(m)(2)
FORM OF
SHAREHOLDER SERVICING AGREEMENT
(Investor Class)
Somerville, New Jersey
Gentlemen:
We are hereby inviting you, subject to the terms and conditions set forth
below, to serve as the agent of your customers ("Customers") for purposes of
performing certain administrative functions in connection with purchases and
redemptions of Investor Class shares of beneficial interest ("Shares") of [Name
of Fund] (the "Portfolio"), a Portfolio of the Xxxxxxx Xxxxxxx Funds, Inc. (the
"Fund") from time to time upon the order and for the account of Customers, and
to provide related services to your Customers in connection with their
investments in the Fund.
1. APPOINTMENT. You hereby agree to perform certain services for
Customers as hereinafter set forth. Your appointment hereunder is
non-exclusive, and the parties recognize and agree that, from time to time, the
Fund may enter into other shareholder servicing agreements, with other
financial institutions.
2. SERVICES TO BE PERFORMED. You shall be responsible for performing
shareholder account administrative and servicing functions, which shall
include, without limitation, one or more of the following activities: (a)
answering Customer inquiries regarding account status and history, the manner
in which purchases and redemptions of the Shares may be effected, and certain
other matters pertaining to the Fund; (b) assisting Customers in designating
and changing dividend options, account designations and addresses; (c)
providing necessary personnel and facilities to establish and maintain certain
shareholder accounts and records, as requested from time to time by the Fund;
(d) assisting in processing purchase and redemption transactions; (e) arranging
for the wiring of funds; (f) transmitting and receiving funds in connection
with Customer orders to purchase or redeem Shares; (g) verifying and
guaranteeing Customer signatures in connection with redemption orders,
transfers among and changes in Customer-designated accounts; (h) providing
periodic statements showing a Customer's account balances and, to the extent
practicable, integration of such information with other client transactions
otherwise effected with or through you; (i) furnishing (either separately or on
an integrated basis with other reports sent to a Customer by you) monthly and
annual statements and confirmations of all purchases and redemptions of Shares
in a Customer's account; (j) transmitting proxy statements, annual reports,
prospectuses and other communications from the Fund to Customers; (k)
receiving, tabulating and transmitting to the Fund proxies executed by
Customers with respect to special meetings of shareholders of the Fund; and (l)
providing such other related services as the Fund or a Customer may reasonably
request. You shall provide all personnel and facilities necessary in order for
you to perform one or more of the functions described in this paragraph with
respect to your Customers. You shall exercise reasonable care in performing all
such services and shall be liable for any failure to exercise such reasonable
care.
3. FEES.
3.1. Fees from the Fund. In consideration for the services
described in section 2 hereof and the incurring of expenses in connection
therewith, you shall receive fees at an annual rate of 0.15% of the
average daily value of all Shares owned by or for all Customers with whom
you maintain a servicing relationship, such fee to be paid in arrears at
the end of each calendar quarter.
3.2. Fees from Customers. It is agreed that you may impose certain
conditions on Customers, in addition to or different from those imposed
by the Fund, such as requiring a minimum initial investment or charging
Customers direct fees for the same or similar services as are provided
hereunder by you (which fees may either relate specifically to your
services with respect to the Fund or generally cover services not limited
to those with respect to the Fund). You shall xxxx Customers directly for
such fees. In the event you charge Customers such fees, you shall make
appropriate prior written disclosure (such disclosure to be in accordance
with all applicable laws) to Customers both of any direct fees charged to
the Customer and of the fees received or to be received by you from the
Fund pursuant to section 3.1 of this Agreement. It is understood,
however, that in no event shall you have recourse or access to the
account of any shareholder of the Fund except to the extent expressly
authorized by law or by the Fund or by such shareholder for payment of
any direct fees referred to in this section 3.2.
4. CAPACITY AND AUTHORITY TO ACT. You and your officers, employees and
agents are not authorized to make any representations concerning the Fund or
the Shares to Customers or prospective Customers, excepting only accurate
communication of factual information contained in the then-current prospectus
and statement of additional information or such other communications as may be
expressly authorized by the Fund. In performing your services under this
Agreement, you shall act as agent for the Customer and shall have no authority
to act as agent for the Fund. Upon request by the Fund, you shall provide the
Fund with copies of any materials which are generally circulated by you to your
Customers or prospective Customers.
5. USE OF THE AGENT'S NAME. The Fund shall not use your name in any
prospectus, sales literature or other material relating to the Fund in a manner
not approved by you prior thereto in writing; provided, however, that your
approval shall not be required for any use of its name which merely refers
accurately to your appointment hereunder or which is required by the Securities
and Exchange Commission or any state securities authority or any other
appropriate regulatory, governmental or judicial authority; provided, further,
that in no event shall such approval be unreasonably withheld or delayed.
6. USE OF THE FUND'S NAME. You shall not use the name of the Fund (other
than for internal use in connection with performing its duties under this
agreement) in a manner not approved by the Fund prior thereto in writing;
provided, however, that the approval of the Fund shall not be required for the
use of the Fund's name in connection with communications permitted by section 4
hereof or for any use of the Fund's name which merely refers accurately to your
role hereunder or which is required by the Securities and Exchange Commission
or any state securities authority or any other appropriate regulatory,
governmental or judicial authority; provided, further, that in no event shall
such approval be unreasonably withheld or delayed.
7. SECURITY. You represent and warrant that, to the best of your
knowledge, the various procedures and systems which you have implemented
(including provision for twenty-four hours a day restricted access) with regard
to safeguarding from loss or damage attributable to fire, theft or any other
cause the Fund's records and other data and your records, data, equipment,
facilities and other property used in the performance of your obligations
hereunder are adequate and that you will make such changes therein from time to
time as in its judgment are required for the secure performance of your
obligations hereunder. The parties shall review such systems and procedures on
a periodic basis, and the Fund may from time to time specify the types of
records and other data of the Fund to be safeguarded in accordance with this
section 7.
8. COMPLIANCE WITH LAWS; ETC.
8.1 You shall comply with all applicable federal and state laws and
regulations, including securities laws. You hereby agree to maintain all
records required by law relating to transactions on the Shares, and upon
our request, or of the Trust, promptly make such of these records
available to us or the Trust's administrator as are requested. In
addition, you hereby agree to establish appropriate procedures and
reporting forms and/or mechanisms and schedules in conjunction with us
and the Trust's administrator, to enable the Trust to identify the
location, type of, and sales to all accounts opened and maintained by
your customers or by you on behalf of your customers. You represent and
warrant to the Trust that the performance of all its obligations
hereunder will comply with all applicable laws and regulations, the
provisions of your charter documents and by-laws and all material
contractual obligations binding upon you. You furthermore undertake that
you will promptly inform the Trust of any change in applicable laws or
regulations (or interpretations thereof) or in your charter or by-laws or
material contracts which would prevent or impair full performance of any
of your obligations hereunder.
8.2 You hereby represent and warrant to us that you (A) have
established and implemented policies, procedures and internal controls
reasonably designed to achieve compliance with the Bank Secrecy Act
("BSA"), Office of Foreign Asset Control orders and other anti-money
laundering laws and regulations applicable to you, including policies and
procedures that can be reasonably expected to detect and cause the
reporting of suspicious transactions under Section 5318 of BSA and
customer identification procedures ("CIP") (collectively, the "AML
Program"); (B) will certify to us annually that you have implemented the
AML Program in compliance with applicable law; (C) perform CIP in
accordance with applicable law with respect to each Customer that invests
in Shares and will report the results of such performance to us as may be
reasonably requested; and (D) permit the Fund, its agents and federal
regulators, as may be reasonably requested, to access records relating to
the performance of the CIP on the Customers.
9. REPORTS. To the extent requested by the Fund from time to time, you
agree that you will provide the Fund with a written report of the amounts
expended by you pursuant to this Agreement and the purposes for which such
expenditures were made. Such written reports shall be in a form satisfactory to
the Fund and shall supply all information necessary for the Fund to discharge
its responsibilities under applicable laws and regulations.
10. RECORD KEEPING.
10.1. Section 31(a), Etc. You shall maintain records in a form
acceptable to the Fund and in compliance with applicable laws and the
rules and regulations of the Securities and Exchange Commission,
including but not limited to the record-keeping requirements of section
31(a) of the Investment Company Xxx 0000, as amended (the "1940 Act"),
and the rules thereunder. Such records shall be deemed to be the property
of the Fund and will be made available, at the Fund's reasonable request,
for inspection and use by the Fund, representatives of the Fund and
governmental authorities. You agree that, for so long as you retain any
records of the Fund, you will meet all reporting requirements pursuant to
the 1940 Act with respect to such records.
10.2. Transfer of Customer Data. In the event this Agreement is
terminated or a successor to you is appointed, you shall, at the expense
of the Fund, transfer to such designee as the Fund may direct a certified
list of the shareholders of the Fund serviced by you (with name, address
and tax identification or Social Security number), a complete record of
the account of each such shareholder and the status thereof, and all
other relevant books, records, correspondence and other data established
or maintained by you under this Agreement. In the event this Agreement is
terminated, you will use your best efforts to cooperate in the orderly
transfer of such duties and responsibilities, including assistance in the
establishment of books, records and other data by the successor.
10.3. Survival of Record-Keeping Obligations. The record-keeping
obligations imposed in this section 10 shall survive the termination of
this Agreement.
11. FORCE MAJEURE. You shall not be liable or responsible for delays or
errors by reason of circumstances beyond your control, including, but not
limited to, acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, Acts of God,
insurrection, war, riots or failure of communication or power supply.
12. INDEMNIFICATION.
12.1. Indemnification of the Agent. The Fund shall indemnify and
hold you harmless from and against any and all losses, claims, damages,
liabilities and expenses incurred by you and resulting from any claim,
demand, action or suit (collectively, "Claims") brought against you and
arising out of or in connection with the performance of your obligations
hereunder, other than any Claim resulting from (i) the bad faith or
negligence of you, your officers, employees or agents, or (ii) any breach
of your obligation under this Agreement or applicable law by you, your
officers, employees or agents, or (iii) any false or misleading statement
contained in any communication by you to any Customer or prospective
Customer not prepared by or expressly authorized by the Fund for your
use.
In any case in which the Fund may be asked to indemnify or hold you
harmless, the Fund shall be advised of all pertinent facts concerning the
situation in question and you shall use reasonable care to identify and
notify the Fund promptly concerning any situation which presents or
appears likely to present a claim for indemnification against the Fund.
The Fund shall have the option to defend you against any Claim which may
be the subject of indemnification hereunder. In the event that the Fund
elects to defend against such claim the defense shall be conducted by
counsel chosen by the Fund and satisfactory to you. You may retain
additional counsel at your expense. Except with the prior written consent
of the Fund, you shall not confess any Claim or make any compromise in
any case in which the Fund will be asked to indemnify you.
12.2. Indemnification of the Fund. You shall indemnify and hold the
Fund harmless from and against any and all losses, claims, damages,
liabilities and expenses incurred by the Fund and resulting from any
Claim brought against the Fund and resulting from (i) the bad faith or
negligence of you, your officers, employees or agents, or (ii) any breach
of your obligations under this Agreement or applicable law by you, your
officers, employees or agents, or (iii) any false or misleading statement
contained in any communication by you to any Customer or prospective
Customer not prepared by or expressly authorized by the Fund for your
use.
In any case in which you may be asked to indemnify or hold the Fund
harmless, you shall be advised of all pertinent facts concerning the
situation in question and the Fund shall use reasonable care to identify
and notify you promptly concerning any situation which presents or
appears likely to present a claim for indemnification against you. You
shall have the option to defend the Fund against any Claim which may be
the subject of indemnification hereunder. In the event that you elect to
defend against such Claim, the defense shall be conducted by counsel
chosen by you and satisfactory to the Fund. The Fund may retain
additional counsel at its expense. Except with the prior written consent
of the agent, the Fund shall not confess any Claim or make any compromise
in any case in which you will be asked to indemnify the Fund.
12.3. Survival of Indemnities. The indemnities granted by the
parties in this section 12 shall survive the termination of this
Agreement.
13. INSURANCE. You shall maintain reasonable insurance coverage against
any and all liabilities which may arise in connection with the performance of
your duties hereunder. You shall provide information with respect to the extent
of such coverage upon our request.
14. NOTICES. All notices or other communications hereunder to either
party shall be in writing and shall be deemed sufficient if mailed to such
party at the address of such party set forth in this Agreement or at such other
address as such party may have designated by written notice to the other.
15. FURTHER ASSURANCES. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.
16. TERMINATION. This Agreement may be terminated by the Fund, without
the payment of any penalty, at any time upon not more than 60 days' nor less
than 30 days' notice to you, by a vote of a majority of the Board of Directors
of the Fund who are not "interested persons" of the Fund (as defined in the
0000 Xxx) and have no direct or indirect financial interest in the operation of
the Fund's Shareholder Servicing Plan (the "Plan"), this Agreement or any other
agreement related to such Plan, or by "a vote of a majority of the outstanding
voting securities" (as defined in the 0000 Xxx) of the Fund. You may terminate
this Agreement upon not more than 60 days' nor less than 30 days' notice to the
Fund. Notwithstanding anything herein to the contrary, this Agreement may not
be assigned and shall terminate automatically without notice to either party
upon any assignment. Upon termination hereof, the Fund shall pay such
compensation as may be due you as of the date of such termination.
17. CHANGES; AMENDMENTS. This Agreement may be changed or amended only by
written instrument signed by both parties.
18. LIMITATION OF LIABILITY. It is expressly acknowledged and agreed that
the obligations of the Fund hereunder shall not be binding upon any of the
shareholders, Directors, officers, employees or agents of the Fund, personally,
but shall bind only the property of the Fund. The execution and delivery of
this Agreement have been authorized by the Directors of the Fund and signed by
an officer of the Fund, acting as such, and neither such authorization by such
Directors 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 Fund.
19. CONFIDENTIALITY. All books, records, information and data pertaining
to the business of the other party which are exchanged or received pursuant to
the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person,
except as may be required in the performance of duties hereunder or as
otherwise required by law.
20. MISCELLANEOUS. This Agreement shall be construed and enforced in
accordance with and governed by the laws of The State of [pick state whose law
shall apply] without giving effect to the conflicts of laws provisions thereof.
The captions in this Agreement are included for convenience of reference only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect. This Agreement has been executed on behalf of the
Fund by the undersigned not individually, but in the capacity indicated. This
Agreement shall be effective when accepted by you below.
Please confirm your agreement hereto by signing and returning the
enclosed counterpart of this Agreement at once to: Xxxxxxx Xxxxxxx Funds, Inc.,
00 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000, Attention: President. Upon
receipt thereof, this Agreement and such signed duplicate copy will evidence
the agreement between us.
XXXXXXX LOEVNER FUNDS, INC.
By:
----------------------------
Name:
Title:
ACCEPTED:
[NAME OF SERVICING AGENT]
By:
--------------------------
Name:
Title:
Dated:
