APPENDIX B (FORM OF DEALER AGREEMENT)
DEALER AGREEMENT
AGREEMENT, made as of this ___ th day of ______________ , 2002, by and between
Gartmore Distribution Services, Inc., or its surviving entity ("Distributor")
and _______________ ("Dealer") whereby Dealer agrees to participate in the
distribution of the shares ("Shares") of the series and classes of Gartmore
Mutual 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.
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 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 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.
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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 the 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 the 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 the 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.
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 B
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 National Association of Securities
Dealers, Inc. ("NASD"). 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.
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(b) In addition to the compensation described in Section 4(a) above and
subject to any limitations set forth in the NASD'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 the Distributor, the
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").
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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 NASD and shall immediately notify
Distributor should it cease to be a member of the NASD;
(c) Dealer is and shall remain throughout the term of this Agreement a
broker-dealer 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 NASD, 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.
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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, 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 the 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.
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13. Complete Agreement. This Agreement supersedes and cancels any prior
agreement with respect to the sale of Shares of a Fund as listed in Exhibit
A, 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. Confidentiality Terms. 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 (all the foregoing referred to as
"Privacy Law") the parties wish to include the confidentiality and
non-disclosure obligations set forth herein.
(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, health information and
personal financial information (which may include consumer account
number).
(b) Usage. The parties understand and acknowledge that they may be
financial institutions subject to Privacy Law, and any Customer
Information that one party receives from the other party is
received with limitations on its use and disclosure. The parties
agree that they are prohibited from using the Customer Information
received from the other party other than:
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1) as required by law, regulation or rule (including any
anti-money laundering laws), or
2) to carry out the purposes for which one party discloses
Customer Information to the other party under
selling/dealer agreement(s), including use under an
exception permitted by Privacy Law in the ordinary course
of business to carry out the purposes of such
Agreement(s).
(c) Nondisclosure. Subject to the provisions of Usage above, the
parties will not disclose the Customer Information to any other
person without prior written permission from the other party.
(d) 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.
(e) Survivability. The provisions of this Confidentiality Section
(paragraph 17) shall survive the termination of the Agreement.
18. Anti-Money Laundering Programs. The Parties have each adopted and
implemented anti-money laundering and customer identification policies,
procedures and controls that comply and will continue to comply in all
respects with the requirements of applicable anti-money laundering laws
and regulations. Each Party will at all times during its relationship
with the other Party strictly adhere to its respective anti-money
laundering policies, procedures and controls.
(a) Anti-Money Laundering Policies. Each Party hereby represents and
warrants that it has anti-money laundering and customer
identification policies, and procedures, which are in compliance
with federal, state and local laws and regulations, as amended.
(b) Due Diligence. Prior to opening an account for a Customer, the
Dealer shall collect the information required under 31 CFR ss.
103.131(b)(2)(i) and provide adequate notice to the Customer as
required 31 CFR ss. 103.131)b)(5). The Dealer will verify the
identities of, and conduct due diligence (and, where appropriate,
enhanced due diligence) with regard to, all prospective Customers
and, where applicable, the principal beneficial owners on whose
behalf a Customer makes an investment in accordance with its
anti-money laundering policies, procedures and controls, and this
Amendment.
(c) Anti-Money Laundering Records. The Dealer will hold evidence of
the identities of each Customer and, where applicable, the
beneficial owners on whose behalf a Customer makes an investment,
in accordance with its anti-money laundering policies, procedures
and controls, and this Amendment, and maintain such evidence for
at least five years following a Customer's final redemption from a
Fund. The Dealer shall make such information available to the
Distributor promptly upon request without violating any Privacy
Laws as described in Section 17.
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(d) Prohibited Customers. The Dealer will take all reasonable and
practicable steps to ensure that it does not accept or maintain
investments in any Fund, directly or indirectly, from:
1) A person or entity whose name appears on:
(i) the List of Specially Designated Nationals and
Blocked Persons maintained by the U.S. Office of
Foreign Assets Control ("OFAC") and any other
prohibited lists determined by such office;
(ii) such other lists of prohibited persons and entities
as may be mandated by applicable U.S. law or
regulation; or
(iii) such other lists of prohibited persons and entities
as may be provided to the Dealer by the Distributor;
2) A foreign shell bank (i.e., a bank with no physical
presence in any country); or
3) A person or entity resident in, or whose subscription
funds originate from, a country or territory that appears
on a list maintained by the Financial Action Task Force on
Money Laundering ("Non-Cooperative Jurisdiction").
(e) Notification. The Dealer will immediately notify the Distributor
who will in turn notify the Anti-Money Laundering Compliance
Officer of the Distributor if it knows, or has reason to suspect,
that a prospective or existing Customer, or the principal
beneficial owners on whose behalf a prospective or existing
Customer has made or is attempting to make, an investment, is
person or entity whose name appears on:
1) The List of Specially Designated Nationals and Blocked
Persons maintained by OFAC or any other prohibited lists
determined by OFAC;
2) Such other lists of prohibited persons and entities as may
be mandated by applicable law or regulation;
3) Such other lists of prohibited persons and entities as may
be provided by the Distributor;
4) A person or entity resident in, or organized or chartered
under the laws of, a Non-Cooperative Jurisdiction;
5) A person or entity resident in, or organized or chartered
under the laws of, a jurisdiction that has been designated
by the Secretary of the Treasury under Sections 311 or 312
of the USA PATRIOT Act as warranting special measures due
to money laundering concerns; or
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6) A person or entity who gives the Dealer reason to believe
that its subscription funds originate from, or are routed
through, an account maintained at a Foreign Shell Bank, an
offshore bank, or a bank organized or chartered under the
laws of a Non-Cooperative Jurisdiction.
(f) Suspicious Activity. The Dealer will immediately notify the
Distributor who will then in turn notify the Anti-Money Laundering
Compliance Officer of the Distributor if it becomes aware of any
suspicious activity or pattern of activity or any activity that
may require further review to determine whether it is suspicious.
(g) Survivability. The provisions of this Anti-Money Laundering
Section (paragraph 18) shall survive the termination of the
Agreement.
19. 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.
20. Acceptance of Agreement. The parties may enter into this Amendment by
executing this document. In addition, the Dealer's placement of an order or
acceptance of payments of any kind after the Dealer's receipt of this
Amendment shall constitute the 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,
Gartmore Distribution Services, Inc. ________________________
0000 Xxxxx Xxxx ________________________
Xxxxxxxxxxxx, XX 00000 ________________________
________________________
By: Xxxxxx Xxxxxxx
Senior Vice President By:____________________
_________________________________ _______________________
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EXHIBIT A
Any and all Gartmore 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 defined in the fund's prospectus.
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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. Distributor shall perform any and all duties, functions, procedures and
responsibilities assigned to it under this Agreement and as otherwise
established by the NSCC. 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.
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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
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
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.
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(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. 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.
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(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 C 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 or 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.
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