EX-99(e)(2)
DEALER AGREEMENT
AGREEMENT, made as of this th day of , 200_, by and between Gartmore
Distribution Services, Inc., or its surviving entity ("Distributor") and
_______________ ("Dealer") whereby Dealer agrees to participate in the
distribution of the shares ("Shares") of the series and classes of Gartmore
Mutual Funds (collectively the "Trust") as are listed on Exhibit A, and as may
be amended from time to time (each, a "Fund"). Dealer also agrees to provide
distribution and shareholder services to the Funds subject to the following
terms and conditions.
1. DEALER AUTHORITY. With respect to the distribution and sales of Shares,
Dealer shall have authority to act as limited agent of a Fund,
Distributor or any other dealer only with respect to facilitating the
purchase and sale of Shares as described herein. All orders are subject
to acceptance or rejection by Distributor or a Fund in its sole
discretion, and if accepted become effective only upon confirmation by
Distributor. Dealer shall have no authority to make any representations
concerning the Shares of a Fund except such representations as may be
contained in a Fund's then current prospectus, in its then current
Statement of Additional Information (collectively, the prospectus and
Statement of Additional Information for each Fund are the
"Prospectus"), and in such other printed information as a Fund or
Distributor may subsequently prepare or distribute to Dealer for
purposes of selling the Shares. Dealer shall have no authority to
distribute any other sales material relating to a Fund or any of its
Shares without the prior written approval of Distributor. Dealer agrees
to follow any written guidelines or standards relating to the sale or
distribution of the Shares as may be provided to Dealer by Distributor
including the provisions outlined in Exhibit B and the relevant Fund's
prospectus, as well as to follow any applicable federal and/or state
securities laws, rules or regulations affecting the sale or
distribution of shares of investment companies offering multiple
classes of shares.
Dealer agrees to take full responsibility for the suitability and
proper supervision of mutual fund recommendations to its customers and
to ensure that, to the extent customers request a class of shares in a
Fund different from what they already hold in the Fund, such customers
are aware of the advantages and disadvantages of selecting one class of
shares over other classes of shares and are aware of the available
methods of mutual fund financing.
2. SALES AND PRICING OF SHARES. Dealer shall offer and sell Shares only at
their respective public offering prices, or the net asset values if
applicable, in accordance with Rule 22c-1 of the Investment Company Act
of 1940, as amended, and the terms and conditions of the Prospectus of
a Fund whose Shares Dealer offers. Dealer shall place orders for Shares
only with Distributor, shall date and time stamp all orders received by
Dealer and promptly shall transmit all orders to Distributor in time
for processing at the price next determined after receipt of the order
by Dealer, in accordance with the Prospectus of the Fund whose Shares
January 2007 1 I # 227207 v.1
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are being sold. Dealer shall not aggregate orders to purchase or redeem
Shares received after close of the New York Stock Exchange (generally,
4:00 p.m. Eastern Time) ("Market Close") with orders received before
Market Close, and warrants that its internal control structure
concerning the processing and transmission of orders is suitably
designed to prevent or detect on a timely basis orders received after
Market Close from being aggregated with orders received before Market
Close and to minimize errors that could result in late transmission of
orders. Orders received by Dealer before Market Close will receive that
day's public offering price or net asset value, as applicable, and
orders received by Dealer after Market Close will receive the next
day's public offering price or net asset value, as applicable. Dealer
shall confirm the transaction with its customer (hereinafter
"Client-shareholder") at the price confirmed in writing by the
Distributor. In the event of differences between verbal and written
price, written confirmations shall be considered final. Prices of the
Shares are computed by a Fund in accordance with its Prospectus.
Distributor will not accept any order from Dealer which is placed on a
conditional basis or subject to any delay or contingency prior to
execution.
3. SERVICES TO BE PROVIDED BY DEALER. Dealer or its affiliates/designees
will maintain records of sales, redemptions and repurchases of Shares
and will furnish the Distributor with such records on request. Dealer
will also distribute Prospectuses and reports to the Client-shareholder
as described below, in compliance with applicable legal requirements
unless the parties expressly agree that Distributor will do so on
Dealer's behalf. Client-shareholders means those customers of the
Dealer who have entered into an agreement with the Dealer for
brokerage, investment advisory, trust, or shareholder services and who
maintain an interest in an account with the Funds registered in the
name of the Dealer.
With respect to shareholder services, Distributor hereby appoints
Dealer to render shareholder services to each of the 12b-1 Funds (as
defined below). Shareholder services may include, but are not limited
to, answering routine shareholder inquiries regarding the 12b-1 Funds;
providing information to shareholders on their investments in the 12b-1
Funds; providing personnel and communication equipment used in
connection therewith; and providing such other services as Distributor
may reasonably request. Dealer shall prepare such quarterly reports for
Distributor as shall reasonably be required by Distributor. Fees paid
under this Agreement for such shareholder services for the 12b-1 Funds
are in addition to, and not duplicative of, any fees paid for services
provided under a separate administrative servicing agreement for the
Funds.
Distributor reserves the right to reject any purchase orders, including
exchanges, for any reason and without notice to Dealer, including if
Distributor, in its sole opinion, believes Dealer's customer(s) is
engaging in short-term or excessive trading into and out of a Fund or
otherwise engaging in trading that may be disruptive to a Fund ("Market
Timing"). Dealer agrees to cooperate with Distributor to monitor for
Market Timing by Dealer's customers, to provide such relevant
information about Market Timers to Distributor as it may reasonably
request and to prevent Market Timing from occurring by or because of
Dealer's customers. Failure of Distributor to reject any purchase
orders that might be deemed to be Market Timing shall not constitute a
waiver of Distributor's rights under this section.
January 2007 2 I # 227207 v.1
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4. DEALER COMPENSATION.
(a) So long as this Agreement is in effect, on purchases from
Distributor of Shares of a Fund sold with a sales charge, Dealer shall
receive a discount from the public offering price (a "Dealer
Concession") at the specified percentages of the public offering price
set forth in Exhibit A and the Fund's prospectus and which may be
modified from time to time by a Fund.
Dealer shall not receive any Dealer Concession with respect to certain
transactions which are exempt from sales charges and will receive the
reduced Dealer Concessions which correspond to the reduced sales
charges applicable to certain types of transactions (e.g., transactions
involving letters of intent or rights of accumulation), as set forth in
a Fund's Prospectus, which are hereby incorporated herein by reference
and which may be modified from time to time by a Fund. Dealer shall not
share or rebate any portion of such Dealer Concessions or otherwise
grant any concessions, discounts or other allowances to any person who
is not a broker or dealer actually engaged in the investment banking or
securities business and is not a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"). Dealer will
receive Dealer Concessions as described above on all purchase
transactions in Client-shareholder accounts (excluding reinvestment of
income dividends and capital gains distributions) for which Dealer is
designated as Dealer of Record except where Distributor determines that
any such purchase was made with the proceeds of a redemption or
repurchase of Shares of a Fund whether or not the transaction
constitutes the exercise of the exchange or conversion privilege.
(b) In addition to the compensation described in Section 4(a) above and
subject to any limitations set forth in the NASD's Rules of Conduct,
including without limitation Rule 2830, Distributor will pay Dealer,
with respect to each of the Funds for which a Distribution Plan
pursuant to Rule 12b-1 of the Investment Company Act of 1940, as
amended (the "1940 Act"), is in place for such Shares and under which a
fee may be paid to broker-dealers for providing distribution or
shareholder services ("12b-1 Funds"), a monthly fee computed at the
annual rate as described in Exhibit A and the Fund's prospectus. The
fee will be paid for the period Shares of the 12b-1 Funds are held in
accounts for which Dealer provides services as described in Section 3
above; provided, however, that any waiver of such fee by Distributor
will apply likewise to Dealer and Distributor is obligated to pay such
fee to Dealer only so long as the Distributor is reimbursed by such
12b-1 Funds for such fees.
(c) With respect to any provision regarding Dealer compensation in this
Section 4, if there is any conflict between a term of Exhibit A and a
term of the applicable Fund prospectus, the term of the prospectus in
effect at such time shall prevail.
January 2007 3 I # 227207 v.1
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(d) If any Shares sold to Dealer under the terms of this Agreement are
repurchased by a Fund, or are tendered for redemption, within seven
business days after the date of Distributor's confirmation of the
original purchase by Dealer, Dealer shall promptly refund to
Distributor the full Dealer Concession received by Dealer pursuant to
Section 4(a) above or Distributor reserves the right to deduct such
amount from any current or future compensation due Dealer.
5. DEALER AUTHORIZATION. Dealer hereby authorizes Distributor to act as
its agent in connection with all transactions in Client-shareholder
accounts for which Dealer is designated as Dealer of Record. All
designations of Dealer of Record and all authorizations of Distributor
to act as Dealer's agent shall cease upon the termination of this
Agreement or upon the Client-shareholders' instructions to transfer his
or her account to another Dealer of Record.
6. PAYMENT FOR SHARES. Payment for all Fund Shares purchased from
Distributor by Dealer shall be received by Distributor within the time
period defined by agreed-upon normal settlement procedure after
acceptance of Dealer's order. If such payment is not so received by the
Distributor, the Distributor and the Fund(s) reserve the right, without
notice, to immediately cancel the sale, or, at Distributor's option, to
sell the Shares ordered by Dealer back to the Fund in which latter
case, Distributor may hold Dealer responsible for any loss, suffered by
Distributor or by the Fund resulting from Dealer's failure to make
payment as described above.
7. PURCHASE OF SHARES. Dealer shall purchase Shares of the Fund only
through Distributor or from the Client-shareholders in accordance with
the terms of the Fund's prospectus. If Dealer purchases Shares from
Distributor, Dealer agrees that all such purchases shall be made only
to cover orders already received by Dealer from the
Client-shareholders, or for Dealer's own bona fide investment without a
view to resale. If Dealer purchases Shares from the
Client-shareholders, Dealer agrees to pay such Client-shareholders the
applicable net asset value per share less any contingent deferred sales
charge or redemption fee that would be applicable if such Shares were
then tendered for redemption in accordance with the applicable
Prospectus ("Repurchase Price").
8. LIMITATION ON SALE OF SHARES. Dealer shall sell Shares only:
(a) to the Client-shareholders at the prices described in
Section 2 above; or
(b) to Distributor as agent for the Fund at the Repurchase Price.
In such a sale to Distributor, Dealer may act either as
principal for Dealer's own account or as agent for the
Client-shareholder. If Dealer acts as principal for its own
January 2007 4 I # 227207 v.1
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account in purchasing Shares for resale to Distributor, Dealer
agrees to pay Client-shareholder not less than nor more than
the Repurchase Price which Dealer received from Distributor.
If Dealer acts as agent for the Client-shareholder in selling
Shares to Distributor, Dealer agrees not to charge the
Client-shareholder more than a fair commission for handling
the transaction.
9. DEALER'S REPRESENTATIONS AND WARRANTIES. Dealer hereby represents and
warrants to Distributor that:
(a) Dealer is willing and possesses the legal authority to provide
the services contemplated by this Agreement without violation
of applicable laws;
(b) Dealer is and shall remain throughout the term of this
Agreement a member in good standing of the NASD and shall
immediately notify Distributor should it cease to be a member
of the NASD;
(c) Dealer is and shall remain throughout the term of this
Agreement a broker-dealer and thus a "Financial Institution"
as defined by Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act (USA Patriot Act) of 2001 (the
"ACT"), duly and properly registered and qualified under all
applicable laws, rules and regulations, including, but not
limited to, all state and federal securities laws, rules and
regulations, as may be necessary or appropriate for Dealer to
perform and observe all of its duties, obligations and
covenants set forth or contemplated by this Agreement;
(d) Dealer shall throughout the term of this Agreement comply with
the requirements of all applicable laws including Title III of
the ACT, rules and regulations, including, but not limited to,
federal and state securities laws, the rules, regulations and
orders of the Securities and Exchange Commission and the NASD,
in performing and observing all of its duties, obligations and
covenants set forth or contemplated by this Agreement;
(e) Dealer shall not withhold placing with Distributor orders
received from the Client-shareholders so as to profit from
such withholding;
(f) Dealer shall not offer Shares of any Fund in any state where
such Shares are not qualified for sale under the Blue Sky Laws
and Regulations of such state or where Dealer is not qualified
to act as a dealer, except in appropriate circumstances when
under state laws and regulations the Shares or the sales
transactions are exempt from qualification or dealer
registration is not required; and
January 2007 5 I # 227207 v.1
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(g) Dealer shall give Distributor at least 30 days advance written
notice of any event which will cause an assignment of this
Agreement (as defined in the 0000 Xxx) by Dealer or its
affiliates.
10. INDEMNIFICATION. Dealer shall indemnify and hold harmless Distributor,
its affiliates and the Fund against any losses, claims, damages,
liabilities or expenses (including reasonable attorneys' fees and
expenses) resulting from (a) any negligence or misfeasance of Dealer or
any of its officers, directors, employees or registered
representatives; or (b) any violation of any law including Title III of
the ACT, rule or regulation or any failure to perform or observe any
obligations of Dealer set forth in this Agreement by Dealer or any of
its officers, directors, employees or registered representatives.
Distributor shall indemnify and hold harmless Dealer and its affiliates
against any losses, claims, damages, liabilities or expenses (including
reasonable attorneys' fees and expenses) resulting from (a) any
negligence or misfeasance of the Funds, Distributor or any of its
officers, directors, employees or registered representatives; or (b)
any violation of any law, rule or regulation or any failure to perform
or observe any obligations of Distributor or the Funds set forth in
this Agreement by the Funds, Distributor or any of its officers,
directors, employees or registered representatives.
11. PROVISION OF SALES MATERIAL. Distributor shall deliver to Dealer
without charge reasonable quantities of the Fund's Prospectuses with
any supplements thereto currently in effect, copies of current
shareholder reports of the Fund, proxy materials, and sales material
issued by Distributor from time to time.
12. RULE 12B-1 AGREEMENT; TERMINATION. This Agreement is a related
agreement under the Distribution Plan ("Rule 12b-1 Plan"), applicable
for the 12b-1 Funds, as adopted pursuant to Rule 12b-1 under the 1940
Act. This Agreement may be terminated as to the payments made by the
12b-1 Funds under the Rule 12b-1 Plan at any time, without the payment
of any penalty, by the vote of a majority of the members of the Board
of Trustees of the Trust who are not interested persons of the Trust
and who have no direct or indirect financial interest in the operation
of the Rule 12b-1 Plan or in any related agreements to the Rule 12b-1
Plan ("Disinterested Trustees") or by a majority of the outstanding
Shares, each with respect to a class of a 12b-1 Fund, upon delivery of
written notice thereof to the parties to this Agreement.
This Agreement will terminate automatically in the event of its
assignment as defined in the 1940 Act or upon termination of the
Distributor's underwriting agreement with the Fund. In addition, either
the Distributor or Dealer may terminate this Agreement upon at least 90
days written notice to the other party.
13. COMPLETE AGREEMENT. This Agreement supersedes and cancels any prior
agreement with respect to the sale of Shares of a Fund as listed in
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Exhibit A, and may be amended at any time and from time to time by
written agreement of the parties hereto, subject to the approval of the
Board of Trustees of the Trust when applicable. Notwithstanding the
foregoing, Distributor may amend or modify the Exhibits incorporated
herein, as provided throughout this Agreement, by providing new
exhibits to Dealer. However, such amendment shall only become effective
and part of this Agreement and be considered binding upon Dealer upon
Dealer's first sale of Shares under the new Exhibits.
14. CHOICE OF LAW. This Agreement shall be governed by and construed to be
in accordance with substantive laws of the State of Delaware without
reference to choice of law principles thereof and in accordance with
the 1940 Act. In the case of any conflict, the 1940 Act shall control.
Each party represents that the undersigned has authority to act, and to
execute this Agreement, on behalf of such party.
15. NOTICES. All communications and notices to Distributor should be sent
to the address below. Any communications or notice to Dealer shall be
duly given if mailed or delivered to Dealer at the address specified by
Dealer below.
16. NON-EXCLUSIVITY. Each of the parties acknowledges and agrees that this
Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into
similar agreements and arrangements with other entities.
17. PRIVACY PROGRAM. Each Party to this Agreement agrees to protect
Customer Information (defined below) and to comply as may be necessary
with requirements of the Xxxxx-Xxxxx-Xxxxxx Act, the relevant state and
federal regulations pursuant thereto, including Regulation S-P, and
state privacy laws.
(a) CUSTOMER INFORMATION. "Customer Information" means any
information contained on an application of a customer
("Customer") of the Funds or other form and all nonpublic
personal information about a Customer that a party receives
from the other party. "Customer Information" includes, by way
of example and not limitation, name, address, telephone
number, social security number, date of birth and personal
financial information.
(b) SAFEGUARDING CUSTOMER INFORMATION. The parties shall establish
and maintain safeguards against the unauthorized access,
destruction, loss, or alteration of Customer Information in
their control, which are no less rigorous than those
maintained by a party for its own information of a similar
nature. In the event of any improper disclosure of any
Customer Information, the party responsible for the disclosure
will immediately notify the other party.
(c) SURVIVABILITY. The provisions of this Privacy Program Section
shall survive the termination of the Agreement.
January 2007 7 I # 227207 v.1
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18. ANTI-MONEY LAUNDERING PROGRAM.
(a) The Distributor will rely upon Dealer to establish a written
Anti-Money Laundering Program (the "Program") to include
policies, procedures, and controls that comply with the ACT
and the Bank Secrecy Act of 1970 ("BSA"). Each party to this
Agreement acknowledges, represents, and warrants that each
party has adopted and implemented an Anti-Money Laundering
Program that complies and will continue to comply with all
aspects and requirements of the ACT, the BSA, and all other
applicable anti-money laundering laws and regulations.
Upon request, Dealer shall promptly certify to having such
Program that complies with and continues to comply with all
aspects and requirements of the ACT, the BSA, and all other
applicable federal, state and local anti-money laundering laws
and regulations.
(b) The Dealer's Program shall include, and the Distributor shall
rely upon, the Dealer's policies, procedures and controls to,
among other things, (i) verify the identity (due diligence) of
the Dealer's customers, (ii) maintain records of the
information used to identify the Dealer's customer, (iii)
determine if a Dealer's customer appears on lists of known or
suspected terrorists or associated with known or suspected
terrorist organizations (said customer hereinafter referred to
as a "Prohibited Customer"), and (iv) to ensure that
Prohibited Customers and foreign shell banks do not maintain
investments in any Fund.
(c) The Dealer's Program shall also comply with the Customer
Identification Program ("CIP") for customers who open accounts
on or after October 1, 2003, and as such, shall among other
matters provide for the release of customer information to law
enforcement agencies, and the filing of Suspicious Activity
Reports ("SARs"), as and if applicable, and in accordance with
the ACT. In addition, the Dealer's Program also shall include
procedures for fulfilling the currency reporting requirements
of the ACT and the BSA, as and if applicable.
(d) The provisions of this Anti-Money Laundering section shall
survive the termination of the Agreement.
19. SHAREHOLDER INFORMATION
19.1 AGREEMENT TO PROVIDE INFORMATION. Dealer agrees to provide the
Fund, upon written request, the taxpayer identification number ("TIN"),
if known, of any or all Shareholder(s) of the account and the amount,
date, name or other identifier of any registered representative(s)
associated with the Shareholder(s) or account (if known), and
transaction type (purchase, redemption, transfer, or exchange) of every
purchase, redemption, transfer, or exchange of Shares held through an
account maintained by the Dealer during the period covered by the
request.
January 2007 8 I # 227207 v.1
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19.1.1 PERIOD COVERED BY REQUEST. Requests must set forth a
specific period, not to exceed 12 months from the date of the
request, for which transaction information is sought. A Fund
may request transaction information older than 12 months from
the date of the request as it deems necessary to investigate
compliance with policies established by the Fund for the
purpose of eliminating or reducing any dilution of the value
of the outstanding shares issued by the Fund.
19.1.2 FORM AND TIMING OF RESPONSE. Dealer agrees to transmit
the requested information that is on its books and records to
the Fund or its designee promptly, but in any event not later
than five (5) business days, after receipt of a request. If
the requested information is not on the Dealer's books and
records, Dealer agrees to: (i) provide or arrange to provide
the requested information from Shareholders who hold an
account with an indirect intermediary; or (ii) if directed by
the Fund, block further purchases of Fund Shares from such
indirect intermediary. In such instance, Dealer agrees to
inform the Fund whether it plans to perform (i) or (ii).
Responses required by this paragraph must be communicated in
writing and in a format mutually agreed upon by the parties.
To the extent practicable, the format for any transaction
information provided to a Fund should be consistent with the
NSCC Standardized Data Reporting Format. For purposes of this
provision, an "indirect intermediary" has the same meaning as
in SEC Rule 22c-2 under the Investment Company Act of 1940.
19.1.3 LIMITATIONS ON USE OF INFORMATION. The Fund agrees not
to use the information received for marketing or any other
similar purpose without the prior written consent of the
Dealer.
19.2 AGREEMENT TO RESTRICT TRADING. Dealer agrees to execute written
instructions from a Fund to restrict or prohibit further purchases or
exchanges of Shares by a Shareholder that has been identified by such
Fund as having engaged in transactions of the Fund's Shares (directly
or indirectly through the Dealer's account) that violate policies
established by the Fund for the purpose of eliminating or reducing any
dilution of the value of the outstanding Shares issued by the Fund.
19.2.1 FORM OF INSTRUCTIONS. Instructions must include the
TIN, if known, and the specific restriction(s) to be executed.
If the TIN is not known, the instructions must include an
equivalent identifying number of the Shareholder(s) or
account(s) or other agreed upon information to which the
instruction relates.
19.2.2 TIMING OF RESPONSE. Dealer agrees to execute
instructions as soon as reasonably practicable, but not later
than five business days after receipt of the instructions by
the Dealer.
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19.2.3 CONFIRMATION BY DEALER. Dealer must provide written
confirmation to the Fund that instructions have been executed.
Dealer agrees to provide confirmation as soon as reasonably
practicable, but not later than ten business days after the
instructions have been executed.
19.3 DEFINITIONS. For purposes of this paragraph 19:
19.3.1 The term "Fund" includes the Distributor and a Fund's
transfer agent. The term does not include any
"excepted funds" as defined in SEC Rule 22c-2(b)
under the 0000 Xxx.
19.3.2 The term "Shares" means the interest of Shareholders
corresponding to the redeemable securities of record
issued by a Fund under the 1940 Act that are held by
the Dealer.
January 2007 10 I # 227207 v.1
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19.3.3 The term "Shareholder" means the beneficial owner of
Shares, whether the Shares are held directly or by
the Dealer in nominee name.
19.3.4 The term "written" includes electronic writings and
facsimile transmissions.
20. TERMINATION AND SURVIVAL. In the event that this Agreement is
terminated under the terms and conditions described in such Agreement,
the indemnification provision contained in this Agreement shall
continue until the possibilities for damages or loss have expired.
21. ACCEPTANCE OF AGREEMENT. The parties may enter into this Agreement by
executing this document. In addition, the Dealer's placement of an
order or acceptance of payments of any kind after the Dealer's receipt
of this Agreement shall constitute the Dealer's acceptance of this
Agreement and, therefore, after such placement of an order or
acceptance of payment, this Agreement shall be binding as between the
parties as of the date of such order or payment.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers as of the day and year first written above.
DISTRIBUTOR, DEALER,
Gartmore Distribution Services, Inc. _____________________________
0000 Xxxxx Xxxx, Xxxxx 0000 _____________________________
Xxxxxxxxxxxx, XX 00000 _____________________________
__________________________________ ____________________________________
By: _____________________________ By: ________________________________
January 2007 11 I # 227207 v.1
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EXHIBIT A
Any and all Gartmore Funds' funds are available for sale. The Broker/ Dealer
will receive the applicable 12b-1 fees and Dealer Concession, as described in
"Essential Fund Sales Information for Broker Dealers", as such document may be
amended from time to time upon notice by the Distributor, based on funds sold
and class purchased as defined in the fund's prospectus.
January 2007 12 I # 227207 v.1
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EXHIBIT B
FUND/SERV PROCESSING PROCEDURES
AND
MANUAL PROCESSING PROCEDURES
The purchase, redemption and settlement of Shares of a Fund will normally follow
the Fund/SERV-Defined Contribution Clearance and Settlement Service ("DCCS")
Processing Procedures below and the rules and procedures of the SCC Division of
the National Securities Clearing Corporation ("NSCC") shall govern the purchase,
redemption and settlement of Shares of the Funds through NSCC by the Dealer. In
the event of equipment failure or technical malfunctions or the parties'
inability to otherwise perform transactions pursuant to the FUND/SERV Processing
Procedures, or the parties' mutual consent to use manual processing, the Manual
Processing Procedures below will apply.
It is understood and agreed that, in the context of Section 22 of the 1940 Act
and the rules and public interpretations thereunder by the staff of the
Securities and Exchange Commission (SEC Staff), receipt by the Dealer of any
Instructions from the Client-shareholder prior to the Close of Trade on any
Business Day shall be deemed to be receipt by the Funds of such Instructions
solely for pricing purposes and shall cause purchases and sales to be deemed to
occur at the Share Price for such Business Day, except as provided in 4(c) of
the Manual Processing Procedures. Each Instruction shall be deemed to be
accompanied by a representation by the Dealer that it has received proper
authorization from each Client-shareholder whose purchase, redemption, account
transfer or exchange transaction is effected as a result of such Instruction.
FUND/SERV-DCCS PROCESSING PROCEDURES
1. On each business day that the New York Stock Exchange (the "Exchange")
is open for business on which the Funds determine their net asset
values ("Business Day"), the Distributor shall accept, and effect
changes in its records upon receipt of purchase, redemption, exchange,
account transfer and registration instructions from the Dealer
electronically through Fund/SERV ("Instructions") without supporting
documentation from the Client-shareholder. On each Business Day, the
Distributor shall accept for processing any Instructions from the
Dealer and shall process such Instructions in a timely manner.
2. Distributor shall perform any and all duties, functions, procedures and
responsibilities assigned to it under this Agreement and as otherwise
established by the NSCC. Distributor shall conduct each of the
foregoing activities in a competent manner and in compliance with (a)
all applicable laws, rules and regulations, including NSCC
Fund/SERV-DCCS rules and procedures relating to Fund/SERV; (b) the
then-current Prospectus of a Fund; and (c) any provision relating to
Fund/SERV in any other agreement of the Distributor that would affect
its duties and obligations pursuant to this Agreement.
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3. Confirmed trades and any other information provided by the Distributor
to the Dealer through Fund/SERV and pursuant to this Agreement shall be
accurate, complete, and in the format prescribed by the NSCC.
4. Trade, registration, and broker/dealer information provided by the
Dealer to the Distributor through Fund/SERV and pursuant to this
Agreement shall be accurate, complete and, in the format prescribed by
the NSCC. All Instructions by the Dealer regarding each Fund/SERV
Account shall be true and correct and will have been duly authorized by
the registered holder.
5. For each Fund/SERV transaction, including transactions establishing a
Client-shareholder account with the Distributor, the Dealer shall
provide the Funds and the Distributor with all information necessary or
appropriate to establish and maintain each Fund/SERV transaction (and
any subsequent changes to such information), which the Dealer hereby
certifies is and shall remain true and correct. The Dealer shall
maintain documents required by the Funds to effect Fund/SERV
transactions. The Dealer certifies that all Instructions delivered to
Distributor on any Business Day shall have been received by the Dealer
from the Client-shareholder by the close of trading (generally 4:00
p.m. Eastern Time ("ET")) on the Exchange (the "Close of Trading") on
such Business Day and that any Instructions received by it after the
Close of Trading on any given Business Day will be transmitted to
Distributor on the next Business Day.
MANUAL PROCESSING PROCEDURES
1. On each Business Day, the Dealer may receive Instructions from the
Client-shareholder for the purchase or redemption of shares of the
Funds based solely upon receipt of such Instructions prior to the Close
of Trading on that Business Day. Instructions in good order received by
the Dealer prior to the close of trading on any given Business Day
(generally, 4:00 p.m. ET (the "Trade Date") and transmitted to the
Distributor by no later than 9:30 a.m. ET the Business Day following
the Trade Date ("Trade Date plus One" or "TD+1"), will be executed at
the NAV ("Share Price") of each applicable Fund, determined as of the
Close of Trading on the Trade Date.
2. By no later than 6:00 p.m. ET on each Trade Date ("Price Communication
Time"), the Distributor will use its best efforts to communicate to the
Dealer via electronic transmission acceptable to both parties, the
Share Price of each applicable Fund, as well as dividend and capital
gain information and, in the case of funds that credit a daily
dividend, the daily accrual for interest rate factor (mil rate),
determined at the Close of Trading on that Trade Date.
3. As noted in Paragraph 1 above, by 9:30 a.m. ET on TD+1 ("Instruction
Cutoff Time") and after the Dealer has processed all approved
transactions, the Dealer will transmit to the Distributor via
facsimile, telefax or electronic transmission or system-to-system, or
by a method acceptable to the Dealer and the Distributor, a report (the
"Instruction Report") detailing the Instructions that were received by
the Dealer prior to the Funds' daily determination of Share Price for
each Fund (i.e., the Close of Trading) on Trade Date.
January 2007 14 I # 227207 v.1
EX-99(e)(2)
(a) It is understood by the parties that all Instructions from the
Client-shareholder shall be received and processed by the
Dealer in accordance with its standard transaction processing
procedures. The Dealer or its designees shall maintain records
sufficient to identify the date and time of receipt of all
Client-shareholder transactions involving the Funds and shall
make or cause to be made such records available upon
reasonable request for examination by the Funds or its
designated representative or, at the request of the Funds, by
appropriate governmental authorities. Under no circumstances
shall the Dealer change, alter or modify any Instructions
received by it in good order.
(b) Following the completion of the transmission of any
Instructions by the Dealer to the Distributor by the
Instruction Cutoff Time, the Dealer will verify that the
Instruction was received by the Distributor and trades are
pending by utilizing a remote terminal or such other method
acceptable to the Distributor.
(c) In the event that an Instruction transmitted by the Dealer on
any Business Day is not received by the Distributor by the
Instruction Cutoff Time, due to mechanical difficulties or for
any other reason beyond the Dealer's reasonable control, such
Instruction shall nonetheless be treated by the Distributor as
if it had been received by the Instruction Cutoff Time,
provided that the Dealer retransmits such Instruction by
facsimile transmission to the Distributor and such Instruction
is received by the Distributor's financial control
representative no later than 9:30 a.m. ET on TD+1. In
addition, the Dealer will place a phone call to a financial
control representative of the Distributor prior to 9:00 a.m.
ET on TD+1 to advise the Distributor that a facsimile
transmission concerning the Instruction is being sent.
(d) With respect to all Instructions, the Distributor's financial
control representative will manually adjust a Fund's records
for the Trade Date to reflect any Instructions sent by the
Dealer.
(e) By no later than 4:00 p.m. on TD+1, and based on the
information transmitted to the Distributor pursuant to
Paragraph 3(c) above, the Dealer will use its best efforts to
verify that all Instructions provided to the Distributor on
TD+1 were accurately received and that the trades for each
Account were accurately completed and the Dealer will use its
best efforts to notify Distributor of any discrepancies.
4. As set forth below, upon the timely receipt from the Dealer of the
Instructions, the Fund will execute the purchase or redemption
transactions (as the case may be) at the Share Price for each Fund
computed as of the Close of Trading on the Trade Date.
(a) Except as otherwise provided herein, all purchase and
redemption transactions will settle on TD+1. Settlements will
be through net Federal Wire transfers to an account designated
by a Fund. In the case of Instructions which constitute a net
purchase order, settlement shall occur by the Dealer
January 2007 15 I # 227207 v.1
EX-99(e)(2)
instructing the trustee or custodian for the Funds to initiate
a wire transfer by 1:00 p.m. ET on TD+1 to the custodian for
the Fund for receipt by the Funds' custodian by no later than
the Close of Business at the New York Federal Reserve Bank on
TD+1, causing the remittance of the requisite funds to the
Distributor to cover such net purchase order. In the case of
Instructions which constitute a net redemption order,
settlement shall occur by the Distributor causing the
remittance of the requisite funds to cover such net redemption
order by Federal Funds Wire by 1:00 p.m. ET on TD+1, provided
that the Fund reserves the right to (i) delay settlement of
redemptions for up to seven (7) Business Days after receiving
a net redemption order in accordance with Section 22 of the
1940 Act and Rule 22c-1 thereunder, or (iii) suspend
redemptions pursuant to the 1940 Act or as otherwise required
by law. Settlements shall be in U.S. dollars and a Fund may
pay redemption proceeds in whole or in part by a distribution
in-kind of readily marketable securities that it holds in lieu
of cash in conformity with applicable law or regulations.
(b) The Dealer or such other party as may be designated, as record
owner of each account ("Record Owner") will be provided with
all written confirmations required under federal and state
securities laws.
(c) On any Business Day when the Federal Reserve Wire Transfer
System is closed, all communication and processing rules will
be suspended for the settlement of Instructions. Instructions
will be settled on the next Business Day on which the Federal
Reserve Wire Transfer System is open. The original TD+1
Settlement Date will not apply. Rather, for purposes of this
Paragraph 4(c) only, the Settlement Date will be the date on
which the Instruction settles.
(d) The Dealer shall, upon receipt of any confirmation or
statement concerning the accounts, promptly verify by use of
the terminal or by such other method acceptable to the
Distributor and the Dealer the accuracy of the information
contained therein against the information contained in the
Dealer's internal record-keeping system and shall promptly,
but in no event not more than SEVEN days, advise the
Distributor in writing of any discrepancies between such
information. The Distributor and the Dealer shall cooperate to
resolve any such discrepancies as soon as reasonably
practicable.
INDEMNIFICATION
In the event of any error or delay with respect to both the Fund/SERV Processing
Procedures and the Manual Processing Procedures outlined in Exhibit B herein:
(i) which is caused by the Funds or the Distributor, the Distributor shall make
any adjustments on the Funds' accounting system necessary to correct such error
or delay and the responsible party or parties shall reimburse the
Client-shareholder and the Dealer, as appropriate, for any losses or reasonable
costs incurred directly as a result of the error or delay but specifically
excluding any and all consequential punitive or other indirect damages or (ii)
which is caused by the Dealer or by any Client-shareholder, the Distributor
shall make any adjustment on the Funds' accounting system necessary to correct
January 2007 16 I # 227207 v.1
EX-99(e)(2)
such error or delay and the affected party or parties shall be reimbursed by the
Dealer for any losses or reasonable costs incurred directly as a result of the
error or delay, but specifically excluding any and all consequential punitive or
other indirect damages. In the event of any such adjustments on the Funds'
accounting system, Dealer shall make the corresponding adjustments on its
internal record-keeping system. In the event that errors or delays with respect
to the Procedures are contributed to by more than one party hereto, each party
shall be responsible for that portion of the loss or reasonable cost which
results from its error or delay. All parties agree to provide the other parties
prompt notice of any errors or delays of the type referred to herein and to use
reasonable efforts to take such action as may be appropriate to avoid or
mitigate any such costs or losses.
January 2007 17 I # 227207 v.1
