Exhibit 9(vii) under Form N-1A
Exhibit 10 Under Item 601/Reg. S-K
SERVICES AGREEMENT
This Agreement is made as of the day of , 199
between (i) the undersigned entity identified in the signature block below
under the heading `Fund Party'', and (ii) Xxxxxxx Xxxxxx & Co., Inc.
(`Schwab''), a California corporation.
RECITALS
A. Fund Party is the principal underwriter or distributor for an
open-end investment company with one or more series or classes of shares
(each such series or class of shares identified on Schedule I hereto, as
amended from time to time, being referred to as a `Fund'').
B. Fund Party wishes to have Schwab perform certain recordkeeping,
shareholder communication, and other services for each Fund.
X. Xxxxxx is willing to perform such services on the terms and
conditions set forth herein.
AGREEMENT
THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services. 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 (the `Services'').
2. Fees. For the Services, Schwab shall receive a fee (the `Fee'')
based on the percentage per annum on Exhibit C applied to the average daily
value of the shares of Fund held in the Schwab accounts of Xxxxxx'x
customers. The Fee shall be calculated and paid in accordance with Exhibit
B hereto. Should Exhibit A be amended to revise the Services, the parties
shall also amend Exhibits B and C, if necessary, in order to reflect any
changes in the Fee.
3. Effectiveness of Agreement; Term.
a. This Agreement will become effective as to any particular
Fund as of the later of (i) the date set forth on Schedule I opposite the
name of such Fund or (ii) such later date as Schwab may, in its discretion,
designate.
b. This Agreement may be terminated by either party as to any
Fund upon 60 days' written notice or 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 immediately upon written notice from Schwab if
such termination is due to a change in the policies or operating procedures
of such Fund in a manner that is inconsistent with the Operating Agreement,
as contemplated in Section 4, below. After the date of such a termination
as to any Fund, Fund Party will not be obligated to pay the Fee with
respect to any shares of such Fund that are first placed or purchased in
Schwab customer accounts after the date of such termination. However,
notwithstanding any such termination, for so long as any shares of such
Fund that was considered in the calculation of the Fee as of the date of
such termination (a `Pre-Termination Share'') is held in any Schwab
account (x) except as set forth in the next following sentence, Fund Party
will remain obligated to pay Schwab the Fee as to each Pre-Termination
Share, and (y) for so long as Fund Party or some other person or entity
continues to pay the Fee or, in accordance with the next following
sentence, such Fund continues to pay a portion of the Fee, Schwab will
continue to perform the Services hereunder with respect to each such Pre-
Termination Share. If at any time, as to any particular Fund, neither Fund
Party nor any person controlling, controlled by, or under common control
with Fund Party continues to be engaged by a Fund in any capacity, then
Fund Party shall be relieved of its obligation to continue to pay the Fee
beginning at the time that (A) this Agreement is assigned to and Fund
Party's obligations hereunder are assumed by a successor approved by Schwab
in accordance with Section 14 or (B) such Fund agrees to pay such portion
of the Fee as to such Pre-Termination Shares as such Fund is legally
permitted to pay, but in no event less than % per annum of the average
daily value of such Pre-Termination Shares. Further, for so long as Schwab
continues to perform the Services as to any Pre-Termination Share, the
agreements regarding operational matters set forth in Section 4, the
representations and warranties in Section 6, and all of the agreements,
acknowledgments, and undertakings set forth in Sections 6 through 17,
inclusive, will remain in full force and effect as to such Pre-Termination
Shares. Fund Party shall reimburse Schwab promptly for any reasonable
expenses Schwab incurs in effecting any termination of this Agreement,
including delivery to any Fund or Fund Party of any records, instruments,
or documents required by Fund Party.
4. Operational Matters. In processing purchase, redemption and
exchange orders placed by Schwab on behalf of its customers, and in order
to facilitate Xxxxxx'x performance of the Services, Fund Party agrees to
follow and comply with, and to use its best efforts to cause each Fund to
follow and comply with, the procedures, terms and conditions set forth in
Xxxxxx'x standard form of Operating Agreement governing operational matters
in Xxxxxx'x Mutual Fund Marketplace, as that standard form may be
supplemented or amended from time (the `Operating Agreement''). Fund
Party's undertaking to cause a Fund to follow and comply with the
procedures, terms, and conditions of the Operating Agreement are subject to
the right of the Board of Trustees of any Fund to change any policies or
operating procedures of such Fund as in its sole judgment are necessary or
appropriate. However, Fund Party shall use its best efforts to convince
each such Board of Trustees not the change such policies or operating
procedures in a manner that would be inconsistent with the Operating
Agreement, and Fund Party will notify Schwab in writing as soon as
practicable after becoming aware of any such change or proposed change in
order that Schwab may either make any adjustments necessitated by such
changes or proposed changes or terminate this Agreement.
5. Transaction Charges. Schwab shall not, during the term of this
Agreement, assess against or collect from its brokerage 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.
6. Representations and Warranties.
a. Fund Party represents and warrants to Schwab that Fund Party
and the persons executing this Agreement on its behalf, including on behalf
of any Fund, are duly authorized and empowered to execute and deliver this
Agreement on behalf of Fund Party.
x. Xxxxxx represents and warrants that it and the persons
executing this Agreement on its behalf are duly authorized and empowered to
enter into this Agreement and that Schwab is a member of the National
Association of Securities Dealers, Inc.
7. Compliance Responsibilities; Uncontrollable Events;
Indemnification.
a. Fund Party acknowledges and agrees that it, the Funds, and
certain `Affiliates'' (as defined below) are, and Schwab is not,
responsible for (i) the compliance of all prospectuses, annual reports,
proxy statements, and items of advertising or marketing material of or
relating to any Fund, and of the tabulation of returned proxies, with all
applicable laws, rules, or regulations (ii) the registration or
qualification of all shares of each Fund under all federal and applicable
state laws and (iii) the compliance by each Fund, Fund Party, and
`affiliated person'' (as that term is defined in the rules under the
Investment Company Act of 1940, as amended (the `Company Act'')) of any of
them (each, an `Affiliate''), with all applicable federal and state laws,
rules and regulations, (including the Company Act, the Investment Advisers
Act of 1940, as amended, and the rules and regulations thereunder) and the
rules and regulations of all self-regulatory organizations with
jurisdiction over such Fund, Fund Party or Affiliate.
x. Xxxxxx acknowledges and agrees that it, and not Fund Party,
any Fund, or any Affiliate, is responsible for Xxxxxx'x compliance with all
laws, rules, regulations and rules and regulations of self-regulatory
organizations with jurisdiction over Schwab, in each case governing
Xxxxxx'x performance of the Services (including those governing the
registration and business practices of broker-dealers), except to the
extent that Xxxxxx'x compliance with any such law, rule, or regulation is
dependent on the compliance by Fund Party or such Fund or Affiliate with
any law, rule, or regulation applicable to such Fund or Affiliate, or
satisfaction by Fund Party or such Fund or Affiliate of all or any
obligations or requirements under this Agreement applicable to Fund Party
or such Fund or Affiliate.
c. In providing the Services, each party to this Agreement is
entitled to rely on any written records or instructions provided to it by
any other party to this Agreement, by its employees, officers or agents, or
by its customers.
d. Neither party to this Agreement assumes any responsibility
hereunder to the other, and neither will be liable to the other, for any
damage, loss of data, delay, or any other loss whatsoever caused by fires,
earthquakes, floods, acts of war, civil insurrection, or other similar
catastrophic events beyond its reasonable control.
e. Fund Party shall indemnify, defend and protect Schwab and
each officer, employee and agent of Schwab and hold Schwab and each such
officer, employee, and agent harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, or costs, charges, counsel
fees, and expenses of any nature (`Losses'') arising out of (i) any
inaccuracy or omission in any prospectus, registration statement, annual
report or proxy statement, of any Fund or Fund Party or any advertising or
promotional material generated by any Fund or Fund Party, (ii) any breach
by Fund Party of any representation, warranty, covenant, or agreement
contained in this Agreement or any applicable Operating Agreement, and
(iii) any action taken or omitted to be taken by Schwab pursuant to this
Agreement, except to the extent such Losses result from Xxxxxx'x breach of
this Agreement, willful misconduct, or gross negligence.
x. Xxxxxx shall indemnify, defend, and protect Fund Party and
each director, officer, employee, and agent of Fund Party and hold Fund
Party and each such director, officer, employee, and agent harmless from
and against any and all Losses arising out of: (i) Xxxxxx'x dissemination
of information regarding Fund Party or a Fund that is materially incorrect
and that was not provided to Schwab by Fund Party, a Fund, or an affiliate,
derived accurately from materials published or provided to Schwab by any of
them, or approved by Fund Party or such Fund; or (ii) Xxxxxx'x willful
misconduct or negligence in the performance of, or failure to perform, its
obligations under this Agreement, except in each case to the extent such
Losses result from Fund Party's breach of this Agreement or Fund Party's or
any Fund's willful misconduct or negligence.
8. Role and Relationship of Schwab. The parties acknowledge and
agree that the Services 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 or the Company Act. This Agreement does not xxxxx Xxxxxx 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 any
Fund or Fund Party for purposes of selling shares of any Fund to any dealer
or the public. To the extent Schwab is involved in any Schwab customer's
purchase of shares of any Fund, such involvement will be made as agent of
such customer only and such purchases will be made through the principal
underwriter of such Fund.
9. Use of Xxxxxx'x Name. Without Xxxxxx'x prior written consent,
Fund Party will not, nor will Fund Party cause or permit any Fund to,
describe or refer to Schwab or the Services or relationship contemplated by
this Agreement in any advertisement or promotional materials or activities.
10. Proprietary Information. Fund Party acknowledges that the
identifies of Xxxxxx'x customers, information maintained by Schwab
regarding those customers, and all computer programs and procedures
developed by Schwab or Xxxxxx'x agents in connection with Xxxxxx'x
performance of its duties hereunder constitute the valuable property of
Schwab. Fund Party agrees that should it come into possession of any list
or compilation of the identities of or other information about Xxxxxx'x
customers, or any other property of Schwab, Fund Party will hold such
information or property in confidence and refrain from using, disclosing,
or distributing any of such information or other property except (i) with
Xxxxxx'x prior written consent, or (ii) as required by law or judicial
process. Fund Party acknowledges that any breach of the foregoing
agreements would result in immediate and irreparable harm to Schwab for
which there would be no adequate remedy at law and agrees that in the event
of such a breach Schwab would be entitled to equitable relief by way of
temporary and permanent injunctions, as well as such other relief as any
court of competent jurisdiction deems appropriate.
11. Information to be Provided. Fund Party has provided to Schwab
and, as to each Fund, shall provide to Schwab prior to the effectiveness of
this Agreement as to such Fund, the following information and documents:
a. Evidence reasonably acceptable to Schwab of the
authorization of Fund Party to enter into this Agreement as to each Fund;
b. A list of the officers of Fund Party who are authorized to
instruct Schwab in connection with the Services with respect to such Fund,
together with specimen signatures of those officers; and
c. Two copies of the then-current Prospectus and Statement of
Additional Information for each such Fund.
Fund Party shall furnish Schwab with written copies of any amendments to or
changes in any of the documents referred to in this Section as soon as
practicable after such amendments or changes become available.
12. Multi-Class Funds. Notwithstanding anything in this Agreement to
the contrary, as to any Fund that offers to the public more than one class
of shares, (i) this Agreement shall not become effective until the
effective date of any agreement or document containing such
representations, warranties, covenants, and agreements as may be both
required by any order of the Securities and Exchange Commission relating to
the offer and sale of such multiple classes of shares and acceptable to
Schwab and (ii) this Agreement shall be terminable under the terms set
forth in Section 3.b. of this Agreement at such times and upon such events
as are required in any such order.
13. Nonexclusivity. Fund Party acknowledges that Schwab may perform
services similar to those to be provided under this Agreement to other
investment companies, investment company sponsors, or service providers to
investment companies. Schwab acknowledges that Fund Party may obtain
services similar to those provided by Schwab under this Agreement from
other brokers, dealers, or providers of services to investment companies.
14. Assignability. This Agreement is not assignable by either party
without the other party's prior written consent; provided that Schway may,
without Fund Party's consent, assign its rights and obligations under this
Agreement to any corporation that (i) controls, is controlled by, or is
under common control with Schwab and (ii) is registered as a transfer agent
under Section 17A(c) of the Securities Exchange Act of 1934, as amended.
In the event of an `assignment'' of this Agreement, within the meaning of
the Company Act and the rules of the Securities and Exchange commission
promulgated thereunder, this Agreement shall terminate in accordance with
and subject to the terms of Section 3.b. of this Agreement. If any event
is proposed (x) for which the consents, if any, required by the first
sentence of this Section 14 have been obtained, and (y) that would
constitute such an `assignment,'' then Schwab and Fund Party shall each
use its best efforts to cause a new agreement, in form and substance as
nearly identical to this Agreement as possible, to be executed and
delivered by the appropriate parties and made effective prior to the time
of such proposed event. If such a new agreement cannot be executed,
delivered, and made effective prior to the termination of this Agreement,
Schwab and Fund Party shall each use its best efforts to obtain such
ratifications or approvals and take such other steps as may be necessary to
reinstate this Agreement, or to cause the effectiveness of anew agreement
in form and substance as nearly identical to this Agreement as possible,
all as soon after such termination as practicable.
15. Notices. All notices required by this Agreement shall be in
writing and delivered personally or sent by first class mail. All notices
and other communications concerning this Agreement will be deemed to have
been received as of the earlier of actual physical receipt or three days
after deposit, first class postage prepaid, in the United States Mail. All
such notices and other communication shall be made:
if to Schwab, to:
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx XxXxxxxxx
With a copy to: General Counsel, at same address
if to Fund Party, to the address given below in the signature block
16. Exhibits. 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.
17. Amendment. 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.
18. Governing Law. 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.
19. Counterparts. 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXXXX XXXXXX & CO., INC.
By:
Its:
FUND PARTY
(name)
By:
Its:
Address:
Attn.:
SCHEDULE I
(List of Funds/Portfolios/Classes to which fees are applicable)
Fund Date
EXHIBIT A
SERVICES
Capitalized terms used in this Exhibit have the meanings given them in the
agreement to which this Exhibit is attached (the `Agreement'').
Record Maintenance.
Schwab shall maintain records for each Schwab customer who holds
shares of any Fund in a Schwab account and for each Fund, which
records shall include:
A. Number of shares;
B. Date and price 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 each such Schwab customer, including zip
codes and tax identification numbers;
D. Records of distributions and dividends payments;
E. Any transfers of shares; and
F. Overall control records.
Fund Communications.
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 the 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.
Shareholder Communications. Schwab shall:
A. Mail Fund prospectuses upon customer request and, as applicable,
with confirmation statements and in accordance with applicable
law, including;
B. As to each Fund, provide to a shareholder mailing agent employed
by such 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 accounts. Such
shareholder mailing agent shall be a person or entity engaged by
such Fund in accordance with the Operating Agreement referred to
in Section 4 of the Agreement and the Fund-related materials to
be sent by such agent shall consist of updated prospectuses,
annual and semi-annual reports, proxy statements, and other
appropriate shareholder communications. Schwab shall provide
such customer names and addresses as of any time reasonably
requested by such Fund;
C. Mail statements to customers on a monthly basis, (or, as to
accounts in which there has been no activity in a particular
money, no less frequently than quarterly) showing, among other
things, the number of shares of each Fund owned by such customer
and the net asset values of such Funds as of a recent date;
D. With respect to each Fund, produce and mail to customers and to
the appropriate Federal taxing authority statement indicating,
for Federal tax purposes, the amounts of dividend income and
capital gains attributable to such customers from such Fund;
E. Produce and mail to customers confirmation statements reflecting
purchases and redemptions of shares of each Fund in Schwab
brokerage accounts; and
F. Respond to customer inquiries regarding, among other things,
share prices, account balances, dividend amounts, and dividend
payment dates.
Transactional Services.
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from
its customers, in accordance with the procedures contemplated in the
Agreement.
EXHIBIT B
CALCULATION OF FEE
Capitalized terms used in this Exhibit have the meanings given them in the
agreement to which this Exhibit is attached (the `Agreement'').
1. Fund Party shall pay to Schwab, for each Fund, a fee, computed
daily and paid monthly in arrears, equal to the percentage per annum
specified on Exhibit C to the Agreement applied to the average daily value
of the total number of shares of such Fund held in accounts at Schwab
(subject to the exclusion in the next sentence). Notwithstanding the
preceding sentence there shall be excluded from the computation of such
amount the value of (i) shares as to which a broker customer paid Schwab a
transaction fee upon such customer's purchase of such shares, (ii) shares
held in a Schwab brokerage account prior to the effective date of the
Agreement as to the Fund issuing such shares, and (iii) shares first placed
or purchased in a Schwab brokerage account after the termination of the
Agreement as to the Fund issuing such shares.
2. As soon as practicable after the end of each month, for each
Fund, Schwab shall send Fund Party, in the manner called for in the
Agreement, a statement of the average daily value for the preceding month
of shares of such Fund as to which the fee called for in Section 1 of this
Exhibit are calculated, together with a statement of the amount of such
fee. In the calculation of fee, Xxxxxx'x records shall govern unless an
error can be shown in the number of shares used in such calculation.
3. Fund Party shall pay Schwab such fee within 30 days after Fund
Party's receipt (in accordance with the Agreement) of such statement. Such
payment shall be by wire transfer unless the amount thereof is less than
$500. Wire transfers shall be sent to Citibank Account No. 4055-8865 or
such other account as Schwab may designate from time to time. Such wire
transfers shall be separate from wire transfers of redemption proceeds and
distributions. Amounts less than $500 may, at Fund Party's discretion, be
paid by check,
4. for purposes of this Exhibit, the average daily value of the
shares of each Fund will be based on the net asset values reported by such
Fund to the National Association of Securities Dealers, Inc. Automated
Quotation System. No adjustments will be made to such net asset values to
correct errors in the net asset values so reported for any day unless such
error is corrected and the correct 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.
EXHIBIT C
AMOUNT OF FEE
Percentage Per Annum
of Average Daily
FUND PARTY Value of Fund Shares
(name) %
