AMENDED AND RESTATED
SHAREHOLDER SERVICES AGREEMENT
--Sweep funds--
This Amended and Restated Shareholder Services Agreement is made as of
April __, 2003, by and among E*TRADE Funds, a Delaware statutory trust
("Trust"), on behalf of each series or class ("Portfolio" and "Class",
respectively) listed on Schedule A hereto as amended from time to time, E*TRADE
Asset Management, Inc., a Delaware corporation ("ETAM") and E*TRADE Securities
LLC, a Delaware limited liability company ("E*TRADE Securities") (ETAM and
E*TRADE Securities collectively are referred to as the "Shareholder Servicing
Agent").
RECITALS
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act");
WHEREAS, the Trust issues shares of beneficial interest ("shares") in
separate series (Portfolios), some of which are further divided into classes
(Classes), with each Portfolio representing interests in a separate portfolio of
securities and other assets;
WHEREAS, certain beneficial owners of the Trust's shares ("investors"
or "shareholders") may require administrative, recordkeeping, and other
services, and the provisions of such services to investors requiring these
services may benefit such investors and facilitate their ability to invest in
the Portfolios or Classes;
WHEREAS, ETAM serves as the investment adviser and administrator to the
Trust under separate agreements and provides certain additional shareholder
services on behalf of each Portfolio or Class; and
WHEREAS, E*TRADE Securities serves as the primary distributor to the
Trust under separate agreement and provides certain additional shareholder
services on behalf of each Portfolio or Class; and
WHEREAS, the Trust desires that Shareholder Servicing Agent provide, or
arrange for an affiliate to provide, certain shareholder services with respect
to shares of the Portfolios or Class in accordance with the terms and conditions
of this Agreement set forth below.
W I T N E S S E T H:
The Trust and Shareholder Servicing Agent (each a "Party") agree as
follows:
1. Appointment. The Trust hereby authorizes Shareholder Servicing
Agent to provide certain shareholder support services to investors in the
Portfolios or Class. The appointment of Shareholder Servicing Agent hereunder is
non-exclusive, and Shareholder Servicing Agent recognizes and agrees that, from
time to time, the Trust may enter into other agreements with financial
intermediaries with respect to the provision of administrative, recordkeeping or
investor services.
2. Services to be Performed. For the duration of this Agreement,
Shareholder Servicing Agent agrees to use its best efforts, subject to
applicable legal and contractual restrictions and in compliance with the
procedures described in the prospectus(es) and statement(s) of additional
information of the Portfolios or Class as from time to time in effect
(collectively, the "Prospectus"), to provide in respect of investors investing
in shares of the Portfolios the following services:
(a) Support services to investors in connection with investments
in the Shares of a Portfolio or Class, which services may include, but are not
limited to: receiving, aggregating and processing purchase and redemption
orders; arranging for the wiring of funds; providing and maintaining retirement
plan records; communicating periodically with investors or shareholders and
answering questions and handling correspondence from investors or shareholders
about their accounts; acting as the sole shareholder of record and nominee for
shareholders; providing check writing services to investors; maintaining account
records and providing beneficial owners with account statements; processing
subaccounting services for payments; issuing shareholder reports and transaction
confirmations; integrating periodic statements with other shareholder
transactions; providing subaccounting services for payments; providing
subaccounting services for shares of a Portfolio or Class held beneficially;
forwarding shareholder communications to beneficial owners; general account
administration activities; and providing such other similar services as the
Trust may reasonably request to the extent Shareholder Servicing Agent is
permitted to do so under applicable statutes, rules, or regulations. Overhead
and other expenses of Shareholder Servicing Agent related to its "service
activities," including telephone and other communications expenses, may be
included in the information regarding amounts expended for such activities.
(b) Shareholder Servicing Agent 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 Shareholder Servicing Agent's
business, or any personnel employed by Shareholder Servicing Agent) as may be
reasonably necessary or beneficial in order to provide such support services
with respect to Shares of a Portfolio or Class.
3. Compensation.
(a) In consideration of Shareholder Servicing Agent's provision
of the services as described in this Agreement, the Trust agrees, subject to the
limitations of applicable law and regulations, to pay ETAM fees ("Service Fees")
at an annual rate, as specified in Schedule A hereto, of the average of the
aggregate net asset value of outstanding shares of each Portfolio or Class
serviced by Shareholder Servicing Agent, measured on each business day during
each month. ETAM may, in turn, pay any or all of these Services Fees to
affiliates, including E*TRADE Securities, or other service providers with whom
it has entered into services agreements, with no recourse to or liability on the
part of the Trust or any Portfolio or Class. Service Fees shall be accrued daily
and paid monthly or at such other interval as Trust and ETAM shall agree. The
Parties acknowledge and agree that the Service Fees will be paid by the Trust on
behalf of each Portfolio or Class and shall be paid for each Portfolio or Class
only so long as the Agreement is in effect.
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(b) Notwithstanding other provisions of this Agreement, the fee
rate with respect to any Portfolio or Class may be prospectively increased or
decreased by the Trust, in its sole discretion, at any time upon notice to
Shareholder Servicing Agent.
(c) On behalf of each Portfolio or Class, Shareholder Servicing
Agent may spend such amounts and incur such expenses as it deems necessary or
appropriate on any service activities. Such expenses may include, without
limitation, compensation to employees and expenses, including overhead and
telephone and other communications expenses, as Shareholder Servicing Agent may
determine to be necessary. Shareholder Servicing Agent shall be solely liable
for any expenses it incurs hereunder.
(d) In addition, Shareholder Servicing Agent will furnish to the
Trust or its designees such information as the Trust or its designees may
reasonably request (including, without limitation, periodic certifications
confirming the rendering of services with respect to shares of the Portfolios as
described herein) and will otherwise cooperate with the Trust and its designees
(including, without limitation, any auditors designed by the Trust) in the
preparation of reports to the Trust's Board of Trustees concerning this
Agreement and the monies paid or payable by the Trust pursuant hereto, as well
as any other reports or filings that may be required by law.
4. Representations of the Parties. Each Party represents and warrants
to each other Party that (i) it is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder and has taken all necessary
action to authorize such execution, delivery and performance, (ii) the person
signing this Agreement on its behalf is duly authorized to do so, (iii) it has
obtained all authorizations of any governmental body required in connection with
this Agreement and such authorizations are in full force and effect and (iv) the
execution, delivery and performance of this Agreement will not violate any law,
ordinance, charter, by-law or rule applicable to it or any agreement by which it
is bound or by which any of its assets are affected.
5. Term and Termination.
(a) Unless sooner terminated, this Agreement will continue in
effect until one year from the date hereof and thereafter for successive annual
periods, provided that such continuance is specifically approved at least
annually by votes of a majority of both (i) the Board of Trustees of the Trust
and (ii) those Trustees of the Trust who are not "interested persons" (as
defined in the 0000 Xxx) and have no direct or indirect financial interest in
the operation of the Agreement.
(b) This Agreement may be terminated with respect to a Portfolio
or Class, at any time without the payment of any penalty, by (i) a vote of a
majority of the Board of Trustees of the Trust; (ii) a vote of a majority of a
Portfolio's or Class' shares; or (iii) by Shareholder Servicing Agent on 30
days' written notice.
6. Governing Law. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of the
State of Delaware applicable to agreements fully executed and to be performed
therein, without regard to its conflicts of law rules.
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7. Limitation on Liability. The obligations of each Portfolio or
Class under this Agreement shall only be binding upon the assets and property of
that Portfolio or Class, and shall not be binding upon any Trustee, officer or
shareholder of the Trust individually or upon any other Portfolio or Class of
the Trust.
8. Exculpation: Indemnification.
(a) The Trust shall not be liable to Shareholder Servicing
Agent and Shareholder Servicing Agent shall not be liable to the Trust except
for acts or failures to act which constitute lack of good faith or gross
negligence and for obligations expressly assumed by either Party hereunder.
Nothing contained in this Agreement is intended to operate as a waiver by the
Trust or by Shareholder Servicing Agent of compliance with any applicable
federal or state law, rule, or regulation.
(b) Shareholder Servicing Agent will indemnify the Trust and
hold it harmless from any claims or assertions relating to the lawfulness of
Shareholder Servicing Agent's participation in this Agreement and the
transactions contemplated hereby or relating to any activities of any persons
serving as officers or employees of Shareholder Servicing Agent and performed in
connection with the discharge of its responsibilities under this Agreement. If
any such claims are asserted, the Trust shall have the right to manage its own
defense, including the selection and engagement of legal counsel of its
choosing, and all costs of such defense shall be borne by Shareholder Servicing
Agent.
9. Notices. Each notice required by this Agreement shall be
given in writing and delivered personally, mailed by certified mail or courier
service, or sent by facsimile or electronic mail to the Party's address
identified on the signature page to this Agreement or such other address as each
Party may by written notice provide to the other.
10. Complete Agreement. This Agreement, including Schedule A,
contains the full and complete understanding of the parties and supersedes all
prior representations, promises, statements, arrangements, agreements,
warranties and understandings between the parties with respect to the subject
matter hereof, whether oral or written, express or implied. This Agreement shall
not be deemed to be complete absent Schedule A.
11. Amendment. This Agreement may be modified or amended, and the
terms of this Agreement may be waived, by a writing signed by each of the
parties.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
13. Severability. If any provision of this Agreement shall be
held invalid by a court decision, statute, rule or otherwise, the remainder of
the Agreement shall not be affected thereby.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement by
their duly authorized officers as of the date and year first written above.
E*TRADE FUNDS, on behalf of the Portfolio or Class listed on Schedule A
By: ____________________________________ Address for Notices:
0000 Xxxxxxxx Xxxxx
Name: __________________________________ Xxxxx Xxxx, XX 00000
Fax: (000)000-0000
Title: _________________________________
E*TRADE ASSET MANAGEMENT, INC.
By: ____________________________________ Address for Notices:
0000 Xxxxxxxx Xxxxx
Name: __________________________________ Xxxxx Xxxx, XX 00000
Fax: (000)000-0000
Title: _________________________________
E*TRADE SECURITIES LLC
By: ____________________________________ Address for Notices:
0000 Xxxxxxxx Xxxxx
Name: __________________________________ Xxxxx Xxxx, XX 00000
Fax: (000)000-0000
Title: _________________________________
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AMENDED SCHEDULE A
to the
SHAREHOLDER SERVICES AGREEMENT-Sweep Funds
Trust Portfolios or Classes and Shareholder Service Fees
Portfolio: Service Fee:
--------- -----------
E*TRADE Money Market Fund
Sweep Class 0.25%
E*TRADE California Municipal Money Market Fund
Sweep Class 0.25%
E*TRADE New York Money Market Fund
Sweep Class 0.25%
E*TRADE Government Money Market Fund
Sweep Class 0.25%
E*TRADE Municipal Money Market Fund
Premier Class 0.20%
Sweep Class 0.25%
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