Exhibit 9(a)
SPECIAL SERVICING AGREEMENT
THIS SPECIAL SERVICING AGREEMENT ("Agreement"), made as of this 15th
day of November, 1996, by and among Xxxxxxx Pathway Series ("Pathway Series"),
each fund which is listed on Appendix A (as such Appendix may be amended from
time to time) and which evidences its agreement to be bound hereby by executing
a copy of this Agreement (such funds hereinafter called the "Underlying Funds"),
Xxxxxxx, Xxxxxxx & Xxxxx, Inc. ("SSC"), Xxxxxxx Service Corporation ("Xxxxxxx
Service"), Xxxxxxx Fund Accounting Corporation ("SFAC"), Xxxxxxx Trust Company
("STC") and Xxxxxxx Investor Services, Inc. ("SIS").
W I T N E S S E T H:
WHEREAS, Pathway Series and each of the Underlying Funds are registered
as open-end, diversified or non-diversified management investment companies
under the Investment Company Act of 1940, as amended.
WHEREAS, Pathway Series and the Underlying Funds have each entered into
agreements with Xxxxxxx Service ("Service Agreements") under which Xxxxxxx
Service provides Pathway Series and the Underlying Funds transfer agent services
and various participant account, participant employer record keeping and
shareholder services in return for such compensation as is set forth therein;
WHEREAS, Pathway Series has entered into an agreement with SFAC, and
each of the Underlying Funds has either entered into an agreement, or intends to
enter into an agreement, with SFAC ("Sub-Accounting Agreements") for the
provision of sub-accounting and other services in return for such compensation
as is set forth therein;
WHEREAS, Pathway Series has entered into an agreement with STC,
("Record-Keeping Agreements") for the provision of record-keeping and other
services in connection with certain retirement and employee benefit plans in
return for such compensation as is set forth therein;
WHEREAS, Pathway Series has entered into an underwriting agreement with
SIS ("Underwriting Agreements") for the provision of distribution services in
connection with Pathway Series' shares;
WHEREAS, Pathway Series has entered into an Investment Management
Agreement with SSC ("IMA") dated November 15, 1996 for the provision of
investment management services. Under the IMA, SSC will be responsible for the
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payment of various Pathway Series expenses, pursuant to this Agreement;
WHEREAS, Pathway Series has entered into an agreement with State Street
Bank and Trust Company ("State Street"), and each of the Underlying Funds has
entered into an agreement with either State Street or Xxxxx Brothers Xxxxxxxx &
Co. (together referred to as "Custodian Agreements") under which the Custodian
is to furnish Pathway Series and the Underlying Funds various custodial services
in return for such compensation as is set forth in the Custodian Agreements;
WHEREAS, Pathway Series is expected to provide a means by which the
Underlying Funds can eliminate shareholder accounts which are or would be
invested directly in the Underlying Funds;
WHEREAS, such shareholder account reduction can reduce the fees of the
Underlying Funds due Xxxxxxx Service under the Service Agreements and various
other fees and expenses that would otherwise be incurred by the Underlying Funds
(such expenses are further defined below as Variable Expenses, and such
reduction in Variable Expenses is hereinafter referred to as "Savings");
WHEREAS, Pathway Series will invest its assets exclusively in the
Underlying Funds, except for temporary defensive purposes and cash or cash items
necessary to meet current expenses and redemptions; and
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WHEREAS, the Board of Directors/Trustees of each Underlying Fund has
determined that it is reasonable to expect the aggregate expenses as described
below of Pathway Series to be less than the estimated Savings to each of the
Underlying Funds from the operation of Pathway Series; and such determination by
the Board of Directors/Trustees is based on some or all of the following
factors, among others as they apply to each Underlying Fund:
a. The amount of Pathway Series expenses to be absorbed by each
Underlying Fund.
b. The amount of assets invested in each Underlying Fund by Pathway
Series;
c. The average and median account sizes for the Underlying Funds and
Pathway Series;
d. The rate at which Variable Expenses (i.e., expenses for
shareholder servicing, marketing to increase or maintain account
size, account management, transfer and dividend disbursing agency
services, and prospectuses, shareholder reports, proxies and
similar communications) and Fixed Expenses (i.e., expenses for
accounting, custodial, auditing and legal services, state
registration, filing, and directors fees and organization and
various miscellaneous expenses) are incurred by Pathway Series
and the Underlying Funds; and
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e. The relationship between Variable and Fixed Expenses in the
Underlying Funds and Pathway Series.
NOW, THEREFORE, in consideration of the promises and mutual covenants
made herein, it is agreed between and among the parties hereto as follows:
1. PATHWAY SERIES EXPENSES
SFAC will calculate the separate amounts of fees and expenses
allocable to Pathway Series due under the Custodian, Service,
Sub-Accounting, Record-Keeping and Underwriting Agreements
referred to above and agreements or arrangements with
third-parties for record-keeping and other administrative
services, as well as any other amounts due persons as a result
of Pathway Series operations under any other agreement or
otherwise ("Expenses"), excluding non-recurring and
extraordinary expenses. Such non-recurring and extraordinary
expenses include: the fees and costs of actions, suits or
proceedings, and any penalties, damages or payments in
settlement in connection therewith, for which the Pathway
Series and/or a portfolio or series thereof ("Pathway
Portfolio") may be liable directly, or which it may incur as a
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result of its legal obligation to provide indemnification to
its officers, directors and agents; the fees and costs of any
governmental investigation and any fines or penalties in
connection therewith; and any federal, state or local tax, or
related interest, penalties or additions to tax for which
Pathway Series or any Pathway Portfolio may be liable. Under
unusual circumstances, the parties may agree to exclude
certain other amounts from Expenses. In addition, SFAC will
calculate the estimated Savings to each Underlying Fund.
2. UNDERLYING FUNDS' PAYMENT OF EXPENSES
Subject to Paragraph 3, each of the Underlying Funds agrees to
pay its pro rata share of the Expenses based on the proportion
which the average daily value of its shares owned by all
Pathway Portfolios in the aggregate bears to the average daily
value of all shares of Underlying Funds owned by all Pathway
Portfolios in the aggregate, provided that no Underlying Fund
will pay such Expenses in excess of the estimated Savings to
it ("Excess Expense"). The Underlying Funds shall pay such
expenses in accordance with instructions from SFAC.
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3. PAYMENT BY SSC
SSC agrees that, at all times, it will bear any Excess Expense
described in Paragraph 2 and shall pay such Excess Expenses in
accordance with instructions from SFAC.
4. USE OF XXXXXXX NAME
Pathway Series may utilize the "Xxxxxxx" name so long as (i)
this Agreement and the IMA remain in effect, (ii) the assets
of Pathway Series are invested solely in shares of the
Underlying Funds (except for such cash or cash items as may be
maintained from time to time to meet current expenses and
redemptions), and (iii) SSC, as Pathway Series' investment
adviser, utilizes the assets deposited with the Custodian,
from the sale of Pathway Series' shares, to promptly purchase
shares of an Underlying Fund and to effect redemption or
exchange of such shares in the manner provided by the
objectives and policies of each Pathway Portfolio.
5. OPINION OF COUNSEL
At any time any of the parties hereto may consult legal
counsel in respect of any matter arising in connection with
this Agreement, and no such party shall be liable for any
action taken or omitted by it in good faith in accordance with
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such instructions or with the advice or opinion of such legal
counsel.
6. LIABILITIES
No party hereto shall be liable to any other party hereto for
any action taken or thing done by it or its agents or
contractors in carrying out the terms and provisions of this
Agreement provided such party has acted in good faith and
without negligence or willful misconduct and selected its
agents and contractors with reasonable care.
7. TERM OF AGREEMENT: AMENDMENT; RENEWAL
The term of this Agreement shall begin on November 15, 1996,
and unless sooner terminated as herein provided, the Agreement
shall remain in effect through September 30, 1997. Thereafter,
this Agreement shall continue from year to year if such
continuation is specifically approved at least annually by the
Board of Directors/Trustees of each Underlying Fund and
Pathway Series, including a majority of the independent
Directors/Trustees of each such Fund. In determining whether
to renew this Agreement, the Directors/Trustees of the
Underlying Funds may request, and SSC will furnish, such
information relevant to determining the past and expected
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future relationship between the Savings and Expenses. The
Agreement may be modified or amended from time to time by
mutual written agreement between the parties hereto. Upon
termination hereof, outstanding obligations hereunder shall
survive. This Agreement may be amended in the future to
include as additional parties to the Agreement other
investment companies for which SSC serves as investment
adviser.
8. ASSIGNMENT
This Agreement shall not be assigned or transferred, either
voluntarily or involuntarily, by operation of law or
otherwise, without the prior written consent of SSC, the
Underlying Funds and Pathway Series. The Agreement shall
automatically and immediately terminate in the event of its
assignment without the prior written consent of such Funds.
9. NOTICE
Any notice under this Agreement shall be in writing, addressed
and delivered or sent by registered or certified mail, postage
prepaid, to the other party at such address as such other
party may designate for the receipt of such notices. Until
further notice to the other parties, it is agreed that for
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this purpose the address of all parties to this Agreement is
Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000, Attention: Xxxxxx
X. XxXxxxxxx.
10. INTERPRETIVE PROVISIONS
In connection with the operation of this Agreement, the
parties may agree from time to time on such provisions
interpretive of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the
general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by all parties and
annexed hereto, but no such provisions shall contravene any
applicable Federal or State Law or regulation. Also, no
existing provision of this Agreement, or interpretive or
additional provision described above, shall be effective if,
as a result, any Pathway Portfolio or any Underlying Fund
would lose its status as a regulated investment company under
Subchapter M of the Internal Revenue Code.
11. STATE LAW
This Agreement shall be construed and enforced in accordance
with and governed by the laws of the Commonwealth of
Massachusetts.
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12. CAPTIONS
The captions in the Agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
With respect to a party which is organized as a Massachusetts business
trust, references in this Agreement to the party mean and refer to the Trustees
from time to time serving under its Declaration of Trust on file with the
Secretary of the Commonwealth of Massachusetts, as the same may be amended from
time to time, pursuant to which the party conducts its business. The obligations
of the party hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the party personally,
but bind only the trust property of the party, as provided in said Declaration
of Trust.
With respect to a party which is organized as either a Massachusetts
business trust or a Maryland corporation, if the party has more than one series,
no series of the party other than the series on whose behalf an obligation shall
have been undertaken shall be responsible for the obligations of the series, and
third parties shall look only to the assets of that series to satisfy those
obligations.
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IN WITNESS WHEREOF, the parties have caused the Agreement to be
executed as of the day and year first above written.
Xxxxxxx Global Fund, Inc.,
on behalf of
Xxxxxxx Emerging Markets Income Fund,
Xxxxxxx Global Fund,
Xxxxxxx Global Discovery Fund,
Xxxxxxx International Bond Fund, and
Xxxxxxx Global Bond Fund
Xxxxxxx International Fund, Inc.,
on behalf of
Xxxxxxx International Fund,
Xxxxxxx Pacific Opportunities Fund,
Xxxxxxx Emerging Markets Growth Fund,
Xxxxxxx Latin America Fund, and
Xxxxxxx Mutual Funds, Inc.,
on behalf of
Xxxxxxx Gold Fund
Xxxxxxx Portfolio Trust,
on behalf of
Xxxxxxx Income Fund, and
Xxxxxxx High Yield Bond Fund
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Xxxxxxx Equity Trust,
on behalf of
Xxxxxxx Capital Growth Fund, and
Xxxxxxx Value Fund
Xxxxxxx Investment Trust,
on behalf of
Xxxxxxx Growth and Income Fund,
Xxxxxxx Quality Growth Fund, and
Xxxxxxx Classic Growth Fund
Xxxxxxx Funds Trust,
on behalf of
Xxxxxxx Short Term Bond Fund
Xxxxxxx Securities Trust,
on behalf of
Xxxxxxx Development Fund,
Xxxxxxx Small Company Value Fund,
Xxxxxxx 21st Century Growth Fund, and
Xxxxxxx Micro-Cap Fund
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Xxxxxxx GNMA Fund
By:__________________________________________
Xxxxx X. Xxx, Vice President
Xxxxxxx Cash Investment Trust
Xxxxxxx Pathway Series
By:__________________________________________
Xxxxx X. Xxx, President
Xxxxxxx, Xxxxxxx & Xxxxx, Inc.
By:__________________________________________
Xxxxx X. Xxx, Managing Director
Xxxxxxx Service Corporation
By:__________________________________________
Xxxxx X. Xxx, Vice President
Xxxxxxx Investor Services, Inc.
By:__________________________________________
Xxxxx X. Xxx, President
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Xxxxxxx Trust Company
By:__________________________________________
Xxxxx X. Xxx, President
Xxxxxxx Fund Accounting Corporation
By:__________________________________________
Xxxxx X. Xxx, President
Dated: November 15, 1996
* This Agreement has been signed by each party which is a Massachusetts
business trust by its President or Vice President in that capacity and
not individually.
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APPENDIX A
The following Funds are parties to this Agreement, and have so
indicated their intention to be bound by such Agreement by executing the
Agreement on the dates indicated thereon:
Xxxxxxx Global Fund, Inc.,
on behalf of
Xxxxxxx Emerging Markets Income Fund,
Xxxxxxx Global Fund,
Xxxxxxx Global Discovery Fund,
Xxxxxxx International Bond Fund, and
Xxxxxxx Global Bond Fund
Xxxxxxx International Fund, Inc.,
on behalf of
Xxxxxxx International Fund,
Xxxxxxx Pacific Opportunities Fund,
Xxxxxxx Emerging Markets Growth Fund, and
Xxxxxxx Latin America Fund
Xxxxxxx Mutual Funds, Inc.,
on behalf of
Xxxxxxx Gold Fund
Xxxxxxx Portfolio Trust,
on behalf of
Xxxxxxx Income Fund, and
Xxxxxxx High Yield Bond Fund
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Xxxxxxx Equity Trust
on behalf of,
Xxxxxxx Capital Growth Fund, and
Xxxxxxx Value Fund
Xxxxxxx Investment Trust,
on behalf of
Xxxxxxx Growth and Income Fund,
Xxxxxxx Quality Growth Fund, and
Xxxxxxx Classic Growth Fund
Xxxxxxx Funds Trust,
on behalf of
Xxxxxxx Short Term Bond Fund
Xxxxxxx Securities Trust,
on behalf of
Xxxxxxx Development Fund,
Xxxxxxx Small Company Value Fund,
Xxxxxxx 21st Century Growth Fund, and
Xxxxxxx Micro-Cap Fund
Xxxxxxx GNMA Fund
Xxxxxxx Cash Investment Trust
Xxxxxxx Pathway Series
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