EXHIBIT 3
SHAREHOLDER SERVICE AGREEMENT
Agreement made as of September 30, 2002 by and between GMO Trust, on
behalf of each fund listed on Schedule A, severally and not jointly (each, a
"Fund"), and GE Financial Trust Company ("Service Provider").
WHEREAS, the Service Provider provides or intends to provide the
services described in Schedule B ("Services") for its clients ("Clients"); and
WHEREAS, the Fund and the Service Provider desire to facilitate the
purchase and redemption of shares of the Fund by the Services Provider on behalf
of its Clients through one or more omnibus accounts in the Fund (each, an
"Account"); and
WHEREAS, the Fund desires that the Service Provider provide certain
recordkeeping and shareholder services to the Clients in connection with
investment by the Account in the Fund, subject to the terms and conditions of
this Agreement:
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. Transaction Processing and Settlement. The Service Provider will
enable and facilitate the purchase and redemption of Fund shares on behalf of
Clients through the Account. Such purchases and redemptions shall be processed
through the National Securities Clearing Corporation ("NSCC") Fund/SERV system
in accordance with NSCC rules then in effect.
2. Shareholder Services. The Service Provider agrees to perform the
services described on Schedule B.
3. Representations of the Service Provider. The Service Provider
represents and warrants that:
(a) it is a corporation duly organized under the laws of Arizona
and is duly registered and/or qualified as a trust company with the
state of Arizona and in every state or territory of the United
States of America (including the District of Columbia) where such
registration or qualification is required and has the requisite
authority to enter into this Agreement and to carry out the
services contemplated herein;
(b) it has full power and authority to enter into and perform this
Agreement;
(c) the arrangements provided for in this Agreement will be
disclosed to the Clients to the extent required by law;
(d) it will comply with all applicable requirements of laws, rules
and regulations of governmental or self-regulatory authorities
having jurisdiction for the acts and duties of it under this
Agreement;
(e) it will transmit to the Fund such information concerning
Clients as the Fund will reasonably conclude is necessary to enable
the Fund to comply with applicable state Blue Sky laws;
(f) it will promptly notify the Fund in the event that it is for
any reason unable to perform any of its obligations under this
Agreement.
4. Representations of Fund. The Fund represents and warrants that:
(a) it has full power and authority to enter into and perform this
Agreement;
(b) that the payment to Service Provider of any fees pursuant
hereto has been duly authorized by the Fund, the Board of Trustees
of the Fund, or any other persons to the extent such authorization
is required to properly make such payment and is properly disclosed
in the relevant Fund prospectus to the extent such disclosure may
be required;
(c) it is registered as an open-end investment company pursuant to
the Investment Company Act of 1940; and
(d) it will promptly notify the Service Provider in the event that
it is for any reason unable to perform any of its obligations under
this Agreement.
5. Information Regarding Fund. The Fund will supply the Service
Provider with the number of Fund's current prospectus, periodic fund reports,
proxy statements, and related materials needed for delivery to the Clients as
reasonably requested by Service Provider. A request by the Service Provider
shall be deemed reasonable to the extent it reflects a sufficient quantity to
meet anticipated requests for dissemination at the Client level or as otherwise
agreed between the parties. The cost of any distribution of the prospectus,
periodic fund reports, proxy statements, and related materials of the Fund to
the Accounts or the Clients will be paid by the Service Provider or the Clients,
as determined by the Service Provider's agreement with each Client, and will not
be the responsibility of the Fund.
6. Compensation of the Service Provider. In consideration for
providing the services under this Agreement, the Fund will pay the Service
Provider the fee set forth in Schedule C attached hereto.
7. Indemnification.
(a) Except with respect to matters excluded from liability pursuant to
this paragraph 7, each of the Fund and the Service Provider (an "Indemnitor")
will indemnify and hold harmless each other, and their respective officers,
directors, partners, trustees, shareholders and agents ("Indemnitees"), against
any claims or liabilities suffered by all or any of such Indemnitees to the
extent arising out of (i) the responsible Indemnitor's lack of good faith,
negligence or willful misconduct in carrying out its duties and responsibilities
under this Agreement; (ii) any breach by the responsible Indemnitor of any
material provision of this Agreement; or (iii) any breach by the responsible
Indemnitor of any representation, warranty, or covenant made in this Agreement,
including reasonable legal fees and other out-of-pocket costs of defending
against any such claim or liability. The indemnification
provided in this paragraph 7 will not be valid to the extent the claim or
liability suffered is due to the negligence or willful misconduct of the
Indemnitee.
(b) Promptly after receipt by an Indemnitee of notice of the
commencement of an investigation, action, claim or proceeding, such Indemnitee
will, if a claim in respect thereof is to be made against the Indemnitor under
this Section 7, notify the Indemnitor of the commencement thereof; but the
omission so to notify the Indemnitor will not relieve it from any liability
which it may have to any Indemnitee otherwise than under this paragraph. In case
any such action is brought against any Indemnitee, and it notified the
Indemnitor of the commencement thereof, the Indemnitor will be entitled to
participate therein and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such Indemnitee. After notice from the
Indemnitor of its intention to assume the defense of an action, the Indemnitee
shall bear the expenses of any additional counsel obtained by it, and the
Indemnitor shall not be liable to such Indemnitee under this paragraph for any
legal or other expenses subsequently incurred by such Indemnitee in connection
with the defense thereof other than reasonable costs of investigation.
8. Non-Exclusivity. Each party acknowledges and agrees that this
Agreement and the arrangements described herein are intended to be non-exclusive
and that each of them is free to enter into similar arrangements with other
entities.
9. Confidentiality. All information, books, records, and data
supplied by one party to the other in connection with the negotiation or
carrying out of the Agreement are and will remain the property of the party
supplying such information, books, records, or data and will be kept
confidential by the other party except as may be required by law.
10. Termination of Agreement. This Agreement shall become effective
upon the date set forth above, provided that this Agreement has been approved by
the Fund or its Board of Trustees, if such approval is required. It shall
continue in force for one year, and shall thereafter continue automatically for
successive annual periods unless earlier terminated, subject to any periodic
approval required by the Fund or its Board of Trustees. This Agreement is
terminable as to any Fund by either party upon 60 days written notice thereof to
the other party. Upon default by either party, the non-defaulting party may
terminate this Agreement provided that it has notified the defaulting party of
such default and the defaulting party has failed to cure such default within 10
business days of such notice.
After the date of termination as to any Fund, no fee will be due with
respect to any shares of such Fund that are first placed or purchased in the
Accounts after the date of such termination. However, notwithstanding any such
termination, the Fund will remain obligated to pay the Service Provider the fee
as to each share of such Fund that was considered in the calculation of the fee
as of the date of such termination, for so long as such share is held in the
Account.
This Agreement, or any provision hereof, shall survive termination to
the extent necessary for each party to perform its obligations with respect to
shares for which a fee continues to be due subsequent to such termination.
11. Notices. All notices and other communications hereunder will be
in writing and will be hand delivered or mailed by certified mail or overnight
courier to the other party at the following address or such other address as
each party may give notice to the other:
If to the Service Provider:
President
GE Financial Trust Company
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
phone 000 000 0000
With a copy to:
Legal Counsel
GE Private Asset Management, Inc
00000 Xxxxxxx Xxxx, Xxxxx xxxxx
Xxxxxxx Xxxx, XX
phone 000 000 0000
If to the Fund:
[Name of Fund]
c/o Grantham, Mayo, Van Otterloo & Co. LLC
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxxxxxx
12. Amendment. This Agreement may not be amended except by a
writing signed by both parties; provided, however, that GMO Trust may amend this
Agreement unilaterally to add additional funds to Schedule A. The new or amended
Schedule A will be effective upon receipt by the Service Provider and will not
require execution by the Service Provider. It is understood and agreed that the
intent of this provision is to avoid the inadvertent omission of funds from
Schedule A where the Service Provider has agreed to provide services to
Shareholders seeking to invest in the funds.
13. Assignment and Other Matters. This Agreement shall not be
assigned by either party without the written consent of the other party. This
Agreement may be executed in several counterparts, each of which will be an
original but all of which together will constitute one and the same instrument.
The headings in this Agreement are for reference only and will not affect the
interpretation or construction of this Agreement. This Agreement contains the
entire agreement of the parties as to the subject matter hereof and supersedes
any prior agreements, written or oral. This Agreement will be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of conflicts of law thereof.
14. GMO Trust. GMO Trust is a Massachusetts business trust and a
copy of the Agreement and Declaration of Trust of GMO Trust is on file with the
Secretary of The
Commonwealth of Massachusetts. Notice is hereby given that this Agreement is
executed on behalf of the Trustees of the Trust as Trustees and not
individually, and that the obligations of or arising out of this Agreement with
respect to each Fund are not binding upon any of the Trustees or shareholders
individually or any other series of the Trust, but are binding only upon the
assets and property of the Fund.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
GE FINANCIAL TRUST COMPANY GMO TRUST, ON BEHALF OF EACH FUND LISTED
ON SCHEDULE A, SEVERALLY BUT NOT JOINTLY
By: By:
___________________________
Name: Name: Xxxxxx X. Xxxxxxxx
_________________________
Title: Title: Vice President
________________________
SCHEDULE A
LIST OF FUNDS
GMO Growth Fund - Class M
SCHEDULE B
The Service Provider will, in accordance with the terms of this Agreement,
perform certain administrative services in connection with the purchase of
shares of the Fund by the Service Provider on behalf of its Clients, including,
but not limited to, the following services:
1. Answer inquiries from Clients and provide them with information concerning
investment options in shares of the Fund.
2. Maintain separate records for each Client, which records will reflect the
dollar amount of shares of the Fund purchased (including by reinvestment of
dividends and capital gains distributions paid by the Fund) and redeemed,
including the date and price for all transactions and the dollar value of
Client account balances.
3. For each Client, maintain such Client's name and address, social security or
taxpayer identification numbers.
4. Prepare and transmit to Clients confirmations of purchases and redemptions
and periodic account statements showing the investment in the Fund as of the
statement closing date, and such pertinent information as the Service
Provider and the Fund may agree from time to time.
5. Furnish or make available to Shareholders all information regarding the Fund
which is to be delivered to the Service Provider pursuant to paragraph 5 of
this Agreement.
6. Provide to Shareholders such reports and information as may be required by
the then-prevailing laws and regulations under the Internal Revenue Code for
non-retirement accounts and qualified and non-qualified retirement plan
accounts.
SCHEDULE C
Capitalized terms used in this schedule have the meanings given to them in this
Agreement:
Fund will pay to the Service Provider a fee, computed daily and paid
quarterly in arrears, equal to 0.25% per annum of the average daily value of the
total number of shares of the Fund held in Accounts at the Service Provider. The
Fund will pay the Service Provider such fee within 30 days after the end of each
quarter. For purposes of this Schedule C, the average daily value of the shares
of the Fund will be based on the NAV reported by the Fund to the Service
Provider.
