Exhibit m.3
XXXXX & XXXX DISTRIBUTORS, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
FORM OF
PROPRIETARY CLASS SUB-DISTRIBUTION AND SERVICE AGREEMENT
Xxxxx & Tang Distributors, Inc. ("R&T") serves as distributor of the money
market funds listed in Exhibit A (the "Funds"). These funds are [Maryland
corporations]. The Funds are open-end investment companies registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"). The
Funds propose to offer a class of shares of each Fund, $.001 par value, to be
offered to clients of [CLIENT NAME] ("[CLIENT ACRONYM]") ("[CLIENT NAME]
Shares"), in accordance with the terms and conditions contained in a separate
prospectus and the related Statement of Additional Information (the "SAI") of
each of the Funds. Xxxxx & Xxxx Asset Management, LLC (the "Manager") serves as
manager for the Funds. The terms "Prospectus" and "SAI" as used herein refer to
the separate prospectus or related Statement of Additional Information of each
Fund on file with the Securities and Exchange Commission which is part of the
most recent registration statement effective from time to time under the
Securities Act of 1933, as amended (the "Securities Act").
In connection with the offering of [CLIENT NAME] Shares to the public,
[CLIENT ACRONYM] may place or facilitate the placement of orders for purchase
and redemption of [CLIENT NAME] Shares for and on behalf of customers of [CLIENT
ACRONYM] on the following terms and conditions:
1. Services. (a) [CLIENT ACRONYM] is hereby authorized to provide
distribution assistance to R&T in connection with the sale of [CLIENT NAME]
Shares and to (i) place orders through R&T for purchases of [CLIENT NAME] Shares
and (ii) tender [CLIENT NAME] Shares through R&T for redemption, in each case
subject to the terms and conditions set forth in each Prospectus and SAI.
(b) [CLIENT ACRONYM] agrees to provide certain shareholder servicing
activities (as listed in Exhibit B) for customers of [CLIENT ACRONYM] (the
"Customers") who have purchased [CLIENT NAME] Shares.
2. Compensation. In consideration of the services and facilities provided
by [CLIENT ACRONYM] hereunder, R&T will pay or cause the Funds to pay an annual
fee to [CLIENT ACRONYM] equal to [ ] on the average daily net assets of the
[CLIENT NAME] Shares of each Fund held from time to time by or on behalf of the
Customers (the "Customers' Fund Shares"). The fee for each Fund for such
services will be computed daily and payable monthly. For purposes of determining
the fees payable under this computation, the
average daily net asset value of the Customers' Fund Shares will be computed in
the manner specified in each Fund's registration statement (as the same is in
effect from time to time) in connection with the computation of the net asset
value of [CLIENT NAME] Shares for purposes of purchases and redemptions. R&T or
the Funds may, in its discretion and without notice, suspend or withdraw the
sale of [CLIENT NAME] Shares, including the sale of such [CLIENT NAME] Shares to
[CLIENT ACRONYM] for the account of any Customers. R&T represents to [CLIENT
ACRONYM] that this Agreement and the payment of such service and distribution
fees by R&T and the Funds have been authorized and approved by the Funds.
3. Compliance With Law. [CLIENT ACRONYM] agrees that it will comply with
the provisions contained in the Securities Act governing the distribution of
Prospectuses to persons to whom [CLIENT ACRONYM] offers [CLIENT NAME] Shares,
and, if requested, will deliver SAIs. [CLIENT ACRONYM] further agrees that it
will deliver, upon request, copies of any amended Prospectus (and SAI) to
Customers whose [CLIENT NAME] Shares [CLIENT ACRONYM] is holding as record owner
and to deliver to such Customers copies of the annual and interim financial
reports and proxy solicitation materials of the Funds. R&T agrees to furnish to
[CLIENT ACRONYM] as many copies of the Prospectus and SAI, annual and interim
financial reports and proxy solicitation materials as you may reasonably
request.
4. Representations. [CLIENT ACRONYM] represents that it is a member in good
standing of the National Association of Securities Dealers, Inc. [CLIENT
ACRONYM] agrees that it will not offer [CLIENT NAME] Shares to persons in any
jurisdiction in which [CLIENT ACRONYM] may not lawfully make such offer due to
the fact that [CLIENT ACRONYM] has not registered under, or is not exempt from,
the applicable registration or licensing requirements of such jurisdiction.
5. Registration and Qualification of Shares. The Funds have registered an
indefinite number of [CLIENT NAME] Shares under the Securities Act. In addition,
the Funds have filed Articles Supplementary with the State of Maryland to
reflect the creation of the [CLIENT NAME] class of shares. Upon application, R&T
will inform [CLIENT ACRONYM] as to the states or other jurisdictions in which
R&T believes the [CLIENT NAME] Shares have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws of such states,
but R&T shall assume no responsibility or obligation as to [CLIENT ACRONYM]'s
right to sell [CLIENT NAME] Shares in any jurisdiction.
6. Authority. Each Fund shall have full authority to take such action as it
deems advisable in respect of all matters pertaining to the offering of the
[CLIENT NAME] Shares, including the right in its discretion, without notice, to
suspend sales or withdraw the offering of [CLIENT NAME] Shares entirely.
7. Recordkeeping. [CLIENT ACRONYM] understands and agrees that [CLIENT
ACRONYM], and not R&T, the Manager or the Funds, shall be responsible for
obtaining and
maintaining taxpayer certifications under applicable law, including the
satisfaction of any penalties imposed for failure to obtain and maintain such
information under and in accordance with applicable law with respect to accounts
established by [CLIENT ACRONYM]. [CLIENT ACRONYM] also agrees that it will (i)
maintain all records required by law relating to transactions in [CLIENT NAME]
Shares and, upon request by the Funds, promptly make such of these records
available to the Funds as the Funds may reasonably request in connection with
its operations; and (ii) promptly notify R&T if [CLIENT ACRONYM] experiences any
difficulty in maintaining the records described in the foregoing clauses in an
accurate and complete manner.
8. Liability. R&T and the Funds shall be under no liability to [CLIENT
ACRONYM] except for lack of good faith and for obligations expressly assumed by
them hereunder. In carrying out R&T's obligations, R&T agrees to act in good
faith and without negligence. Nothing contained in this agreement is intended to
operate as a waiver by R&T, the Manager and the Funds or [CLIENT ACRONYM] of
compliance with any provision of the Investment Company Act, the Securities Act,
the Securities Exchange Act of 1934, as amended, or the rules and regulations
promulgated by the Securities and Exchange Commission thereunder.
9. Indemnification. For all purposes of this Agreement [CLIENT ACRONYM]
will be deemed to be an independent contractor and will have no authority to act
as agent for R&T or the Funds in any manner or in any respect, other than as
specifically set forth herein and in the exhibits hereto. By [CLIENT ACRONYM]'s
and R&T's written acceptance of this Agreement, [CLIENT ACRONYM] and R&T (as the
case may be, "Indemnifying Party") each agree to and do release, indemnify,
defend and hold the other (in each case, the "Indemnified Party") harmless from
and against any and all direct and indirect liabilities or losses (including
without limitation reasonable court costs and attorneys' fees) resulting from
any directions, actions or inactions of the Indemnifying Party or its officers,
employees, or agents, except, however, to the extent arising from the
negligence, bad faith or willful wrongdoing of the Indemnified Party or its
officers, employees, or agents regarding its responsibilities hereunder. This
paragraph shall survive the termination of this Agreement.
10. Effective Date and Term. This Agreement is effective on the date hereof
and shall extend from the date of the initial purchases of [CLIENT NAME] Class
Shares of a Fund to [ YEAR PERIOD], (the "Initial Term"). Following the Initial
Term, this Agreement shall automatically renew upon the mutual agreement of both
parties for a subsequent term of one (1) year each year thereafter and may be
terminated without penalty by either party upon six (6) months' written notice
to the other party. R&T may terminate this agreement at any time upon notice,
including during the Initial Term, if the aggregate average assets of the Funds
listed on Exhibit A fall below $[ ] million unless [CLIENT ACRONYM] pays to R&T
a minimum fee of [$ ] per month.
11. Termination. Notwithstanding any provision to the contrary contained
herein, this Agreement shall automatically terminate in the event of its
assignment, as defined in the Investment Company Act. This Agreement may also be
terminated at any time for any reason or no reason without penalty by the vote
of a majority of the members of the Board of Directors of a Fund who are not
"interested persons" (as such phrase is defined in the Investment Company Act)
and have no direct or indirect financial interest in the operation of the plan
of distribution with respect to the [CLIENT NAME] Shares and any related
agreement, or by the vote of a majority of the outstanding voting securities of
the [CLIENT NAME] Shares of a Fund.
12. Representations and Sales Materials. No person is authorized to make
any representations concerning the Funds or the [CLIENT NAME] Shares except
those contained in each Prospectus and SAI and in such printed information as
R&T may subsequently prepare. No person is authorized to distribute any sales
material relating to the Funds without the prior written approval of R&T.
13. Arbitration. Any dispute, controversy, or claim arising out of,
connected with, or relating to this Agreement, or the breach, validity, or
enforceability of any provision of this Agreement, will be resolved by final and
binding arbitration in accordance with and subject to the Commercial Arbitration
Rules of the American Arbitration Association ("AAA") then in effect.
Arbitration shall take place at a location within the state of New York, or at a
location at the discretion of the arbitrators. All expenses associated with
obtaining and utilizing the services of the AAA and the arbitrators shall be
shared equally by the parties hereto. The AAA and the arbitrators shall be made
aware of this provision and shall agree to request payment separately from R&T
and [CLIENT ACRONYM] for said services, including all expenses directly related
to the arbitration, other than the expense of witnesses, which shall be borne by
the party producing such witnesses.
Notwithstanding the foregoing, R&T and [CLIENT ACRONYM] shall bear their
own respective costs of preparing for and participating in the arbitration,
including, without limitation, their attorneys' fees, expert and/or witness
fees, and their costs of complying with discovery requests. Discovery as
permitted by the Federal Rules of Civil Procedure then in effect will be allowed
in connection with the arbitration to the extent consistent with the purpose of
the arbitration and as allowed by the arbitrators. Judgment upon the award
rendered in any arbitration may be entered in any court of competent
jurisdiction, or application may be made to such court for a judicial acceptance
of the award and an enforcement, as the law of the state having jurisdiction may
require or allow. The fact that arbitration is or may be allowed will not impair
the exercise of any termination rights under this Agreement.
14. Waiver. No failure or delay by either party to exercise any right of
such party regarding an obligation of the other party to this Agreement shall
operate as a waiver thereof, unless agreed to in writing by both parties. Any
single or partial exercise by either party of any
of its rights shall not preclude such party from any other or further exercise
of any such right or the exercise of any other right. Any single or partial
waiver by either party of any obligation of the other party under this Agreement
shall constitute a waiver of such obligation only as specified in such waiver
and shall not constitute a waiver of any other obligation.
15. Amendment. This Agreement cannot be changed, modified or amended,
except by an instrument in writing executed by all parties hereto.
16. Choice of Law; Entire Agreement. This Agreement shall be governed by
and shall be interpreted in accordance with the laws of the State of New York.
This Agreement, including any attachments or exhibits hereto, supersedes any and
all prior written or oral agreements between the parties, and hereby constitutes
the entire Agreement between the parties with respect to the subject matter
hereof, and may only be amended in writing signed by authorized officers of the
parties.
17. Notice. Any notice or other communication given under this Agreement to
either party shall be in writing, delivered by hand or through the United States
Postal Service, registered or certified mail with return receipt requested to
the following individuals' attention (or to such other individuals and/or
addresses as may be set forth in a written notice sent by either party, as
applicable):
Notices to R&T and to any of the Funds:
Attention: Xxxxxxx Xxxxxxx
Title: Senior Vice President
FAX number: (000) 000-0000
Address: 000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Notices to [CLIENT ACRONYM]:
Attention:
Title:
FAX number: ( ) -
Address:
The parties agree that proper notice given to R&T constitutes notice to R&T
and each and all of the Funds.
Please indicate your confirmation and acceptance of this Agreement by signing
below and returning two copies of this agreement to Xxxxx & Xxxx Distributors,
Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000.
Xxxxx & Tang Distributors, Inc.
, 2002
by:
Xxxxxxx Xx Xxxxxxx
Vice President, CFO & Treasurer
[CLIENT NAME]
, 2002
by:
Name:
Title:
EXHIBIT A
[LIST FUND NAMES]
EXHIBIT B
Services to be Performed
Omnibus Fund Account
1. Maintain customer account detail for Fund shares held as agent for
customers.
2. Issue and deliver periodic statements to customers.
3. Break down daily dividend accruals and apply them to customer account
records.
4. Receive, break down and pay or, at customers' direction, consolidate and
reinvest customer dividends on monthly payment date.
5. Consolidate and remit to the Fund customer monies associated with their
purchase of Fund shares.
6. Receive from the Fund, break down and remit to customer monies associated
with their redemptions of Fund shares.
7. Maintain all proof procedures between customer sub-accounts and the central
account with the Fund.
8. Perform all special mailings to customers required by the Fund, such as
annual prospectuses mailings, proxy solicitations, and semi-annual and
annual reports.
9. Perform all customer service functions for the Fund, including responding
to telephone inquiries and requests.
10. Fill all customer requests for prospectuses.
11. Receive and process customer registration forms.
12. Retain records regarding the services to be performed, as required by law
and regulations.
13. Transmit to customers and governmental authorities all IRS reporting.
