Exhibit e(i)
SERVICES AGREEMENT
AGREEMENT made this 1st day of January, 2001 between X.xxx Asset Management,
Inc.("X.xxx"), a Delaware corporation, X.xxx Corporation (to be renamed PayPal,
Inc.), the parent company to X.xxx ("Parent"), a Delaware corporation, and Funds
Distributor, Inc. ("FDI"), a Massachusetts corporation.
WHEREAS, X.xxx serves as the investment adviser and transfer agent for certain
investment portfolios or series of one or more open-end management investment
companies registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as listed on Schedule A, as such Schedule may be amended from time
to time (each a "Fund," collectively, the "Funds");
WHEREAS, PayPal owns the PayPal website and is responsible for all content
therein;
WHEREAS, the investment companies listed on Schedule A have entered into a
selling agreement with FDI (the "Selling Agreement") for the offer and sale by
FDI of certain shares of common stock (the "Shares") in the investment companies
or in the Funds in the United States;
WHEREAS, certain employees of X.xxx will be registered with the National
Association of Securities Dealers, Inc. ("NASD") as representatives of FDI (such
persons shall hereinafter be referred to as "Registered Representatives") and
will perform sales, marketing and compliance functions for FDI with respect to
the Funds;
WHEREAS, X.xxx, PayPal and FDI desire to enter into this Agreement pursuant to
which FDI will perform certain services for X.xxx and PayPal with respect to
Shares of each Fund and X.xxx and PayPal will perform certain services for FDI
with respect to Shares of each Fund; and
WHEREAS, X.xxx and PayPal have agreed to enter into this Agreement as
consideration for FDI to enter into the Selling Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
herein contained, the parties agree as follows:
1. Services provided by FDI. FDI will assist X.xxx and PayPal in providing
services with respect to each Fund with respect to transactions in the
Fund in the United States or with respect to account holders in the
United States, as may be reasonably requested by X.xxx or PayPal from
time to time. At the direction of X.xxx or PayPal, specific assignments
may include any of the following:
(a) legal review and principal sign-off of all Fund marketing materials
and other sales related materials to ensure compliance with the
advertising rules of the relevant regulatory authorities and file
such materials, and use commercially reasonable efforts to obtain
such approvals for their use as may be required by the Securities
and Exchange Commission ("SEC") or the NASD. FDI will forward all
NASD comments on marketing materials to X.xxx for incorporation and
X.xxx shall have sole responsibility for incorporating such
comments. With respect to all Fund marketing materials and other
sales related materials, X.xxx shall provide all factual content,
opinion, and other content for such materials and FDI shall not be
responsible for the accuracy of the content of such materials, when
used thereafter by X.xxx or any other person authorized by X.xxx to
use such materials, nor shall FDI be responsible for the filing or
content of any such materials used by third parties without the
authorization of FDI; and provided further that FDI shall not be
responsible for filing any materials that fall with the definition
of advertising or sales literature if such materials are not
provided to FDI in a form suitable for filing in a timely manner;
(b) the forwarding of sales related complaints concerning the Funds to
X.xxx;
(c) coordination of registration of the Funds with the National
Securities Clearing Corporation ("NSCC") and filing of required
Fund/SERV reports with the NSCC, if applicable;
(d) the provision of advice and counsel to the Funds with respect to
regulatory matters regarding Fund marketing material and other
sales related materials, broker/dealer and distribution related
issues, including monitoring regulatory and legislative
developments that may affect the Funds and assisting the Funds in
routine regulatory examinations or investigations;
(e) assistance in the preparation of quarterly board materials with
regard to sales and other distribution related data reasonably
requested by the board;
(f) preparation of materials for the board supporting the annual
renewal of the Selling Agreement;
(g) in connection with the foregoing activities, maintenance of an
office facility (which may be in the offices of X.xxx or a
corporate affiliate);
(h) in connection with the foregoing activities, the furnishing of
clerical services and internal executive and administrative
services, stationery and office supplies;
(i) cooperate with reasonable requests for information and other
assistance needed by the administrator for the Funds for the
administrator's provision of all blue sky services on behalf of
X.xxx. FDI will work with X.xxx personnel and the administrator to
assist the administrator in its responsibility for ensuring that
the Funds are in full compliance with any applicable state
regulatory requirements. FDI also agrees to communicate offers of
Shares in the various states where requested by X.xxx; and
(k) FDI will keep and maintain all books and records relating to its
services in accordance with Rule 31a-1 under the 1940 Act.
2. Services Provided by X.xxx. In furtherance of its responsibilities
under this Agreement X.xxx will:
(a) cause the registration of the Shares under the Securities Act of
1933 (the "1933 Act") and the qualification for the Shares for sale
in those states that the Funds may designate;
(b) monitor or cause the Funds' transfer agent to monitor sales of the
Shares with respect to compliance with applicable state securities
laws;
(c) provide transfer agent information about transactions in Shares;
(d) perform sub-transfer agent services with respect to transactions in
accounts used to fund purchases of Shares and used to receive
proceeds of redemptions of Shares, and furnish FDI the information
specified elsewhere in the Agreement;
(e) establish appropriate procedures, and monitor the registration of
account holders of PayPal to ensure that the only account holders
who hold Shares of the Funds in transactions made through FDI are
United States residents and to ensure compliance with any laws or
regulations regarding the detection and prevention of money
laundering;
(f) monitor the performance of the Registered Representatives with
respect to compliance with the NASD's Conduct Rules, and in
particular the NASD's interpretation of the applicability of Rule
3040 of the NASD's Conduct Rules to certain activities of persons
registered as representatives with an NASD member and who are
active as, or on behalf of, an investment adviser with the SEC, and
who conduct their advisory activities away from their NASD
employer/member as described in the NASD's Special Notice to
Members 94-44;
(g) provide consulting services with regard to such advertising,
marketing and promotional activities as X.xxx believes reasonable,
including but not limited to (i) development of information,
analyses and reports, (ii) preparing, printing and distributing
sales literature brochures, letters, training materials and dealer
guides and all similar materials and advertisements as defined
below, (iii) develop and implement audio and video advertising
programs, and (iv) arrange for the printing and distribution of
prospectuses and reports of the Funds to prospective shareholders;
provided that it is understood that FDI shall have no
responsibility for strategic planning or development with respect
to such matters, nor shall FDI have responsibility for ensuring the
accuracy of the content of such materials. For purposes of this
Agreement "sales literature" and "advertisements" mean brochures,
letters, electronic media (including web pages), training materials
and dealers' guides, materials for oral presentations and all other
similar materials, whether transmitted directly to potential
shareholders or published in print or audio-visual media, but does
not include generic materials that do not mention the Funds or the
Shares;
(h) submit all Fund-related sales literature and advertisements
prepared pursuant to Section 2(c) above to FDI for legal/compliance
review in advance of use, and incorporate such changes as FDI may
reasonably request therein, which FDI will use reasonable efforts
to request within 3 business days of submission by X.xxx. FDI will
file such materials and use commercially reasonable efforts to
obtain such approvals for their use as may be required by the SEC
or NASD;
(i) to the extent applicable, cause the Funds' transfer agent to give
necessary information for the preparation of quarterly reports for
the board in a form reasonably satisfactory to FDI regarding any
Rule 12b-1 fees, front-end sales loads, back-end sales loads and
other data regarding sales and sales loads as required by the 1940
Act or as requested by the board of directors of the applicable
investment companies listed on Schedule A, as well as any such
information that FDI may request in order to perform any
reconciliation or other activities it may be requested by X.xxx to
perform;
(j) to the extent applicable, cause the Funds' transfer agent to
provide FDI with all necessary information so that FDI can
calculate the maximum sales charges payable by the Funds pursuant
to the Conduct Rules of the NASD and the actual sales charges paid
by the Funds; and cause the Fund's transfer agent to provide such
information in a form satisfactory to FDI no less often than
monthly for every Fund and on a daily basis for any Fund for which
FDI determines that the remaining limit is approaching zero;
(k) support or cause the Funds' transfer agent to support the servicing
of the shareholders; in connection therewith the Funds' transfer
agent or X.xxx will provide one or more persons during normal
business hours to respond to telephone questions concerning the
Funds;
(l) provide FDI with copies of, or access to, any documents that FDI
may reasonably request and notify FDI as soon as possible of any
matter materially affecting FDI's performance of services under
this Agreement; and
(m) (i) submit the form of confirmation statement to be used by the
transfer agent for sale of the Shares to FDI for its approval and
provide or cause to be provided to customers of the Funds
("Customers") such confirmations of all transactions in the Shares
as may be required by the 1934 Act and the Selling Agreement, and
(ii) use reasonable efforts to monitor the Fund's transfer agent in
its preparation and mailing of such confirmations regarding the
sales of the Shares and report to FDI any deficiencies of which
X.xxx is aware in the transfer agent's performance of such
activities.
3. Services to be provided by PayPal. In furtherance of its
responsibilities under this Agreement X.xxx will:
(a) establishment and maintenance of the website relating to PayPal
accounts;
(b) establish procedures in conjunction with X.xxx and FDI to ensure
that the appropriate legal review and principal sign off has
occurred; and
(c) cause all proposed changes to the website to be provided to FDI in
a timely manner and incorporate all such changes as FDI may
reasonably request.
4. Delivery of Documents. In order to assist FDI in the performance of its
duties, X.xxx has caused each Fund to furnish FDI with, or provide FDI
with access to, each of the following:
(a) each Fund's most recent Post-Effective Amendment to its
Registration Statement on Form N-1A (the "Registration Statement")
under the 1933 Act and under the 1940 Act as filed with the SEC
relating to each Fund's shares;
(b) each Fund's most recent Prospectus(es);
(c) each Fund's most recent Statement(s) of Additional Information;
(d) each Fund's most recent annual and semi-annual financial
statements;
(e) each Fund's most recent filing pursuant to Rule 24f-2 under the
1940 Act;
(f) each Fund's most recent SEC examination letter to the extent that
such information contained in the SEC letter: (i) materially
affects FDI's performance under this Agreement; or (ii) the issues
identified in the letter may result in FDI incurring any loss,
claim, damage or liability or action in respect thereof; and
(g) the Fund's charter documents and by-laws.
X.xxx will cause each Fund to furnish FDI from time to time with copies
of, or provide FDI with notice of and access to, all amendments of or
supplements to the foregoing immediately upon the availability of such
amendments or supplements. Furthermore, X.xxx will provide FDI with copies of,
or access to, any other documents that FDI may reasonably request and will
notify FDI as soon as possible of any matter materially affecting FDI's
performance of its services under this Agreement.
5. Compensation; Reimbursement of Expenses.
(a) X.xxx shall pay FDI for the services provided under this Agreement
an aggregate annual fee in the first year of $75,000 per Fund
unless otherwise mutually agreed, for the initial one Fund, payable
in equal monthly installments on the first business day of each
month. As consideration for entering into a two year agreement as
set forth in Section 6(a) below, FDI hereby agrees to waive 20% of
the aggregate annual fee for each of those two years (resulting in
a revised annual fee of $60,000), provided that if this Agreement
is terminated by X.xxx in the absence of a material breach of the
Agreement by FDI, or terminated by FDI because of a material breach
of this Agreement by X.xxx (in either case, an "Adjusting
Termination"), one or more of the following fee adjustments will
apply, as applicable: (i) if the Adjusting Termination occurs
before the completion of the sixth month after the effective date
of this Agreement, X.xxx will owe FDI $75,000 less any amounts
previously paid (representing full payment for the first year at
the full annual rate); (ii) if the Adjusting Termination occurs
before the completion of the 13th month after the effective date of
this Agreement, the annual fee rate for all periods before the
Adjusting Termination will retroactively be $75,000 and the
difference for those prior periods will be owed by X.xxx to FDI;
and (iii) any Adjusting Termination after the completion of the
first anniversary of the effective date of this Agreement will not
be effective to terminate X.xxx's obligation to pay the monthly fee
(or portion thereof) until 6 months after delivery of the
termination notice. Such annual fee may be changed by mutual
written agreement should the number of Funds and/or the
corresponding services provided by FDI under this Agreement change.
(b) The fee as stated above is subject to the following conditions: (i)
that FDI shall only sponsor 6 or fewer Registered Representatives
(additional sponsorships shall be subject to a $3,500 annual fee
per Registered Representative sponsored by FDI in excess of the 6
Registered Representatives); (ii) FDI will conduct a one-time
review and filing with the NASD of the present website with any
updates or maintenance reviews to be charged at a flat fee of $10
per page thereafter; and (iii) that all other advertising legal
review shall be for the lesser of 30 marketing pieces or 150 pages
per calendar year (advertising legal review in excess of 30 pieces
or 150 pages for the relevant annual contract period (the "Annual
Period") shall be subject to a flat fee of $10 per page (including
each linked page) thereafter for such piece).
(c) All fees to FDI for the services described in this Agreement are
exclusive of out-of-pocket costs. X.xxx agrees to reimburse FDI for
FDI's reasonable out-of-pocket expenses incurred in providing the
services hereunder including but not limited to NASD/state
registration related expenses, including expenses related to
sponsorship and maintenance of Registered Representative licenses,
broker-dealer costs, postage, courier, travel and meals, and NASD
filing fees for sales literature. Expenses incurred out of the
ordinary course in providing the services hereunder are subject to
prior approval by X.xxx.
(d) If this Agreement becomes effective subsequent to the first day of
a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of
the fees as set forth above.
6. Effective Date. This Agreement shall become effective with respect to a
Fund as of the date first written above (or, if a particular Fund is
not in existence on that date, on the date FDI enters into a Selling
Agreement for the shares of such Fund; Schedule A to this Agreement
shall be deemed amended to include such Fund and any classes of Shares
of such Fund from and after such date).
7. Term.
(a) This Agreement shall continue for an initial two-year period and
shall continue thereafter for successive one-year terms unless
terminated pursuant to the provision of sub-sections (b) or (c) of
this Section 7.
(b) Either party may terminate this Agreement, if (a) a material breach
of any provision of this Agreement has been committed by the other
party; (b) the non-breaching party delivers notice that the other
party is in breach of any of its obligations under this Agreement;
and (c) either (i) the action or inaction of the breaching party
giving rise to the cause for termination is not capable of being
remedied or (ii) if such action or inaction is capable of being
remedied, the breaching party shall not have remedied such action
or inaction within thirty (30) days after such notice. X.xxx may
terminate this agreement with ninety (90) days' prior written
notice to FDI, subject to the provisions of Section 5 hereof. FDI
may terminate this Agreement with ninety (90 days prior written
notice to X.xxx. FDI may terminate this Agreement immediately in
the event that: (i) X.xxx is restrained or enjoined by a court
order from continuing to utilize, or is restrained or enjoined by a
court order from continuing to provide, the services and materials,
including but not limited to the Fund(s) provided by X.xxx
hereunder, or (ii) FDI, in the reasonable exercise of its
professional judgment, determines that litigation or regulatory
action against FDI, X.xxx or both (a) is likely to materially
affect FDI's ability to perform its obligations under this
Agreement, or (b) is likely to subject FDI to material liability or
damage its reputation.
(c) This Agreement will automatically and immediately terminate in the
event of FDI's expulsion or suspension by the NASD.
(d) The provisions of Section 8 and 9, and the provisions of Section 5
with respect to fee adjustments and additional charges and
expenses, shall survive termination of this Agreement and continue
in full force and effect. Compensation due FDI and unpaid by X.xxx
upon such termination shall be immediately due and payable upon and
notwithstanding such termination.
8. Standard of Care and Indemnification.
(a) X.xxx and PayPal, jointly and serverally, shall indemnify and hold
FDI, its officers, directors, employees, shareholders, affiliated
persons (as such term is defined in the 0000 Xxx) and agents
(collectively the "FDI Indemnified Parties" and each individually
an "FDI Indemnified Party") harmless from and against any and all
losses, claims, damages, expenses and liabilities, joint or several
(including, but not limited to, any reasonable investigation, legal
and other expenses incurred in connection with, and any amount paid
in settlement of, any action, suit, proceeding or claim), which
such FDI Indemnified Party or FDI Indemnified Parties may be or
become subject to or liable for by reason of or in connection with
this Agreement, FDI's provision of services pursuant to this
Agreement, or any other matter, event or transaction in any way
relating to or connected with this Agreement or the subject matter
hereof; provided, however, that an FDI Indemnified Party shall not
be entitled to indemnification hereunder to the extent, but only to
the extent, that such loss, claim, damage, expense or liability was
caused directly and proximately by action or omission of FDI and
that such action or omission involved bad faith, gross negligence
or intentional misconduct by FDI.
(b) FDI shall indemnify and hold X.xxx and PayPal, their officers,
directors, employees, shareholders, affiliated persons (as such
term is defined in 1940 Act), agents, and the Funds and their
officers and directors (collectively the "X.xxx Indemnified
Parties" and each individually an "X.xxx Indemnified Party")
harmless from and against any and all losses, claims, damages,
expenses and liabilities, joint or several (including, but not
limited to, any reasonable investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of,
any action, suit, proceeding or claim), which such X.xxx
Indemnified Party or X.xxx Indemnified Parties may be or become
subject to or incur by reason of this Agreement or under the 1933
Act, the 1934 Act, common law or otherwise, but only to the extent
that such loss, claim, damage, expense or liability incurred by a
X.xxx Indemnified Party shall have been caused directly and
proximately by acts or omissions of FDI and such acts or omissions
involved bad faith, gross negligence or intentional misconduct by
FDI.
(c) In order to provide for just and equitable contribution in
circumstances in which the terms of Section 8(a) or 8(b) are
applicable, but for any reason the indemnification provided for
therein is held to be unavailable, X.xxx and FDI shall contribute
to the aggregate losses, claims, damages, expenses and liabilities
(including, but not limited to, any reasonable investigation, legal
and other expenses incurred in connection with, and any amount paid
in settlement of, any action, suit, proceeding or claim) which any
of the FDI Indemnified Parties or X.xxx Indemnified Parties (as
defined above), respectively, may be subject to or liable for in
proportion to the relative fault of X.xxx, on the one hand, and
FDI, on the other hand; provided, however, that in determining
relative fault, there shall be considered the relative benefits
received by each party from the transactions giving rise to the
loss, claim, damage, expense or liability, the parties' relative
knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to correct
and prevent any statement or omission, and any other equitable
considerations appropriate under the circumstances; provided,
further, that in no event shall FDI be required to contribute in
the aggregate hereunder any amount in excess of the aggregate
compensation received by it for its services during the immediately
preceding 12 month period. Neither X.xxx nor FDI shall have any
other right of contribution in connection herewith.
(d) The applicable indemnified party, promptly and in any event within
ten (10) days after receipt of notice of commencement of any
action, suit, proceeding or claim in respect of which a claim for
indemnification may be made by it, shall notify the applicable
indemnifying party in writing of the commencement of such action,
suit, proceeding or claim, enclosing a copy of all papers served.
However, the omission to so notify the applicable indemnifying
party of any such action, suit, proceeding or claim shall not
relieve such indemnifying party from any liability that it may have
under Section 8(a) or (b), as applicable, of this Agreement except
to the extent that the ability of such indemnifying party to defend
such action, suit, proceeding or claim is materially adversely
affected.
(e) In case any such action, suit, proceeding or claim for which
indemnity may be payable hereunder shall be brought against an FDI
Indemnified Party or X.xxx Indemnified Party, as applicable (an
"Indemnified Party"), and such Indemnified Party shall notify the
applicable indemnifying party of the commencement thereof, such
indemnifying party shall be entitled to participate in and, to the
extent that such indemnifying party wishes, to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified
Party, subject to the further provisions of this paragraph. After
written notice from such indemnifying party to such Indemnified
Party of its election to so assume the defense thereof, such
indemnifying party shall not be liable to the applicable
Indemnified Parties for any additional attorneys' fees or other
expenses of litigation, other than reasonable costs of
investigation subsequently incurred by such Indemnified Parties in
connection with the defense thereof, unless (i) the employment of
counsel by such Indemnified Parties has been authorized in writing
by such indemnifying party, such authorization not to be
unreasonably withheld or delayed; (ii) such Indemnified Parties
shall have obtained a written opinion of counsel reasonably
acceptable to such indemnifying party that there exists a conflict
of interest between such Indemnified Parties and the relevant party
in the conduct of the defense of such action or that there are one
or more defenses available to such Indemnified Parties that are
unavailable to such indemnifying party (in which case such
indemnifying party shall not have the right to direct the defense
of such action on behalf of such Indemnified Parties); or (iii)
such indemnifying party shall not in fact have employed counsel
reasonably satisfactory to such Indemnified Parties to assume the
defense of such action, in each of which cases the reasonable fees
and expenses of counsel utilized by such Indemnified Parties shall
be at the expense of such indemnifying party, it being understood,
however, that such indemnifying party shall not, in connection with
any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for
an Indemnified Party, which firm shall be designated in writing by
the Indemnified Party. Notwithstanding the foregoing, under the
circumstances described in clause (ii) above, the applicable
Indemnified Parties shall be entitled to retain an additional law
firm, in any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, provided such Indemnified
Parties have obtained a written opinion of counsel reasonably
acceptable to the indemnifying party that a conflict of interest
exists that would preclude the use of a single law firm, in which
case the indemnifying party shall be liable for the reasonable fees
and expenses of counsel designated by the Indemnified Parties in
writing. All such fees and expenses which are at the expense of an
indemnifying party hereunder shall be promptly paid by such
indemnifying party.
(f) Nothing in this Agreement shall be construed as limiting an
Indemnified Party's rights to employ counsel at its own expense or
to obtain indemnification for amounts reasonably paid to adverse
claimants in satisfaction of any judgments or in settlement of any
actions, suit, proceeding or claims, except that no party hereto
shall be liable for any settlement of any action, suit, proceeding
or claim effected without its written consent. None of the parties
hereto shall settle or compromise any action, suit, proceeding or
claim if such settlement or compromise provides for an admission of
liability on the part of an Indemnified Party without such
Indemnified Party's written consent.
9. Confidentiality. During the term of this Agreement, FDI and X.xxx may
have access to confidential information relating to such matters as
either party's business, trade secrets, systems, procedures, manuals,
products, contracts, personnel, and clients. As used in this Agreement,
"Confidential Information" means information belonging to FDI or X.xxx
which is of value to FDI or X.xxx and the disclosure of which could
result in a competitive or other disadvantage to either party.
Confidential Information includes, without limitation, financial
information, proposals and presentations, reports, forecasts;
inventions, improvements and other intellectual property; trade
secrets; know-how; designs, processes or formulae; software; market or
sales information or plans; customer, client or supplier lists; and
business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities). Confidential
Information includes information obtained or developed by either party
in the course of engaging in the activities provided for in this
Agreement, unless: (i) the information is or becomes publicly known
through lawful means; (ii) at the time of receipt the information was
already actually known to the other party; or (iii) the information is
disclosed to the other party without a confidential restriction by a
third party who rightfully possesses the information and did not obtain
it, either directly or indirectly, from FDI or X.xxx, as the case may
be, or any of their respective principals, employees, affiliated
persons, or affiliated entities. The parties understand and agree that
all Confidential Information shall be kept confidential by the other
both during and after the term of this Agreement. The parties further
agree that they will not, without the prior written approval by the
other party, disclose such Confidential Information, or use such
Confidential Information in any way, either during the term of this
Agreement or at any time thereafter, except as required in the course
of this Agreement and as approved by the other party or as required by
law.
10. Record Retention and Confidentiality.
(a) FDI shall keep and maintain on behalf of the Funds all books and
records which the Funds and FDI are, or may be, required to keep
and maintain in connection with the services to be provided
hereunder pursuant to any applicable statutes, rules and
regulations, including without limitation Rules 31a-1 and 31a-2
under the 1940 Act. FDI further agrees that all such books and
records shall be the property of the Funds and to make such books
and records available for inspection by or upon the request of the
Funds, by X.xxx, or by the SEC at reasonable times and otherwise to
keep confidential all books and records and other information
relative to the Funds and its shareholders; except when requested
to divulge such information by duly-constituted authorities or
court process.
(b) Each party shall be permitted reasonable access to records required
to be maintained by the other party pursuant to this Agreement to
the extent necessary to perform its obligations hereunder;
provided, however, that to the extent a party provides records
containing information relating to a customer of that party, the
party receiving such records shall use the information contained in
such records solely for the purpose of fulfilling its obligations
under this Agreement and applicable law and for no other purpose.
(c) Each party to this Agreement agrees to keep all information
required by law, to maintain books, accounts and records as to
clearly and accurately disclose the precise nature and details of
transactions involving their duties and obligations under this
Agreement, and to assist one another in the timely preparation of
any reports required by law.
(d) Each party to this Agreement shall furnish to the other party any
reports and information which the other party may reasonably
request for the purpose of meeting reporting and recordkeeping
requirements under the laws of any applicable state or jurisdiction
or of any self-regulatory organization.
11. Rights of Ownership. All computer programs and procedures developed to
perform the services to be provided by FDI under this Agreement are the
property of FDI. All records and other data except such computer
programs and procedures are the exclusive property of the Funds and all
such other records and data will be furnished to X.xxx and/or the Funds
in appropriate form as soon as practicable after termination of this
Agreement for any reason. FDI acknowledges that any website maintained
by X.xxx relating to the Funds remains the property of X.xxx and the
Funds.
12. Return of Records. FDI may at its option at any time, and shall
promptly upon the demand of X.xxx and/or the Funds, turn over to X.xxx
and/or the Funds and cease to retain FDI's files, records and documents
created and maintained by FDI pursuant to this Agreement which are no
longer needed by FDI in the performance of its services or for its
legal protection. If not so turned over to X.xxx and/or the Funds, such
documents and records will be retained by FDI for six years from the
year of creation. At the end of such six-year period, such records and
documents will be turned over to X.xxx and/or the applicable Fund
unless the applicable Fund authorizes in writing the destruction of
such records and documents.
13. Representations of X.xxx and PayPal. X.xxx and PayPal each represent
and warrant that this Agreement has been duly authorized by X.xxx and
PayPal and , when executed and delivered by each of them, will
constitute a legal, valid and binding obligation of each of them,
enforceable against each of them in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and
secured parties.
14. Representations of FDI. (a) FDI represents and warrants that this
Agreement has been duly authorized by FDI and, when executed and
delivered by FDI, will constitute a legal, valid and binding obligation
of FDI, enforceable against FDI in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and
secured parties.
(b) FDI further represents and warrants that it is a member of the NASD
and agrees to abide by all of the rules and regulations of the
NASD, including, without limitation, its Conduct Rules. FDI agrees
to comply with all applicable federal and state laws, rules and
regulations. FDI agrees to notify X.xxx immediately in the event of
its expulsion or suspension by the NASD. Expulsion of FDI by the
NASD will automatically terminate this Agreement immediately
without notice. Suspension of FDI by the NASD will terminate this
Agreement effective immediately upon written notice of termination
to FDI from X.xxx.
15. Notices. Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to X.xxx at the following address:
X.xxx Asset Management, Inc., 0000 Xxxxxxxxxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000, Attention: President; to PayPal at 0000 Xxxxxxxxxxx
Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, Attention: President, and to FDI at
the following address: 00 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000,
Attention: President with a copy to General Counsel, or at such other
address as either party may from time to time specify in writing to the
other party pursuant to this Section.
16. Headings. Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this
Agreement.
17. Assignment. This Agreement and the rights and duties hereunder shall
not be assignable by either of the parties hereto except by the
specific written consent of the other party. Any entity into which FDI
may be merged or converted or with which it may be consolidated, or any
entity resulting from any merger, conversion or consolidation to which
FDI shall be a party, or any entity succeeding to all or substantially
all of the business of FDI shall be the successor of FDI hereunder,
without the execution of any instrument or any further act on the part
of any of the parties hereto.
18. Governing Law. This Agreement shall be governed by and provisions shall
be construed in accordance with the laws of The Commonwealth of
Massachusetts.
19. Use of X.xxx Name. X.xxx and PayPal consent to FDI's non-exclusive use
of the "X.xxx", "PayPal" and "X.xxx Money Market Reserve Fund" and any
other Funds' names solely in connection with FDI's website, trade
advertisements, client lists and mutual fund industry conferences and
displays. FDI agrees and acknowledges that X.xxx and X.xxx Money Market
Reserve Fund and PayPal and/or their affiliates own all right, title,
and interest in the name "X.xxx" and "X.xxx Money Market Reserve Fund"
and PayPal and will only use these names as stated herein.
20. Services Not Exclusive. The Fund and X.xxx hereby acknowledge that the
services provided hereunder by FDI are not exclusive. Nothing herein
shall be deemed to limit or restrict FDI's right, or the right of any
of FDI's officers, directors or employees to engage in any other
business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar
nature, or to render services of any kind to any other corporation,
fund, firm, individual or association, as well as provide distribution
services to any other mutual fund, including any fund which may
directly compete with or be similar to X.xxx. FDI shall devote such
time and such personnel, in its sole discretion, as is necessary to
carry out the services described herein.
21. Independent Contractor Status. Nothing herein shall be construed to
create a joint venture or partnership between the parties, nor is this
Agreement intended or to be construed to create any relationship
between the parties other than that of independent parties contracting
with each other solely for the purpose of effecting the provisions and
requirements of this Agreement.
22. Severability. If any part, term or provision of this Agreement is held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if this Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
23. Counterparts. This Agreement may be executed by the parties hereto on
any number of counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed all as of the day and year first above written.
X.XXX ASSET MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxx
-------------------------
Title: Vice President
------------------------
FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxxxx
-------------------------
Title: Executive Vice President
------------------------
X.XXX CORPORATION
By: /s/ H. Xxxxx Xxxxxxx
---------------------------
Name: H. Xxxxx Xxxxxxx
-------------------------
Title: Chief Financial Officer
------------------------
Dated: January 1, 2001
SCHEDULE A
TO THE SERVICES AGREEMENT
BETWEEN
X.XXX ASSET MANAGEMENT INC.
AND
FUNDS DISTRIBUTOR, INC.
FUNDS
-----
X.xxx Money Market Reserve Fund, a series of X.xxx Funds
X.XXX ASSET MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Vice President
FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxx
Title: Executive Vice President
X.XXX CORPORATION
By: /s/ H. Xxxxx Xxxxxxx
Name: H. Xxxxx Xxxxxxx
Title: Chief Financial Officer
