Fund prior to
Market Close on Day 2, for all purposes, including, without limitation,
effecting distributions.
b. Notwithstanding Sections 3 and 4a above, Fund
Company agrees that, if Schwab is prevented for transmitting Day 1 Trades to the
Order Accepter by 8:00 p.m. Eastern Time on Day 1 due to unforeseen
circumstances, such as computer system failures, natural catastrophes, or other
emergencies or human error, then Schwab may transmit such Day 1 Trades by 9:30
a.m. Eastern Time on Day 2, and such Day 1 Trades will be effected at the Net
Asset Value calculated as of Market Close on Day 1, provided that Schwab
notifies the Order Accepter of such contingency prior to 8:00 p.m. Eastern Time
on Day 1.
5. Settlement. In accordance with the Operating Agreement,
Schwab and Fund Company will settle Day 1 Trades on Day 2 and will settle Day 2
Trades on Day 3.
6. Representations and Warranties.
a. Fund Company represents and warrants that each Fund's
Board of Directors or Board of Trustees has authorized the Fund Company and each
Fund to enter into this Amendment, or will ratify the action of the Fund Company
and each Fund of entering into this Amendment within four months after the date
of this Amendment.
b. Fund Company represents and warrants that it will cause
each Fund's Board of Directors or Board of Trustees thereafter periodically to
review the terms of this Amendment.
c. Fund Company represents and warrants that the person
signing this Amendment on its behalf and on behalf of each Fund is an officer so
authorized to execute this Amendment.
x. Xxxxxx represents and warrants that Xxxxxx'x internal
control structure over the processing and transmission of Orders for Fund
transactions 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 to the Funds under Section 4b above.
x. Xxxxxx represents and warrants that it will cause an
independent public accountant or other qualified independent party annually to
review Xxxxxx'x internal controls and prepare a written report to Schwab
concerning their adequacy for the obligations undertaken by Schwab under this
Amendment.
x. Xxxxxx represents and warrants that it will also require
each Sub-Designee to retain an independent public accountant or other qualified
independent party annually to review Sub-Designee's internal controls and
prepare a written report to Schwab and the Sub-Designee concerning their
adequacy for the obligations undertaken by Sub-Designee as set forth in this
Amendment.
x. Xxxxxx represents and warrants that, upon its receipt of
its internal control report and those of any Sub-Designee, described in Sections
6d and 6e respectively, it will make them available to Fund Company or any Fund
upon request.
7. Prospectus Disclosure. Fund Company shall ensure that the
prospectus of each Fund adequately discloses that (i) the Fund has authorized
one or more brokers to accept on its behalf purchase and redemption orders; (ii)
that such brokers are authorized to designate other intermediaries to accept
purchase and redemption orders on the Fund's behalf; (iii) that the Fund will be
deemed to have received a purchase or redemption order when an authorized broker
or, if applicable, a broker's authorized designee, accepts the order; and (iv)
that customer orders will be priced at the Fund's Net Asset Value next computed
after they are accepted by an authorized broker or the broker's authorized
broker or the broker's authorized designee. This disclosure may be contained in
the Statement of Additional Information of the Fund ("SAI") if the SAI is
incorporated into the prospectus. If adequate disclosure is not currently
contained in the prospectus (including any incorporated SAI), then it may be
added at the next regular printing of the prospectus, provided such printing
occurs within a reasonable time after the date of this Amendment.
8. Effectiveness. This Amendment shall become effective 10
days after written notice by Schwab to Fund Company.
9. Effect of Amendment. This Amendment is intended to
amend and supplement the provisions of the Operating Agreement. In the event of
a conflict between the provisions of this Amendment and the provisions of the
Operating Agreement, the provisions of this Amendment shall control. All other
provisions of the Operating Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, this Agreement has been executed by a
duly authorized representative of the parties hereto.
XXXXXXX XXXXXX & CO., INC.
By: /s/Xxxx Xxxxx
Xxxx Xxxxx
Vice President/Mutual Funds
Operations Administration
Date: January 6, 1998
GREENSPRING FUND, INCORPORATED, on its own behalf and
on behalf of each Fund
By: /s/Xxxxxxx xX. Xxxxxxx
Xxxxxxx vK. Xxxxxxx
President
Date: October 17, 1997
