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Draft - 2/6/96
ALPS Mutual Funds Services, Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
SPECIALIST INSTITUTIONS SERVICES AGREEMENT
____________________
____________________
____________________
Ladies and Gentlemen:
As distributor and principal underwriter of The
CountryBaskets(SM) Index Fund, Inc. (the "Fund"), we wish to enter into
this Specialist Institutions Services Agreement (this "Agreement") with
you, acting as a "Specialist Institution" hereunder, concerning your
Creation Unit purchases supporting the commencement of, and continued
liquidity in, the secondary market for, issued and outstanding shares of
common stock (the "CB Shares(SM)" or "CountryBaskets(SM)") of the series
(each a "Series") of the Fund in which you are registered as the NYSE
specialist, as indicated on Annex A hereto. Pursuant to a Marketing
Agreement between us and the Fund (the "Marketing Agreement"), we will
provide various marketing and other services with respect to the CB
Shares(SM) that will support and complement your secondary market trading
activities, as described herein. Capitalized terms, unless otherwise
defined herein, shall have the meanings attributed to them in the Fund's
current prospectus and statement of additional information.
In consideration of your covenants and agreements contained in
Section 1 and our covenants and agreements contained in Section 2, the
parties hereto agree as follows:
Section 1. Obligations of a Specialist Institution. In
connection with the offering by the Fund of CB Shares(SM) in Creation Unit
aggregations, you agree that you will enter into a purchase agreement with
the Fund, substantially in the form attached hereto as Annex B (a "Purchase
Agreement"), pursuant to which you agree to purchase (acting through an
Authorized Participant, if required to comply with procedures established
by the Fund) prior to the commencement of trading of CB Shares(SM) on the
NYSE the lesser of (i) three Creation Unit aggregations of CB Shares(SM) of
each Series and (ii) the maximum number of such Creation Units that the
rules of the NYSE would then permit you (taking into account any exemptions
then available to you), as appropriate to facilitate the maintenance of a
fair and orderly market, to purchase based on the aggregate number of CB
Shares(SM)
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outstanding after giving effect to all purchases of Creation Units to be
sold by the Fund pursuant to Purchase Agreements on the same date.
Section 2. Support for your Activities.
(a) Promotion and Advertising. The marketing and promotional
activities undertaken by us, and the sales, advertising or marketing
material relating to CB Shares(SM) developed by or made available to us,
pursuant to the Marketing Agreement for distribution to potential investors
and participants in the CountryBaskets(SM) secondary markets will be
designed or developed with a view to increasing the demand for CB
Shares(SM) on the secondary market.
(b) PFIs. We have entered into investor services agreements
with certain participating financial institutions (the "PFIs") to provide
certain services that will support your activities under Section 1(b),
including making markets in CB Shares(SM) or Fund Basket securities. The
availability of these services is a supplement to your usual and customary
mechanisms for satisfying market demand for CB Shares(SM). We agree, upon
inquiry, to facilitate communications between you and PFIs that may offer
special services to you, including access to foreign equity markets,
foreign listed derivatives markets, foreign exchange and over-the-counter
derivatives and clearance and settlement facilities for foreign securities.
(c) CB Shares(SM) Conference. A representative of your
organization designated by you will be invited to, and will participate in,
an annual two-day conference to be organized pursuant to the marketing plan
to be developed in accordance with the Marketing Agreement and in
conjunction with the Adviser at which CB Shares(SM) product and market
trends will be considered. The conference agenda is expected to be
presented by CB Shares(SM) product specialists, academics, international
economists and others. You will bear any expenses (including
transportation, compensation and any other out-of-pocket expenses) in
connection with the attendance of your representative at such conference.
(d) Data Support. The official net asset value, indicative net
accumulated dividends and indicative price-only net asset value for each
CountryBaskets(SM) Series will be made available daily on the Consolidated
Tape. In addition, indicative FT/S&P Actuaries World Indices(TM) index
values, as well as indicative net asset values, with respect to each
Series, will be made available on a real time basis at 30-second intervals
on the Consolidated Tape. Real-time or daily updated news and information
with respect to CB Shares(SM) (including, subject to the establishment of
satisfactory arrangements with third party vendors, spot foreign exchange
rates and major market index prices related to the country markets relevant
to the Series) will be made available by the Adviser through one or more
third-party vendors of on-line market information, including Automated Data
Processing,
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Reuters, Dow Xxxxx Telerate and/or Bloomberg, which vendors will distribute
such news and information in the form of a separate CountryBaskets(SM)
"page". You will also be provided with access to additional market
information, including without limitation, 5-year historical data (prior to
_______, 1995) on the relevant FT/S&P Actuaries World Indices(TM) country
indices, on diskette (or other suitable format) and in printed form; key
analytic data (spreads, correlations, historic performance, optimization
routines); and, as and when deemed necessary by the Adviser to support
trading, arbitrage and brokerage in CB Shares(SM), specific dealer research
(such as hedging strategies, options strategies and security-specific
correlations), in each case as made available to us or the Fund by the
Adviser or another third party (who shall consent to such data being
provided to you).
(e) CB Shares(SM) Loan Pool. In conjunction with the Adviser,
we will make arrangements with a major securities dealer to make available
for lending exclusively to Specialist Institutions which have executed an
agreement in this form (the "Specialist Institutions") and the PFIs a
quantity of CB Shares(SM) equal in aggregate market value to not less than
$100,000,000, divided among all Series, and available to Specialist
Institutions and PFIs on a "first-come, first-served" basis. Such
arrangements will remain in effect for a period of not less than six months
after the initial issuance and sale of CB Shares(SM) and will be for the
sole purpose of settling secondary market transactions entered into by
Specialist Institutions and PFIs. Such arrangements are expected to
include (i) pre-approved aggregate borrowing limits for each Specialist
Institution or PFI; and (ii) lending fees equivalent to _____ basis points
below a CB Share(SM) lending Call Rate. The "Call Rate" on any [London]
Business Day with respect to all Series will be the arithmetic mean,
determined daily by the Adviser, of the lending fee rates offered by three
major custodians or broker dealers selected by the Adviser from among State
Street Bank and Trust Company, The Bank of New York, The Chase Manhattan
Bank, N.A., Xxxxxxx Xxxxx & Co., Xxxxxxx, Sachs & Co., Nomura International
PLC and Paloma Securities, L.P. for loans of not less than ________
[amount] CB Shares(SM) in a single transaction. You understand also that
the availability of such arrangements to you will be subject to your
execution of a securities borrowing agreement substantially in the form
customarily required by Deutsche Xxxxxx Xxxxxxxx/X. X. Xxxxxxxx Inc., the
authorized securities lending agent for the lender(s).
(f) Exclusivity. We shall not have agreements in the form
hereof with any persons other than twelve (12) PFIs and the other
Specialist Institutions.
Section 3. No Representations. You and your officers,
employees or agents shall not make any representations as authorized by us,
the Fund or the Adviser except those contained in the Fund's then current
prospectus and statement of additional information or in such sales,
marketing or advertising materials as may be
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authorized by us and the Fund in writing, including the materials referred
to in Section 2(a) hereof. You understand that neither the Fund nor any
Series will be advertised or marketed as an open-end investment company,
i.e., as a mutual fund, which offers redeemable securities. Any
advertising materials, including the Fund prospectus, will prominently
disclose that the CB Shares(SM) are not redeemable units of beneficial
interest in the Fund. In addition, any advertising material, including the
Fund prospectus, will disclose that the owners of CB Shares(SM) may acquire
and tender those shares for redemption to the Fund in Creation Unit
aggregations only. You understand further that any advertising or
marketing materials relating to the Fund will contain such disclosures and
caveats as the Fund or we may deem to be required under any applicable
statute or rule, regulation or order of any governmental authority or self-
regulatory organization or under the policies of the Fund.
Section 4. Independent Contractor. For all purposes of this
Agreement, you will be deemed to be an independent contractor, and will
have no authority to act as agent for us in any matter or in any respect.
You and your employees will, upon request, be available during normal
business hours to consult with us or our designees concerning the
performance of your responsibilities under this Agreement.
Section 5. Termination; Amendment. This Agreement will become
effective between us on the date a fully executed copy of this Agreement is
received by us or our designee. This Agreement is terminable, without
penalty, (a) at any time by the Fund with respect to any Series of CB
Shares(SM) or (b) by you, in either case upon 90 days' notice in writing to
the other party hereto. This Agreement may be amended by execution of an
instrument in writing by each of the parties hereto.
Section 6. Miscellaneous.
(a) All notices and other communications to either you or us
will be duly given if mailed, telegraphed or transmitted by facsimile or
similar telecommunications device at the address shown below.
(b) This Agreement shall be construed in accordance with the
laws of the State of New York.
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If you agree to be bound by the provisions for this Agreement,
please sign a copy of this letter where indicated below and promptly return
it to us, c/o ALPS Mutual Funds Services Inc., 000 00xx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000.
Very truly yours,
ALPS MUTUAL FUNDS SERVICES, INC.
Date: , 1996
By:______________________________
Authorized Officer
Accepted and Agreed to:
_________________________________
[Name of Specialist Institution]
Date: , 1996
By: _____________________________
Authorized Officer
Address: _______________________
_______________________
_______________________
Facsimile No.____________________
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Annex A
Specialist Institutions
Specialist Institutions Services Agreement
[DELETE SERIES AS NECESSARY.]
CB Shares(SM)
NYSE CUSIP
Series Symbol No.
Australia Index Series GXA 22236E10 9
France Index Series GXF 22236E20 8
Germany Index Series GXG 22236E30 7
Hong Kong Index Series GXH 22236E40 6
Italy Index Series GXI 22236E50 5
Japan Index Series GXJ 22236E60 4
South Africa Index GXR 22236E70 3
Series
UK Index Series GXK 22236E80 2
US Index Series GXU 22236E88 5
