EXHIBIT 99B9(E)
FINANCIAL SERVICES AGREEMENT
AGREEMENT made as of December 31, 1997 by and between Masterworks Funds,
Inc. ("Masterworks") and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("MLPF&S").
WITNESSETH:
WHEREAS, each of the investment companies listed on Schedule A hereto as
such Schedule may be amended from time to time (collectively, the "Funds," and
each a "Fund") is an investment company registered under the Investment Company
Act of 1940, as amended; and
WHEREAS, MLPF&S, a broker-dealer registered under the Securities Exchange
Act of 1934, as amended, has entered into an agreement with Xxxxxxxx Inc., as
Distributor of the Funds, pursuant to which it sells shares of the Funds to
certain customers with XXX Accounts; and
WHEREAS, for the convenience of its customers MLPF&S is the record owner of
such shares and maintains an omnibus account with each of the Funds which
represents the aggregate number of shares held by such customers at any given
time; and
WHEREAS, MLPF&S tracks the beneficial ownership of such shares and
distributes dividends, and shareholder information and performs other services
for its customers' benefit as set forth on Exhibit 1;
WHEREAS, the Funds receive a direct benefit from MLPF&S performing the
Services that they would otherwise perform, or have performed, on behalf of such
customers.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, each party hereto agrees, as follows:
1. MLPF&S agrees to perform the Services specified in Exhibit I hereto (the
"Services") for the benefit of the shareholders of the Funds maintaining shares
of any of such Funds in brokerage accounts with MLPF&S and whose shares are
included in the omnibus account referred to above (each a "Customer" and
collectively, the "Customers"). MLPF&S shall comply with applicable federal
securities laws in connection with the provision of the Services hereunder.
2. MLPF&S agrees that it will maintain and preserve all records as required
by law to be maintained and preserved in connection with providing the Services,
and will otherwise comply with all laws, rules, and regulations applicable to
the Services.
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3. Upon request of the Masterworks, MLPF&S will provide access to our
facilities and records related to the Services to the Fund and its legal and
audit representatives to review the quality of the Services, and to respond to
requests of the board of directors of Masterworks, a governmental body, self-
regulatory organization or a shareholder. Notwithstanding this provision, it is
understood and agreed that the names and addressees of MLPF&S customers
(including the Customers) are the exclusive property of MLPF&S and that such
customer information will not be provided to the Funds and their representatives
pursuant to this Agreement. All costs and expenses incurred by MLPF&S in
providing access to the Fund and its representatives shall be paid by
Masterworks.
4. Masterworks agrees that it and its representatives given access to
MLPF&S' facilities and/or records in accordance with Paragraph 3 hereto shall
treat all records and any information obtained in connection with access to our
facilities as confidential and shall not disclose information contained therein
except as permitted under Paragraph 3. All such records and information
maintained by MLPF&S and its affiliates in connection with this Agreement are
the exclusive property of MLPF&S and shall remain so notwithstanding any release
thereof in accordance with the terms of this Agreement. No person having access
to such records or information may use such records or information to solicit,
directly or indirectly, any customer of MLPF&S for any purpose. The provisions
of Paragraphs 3 and 4 shall survive the termination of this Agreement.
5. In consideration of the Services provided hereunder, Masterworks shall
pay to MLPF&S the amounts set forth in Schedule B hereto. If for any reason, any
fees or other payments to be made by Masterworks to MLPF&S under this Agreement
are not paid by Masterworks within 30 days of Masterworks receipt of a xxxx
therefore, Barclay Global Investors, Inc. ("BGI") agrees to pay such fees and/or
other payments to MLPF&S immediately upon receipt of a xxxx therefor.
6. MLPF&S shall indemnify and hold harmless Masterworks from and against
any and all losses that it may incur (including, without limitation, reasonable
attorneys' fees and expenses) arising out of or related to the non-performance
of MLPF&S of its responsibilities under this Agreement, except to the extent any
such losses are caused, or contributed to, by Masterworks.
7. (a) Masterworks shall indemnify and hold harmless MLPF&S from any and
all losses that it may incur (including, without limitation, reasonable
attorneys' fees and expenses) that are related to the non-performance of
Masterworks of its responsibilities under this Agreement, except to the extent
any such losses are caused, or contributed to by MLPF&S.
(b) BGI shall indemnify and hold harmless MLPF&S from any and all
losses that it may incur (including, without limitation, reasonable attorneys'
fees and expenses) that are related to the non-performance of BGI of its
responsibilities under
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this Agreement, except to the extent any such losses are caused, or contributed
to by MLPF&S.
(c) The provisions of Paragraphs 6 and 7 shall survive the
termination of this Agreement.
8. This Agreement may be terminated, without penalty, at any time by
MLPF&S or Masterworks in whole, or in part with respect to one or more of the
Funds, upon 30 days written notice to the other party. Upon termination, subject
to Section 5, Masterworks shall pay such compensation as shall be due and owing
to MLPF&S as of the date of such termination.
9. This Agreement, including its Exhibits and Schedules, constitutes the
entire agreement between the parties with respect to the matters dealt with
herein, and supersedes any previous agreements and documents with respect to
such matters.
10. All communications under this Agreement shall be written and sent to
us at our offices at 0000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxx 00000,
Attention: President, and Masterworks or BGI at the address provided at the end
of this Agreement. Notice shall be deemed to have been given on the date it was
delivered personally to the other party or any officer or was either received by
express delivery or telecopy (with receipt) by the other party at its address
specified in this Agreement. Either party may change the address to which
communications to it shall be sent by giving notice thereof in accordance with
this provision.
11. This Agreement may be amended only by mutual agreement of the parties
in writing; provided however, that any amendment to Schedule A of this Agreement
to add additional Fund(s) shall be deemed effective and part of this Agreement
upon the day of the first sale by MLPF&S of any shares of such Fund(s).
12. The rights and obligations of the parties hereunder may not be
assigned without the prior written consent of the non-assigning party.
Notwithstanding the forgoing, it is expressly understood and agreed that Xxxxxxx
Xxxxx Financial Data Services, Inc. ("FDS") and any successor to FDS may perform
any of the Services hereunder pursuant to the request of MLPF&S.
13. This Agreement shall be governed by laws of the State of New York
without giving affect to provisions relating to conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx
______________________________
Print Name: Xxxxxx X. Xxxxxx
_______________________
Title: First Vice President
____________________________
MASTERWORKS FUNDS, INC. Address for Notice:
By: /s/ Xxxxxxx X. Xxxxx, Xx. 000 Xxxxxx Xxxxxx
____________________________ __________________________
Print Name: Xxxxxxx X. Xxxxx, Xx. Xxxxxx Xxxx, XX 00000
____________________ __________________________
Title: Sec.
_________________________ __________________________
SOLELY FOR THE PURPOSES OF SECTIONS 5 AND 7(B):
Barclays Global Investors, Inc. Address for Notes:
By: /s/ Xxxxx X. Xxxxxxx
____________________________ __________________________
Print Name: Xxxxx X. Xxxxxxx
_____________________ __________________________
Title: Principal
_________________________ __________________________
By: /s/ Xxxxxx X. Xxxxxxxxxxxxxx
____________________________ __________________________
Print Name:Xxxxxx X. Xxxxxxxxxxxxxx
_____________________ __________________________
Title: Managing Director
_________________________ __________________________
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EXHIBIT 1
Pursuant to the Agreement by and among the parties hereto, MLPF&S shall
perform the following Services:
1. Maintain separate records for each Customer with respect to each of the
Funds held by such Customer, which records shall reflect shares purchased and
redeemed and share balances. MLPF&S shall maintain an omnibus account for each
Fund with the transfer agent of the Funds representing the position of such
Customers and such account shall be in the name of MLPF&S or its nominee as the
record owner of the shares owned by such Customers.
2. Transmit to the Funds purchase and redemption orders on behalf of
Customers. Disburse or credit to Customers all proceeds of redemptions of shares
of each of the Funds and all dividends and other distributions not reinvested in
shares of each of the Funds.
3. Prepare and transmit to Customers periodic account statements showing
the total number of shares owned by them as of the statement closing date,
purchases and redemptions of Fund shares by the customer during the period
covered by the statement and the dividends and other distributions paid to the
customer during the statement period (whether paid in cash or reinvested in Fund
shares).
4. Transmit to MLPF&S customers proxy materials, reports and other
information required to be sent to shareholders under the federal securities
laws received by MLPF&S from any of the Funds. Upon request of a Fund, MLPF&S
will transmit to Customers fund communications deemed by the Fund, through its
Board of Directors or other similar governing body, to be material to
shareholders of the Fund. In the event MLPF&S were to mail any Fund materials,
reports, prospectuses and other information to Customers/shareholders of any
Fund who are MLPF&S customers pursuant to this paragraph, Masterworks agrees to
reimburse MLPF&S or cause the Fund to reimburse MLPF&S for all out-of-pocket
expenses, including, without limitation, reasonable clerical expenses incurred
in connection with the distribution of such materials using rates and guidelines
set forth in Rule 451.90 of the New York Stock Exchange Inc.
5. Provide to the Funds such periodic reports as shall reasonably be
concluded to be necessary to enable each of the Funds and its distributor to
comply with State Blue Sky requirements.
6. Retail account support and relationship management.
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SCHEDULE A
FUNDS
-----
MasterWorks Funds, Inc. LifePath 2000 Fund
MasterWorks Funds, Inc. LifePath 2010 Fund
MasterWorks Funds, Inc. LifePath 2020 Fund
MasterWorks Funds, Inc. LifePath 2030 Fund
MasterWorks Funds, Inc. LifePath 2040 Fund
MasterWorks Funds, Inc. Asset Allocation Fund
MasterWorks Funds, Inc. Bond Index Fund
MasterWorks Funds, Inc. Growth Stock Fund
MasterWorks Funds, Inc. Money Market Fund
MasterWorks Funds, Inc. S&P 500 Index Fund
MasterWorks Funds, Inc. Short-Intermediate Term Fund
MasterWorks Funds, Inc. U.S. Treasury Allocation Fund
SCHEDULE B
1. In consideration of the Services, Fund Manager agrees to pay MLPF&S an annual
fee equal to (i) 10 basis points on net assets of Funds held in ERISA Accounts
at MLPF&S in the MFA Program or any other programs requiring equalization under
ERISA and (ii) the following basis points per fund on all other net assets of
the Funds held in accounts at MLPF&S:
FUND BASIS POINTS
---- ------------
MasterWorks Funds, Inc. LifePath 2000 Fund .20%
MasterWorks Funds, Inc. LifePath 2010 Fund .20%
MasterWorks Funds, Inc. LifePath 2020 Fund .20%
MasterWorks Funds, Inc. LifePath 2030 Fund .20%
MasterWorks Funds, Inc. LifePath 2040 Fund .20%
MasterWorks Funds, Inc. Asset Allocation Fund .20%
MasterWorks Funds, Inc. Bond Index Fund .07%
MasterWorks Funds, Inc. Growth Stock Fund .10%
MasterWorks Funds, Inc. Money Market Fund .10%
MasterWorks Funds, Inc. S&P 500 Index Fund .07%
MasterWorks Funds, Inc. Short-Intermediate Term Fund .10%
MasterWorks Funds, Inc. U.S. Treasury Allocation Fund .20%
Such amounts shall be paid immediately upon receipt of a xxxx therefor by
Federal funds wire to the account specified by MLPF&S.
2. In addition to fees set forth above, Fund Manager shall pay, or cause to be
paid, to MLPF&S amounts due pursuant to Paragraph 3 of the Agreement and
Paragraph 4 of Exhibit I of this Agreement. Such amounts shall be paid
immediately upon receipt of a xxxx therefore by Federal funds wire to the
account specified by MLPF&S.
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