DISTRIBUTION AND SERVICE AGREEMENT
----------------------------------
AGREEMENT made as of the _____day of __________, 200__ by and between X.
Xxxx Price Investment Services, Inc. ("DISTRIBUTOR"), and __________________
("COMPANY").
WITNESSETH:
-----------
WHEREAS, the Distributor is the principal underwriter of the X. Xxxx Price
open-end investment companies ("FUNDS") registered under the Investment Company
Act of 1940, as amended (the "40 ACT") and certain of such Funds have issued
multiple classes (each a "CLASS"; collectively as "CLASSES") of shares;
WHEREAS, the Company is registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "34 ACT") and with the National Association of
Securities Dealers, Inc. ("NASD") and wishes to offer its clients ("CLIENTS")
one or more of the Classes set forth on Schedule A; and
WHEREAS, the Distributor wishes to retain the Company to furnish certain
services with respect to distribution, shareholder servicing, maintenance of
shareholder accounts and other administrative services ("SERVICES") for each
Class listed in Schedule A attached hereto, as may be amended from time to time,
and the Company is willing to furnish such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, Distributor and Company hereby agree, as follows:
1. TRANSACTIONS IN THE CLASSES
---------------------------
a)Subject to the terms and conditions of this Agreement and those of the
applicable prospectus and statement of additional information ("SAI") for the
affected Class, Distributor will make shares of each Class available to be
purchased, exchanged or redeemed by Company on behalf of its Clients at the net
asset value applicable to each order, as determined in accordance with each
Class's then-effective prospectus and SAI.
b)
Distributor shall notify Company immediately if any qualification of shares of a
Class for sale in any state or other jurisdiction within the United States is
terminated or if Distributor or a Class wishes to prevent Company from placing
or continuing to place purchase orders for shares of a Class on behalf of its
clients who reside in a particular state or other jurisdiction. Company agrees
that it will offer or sell shares of the Classes only in compliance with
applicable federal and state securities laws.
PAGE 43
c.Distributor hereby appoints Company as agent for the limited purpose of
receiving orders for the Classes from its Clients.
d.
Company agrees that, in connection with transactions in Class shares, and except
as otherwise agreed to by the parties, Company will follow the operating
procedures set forth in Schedule B to this Agreement.
e.
Company agrees to monitor its Client's accounts for excessive trading or market
timing activity (as determined by Distributor) and agrees to work with
Distributor to deter or block any future such activity.
2. SERVICES
--------
The Company agrees to provide, and incur all expenses incident to
providing, Services with respect to investment in the Classes by its Clients. It
is anticipated that such Services may include but shall not be limited to:
A.
DISTRIBUTION SERVICES. Distribution Services include any activities primarily
intended to result in the sale of shares of one or more Classes including but
not limited to:
(1)
distribution of prospectuses, SAI and shareholder reports for the Class(es) for
other than existing shareholders of such Class(es);
(2)
the preparation and distribution of sales literature and advertising materials
for the Class(es);
(3)
provision to each Client of access to one or more of Company's representatives
who will provide personal service and attention with respect to the foregoing;
and
(4) other distribution Services as mutually agreed upon by both parties.
B.SHAREHOLDER SERVICING, MAINTENANCE OF SHAREHOLDER ACCOUNTS AND/OR OTHER
ADMINISTRATIVE SERVICES. Shareholder and Administrative Services include
Services with respect to a Class, its accounts and/or shareholders. Such
services may include but are not limited to:
(1) Mailing of prospectuses, reports, notices, proxies and proxy
statements and other informational materials to Clients who are
existing shareholders of the Class;
(2) Transmission of net purchase or redemption orders to Classes'
transfer agent;
(3) Maintenance of separate records for each Client reflecting, as to
each Class, shares purchased and redeemed and share balances;
(4) Mailing of shareholder confirmations and periodic statements;
PAGE 44
(5) Provision of information to Clients regarding the Price Funds
supplied to the Company by X. Xxxx Price or its affiliates;
(6) Provision of shareholder support services with respect to the
Clients' accounts;
(7) Telephonic support to respond to questions about the Clients'
investment in the Class and the Clients' accounts; and
(8) Provision of other non-distribution Services as shall be mutually
agreed upon from time to time by the parties.
3. PAYMENT OF 12B-1 FEES.
---------------------
a. As compensation for performing Services with respect to a Class,
Distributor shall pay Company a fee at the rate specified for that Class on
Schedule C, such fee to be calculated and accrued daily and paid quarterly, and
which fee shall be payable from and to the extent of the corresponding fee paid
by that Class pursuant to its distribution and service plan under Rule 12b-1
under the 40 Act.
b. For purposes of calculating the fees described in Schedule C, the value
of Client assets invested in the Classes shall be determined in accordance with
the then-effective prospectus(es) and SAI(s) of the Classes.
c.The fees payable hereunder are payable without regard to the aggregate
amount that may be paid over the years, provided that the amounts paid hereunder
shall not exceed any limitations, including permissible interest, imposed by
applicable NASD or SEC rules.
4. NO LIMITATION
-------------
a.The provisions of this Agreement in no way shall limit the authority of
Distributor or any Fund to take such action as it or they may deem appropriate
or advisable in connection with all matters relating to the operations of a
Class and/or the sale of Class shares. All purchases and sales are subject to
the terms of the Class's then-current prospectus. The Board of
Directors/Trustees of the Fund (hereinafter the "BOARD") may refuse to sell Fund
shares to any person, or suspend or terminate the offering of Fund shares if
such action is required by law or by regulatory authorities having jurisdiction,
or is, in the sole discretion of the Board acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the shareholders of such Fund.
b.Distributor agrees that, at the Company's request, any full or fractional
shares of the Funds held by the Company will be redeemed and such request will
ordinarily be executed on a daily basis at the net asset value next computed
after receipt by the Fund or its designee, except that
PAGE 45
Company acknowledges that the Fund reserves the right to suspend the right of
redemption or postpone the date of payment or satisfaction upon redemption
consistent with Section 22(e) of the 40 Act and any rules thereunder, and in
accordance with the procedures and policies of the Fund as described in the
then-current prospectus.
5. RECORDS AND REPORTING
---------------------
Company will maintain and preserve all records as required by law in
connection with its provision of Services under this Agreement. Upon the
reasonable request of Distributor, a Fund or the transfer agent for a Class,
Company will provide timely copies of: (a) historical records relating to Client
transactions involving the Class; (b) written communications regarding the Class
to or from Clients; and (c) other materials relating to the provision of
Services by Company under this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF DISTRIBUTOR
---------------------------------------------
Distributor represents and warrants to the Company that:
a. It is a corporation duly organized, existing and in good standing under
the laws of the State of Maryland.
b. It is a broker dealer registered under the 34 Act.
c. Shares of the Classes are registered and authorized for sale in
accordance with any and all applicable federal and state securities laws.
d. It is authorized to enter into and perform this Agreement, and the
performance of its obligations hereunder does not and will not violate or
conflict with any governing documents or agreements of or on behalf of
the Classes.
e. It agrees to notify the Company promptly in the event that it is, for
any reason, unable to perform any of its obligations under this
Agreement.
7. REPRESENTATION, WARRANTIES AND COVENANTS OF COMPANY
---------------------------------------------------
Company represents, warrants and covenants to Distributor that:
a. It is a _______________ duly organized, existing in good standing under
the laws of the State of ________________.
b. It has full power and authority under applicable law, and has taken all
action necessary, to enter into and perform this Agreement, and the
performance of its obligations hereunder does not and will not violate or
conflict with any governing documents or agree-
PAGE 46
ments of Company.
c. It has all requisite licenses and authority to carry on its business in
all jurisdictions in which it conducts business.
d. It has the necessary facilities, equipment and qualified personnel to
perform its duties and obligations hereunder in accordance with (1) the
terms of this Agreement, in a businesslike and competent manner, (2) all
laws, rules and regulations (3) the Funds' prospectuses and SAIs, and (4)
the highest industry standards.
e. In case of any requests or demands for the inspection of Client records
of a Class by any governmental agency or otherwise pertaining to any
aspect of the duties covered by this Agreement, it will promptly notify
Distributor in writing as to such inspection prior to turning over such
records.
f. It will disclose to Clients the arrangements provided for in this
agreement.
g. It agrees to notify the Distributor promptly in the event that it is,
for any reason, unable to perform any of its obligations under this
Agreement.
h. It covenants and agrees that it will not make any representations about
a Class except to the extent such representations: (i) are contained in
the Class's current prospectus, SAI, as amended from time to time, or
sales literature approved by Distributor; (ii) are consistent with
information contained in such materials; or (iii) are otherwise
authorized by or on behalf of the applicable Fund.
i. Its acceptance of the fee is in compliance with all applicable rules and
regulations and will not constitute a non-exempt "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the
Code.
8. USE OF NAMES
------------
a.
Company shall furnish, or shall cause to be furnished, to the Distributor or its
designee, each piece of sales literature or other promotional material that the
Company develops or uses and in which a Class, Distributor, or a Fund's
investment adviser is named, at least fifteen calendar days prior to its use. No
such material shall be used if Distributor or its designee reasonably object to
such use within fifteen calendar days after receipt of such material. The
Distributor or its designee reserves the right to reasonably object to the
continued use of such material, and no such material shall be used if the
affected Fund or its designee so object.
b. Company acknowledges and agrees that neither Distributor nor its
affiliates are responsible for any information contained in any advertising or
marketing materials prepared by Company, except for information provided by
Distributor or contained in any Class then-current
PAGE 47
prospectus, SAI, registration statement, annual report, proxy statement, or item
of advertising or marketing material prepared by Distributor.
9. PROVISION OF MATERIALS
----------------------
a. Distributor shall furnish Company with current prospectuses and SAIs of
the Classes (including any supplements thereto), periodic reports and marketing
and other materials relating to the Classes in such quantities as Company
reasonably requests.
b. Company, at its expense, will send prospectuses and SAIs to Clients and
prospective Clients requesting them through Company. Company will also send a
Class prospectus with the trade confirmation or before the purchase trade
confirmation is received by Client, for the initial purchase of the Class, and
will send an updated prospectus annually to shareholders in the Class.
10. LIABILITY AND INDEMNIFICATION
-----------------------------
a. Distributor shall indemnify, defend and protect Company, its employees,
officers and directors, and hold each of them harmless from and against any and
all claims, demands, actions, losses, damages, liabilities, costs, charges,
reasonable counsel fees, and expenses of any nature it or they incur ("Losses")
arising out of or from, with respect to each Class: (i) any material
misstatement in omission of a material fact from the Class's then-current
prospectus, registration statement, SAI, annual report or proxy statement or any
advertising or promotional material generated by Distributor; (ii) any Class
data furnished to Company by or on behalf of Distributor or the Class; (iii) any
failure of Distributor or the Class for the Class's shares to be properly
registered or qualified for sale and available for sale to the public under any
applicable federal law and regulation or the applicable laws and regulations of
any state, any US territory or the District of Columbia unless Distributor has
notified Company in writing that the Class and its shares are not qualified for
sale in a particular jurisdiction and Company sells shares of the Class in such
jurisdiction after such notification; (iv) any material breach by Distributor of
any representation, warranty, covenant, or agreement contained in this
Agreement; and (v) the actions of Distributor relating to the processing of
purchase, exchange, and redemption orders and the servicing of shareholder
accounts to the extent such actions constitute willful misfeasance, bad faith or
negligence by Distributor; provided, Company has not acted with willful
misfeasance, bad faith or negligence.
b. Company shall indemnify, defend and protect Distributor its employees,
officers, directors, each Fund's officers and directors/trustees, and their
respective affiliates and agents, free and harmless from and against any and all
Losses arising out of or from, with respect to each Class: (i) any material
statements or representations or omissions of material facts that Company makes
concerning the Class that are inconsistent with either the Class's then-current
prospectus, SAI, periodic reports to shareholders, proxy statements or any other
material Distributor has provided in writing to Company; (ii) any sale of shares
of the Class by Company where the Class or its shares are not properly
registered or qualified for sale in any state, any US territory or the District
of Columbia
PAGE 48
after Distributor has notified Company in writing that the Class and its shares
are not qualified for sale in such jurisdiction; (iii) any material breach by
Company of any representation, warranty, covenant, or agreement contained in
this Agreement; and (iv) any actions of Company in connection with its
performance of the Services to the extent such actions constitute willful
misfeasance, bad faith or negligence by Company; provided, Distributor has not
acted with bad faith, willful misfeasance or negligence.
11. TERM AND TERMINATION OF AGREEMENT
---------------------------------
This Agreement may be terminated by either party hereto at any time upon at
least ninety (90) days' written notice by either party. Notwithstanding the
foregoing, this Agreement is terminable (i) upon less than ninety (90) day's
notice if required by law, rule, regulation, order or instruction by a court of
competent jurisdiction or a regulatory body or self-regulatory organization with
jurisdiction over the terminating party and (ii) by any party at any time by
giving 30 day's written notice to the other party(ies) in the event of a
material breach of this Agreement by the other party or parties that is not
cured during such 30-day period. Pursuant to the terms of this Section 11, this
agreement may also be terminated by any Class listed on Schedule A on behalf of
itself and such termination will not affect the continuation of this agreement
with respect to the other Classes listed on Schedule A.
12. NOTICES
-------
All notices and other communications hereunder shall be given or made in
writing and shall be delivered personally, or sent by facsimile, express
delivery or registered or certified mail, return receipt requested, to the party
or parties to whom they are directed at the following addresses, or at such
other addresses as may be designated by notice from such party to the other
party.
Company: _________________________
_________________________
_________________________
Attn: _________________________
Distributor: X. Xxxx Price Investment Services, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX. 00000
Attn: Xxxxx Xxxxxx
cc: Xxxxx Xxxxxxx, Esq.
Any notice, demand or other communication given in a manner prescribed in this
Section 12 shall be deemed to have been delivered on receipt.
13. NON-EXCLUSIVITY
---------------
PAGE 49
Each party to this Agreement acknowledges that the other party hereto may
enter into similar agreements with third parties.
14. MISCELLANEOUS
-------------
a. This Agreement represents the entire agreement between the parties with
regard to the matters described herein, and may not be modified or amended
except by written instrument executed by both parties. This Agreement may not be
assigned by either party hereto without the prior written consent of the other
party. This Agreement is made and shall be construed under the laws of the State
of Maryland without giving effect to principles of conflict of laws. This
Agreement supersedes all previous agreements and understandings between the
parties with respect to its subject matter. If any provision of the Agreement
shall be held or made invalid by a statute, rule, regulation, decision of a
tribunal or otherwise, the remainder of the Agreement shall not be affected
thereby. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, any party hereto may
execute this Agreement by signing any such counterpart.
b. The provisions of Section 10 shall survive the termination of this
Agreement.
c. All Exhibits and Schedules, as they may be amended from time to time,
are incorporated herein by reference and made part of this Agreement.
IN WITNESS HEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
X. XXXX PRICE INVESTMENT COMPANY
SERVICES, INC.
By: _____________________________
By: _____________________________
Name: __________________________
Name: ___________________________
Title: __________________________
Title: ____________________________
PAGE 50
SCHEDULE A
----------
Listing of Classes
PAGE 51
SCHEDULE B
----------
OPERATING PROCEDURES
--------------------
Except as otherwise indicated, all references to Company in this Schedule B
shall be deemed to include any affiliate or agent of Company that is involved in
communicating instructions to the Classes on behalf of Company.
If Company executes and settles transactions through the NSCC Fund/SERV system,
operating procedures are set forth in the Fund/SERV Agreement or the Fund/SERV &
Networking Agreement.
A. The Distributor will use its best efforts to provide Company, by 7:00 p.m.
Eastern Time ("E.T.") on each business day, with the Class's closing net
asset value ("NAV") for that day.
B. The Company will open one omnibus account per Class ("OMNIBUS ACCOUNT" or
"ACCOUNT"). Subject to the Class having no objection, Company may open
additional accounts from time to time to accommodate other investment options
and features, and to consolidate existing accounts if and when appropriate.
Distributor's affiliate X. Xxxx Price Services, Inc. ("PRICE SERVICES") shall
designate each such account with an account number. Account numbers will be
the means of identification when the parties are transacting in the accounts.
The parties acknowledge that the Omnibus Accounts subject hereto are
registered in Company's name with interests held for the benefit of any
number of account holders. The assets in the Omnibus Accounts are customer
securities and are segregated from Company's own assets.
C. For each day on which any Client places with Company a purchase or redemption
order for shares of a Class, Company shall aggregate all such purchase orders
and aggregate all such redemption orders and communicate to Price Services'
designated contact, by telephone or via facsimile, an aggregate purchase
order and an aggregate redemption order for each Class. For purposes of this
Agreement, a "business day" is any day the New York Stock Exchange ("NYSE")
is open for trading (and for the X. Xxxx Price Japan Fund the Tokyo Stock
Exchange). Orders will be priced with that business day's NAV provided
Company communicates the order to Price Services by 4:00 p.m. E.S.T. Any
orders received after 4:00 p.m. will receive the next business day's NAV. All
purchases and redemptions are subject to the terms and conditions of the
Class's most current prospectus, including the Class's right to delay
redemption proceeds or perform a redemption in kind for large redemptions.
D. For each day on which Company places a purchase order for any Class within
the time designated for the Class, Company will wire proceeds to Price
Services by 4:00 p.m. E.S.T. on the next business day after the trade date.
If the wire is not received on the next business day, the order may be
canceled and the Company will be responsible for any losses incurred by the
Class due to such cancellation.
PAGE 52
E. Except as otherwise provided in the Class's then-current prospectus, for each
business day on which Company places a redemption order for any Class within
the time designated for such Class, Price Services will send to Company the
proceeds by wire transfer by 4:00 p.m. E.S.T. on the next business day
following the trade date for the applicable redemption orders; provided that
Price Services may, in its discretion, send such proceeds by check if the
aggregate amount of the redemption is less than an agreed upon dollar amount.
F. The cost of the wire transfer is the responsibility of the party sending the
wire. The interest cost associated with any delayed wire is the
responsibility of the party sending the wire.
G. Price Services shall provide Company with all distribution announcement
information as soon as it is announced for such Class. The distribution
information shall set forth ex-date, record date, payable date, distribution
rate per share, record date share balances, cash and reinvested payment
amounts.
H. Company agrees to examine each confirmation received for a transaction.
Company agrees to report to Price Services immediately, but no later than 5
business days, any discrepancies discovered in the confirmation statement.
Any errors caused by Company will be corrected based on the net asset value
of the Class on the day the error is reported to Price Services.
PAGE 53
SCHEDULE C
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FEES
----
Out of the fees it receives pursuant to the Rule 12b-1 Plan for a Class,
Distributor shall pay the following amounts to Company:
_________ of the average daily net asset value of all Client assets invested in
that Class (including assets invested through reinvestment of dividends and
distributions), payable quarterly, in arrears.
The fees described in this Schedule will be payable to Company within 30 days
business days after the end of each quarter.
