SERVICE AGREEMENT
This Service Agreement ("Agreement") is made as of October 15, 2002 by
and among the Funds described on attached Exhibit A (the "Funds"), each a
Massachusetts business trust, and Pruco Securities Corporation (Pruco), a New
Jersey corporation.
RECITALS
WHEREAS, Pruco desires to provide personal customer account, maintenance
and related administrative services for customers participating in its
COMMAND Account Program or other programs or accounts that are eligible to
have available account assets swept into Class S shares of the Fund
(collectively, its "Customers"); and
WHEREAS, it is in the best interests of the Funds to make the customer
services of Pruco available to Fund shareholders; and
WHEREAS, the Funds desire to appoint Pruco to act as servicing agent to
provide personal customer account, maintenance and related administrative
services for its Customers,
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:
1. PERFORMANCE OF SERVICES. Pruco agrees to perform the personal customer
account, maintenance and related administrative services specified in
Schedule A attached hereto with respect to Class S shares of the Funds
purchased and/or redeemed by its Customers (the "Services").
2. THE ACCOUNTS. Each COMMAND and other account will be opened upon
completion of the application and such other forms as Pruco may require. In
connection with each COMMAND and other account, Pruco represents and warrants
that it is authorized to act on behalf of its Customers in relation to such
account(s).
3. PURCHASE AND REDEMPTION ORDERS. On each business day (as defined in the
Funds' current prospectus), Pruco shall report to the Funds' transfer agent
the purchase and redemption orders that it has received from its Customers
prior to 4:00 p.m., Eastern time (i.e., the close of trading) in respect of
Class S shares of the Funds.
4. AGENCY. The Funds hereby appoint Pruco as their agent for the limited
purpose of accepting purchase and redemption instructions from its Customers.
Pruco represents and warrants that it will not, nor will any of its officers,
employees or agents, make any representations concerning the Funds
inconsistent with those contained in the Funds' current prospectuses or in
such supplemental advertising material approved by the Funds.
5. FUND EXPENSES. Pruco shall not bear any of the expenses for the cost of
registration of the Funds' shares, preparation of the Funds' prospectuses,
proxy materials and financial reports, and the preparation of other Fund
related statements and notices required by law, unless agreed to in writing.
6. COMPLIANCE WITH LAWS. Pruco shall comply with all laws, rules and
regulations applicable to it by virtue of entering into this Agreement
including, but not limited to any information
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contained in any prospectus, registration statements, annual report, proxy
statement, or item of advertising or marketing material prepared by Pruco
for, or relating to, the Funds.
Each party hereto is entitled to rely on any written records or instructions
provided to it by the other party.
7. INDEMNIFICATION. Pruco shall indemnify, defend and hold harmless the Funds
and each of their affiliates, directors, officers, employees and agents and
each person who controls the Funds within the meaning of the Securities Act
of 1933, as amended, ("Fund Indemnitees") from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable
attorney's fees) they incur ("Losses") insofar as such Losses arise out of or
are based upon (1) the provision of services by Pruco, (2) Pruco's
negligence, willful misconduct or violation of applicable law in the
performance of its duties and obligations under this Agreement, or (3) any
breach by Pruco of any provisions of this Agreement. This indemnity is in
addition to any other liability, which Pruco may otherwise have.
The Funds shall indemnify, defend and hold harmless Pruco and each of its
affiliates, directors, officers, employees and agents and each person who
controls them within the meaning, of the Securities Act of 1933, as amended,
from and against any and all losses, claims, damages, liabilities and
expenses (including reasonable attorney's fees) they incur ("Losses") insofar
as such Losses arise out of or are based upon (1) the Funds' negligence,
willful misconduct or violation of applicable law in the performance of their
duties and obligations under this Agreement, or (2) any breach by the Funds
of any material provisions of this Agreement. This indemnity agreement is in
addition to any other liability that the Funds may otherwise have.
Promptly after receipt by a party entitled to indemnification under this
section (an "Indemnified Party") of notice of the commencement of an
investigation, action, claim or proceeding, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under
this section, notify the indemnifying party of the commencement thereof; but
the omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any Indemnified Party otherwise than under
this Section. In case any such action is brought against any Indemnified
Party, and it notified the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, assume the defense thereof, with counsel
satisfactory to such Indemnified Party. After notice from the indemnifying
party of its intention to assume the defense of an action, the Indemnified
Party shall bear the expenses of any additional counsel obtained by it, and
the indemnifying party shall not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation. The Indemnified Party may not settle any
action without the written consent of the indemnifying party. The
indemnifying party may not settle any action without the written consent of
the Indemnified Party unless such settlement completely and finally releases
the Indemnified Party from any and all liability. In either event, consent
shall not be unreasonably withheld.
8. FEES. In consideration for the Services to be provided, Pruco will be
entitled to receive from the Funds fees as set forth in Schedule B to this
Agreement or as otherwise agreed upon in writing from time to time by the
Funds and Pruco. The fee shall be computed daily and payable monthly or at
such other interval as shall be agreed from time to time by the parties
hereto.
The parties agree that the fees are solely for the Services provided by Pruco
and its affiliates and do not constitute payment in any manner for investment
advisory, distribution, trustee, or custodial services.
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Notwithstanding the foregoing, the service fees payable in respect of any day
by the Funds under this Agreement or any service agreement between the Funds
and PSI Securities Incorporated shall be reduced to the extent necessary to
prevent a Fund's distribution to shareholders of Class S shares of a Fund
(taking into account such service fees) from being reduced to zero or below.
9. RECORDS. Pruco agrees that it shall maintain and preserve all records
required by law to be maintained and preserved in connection with providing
the Services to the holders of Class S shares of the Funds, and shall
otherwise comply with all applicable laws, rules, or regulations as they
apply to Pruco's provision of the Services.
Pruco also agrees that it shall permit the Funds, their officers, agents or
representatives to have reasonable access to all records maintained and
prepared by Pruco in connection with its performance of the Services for the
purpose of inspection.
10. CONFIDENTIALITY. Pruco agrees that all non-public books, records and
information prepared or maintained by it in connection with the Services
shall remain confidential and shall not be voluntarily disclosed to any other
person, entity or organization unless such disclosure is mandated pursuant to
law, regulation, or judicial process. In the event of any demand served on or
received by Pruco for the production or release of any non-public books,
records or information, Pruco shall promptly notify the Funds of such demand
or request and Pruco shall seek permission from the Funds before making any
disclosure of non-public records or information.
11. REPRESENTATIONS AND WARRANTIES. Pruco and the Funds hereby represent and
warrant to each other that each is duly qualified and has all requisite
licenses and authority to conduct its business in all jurisdictions. Pruco
and the Funds further represent and warrant to each other that they are each
authorized to enter into this Agreement, and the performance of their
obligations hereunder will not violate or conflict with any governing
documents or agreements of either Pruco or the Funds, or any applicable law.
Pruco hereby further represents and warrants to the Funds that it has and
will continue to have access to the necessary facilities, equipment and
personnel to perform its obligations under this Agreement.
12. TERMINATION.
(a) Any party may terminate this Agreement by providing 60
days' prior written notice to the other parties.
(b) Notwithstanding the foregoing, this Agreement may be terminated by any
party (1) at any time by giving 30 days' prior written notice to the other
parties in the event of a material breach of this Agreement by the other
party that is not cured during such 30-day period; and (2) at any time by
giving written notice to the other party (A) upon institution of formal
proceedings relating to the legality of the terms and conditions of this
Agreement by the National Association of Securities Dealers, Inc., the
Securities and Exchange Commission or any other regulatory body provided that
the terminating party has a reasonable belief that the institution of formal
proceedings is not without foundation and will have a material adverse impact
on the terminating party, (B) upon assignment of the Agreement in
contravention of the terms hereof, (C) as is required by law, order, or
instruction by a court of competent jurisdiction or a regulatory body or
self-regulatory organization with proper jurisdiction over the terminating
party.
13. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York applicable to agreements
fully executed and to be performed therein, exclusive of conflicts of laws.
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14. AMENDMENT AND WAIVER. No modification of any provision of this Agreement
will be binding unless in writing and executed by the parties. No waiver of
any provision of this Agreement will be binding unless in writing and
executed by the parties. Any valid waiver of a provision set forth herein
shall not constitute a waiver of any other provision of this Agreement. In
addition, any valid waiver shall constitute a present waiver of such
provision and shall not constitute a permanent future waiver of such
provision.
15. ASSIGNMENT. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns; provided,
however, that neither this Agreement nor any rights, privileges, duties or
obligations of the parties may be assigned by either party without the
written consent of the other party or as expressly contemplated by this
Agreement. For purposes of this Agreement, "assignment" shall mean an
assignment as that term is defined under the Investment Company Act of 1940,
as amended.
16. ENTIRE AGREEMENT. This Agreement contains the full and complete
understanding between the parties with respect to the transactions covered
and contemplated hereunder, and supersedes all prior agreements or
understandings between the parties relating to the subject matter hereof,
whether oral or written, express or implied.
17. NOTICES. All notices hereunder shall be in writing (and shall be deemed
to have been duly given upon receipt) by delivery in person, by facsimile, by
registered or certified mail or by overnight delivery (postage prepaid,
return receipt requested) to the respective parties as follows:
If to the Funds:
COMMAND Money Fund
COMMAND Tax-Free Fund
COMMAND Government Fund
Prudential California Municipal Fund - California Money Market Series
Prudential Municipal Series Fund - New Jersey Money Market Series
Prudential Municipal Series Fund - New York Money Market Series
Prudential Government Securities Trust - U.S. Treasury Money Market Series
Gateway Center Three
000 Xxxxxxxx Xxxxxx, 0xx xxxxx
Xxxxxx, XX 00000
Attention: Secretary
If to Pruco:
Pruco Securities Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President & Chief Operating Officer
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
COMMAND Money Fund
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COMMAND Tax-Free Fund
COMMAND Government Fund
Prudential California Municipal Fund - California Money Market Series
Prudential Municipal Series Fund - New Jersey Money Market Series
Prudential Municipal Series Fund - New York Money Market Series
Prudential Government Securities Trust - U.S. Treasury Money Market Series
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President
Pruco Securities Corporation
By: /s/ Xxxx Xxxxxx
---------------
Name: Xxxx Xxxxxx
Title: President & Chief Operating Officer
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SCHEDULE A
THE SERVICES
1. Pruco shall maintain its Customer account records reflecting shares
purchased and redeemed and share balances for each Customer, and shall
provide each Customer with periodic account statements showing all activity
in the Funds as of the statement closing date.
2. Pruco shall provide appropriate assistance to any Customer with respect to
the sweep of Customer assets into the Funds by means of a purchase of Fund
shares by such Customer, or by means of a sweep of Customer assets out of the
Funds by means of a redemption of Fund shares.
3. Pruco shall transmit prospectuses, proxy materials, shareholder reports,
and other information provided by the Funds with respect to existing
shareholders and required to be sent to shareholders under the Federal
securities laws.
4. Pruco shall transmit to the Funds purchase orders and redemption requests
for Fund shares arising from its periodic sweep of Customer assets into and
out of Class S shares of the Funds.
5. Pruco shall respond to inquiries from holders of Class S shares regarding,
among other things, Class S share prices, account balances, and other
applicable sweep class share information.
6. Pruco shall maintain and preserve all records required by law to be
maintained and preserved in connection with providing the Services.
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SCHEDULE B
FEES
Each Fund shall pay to Pruco a service fee at the annual rate of 0.25% of the
average daily net assets of each Fund applicable to Class S shares of each
Fund.
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EXHIBIT A
COMMAND Money Fund
COMMAND Tax-Free Fund
COMMAND Government Fund
Prudential California Municipal Fund - California Money Market Series
Prudential Municipal Series Fund - New Jersey Money Market Series
Prudential Municipal Series Fund - New York Money Market Series
Prudential Government Securities Trust - U.S. Treasury Money Market Series
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