THE WESTPORT FUNDS
SHAREHOLDER SERVICE AGREEMENT
AGREEMENT made this _ day of _________, 199_, between Countrywide Fund
Services, Inc. ("Countrywide"), a corporation organized under the laws of State
of [Delaware] with its principal place of business at [ ] and the institution
executing this document below (the "Institution").
WHEREAS, Countrywide acts as administrator of The Westport Funds (the
"Trust"), a Delaware business trust registered under the Investment Company Act
of 1940, as amended (the "Act") as an open-end management investment company,
which may issue its shares of beneficial interest in separate series; and
WHEREAS, the Trust has adopted a Shareholder Service Plan with respect
to the Class A shares of each Series of the Trust (the "Service Plan") that
authorizes Countrywide to pay fees to qualified financial institutions for
maintaining and providing services to shareholder accounts of such Series; and
WHEREAS, Countrywide desires that Institution perform certain service
activities on behalf of Countrywide and the Trust with respect to the Trust and
Institution is willing to perform those services on the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, for and in consideration of the representations,
covenants and agreements contained herein and other valuable consideration, the
undersigned parties do hereby agree as follows:
SECTION 1. SERVICE ACTIVITIES
In connection with providing services and maintaining shareholder
accounts of the Class A shares of each Series of the Trust with respect to its
various customers, Institution may provide services including: (a) establishing
and maintaining accounts and records relating to clients of Institution; (b)
answering shareholder inquiries regarding the manner in which purchases,
exchanges and redemptions of Class A shares of the Trust may be effected and
other matters pertaining to the Trust's services; (c) providing necessary
personnel and facilities to establish and maintain shareholder accounts and
records; (d) assisting shareholders in arranging for processing purchase,
exchange and redemption transactions; (e) arranging for the wiring of funds; (f)
guaranteeing shareholder signatures in connection with redemption orders and
transfers and changes in shareholder-designated accounts; (g) integrating
periodic statements with other shareholder transactions; and (h) providing such
other related services as the shareholder may request. Institution shall not be
obligated to perform any specific service for its clients. Institution's
appointment shall be nonexclusive and Countrywide may enter into similar
agreements with other persons.
SECTION 2. COMPENSATION
(a) As compensation for Institution's service activities with respect
to the Trust, Countrywide shall pay Institution fees in the amounts listed on
Schedule A to this Agreement (the "Payments"); provided, however, that in no
event will Countrywide be required to make any payments for service activities
in an amount greater than that which Countrywide is paid by the Trust for such
services.
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(b) The Payments shall be accrued daily and paid monthly or at such
other interval as Countrywide and Institution shall agree.
(c) On behalf of the Class A shares of each Series of the Trust,
Institution may spend such amounts and incur such expenses as it deems
appropriate or necessary on any service activities. Such expenses may include
compensation to employees and expenses, including overhead and telephone and
other communication expenses, of Institution. Institution shall be solely liable
for any expenses it incurs.
SECTION 3. REPRESENTATIONS OF INSTITUTION
Institution represents that:
(a) the compensation payable to it under this Agreement in connection
with the investment in the Class A shares of each Series of the Trust of the
assets of its customers (i) will be disclosed by the Institution to its
customers, (ii) will be authorized by its customers, and (iii) will not result
in an excessive fee to Institution;
(b) if it is a member of the National Association of Securities
Dealers, Inc. ("NASD"), it shall abide by the Rules of Conduct of the NASD;
(c) it will, in connection with sales and offers to sell shares,
furnish to or otherwise insure that each person to whom any such sale or offer
is made receives a copy of the Trust's then current prospectus;*
(d) it will purchase shares only as agent of the Trust and that it will
purchase shares only for the purpose of covering purchase orders already
received or for its own bona fide investment purposes;*
(e) the performance of all its obligations hereunder will comply with
all applicable laws and regulations, including any applicable Federal securities
laws and any requirements to deliver confirmations to its customers, the
provisions of its charter documents and bylaws and all material contractual
obligations binding upon the Institution; and
(f) it will promptly inform the Trust of any change in applicable laws
or regulations (or interpretations thereof) or in its charter or bylaws or
material contracts which would prevent or impair full performance of any of its
obligations hereunder.
SECTION 4. FUND LITERATURE*
Institution is not authorized to make any representations concerning
shares of the Trust except those contained in the Trust's then current
prospectus and statement of additional information ("SAI") and printed
information issued by the Trust or by Countrywide as information supplemental to
the prospectus. Countrywide will supply Institution upon its request with
prospectuses, SAIs, reasonable quantities of supplemental sales literature and
additional information. Institution agrees not to use other advertising or sales
material relating to the Trust unless approved in writing by Countrywide in
advance of such use. Any
____________________
* [To be included only in Agreements with dealers with whom the Trust's
Distributor has entered into an agreement.]
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printed information furnished by Countrywide other than the then current
prospectus and SAI, periodic reports and proxy solicitation materials are
Countrywide's sole responsibility and are not the responsibility of the Trust
and the Trust shall have no liability or responsibility to Institution in these
respects unless expressly assumed in connection therewith. Institution shall
have no responsibility with regard to the accuracy or completeness of any of the
printed information furnished by the Trust and shall be held harmless by the
Trust from and against any cost or loss arising therefrom.
SECTION 5. REPORTS
Institution shall prepare and furnish to Countrywide, at Countrywide's
request, written reports setting forth all amounts expended by Institution and
identifying the activities for which the expenditures were made.
SECTION 6. INDEMNIFICATION
Institution agrees to indemnify and hold harmless Countrywide and the
Trust from any claims, expenses, or liabilities incurred by Countrywide or the
Trust as a result of any act or omission of the Institution in connection with
its services under this Agreement.
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the date hereof and, upon
its effectiveness, shall supersede all previous agreements between the parties
covering the subject matter hereof.
(b) This Agreement may be terminated as follows:
(i) at any time, without the payment of any penalty, by the
vote of a majority of the Trustees of the Trust;
(ii) automatically in the event of the termination of the
Administration agreement between the Trust and Countrywide or the
Service Plan;
(iii) automatically in the event of the assignment of this
Agreement as defined in the Act; and
(iv) by either party to the Agreement without cause by giving
the other party at least sixty (60) days' written notice of its
intention to terminate.
SECTION 8. NOTICES
Any notice under this Agreement shall be in writing and shall be
addressed and delivered, or mailed postage prepaid, to the other party's
principal place of business, or to such other place as shall have been
previously specified by written notice given to the other party.
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SECTION 9. AMENDMENTS
Subject to approval of material amendments to the form of this
Agreement by the Trust's Board of Trustees, this Agreement may be amended by the
parties at any time. In addition, this Agreement may be amended by Countrywide
from time to time by the following procedure: Countrywide will mail a copy of
the amendment to Institution at its principal place of business or such other
address as Institution shall in writing provide to Countrywide. If Institution
does not object to the amendment within thirty (30) days after its receipt, the
amendment will become part of the Agreement. The Institution's objection must be
in writing and be received by Countrywide within the thirty (30) days.
SECTION 10. USE OF THE TRUST'S NAME
Institution shall not use the name of the Trust on any checks, bank
drafts, bank statements or forms for other than internal use in a manner not
approved by the Trust prior thereto in writing; provided, however, that the
approval of the Trust shall not be required for the use of the Trust's name
which merely refers in accurate and factual terms to the Trust in connection
with the Institution's role hereunder or which is required by any appropriate
regulatory, governmental or judicial authority; and further provided that in no
event shall such approval be unreasonably withheld or delayed.
SECTION 11. MISCELLANEOUS
(a) This Agreement shall be construed in accordance with the laws of
the State of New York.
(b) 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
INSTITUTION:
_______________________________________
Name of Institution
By:____________________________________
COUNTRYWIDE FUND SERVICES, INC.
By:_________________________________
Name:
Title:
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THE WESTPORT FUNDS
SHAREHOLDER SERVICE AGREEMENT
Schedule A
PAYMENTS PURSUANT TO THE SERVICE PLAN
up to 0.25% of the average annual daily net assets of the Westport Fund
represented by shares owned by investors for which Institution provides services
pursuant to this Agreement.
up to 0.25% of the average annual daily net assets of the Westport Small Cap
Fund represented by shares owned by investors for which Institution provides
services pursuant to this Agreement.
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