EXHIBIT 99B9(D)
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
SERVICE AGREEMENT
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Ladies and Gentlemen:
You have invited us to provide certain services to our clients that own
shares of the open-end investment companies listed on Schedule A hereto, as
amended from time to time in accordance with paragraph 10 (d) hereunder
(hereinafter collectively referred to as the "Funds" or, individually, as the
"Fund"), for which you are the distributor on the following terms:
1. PURCHASES OF FUND SHARES FOR SALE TO CUSTOMERS
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(a) We agree that all purchases of fund shares by us shall be made only on
behalf of our customers, or for our own bona fide investment.
(b) We agree to effect purchases for our customers subject to minimum
investment requirements applicable to each order and at the applicable public
offering price described in the prospectus and statement of additional
information of such Fund in effect on the date of the sale (the prospectus and
statement of additional information as of any such sale date or of any
applicable redemption or repurchase date being sometimes referred to together
herein as the "then current prospectus"), provided, however, that it is
understood that we assume no responsibility or liability for the determination
of such price.
(c) We shall not withhold placing orders received from our customers so as
to profit ourself as a result of such withholding (e.g., by a change in the net
asset value from that used in determining the public offering price to our
customers).
(d) We understand that all orders are subject to acceptance or rejection by
you or the Fund in the sole discretion of either. No conditional order will be
accepted by the Fund on any basis other than a definite price. The handling of
orders by the parties shall be subject to such procedures as may be mutually
agreed upon from time to time.
(e) Payment for Fund shares purchased by us shall be made on the settlement
date specified in your confirmation by New York Clearing House Funds or by
Federal Funds wire. If such payment is not received by you, you reserve the
right, without notice, either to cancel the sale, or, at your option, to sell
the shares ordered back to such Fund, and in either case, you may hold us
responsible for any direct loss suffered by you or by such Fund resulting from
our failure to make payment as aforesaid.
2. SELLING PROCEDURES/SALES MATERIALS
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(a) "Sales Material," as used herein, shall include, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, circulars, research reports, market letters, performance reports
or summaries, form letters, posters, signs and other similar materials, whether
in print, hypertext, video, audio or other media, and any items derived from the
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foregoing, and including sales materials intended for wholesale use (i.e.,
broker/dealer use only) or retail use.
(b) We shall not make any representation concerning the Funds or their
securities except those contained in the then current prospectus or any Sales
Materials furnished by you relating to the Funds. (We assume no responsibility
or liability for representations contained in any of such documents.) You agree
to notify us in writing at the address specified in paragraph (c) of any change
to the prospectus or statement of additional information of each Fund,
specifying such change, at least 10 days before making such change, provided
that if such notice is not reasonably practicable, you may provide us with the
required notice within such other period as is reasonable under the
circumstances, but, in any event, not later than concurrently with such change.
(c) You agree to supply to us at your expense additional copies of the
prospectus, statement of additional information, shareholder materials, periodic
reports and proxy statements for each of the Funds and any printed supplemental
material in reasonable quantities upon request. We agree to deliver copies of
the above materials to customers and potential customers in accordance with
applicable law and the rules of the Securities and Exchange Commission ("SEC").
Further, you agree to provide to our Mutual Funds Marketing Department (the
"Marketing Department") copies of the most recent amended or supplemented
prospectus and statement of additional information of each Fund, and such other
SEC filing as we may request, in reasonable quantities upon our request. Such
materials shall be mailed to us at Merrill
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Xxxxx Mutual Funds Marketing, Attention: Mutual Funds Administration, 000
Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
(d) You agree not to distribute any Sales Materials (other than copies of
the then current prospectus) to any of our employees or sales offices unless the
distribution of such materials has been approved in writing by our Marketing
Department in accordance with written procedures (as amended from time to time)
distributed by the Marketing Department. In approving such materials for
distribution within our offices or through our sales offices to our customers,
we assume no responsibility or liability for the representations or any
omissions contained in any Sales Materials furnished by you nor for
representations or any omissions contained in the prospectus or statement of
additional information relating to the Fund.
(e) With the exception of (i) listings of product offerings; (ii) materials
in the public domain (e.g., magazine articles and trade publications); and (iii)
materials used by us on an internal basis only, we agree not to furnish or cause
to be furnished to any third parties or to display publicly or publish any Sales
Materials, except such Sales Materials relating to the Fund as may be
distributed to us by you (as authorized for use by you) or approved in writing
for distribution by you upon our request.
3. REDEMPTION/REPURCHASE/TRANSFER OF FUND SHARES AND EXCHANGES
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(a) If we effect a redemption on behalf of customers, we agree to pay such
customers not less than the applicable redemption price (i.e., the next
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determined net asset value minus any applicable sales charges or redemption
fees) determined as set forth in the then current prospectus of the Fund,
provided, however, that it is understood that we assume no responsibility or
liability for the determination of such price.
(b) We shall not withhold placing redemption or repurchase orders received
from our customers so as to profit ourself as a result of such withholding
(e.g., by a change in the net asset value from that used in determining the
public offering price to our customers).
(c) Redemption and repurchase orders are subject to such procedures as may
be mutually agreed upon from time to time, provided that any order placed by us
regarding the redemption or repurchase of Fund shares is subject to timely
receipt by you or the Fund's transfer of all required documents.
(d) Where shares of a Fund are held in the name of our customer directly at
the Fund's transfer agent with us listed as the broker-dealer of record, and the
customer requests that such shares be transferred to the name of Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") as nominee, you undertake
to provide to us as soon as is practicable the account history in connection
with processing a transfer request.
(e) Exchanges of shares between Funds will be effected in the manner and
subject to the restrictions and charges described in the then current
prospectuses of the relevant Funds. The handling of exchanges will be further
subject to such other procedures as may be mutually agreed upon from time to
time.
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(f) You understand and agree that this is a limited dealer agreement
intended to allow the purchase and sale of shares of particular Funds held in
individual retirement accounts with respect to which we (or one of our
affiliates became or has become custodian pursuant to the Purchase and
Assumption Agreement, dated as of August 29, 1997, between us and Barclays
Global Investors, N.A. (It is understood and agreed by the parties hereto that
a liquidation of a Fund position in such an individual retirement account in
connection with the above-described transaction and a concurrent repurchase of
the same position in a Xxxxxxx Xxxxx XXX (as defined below) required to effect
the transfer of the shareholders assets to a Xxxxxxx Xxxxx XXX will be
considered to be a qualifying purchase and sale hereunder.). In addition, it
is understood and agreed that the purchase and selling privileges hereunder
will not allow shareholders to transfer shares of the Funds into an individual
retirement account with respect to which we or one of our affiliates acts as
custodian (a "Xxxxxxx Xxxxx XXX") from a retirement plan covered under the
Special Purpose Shareholder Servicing Agreement between and among Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Masterworks Funds, Inc. and
Barclays Global Investor N.A. You further understand and agree that we will
not promote the sale of the Funds to clients who are not shareholders of the
Fund described in the first sentence of this section. However, we will service
such shareholders and you agree to compensate us for such services and our
sale of Fund shares in accordance with the terms otherwise provided in this
Agreement. You agree to conduct your business with us in a manner that is
consistent with the limitations
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stated above and understand and agree that you may not promote the sale of your
products in our offices or to our employees. In addition, you understand and
agree that you may not represent that we are a dealer or promoter of the Funds
in any manner that is inconsistent with the terms of this Agreement.
4. PRICING ERRORS
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You agree to notify us promptly or to cause the relevant Fund to notify us
promptly whenever an error is made in the pricing of shares of a Fund and to
indemnify us and hold us harmless against any and all losses, claims, damages,
liabilities or expenses (including, but not limited to, any losses suffered by
our clients and any additional costs and expenses related to the price
correction, such as research costs, expenses related to developing computer
software specifically for the price correction, processing overtime and notices
to customers) to which we may become subject insofar as any such loss, claim,
damage, liability or expense arises out of or is based on any error or alleged
error made in the pricing of shares of a Fund. Payment shall be made by you
promptly upon receipt of a xxxx from us stating the costs of the price
correction and the expenses related thereto.
5. COMPENSATION
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We acknowledge that we are fully compensated pursuant to the separate
Financial Services Agreement between us and [you or the Funds or the Fund
Manager (as defined in the Financial Services Agreement)] and that you are not
obligated to pay us any compensation pursuant to this Agreement.
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6. NASD MEMBERSHIP
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(a) We are registered and/or licensed as a broker and/or dealer under the
federal and applicable state laws. We represent and warrant to you that we are a
member of the National Association of Securities Dealers, Inc. (the "NASD").
(b) We agree to notify you immediately if we cease to be registered or
licensed as a broker or dealer or fail to be a member in good standing of the
NASD.
(c) We agree to abide by the rules and regulations of the NASD, including,
without limitation, Rule 2830 of the NASD Conduct Rules.
7. COMPLIANCE WITH REGULATORY REQUIREMENTS
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You represent and warrant to us the following:
(a) Each Fund has filed a registration statement (a "Registration
Statement") with the SEC relating to its shares under the Securities Act of 1933
(the "1933 Act") on Form N-1A, including a prospectus and a statement of
additional information. The Registration Statement (including the prospectus and
the statement of additional information) conforms in all respects to the
requirements of the 1933 Act, the 1940 Act and the rules thereunder.
(b) To the extent required by law, each Fund is registered and its shares
are qualified for sale in all states and other jurisdictions in the United
States unless we are notified in writing to the contrary. We may rely solely on
such representation in selling the shares, but you assume no responsibility or
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obligation as to our right as a broker-dealer to sell shares of the Funds in any
state or jurisdiction. Upon receipt of written notice from you, that a Fund's
registration or qualification in a jurisdiction has terminated or that the Fund
otherwise wishes us to cease accepting purchase orders for shares of a Fund in
such jurisdiction, we shall promptly cease accepting purchase orders for shares
of such Fund in accordance with such notification.
(c) The then current prospectus for each of the Funds contains such
disclosure with respect to fees paid and charges imposed by the Funds in
connection with the sale of the Fund shares as is necessary to comply with the
rules and regulations of the NASD, including, without limitation, disclosure of
all compensation from the Funds of the type described in paragraph 5 hereof as
required by Rule 2830 of the NASD Conduct Rules. Such fees and charges will be
in compliance with the rules and regulations of the NASD, including, without
limitation, Rule 2830 of the NASD Conduct Rules.
(d) Each investment adviser of each Fund is registered as an investment
adviser under the Investment Advisers Act of 1940 or is exempt from such
registration, and in any state where registration is required.
(e) The Registration Statement (including the prospectus and statement of
additional information) and any Sales Materials relating to the Fund provided by
you to us do not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
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(f) All Sales Materials will comply in all material respects with the
rules and regulations of the SEC, the NASD and any states having such rules
and regulations and will be filed with the NASD or SEC and the relevant states
as required by the rules and regulations of the NASD, the SEC and such states,
respectively.
(g) You are registered and/or licensed as a broker and/or dealer under
federal and applicable state laws and are a member of the NASD. You agree to
notify us immediately if you cease to be registered or licensed as a broker or
dealer or fail to be a member in good standing of the NASD.
(h) The foregoing representations and warranties will be true and correct
at all times during the term of this Agreement (with references to the
Registration Statement throughout this Agreement being deemed to refer to the
Registration Statement in effect at the time such reference is made and to the
then current prospectus of the Fund).
8. INDEMNIFICATION
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(a) You agree to indemnify us (for the purposes of this Section 8, "us" and
"we" shall mean Xxxxxxx Xxxxx, the officers, directors and employees of Xxxxxxx
Xxxxx, and any person who is or may be deemed to be a controlling person of
Xxxxxxx Xxxxx) and hold us harmless against any and all losses, claims, damages,
liabilities or expenses (including the reasonable costs of investigation and
attorney's fees and expenses as such expenses are incurred by us in any action
or proceeding between the parties hereto or between us and any third
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party) to which we may become subject under the 1933 Act, the 1940 Act, or
otherwise, insofar as any such loss, claim, damage, liability or expense (or
actions with respect thereto) arises out of or is based on any untrue statement
of a material fact or alleged untrue statement of a material fact contained in
any Registration Statement of the Fund (including any prospectus or statement of
additional information which is part of any such Registration Statement) or any
amendment or supplement thereto or in any Sales Material relating to the Fund
provided to us by you (whether or not we have approved the use of such Sales
Materials), or arises out of or is based on the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading. This indemnity agreement will be in
addition to any liability which you may otherwise have. No indemnity by you
hereunder shall apply in respect of any prospectus, statement of additional
information or Sales Materials used at a time not authorized under the 1933 Act
or the regulations adopted thereunder, or at a time or in a fashion not
authorized for use by you, provided in each case that you have informed us in
writing that there is no such authorization.
(b) If we seek indemnity under this Section we shall, promptly after
receipt of notice of commencement of any action, suit or proceeding against us,
give written notice of the commencement of such action, suit or proceeding to
you, but the omission so to notify you shall not relieve you from any such
obligation you may otherwise have. In case such notice of any such action shall
be so given, you shall be entitled to participate at your own expense in the
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defense, or, if you so elect, to assume the defense of such action, in which
event such defense shall be conducted by counsel (satisfactory to us) chosen by
you; provided, however, that you shall not have the right to assume the defense
of any action in which the named parties (including any implied parties) include
both you and us and in which counsel to either of us has advised that there may
be legal defenses available to us which are different from or in addition to
those available to you. If you do not elect to assume the defense of such action
and in cases where separate counsel is retained because of the availability of
different defenses, you will reimburse us for the reasonable fees and expenses
of any counsel retained by us. Payment (other than the reimbursement of our
legal and other related fees and expenses, which will be payable to us upon your
receipt of our xxxx related thereto) shall be made upon any final determination
of liability resulting from such claim or misstatement or omission by a court,
panel of arbitrators, administrative agency or self-regulatory organization, or
upon any settlement of any dispute, the subject of which involves such a claim.
In any action in which you have elected to assume the defense, we shall bear the
fees and expenses of any additional counsel we retain, unless either of us has
retained separate counsel because there are legal defenses available to one of
us which are different from or in addition to those available to the other of
us, in which case you shall bear the fees and expenses of our counsel as well.
(c) This Section 8 shall survive the termination of this Agreement.
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9. TERMINATION
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Either party hereto may cancel this Agreement upon 30 days' prior written
notice to the other. Except as set forth in Section 10(d), this Agreement shall
be in substitution of any prior agreement between us regarding the distribution
of these shares.
10. MISCELLANEOUS
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(a) We are not acting as underwriter or principal for Fund shares under
this Agreement, and that we are in no way responsible for the manner of your
performance or for any of your acts or omissions in connection therewith. We are
a limited purpose agent of the Funds only and act only on behalf of our
customers. Nothing shall constitute us as a syndicate, association, joint
venture, partnership, unincorporated business, or other separate entity or
otherwise partners with you.
(b) We acknowledge and agree that each Fund reserves the right in its
discretion and you reserve the right, in your discretion and without notice to
us, subject to applicable law, to suspend sales or redemptions or to withdraw
the offering of shares of the Fund.
(c) All communication shall be sent to us at our offices at Xxxxxxx Xxxxx
Mutual Funds Marketing, Attention: Mutual Funds Administration, 000 Xxxxxxxx
Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 and to you at the address you have
provided at the end of this Agreement. Notice shall be deemed to have been given
on the date it was either delivered personally to the other party or
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any officer or member thereof or was either received by express delivery or
telecopy (with receipt) by the other party at his or her address specified in
this Agreement. Either party may change the address to which communications to
it shall be sent by giving notice thereof in accordance with this provision.
(d) This Agreement may be amended only by mutual agreement of the parties
in writing; provided however, that any amendment to Schedule A of this Agreement
to add additional Fund(s) shall be deemed effective and part of this Agreement
upon the first day of sale by us of any shares of such Fund(s).
(e) This Agreement shall become effective as of the date when it is
executed and dated by you below. This Agreement shall be governed by the laws of
the State of New York.
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(f) If a dispute arises between us and you with respect to this
Agreement which the parties are unable to resolve themselves, it shall be
settled by arbitration in accordance with the then existing NASD Code of
Arbitration Procedure (the "NASD Code"). The parties agree, that to the extent
permitted by the NASD Code, the arbitrator(s) shall be selected from the
securities industry.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By: /s/ Xxxxxx X. Xxxxxx
____________________________
(Authorized Signature)
Xxxxxx X. Xxxxxx
____________________________
Name
First Vice President
____________________________
Title
Accepted:
Xxxxxxxx Inc.
By: /s/ Xxxxxxx X. Xxxxx
______________________________
Xxxxxxx X. Xxxxx, Xx.
______________________________
Name
______________________________
Title
Address: 000 Xxxxxx Xxxxxx
__________________________
Xxxxxx Xxxx, XX 00000
__________________________
Date: December 31, 1997
____________________________
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SCHEDULE A
FUNDS
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MasterWorks Funds, Inc. LifePath 2000 Fund
MasterWorks Funds, Inc. LifePath 2010 Fund
MasterWorks Funds, Inc. LifePath 2020 Fund
MasterWorks Funds, Inc. LifePath 2030 Fund
MasterWorks Funds, Inc. LifePath 2040 Fund
MasterWorks Funds, Inc. Asset Allocation Fund
MasterWorks Funds, Inc. Bond Index Fund
MasterWorks Funds, Inc. Growth Stock Fund
MasterWorks Funds, Inc. Money Market Fund
MasterWorks Funds, Inc. S&P 500 Index Fund
MasterWorks Funds, Inc. Short-Intermediate Term Fund
MasterWorks Funds, Inc. U.S. Treasury Allocation Fund
