Exhibit 23 (m)(2)
ProFunds
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
SHAREHOLDER SERVICES AGREEMENT FOR VP FUNDS
[Name]
[Address]
[City, State, Zip]
Ladies and Gentlemen:
ProFunds ("Trust") is an open-end management investment company organized
as a Delaware business trust and registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940, as amended ("1940
Act"). On behalf of each of the ProFunds VP series of the Trust identified in
Schedule A ("Funds"), the Trustees of the Trust have adopted a Distribution Plan
("Plan") that, among other things, authorizes the Trust to enter into this
Agreement with you ("Authorized Firm") concerning the provision of the services
("Services") set forth in Section 2 to your contract owners or other permissible
purchasers ("Customers") who may from time to time be investors, or prospective
investors, in the Funds. The terms and conditions of this Agreement are as
follows:
1. REFERENCE TO PROSPECTUS; DETERMINATION OF NET ASSET VALUE.
1.1 Reference is made to the prospectus for each Fund as from time to time are
effective under the Securities Act of 1933 (the "1933 Act"). Terms defined
therein and not otherwise defined herein are used herein with the meaning
so defined.
1.2 For purposes of determining the fees payable to you under Section 3, the
average daily net asset value of a Fund's shares will be computed in the
manner specified in the Trust's registration statement (as the same is in
effect from time to time) in connection with the computation of the net
asset value of such Fund's shares for purposes of purchases and
redemptions.
2. SERVICES AS AUTHORIZED FIRM.
2.1 Authorized Firm is hereby authorized and may from time to time undertake to
perform the following non-exclusive list of Services: the printing and
mailing of Fund prospectuses, statements of additional information, any
supplements thereto and shareholder reports for prospective investors; the
development, preparation, printing and mailing of advertisements, sales
literature and other promotional materials describing and/or relating to
the Funds; holding seminars and sales meetings designed to promote the
distribution of the Funds' shares; obtaining information and providing
explanations to wholesale and retail distributors of contracts regarding
the investment objectives and policies and other information about the
Funds, including the performance of the Funds; training sales personnel
regarding the Funds; and financing any other activity that is primarily
intended to result in the sale of shares of the Funds. Overhead and other
expenses of Authorized Firm related to the provision of Services, including
telephone and other communications expenses, may be included in the
information regarding amounts expended for such activities.
2.2 In addition, Authorized Firm may receive compensation pursuant to this
Agreement for making the Funds available to its Customers as funding
vehicles for their variable insurance contracts, or compensation for
services performed and expenses incurred by Authorized Firm or its
affiliates in connection with the sale of shares of the Funds.
2.3 Authorized Firm will provide such office space and equipment, telephone
facilities, and personnel (which may be any part of the space, equipment,
and facilities currently used in Authorized Firm's business, or any
personnel employed by Authorized Firm) as may be reasonably necessary or
beneficial in order to provide such Services.
2.4 The procedures relating to the handling of orders shall be subject to
instructions which the Trust shall forward from time to time to Authorized
Firm. All orders for a Fund's shares are subject to acceptance or rejection
by the Trust in its sole discretion, and the Trust may, in its discretion
and without notice, suspend or withdraw the sale of a Fund's shares,
including the sale of such shares to Authorized Firm for the account of any
Customer or Customers, unless otherwise agreed to by the parties to this
Agreement.
2.5 In no transaction shall Authorized Firm act as dealer for its own account;
Authorized Firm shall act solely for, upon the specific or pre-authorized
instructions of, and for the account of, its Customers. For all purposes of
this Agreement except as specifically provided in section 4.3, Authorized
Firm will be deemed to be an independent contractor, and will have no
authority to act as agent for the Trust or any dealer of the shares in any
matter or in any respect. No person is authorized to make any
representations concerning the Trust or a Fund's shares except those
representations contained in the Fund's then-current prospectus and
statement of additional information and in such printed information as the
Trust may subsequently prepare, unless otherwise agreed to by the parties
to this Agreement.
2.6 Authorized Firm and its employees will, upon request, be available during
normal business hours to consult with the Trust or its designees concerning
the performance of Authorized Firm's responsibilities under this Agreement.
Authorized Firm will provide to the Trust's Board of Trustees (or assist in
the provision of), and the Trust's Trustees will review at least quarterly,
a written report of the amounts so expended.
In addition, Authorized Firm will furnish to the Trust or its designees
such information as the Trust or its designees may reasonably request
(including, without limitation, periodic certifications confirming the
rendering of Services as described herein), and will otherwise cooperate
with the Trust and its designees (including, without limitation, any
auditors designated by the Trust), in the preparation of reports to the
Trust's Board of Trustees concerning this Agreement and the monies paid,
reimbursed, payable, or reimbursable pursuant hereto, the Services provided
hereunder and related expenses, and any other reports or filings that may
be required by law.
3. FEES.
3.1 In consideration of the costs and expenses of furnishing the Services and
facilities provided by Authorized Firm hereunder, and subject to the
limitations of applicable law and regulations, Authorized Firm will be
reimbursed and/or compensated (as applicable) quarterly at an annual rate
of up to, but not more than, ___% of the average daily net assets of a Fund
attributable to the Fund's shares which are held in the name of Authorized
Firm for its Customers. The fee will not be paid to Authorized Firm with
respect to shares of a Fund that are redeemed or repurchased by the Trust
within seven business days of receipt of confirmation of such sale.
3.2 The fee rate with respect to any Fund or Funds may be prospectively
increased or decreased by the Trust, in its sole discretion, at any time
upon notice to Authorized Firm.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
4.1 The parties acknowledge that they are financial institutions subject to the
USA Patriot Act of 2001 and the Bank Secrecy Act (collectively, the "AML
Acts"), which require among other things, that financial institutions adopt
compliance programs to guard against money laundering and provide for
customer identification programs. The parties further acknowledge that they
are in compliance and will continue to comply with the AML Acts and
applicable anti-money laundering rules of self-regulatory organizations,
including NASD Conduct Rule 3011, in all relevant respects.
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4.2 By written acceptance of this Agreement, Authorized Firm represents,
warrants, and agrees that, to the extent required by law: (i) Authorized
Firm will provide to Customers a schedule of the services it will perform
pursuant to this Agreement and a schedule of any fees that Authorized Firm
may charge directly to Customers for services it performs in connection
with investments in the Trust on the Customer's behalf; and (ii) any and
all compensation payable to Authorized Firm by Customers in connection with
the investment of their assets in the Trust will be disclosed by Authorized
Firm to Customers and will be authorized by Customers and will not result
in an excessive fee to Authorized Firm.
4.3 Authorized Firm agrees to comply with all requirements applicable to it by
reason of all applicable laws, including federal and state securities laws,
the rules and regulations of the SEC, including, without limitation, all
applicable requirements of the 1933 Act, the Securities Exchange Act of
1934, the Investment Advisers Act of 1940, and the 1940 Act. The Trust has
informed Authorized Firm of the states or other jurisdictions in which the
Trust believes the shares of the Funds are qualified for sale, and
Authorized Firm agrees that it will not purchase a Fund's shares on behalf
of a Customer's account in any jurisdiction in which such shares are not
qualified for sale. Authorized Firm further agrees that it will maintain
all records required by applicable law or otherwise reasonably requested by
the Trust relating to the services provided by it pursuant to the terms of
this Agreement. The Authorized Firm agrees that it will comply at all times
with the provisions of Rule 22c-1 of the 1940 Act. Purchase and redemption
orders, and payment for shares of a Fund ordered from the Trust, must be
received at the time, and in the manner, as determined by the Trust. All
Orders are subject to acceptance or rejection by the Trust or the relevant
Fund in the sole discretion of either, or by the relevant Fund's transfer
agent acting on the Trust's or the Fund's behalf, and orders shall be
effective only upon receipt in proper form. The Trust may, if necessary,
delay redemption of shares of a Fund to the extent permitted by the 1940
Act. The Authorized Firm may submit a purchase, exchange or redemption
order (an "Order") for shares of a Fund on behalf of a Customer to such
Trust's designated contact in the manner determined by the Trust. Receipt
and acceptance of any such Order on any day the New York Stock Exchange is
open for trading and on which a Fund calculates its net asset value (a
"Business Day") pursuant to the rules of the Securities and Exchange
Commission ("SEC") by the Authorized Firm as limited agent of the Fund
prior to the time that the Fund ordinarily calculates its net asset value
as described from time to time in the Fund's prospectus (which as of the
date of execution of this Agreement is 4:00 p.m. Eastern Time) shall
constitute receipt and acceptance by the Fund on that same Business Day. To
facilitate the Funds' daily trading practices, the Authorized Firm (i) may
be required to provide the Funds with estimated daily net aggregate trade
and other information relating to the Funds at times and in the manner
reasonably specified by the Funds prior to the close of business on each
Business Day and (ii) may be required to provide the Funds on the following
Business Day with a confirmed final report of the previous Business Day's
transaction information related to the Funds at such times mandated by the
Funds.
4.4 Authorized Firm agrees that under no circumstances shall the Trust be
liable to Authorized Firm or any other person under this Agreement as a
result of any action by the SEC affecting the operation or continuation of
the Plan.
4.5 Each party hereto agrees that any Nonpublic Personal Information, as the
term is defined in Securities and Exchange Commission Regulation S-P ("Reg
S-P"), that may be disclosed by a party hereunder is disclosed for the
specific purpose of permitting the other party to perform the services set
forth in this Agreement. Each party agrees that, with respect to such
information, it will comply with Reg S-P and any other applicable
regulations and that it will not disclose any Non-Public Personal
Information received in connection with this Agreement to any other party,
except to the extent required to carry out the services set forth in this
Agreement or as otherwise permitted by law.
4.6 The Authorized Firm agrees that under no circumstances shall the Trust be
liable to the Authorized Firm or any other person under this Agreement as a
result of any action by the SEC affecting the operation or continuation of
the Agreement.
4.7 The Authorized Firm agrees that the obligations of the parties hereto and
the operation and/or continuation of this Agreement are subject to any
applicable policies of the Trust, as they may be amended from time to time.
The Authorized Firm further agrees that the operation and/or continuation
of this Agreement is subject to: (i) the Board of Trustees' evaluation of
the services and Services; (ii) any determinations by the Board of Trustees
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regarding the nature and quality of and the compensation for the services
and Services; and (iii) any other determinations that the Board of Trustees
deems appropriate.
4.8 The Authorized Firm will make available to the Trust, promptly upon
request, appropriate books and records as are maintained under this
Agreement, and will furnish to regulatory authorities having the requisite
authority any such books and records and any information or reports in
connection with the Authorized Firm's services under this Agreement that
may be requested, following notice to the Trust.
4.9 The Funds' prospectus will generically identify the Authorized Firm as a
party that may accept purchase and redemption orders on behalf of a Fund
and will provide: (i) that the Funds have authorized one or more
intermediaries to accept on its behalf purchase and redemption orders that
are in "good order"; (ii) that the intermediaries are authorized to
designate other intermediaries to accept purchase and redemption orders on
the Funds' behalf; (iii) that the Funds will be deemed to have received a
purchase or redemption order when an authorized intermediary or, if
applicable, an intermediary's authorized designee, accepts the order; and
(iv) that customer orders will be priced at the Funds' net asset value next
computed after they are accepted by an authorized intermediary or the
intermediary's designee.
5. EXCULPATION; INDEMNIFICATION.
5.1 The Trust shall not be liable to Authorized Firm and Authorized Firm shall
not be liable to the Trust except for acts or failures to act which
constitute lack of good faith or gross negligence and for obligations
expressly assumed by either party hereunder. Nothing contained in this
Agreement is intended to operate as a waiver by the Trust or by Authorized
Firm of compliance with any applicable law, rule, or regulation.
5.2 Authorized Firm will indemnify the Trust and hold it harmless from any
claims or assertions relating to a breach of any representation or warranty
under this Agreement, failure by the Authorized Firm to maintain required
anti-money laundering procedures (including customer identification
programs), the lawfulness of Authorized Firm's participation in this
Agreement and the transactions contemplated hereby or relating to any
activities of any persons or entities affiliated with Authorized Firm
performed in connection with the discharge of its responsibilities under
this Agreement. If any such claims are asserted, the Trust shall have the
right to manage its own defense, including the selection and engagement of
legal counsel of its choosing, and all costs of such defense shall be borne
by Authorized Firm.
6. EFFECTIVE DATE; TERMINATION.
6.1 This Agreement will become effective with respect to each Fund on the date
of its acceptance by Authorized Firm. Unless sooner terminated with respect
to any Fund, this Agreement will continue with respect to a Fund until
terminated in accordance with its terms, provided that the continuance of
the Plan is specifically approved at least annually in accordance with the
terms of the Plan.
6.2 This Agreement will automatically terminate with respect to a Fund in the
event of its assignment (as such term is defined in the 1940 Act). This
Agreement may be terminated with respect to any Fund by the Trust or by
Authorized Firm, without penalty, upon sixty days' prior written notice to
the other party. This Agreement may also be terminated with respect to any
Fund at any time without penalty by the vote of a majority of the
Independent Trustees (as defined in the Plan) or a majority of the
outstanding shares of a Fund on sixty days' written notice.
7. GENERAL.
7.1 All notices and other communications to either Authorized Firm or the Trust
will be duly given if mailed, telegraphed or telecopied to the appropriate
address set forth on page 1 hereof, or at such other address as either
party may provide in writing to the other party.
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7.2 The Trust may enter into other similar agreements for the provision of
Services with any other person or persons without Authorized Firm's
consent.
7.3 Upon receiving the consent of the Trust, Authorized Firm may, at its
expense, subcontract with any entity or person concerning the provision of
the Services contemplated hereunder; provided, however, that Authorized
Firm shall not be relieved of any of its obligations under this Agreement
by the appointment of such subcontractor and provided further, that
Authorized Firm shall be responsible, to the extent provided in Article 5
hereof, for all acts of such subcontractor as if such acts were its own.
7.4 This Agreement supersedes any other agreement between the Trust and
Authorized Firm relating to the Services and relating to any other matters
discussed herein. All covenants, agreements, representations, and
warranties made herein (including but not limited to those set forth in
sections 4 and 5) shall be deemed to have been material and relied on by
each party, notwithstanding any investigation made by either party or on
behalf of either party, and shall survive the execution and delivery of
this Agreement. The invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of any other term or
provision hereof. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof.
This Agreement may be executed in any number of counterparts which together
shall constitute one instrument and shall be governed by and construed in
accordance with the laws (other than the conflict of laws rules) of the
State of New York and shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns.
7.5 It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the
property of the respective Funds. The execution and delivery of this
Agreement have been authorized by the Trustees, and this Agreement has been
signed and delivered by an authorized officer of the Trust, acting as such,
and neither such authorization by the Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the property of the relevant Fund as provided in the
Trust's Amended and Restated Declaration of Trust.
7.6 Notices and communications required or permitted hereby will be given to
the following persons at the following addresses or facsimile numbers as
the party receiving such notices or communications may subsequently direct
in writing:
If to the Trust:
ProFunds
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Chief Legal Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Authorized Firm:
Attention:
7.7 During the term of this Agreement, the Authorized Firm will pay all
ordinary expenses incurred by it in connection with its obligations under
this Agreement.
7.8 Each party acknowledges that the identities of the other party's customers,
as well as information maintained by such other party regarding those
customers, and all computer programs, technical, trade secret or business
information, including, without limitation, financial information, business
or marketing strategies or plans, product development and procedures
developed by such other party or such other party's agents in connection
with this arrangement which is disclosed to the other party hereto or
otherwise obtained by the other party, its affiliates, agents or
representatives during the term of this Agreement, constitute the valuable
property of such other party ("Proprietary Information"). Each party agrees
that
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should either of them be furnished any Proprietary Information, the party
who acquired such Proprietary Information shall use its best efforts to
hold such information or property in confidence and refrain from using,
disclosing, or distributing any of such information or other property
except (i) with the other party's prior written consent, or (ii) as
required by law or judicial process. Each party acknowledge that any breach
of the foregoing agreements as to the other party would result in immediate
and irreparable harm to such other party for which there would be no
adequate remedy at law and agree that in the event of a breach such other
party will be entitled to seek equitable relief, as well as such other
relief as any court of competent jurisdiction deems appropriate. Each party
shall promptly notify the other in writing of any unauthorized, negligent
or inadvertent use or disclosure of Proprietary Information. Each party
shall be liable under this Agreement for any use or disclosure in violation
of this Agreement by its employees, attorneys, accountants, or other
advisors or agents. This section 7.8 shall continue in full force and
effect notwithstanding the termination of this Agreement.
7.9 Any and all disputes arising under or in connection with this Agreement
will be finally and exclusively resolved by arbitration under the rules of
arbitration then in effect for the National Association of Securities
Dealers, Inc. or the American Arbitration Association, such organization to
be selected in the sole discretion of the Trust. The arbitration will be
held in Washington, D.C. before three arbitrators who have no present or
former affiliation with any party to this Agreement and who are
knowledgeable about mutual funds, the asset management industry and the
subject of the dispute. Each party will choose one arbitrator, and the two
arbitrators so chosen will choose a third who will chair the proceedings.
In no event will the arbitrators have the authority to make any award that
provides for punitive or exemplary damages. Any decision rendered by the
arbitrators will be binding, final and conclusive upon both parties, and a
judgment thereon may be entered in, and enforced by, any court having
jurisdiction over the party against which an award is entered, or by any
court having jurisdiction over the assets of any party against which an
award is entered, and the parties hereby irrevocably waive any objections
to the jurisdiction of such court based on any ground, including improper
venue or forum non conveniens. Except where clearly prevented by the
subject matter of the dispute, both parties will continue performing their
respective obligations under this Agreement while the dispute is being
resolved. The prevailing party in any claim, action, arbitration, or other
proceeding arising under or in connection with the implementation or
enforcement of this Agreement will be entitled to recover from the other
party all reasonable attorneys' fees incurred in connection therewith.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below.
ProFunds
By:
Title:
---------------------------------
The foregoing Agreement is hereby accepted:
[Authorized Firm]
By:
Title:
Date:
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SCHEDULE A
ProFund VP Airlines* ProFund VP OTC
ProFund VP Asia 30 ProFund VP Pharmaceuticals
ProFund XX Xxxxx ProFund VP Precious Metals
ProFund VP Basic Materials ProFund VP Real Estate
ProFund VP Bear ProFund VP Rising Rates Opportunity
ProFund VP Biotechnology ProFund VP Semiconductor
ProFund VP Bull ProFund VP Short OTC
ProFund VP Bull Plus* ProFund VP Short Small-Cap
ProFund VP Consumer Cyclical ProFund VP Small-Cap
ProFund VP Consumer Non-Cyclical ProFund VP Small-Cap Growth
ProFund VP Energy ProFund VP Small-Cap Value
ProFund VP Europe 30 ProFund VP Technology
ProFund VP Financial ProFund VP Telecommunications
ProFund VP Healthcare ProFund VP U.S. Government Plus
ProFund VP Industrial ProFund VP UltraBear*
ProFund VP Internet ProFund VP UltraBull
ProFund VP Japan ProFund VP UltraDow 30*
ProFund VP Large-Cap Growth* ProFund VP UltraEurope*
ProFund VP Large-Cap Value* ProFund VP UltraMid-Cap
ProFund VP Leisure Goods & Services* ProFund VP UltraOTC
ProFund VP Mid-Cap* ProFund VP UltraShort OTC*
ProFund VP Mid-Cap Growth ProFund VP UltraSmall-Cap
ProFund VP Mid-Cap Value ProFund VP Utilities
ProFund VP Money Market ProFund VP Wireless Communications*
ProFund VP Oil Drilling Equipment &
Services*
*ProFunds VP has not commenced investment operations.
Dated as of: December 17, 2003
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