FundVest - No Transaction Fee Agreement
This Agreement is made as of____________________________ 1999, between Pershing
Division of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("Pershing"), a
Delaware Corporation, and DLJdirect Mutual Funds ("Fund").
WHEREAS it is understood that Pershing functions primarily as a clearing agent
for introducing broker-dealers/correspondents and in such capacity performs
traditional operational functions, including execution and clearance of trades
and holding Client/Shareholders funds and securities, and that certain of these
broker-dealers/correspondents have agreed to participate in Pershing's FundVest
no transaction fee program ("FundVest") under the terms and conditions as set
forth in an agreement between Pershing and the broker-dealers/correspondents
("Participating Correspondent(s)");
WHEREAS the terms and conditions set forth herein apply to mutual fund
transactions effected either on behalf of Client/Shareholders of Participating
Correspondents or direct Client/Shareholders of Pershing
("Client/Shareholders");
WHEREAS Fund wishes to have Pershing or Participating Correspondents provide on
its behalf certain administrative services with respect to Client/Shareholders
of such Funds which Pershing makes available to Client/Shareholders through
FundVest
WHEREAS such services will be performed pursuant to the terms and conditions as
set forth herein;
WHEREAS both Fund and Pershing agree to transact business in the manner
prescribed in Schedule II attached hereto;
NOW THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the parties agree as follows:
1. Services
During the term of this Agreement, Pershing or Participating Correspondents
will perform services as set forth in Schedule III attached hereto (the
"Services"). Such Schedule may be amended from time to time with mutual
consent of the parties.
2. Fees
a. For performance of Services, Pershing shall receive a fee (the "Fee")
which will be calculated and paid as provided in Schedule IV attached
hereto. Fees are solely for shareholder servicing and other
administrative services provided by Pershing or Participating
Correspondents and do not constitute payment in any manner for
investment advisory, distribution, trustee, or custodial services. Fees
shall be payable on all shares of the Fund being held by Pershing for -
Client/Shareholders of Participating Correspondents, excluding: (i)
shares held by Pershing for such Client/Shareholders prior to the
effective date of the Agreement as to such Fund (ii) shares first
placed into a brokerage account with Pershing after the termination of
the Agreement as to the Fund issuing such shares (iii) shares on which
Pershing or Participating Correspondent has, upon purchase, assessed to
Client/Shareholders any transaction fee. The total number of shares
of the funds
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upon which Fees are due Pershing are referred to within the Agreement
as program shares ("Program Shares").
b. The Fund's sole responsibility for fee payment shall be to Pershing.
Pershing shall be solely responsible for payment of a portion of such fee
to Participating Correspondents pursuant to separate agreements with such
correspondents.
Fund represents that fees paid to Pershing will be paid out of shareholder
servicing or other fees presently being charged to the Funds as set forth
in the current prospectus of each of the Funds.
c. In the event that Schedule III is revised, the parties agree, in good
faith, to negotiate a revision of fees set forth in Schedule IV.
3. Transaction Charges.
Pershing or any Participating Correspondent shall not, during the term of
this Agreement, assess against, or collect from, Client/Shareholders, any
transaction fee upon the purchase or redemption of any Fund's shares that
meet the minimum purchase criteria set forth in this Agreement, except as
noted in Section 4 below. Client/Shareholder purchases not meeting the
criteria as set forth herein may be charged a transaction fee by the
Participating Correspondent or Pershing, as the case may be, and will not
be included in service fee invoices presented to Fund for payment.
4. Short Term Redemptions and Transfers
a. It is hereby understood that Pershing or Participating Correspondents
may apply a redemption fee for any short-term redemption of shares
purchased within specified time frames.
x. Xxxxxxxx or the Participating Correspondent, as the case may be,
reserves the right to apply a fee for the transfer of any Fund position
purchased within specified time frames.
5. Indemnification.
x. Xxxxxxxx shall indemnify and hold harmless each of the Funds, their
directors, officers, employees, and agents (hereinafter, "Indemnified
Parties") from and against any and all losses, claims, liabilities
and expenses (including, but not limited to, reasonable attorney's
fees) incurred by any of them and arising as a result of: (i)
Pershing's dissemination of information (oral or written) regarding
any Fund, that is materially incorrect and that was not provided to
Pershing, or approved by such Fund, the Fund or any of their
affiliated persons (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) (affiliates) or agents; or (ii)
Pershing's willful misconduct or negligence in the performance of, or
failure to perform, its obligations under this Agreement, except to
the extent the losses are a result of the negligence, willful
misconduct, or breach of this Agreement by an Indemnified Party or
(iii) the failure of Pershing to comply with any provision hereof or
the breach of any representation or warranty herein (including the
schedules hereto).
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x. Xxxxxxxx has obtained from each Participating Correspondent an
agreement with Pershing regarding the Program which contains the
following clause:
The Participating Correspondent shall indemnify and hold harmless
each of the Participating Funds, as identified on Schedule A as may
be amended from time to time, their directors, officers, employees,
and agents (hereinafter, "Indemnified Parties") from and against
any and all losses, claims, liabilities and expenses (including,
but not limited to, reasonable attorney's fees) incurred by any of
them and arising as a result of Participating Correspondents (i)
violation of any law, rule or regulation, including any related to
or in connection with the sale of Fund shares, (ii) dissemination
of information regarding any Fund, that is materially incorrect or
misleading and which was not provided in writing to Participating
Correspondent by such fund or approved in writing, or any of their
affiliated persons (as defined in the Investment company Act of
1940, as amended (the "1940 Act")) or (iii) Participating
Correspondents willful misconduct or negligence in the performance
of , or failure to perform, its obligations under this Agreement,
except to the extent the losses are a result of the negligence,
willful misconduct, or breach of the Agreement by an Indemnified
Party.
c. Fund hereby agrees to indemnify Pershing and Participating
Correspondents against any and all losses, claims, damages and
liabilities to which Pershing may become subject as a result of any
untrue or alleged untrue statement of a material fact contained in
the prospectus or statement of additional information, as amended or
supplemented from time to time, or the omission of a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The participating fund shall indemnify and
hold harmless Pershing and the Participating Correspondents and their
directors, officers, employees, and agents (hereinafter, "Indemnified
Parties") from and against any and all losses, claims, damages,
liabilities and expenses (including, but not limited to , reasonable
attorney's fees) incurred by any of them and arising as a result of
Participating Fund's (i) violation of any law, rule or regulation, at
common law or otherwise, including any related to or in connection
with the offering for sale of Fund shares, (ii) dissemination of any
information, advertising or promotional material regarding any Fund,
that is inaccurate or misleading and which was provided or generated
by the Fund or any of its affiliated persons (as defined in the
Investment Company of 1940, as amended (the "1940 Act")) or (iii)
willful misconduct or negligence in the performance of, or failure to
perform, its obligations pursuant to the underlying Service Agreement
between Participating Fund and the Pershing Division of Xxxxxxxxx,
Lufkin and Xxxxxxxx, except to the extent the losses are a result of
the negligence or willful misconduct of an Indemnified Party.
d. In any event, no party shall be liable for any special, consequential
or incidental damages.
e. In order that the indemnification provisions contained herein shall
apply, upon the assertion of a claim or loss for which any party
(the "Indemnitor") may be required to indemnify another party (the
"Indemnitee"), the Indemnitee shall promptly notify the Indemnitor of
such assertion or loss, and shall keep the
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Indemnitor advised with respect to all developments concerning any
such claim. The Indemnitor shall have the option to participate at
its expense with the Indemnitee in the defense of any such claim. The
Indemnitee shall in no case confess any claim or make any compromise
in any case in which the Indemnitor may be required to indemnify it
except with the Indemnitor's prior written consent.
f. This section 5 shall survive termination of this Agreement.
6. Role of Parties
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
within the meaning of the Securities Act of 1933, as amended, or the
Investment Company Act of 1940. This Agreement does not xxxxx Xxxxxxxx or
Participating Correspondents any right to purchase shares from any Fund
(although it does not preclude them from purchasing any such shares), nor
does it constitute Pershing or Participating Correspondent an agent of
the Fund for purposes of selling shares of any Fund to any dealer or to
the public. To the extent Pershing or Participating Correspondent is
involved in the purchase of shares of any Fund by Client/Shareholders,
such involvement will be as agent of such Client/Shareholders only.
7. Information to be provided
The Fund shall provide to Pershing, prior to the effectiveness of this
Agreement, or as soon thereafter as possible, a copy of the current
prospectus and statement of additional information for each Fund
participating in the program described herein. The Fund shall provide
Pershing with written copies of any amendments to, or changes in such
documents as soon as possible after such amendments or changes become
available.
8. Notices
All notices required under this Agreement (not including the Operating
Agreement, if any) must be in writing and delivered either personally or
via first class mail. Such notices will be deemed to be received as of
the date of actual receipt, or three (3) days after deposit, first class
postage prepaid, in the United States mail, whichever is earlier.
All such notices shall be made:
if to Pershing, to: Pershing Division of Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
with a copy to: Attention: General Counsel (at the same address);
if to the Fund, to the address as given below in the signature block, with a
copy to the Fund: Attention: General Counsel (at the same address).
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9. Nonexclusivity
Each Party acknowledges that the other may enter into agreements, similar
to this one, 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.
10. Assignability
This Agreement is not assignable by any party without the other party's
prior written consent. Any attempted assignment in contravention hereof
shall be null and void; provided, however, that Pershing or the Fund may
assign its rights and obligations under this Agreement to any affiliate.
11. Schedules.
All Schedules attached 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.
12. Entire Agreement--Amendment.
This Agreement (including the Schedules attached hereto), together with
the Operating Agreement, if any, constitute the entire agreement between
the parties with regard to the subject matter herein. Additionally, these
materials supersede any and all agreements, representations and
warranties, whether written or oral, made prior to the execution of this
Agreement . This Agreement and the Schedules attached hereto may be
amended only by a writing executed by each party to be bound by the
amendment.
13. Governing Law
This Agreement will be governed by, and interpreted under, the laws of
the State of New York as applied to contracts entered into and to be
performed entirely within that state.
14. Counterparts
This Agreement may be executed in one or more counterparts, each of which
will be deemed an original, but all of which together shall constitute
one instrument.
15. Effectiveness of Agreement--Termination.
a. This Agreement will become effective as to a Fund as of: (i) the date
set forth on Schedule I opposite the name of the Fund; or (ii) such
later date as Pershing may, in its discretion, designate.
b. This Agreement shall have an initial term of one (1) year after which
it may be terminated, as to one or more Funds (as reflected in
Schedule I), by either party (i) upon one hundred twenty (120) days
written notice to the other parties; or (ii) upon such shorter notice
as is required by law, order, or instruction from a court of
competent jurisdiction, regulatory body, or self-regulatory
organization with jurisdiction over the terminating party; or (iii)
automatically, effective on the day following termination of any plan
of distribution ("Rule 12b-1 Plan") adopted and maintained pursuant
to Rule 12b-1 under the 1940 Act by any fund that has a Rule 12b-1
Plan in effect as of the effective date of this Agreement, provided
that a portion of the Fee is paid pursuant to the Rule 12b-1 Plan.
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c. Upon termination as to a Fund, Fund will not be obligated to pay the
fee with respect to any shares of the Fund that become part of a
Pershing Client/Shareholders account after the date of such
termination. However, notwithstanding any such termination, the Fund
will remain obligated to pay Pershing the fee as to each share of
such fund that was considered when calculating the fee as of the
date of termination (a "Pre-Termination Share"), for so long as such
Pre-Termination Share is held in any Pershing brokerage account and
Pershing or Participating Correspondent continues to perform the
Services as to such shares. The Fund shall reimburse Pershing
promptly for any reasonable expenses Pershing incurs in effecting
any termination of this Agreement, including, but not limited to,
delivery to the Fund of any records, instruments, or documents
reasonably requested by the Fund.
16. Confidentiality
Each party acknowledges and understands that any and all technical, trade
secret, or business information, including, without limitation, financial
information, business or marketing strategies or plans, product
development or customer information, which is disclosed to the other or
is otherwise obtained by the other, its affiliates, agent or
representatives during the term of this Agreement (the "Proprietary
Information") is confidential and proprietary, constitutes trade secrets
of the owner, and is of great value and importance to the success of the
owner's business. Each party agrees to use its best efforts (the same
being not less than that employed to protect his own proprietary
information) to safeguard the Proprietary Information and to prevent the
unauthorized, negligent or inadvertent use or disclosure thereof. Neither
party shall, without the prior written approval of any officer of the
other, directly or indirectly, disclose the Proprietary Information to
any person or business entity except for a limited number of employees,
attorneys, accountants and other advisors of the other on a need-to-know
basis or as may be required by law or regulation. Each party shall
promptly notify the other in writing of any unauthorized, negligent or
inadvertent use or disclosure of Proprietary information. Each party
shall be liable under this Agreement to the other for any use or
disclosure in violation of this Agreement by its employees, attorneys,
accountants, or other advisors or agents. This section shall continue in
full force and effect notwithstanding the termination of this Agreement.
17. Custody
Fund acknowledges that Fund shares maintained by the Fund for
Client/Shareholders hereunder are held in custody for the exclusive
benefit of Client/Shareholders of Pershing or Participating
Correspondents and shall be held free of any right, charge, security
interest, lien or claim against Pershing or Participating Correspondents
in favor of the Fund or its agents acting on behalf of the Fund.
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IN WITNESS WHEREOF, duly authorized representatives of the parties hereto have
executed this Agreement.
Fund:______________________ Pershing Division of Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities
Corporation
By:__________________________ By:________________________________
Print Name:__________________ Print Name:________________________
Title:_______________________ Title:_____________________________
Address:
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Schedule I
Fund Name CUSIP Trading Symbol
--------- ----- --------------
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Schedule II
Operational Procedures Relevant to the Agreement
Unless processed using the NSCC FundServ and/or Networking interfaces in the
customary manner as prescribed by the NSCC, or as amended by mutual agreement
whether verbally or in writing, operational responsibilities will be executed as
outlined below in paragraphs (1), (2), and (3).
(1) Purchase and Redemption Orders
Pershing will aggregate and calculate purchase and redemption orders for shares
of a Fund that it has accepted as placed by Client/Shareholders prior to the
close of trading on the New York Stock Exchange, and will communicate to Fund
such orders for each Fund for each business day. Such orders will receive the
applicable Fund's closing net asset value for that business day, provided they
are communicated to Fund by 5:00 p.m. Eastern Time.
(2) Settlement of Trades
Both Pershing and Fund will use their best efforts to cause to be transmitted by
wire on the Business Day immediately following trade date (settlement date) to
an account as directed by the counterpart, the proceeds of all redemption orders
and the purchase price of all purchase orders.
(3) Account Activity and Distribution Information
(a) Fund shall cause to be provided to Pershing confirmations of Fund activity
in the form of statements detailing activity no less frequently than monthly, as
well as other information as may reasonably be requested by Pershing.
(b) Fund shall cause to be provided to Pershing all distribution announcement
information (ex dates, record dates, payable dates, distribution rate per share,
record date share balances, etc.) as soon as it is announced by each Fund.
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Schedule III
Schedule of services to be performed by Pershing or Participating
Correspondent(s) pursuant to this Agreement.
1. Pershing/Participating Correspondent represents and warrants that it has
and will continue at all times to have the necessary facilities, equipment
and personnel to perform the services hereunder in a businesslike and
competent manner and its system complies with any applicable laws, rules
and regulations related to the services to be provided under this
Agreement, including the maintenance and preservation of all records and
registrations required by any applicable laws, rules and regulations.
2. Client-Shareholders are aware that they are transacting business with
Pershing/Participating Correspondent and not the Fund, and will look to
Pershing/Participating Correspondent and not the Fund for resolution of
problems or discrepancies in their accounts.
3. Pershing/Participating Correspondent agrees that it will perform various
services for the Client-Shareholders in those accounts, including where
applicable:
Establishing and maintaining records of Client-Shareholders' accounts;
Processing purchase and redemption transactions;
Confirming Client-Shareholder transactions;
Answering routine client inquires regarding the Fund;
Assisting clients in changing dividend options, accounts
designations and addresses; withholding taxes on non-resident
alien accounts;
Disbursing income dividends and capital gains distributions;
Reinvesting dividends and distributions;
Preparing and delivering to Client-Shareholders and state and
federal authorities, including the United States Internal Revenue
Service, such information respecting dividends and distributions
paid by the Funds as may be required by law, rule or regulation;
Withholding on dividends and distributions as may be required by
state or Federal authorities from time to time;
And such other services as Fund may reasonably request.
Pershing/Participating Correspondent shall maintain all historical
Client-Shareholder records, consistent with requirements of all applicable
laws, rules and regulations. (a) Upon the request of the Fund, Pershing
shall provide copies of all the historical records relating to transactions
between the Funds and the Shareholders, written communications regarding
the Funds to or from the Shareholders and other materials, in each case (1)
as are maintained by Pershing in the ordinary course of its business, and
(2) as may reasonably be requested to enable the Fund including without
limitation its auditors or legal counsel to (A) monitor and review the
Services, (B) comply with any request of a governmental or self regulatory
organization, (C) verify compliance by Pershing with the terms of this
agreement, (D) make required regulatory reports, or (E) perform general
customer supervision. Pershing agrees that it will permit the Fund to have
reasonable access to its personnel and records in order
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to facilitate the monitoring of the services.(b)Upon the request of
Pershing, Fund shall provide copies of all the historical records relating
to transactions between the Funds and Pershing, written communications
regarding the Funds to or from Pershing and other materials, in each case
(1) as are maintained by the Fund in the ordinary course of its business
and in compliance with applicable law, and (2) as may be requested to
enable Pershing to (A) comply with the request of any governmental body or
self regulatory organization, (B) verify compliance by the Fund with the
terms of this Agreement, (C) make required regulatory reports, or (D)
perform general customer supervision.
4. Pershing/Participating Correspondent shall make available to Fund (if
requested) records or communications necessary to determine the number of
Client-Shareholders in each Pershing/Participating Correspondent omnibus
account, if applicable.
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Schedule IV
For performance of Services as outlined in Schedule III (attached hereto),
Pershing shall receive a service fee calculated as follows:
An annual service fee rate of 25 basis points of the average daily market value
of Program Shares, to be paid monthly upon receipt of invoice by the Fund from
Pershing. Total market value of Program Shares will be calculated daily and
averaged throughout the exact number of days in the month to arrive at the
average daily market value.
Payment shall be made by the Fund to Pershing within 30 days after Fund's
receipt of such invoice. Unless otherwise agreed to by Pershing and Fund, such
payment shall be by wire transfer and shall be separate from other wire transfer
payments from the fund to Pershing.
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