CHIEF COMPLIANCE OFFICER SERVICES
AGREEMENT (this "Agreement) dated January
___, 2006 between WISDOMTREE TRUST (the
"Trust"), and ALPS MUTUAL FUNDS
SERVICES, INC. ("ALPS"), a Colorado
corporation. The "Effective Date"
of this Agreement is _______, 2006
In an effort to ensure that the Trust is in compliance with Rule 38a-1
(the "Rule") under the Investment Company Act of 1940, as amended (the "1940
Act"), ALPS has agreed to render services to the Trust on behalf of each
portfolio series of the Trust (each such series, a "Fund") as listed on Exhibit
C hereto, which may be updated from time to time, by entering into a formal
agreement with respect thereto effective from and after the Effective Date.
ACCORDINGLY, in consideration of the foregoing premises and the mutual
covenants and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Trust and ALPS hereby agree as set forth below.
SECTION 1. Term of Agreement.
The Trust hereby retains ALPS, on behalf of each Fund, for a period
beginning on the Effective Date and ending ________, 2009 subject to early
termination as provided in Sections 8 and 9 (the "Term"). This Agreement may be
renewed for additional one-year periods beyond the Term by mutual agreement,
subject to the annual approval of the Board of the Trust, including approval by
a majority of the trustees of the Trust who are not interested persons of the
Trust as defined under Section 2(a)(19) of the 1940 Act ("Independent
Trustees").
SECTION 2. Duties.
(a) ALPS shall designate, subject to the Trust's approval, one of its own
employees to serve as Chief Compliance Officer of the Trust and each Fund of the
Trust within the meaning of the Rule (such individual, the "CCO"). The CCO shall
render to the Trust such advice and services ("Services") as are required to be
performed by a CCO under the Rule and as are set forth on Exhibit A hereto, as
such exhibit may be modified from time to time by written agreement of the
parties hereto. Exhibit A is hereby incorporated into and made a part of this
Agreement. The Trust acknowledges that other employees of ALPS will assist the
CCO in the performance of his duties hereunder. Xx. Xxxxxxx Xxxxxxx will lead
the engagement and will have overall supervisory responsibility for the ongoing
obligations hereunder. A brief biography for Xx. Xxxxxxx is attached as Exhibit
B hereto.
(b) During the Term, the CCO shall report to such individuals as may be
designated from time to time by the Board of the Trust, subject to the
provisions of Exhibit A.
(c) The parties agree that only employees of ALPS shall act as CCO or
otherwise perform services to the Trust under this Agreement unless otherwise
agreed in writing by the
Trust. Notwithstanding his other duties for ALPS or any other investment
company, the CCO shall perform the Services in a professional manner and shall
devote appropriate time, energies and skill to the Services.
(d) The Trust acknowledges that the CCO may act as Chief Compliance
Officer within the meaning of the Rule for other investment companies, and
nothing herein shall be construed to prohibit the CCO from acting in such
capacity; provided, however, that during the Term neither ALPS nor the CCO shall
enter into any agreement, arrangement or understanding which would conflict with
this Agreement or prevent ALPS or the CCO from performing its or his obligations
hereunder.
(e) The Trust shall cooperate in good faith with ALPS and the CCO in order
to assist in the performance of the Services. In furtherance of this agreement
to cooperate, the Trust shall make those of its and its Affiliates' officers,
employees and outside counsel available for consultation with ALPS and the CCO
and shall communicate with the board of trustees of the Trust (the "Board") and
the service providers(1) of the Trust (for purposes of this Agreement, the Board
and such other service providers collectively, the "Service Providers") in each
case as ALPS or the CCO may reasonably request. The Trust shall provide ALPS and
the CCO with the names of appropriate contact people at the Service Providers
and shall make introductions and otherwise assist ALPS and the CCO in obtaining
the cooperation of the Service Providers. The Trust shall provide ALPS and the
CCO with such books and records regarding the Trust as ALPS and the CCO may
reasonably request.
SECTION 3. Fee.
(a) As compensation for the timely and satisfactory performance of the Services
on behalf of up to 38 Funds of the Trust with the same Service Providers and
investment strategy as the Funds, the Trust shall pay to ALPS, or shall cause
the Trust to pay to ALPS, an annual fee of: $250,00 for the first 12 month
period (such period shall commence on the Effective Date); $200,000 for the
second 12 month period; and $200,000 for the third 12 month period; each paid
1/12 on a monthly basis (or a pro rata portion thereof for a partial month) (the
"Fee"). For each additional Fund added to the Trust in excess of 38 Funds, an
additional fee of $1,000 per year per such additional Fund (with an appropriate
proration of such $1,000 in the first year that such additional Fund is added to
the Trust, on the basis of the number of days that the Fund is in existence
during such first year) shall be added to the annual fee set forth in the
preceding sentence. The Fee shall be payable by the Trust within 30 days of its
receipt of an invoice from ALPS, which invoices shall include amounts for any
expenses reimbursable under Section 4 hereof.
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(1) Includes the Trust's investment adviser, WisdomTree Asset Management,
Inc., the Trust's administrator, transfer agent and investment subadviser, The
Bank of New York, and the Trust's distributor, ALPS Distributors, Inc.
(b) The CCO shall not receive and shall not make any claim under this
Agreement or otherwise against the Trust for compensation, workers'
compensation, unemployment insurance compensation, or life insurance, social
security benefits, disability insurance benefits or any other benefits. ALPS is
solely responsible for any such compensation or benefits to be paid to the CCO,
and ALPS shall withhold on behalf of the CCO the required sums for income tax,
unemployment insurance or social security pursuant to any law or requirement of
any government agency including, without limitation, unemployment tax, federal,
state or foreign income tax, federal social security (FICA) payments and
disability insurance taxes. ALPS and the CCO shall make such tax payments as may
be required by applicable law and shall indemnify and hold the Trust harmless
from any liability that the Trust may incur as a consequence of ALPS's or the
CCO's failure to make any such tax payment(s).
(c) ALPS and the CCO shall perform the services hereunder as independent
contractors and not as employees of the Trust, although the CCO shall be an
employee of ALPS. As independent contractors, neither ALPS nor the CCO is, and
neither shall represent itself or himself to third parties as being, the agent
or representative of the Trust, except as specifically set forth herein. Neither
ALPS nor the CCO have, and shall not represent itself or himself to third
parties as having, actual or apparent power or authority to do or take any
action for or on behalf of the Trust, as its agent, representative or otherwise,
except as specifically set forth herein.
SECTION 4. Reimbursement of Expenses.
During the Term, the Trust shall reimburse ALPS for all reasonable and
customary travel and lodging expenses and other out-of-pocket disbursements
incurred by ALPS for or on behalf of the Trust in connection with the
performance of ALPS's or the CCO's duties hereunder; provided that ALPS provides
the Trust with appropriate receipts and other reasonable documentation as the
Trust may request; and further provided that the Trust is not obligated to
reimburse ALPS for any portion of such expenses or disbursements that the Trust
deems to be unreasonable or excessive.
SECTION 5. Disclosure of Information.
(a) From and after the date hereof, neither ALPS nor the CCO shall use or
disclose to any Person, except as required in connection with the performance of
the Services and in compliance with the terms of this Agreement and as required
by law, regulation or judicial process, any Confidential Information (as defined
in Section 5(b)), for any reason or purpose whatsoever, nor shall ALPS or the
CCO make use of any Confidential Information for ALPS's or the CCO's purposes or
for the benefit of any Person except the Trust or the Trust's Affiliates. ALPS
shall maintain commercially reasonable information security policies and
procedures for protecting Confidential Information. For purposes of this
Agreement, an "Affiliate" is an individual or entity (collectively, "Person")
controlling or controlled by or under common control with the Trust.
(b) For purposes of this Agreement, "Confidential Information" means (i)
the non-public intellectual property rights of WisdomTree Investments, Inc.,
WisdomTree Asset Management, Inc., the Board, the Trust and the Trust's
Affiliates and (ii) all other information of a proprietary or confidential
nature in whatever form relating to the Board, the Trust or the Trust's
Affiliates, or the business or assets of the Trust or the Trust's Affiliates,
including, without limitation, investment advisory contracts, portfolio
holdings, xxxxxxx xxxxxxx policies and procedures, best execution evaluations,
compliance manuals, books, records, customer and registered user lists, vendor
lists, supplier lists, customer agreements, vendor agreements, supplier
agreements, incentive and commission program information, distribution channels,
pricing information, cost information, business and marketing plans, strategies,
forecasts, financial statements, budgets and projections, technology, and all
information related to the quantitative securities benchmarks, along with
associated service marks, together with any applications or registrations now or
hereinafter issued on said service marks, on which each Fund's investment
strategy is based. Confidential Information does not include (i) information in
the public domain not as a result of a breach by ALPS or the CCO of this
Agreement, (ii) information lawfully received by ALPS or the CCO from a third
Person who had the right to disclose such information, and (iii) information
developed by ALPS's or the CCO's own independent knowledge, skill and know-how.
(c) ALPS and the CCO agree to promptly notify the Trust of any request for
records or any subpoena by any governmental agency or third party. In the event
that ALPS or the CCO is requested by legal process to disclose Confidential
Information, ALPS shall notify the Trust thereof and shall cooperate with the
Trust and the Board, as appropriate, at the expense of the Trust or the Board,
as appropriate, in any action that such entity may desire to take to protect its
Confidential Information.
SECTION 6. Assignment of Written Materials.
During the Term, ALPS and the CCO shall promptly disclose, and hereby
grant and assign to the Trust for its sole use and benefit, any and all
technical information, data, procedures, records, suggestions and other
materials, insofar as they are reduced to writing, including without limitation
the Written Compliance Program of the Trust (as that term is defined in Exhibit
A), that are reasonably related to the Trust (collectively, the "Materials")
which ALPS or the CCO may develop or acquire during the Term (whether or not
during usual working hours), together with all copyrights and reissues thereof
that may at any time be granted for or with respect to the Materials. For the
avoidance of doubt, the Materials shall include all records referred to in
Exhibit A. The Materials shall constitute Confidential Information within the
meaning of Section 5.
SECTION 7. Delivery of Materials Upon Termination of Term.
ALPS shall promptly deliver to the Trust at the termination of the Term,
or at any time upon the Trust's request, the Materials and all memoranda, notes,
plans, records, reports, software and other documents and data (and copies
thereof existing in any media) relating to the Confidential Information,
inventions or the business of the Trust or any of its Affiliates that it or the
CCO may then possess or have under its or his control regardless of the location
or form of
such material and, if requested by the Trust, will provide the Trust with
written confirmation that all such materials have been delivered to the Trust.
SECTION 8. Termination.
(a) The Trust shall have the right to terminate this Agreement, without
the payment of any penalty, as to each Fund immediately in the event of:
(i) a vote of the Board, including a majority of the Independent
Trustees, upon ninety (90) days' prior written notice to ALPS; provided
however, that no prior notice is required if termination is for Cause
(defined below). For purposes of this Agreement, "Cause" shall be defined
as: (aa) willful misfeasance, bad faith or negligence in connection with
the performance of the duties by the CCO under this Agreement, (bb)
failure of the CCO to perform his duties under this Agreement, after
written notice and a thirty (30) day period to cure, (cc) the CCO's
indictment for, conviction of, or entry of a plea of no contest with
respect to, any felony or (dd) the determination by the Board, including a
majority of the Independent Trustees, in its sole discretion, that it has
lost confidence in the CCO's effectiveness as the CCO of the Trust. ALPS
agrees that it will report to the Trust's officers or the Board promptly
if ALPS learns that the CCO has engaged in any conduct or been subject to
any of the actions described in clauses (aa) through (cc) above;
(ii) the deregistration of the Trust under the 1940 Act;
(iii) a change in the 1940 Act, the Rule or other applicable law or
regulation, or the interpretation of any of the foregoing by the
Securities and Exchange Commission or other regulatory or judicial
authority with appropriate jurisdiction, that results in the arrangement
created by this Agreement no longer satisfying the Trust's or the Trust's
obligations under the Rule;
(iv) subject to the provisions of Section 2(d), any failure of ALPS
to employ a CCO for the Trust acceptable to the Trust;
(v) any assignment of this Agreement. An internal corporate
reorganization of any party (which does not result in a change in the
nature, scope and quality of services provided hereunder) shall not, by
itself, constitute an assignment of this Agreement.
In the event of the termination or dissolution of a particular Fund, this
Agreement shall be terminated as to that Fund and shall continue with respect to
the non-terminating or non-dissolving Funds.
(b) ALPS shall have the right to terminate this Agreement, without the
payment of any penalty, as to each Fund immediately in the event of:
(i) a failure by the Trust to meet its obligations hereunder or a
breach of the Trust's representations and warranties hereunder, if such
failure or breach goes uncured for a period of 30 days after the Trust
receives written notice of such failure from ALPS;
(ii) the termination or dissolution of the Fund, or the
deregistration of the Trust under the 1940 Act; or
(iii) a change in the 1940 Act, the Rule or other applicable law or
regulation, or the interpretation of any of the foregoing by the
Securities and Exchange Commission or other regulatory or judicial
authority with appropriate jurisdiction, that results in the arrangement
created by this Agreement being deemed impermissible.
(c) Upon termination of this Agreement, the Trust shall have no further
liability to ALPS with respect to ALPS's fees or expenses under this Agreement,
except payment of the Fee accrued but unpaid as of the date of termination paid
in a lump sum within 60 days of termination.
(d) Upon termination of this Agreement, ALPS and the CCO each agrees that
it will cooperate in the smooth transition of Services and to minimize
disruption to the Trust. All payments and expense reimbursements in connection
with the termination of this Agreement are subject to the execution of a waiver
and release of all known and unknown compensating and reimbursement claims
against the Trust by ALPS and the CCO. Any liability to ALPS or the CCO with
respect to any regulatory action or litigation pertaining to services rendered
by ALPS or the CCO under this Agreement, will survive the termination of this
Agreement.
SECTION 9. BOARD ACTION UNDER RULE 38a-1
(a) If the Board dismisses the CCO, this Agreement will either end
immediately, or, at the sole discretion of the Board of the Trust, ALPS may
present another CCO candidate for Board consideration and approval to continue
the Services under this Agreement.
(b) If ALPS wishes to dismiss the CCO under the terms of ALPS's contract
with the CCO, then ALPS will make its case to the Board of the Trust before
taking such action. Under such circumstances ALPS may, at its own discretion,
offer to present another CCO candidate to the Board that would be employed by
ALPS, provided however, that the Board of the Trust is not obligated to approve
such other proposed CCO candidate to serve as CCO of the Trust and each Fund of
the Trust. If the Board (including a majority of the Independent Trustees)
approves the new CCO, this Agreement will continue in effect, as amended to
reflect the new CCO. If the Board chooses to engage its own CCO as a result of
ALPS dismissing the CCO under this Agreement, this Agreement will terminate.
(c) ALPS warrants that it shall not retaliate against the CCO should the
CCO either (i) inform the Board of a compliance failure or (ii) take aggressive
action to ensure compliance with the Federal Securities Laws by the Trust, a
Fund or a Service Provider.
(d) If the Board decides to increase the CCO's compensation or provide a
bonus to the CCO, then either the fees paid to ALPS by the Trust will increase
proportionately or the Trust will separately compensate the CCO for any amounts
it deems due to the CCO above the amounts due to ALPS under this Agreement.
(e) If the CCO voluntarily resigns, at the discretion of both parties,
ALPS may present an alternative CCO candidate for Board consideration and
approval to continue the
Services under this Agreement. If the Board chooses to terminate this Agreement
with ALPS as a result of such voluntary resignation by the CCO, ALPS will make
every effort to assist the Board in a smooth transition during this period.
SECTION 10. Representations and Warranties.
(a) ALPS hereby represents and warrants to the Trust and the Trust that
(a) the execution, delivery and performance of this Agreement by ALPS does not
breach, violate or cause a default under any agreement, contract or instrument
to which ALPS is a party or any judgment, order or decree to which ALPS is
subject; (b) the execution, delivery and performance of this Agreement by ALPS
has been duly authorized and approved by all necessary action; and (c) upon the
execution and delivery of this Agreement by ALPS and the Trust, this Agreement
will be a valid and binding obligation of ALPS.
(b) The Trust hereby represents and warrants to ALPS that (a) the
execution, delivery and performance of this Agreement by the Trust does not
breach, violate or cause a default under any agreement, contract or instrument
to which the Trust is a party or any judgment, order or decree to which the
Trust is subject; (b) the execution, delivery and performance of this Agreement
by the Trust has been duly authorized and approved by all necessary action; and
(c) upon the execution and delivery of this Agreement by ALPS and the Trust,
this Agreement will be a valid and binding obligation of the Trust.
SECTION 11. Entire Agreement; Amendment and Waiver.
This Agreement and the other writings referred to herein contain the
entire agreement between the parties hereto with respect to the subject matter
hereof and thereof and supersede any prior agreement between ALPS and the Trust.
No waiver, amendment or modification of this Agreement shall be valid unless it
is in writing and signed by each party hereto. The waiver by either party of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by such other party.
SECTION 12. Notices.
All notices or other communications pursuant to this Agreement shall be in
writing and shall be deemed to be sufficient if delivered personally,
telecopied, sent by nationally-recognized, overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to the Trust, to:
Xxxxxxxx Xxxxxxxxx, President
WisdomTree Trust
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to
Xxxxxx X. Xxxxxxx, Xx.
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to ALPS, to:
ALPS Mutual Fund Services, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
All such notices and other communications shall be deemed to have been
given and received (a) in the case of personal delivery or delivery by
facsimile, on the date of such delivery if delivered during business hours on a
business day or, if not so delivered, on the next following business day, (b) in
the case of delivery by nationally-recognized, overnight courier, on the
business day following dispatch, and (c) in the case of mailing, on the third
business day following such mailing.
SECTION 13. Headings.
The section headings in this Agreement are for convenience only and shall
not control or affect the meaning of any provision of this Agreement.
SECTION 14. Severability.
In the event that any provision of this Agreement is determined to be
partially or wholly invalid, illegal or unenforceable in any jurisdiction, then
such provision shall, as to such jurisdiction, be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or if
such provision cannot be modified or restricted, then such provision shall, as
to such jurisdiction, be deemed to be excised from this Agreement; provided,
however, that the binding effect and enforceability of the remaining provisions
of this Agreement, to the extent the economic benefits conferred upon the
parties by virtue of this Agreement remain substantially unimpaired, shall not
be affected or impaired in any manner, and any such invalidity, illegality or
unenforceability with respect to such provisions shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 15. Remedies.
(a) Each of the parties hereto acknowledges and understands that certain
provisions of this Agreement are of a special and unique nature, the loss of
which cannot be adequately compensated for in damages by an action at law, and
thus, the breach or threatened breach of the
provisions of this Agreement would cause the non-breaching party irreparable
harm. Each of the parties hereto further acknowledges that, in the event of a
breach of any of the covenants contained in this Agreement, the non-breaching
party shall be entitled to immediate relief enjoining such violations in any
court or before any judicial body having jurisdiction over such a claim. All
remedies hereunder are cumulative, are in addition to any other remedies
provided for by law or in equity and may, to the extent permitted by law, be
exercised concurrently or separately, and the exercise of any one remedy shall
not be deemed to be an election of such remedy or to preclude the exercise of
any other remedy.
(b) ALPS shall indemnify and hold the Trust and each applicable Fund
harmless from and against any and all losses, damages, costs, charges,
reasonable attorneys' fees, payments, expenses and liability arising out of or
attributable to any refusal or failure to comply with the terms of this
Agreement by ALPS or the CCO, or which arise out of a lack of good faith,
negligence or willful misconduct by ALPS or the CCO with respect to the
performance by ALPS or the CCO under or in connection with this Agreement or by
reason of the reckless disregard by ALPS or the CCO of its or his obligations
and duties under this Agreement.
SECTION 16. Limitation of Liability.
The Declaration of Trust establishing the Trust provides that the Trustees
shall be entitled to the protection against personal liability for the
obligations of the Trust under Section 3803(b) of the Delaware Business Trust
Act, as amended (the "DBTA"). It is expressly acknowledged and agreed that the
obligations of the Trust hereunder shall not be binding upon any of the
shareholders, Trustees, officers, employees or agents of the Trust, personally,
but shall bind only the trust property of the Trust, as provided in its
Declaration of Trust and under Section 3803 of the DBTA. The execution and
delivery of this Agreement have been authorized by the Trustees of the Trust and
signed by an officer of the Trust, acting as such, and neither such
authorization by such 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 trust property of
the Trust as provided in its Declaration of Trust and under Section 3803 of the
DBTA. ALPS understands that the rights and obligations of each Fund of the Trust
under the Declaration of Trust are separate and distinct from those of any and
all other series.
SECTION 17. Distinction of Funds.
Notwithstanding any other provision of this Agreement, the parties agree
that the assets and liabilities of each Fund of the Trust are separate and
distinct from the assets and liabilities of each other Fund and that no Fund
shall be liable or shall be charged for any debt, obligation or liability of any
other Fund, whether arising under this Agreement or otherwise.
SECTION 18. Benefits of Agreement; Assignment.
The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, assigns,
representatives, heirs and estate, as applicable. This Agreement shall not be
assignable by ALPS without the express written consent of the Trust. Any
purported assignment in violation of the immediately preceding sentence shall be
void and of no effect.
SECTION 19. Survival.
Anything to the contrary contained in this Agreement notwithstanding, the
provisions of Sections 5 through 7, and 15 through 17 of this Agreement shall
survive the termination of the Term.
SECTION 20. Counterparts and Facsimile Execution.
This Agreement may be executed in two counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered (by
facsimile or otherwise) to the other party, it being understood that all parties
need not sign the same counterpart. Any counterpart or other signature hereupon
delivered by facsimile shall be deemed for all purposes as constituting good and
valid execution and delivery of this Agreement by the party delivering it.
SECTION 21. Governing Law; Mutual Waiver of Jury Trial; Jurisdiction.
(a) All questions concerning the construction, interpretation and validity
of this Agreement shall be governed by and construed and enforced in accordance
with the domestic laws of the State of New York without giving effect to any
choice or conflict of law provision or rule (whether in the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York. In furtherance of the foregoing,
the law of the State of New York will control the interpretation and
construction of this Agreement, even if under such jurisdiction's choice of law
of conflict of law analysis, the substantive law of some other jurisdiction
would ordinarily or necessarily apply.
(b) THE PARTIES IRREVOCABLY AND UNCONDITIONALLY AGREE THAT THE EXCLUSIVE
PLACE OF JURISDICTION FOR ANY ACTION, SUIT OR PROCEEDING ("ACTIONS") RELATING TO
THIS AGREEMENT SHALL BE IN THE COURTS OF THE UNITED STATES OF AMERICA SITTING IN
THE CITY OF NEW YORK, NEW YORK OR, IF SUCH COURTS SHALL NOT HAVE JURISDICTION
OVER THE SUBJECT MATTER THEREOF, IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX SITTING
THEREIN, AND EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES TO
SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR PURPOSES OF ANY SUCH ACTIONS. IF
ANY SUCH STATE COURT ALSO DOES NOT HAVE JURISDICTION OVER THE SUBJECT MATTER
THEREOF, THEN SUCH AN ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN THE FEDERAL
OR STATE COURTS LOCATED IN THE STATES OF THE PRINCIPAL PLACE OF BUSINESS OF ANY
PARTY HERETO. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION IT
MAY HAVE TO THE VENUE OF ANY ACTION BROUGHT IN SUCH COURTS OR TO THE CONVENIENCE
OF THE FORUM. FINAL JUDGMENT IN ANY SUCH ACTION SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT, A CERTIFIED OR TRUE
COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF ANY
INDEBTEDNESS OR LIABILITY OF ANY PARTY THEREIN DESCRIBED.
SECTION 22. Mutual Contribution.
The parties to this Agreement and their counsel have mutually contributed
to its drafting. Consequently, no provision of this Agreement shall be construed
against any party on the ground that a party drafted the provision or caused it
to be drafted.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, each of the undersigned has executed this Chief
Compliance Officer Services Agreement as of the date first above written.
WISDOMTREE TRUST
By: ___________________________________
Name: Xxxxxxxx Xxxxxxxxx
Title: President
ALPS MUTUAL FUNDS SERVICES, INC.
By: ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
Exhibit A
Duties of Chief Compliance Officer
The Services shall include, but not be limited to, the following. Terms used in
this Exhibit A shall have the meanings assigned thereto in the Chief Compliance
Officer Services Agreement to which this Exhibit A is attached.
I. Drafting of Compliance Program. No later than January 31, 2006, the CCO
shall, with the assistance of the Trust, draft written compliance policies
and procedures (the "Compliance Program") of the Trust, which shall
address compliance with, and be reasonably designed to prevent violation
of, "Federal Securities Laws."(2) In addition to provisions of Federal
Securities Laws that apply to the Trust, the Compliance Program shall
address compliance with, and be reasonably designed to prevent violation
of, the Trust's charter and by-laws and all exemptive orders, no-action
letters and other regulatory relief received by the Trust from the
Securities and Exchange Commission (the "SEC") and NASD, Inc. (the "NASD")
(all such items collectively, "Regulatory Relief"); provided, however,
that the Compliance Program shall address only that Regulatory Relief
afforded the Service Providers or the Trust or relevant to compliance by
the Service Providers or the Trust, and shall not address the terms by
which other parties may receive the benefits of any Regulatory Relief. In
drafting the Compliance Program, the CCO shall engage in the following
activities:
A. Evaluation of Internal Control Structure.
1. Conduct interviews with certain employees throughout the
business lines of the Trust that are responsible for the
day-to-day operations of the Trust in relation to compliance
by the Trust and its Service Providers (defined below) with
the Federal Securities Laws.
2. Assess from such interviews the operational risks and
compliance with stated policies and procedures of the Trust
and its Service Providers.
3. Review internal audit and other reports maintained by the
Trust, and to the extent practicable, its Service Providers,
related to compliance with the Federal Securities Laws.
4. Review any written policies and procedures to assess the
adequacy of such policies and procedures with respect to
compliance with the Federal Securities Laws by the Trust and
its Service Providers.
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(2) "Federal Securities Laws" are defined by the Rule as the Securities Act of
1933, the Securities Exchange Act of 1934, the Xxxxxxxx-Xxxxx Act of 2002,
the Investment Company Act of 1940, the Investment Advisers Act of 1940,
Title V of the Xxxxx-Xxxxx-Xxxxxx Act, any SEC rules adopted under any of
the foregoing laws, the Bank Secrecy Act, as it applies to registered
investment companies, and any rules adopted thereunder by the SEC or the
Department of Treasury.
B. Policies and Procedures of the Trust. Conduct a detailed review of
the Trust's Compliance Program pertaining to compliance by
registered investment companies with the Federal Securities Laws,
among other things:
1. Pricing of portfolio securities and Fund shares, with a focus
on the following items within the pricing polices and
procedures:
(a) monitoring for circumstances that may necessitate the
use of fair value prices;
(b) establishing criteria for determining when market
quotations are no longer reliable for a particular
portfolio security;
(c) providing a methodology or methodologies by which the
Funds determine the current fair value of their
portfolio securities; and
(d) reviewing the appropriateness and accuracy of the
methodology used in valuing securities, including making
any necessary adjustments.
2. Processing of Fund shares, with a focus on the following
items:
(a) segregation of investor orders received before the Funds
price their shares from those that were received after
the Funds price their shares; and
(b) methodology used by the Funds to protect themselves and
their shareholders against late trading.
3. Identification of affiliated persons to ensure that any
transactions with affiliated persons are executed in
compliance with the 1940 Act.
4. Protection of nonpublic information, including:
(a) prohibitions against trading portfolio securities on the
basis of information acquired by analysts or portfolio
managers employed by the Trust or the Funds' investment
adviser ("Adviser") or the Funds' investment subadviser
("Subadviser") ;
(b) disclosure to third parties of material information
about the Funds' portfolio holdings, trading strategies
or pending transactions; and
(c) purchase or sale of Fund shares by the personnel of the
Trust or the Adviser or Subadviser based on material,
nonpublic information about the Funds' portfolios.
5. Compliance with Fund governance requirements, including the
procedures to guard against:
(a) an improperly constituted Board of Trustees ("Board");
(b) failure of the Board to properly consider matters
entrusted to it; and
(c) failure of the Board to request and consider information
required by the 1940 Act from the Trust and other
Service Providers.
6. The excessive short-term trading of mutual fund shares that
may be harmful to the Funds, including a focus on the
following areas:
(a) consistency of policies and procedures with the Funds'
disclosed policies regarding market timing;
(b) monitoring of shareholder trades or flows of money in
and out of the Funds in order to detect market timing
activity;
(c) enforcement of the Funds' policies regarding market
timing;
(d) prevention of waivers that would harm the Funds or their
shareholders, or subordinate the interests of the Funds
or their shareholders to those of the Trust or any other
affiliated person or associated person of the Trust; and
(e) reporting to the Trust's Board regarding all waivers
granted, so that the Board can determine whether such
waivers were proper.
7. The distribution, marketing and advertising of the Funds'
shares.
8. The trading of portfolio securities by the Funds, including a
focus on enforcement of the Trust's policies with respect to
brokerage, soft dollars and allocation of trades.
9. The review of any electronic mail communications.
II. Administration of Compliance Program. The CCO shall administer and enforce
the Trust's Compliance Program.
III. Oversight of Service Providers. The CCO is responsible for overseeing, on
behalf of the Trust, adherence to the written compliance policies and
procedures of the Trust's service providers, including the Trust's
investment adviser, WisdomTree Asset Management, Inc. (the "Investment
Adviser"), the Trust's administrator, transfer agent and investment
subadviser, The Bank of New York (the "Investment Subadviser", and the
Trust's distributor, ALPS Distributors, Inc. (the "Distributor"), (for
purposes of this Exhibit A, the Investment Adviser, the Investment
Subadviser and the Distributor, collectively, the "Service Providers"). In
furtherance of this duty,
A. No later than January 31, 2006, the CCO shall obtain and review the
written compliance policies and procedures of the Service Providers
or summaries of such policies that have been drafted by someone
familiar with them.
B. The CCO shall monitor the Service Providers' compliance with their
own written compliance policies and procedures, Federal Securities
Laws and the Trust's charter, by-laws and Regulatory Relief. In so
doing, the CCO shall interact with representatives of the Service
Providers as appropriate. Where deemed appropriate and in accordance
with pronouncements by the Staff of the Securities and Exchange
Commission ("SEC"), ALPS may rely on summaries that are prepared by
a Service Provider or a third party, instead of the actual policies
and procedures of the Service Provider.
C. The CCO shall attempt to obtain the following representations from
each Service Provider and, if it fails to obtain such
representations, shall report this fact to the Trust:
1. In connection with the documentation of its written policies
and procedures governing the provision of its services to the
relevant Trust, the Service Provider has prepared and
delivered to the Trust a summary of core services that it
provides to the Trust or, if no such summary is available,
that it has delivered to the Trust copies of the relevant
policies and procedures.
2. The Service Provider will provide to the Trust and the CCO any
revisions to its written compliance policies and procedures on
at least an annual basis, or more frequently in the event of a
material revision.
3. The Service Provider's written compliance policies and
procedures have been reasonably designed to prevent, detect
and correct violations of the applicable Federal Securities
Laws and critical functions related to the services performed
by Service Provider pursuant to the applicable agreement
between the Service Provider and the Trust.
4. The Service Provider has established monitoring procedures,
and shall review, no less frequently than annually, the
adequacy and effectiveness of its written compliance policies
and procedures to check that they are reasonably designed to
prevent, detect and correct violations of those applicable
Federal Securities Laws and critical functions related to the
services performed by the Service Provider pursuant to the
applicable agreement between the Service Provider and the
Trust.
IV. Annual Review. The CCO will monitor the Trust's Compliance Program for
effectiveness, including ongoing dialogue with key compliance personnel at
the Trust's Service Providers. Such monitoring will include risk-based
compliance testing of the Trust's Compliance Program. The Rule requires
that, at least annually, the Trust review
its Compliance Program and that of its Service Providers and the
effectiveness of their respective implementations (the "Annual Review").
The CCO shall perform the Annual Review for the Trust. The first Annual
Review shall be completed no later than February 1, 2007.
V. Reports to the Trust; Escalation
A. The CCO shall make [weekly] [monthly] [quarterly] reports to the
Trust regarding its administration and enforcement of the Compliance
Program. These regular reports shall address compliance by the Trust
and the Service Providers and such other matters as the Trust may
reasonably request.
B. In addition, at least annually, the CCO shall submit a written
report to the Trust addressing the following issues:
1. the operation of the Compliance Program, and the written
compliance policies and procedures of the Service Providers;
2. any material changes made to the Compliance Program since the
date of the such last report;
3. any material changes to the Compliance Program recommended as
a result of the Annual Review; and
4. each "Material Compliance Matter" that occurred since the date
of the last report.(3)
This written report shall be based on the Annual Review. The first
written report shall be presented to the Trust no later than 60 days
after the date of the first Annual Review.
C. In the event that the CCO reports a Material Compliance Matter and
is not reasonably satisfied with the Trust's efforts to address and
remedy the same, the CCO shall report such Material Compliance
Matter to the Board.
VI. Recordkeeping. The CCO shall maintain the books and records for the Trust
that are required to be retained by the Rule, which books and records may
be maintained electronically but which shall, in any event, be backed-up
and safeguarded in accordance with ALPS's regular practices for record
retention.
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(3) "Material Compliance Matter" is defined as "any compliance matter about
which the [Trust's board] would reasonably need to know to oversee fund
compliance," which involves any of the following (without limitation): (i)
a violation of Federal Securities Laws by the Trust or any Service
Provider; (ii) a violation of the Compliance Program of the Trust, or the
written compliance policies and procedures of its Service Providers; or
(iii) a weakness in the design or implementation of the Compliance Program
policies and procedures of the Trust, or the written compliance policies
and procedures of its Service Providers.
VII. Meeting with Regulators. The CCO shall meet with, and reply to inquiries
from, the SEC, the NASD and other legal and regulatory authorities with
responsibility for administering Federal Securities Laws as necessary or
as reasonably requested by the Board.
VIII. Amendments to the Compliance Program. The CCO shall consult with the Board
and its representatives as necessary to amend, update and revise the
Compliance Program as necessary, but no less frequently than annually.
Additionally, the CCO will recommend amendments and draft policies and
procedures as they pertain to:
A. consistency with regulatory expectations of risk-based policies and
procedures;
B. maintenance of compliance with the Federal Securities Laws; and
C. consistency within the structure, organization and format of the
policies and procedures.
Any amendments to the Trust's policies and procedures will be based on
industry best practices and regulatory expectations. In addition, on a
quarterly basis, the CCO, in consultation with the Trust's counsel, will
provide the Trust with updates, if any, to the Trust's policies and
procedures to reflect changing regulatory requirements.
Exhibit B
[insert biography]
Exhibit C
Portfolio Series of the Trust
(as of June 12, 2006)
WisdomTree Total Dividend Fund
WisdomTree High-Yielding Equity(SM) Fund
WisdomTree LargeCap Dividend Fund
WisdomTree Dividend Top 100(SM) Fund
WisdomTree MidCap Dividend Fund
WisdomTree SmallCap Dividend Fund
WisdomTree DIEFA(SM) Fund
WisdomTree DIEFA High-Yielding Equity Fund
WisdomTree Europe Total Dividend Fund
WisdomTree Europe High-Yielding Equity Fund
WisdomTree Europe SmallCap Dividend Fund
WisdomTree Japan Total Dividend Fund
WisdomTree Japan High-Yielding Equity Fund
WisdomTree Japan SmallCap Dividend Fund
WisdomTree Pacific ex-Japan Total Dividend Fund
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
WisdomTree International LargeCap Dividend Fund
WisdomTree International Dividend Top 100(SM) Fund
WisdomTree International MidCap Dividend Fund
WisdomTree International SmallCap Dividend Fund
WisdomTree International Basic Materials Sector Fund
WisdomTree International Communications Sector Fund
WisdomTree International Consumer Cyclical Sector Fund
WisdomTree International Consumer Non-Cyclical Sector Fund
WisdomTree International Energy Sector Fund
WisdomTree International Financial Sector Fund
WisdomTree International Health Care Sector Fund
WisdomTree International Industrial Sector Fund
WisdomTree International Technology Sector Fund
WisdomTree International Utilities Sector Fund
