XXXXX STREET FUNDS
EXHIBIT (h)9
AMERICAN FUNDS PLAN PREMIER
PARTICIPATION AGREEMENT
This Participation Agreement ("Agreement") is entered into by and
between American Funds Distributors, Inc. ("AFD"), Northwestern Mutual
Investment Services, LLC ("NMIS") and Xxxxx Street Funds, Inc. (the "Fund")
and is effective as of August 7, 2003.
WHEREAS, AFD has developed a full service retirement plan recordkeeping
program (the "Program"); and
WHEREAS, the Fund is an open-end investment company registered under the
Investment Company Act of 1940, as amended; and
WHEREAS, NMIS is the distributor and principal underwriter of the Fund and
the shares of the separate series of the Fund listed on Schedule I attached
hereto, as amended from time to time (the "Portfolios") and distributes the
Portfolios to various retirement plans through its registered representatives;
and
WHEREAS, AFD desires to permit plan sponsors of retirement plans that
participate in the Program to include the Portfolios as investment options
within their retirement plans for servicing and recordkeeping purposes; and
WHEREAS, the parties have agreed that the Portfolios are only to be
included in the Program as investment options for those retirement plans for
which a registered representative of NMIS is the designated representative (the
"Plans").
NOW, THEREFORE, in consideration of the above premises and the mutual
obligations, covenants and agreements set forth in this Agreement and other
valuable consideration, AFD, NMIS and the Fund hereby agree as follows:
1. Availability of Portfolios. NMIS and the Fund agree that AFD may
include in the Program the Portfolios as investment options for Plans. The
Portfolios shall not be included in the Program for retirement plans for which
NMIS registered representatives are not designated representatives.
2. Transactions in Fund Shares. All orders for the purchase and redemption
of Portfolio shares on behalf of Plans will be executed by BenefitsCorp
Equities, Inc. ("BCE") pursuant to the Administrative Services Agreement between
BCE, NMIS and the Fund ("BCE Agreement").
3. Administrative Fees. In consideration of the inclusion of the
Portfolios in the Program by AFD, NMIS shall perform the duties and
responsibilities required of NMIS contained herein. The parties acknowledge that
the Fund compensates BCE, pursuant to the BCE Agreement for administrative and
recordkeeping services in respect of Portfolio shares ordered on behalf of
Plans, in an amount determined therein. The Fund agrees that it will not reduce
or eliminate the compensation it pays to BCE without providing AFD at least 60
days prior written notice, unless the BCE Agreement is terminated in accordance
with Article 10 of the BCE Agreement or because compensation paid pursuant to
that agreement is found to be inconsistent with or in violation of any state or
federal law as determined by a state or federal regulatory authority, in which
case that agreement may be terminated immediately and all compensation paid
under such agreement shall be discontinued.
4. Compensation to NMIS Registered Representatives. It is acknowledged and
understood by the parties that neither AFD nor BCE is responsible for the
compensation of the NMIS registered representatives who are designated
representatives of the Plans.
5. Use of Names. No party nor any of its affiliates will use the name of
any other party in any manner without such other party's written consent.
Notwithstanding the foregoing, advertising, promotional, and other written
materials relating to the Program may include the names and other identifying
marks of the Fund or particular Portfolios that are available through the
Program, or may indicate generally that AFD makes the Portfolios available to
Plans that: (a) are sold by registered representatives of NMIS; and (b)
participate in the Program.
6. Fund and Portfolio Information. (a) AFD will make no representations
concerning the Fund or any Portfolio that are inconsistent with the Fund's
currently effective registration statement, including exhibits thereto, or in
the offering documents, sales literature, and marketing materials delivered to
AFD. AFD assumes no responsibility or liability for the representations
contained in such registration statement or other materials prepared by or under
the direction of NMIS or its affiliates.
(b) NMIS agrees that AFD may update statistical information using third
party statistical sources (e.g., CDA, Morningstar, Lipper, etc.) without NMIS'
written consent, provided such information is contained in material that was
produced initially with NMIS' consent. NMIS and the Fund are responsible for the
accuracy of all information concerning the Portfolios that the Fund and/or its
service providers makes available to third party statistical sources.
7. Compliance with Regulatory Requirements. (a) The Fund represents and
warrants that (i) each Portfolio's shares have been registered or qualified for
sale under the federal securities laws and that appropriate notice filings or
other qualifications have been made under the securities laws of all states and
the District of Columbia in which Portfolio shares are sold and (ii) the Fund's
registration statement and all information supplemental to the registration
statement provided to AFD by NMIS for distribution to shareholders or
prospective shareholders, including but not limited to sales literature and
advertisements, will be prepared in accordance with all applicable federal and
state securities laws and regulations and will not contain any untrue statement
of a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, or omit to state a material fact required to be stated therein.
(b) NMIS and AFD hereby agree to abide by, and cause compliance with, all
rules and regulations of the NASD, including, without limitation, the NASD
Conduct Rules. NMIS further represents and warrants that the Fund's prospectus
and/or statement of additional information, as appropriate, will provide any and
all disclosure required by applicable rules of compensation to be paid to AFD or
any other service provider with respect to the Program.
(c) The obligations of the Fund, NMIS and AFD under this Section 7 will
survive termination of this Agreement.
8. Authorization. (a) The Fund and NMIS represent and warrant to AFD that
(i) each has obtained any and all necessary approvals and authorizations
necessary to make the Portfolios available through the Program, and (ii) NMIS,
the Fund and the persons executing this Agreement on their behalf are duly
authorized and empowered to execute and deliver this Agreement on behalf of NMIS
and the Fund.
(b) AFD represents and warrants to NMIS and the Fund that it, and the
person executing this Agreement on its behalf, are duly authorized and empowered
to execute and deliver this Agreement on behalf of AFD.
9. Expenses. Except as may otherwise be provided in this Agreement, each
party shall bear all expenses incurred by such party incidental to the
performance of its obligations under this Agreement.
10. Relationship of Parties. It is understood and agreed that the
arrangement that is the subject of this Agreement shall not be construed as a
joint venture.
11. Indemnification. (a) NMIS agrees to indemnify and hold harmless AFD and
its affiliates and their respective directors, officers, employees, agents and
each person, if any, who controls AFD within the meaning of the Securities Act
of 1933, as amended (the "Securities Act"), against any losses, claims, damages
or liabilities to which any such indemnitee may become subject insofar as those
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of any actions or failure or omission to act by the Fund or NMIS, or their
affiliates, under this Agreement, or occur in connection with or are based upon
their representations, warranties, and obligations under this Agreement, and
NMIS will reimburse the indemnitees for any legal or other expenses incurred by
them in connection with investigating or defending such claim or action;
provided, however, that NMIS will not be liable for indemnification hereunder to
the extent that any such loss, claim, damage or liability results from the
negligence or willful misconduct of AFD, its directors, officers, employees,
agents, or successors or assigns, as permitted hereunder. This right of
indemnification shall survive termination of this Agreement with respect to
actions taken prior to termination of this Agreement.
(b) AFD agrees to indemnify and hold harmless NMIS, the Fund, their
respective affiliates and their respective directors, officers, employees,
agents and each person, if any, who controls NMIS or the Fund within the meaning
of the Securities Act against any losses, claims, damages or liabilities to
which any such indemnitee may become subject insofar as those losses, claims,
damages or liabilities (or actions in respect thereof) arise out of any actions
or failure or omission to act by AFD or its affiliates under this Agreement, or
occur in connection with or are based upon their representations, warranties,
and obligations under this Agreement, and AFD will reimburse the indemnitees for
any legal or other expenses incurred by them in connection with investigating or
defending such claim or action; provided, however, that AFD will not be liable
for indemnification hereunder to the extent that any such loss, claim, damage or
liability results from the negligence or willful misconduct of the Fund, NMIS,
or their directors, officers, employees, agents, or successors or assigns, as
permitted hereunder. This right of indemnification shall survive termination of
this Agreement with respect to actions taken prior to termination of this
Agreement.
12. Insurance. At all times each party shall maintain insurance coverage
that is reasonable and customary in light of all its responsibilities hereunder.
13. Duration and Termination of Agreement. (a) The Agreement will continue
in effect unless terminated as provided herein. If NMIS, the Fund or AFD wishes
to terminate this Agreement in its entirety or with respect to an individual
Portfolio, the terminating party will provide the other parties with written
notice at least sixty (60) days prior to the date of termination; provided,
however, that any such termination will not affect accounts existing on the date
of termination.
(b) Notwithstanding paragraph (a) of this Section 13, any party may
terminate this Agreement immediately upon (i) a material breach by any other
party not cured within thirty days after notice from the terminating party, (ii)
upon termination of services from any party to the Plans, or (iii) with respect
to a particular Portfolio, upon the provision of notice by the Fund that it has
terminated NMIS' authority to serve as principal underwriter for such Portfolio,
such notice to be provided by the Fund promptly after the Fund terminates NMIS'
underwriting agreement. The termination of this Agreement with respect to any
Portfolio will not cause its termination with respect to any other Portfolio.
(c) Each party agrees to promptly notify the other parties in the event
(i) it files a petition in bankruptcy or a petition seeking similar relief under
any bankruptcy, insolvency, or similar law, or a proceeding is commenced against
a party seeking such relief, or (ii) it is found by the SEC, the NASD, or any
other federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule, or regulation, which violation was made
in connection with its obligations under this Agreement or is reasonably likely
to impair its ability to perform its obligations under this Agreement.
(d) NMIS shall promptly notify AFD if any of the following events occurs:
(i) the Fund or its agent sends notice to shareholders of a Portfolio regarding
an upcoming shareholder meeting; (ii) NMIS and the Fund do not have a valid or
effective service agreement with BCE or another third party acceptable to AFD;
or (iii) NMIS or the Fund has given notice to terminate any agreement with BCE
or such third party.
14. Notices. Except as otherwise specifically provided in this Agreement,
all notices required or permitted to be given under this Agreement will be given
in writing and delivered by personal service, by postage prepaid mail - return
receipt requested, by facsimile machine or a similar means of same day delivery
that provides evidence of receipt (with a confirming copy by mail as set forth
herein), or by overnight mail. All notice shall be sent to the addresses below,
or such other address as provided by a party:
If to AFD: If to NMIS:
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American Funds Distributors, Inc. Northwestern Mutual Investment
000 Xxxxx Xxxx Xxxxxx, 00xx Floor Services, LLC
Xxx Xxxxxxx, XX 00000 Suite 300
Attention: Xxxxxxx Xxxxxxx 000 X. Xxxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxxxxxx
With a copy to: If to Fund:
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American Funds Distributors, Inc. Xxxxx Street Funds, Inc.
000 Xxxxx Xxxx Xxxxxx, 00xx Floor 000 X. Xxxxxxxxx Xxx.
Xxx Xxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx Attention: Xxxxxxx X. Xxxxxxxx
15. Non-Exclusivity. NMIS and the Fund acknowledge that AFD may enter into
similar agreements with other investment companies or investment company
sponsors. AFD acknowledges that NMIS and the Fund may enter into similar
agreements with third parties.
16. Confidentiality. Each party to this Agreement agrees to maintain all
information received from the other party pursuant to this Agreement in
confidence, and each party agrees not to use any such information for any
purpose, or disclose any such information to any person, except as permitted or
required by applicable laws, rules and regulations or as requested by a
regulatory agency with jurisdiction over the disclosing party.
17. Miscellaneous. (a) If any provision of this Agreement is held or made
invalid by a court or regulatory agency decision, statute, rule or otherwise,
the remainder of the Agreement will continue to be valid and enforceable.
(b) The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions of the
Agreement or otherwise affect their meaning or interpretation.
(c) This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
and the same instrument.
(d) This Agreement is not assignable by any party without the other
parties prior written consent and any attempted assignment or contravention
hereof shall be null and void. This provision shall not be interpreted to
prevent AFD from contracting with BCE (or its affiliate, FASCorp) for the
provision of recordkeeping services to the Plans on its behalf, and by executing
this Agreement NMIS is agreeing to BCE (or its affiliate, FASCorp) providing
such services on AFD's behalf.
(e) This Agreement, together with its accompanying schedule(s) and
exhibit(s), constitutes the entire Agreement between the parties with respect to
the subject matter herein and there are no agreements, representations or
warranties between the parties relating to the subject matter of this Agreement,
other than those set forth or provided for herein.
(f) This Agreement may be amended, modified, superseded, canceled, renewed
or extended, and the terms or covenants hereof may be waived only by a written
instrument executed by all of the parties hereto, or in the case of a waiver, by
the party waiving compliance.
(g) The provisions of this Agreement shall supersede the terms of any
other agreement between AFD, NMIS and the Fund to the extent that a conflict
exists between the provisions of such agreement and this Agreement.
(h) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the principles of
conflicts of law thereof.
(i) EACH PARTY HERETO KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
(WHETHER BASED IN CONTRACT, TORT OR OTHERWISE), OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED INSTRUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS
OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AMERICAN FUNDS DISTRIBUTORS, INC. NORTHWESTERN MUTUAL INVESTMENT SERVICES, LLC
By: /s/XXXXXXX XXXXXXX By: /s/XXXXXXX X. XXXXXXXXX
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Name: Xxxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President Title: Senior Vice President -
Variable Annuities
XXXXX STREET FUNDS, INC.
By: /s/XXXX X. XXXX
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Name: Xxxx X. Xxxx
Title: President
SCHEDULE I
LIST OF AVAILABLE PORTFOLIOS
NAME OF PORTFOLIO SHARE CLASS OFFERED
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Xxxxx Street Aggressive Growth Stock Fund A
Xxxxx Street Growth Stock Fund A
Xxxxx Street Small Cap Growth Stock Fund A
Xxxxx Street Asset Allocation Fund A
Xxxxx Street High Yield Bond Fund A
Xxxxx Street Select Bond Fund A
