Exhibit (m)(9)
SERVICES AGREEMENT
This Agreement is made as of, between Xxxxxxx Xxxxxx & Co., Inc.
("Schwab"), a California corporation, each registered investment company ("Fund
Company") executing this Agreement, on its own behalf and on behalf of each of
its series or classes of shares ("Fund(s)") listed on Schedule I, as amended
from time to time, Xxxxxxxx Advisors, Inc. ("Fund Affiliate") and Xxxxxxxx Data
Corporation ("SDC"). Fund Company, Fund Affiliate and SDC are collectively
referred to herein as "Fund Parties." In the event that there are no series or
classes of shares listed on Schedule I, the term "Fund(s)" shall mean "Fund
Company."
WHEREAS, Fund Affiliate is the principal underwriter for the Funds.
WHEREAS, Fund Parties wish to have certain recordkeeping, shareholder
communication, and other such administrative services performed for each Fund;
and
WHEREAS, SDC is the shareholder servicing agent for each Fund; and
WHEREAS, Schwab is willing to perform or cause to be performed such
administrative services on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services
a. During the term of this Agreement, Schwab shall perform or cause to
be performed the administrative services set forth on Exhibit A hereto, as such
exhibit may be amended from time to time by mutual consent of the parties (the
"Services").
b. The parties agree that the Operating Agreement, dated as of,
between Schwab and Fund Parties, as amended from time to time ("Operating
Agreement"), is incorporated herein by this reference. In processing purchase,
redemption, transfer and exchange orders placed by Schwab on behalf of
investors, and in order to facilitate the performance of Services, all terms and
conditions of the Operating Agreement shall be binding as between Schwab and
Fund Parties, and the references to Fund Company therein shall be deemed to mean
Fund Parties for the purposes of this Agreement. In the event of any
inconsistency between the Operating Agreement and this Agreement, this Agreement
shall control.
2. Fees
a. For the Services, Schwab shall receive a fee (the "Fee") which
shall be calculated and paid in accordance with Exhibit B hereto. Schedule II
identifies the amount of components of the Fee as follows:
(i) that portion of the Fee, if any, determined by the Fund's
board of directors to be payable by the Fund for non-distribution related
services, and not paid pursuant to a plan of distribution or shareholder
servicing adopted and maintained pursuant to Rule 12b-1 ("Rule 12b-1 Plan")
under the Investment Company Act of 1940 Act, as amended (the "1940 Act")
("Component 1");
(ii) that portion of the Fee, if any, paid pursuant to a Rule
12b-1 Plan ("Component 2"); and either
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(iii) (A) that portion of the Fee, if any, not payable by the
Fund and not paid pursuant to a Rule 12b-1 Plan ("Component 3"), or
(B) that portion of the Fee, if any, not payable by the Fund
or paid pursuant to a Rule 12b-1 Plan and determined by the Fund's board of
directors to be for non-distribution related services ("Component 4").
b. Fund Parties acknowledge and agree that:
(i) Fund Company will pay to Schwab Component 1, and Fund
Affiliate will be jointly and severally responsible to Schwab with Fund Company
for Component 1; and,
(ii) Fund Affiliate as the Fund's principal underwriter or Fund
Affiliate on behalf of the Fund's principal underwriter will pay to Schwab any
remaining Fee under Component 2; and, either
(iii) (A) Fund Affiliate as the Fund's principal underwriter or
Fund Affiliate on behalf of the Fund's principal underwriter will pay to Schwab
any remaining Fee under Component 3, or
(B) Fund Affiliate will pay to Schwab any remaining Fee
under Component 4.
3. Transaction Charges
The parties acknowledge and agree that Schwab may collect transaction
fees from certain customers (including "Active Traders," as Schwab may define
that term) for certain services and from other customers upon such other
customers' redemption of certain shares.
4. Indemnification
x. Xxxxxx shall indemnify and hold harmless Fund Parties and their
directors, officers, employees, and agents ("Indemnified Parties") from and
against any and all losses, claims, liabilities and expenses (including
reasonable attorney's fees) ("Losses") incurred by any of them arising out of
(i) Xxxxxx'x dissemination of information regarding Fund Parties or a Fund that
contains an untrue statement of material fact or any omission of a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading and that was not published or
provided to Schwab by or on behalf of Fund Company or its affiliated persons
("Affiliates") as defined under the Investment Company Act of 1940, as amended
(the "1940 Act"), or accurately derived from information published or provided
by or on behalf of Fund Company or any Affiliate, (ii) any breach by Schwab of
any representation, warranty or agreement contained in this Agreement, or (iii)
any willful misconduct or negligence by Schwab in the performance of, or failure
to perform, its obligations under this Agreement, except to the extent such
Losses are caused by Fund Company or Fund's breach of this Agreement or Fund
Company or Fund's willful misconduct or negligence in the performance, or
failure to perform, its obligations under this Agreement. This Section 4(a)
shall survive termination of this Agreement.
b. In any event, no party shall be liable for any special,
consequential or incidental damages.
5. Role and Relationship of Schwab
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The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related services only
and are not the services of an underwriter or a principal underwriter of any
Fund within the meaning of the Securities Act of 1933, as amended, or the 1940
Act, although certain of these services may be distribution related. This
Agreement does not xxxxx Xxxxxx any right to purchase shares from any Fund
(although it does not preclude Schwab from purchasing any such shares), nor does
it constitute Schwab an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent Schwab is
involved in the purchase of shares of any Fund by Xxxxxx'x customers, such
involvement will be as agent of such customer only.
6. Information to be Provided
Fund Parties shall provide to Schwab prior to the effectiveness of
this Agreement or as soon thereafter as practicable, two (2) copies of the
then-current prospectus and statement of additional information of each Fund.
Fund Party shall provide Schwab with written copies of any amendments to or
changes in the Fund's prospectus or statement of additional information
immediately upon their effective date.
7. Representations and Warranties
a. Each Fund Company represents and warrants that it has obtained
certified resolutions of its board of directors authorizing such Fund Company to
enter into this Agreement, and each of SDC and Fund Affiliate represent and
warrant that each has been duly authorized to enter into this Agreement.
b. Each Fund Party represents and warrants that the person signing
this Agreement on its behalf is an officer authorized to execute this Agreement
on behalf of such Fund Party.
8. Notices
All notices required by this Agreement (excluding the Operating
Agreement) shall be in writing and delivered personally or sent by first class
mail. Such notices will be deemed to have been received as of the earlier of
actual physical receipt or three (3) days after deposit, first class postage
prepaid, in the United States mail. All such notices shall be made:
if to Schwab, to: Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Senior Vice President/Mutual Funds
with a copy to: General Counsel, Mutual Funds
at the same address;
if to Fund Party, to the address given below in the signature block.
9. Nonexclusivity
Each party acknowledges that the other may enter into agreements
similar to this Agreement with other parties for the performance of services
similar to those to be provided under this Agreement, unless otherwise agreed to
in writing by the parties.
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10. Assignability
This Agreement is not assignable by any party without the other
parties' prior written consents and any attempted assignment in contravention
hereof shall be null and void; provided, however, that Schwab may, without the
consent of Fund Parties, assign its rights and obligations under this Agreement
to any Affiliate.
11. Exhibits and Schedules; Entire Agreement
All Exhibits and Schedules to this Agreement, as they may be amended
from time to time, are by this reference incorporated into and made a part of
this Agreement. This Agreement (including the Exhibits and Schedules hereto),
together with the Operating Agreement, constitute the entire agreement between
the parties as to the subject matter hereof and supersede any and all
agreements, representations and warranties, written or oral, regarding such
subject matter made prior to the time at which this Agreement has been executed
and delivered by Schwab and Fund Parties.
12. No Waiver
The failure of either party to insist upon exercising any right under
this Agreement shall not be construed as a waiver or relinquishment to any
extent of such party's right to assert or rely upon such provision or right in
any other instance.
13. Amendment
This Agreement and the Exhibits and Schedules hereto may be amended
only by a writing executed by each party hereto that is to be bound by such
amendment.
14. Governing Law
This Agreement shall be governed by and interpreted under the laws of
the State of California, applicable to contracts between California residents
entered into and to be performed entirely within the state.
15. Effectiveness of Agreement; Termination
a. The effective date of this Agreement as to any Fund shall be the
later of the date on which this Agreement is made or the date set forth opposite
the name of the Fund on Schedule I. This Agreement shall continue in force for
one year, and shall thereafter continue automatically for successive annual
periods provided it is specifically approved at least annually by a vote of the
Board of Directors/Trustees of each Fund, and of the Directors/Trustees
("Disinterested Directors") who are not interested persons of the Funds and have
no direct or indirect financial interest in the operation of each Funds'
administration, shareholder services and distribution plan (each a "Rule 12b-1
Plan") or any agreement relating to the Rule 12b-1 Plan.
b. This Agreement may be terminated as to a Fund (i) by any party upon
ninety (90) days' written notice to the other parties or (ii) by any party upon
such shorter notice as is required by law, order, or instruction by a court of
competent jurisdiction or a regulatory body or self-regulatory organization with
jurisdiction over such terminating party (iii) by Fund Parties, upon notice to
Schwab of the termination of any Rule 12b-1 Plan as to any Fund that had such
Rule 12b-1 Plan in effect as of its effective date on this Agreement, provided
that a portion of the Fee is paid pursuant to the Rule 12b-1 Plan or (iv) at
any time, without the payment of a penalty, by vote of a majority of such Fund's
Disinterested Directors or by vote of
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the outstanding voting securities of such Fund, upon 60 days notice.
c. Notwithstanding any termination pursuant to the foregoing paragraph
(b), Fund Affiliate shall be liable for fees payable with respect to each share
of the Fund purchased following such termination for a period of not less than
10 days following such termination if not paid by Fund Company. Further, Fund
Parties will remain obligated to pay Schwab the Fee as to each share of the Fund
that was considered in the calculation of the Fee as of the date of termination,
and as to each share of the Fund which results from reinvesting the dividends or
capital gains distributed on such shares (each a "Pre-Termination Share"), for
so long as such Pre-Termination Share is held in any of the Account(s) (as
defined in the Operating Agreement) and Schwab continues to perform
substantially all of the Services as to such Pre-Termination Share.
Notwithstanding the foregoing, there shall not be any Minimum Fee (as referred
to in Exhibit B) with respect to such Pre-Termination Shares. Further, for so
long as Schwab continues to perform the Services as to any Pre-Termination
Shares, this Agreement will otherwise remain in full force and effect as to such
Pre-Termination Shares. Fund Parties shall reimburse Schwab promptly for any
reasonable expenses Schwab incurs in effecting any termination of this
Agreement, including delivery to a Fund Party of any records, instruments, or
documents reasonably requested by the Fund Party.
d. In the event a Fund merges or is subject to some other form of
business reorganization such that shareholders of the Fund receive shares of an
entity not listed on Schedule I to this Agreement (each share a "Reorganized
Share"), each such Reorganized Share shall be deemed to be a Pre-Termination
Share and Fund Parties will remain obligated to pay Schwab the Fee as to each
Reorganized Share for so long as such Reorganized Share is held in any Schwab
account, unless such Reorganized Share is subject to a services agreement with
Schwab other than this services agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto.
XXXXXXX XXXXXX & CO., INC. XXXXXXXX DATA CORPORATION, on
its own behalf and on behalf of each
Fund listed on Schedule I hereto
By:
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Xxxxxxx X. Xxxxxx
Senior Vice President By:
Mutual Funds -----------------------------------
Name:
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Date:
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Title:
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XXXXXXXX ADVISORS, INC. Date:
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Address:
By: ------------------------------
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Name: ---------------------------------------
------------------------------- Attn:
Title: --------------------------------
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Date:
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Address:
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Attn:
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EXHIBIT A
SERVICES
1. Record Maintenance
Schwab shall maintain, and require any correspondent brokers or banks
to maintain with respect to their customers, the following records with respect
to a Fund for each customer who holds Fund shares in a Schwab brokerage account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions (including
dividend reinvestments) and dates and amounts of dividends paid for at least the
current year to date;
c. Name and address of the customer, including zip codes and social
security numbers or taxpayers identification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. Shareholder Communications
Schwab shall:
a. Provide to a shareholder mailing agent for the purpose of mailing
certain Fund-related materials the names and addresses of all Schwab customers
who hold shares of such Fund in their Schwab brokerage accounts. The shareholder
mailing agent shall be a person or entity with whom the Fund has arranged for
the distribution of certain Fund-related material in accordance with the
Operating Agreement. The Fund-related materials shall consist of updated
prospectuses and any supplements and amendments thereto, annual and other
periodic reports, proxy or information statements and other appropriate
shareholder communications. In the alternative, in accordance with the Operating
Agreement, Schwab may distribute the Fund-related materials to its customers.
b. Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request and, as
applicable, with confirmation statements;
c. Mail statements to customers on a monthly basis (or, as to accounts
in which there has been no activity in a particular month, no less frequently
than quarterly) showing, among other things, the number of shares of each Fund
owned by such customer and the net asset value of such Fund as of a recent date;
d. Produce and mail to customers confirmation statements reflecting
purchases and redemptions of shares of each Fund in Schwab brokerage accounts;
e. Respond to customer inquiries regarding, among other things, share
prices, account balances, dividend amounts and dividend payment dates; and
f. With respect to Fund shares purchased by customers after the
effective date of this Agreement, provide average cost basis reporting to
customers to assist them in preparation of income tax returns.
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g. If Schwab clears transactions in Fund shares for any correspondent
brokers or banks in an omnibus relationship, it will require each such
correspondent broker or bank to provide such shareholder communications as set
forth in 2(a) through to 2(f) to its own customers.
3. Transactional Services
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from its
customers or from any correspondent brokers and banks for their customers.
Schwab shall also communicate to beneficial owners holding through it, and to
any correspondent brokers or banks for beneficial owners holding through them,
as to shares of each Fund, mergers, splits and other reorganization activities,
and require any correspondent broker or bank to communicate such information to
its customers.
4. Tax Information Returns and Reports
Schwab shall prepare and file, and require to be prepared and filed by
any correspondent brokers or banks as to their customers, with the appropriate
governmental agencies, such information, returns and reports as are required to
be so filed for reporting (i) dividends and other distributions made, (ii)
amounts withheld on dividends and other distributions and payments under
applicable federal and state laws, rules and regulations, and (iii) gross
proceeds of sales transactions as required.
5. Fund Communications
Schwab shall, upon request by Fund Parties, on each business day and
for each Fund, report the number of shares on which the Fee is to be paid
pursuant to this Agreement and the number of shares on which no such Fee is to
be paid. Schwab shall also provide each Fund with a monthly invoice.
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EXHIBIT B
Calculation of Fee
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SCHEDULE I
TO THE SERVICES AGREEMENT
Fund Company(ies)/Fund(s) Effective date
MIN Indicates that Fund is subject to the minimum monthly Fee as set forth on
Exhibit B.
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SCHEDULE II
TO THE SERVICES AGREEMENT
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