1 Draft - 1/30/96
ALPS Mutual Funds Services, Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
INVESTOR SERVICES AGREEMENT
Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
As distributor and principal underwriter of The CountryBasketsSM
Index Fund, Inc. (the "Fund"), a management investment company organized in
multiple series and registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), we wish to enter into this Investor Services
Agreement (this "Agreement") with you concerning (i) your provision of
broker-dealer and shareholder support services to your clients ("Clients")
who may from time to time beneficially own issued and outstanding shares of
common stock (the "CB SharesSM" or "CountryBasketsSM") of the initial nine
series of the Fund indicated on Appendix A hereto (each, an "Initial
Series"), and each additional series subsequently established by the Fund
and made subject to this Agreement in accordance with Section 10 (each, an
"Additional Series" and, together with the Initial Series, the "Series"),
and (ii) your educational and promotional activities in the secondary
market for CB SharesSM listed and traded on the New York Stock Exchange (the
"NYSE"). Pursuant to a Marketing Agreement (the "Marketing Agreement")
between us and the Fund we will provide various marketing and shareholder
services with respect to the CB SharesSM. Capitalized terms, unless
otherwise defined herein, shall have the meanings attributed to them in the
Fund's current prospectus and statement of additional information.
This Agreement is a related agreement as contemplated by Rule
12b-1 under the 1940 Act with respect to the Rule 12b-1 plan (each a "12b-1
Plan" and together the "12b-1 Plans") of each Initial Series of the Fund
and, subject to the approval of the Board of Directors pursuant to
Rule 12b-1, each Additional Series. Both you and we and the Fund expect
that your services and educational and promotional activities in connection
with CB SharesSM pursuant to this Agreement will tend to increase investor
interest in and the use and trading of CB SharesSM on the secondary market
and thus further sales of shares of the Fund.
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The terms and conditions of this Agreement are as follows:
Section 1. The services you agree to provide to the Fund with
respect to each Series shall include: (a) broker/dealer and shareholder
support services to Clients in connection with the outstanding and issued
CB SharesSM, including one or more of the following: (i) distributing
prospectuses and shareholder reports to current shareholders;
(ii) processing dividend and distribution payments on behalf of Clients;
(iii) providing information periodically to Clients showing their positions
in CB SharesSM; (iv) at your discretion, providing and maintaining elective
services such as check writing on the Client's account and wire transfer
services; (v) acting as nominee for Clients; (vi) maintaining account
records for Clients; (vii) issuing confirmations of transactions;
(viii) providing account information with respect to CB SharesSM
beneficially owned by Clients; (ix) if required by law, forwarding
shareholder communications from us or on behalf of the Fund (such as
proxies, shareholder reports, annual and semi-annual financial statements
and dividend, distribution and tax notices); (x) providing services
primarily intended to result in the sale of CB SharesSM; (xi) assisting
shareholders who wish to aggregate sufficient CB SharesSM of a Series to
constitute a Creation Unit for redemption; and (xii) such other services
analogous to the foregoing as you customarily provide to Clients with
respect to holdings of shares of open-end investment companies or exchange-
listed stocks or as the Fund and you may agree from time to time to the
extent you are permitted to do so under applicable statutes, rules and
regulations; and
(b) educational and promotional services related to the secondary market
trading of CB SharesSM, including the following: (i) facilitating access
for investor relations representatives for CB SharesSM to designated Xxxxx
Xxxxxx branches for the purpose of broker education, including through
sales meetings and, one-on-one broker contact; and (ii) during the first
180 days following the initial sale of Creation Units of the Initial
Series, providing sales incentives to your brokers, all pursuant to
arrangements set forth in a letter from you to us.
Mutual understandings between you and the Adviser with respect
to educational and promotional services related to secondary market trading
of CB SharesSM to be performed by you, including, but not limited to,
(i) making your country allocation research available widely through your
internal systems; (ii) working with us and the Adviser to facilitate the
flow of CountryBasketsSM data through your internal
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information systems, which information shall include specified CB SharesSM
data and may also include composite data and other research and news; and
(iii) certain activities of management promoting use of CB SharesSM as a
trading and portfolio diversification tool, shall be set forth in a
separate agreement (the "Branch Marketing Contract") between the Adviser
and you.
Section 2. You will provide such office space and equipment,
telephone facilities and personnel (which may be any part of the space,
equipment and facilities currently used in your business, or any personnel
employed by you) as may be reasonably necessary or beneficial in order to
provide the services to Clients described in Section 1.
Section 3. (a) Pursuant to the terms of the 12b-1 Plans,
during the initial twelve months thereunder, the Fund is expected to have
available 0.05% of the average aggregate daily net assets over $200 million
of the Initial Series for expenditures for sales, advertising and marketing
materials. Such materials are expected to be produced pursuant to
arrangements which may be entered into by the Fund either through us as
Distributor and under the Marketing Agreement or with third parties,
including the Adviser; additional amounts may be made available by such
third parties for the costs of advertising and marketing materials related
to the CB SharesSM. Such sales, advertising and marketing materials are
expected to include customer and account executive brochures, materials for
sales presentations, videotapes, print advertisements in national
publications and radio and TV advertising. Mutual understandings with
respect to the sales, advertising and marketing materials which may be
provided to you in connection with your services hereunder shall be set
forth in the Branch Marketing Contract.
(b) Pursuant to the Marketing Agreement, we expect to retain
appropriate investor representatives and marketing staff to provide sales
and marketing support with respect to CB SharesSM. In accordance therewith,
we will make available their services to conduct the broker education
program for your sales staff described in the Branch Marketing Contract.
Section 4. You and your officers, employees and agents will
not make any representations on our behalf or the Fund's, or as authorized
by us, the Fund or the Adviser, except those contained in the Fund's then
current prospectus and statement of additional information for such CB
SharesSM or in such sales, marketing or advertising materials as may be
authorized by us and the Fund in writing, including those referred to in
Section 3 hereof. You understand that neither the Fund nor any Series will
be advertised or
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marketed as an open-end investment company, i.e., as a mutual fund, which
offers redeemable securities. Any advertising materials, including the
Fund prospectus, will prominently disclose that the CB SharesSM are not
redeemable units of beneficial interest in the Fund. In addition, any
advertising material, including the Fund prospectus, will disclose that the
owners of CB SharesSM may acquire and tender those shares for redemption to
the Fund in Creation Unit aggregations only.
Section 5. For all purposes of this Agreement, you will be
deemed to be an independent contractor, and will have no authority to act
as agent, partner, joint venture participant or in any similar capacity for
us in any matter or in any respect. You and your officers and employees
will, upon request, be available during normal business hours to consult
with us or our designees concerning the performance of our responsibilities
under this Agreement.
Section 6. In consideration of the services and facilities
provided by you hereunder, subject to the terms and conditions of the 12b-1
Plans, the Fund has agreed pursuant to an agreement with you of this date
(the "Fund Payment Agreement") to compensate you on behalf of the Initial
Series directly for the services performed under this Agreement and you
agree to accept as full payment therefor, a fee at the annual rate of 0.05
of 1% of the average aggregate daily net assets over $200 million of all
Initial Series, computed daily and payable on a quarterly basis. If this
Agreement is renewed in accordance with Section 10 hereof and the Fund
Payment Agreement is renewed in accordance with the terms thereof, the Fund
pursuant to the Fund Payment Agreement and subject to the terms and
conditions of the 12b-1 Plans will compensate you for any subsequent
twelve-month period hereunder at the rate of 0.05 of 1% of the average
aggregate daily net assets over $200 million of all Initial Series, subject
to review by the Board of Directors of the Fund. In the event that any
Additional Series becomes subject to this Agreement, the Fund has also
agreed pursuant to the Fund Payment Agreement to pay you for the services
and facilities to be provided by you hereunder with respect to such
Additional Series a fee at the rate set forth in the 12b-1 Plan approved by
the Board of Directors of the Fund with respect to such Additional Series.
Section 7. You will provide to us and the Fund's Board of
Directors, and we and the Fund's Directors will review, at least quarterly,
a written report of the amounts so expended and the purposes for which such
expenditures were made. In addition, you will furnish us or our
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designees with such information as we or they may reasonably request
(including, without limitation, periodic certifications confirming the
provision to Clients by you or your agents of the services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us or the Fund), in
connection with preparation of reports to the Fund's Board of Directors
concerning this Agreement and the Fund Payment Agreement and the monies
paid or payable to you by the Fund in connection with your services
hereunder as well as any other reports or filings that may be required by
law.
Section 8. By your written acceptance of this Agreement, you
represent, warrant and agree that you understand that this Agreement is a
Rule 12b-1 related agreement under the 1940 Act, subject to the provisions
of such Rule, as well as any other applicable rules or regulations of the
Securities and Exchange Commission; agree to conform to the reasonable
applicable compliance standards adopted by us for sale of CB SharesSM, as in
effect from time to time, provided that you shall be given the opportunity
to review and discuss with our counsel prior to their adoption any such
compliance standards proposed after the date hereof that will be applicable
to the activities to be performed by you hereunder; and agree to comply
with applicable federal and state securities laws and regulations
pertaining to transactions in CB SharesSM.
Section 9. [RESERVED]
Section 10. Unless sooner terminated, this Agreement will
continue for one year following the date of its adoption as provided in
Section 13, and thereafter will continue automatically for successive
annual periods provided such continuance is specifically approved at least
annually by the Fund in the manner described in Section 12 hereof. This
Agreement is terminable, without penalty, at any time (a) by the Fund with
respect to any Series of CB SharesSM (which termination may be by a vote of
a majority of the Disinterested Directors (as defined in Section 13 hereof)
or by vote of the holders of a majority of the voting securities (as such
term is defined in the 0000 Xxx) of such Series) or by you upon 60 days'
notice in writing to the other party hereto or (b) upon the termination of
the Distribution Agreement between the Fund and us or the Branch Marketing
Contract. This Agreement will also terminate automatically in the event of
its assignment (within the meaning of the 1940 Act). This Agreement may be
amended in writing by the parties hereto. In the event that the Board of
Directors of the Fund establishes any series of CB
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SharesSM listed and traded on the NYSE or any other national securities
exchange in addition to the Series then subject to this Agreement, adopts a
12b-1 Plan with respect to such additional series and approves this
Agreement and the Fund Payment Agreement as "related agreements" with
respect to such additional series in accordance with Rule 12b-1, such
additional series shall be made subject to this Agreement and shall become
an "Additional Series" hereunder effective immediately upon such adoption
and approval.
Section 11. All notices and other communications to either you
or us will be duly given if mailed, telegraphed, telexed or transmitted by
similar telecommunications device to us at the address shown above and to
you at the address shown below.
Section 12. This Agreement will be construed in accordance
with the laws of the State of New York.
Section 13. This Agreement, and each Rule 12b-1 Plan, is
subject to approval by vote of (i) the Fund's Board of Directors and
(ii) of a majority of those Directors who are not "interested persons" (as
defined in the 0000 Xxx) of the Fund and have no direct or indirect
financial interest in the operation of the 12b-1 Plans adopted by the Fund
regarding the provision of support services to the beneficial owners of CB
SharesSM of the respective Series or in any agreement related thereto
("Disinterested Directors") cast in person at a meeting called for the
purpose of voting on such approval.
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If you agree to be bound by the provisions for this Agreement,
please sign a copy of this letter where indicated below and promptly return
it to us, c/o ALPS Mutual Funds Services, Inc., 000 00xx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxx 00000.
Very truly yours,
ALPS MUTUAL FUNDS SERVICES, INC.
Date: By:
Authorized Officer
Accepted and Agreed to:
XXXXX XXXXXX INC.
Date: By:
Authorized Officer
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Appendix A
Investor Services Agreement
CB SharesSM
NYSE CUSIP
Series Symbol No.
Australia Index Series GXA 22236E10 9
France Index Series GXF 22236E20 8
Germany Index Series GXG 22236E30 7
Hong Kong Index Series GXH 22236E40 6
Italy Index Series GXI 22236E50 5
Japan Index Series GXJ 22236E60 4
South Africa Index GXR 22236E70 3
Series
UK Index Series GXK 22236E80 2
US Index Series GXU 22236E88 5
