EXHIBIT H(2)
FORM OF
FINANCIAL INSTITUTION AGENCY AGREEMENT
This Agreement is entered into between the financial institution executing
this Agreement ("Financial Institution") and Bear, Xxxxxxx & Co. Inc. ("BSC")
for the mutual funds (referred to individually as the "Fund" and collectively as
the "Funds") for which BSC serves as Distributor of shares of beneficial
interest or capital stock ("Shares"). The Funds include, but are not limited
to, those offered as part of The Bear Xxxxxxx Funds.
1. Status of Financial Institution as "Bank" or Registered Broker-Dealer.
The Financial Institution represents and warrants to BSC that:
(a) It is either a "bank" as that term is defined in Section 3(a)(6) of
the Securities Exchange Act of 1934 (the "Exchange Act") or a broker-
dealer registered with the Securities and Exchange Commission.
(b) If the Financial Institution is a "bank", it is a duly organized and
validly existing bank in good standing under the laws of the
jurisdiction in which it is organized. The Financial Institution
agrees to give written notice to BSC promptly in the event that it
shall cease to be a "bank" as defined in Section 3(a)(6) of the
Exchange Act. In that event, this Agreement shall be automatically
terminated upon such written notice.
(c) If the Financial Institution is a registered broker-dealer, it is a
member of the National Association of Securities Dealers, Inc.
("NASD") and it agrees to abide by all of the rules and regulations of
the NASD including, without limitation, the NASD Conduct Rules. The
Financial Institution agrees to notify BSC immediately in the event of
(1) its expulsion or suspension from the NASD, or (2) its being found
to have violated any applicable federal or state law, rule or
regulation arising out of its activities as a broker-dealer or in
connection with this Agreement, or which may otherwise affect in any
material way its ability to act in accordance with the terms of this
Agreement. The Financial Institution's expulsion from the NASD will
automatically terminate this Agreement immediately without notice.
Suspension of the Financial Institution from the NASD for violation of
any applicable federal or state law, rule or regulation will terminate
this Agreement effective immediately upon BSC's written notice of
termination to the Financial Institution.
2. Financial Institution Acts as Agent for its Customers.
The parties agree that in each transaction in the Shares of any Fund: (a)
the Financial Institution is acting as agent for the customer; (b) each
transaction is initiated solely upon the order of the customer; (c) as between
the Financial Institution and its customer, the customer will have full
beneficial ownership of all Shares of the Funds; (d) each transaction shall be
for the account of the customer and not for the Financial
Institution's account; and (e) each transaction shall be without recourse to the
Financial Institution provided that the Financial Institution acts in accordance
with the terms of this Agreement. The Financial Institution shall not have any
authority in any transaction to act as BSC's agent or as agent for the Funds.
3. Execution of Orders for Purchase and Redemption of Shares.
(a) The procedures relating to all orders and the handling of them will be
subject to the terms of the relevant Prospectus and Statement of
Additional Information as most currently amended or supplemented
("SAI") and BSC's written instructions to the Financial Institution
from time to time.
(b) All orders for the purchase of any Shares shall be executed at the
then current public offering price per share (i.e., the net asset
value per share plus the applicable sales load, if any) subject to the
minimum investment amount set forth in the relevant Prospectus and SAI
and subject to any waivers or reductions of sales load (the "Sales
Load") or dealer allowances (the "Dealer Allowances") as described in
the relevant Prospectus and SAI as amended from time to time and all
orders for the redemption of any Shares shall be executed at the net
asset value per share, plus any applicable redemption charge, in each
case as described in the relevant Prospectus and SAI. Any amendment to
a Prospectus which affects the Sales Load, Dealer Allowances, waivers
or discounts shall not affect the Sales Load, Dealer Allowances,
discounts or waivers with respect to sales on which orders have been
accepted by BSC prior to the date of notice of such amendment. The
Financial Institution's placement of an order for Shares after the
date of any notice of such amendment shall conclusively evidence the
Financial Institution's agreement to be bound thereby. The Funds and
BSC reserve the right to modify any minimum investment requirements,
the subsequent investment requirements, the manner in which Shares are
offered and the Sales Load rates applicable to future purchase of
Shares. The Financial Institution acknowledges that the amounts
charged to the public for Shares may include such transaction fees
("Transaction Fees") as may be described in the relevant Prospectus
and SAI. In addition, the Financial Institutions may make available
Shares through a "no transaction fee" program, to the extent permitted
in a Fund's Prospectus or SAI. BSC shall make a reasonable effort to
notify the Financial Institution of any redetermination or suspension
of the public offering price, but BSC shall be under no liability for
failure to do so. Reduced Sales Loads also may be available as a
result of a cumulative discount or pursuant to a right of accumulation
as set forth in the relevant Prospectus. The Financial Institution
agrees to advise BSC promptly as to the amounts of any sales made by
you to the public qualifying for reduced Sales Loads. BSC and the
Funds reserve the right to reject any purchase request at their sole
discretion. If required by law, each transaction shall be confirmed in
writing on a fully disclosed basis and, if confirmed by BSC, a copy of
each confirmation shall be sent
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simultaneously to the Financial Institution if the Financial
Institution so requests.
(c) Upon receipt from the Financial Institution of any order to purchase
Shares and, if a new account, an Account Information Form, BSC shall
confirm such order to the Financial Institution in writing or by wire
to be followed by a confirmation in writing. If any such orders are
faxed to the Transfer Agent, they must be transmitted no later than
4:00 p.m. Eastern Standard Time. Any faxes sent to the Transfer Agent
must be followed with a phone call to confirm receipt. Additional
instructions may be forwarded to the Financial Institution from time
to time. Payment for Shares ordered from BSC shall be made in Federal
Funds and must be received by the Funds' agent, PFPC Inc., within
three business days of a receipt and acceptance by BSC of an order. If
payment in Federal Funds is not received by the third business day
after the Subscription Date or, in the case of orders, within three
days after the execution of the order described in this paragraph
3(c), BSC reserves the right, without notice, to cancel the sale and
to hold the Financial Institution responsible for any loss sustained
as a result thereof.
(d) The Financial Institution agrees to provide such security as is
necessary to prevent any unauthorized use of the Funds' recordkeeping
system, accessed via any computer hardware or software provided to the
Financial Institution by BSC.
4. Fees Payable to the Financial Institution from Sales Loads.
On each order accepted by BSC, in exchange for the performance of sales
and/or administrative services, the Financial Institution will be entitled to
receive that portion of the Sales Load allocated to Authorized Dealers as set
forth in the relevant Prospectus in connection with purchases of Shares effected
by or through the Financial Institution. The Financial Institution acknowledges
that the Prospectuses will set forth a description of waivers or reduction of
the Sales Load in certain cases and the Financial Institution hereby waives such
portion of the Sales Load otherwise allocated to it. BSC will promptly remit or
cause to be remitted to the Financial Institution, by wire transfer of same day
funds to an account the Financial Institution shall designate, that portion of
the Sales Load or Transaction Fees, if any, to which the Financial Institution
is entitled, after deduction of the portion allocated to BSC, which was received
by BSC and was not yet paid to the Financial Institution.
5. Payment of Rule 12-b Fees and Shareholder Servicing Fees to the Financial
Institution.
(a) Subject to and in accordance with the terms of each relevant
Prospectus and SAI, the Rule 12b-1 Plan, if any adopted by resolution
of the Board of Directors or Trustees of any Fund pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, BSC may
pay fees to certain financial institutions (such as banks and
securities dealers) for
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services as described in the Relevant Prospectus and SAI. To the
extent the Financial Institution provides services of the type
contemplated by the 12b-1 Plan, it may be entitled to receive
compensation from BSC as set forth in the 12b-1 Plan. All
compensation, including fees under the l2b-1 Plan, shall be payable to
the Financial Institution only to the extent that funds are received
and are in the possession of BSC.
(b) Those Series or Classes set forth as having a Shareholder Servicing
Plan have adopted such as plan as described in the relevant Prospectus
and SAI. To the extent that the Financial Institution provides
services of the type contemplated by the Shareholder Servicing Plan,
it may be entitled to receive compensation from BSC as set forth in
the Shareholder Servicing Plan. Such services may include: (i)
establishing and maintaining accounts and records relating to
shareholders; (ii) processing dividend and distribution payments from
the Trusts on behalf of shareholders; (iii) providing information
periodically to shareholders showing their positions in shares and
integrating such statements with those of other transactions and
balances in shareholders' other accounts serviced by such financial
institution; (iv) arranging for bank wires; (v) responding to
shareholder inquiries relating to the services performed; (vi)
responding to routine inquiries from shareholders concerning their
investments; (vii) providing subaccounting, with respect to shares
beneficially owned by shareholders, or the information to the Funds
necessary for subaccounting; (viii) if required by law, forwarding
shareholder communications from the Funds (such as proxies,
shareholder reports, annual and semi-annual financial statements and
dividend, distribution and tax notices) to shareholders; (ix)
assisting in processing purchase, exchange and redemption requests
from shareholders and in placing such orders with our service
contractors; (x) assisting shareholders in changing dividend options,
account designations and addresses; (xi) providing shareholders with a
service that invests the assets of their accounts in shares pursuant
to specific or pre-authorized instructions; and (xii) providing such
other similar services as the Funds or BSC may reasonably request to
the extent you are permitted to do so under applicable statutes, rules
and regulations. All compensation, including the fees under the
Shareholder Servicing Plan, shall be payable to the Financial
Institution only to the extent that funds are received and are in the
possession of BSC.
6. Undertakings.
(a) The Financial Institution will deliver or cause to be delivered to
each customer, at or prior to the time of any purchase of Shares, a
copy of the prospectus of the Fund. The Financial Institution will
deliver thereafter to any customer whose Shares it is holding as
record holder copies of the annual and interim reports and proxy
solicitation materials relating to Shares. The Financial Institution
shall not make any representations concerning any Shares other than
those contained in the prospectus of
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the applicable Fund or in any promotional materials or sales
literature furnished to the Financial Institution by BSC or the Fund.
(b) The Financial Institution agrees to keep an accurate record of
distributions (including dates, number of copies and persons to whom
sent) of copies of any Prospectus (and any SAI) for each Fund (or any
amendment or supplement) and, promptly upon request by BSC, to bring
all subsequent changes to such Prospectus to the attention of anyone
to whom such material shall have been distributed. The Financial
Institution further agrees to furnish to persons who receive a
confirmation of sale of Shares of any Fund a copy of the Prospectus
(and not the SAI for such fund of the Trusts filed pursuant to Rule
497 under the Securities Act of 1933, as amended).
7. Indemnification.
(a) The Financial Institution shall indemnify and hold harmless BSC, each
Fund, the transfer agents of the Funds, and their respective
subsidiaries, affiliates, officers, directors, agents and employees
from all direct or indirect liabilities, losses or costs (including
attorneys fees) arising from, related to or otherwise connected with:
(1) any breach by the Financial Institution of any provision of this
Agreement; or (2) any actions or omissions of BSC, any Fund, the
transfer agents of the Funds, and their subsidiaries, affiliates,
officers, directors, agents and employees in reliance upon any oral,
written or computer or electronically transmitted instructions
believed to be genuine and to have been given by or on behalf of the
Financial Institution.
(b) BSC shall indemnify and hold harmless the Financial Institution and
its subsidiaries, affiliates, officers, directors, agents and
employees from and against any and all direct or indirect liabilities,
losses or costs (including attorneys fees) arising from, related to or
otherwise connected with: (1) any breach by BSC of any provision of
this Agreement; or (2) any alleged untrue statement of a material fact
contained in any Fund's Registration Statement or Prospectus, or as a
result of or based upon any alleged omission to state a material fact
required to be stated, or necessary to make the statements not
misleading.
(c) The agreement of the parties in the to indemnify each other is
conditioned upon the party entitled to indemnification (the
"Indemnified Party") giving notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after the summons
or other first legal process or any claim as to which indemnity may be
sought is served on the Indemnified Party. The Indemnified Party shall
permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting from it, provided that counsel for the
Indemnifying Party who shall conduct the defense of such claim or
litigation shall be approved by the Indemnified
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Party (which approval shall not unreasonably be withheld), and that
the Indemnified Party may participate in such defense at its own
expense. The failure of the Indemnified Party to give notice as
provided in this subparagraph (c) shall not relieve the Indemnifying
Party from any liability other than its indemnify obligation under
this Paragraph. No Indemnifying Party, in the defense of any such
claim or litigation, shall, without the consent of the Indemnified
Party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term the giving by the
claimant or plaintiff to the Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) The provisions of this Paragraph 7 shall survive the termination of
this Agreement.
8. Customer Names Proprietary to the Financial Institution.
(a) The names of the Financial Institution's customers are and shall
remain the Financial Institution's sole property and shall not be used
by BSC or its affiliates for any purpose except the performance of its
duties and responsibilities under this Agreement and except as
required by applicable federal or state law, rule, or regulation and
except for servicing and informational mailings relating to the Funds.
Notwithstanding the foregoing, this Paragraph 8 shall not prohibit BSC
or any of its affiliates from utilizing the names of the Financial
Institution's customers for any purpose if the names are obtained in
any manner other than from the Financial Institution pursuant to this
Agreement.
(b) Neither party shall use the name of the other party in any matter
without the other party's written consent, except as required by any
applicable federal or state law, rule or regulation, and except
pursuant to any mutually agreed upon promotional programs.
(c) The provisions of this Paragraph 8 shall survive the termination of
this Agreement.
9. Solicitation of Proxies.
The Financial Institution agrees not to solicit or cause to be solicited
directly, or indirectly, at any time in the future, any proxies from the
shareholders of any or all of the Funds in opposition to proxies solicited by
management of the Fund or Funds, unless a court of competent jurisdiction shall
have determined that the conduct of a majority of the Board of Directors or
Trustees of the Fund or Funds constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties. This Paragraph 9 will survive
the termination of this Agreement.
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10. Certification of Customers' Taxpayer Identification Numbers.
The Financial Institution agrees to obtain any taxpayer identification
number certification from its customers required under Section 3406 of the
Internal Revenue Code of 1986, as amended, and any applicable Treasury
regulations, and to provide BSC or its designee with timely written notice of
any failure to obtain such taxpayer identification number certification in order
to enable the implementation of any required backup withholding.
11. Notices.
Except as otherwise specifically provided in this Agreement, all notices
required or permitted to be given pursuant to this Agreement shall be given in
writing and delivered by personal delivery by postage prepaid, registered or
certified United States first class mail, return receipt requested, by
facsimile, telegram or similar means of same day delivery (with a confirming
copy by mail as provided herein). Unless otherwise notified in writing, all
notices to BSC shall be given or sent to BSC at its offices located at
_____________________________, and all notices to the Financial Institution
shall be given or sent to it at its address shown below.
12. Termination and Amendment.
(a) This Agreement shall become effective in this form as of the date set
forth below and may be terminated at any time by either party upon
thirty (30) days' prior notice to the other party. This Agreement
supersedes any prior sales agreements between the parties.
(b) This Agreement may be amended by BSC from time to time by the
following procedure. BSC will mail a copy of the amendment to the
Financial Institution's address, as shown below. If the Financial
Institution does not object to the amendment within thirty (30) days
after its receipt, the amendment will become part of the Agreement.
The Financial Institution's objection must be in writing and be
received by BSC within such thirty (30) days.
13. Arbitration.
(a) Any controversy or claim arising out of or relating to this Agreement,
or any breach thereof, shall be settled by arbitration in accordance
with the Rules of the American Arbitration Association. Such
arbitration shall be commenced within one year after the cause of
action forming the basis of the controversy or claim accrued. The
arbitration shall be conducted in New York, New York before three
arbitrators, all of whom shall be from the securities industry.
Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.
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14. Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York.
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The Financial Institution acknowledges that it is confirming its agreement
by signing and returning to BSC the two enclosed duplicate copies of this
Agreement. Upon BSC's acceptance hereof the Agreement shall constitute a valid
and binding contract between the Financial Institution and BSC. After
acceptance, BSC will deliver to the Financial Institution one fully executed
copy of the Agreement.
_________________________________
Financial Institution Name
(Please Print or Type)
_________________________________
Address
_________________________________
City State Zip Code
By: ______________________________
Authorized Signature
_________________________________
Title
_________________________________
Please Print or Type Name
BEAR, XXXXXXX & CO. INC.
Date:______________________ By: _____________________________
_____________________________
Title
_____________________________
Please Print or Type Name
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