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Draft of February 2, 1996
The CountryBasketsSM Index Fund, Inc.
Fund Payment Agreement
This Fund Payment Agreement (the "Agreement"), is made as of
___________ __, 1996 between The CountryBasketsSM Index Fund, Inc., a
Maryland corporation (the "Fund"), and _________________ (the "Investor
Servicer").
WHEREAS, the Fund has entered into a Distribution Agreement
with ALPS Mutual Funds Services, Inc. ("ALPS") whereby ALPS agrees to act
as its distributor and principal underwriter; and
WHEREAS, ALPS and the Investor Servicer have entered into an
Investors Services Agreement (the "Services Agreement") whereby the
Investor Servicer agrees to provide certain broker/dealer and shareholder
support services to its clients and educational and promotional services
with respect to the issued and outstanding shares of common stock ("CB
SharesSM" or "CountryBasketsSM") of the nine initial series of the Fund
indicated on Appendix A thereto (each, an "Initial Series") and each
additional series of CB SharesSM subsequently established by the Fund and
made subject to the Services Agreement and this Agreement in accordance
with the terms thereof and hereof (each, an "Additional Series" and,
together with the Initial Series, the "Series") for the benefit of the
Fund; and
WHEREAS, the Fund wishes to compensate the Investor Servicer
directly for such services.
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NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the Fund and the Investor Servicer agree as
follows:
Section 1. In consideration of the services and facilities
provided by the Investor Servicer to ALPS pursuant to the Services
Agreement and subject to the terms and conditions of the 12b-1 Plans (as
defined herein), the Fund agrees to compensate the Investor Servicer on
behalf of the Initial Series directly for such services and the Investor
Servicer agrees to accept as full payment therefor, a fee at the annual
rate of 0.05 of 1% of the average aggregate daily net assets over $200
million of all Initial Series, computed daily and payable on a quarterly
basis. If the Services Agreement is renewed for any subsequent twelve-
month period, as set forth in Section 10 thereof, and subject to the terms
and conditions of the 12b-1 Plans, the Fund will pay the Investor Servicer
0.05 of 1% of the average aggregate daily net assets over $200 million of
all Initial Series, subject to review by the Board of Directors of the Fund
and the termination of this Agreement. In the event that any Additional
Series becomes subject to this Agreement, the Fund will pay the Investor
Servicer for the services and facilities to be provided by the Investor
Servicer with respect to such Additional Series a fee at the rate set
forth in the 12b-1 Plan approved by the Board of Directors of the Fund with
respect to such Additional Series.
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For purposes of determining the fees payable under this
Agreement, the average aggregate daily net assets of the Series will be
computed in the manner specified in the 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 CB SharesSM for purposes of purchases and
redemptions. All fees payable by the Fund under this Agreement with
respect to the CB SharesSM of a particular Series shall be borne solely by
the holders of such CB SharesSM and no other Series of CB SharesSM or
shareholders shall be responsible for such fees. However, payments and
reimbursed expenses under the 12b-1 Plans attributable to the Fund as a
whole shall be allocated to each Series according to the method adopted by
the Fund's Board of Directors.
Section 2. This Agreement is a related agreement as
contemplated by Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act") with respect to the Rule 12b-1 plan (each a "12b-1 Plan" and
together the "12b-1 Plans") of each Initial Series of the Fund and, subject
to the approval of the Board of Directors of the Fund as contemplated in
Section 5, each Additional Series. The Investor Servicer and the Fund
expect that the Investor Servicer's services and educational and
promotional activities in connection with CB SharesSM pursuant to the
Services Agreement will tend to increase investor interest in and the
use and trading of
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CB SharesSM on the secondary market and thus further sales of shares
by the Fund.
Section 3. The Investor Servicer represents, warrants and
agrees that it understands that this Agreement is a Rule 12b-1 related
agreement under the 1940 Act, subject to the provisions of such Rule, as
well as any other applicable rules or regulations of the Securities and
Exchange Commission, and agrees to conform to the reasonable applicable
compliance standards adopted by the Fund's distributor for the sale of CB
SharesSM, as in effect from time to time, provided that the Investor
Servicer shall be given the opportunity to review and discuss with counsel
to the distributor prior to their adoption any such compliance standards
proposed after the date hereof that will be applicable to the activities to
be performed by the Investor Servicer pursuant to the Services Agreement.
Section 4. (a) The Fund agrees to be liable for and to hold
the Investor Servicer, its officers, directors and employees
("Indemnitees") harmless from and to indemnify each of them for any losses
and costs arising out of the Indemnitees' performance of the Services
Agreement relating to the purchase and sale of outstanding and issued CB
SharesSM trading in the secondary market as a result of (i)
any untrue statement of a material fact or omission of a material fact
necessary in order to make the statements made, in light of the
circumstances under which they were
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made, not misleading which are contained in any marketing or other written
material relating to the Fund provided to the Investor Servicer and
authorized for the Investor Servicer's use by ALPS and the Fund in
connection with the purchase and sale of outstanding and issued CB Shares;
(ii) any material misstatement in or omission of a material fact from the
Fund's current prospectus or statement of additional information necessary
in order to make the statements made, in light of the circumstances under
which they were made, not misleading; or (iii) any failure of the Fund, any
Series or the CB SharesSM to be registered and qualified for sale under any
applicable federal law and regulation or the laws of and regulations of any
state, U.S. territory or the District of Columbia when the Fund has
represented to the Investor Servicer that the Fund, any Series or the CB
SharesSM are so registered or qualified, provided that any payments under
this subparagraph (iii) shall be limited to the amount of any losses or
costs for which the Fund is indemnified by State Street Bank and Trust
Company ("State Street"), the Fund's Administrator, pursuant to the
Administration Agreement between the Fund and State Street; provided,
however, that nothing in this Section 4 shall protect the Indemnitees
against any losses or costs to which the Indemnitees would otherwise be
liable to a Fund or its security holders (A) by reason of willful
malfeasance, bad faith or gross negligence in the performance of its
duties
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under the Services Agreement, (B) by reason of the Indemnitee's reckless
disregard of its obligations and duties under the Services Agreement or
(C) where such liability arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission in the
Fund's prospectus or statement of additional information that was made in
reliance upon and in conformity with written information furnished by the
Investor Servicer to the Fund or ALPS. The Fund's obligation to indemnify
any Indemnitee is expressly conditioned upon the Indemnitee's notification
of the Fund of the commencement of any action against the Indemnitee, which
notification shall be given by letter or by facsimile transmission
addressed to the Fund at its principal office in New York, New York, and
sent to the Fund by the person against whom such action is brought within
ten days after the summons or other first legal process shall have been
served. The Indemnitee's failure to so notify the Fund shall not relieve
the Fund of any liability which it may have to the Indemnitee by reason of
any such untrue statement or omission or alleged untrue statement or
omission independent of this indemnification. The Fund will be entitled
to assume the defense of any suit brought to enforce any such claim, demand
or liability and
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to retain legal counsel of good standing chosen by the Fund and approved by
the Indemnitee (such approval not to be unreasonably withheld). If the
Fund elects to assume the defense of any such suit and retain counsel
approved by the Indemnitee, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of
them. In the event the Fund does not elect to assume the defense of any
such suit and retain counsel of good standing approved by the Indemnitee or
the Indemnitee does not approve of the counsel chosen by the Fund (such
approval not to be unreasonably withheld), the defendant or defendants in
such suit shall bear the fees and expenses of any counsel retained by any
of them and the Fund shall reimburse any Indemnitee named as defendant in
such suit for the reasonable fees and expenses of any such counsel retained
by them. The indemnification agreement contained in this Section 4(a)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Indemnitees. This
indemnification will inure exclusively to the benefit of the Indemnitees
and their successors, assigns and estate.
(b) The Investor Servicer agrees to be liable for, to hold the
Fund, its officers, directors and employees (for purposes of this
Section 4(b), the "Fund Affiliates") harmless from, and to indemnify them
from any losses and costs arising from (i) any statements or
representations
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that the Investor Servicer or its employees make concerning the Fund or any
Series that are inconsistent with the Fund's current prospectus and
statement of additional information or any marketing or other written
material provided to the Investor Servicer and authorized for the Investor
Servicer's use by ALPS and the Fund relating to the Fund or any Series; or
(ii) any sale of CB SharesSM in any state, any U.S. territory or the
District of Columbia where the Fund, any Series or its CB SharesSM were not
registered or qualified for sale, when the Fund has not indicated to the
Investor Servicer that the Fund, such Series or its CB SharesSM were so
registered or qualified. The Investor Servicer's obligation to indemnify
the Fund Affiliates is expressly conditioned upon the Investor Servicer
being notified of the commencement of any action brought against the Fund
Affiliates, which notification shall be given by letter or facsimile
transmission addressed to the Investor Servicer at its principal offices in
New York, New York and sent to the Investor Servicer by the person against
whom such action is brought within ten days after the summons or other
first legal process shall have been served. The Fund Affiliates' failure
to notify the Investor Servicer of the commencement of any such action
shall not relieve the Investor Servicer from any liability which it may
have to the Fund Affiliates by reason of any such statements or
representations or sale of CB SharesSM on the part of the Investor Servicer
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independent of this indemnification. The Investor Servicer shall have a
right to control the defense of such action, with counsel of its own
choosing, satisfactory to the Fund Affiliates, if such action is based
solely upon such untrue statement or omission or alleged untrue statement
or omission on its part, and in any other event the Investor Servicer and
the Fund Affiliates shall each have the right to participate in the defense
or preparation of the defense of such action at their own expense.
(c) The provisions of this Section 4 shall survive the
termination of this Agreement.
Section 1. Unless sooner terminated, this Agreement will
continue for one year following the date of its adoption as provided in
Section 8 hereof, and thereafter will continue automatically for successive
annual periods provided such continuance is specifically approved at least
annually by the Fund in the manner described in Section 8 hereof. This
Agreement is terminable, without penalty, at any time (a) by the Fund with
respect to any Series of CB SharesSM (which termination may be by a vote of
a majority of the Disinterested Directors as defined in Section 8 hereof or
by vote of the holders of a majority of the voting securities (as such term
is defined in the 0000 Xxx) of such Series) or by the Investor Servicer
upon 60 days' notice in writing to the other party hereto or (b) upon the
termination of the Services Agreement between the Investor
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Servicer and ALPS. This Agreement will also terminate automatically in the
event of its assignment (within the meaning of the 1940 Act). This
Agreement may be amended in writing by the parties hereto. In the event
that the Board of Directors of the Fund establishes any series of CB
SharesSM listed and traded on the New York Stock Exchange or any other
national securities exchange (as defined under the Securities Exchange Act
of 1934) in addition to the Series then subject to this Agreement, adopts a
12b-1 Plan with respect to such additional series and approves the Services
Agreement and this Agreement as "related agreements" with respect to such
additional series in accordance with Rule 12b-1, such additional series
shall be made subject to this Agreement and shall become an "Additional
Series" hereunder effective immediately upon such adoption and approval.
Section 2. All notices and other communications to either
party will be duly given if mailed, telegraphed, telexed or transmitted by
similar telecommunications device as follows:
To the Investor Servicer:
_____________________
_____________________
Attention:
To the Fund:
c/o Deutsche Xxxxxx Xxxxxxxx/
X. X. Xxxxxxxx Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xx Xxxxx
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Section 3. This Agreement will be construed in accordance with
the laws of the State of New York.
Section 4. This Agreement, and each Rule 12b-1 Plan, is
subject to approval by vote of (i) the Fund's Board of Directors and
(ii) of a majority of those Directors who are not "interested persons" (as
defined in the 0000 Xxx) of the Fund and have no direct or indirect
financial interest in the operation of the 12b-1 Plans adopted by the Fund
regarding the provision of support services to the beneficial owners of CB
SharesSM of the respective Series or in any agreement related thereto
("Disinterested Directors") cast in person at a meeting called for the
purpose of voting on such approval.
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IN WITNESS WHEREOF the parties have caused the Agreement to be
executed as of the day and year first written above.
THE COUNTRYBASKETSSM INDEX
FUND, INC.
By: _________________________
Name:
Title:
[NAME OF INVESTOR SERVICER]
By: _________________________
Name:
Title:
