EXHIBIT 1
SHAREHOLDER SERVICE AGREEMENT
Agreement made as of March 1, 2004 by and between GMO Trust, on behalf
of each fund listed on Schedule A, severally and not jointly (each, a "Fund")
and NYLIM Service Company LLC and NYLIFE Distributors LLC (collectively, the
"Service Provider").
WHEREAS, the Service Provider provides or intends to provide
administrative services and functions consisting of, but not limited to, certain
record keeping, reporting and processing distribution services for certain
employee benefit plans and investment programs which services include processing
and transfer arrangements for the investment and reinvestment of a plan's assets
in funds specified by an investment advisor, sponsor or administrative committee
of a plan generally upon the direction of a plan's beneficiaries, for its
clients ("Shareholders"); and
WHEREAS, the Fund and the Service Provider desire to facilitate the
purchase and redemption of shares of the Fund on behalf of the Shareholders
through one or more omnibus accounts in the Fund (each, an "Account"); and
WHEREAS, the Fund desires that the Service Provider provide certain
recordkeeping and shareholder services to the Shareholders in connection with
investment by the Account in the Fund, subject to the terms and conditions of
this Agreement:
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. Transaction Processing and Settlement. The Service Provider
will enable and facilitate the purchase and redemption of Fund shares on behalf
of Shareholders through the Account. Such purchases and redemptions shall be
transmitted to the Fund via facsimile or such other means as agreed in writing
between the parties prior to the time as of which the Fund determines its net
asset value (the "Valuation Time") on each business day that the New York Stock
Exchange is open for business (each, a "Business Day"). Purchase and redemption
orders transmitted to the Fund after the Valuation Time will receive the next
Business Day's price.
2. Shareholder Services. The Service Provider agrees to perform
the services described on Schedule B.
3. Representations of the Service Provider. The Service Provider
represents and warrants that:
(a) it is a Limited Liability Company duly organized under the
laws of Delaware and is duly registered and/or qualified as a
broker/dealer with the SEC, NASD and in every state or
territory of the United States of America (including the
District of Columbia) where such registration or qualification
is required and has the requisite authority to enter into this
Agreement and to carry out the services contemplated herein;
(b) it has full power and authority to enter into and perform
this Agreement;
(c) the arrangements provided for in this Agreement will be
disclosed to the Shareholders;
(d) it will comply with all applicable requirements of laws,
rules and regulations of governmental or self-regulatory
authorities having jurisdiction for the acts and duties of it
under this Agreement;
(e) it will transmit to the Fund such information concerning
Shareholders as the Fund will reasonably conclude is necessary
to enable the Fund to comply with applicable state Blue Sky
laws;
(f) it will promptly notify the Fund in the event that it is
for any reason unable to perform any of its obligations under
this Agreement.
4. Representations of Fund. The Fund represents and warrants
that:
(a) it has full power and authority to enter into and perform
this Agreement;
(b) that the payment to Service Provider of any fees pursuant
hereto has been duly authorized by the Fund, the Board of
Trustees of the Fund, or any other persons to the extent such
authorization is required to properly make such payment and is
properly disclosed in the relevant Fund prospectus to the
extent such disclosure may be required;
(c) it is registered as an open-end investment company
pursuant to the Investment Company Act of 1940; and
(d) it will promptly notify the Service Provider in the event
that it is for any reason unable to perform any of its
obligations under this Agreement.
5. Information Regarding Fund. The Fund will supply the Service
Provider with the Fund's current prospectus, periodic fund reports, proxy
statements, and related materials for delivery to the Shareholders. The cost of
any distribution of the prospectus, periodic fund reports, proxy statements, and
related materials of the Fund to the Accounts or the Shareholders will be paid
by the Service Provider or the Shareholders, as determined by the Service
Provider's agreement with each Shareholder, and will not be the responsibility
of the Fund.
6. Compensation of the Service Provider. In consideration for
providing the services under this Agreement, the Fund will pay the Service
Provider the fee set forth in Schedule C attached hereto.
7. Indemnification.
(a) Except with respect to matters excluded from liability pursuant to
this paragraph 7, each of the Fund and the Service Provider (an "Indemnitor")
will indemnify and hold harmless each other, and their respective officers,
directors, partners, trustees, shareholders and agents ("Indemnitees"), against
any claims or liabilities suffered by all or any of such Indemnitees to the
extent arising out of (i) the responsible Indemnitor's lack of good faith,
negligence or willful misconduct in carrying out its duties and responsibilities
under this Agreement; (ii) any breach by
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the responsible Indemnitor of any material provision of this Agreement; or (iii)
any breach by the responsible Indemnitor of any representation, warranty, or
covenant made in this Agreement, including reasonable legal fees and other
out-of-pocket costs of defending against any such claim or liability. The
indemnification provided in this paragraph 7 will not be valid to the extent the
claim or liability suffered is due to the negligence or willful misconduct of
the Indemnitee.
(b) Promptly after receipt by an Indemnitee of notice of the
commencement of an investigation, action, claim or proceeding, such Indemnitee
will, if a claim in respect thereof is to be made against the Indemnitor under
this Section 7, notify the Indemnitor of the commencement thereof; but the
omission so to notify the Indemnitor will not relieve it from any liability
which it may have to any Indemnitee otherwise than under this paragraph. In case
any such action is brought against any Indemnitee, and it notified the
Indemnitor of the commencement thereof, the Indemnitor will be entitled to
participate therein and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such Indemnitee. After notice from the
Indemnitor of its intention to assume the defense of an action, the Indemnitee
shall bear the expenses of any additional counsel obtained by it, and the
Indemnitor shall not be liable to such Indemnitee under this paragraph for any
legal or other expenses subsequently incurred by such Indemnitee in connection
with the defense thereof other than reasonable costs of investigation.
8. Non-Exclusivity. Each party acknowledges and agrees that this
Agreement and the arrangements described herein are intended to be non-exclusive
and that each of them is free to enter into similar arrangements with other
entities.
9. Confidentiality. All information, books, records, and data
supplied by one party to the other in connection with the negotiation or
carrying out of the Agreement are and will remain the property of the party
supplying such information, books, records, or data and will be kept
confidential by the other party except as may be required by law.
10. Termination of Agreement. This Agreement shall become
effective upon the date set forth above, provided that this Agreement has been
approved by the Fund or its Board of Trustees, if such approval is required. It
shall continue in force for one year, and shall thereafter continue
automatically for successive annual periods unless earlier terminated, subject
to any periodic approval required by the Fund or its Board of Trustees. This
Agreement is terminable as to any Fund by either party upon 60 days written
notice thereof to the other party. Upon default by either party, the
non-defaulting party may terminate this Agreement provided that it has notified
the defaulting party of such default and the defaulting party has failed to cure
such default within 10 business days of such notice.
After the date of termination as to any Fund, no fee will be due with
respect to any shares of such Fund that are first placed or purchased in the
Accounts after the date of such termination. However, notwithstanding any such
termination, the Fund will remain obligated to pay the Service Provider the fee
as to each share of such Fund that was considered in the calculation of the fee
as of the date of such termination, for so long as such share is held in the
Account.
This Agreement, or any provision hereof, shall survive termination to
the extent necessary for each party to perform its obligations with respect to
shares for which a fee continues to be due subsequent to such termination.
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11. Notices. All notices and other communications hereunder will
be in writing and will be hand delivered or mailed by certified mail or
overnight courier to the other party at the following address or such other
address as each party may give notice to the other:
If to the Service Provider:
000 Xxxxxxxxxx Xxx.
Xxxxxxx XX, 00000
If to the Fund:
[Name of Fund]
c/o Grantham, Mayo, Van Otterloo & Co. LLC
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxxxxxx
12. Amendment. This Agreement may not be amended except by a
writing signed by both parties; provided, however, that GMO Trust may amend this
Agreement unilaterally to add additional funds to Schedule A. The new or amended
Schedule A will be effective upon receipt by the Service Provider and will not
require execution by the Service Provider. It is understood and agreed that the
intent of this provision is to avoid the inadvertent omission of funds from
Schedule A where the Service Provider has agreed to provide services to
Shareholders seeking to invest in the funds.
13. Assignment and Other Matters. This Agreement shall not be
assigned by either party without the written consent of the other party. This
Agreement may be executed in several counterparts, each of which will be an
original but all of which together will constitute one and the same instrument.
The headings in this Agreement are for reference only and will not affect the
interpretation or construction of this Agreement. This Agreement contains the
entire agreement of the parties as to the subject matter hereof and supersedes
any prior agreements, written or oral. This Agreement will be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of conflicts of law thereof.
14. Anti-Money Laundering. Service Provider certifies that it is
in compliance with the applicable anti-money laundering laws, regulations, rules
and government guidance, including the reporting, recordkeeping and compliance
requirements of the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001
(the "Patriot Act"), its implementing regulations, and related Securities and
Exchange Commission and self-regulatory organization rules and regulations. As
required by the Patriot Act, Service Provider hereby certifies to the Fund that
Service Provider has a comprehensive anti-money laundering program that
includes: a risk based program to comply with "Know Your Customer" regulations;
internal policies, procedures and systems to identify, investigate and report
suspicious activity; designates a compliance officer; provides for periodic
training and education of appropriate employees; and requires an internal audit
at least annually of such policies, procedures and systems. Service Provider
agrees to provide the Fund with (i) a copy of the policies and procedures, which
set forth Service Provider's anti-money
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laundering program; and (ii) a copy of any amendments or revisions to such
policies and procedures within a reasonable time of such changes becoming
effective. Service Provider further certifies that it is in compliance with the
economic sanctions programs administered by the U.S. Treasury Department's
Office of Foreign Assets Control ("OFAC") and has an OFAC compliance program
that satisfies all applicable laws and regulations. Service Provider
acknowledges and understands that the Fund is relying on the foregoing
certifications in administrating its own anti-money laundering compliance
program.
15. GMO Trust. GMO Trust is a Massachusetts business trust and a
copy of the Agreement and Declaration of Trust of GMO Trust is on file with the
Secretary of The Commonwealth of Massachusetts. Notice is hereby given that this
Agreement is executed on behalf of the Trustees of the Trust as Trustees and not
individually, and that the obligations of or arising out of this Agreement with
respect to each Fund are not binding upon any of the Trustees or shareholders
individually or any other series of the Trust, but are binding only upon the
assets and property of the Fund.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
NYLIM SERVICE COMPANY LLC GMO TRUST, ON BEHALF OF EACH FUND LISTED
ON SCHEDULE A, SEVERALLY BUT NOT JOINTLY
By: _____________________ By: _____________________________________
Name: Name:
Title: Title:
NYLIFE DISTRIBUTORS LLC
By: ___________________
Name:
Title:
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SCHEDULE A
LIST OF FUNDS
GMO INTRINSIC VALUE FUND - CLASS III
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SCHEDULE B
The Service Provider will, in accordance with the terms of this Agreement,
perform certain administrative services in connection with the purchase of
shares of the Fund by the Shareholders, including, but not limited to, the
following services:
1. Answer inquiries from Shareholders and provide them with information
concerning investment options in shares of the Fund.
2. Maintain separate records for each Shareholder, which records will
reflect the dollar amount of shares of the Fund purchased (including by
reinvestment by the Shareholder of dividends and capital gains
distributions paid by the Fund) and redeemed, including the date and
price for all transactions and the dollar value of Shareholder account
balances.
3. For each Shareholder, maintain such Shareholder's name and address,
social security or taxpayer identification numbers.
4. Prepare and transmit to Shareholder's confirmations of purchases and
redemptions and periodic account statements showing the investment in
the Fund as of the statement closing date, and such pertinent
information as the Service Provider and the Fund may agree from time to
time.
5. Furnish or make available to Shareholders all information regarding the
Fund which is to be delivered to the Service Provider pursuant to
paragraph 5 of this Agreement.
6. Provide to Shareholders such reports and information as may be required
by the then-prevailing laws and regulations under the Internal Revenue
Code for non-retirement accounts and qualified and non-qualified
retirement plan accounts.
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SCHEDULE C
Capitalized terms used in this schedule have the meanings given to them in this
Agreement:
CLASS III SHARES
In consideration of the services provided by the Service Provider under this
Agreement with respect to Class III shares of any Fund, no compensation will be
paid.
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