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MUTUAL FUND MARKETPLACE(R)
SERVICES AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
MUTUAL FUND MARKETPLACE(R)
SERVICES AGREEMENT
This Agreement is made as of______________ 199_, between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Co., Inc. ("Schwab"), a California corporation, each registered investment
company ("Fund Company") that has executed Schedule I ,on its own behalf and on
behalf of each of the series or classes of shares, if any, listed on Schedule I,
as amended from time to time (such series or classes being referred to as the
"Fund(s)"), and Fund Affiliate (defined below) that has executed this Agreement.
Fund Company and Fund Affiliate are collectively referred to herein as "Fund
Parties." In the event that there are no series or classes of shares listed on
Schedule I, the term "Fund(s)" shall mean "Fund Company".
WHEREAS Fund Affiliate is either (i) an investment adviser to or
administrator for the Funds or (ii) the principal underwriter or distributor for
the Funds.
WHEREAS Fund Parties wish to have Schwab perform certain recordkeeping,
shareholder communication, and other services for each Fund; and
WHEREAS Schwab is willing to perform such services on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services
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a. During the term of this Agreement, Schwab shall perform the
services set forth on Exhibit A hereto, as such exhibit may be amended from time
to time by mutual consent of the parties (the "Services").
b. In processing purchase, redemption, transfer and exchange orders
placed by Schwab on behalf of its customers, and in order to facilitate ▇▇▇▇▇▇'▇
performance of Services, the parties agree that the Operating Agreement, dated
as of _____________ 199_, between Schwab and Fund Company, as amended from time
to time ("Operating Agreement"), is incorporated herein by this reference. All
terms and conditions of the Operating Agreement shall be binding as between
Schwab and Fund Parties, and the references to Fund Company therein shall be
deemed to mean Fund Parties for the purposes of this Agreement. In the event of
any inconsistency between the Operating Agreement and this Agreement, this
Agreement shall control.
2. Fees
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For the Services, Schwab shall receive a fee (the "Fee") which shall
be calculated and paid in accordance with Exhibit B hereto. Schedule II reflects
the amount of the Fee that each Fund Party has agreed, as between them, to pay.
Should Exhibit A be amended to revise the Services, the parties shall also amend
Exhibit B and Schedule II, if necessary, in order to reflect any changes in the
Fee.
3. Transaction Charges
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Schwab shall not, during the term of this Agreement, assess against or
collect from its customers any transaction fee upon the purchase or redemption
of any Fund's shares that are considered in calculating the Fee. The parties
acknowledge and agree that Schwab may collect such transaction fees from certain
customers (including "Active Traders," as Schwab may define that term) for
certain special trading services and from other customers upon such other
customers' redemption of certain shares. The value of shares as to which such
transaction fees are charged will not be included in the calculation of the Fee.
4. Indemnification
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▇. ▇▇▇▇▇▇ shall indemnify and hold harmless Fund Parties and their
directors, officers, employees, and agents ("Indemnified Parties") from and
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against any claims, liabilities and expenses (including reasonable attorney's
fees) ("Losses") incurred by any of them arising out of (i) ▇▇▇▇▇▇'▇
dissemination of information regarding Fund Parties or a Fund that is incorrect
and that was not provided to Schwab, or approved, by a Fund Party, its
affiliated persons ("Affiliates") as defined under the Investment Company Act of
1940, as amended (the "1940 Act"), or agents or (ii) ▇▇▇▇▇▇'▇ willful misconduct
or negligence in the performance of, or failure to perform, its obligations
under this Agreement, except to the extent such Losses result from the
negligence, willful misconduct or breach of this Agreement by an Indemnified
Party.
b. In any event, no party shall be liable for any special,
consequential or incidental damages. In the event of a rescission offer, the
cost of the rescission offer and the mailing cost of such offer shall not be
considered special, consequential or incidental damages.
5. Role and Relationship of Schwab
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The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related services only
and are not the services of an underwriter or a principal underwriter of any
Fund within the meaning of the Securities Act of 1933, as amended, or the 1940
Act. This Agreement does not ▇▇▇▇▇ ▇▇▇▇▇▇ any right to purchase shares from any
Fund (although it does not preclude Schwab from purchasing any such shares), nor
does it constitute Schwab an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent Schwab is
involved in the purchase of shares of any Fund by ▇▇▇▇▇▇'▇ customers, such
involvement will be as agent of such customer only.
6. Information to be Provided
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Fund Parties shall provide to Schwab prior to the effectiveness of
this Agreement or as soon thereafter as practicable:
a. Certified resolutions of the board of directors of each Fund
Party authorizing the Fund Party to enter into this Agreement and indicating the
officers authorized to execute this Agreement on behalf of the Fund Party; and
b. Two (2) copies of the then-current prospectus and statement of
additional information of each Fund. Fund Party shall provide Schwab with
written copies of any amendments to or changes in the Fund's prospectus or
statement of additional information as soon as practicable after such amendments
or changes become available.
7. Notices
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All notices required by this Agreement (excluding the Operating
Agreement) shall be in writing and delivered personally or sent by first class
mail. Such notices will be deemed to have been received as of the earlier of
actual physical receipt or three (3) days after deposit, first class postage
prepaid, in the United States mail. All such notices shall be made:
if to Schwab, to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President/Mutual Funds
with a copy to: General Counsel, at the same address;
if to Fund Party, to the address given below in the signature block.
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8. Nonexclusivity
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Each Party acknowledges that the other may enter into agreements
similar to this Agreement with other parties for the performance of services
similar to those to be provided under this Agreement, unless otherwise agreed to
in writing by the parties.
9. Assignability
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This Agreement is not assignable by any party without the other
parties' prior written consents and any attempted assignment in contravention
hereof shall be null and void; provided, however, that Schwab may, without the
consent of Fund Parties, assign its rights and obligations under this Agreement
to any Affiliate.
10. Exhibits and Schedules
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All Exhibits and Schedules 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.
11. Entire Agreement; Amendment
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This Agreement (including the Exhibits and Schedules hereto), together
with the Operating Agreement, constitute the entire agreement between the
parties as to the subject matter hereof 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 Schwab and Fund Parties. 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.
12. Governing Law
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This Agreement will be governed by and interpreted under the laws of
the State of California as applied to contracts entered into and to be performed
entirely within that state.
13. Counterparts
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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.
14. Effectiveness of Agreement; Termination
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a. This Agreement will become effective as to a Fund as of the later
of (i) the date set forth on Schedule I opposite the name of the Fund or (ii)
such later date as Schwab may, in its discretion, designate.
b. This Agreement may be terminated as to a Fund by any party (i)
upon ninety (90) days' written notice to the other parties or (ii) 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 or (iii) automatically, effective on the
day following the termination of any plan of distribution ("Rule 12b-1 Plan")
adopted and maintained pursuant to Rule 12b-1 under 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.
c. After the date of termination as to a Fund, Fund Parties will not
be obligated to pay the Fee with respect to any shares of the Fund that are
first held in Schwab customer accounts after the date of such termination.
However, notwithstanding any such termination, Fund Parties will remain
obligated to pay Schwab the Fee as to each share of the Fund that was considered
in the calculation of the Fee as of the date of termination (a "Pre-Termination
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Share"), for so long as such Pre-Termination Share is held in any Schwab
brokerage account and Schwab continues to perform substantially all of the
Services as to such Pre-Termination Share. Further, for so long as Schwab
continues to perform the Services as to any Pre-Termination Shares, this
Agreement will otherwise remain in full force and effect as to such
Pre-Termination Shares. Fund Parties shall reimburse Schwab promptly for any
reasonable expenses Schwab incurs in effecting any termination of this
Agreement, including delivery to a Fund Party of any records, instruments, or
documents reasonably requested by the Fund Party.
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
The term "Fund" when it pertains to a
mutual fund means and refers to the
trustees from time to time serving By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
under the Master Trust Agreement of ---------------------------------
a Fund (organized as a Massachusetts ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
business trust), as the same may Vice President/Mutual Funds
from time to time be amended. It is
expressly agreed that the obligations Date: March 1, 1994
of a Fund hereunder shall not be
binding upon any trustees, share-
holders, nominees, officers, agents ▇▇▇ ▇▇▇ Associates Corp.
or employees of a Fund personally, ---------------------------------------
but bind only the assets and prop- Name of Fund Affiliate
erty of a Fund. The execution and
delivery of the Agreements by the
officers of each Fund have been By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
authorized by the trustees of each ---------------------------------
Fund, acting as such, and neither
such authorization by the trustees Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
or execution and delivery by any
such officer shall be deemed to Title: Senior Managing Director
have been made by any of them per-
sonally, but shall bind only the Address: ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
assets and property of a Fund as ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
provided in its Master Trust
Agreement. Attn:
---------------------------------
Date: March 16, 1994
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EXHIBIT A
SERVICES
1. Record Maintenance
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Schwab shall maintain the following records with respect to a Fund for
each customer who holds Fund shares in a Schwab brokerage account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions (including
dividend reinvestments) and dates and amounts of dividends paid for at least the
current year to date;
c. Name and address of the customer, including zip codes and social
security numbers or taxpayers identification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. Shareholder Communications
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Schwab shall:
a. Provide to a shareholder mailing agent employed by each Fund for
the purpose of mailing certain Fund-related materials the names and addresses of
all Schwab customers who hold shares of such Fund in their Schwab brokerage
accounts. Such shareholder mailing agent shall be a person or entity engaged by
such Fund in accordance with the Operating Agreement and the Fund-related
materials to be sent by such agent shall consist of updated prospectuses and any
supplements and amendments thereto, annual and other periodic reports, proxy or
information statements and other appropriate shareholder communications.
b. Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request and, as
applicable, with confirmation statements;
c. Mail statements to customers 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 customer and the net asset value of such Fund as of a
recent date;
d. Produce and mail to customers confirmation statements reflecting
purchases and redemptions of shares of each Fund in Schwab brokerage accounts;
e. Respond to customer inquiries regarding, among other things,
share prices, account balances, dividend amounts and dividend payment dates; and
f. With respect to Fund shares purchased by customers after the
effective date of this Agreement, provide average cost basis reporting to the
customers to assist them in preparation of income tax returns.
3. Transactional Services
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Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from its
customers. Schwab shall also communicate, as to shares of each Fund, mergers,
splits and other reorganization activities.
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4. Tax Information Returns and Reports
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Schwab 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.
5. Fund Communications
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Schwab shall, on a daily basis and for each Fund, report the number of
shares on which the Fee is to be paid pursuant to this Agreement and the number
of shares on which no such Fee is to be paid. Schwab shall also provide each
Fund with monthly summaries of reports. Such summaries shall be expressed in
both shares and dollar amounts.
A-2
EXHIBIT B
CALCULATION OF FEE
1. The Fee shall be calculated by multiplying the Daily Value of
Qualifying Shares (defined below) times the appropriate Fee Rate (indicated
below). The Fee shall be computed daily and paid monthly in arrears.
2. The Daily Value of Qualifying Shares is the aggregate daily value of
all shares of the Fund held in Schwab brokerage accounts, subject to the
following exclusions ("Qualifying Shares"). There shall be excluded from the
shares (i) shares as to which a brokerage customer paid Schwab a transaction fee
upon the purchase of such shares, (ii) shares held in a Schwab brokerage account
prior to the effective date of this Agreement as to the Fund and (iii) shares
first held in a Schwab brokerage account after the termination of this Agreement
as to the Fund.
3. The Fee Rate is determined based on the aggregate value of the
Qualifying Shares of all Funds listed on all Schedule I's, as amended from time
to time, as of the prior review date. The review dates are December 31 and June
30. The Fee Rate is effective from the next business day following the review
date up to and including the next review date. The Fee Rates are as follows:
Aggregate
Value of Qualifying Shares Fee Rate
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Up to and including $500 million 38 basis points per annum
Over $500 million 33 basis points per annum
The rate scale is not intended to produce a "blended rate". Rather, once a
threshold is reached, the rate applicable to the total amount of assets will be
used for all assets. Thus, if the aggregate value of Qualifying Shares of all
such Funds is $501 million as of a review date, the Fee Rate will be 33 basis
points (to be applied to the Daily Value of Qualifying Shares) until the next
review date.
4. For purposes of this Exhibit, the daily value of the shares of each
Fund will be the net asset value reported by such Fund to the National
Association of Securities Dealers, Inc. Automated Quotation System. No
adjustments will be made to the net asset values to correct errors in the net
asset values so reported for any day unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the first business day after the day to which the
error relates.
5. At the request of Fund Parties, Schwab shall provide, on each business
day, a statement detailing the calculation for each Fund, the aggregate value of
the Qualifying Shares of each Fund and the amount of the Fee for each Fund. As
soon as practicable after the end of the month, Schwab shall also provide to
Fund Parties an invoice for the amount of the Fee due for each Fund. In the
calculation of such Fee, ▇▇▇▇▇▇'▇ records shall govern unless an error can be
shown in the number of shares used in such calculation.
6. Fund Parties shall pay Schwab the Fee within thirty (30) days after
Fund Parties' receipt of such statement. Such payment shall be by wire transfer,
unless the amount thereof is less than $250. Such wire transfers shall be
separate from wire transfers of redemption proceeds or distributions under the
Operating Agreement. Amounts less than $250 may, at Fund Parties' discretion, be
paid by check.
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