Exhibit (h)(64)
NETWORKING AGREEMENT
The undersigned hereby enters into this Agreement ("Agreement") this 28th day of
July, 2003.
WHEREAS, this Agreement is being executed by either (a) the transfer agent,
shareholder servicing agent and/or other agent ("Fund Agent") for certain
investment companies ("Funds"), or (b) an entity that engages in the purchase
and sale of shares of the Funds on behalf of its clients ("Firm");
WHEREAS, the Firm, certain introducing brokers of or other correspondents of the
Firm ("Correspondents"), and/or clients of the Firm or the Correspondents are
shareholders of the Funds ("Shareholders");
WHEREAS, the Firm and either the Funds or the Funds' principal underwriter or
other agent ("Underwriter") are members of the National Securities Clearing
Corporation ("NSCC") or otherwise have access to the NSCC's NETWORKING system
("NETWORKING") through a registered clearing agency;
WHEREAS, NETWORKING permits the transmission of Shareholder data between the
Firm and the Funds or the Underwriter pursuant to certain matrix levels
established by the NSCC or as modified by the agreement between the Firm and the
Fund Agent ("Matrix Levels");
WHEREAS, the Fund Agent, on behalf of the Funds and/or the Underwriter, and the
Firm desire to participate in NETWORKING with each other pursuant to one or more
Matrix Levels, as described in Exhibit A, attached hereto and incorporated
herein by reference;
WHEREAS, for purposes of this Agreement, the undersigned shall be the Fund; and
WHEREAS, this Agreement shall inure to the benefit of and shall be binding upon
the undersigned and each entity that has entered into a separate written
agreement to participate in NETWORKING with the undersigned, and each such
entity shall be a Firm, for purposes of this Agreement (the Fund Agent and the
Firm shall be collectively referred to herein as the "Parties" and individually
as a "Party").
NOW, THEREFORE, in consideration of the mutual covenants herein contained, which
consideration is full and complete, the Fund Agent and the Firm hereby agree as
follows:
I. OBLIGATIONS OF THE FUND AGENT
1. Transactions Subject to NETWORKING.
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For each Shareholder account opened or maintained pursuant to NETWORKING
("NETWORKING Accounts"), the Fund Agent shall accept, and effect changes in its
records upon receipt of, instructions, communications and actions from the Firm
electronically through NETWORKING without supporting documentation from the
Shareholder. The Fund Agent shall be responsible for processing any such
instructions, communications or actions from the Firm and for executing the
Firm's instructions in a timely manner.
2. Performance of Duties.
The Fund Agent shall perform any and all duties, functions, procedures and
responsibilities assigned to it pursuant to each Matrix Level and as otherwise
established by the NSCC from time to time. The Fund Agent shall maintain
facilities, equipment and skilled personnel sufficient to perform the foregoing
activities and to otherwise comply with the terms of this Agreement. The Fund
Agent shall conduct each of the foregoing activities in a businesslike and
competent manner and in compliance with (a) all applicable laws, rules and
regulations, including NSCC rules and procedures relating to NETWORKING; (b) the
then-current prospectuses and statements of additional information of the Funds;
and (c) any provision relating to NETWORKING in any agreement between the Firm
and the Underwriter that would affect the Fund Agent's duties and obligations
pursuant to this Agreement.
3. Accuracy of Information; Transmissions Through and Access to NETWORKING.
Any information provided by the Fund Agent to the Firm through NETWORKING
and pursuant to this Agreement shall be accurate, complete and, if through
NETWORKING, in the format prescribed by the NSCC. The Fund Agent shall adopt,
implement and maintain procedures reasonably designed to ensure the accuracy of
all transmissions through NETWORKING and to limit the access to, and the
inputting of data into, NETWORKING to persons specifically authorized by the
Fund Agent.
4. Tax Statements.
The Fund Agent shall provide to the Firm in a timely manner the information
regarding the Funds to be included in Shareholder tax statements for the period
during which each NETWORKING Account was maintained under Matrix Level 3 at any
time during a taxable year.
5. Notice of Prospectus and Statement of Additional Information Revisions.
The Fund Agent shall provide the Firm with reasonable notice of any
revisions to the Funds' prospectuses and statements of additional information
that the Fund Agent reasonably believes would affect the Firm's performance of
its duties and obligations pursuant to NETWORKING or this Agreement.
II.
III. II. OBLIGATIONS OF THE FIRM
1. Performance of Duties.
The Firm shall perform any and all duties, functions, procedures and
responsibilities assigned to it pursuant to each Matrix Level and as otherwise
established by the NSCC from time
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to time. The Firm, or the Firm's Correspondents on behalf of the Firm, shall
maintain facilities, equipment and skilled personnel sufficient to perform the
foregoing activities and to otherwise comply with the terms of this Agreement.
The Firm shall conduct each of the foregoing activities in a businesslike and
competent manner and in compliance with (a) all applicable laws, rules and
regulations, including NSCC rules and procedures relating to NETWORKING, and, if
the Firm is a member of the National Association of Securities Dealers, Inc.
("NASD"), the NASD Conduct Rules; (b) the then-current prospectuses and
statements of additional information of the Funds; and (c) any provision
relating to NETWORKING in any agreement between the Firm and the Underwriter
that would affect the Firm's duties and obligations pursuant to this Agreement.
2. Accuracy of Information; Transmissions Through and Access to NETWORKING.
Any information provided by the Firm to the Fund Agent through NETWORKING
and pursuant to this Agreement shall be accurate, complete and, if through
NETWORKING, in the format prescribed by the NSCC. All instructions,
communications and actions by the Firm regarding each NETWORKING Account shall
be true and correct and will have been duly authorized by the Shareholder. The
Firm shall adopt, implement and maintain procedures reasonably designed to
ensure the accuracy of all transmissions through NETWORKING and to limit the
access to, and the inputting of data into, NETWORKING to persons specifically
authorized by the Firm.
3. Information Relating to NETWORKING Accounts.
For each NETWORKING Account, the Firm, or the Firm's Correspondents on
behalf of the Firm, shall provide the Funds and the Fund Agent with all
information necessary or appropriate to establish and maintain each NETWORKING
Account (and any subsequent changes to such information) which the Firm hereby
certifies, to the best of the knowledge of the Firm or the Firm's
Correspondents, is and shall remain true and correct. The Firm, or the Firm's
Correspondents on behalf of the Firm, shall comply in all respects with any and
all applicable obligations relating to withholding pursuant to the Internal
Revenue Code of 1986, as amended ("Code") and shall promptly advise the Funds or
the Fund Agent of any matter that may affect the responsibilities of the Funds
or the Fund Agent to Shareholders pursuant to the Code. The Firm, or the Firm's
Correspondents on behalf of the Firm, shall maintain adequate documentation to
verify the relevant information regarding each NETWORKING Account.
4. Shareholder Instructions Regarding NETWORKING Accounts.
Unless otherwise prohibited by law, upon receipt of appropriate
instructions from a Shareholder (including instructions from the Firm's
Correspondents, the Funds or the Fund Agent that were received from the
Shareholder), the Firm shall promptly execute the Shareholder's instructions to
terminate the maintenance of the Shareholder's account through NETWORKING or to
effect changes regarding the Matrix Levels utilized by the Shareholder in
accordance with the Shareholder's instructions; provided, however, that the Firm
shall be required to terminate the maintenance of a Shareholder's account
through NETWORKING only if the Shareholder has paid for all shares of the Funds
in its NETWORKING Account ("Fund Shares") and the Shareholder does not have any
obligation, arising out of a margin account or otherwise, to the Firm with
respect to the Fund Shares.
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5. Firm's Financial Condition.
Each Firm that is not a member of the NASD shall deliver to the Fund Agent
such financial statements as the Fund Agent reasonably requests concerning the
Firm's financial condition; such statements shall fairly represent the Firm's
financial condition as of the date thereof. The transmission by any such Firm of
any instruction, communication or action through NETWORKING shall constitute a
representation that there has been no material adverse change in the Firm's
financial condition that would affect the Firm's ability to perform its duties
and obligations pursuant to NETWORKING or this Agreement. Any such material
adverse change in the Firm's financial condition shall be promptly disclosed in
writing to the Fund Agent.
6. Shareholder Reports and Other Documents; Solicitation of Proxies.
The Firm shall timely deliver to each Shareholder all reports and other
documents provided to it by the Funds or the Fund Agent as are required by
applicable law and the applicable Matrix Level, provided that the Firm has
timely received sufficient copies of such reports and/or documents. Subject to
receipt by the Fund Agent of such supporting documentation as it may reasonably
request, the Fund Agent or its agent shall reimburse the Firm for all reasonable
out-of-pocket expenses incurred by the Firm in mailing all such reports and/or
documents. The Fund Agent and the Firm shall cooperate with each other in the
solicitation of proxies on behalf of the Funds. For each NETWORKING Account
maintained under Matrix Level 3 on a Fund's record date, the Firm shall permit
each Shareholder, upon the Shareholder's request, to directly vote such
Shareholder's Fund Shares in connection with any solicitation of proxies on
behalf of the Funds.
7. Tax Statements.
All information that is timely received by the Firm from the Funds or the
Fund Agent for inclusion in Shareholder tax statements relating to the period
during which a NETWORKING Account was maintained under Matrix Level 3 in a
taxable year shall be reported to Shareholders accurately, completely and in a
timely manner.
8. Cash Dividends.
For each NETWORKING Account maintained under a Matrix Level in which cash
dividends are received by the Firm from the Funds or the Fund Agent for payment
to Shareholders, the Firm shall be solely responsible for ensuring that all cash
dividends received by the Firm are paid to Shareholders in a timely manner. As
among the Funds, the Fund Agent and the Firm, the Firm shall be solely
responsible for any liabilities arising from such cash dividend payments
reported by Shareholders as lost, stolen, materially altered, or forged.
IV. III. INDEMNIFICATION
1. Fund Agent.
The Fund Agent shall indemnify and hold harmless the Firm, each of the
Firm's affiliated companies, and all of the divisions, subsidiaries, directors,
officers, agents, employees and assigns of each of the foregoing (collectively,
"Indemnified Firm Parties"), against and from any
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and all demands, damages, liabilities, and losses, or any pending or completed
actions, claims, suits, complaints, proceedings, or investigations (including
reasonable attorneys fees and other costs, including all expenses of litigation
or arbitration, judgments, fines or amounts paid in any settlement consented to
by the Fund Agent) to which any of them may be or become subject as a result or
arising out of (a) any negligent act or omission by the Fund Agent or its agents
relating to NETWORKING; (b) any breach of the Fund Agent's representations or
warranties contained in this Agreement; (c) the Fund Agent's failure to comply
with any of the terms of this Agreement; or (d) the Firm's acceptance of any
transaction or account maintenance information from the Fund Agent through
NETWORKING. The Fund Agent represents and warrants that at all times it has
sufficient financial resources, whether through a fidelity bond or otherwise, to
meet all of its indemnification obligations arising under this Agreement.
2. Firm.
The Firm shall indemnify and hold harmless the Funds, the Funds' custodian,
the Funds' underwriter, the Funds' investment adviser, the Fund Agent, the
Funds' transfer agent/shareholder servicing agent, each of their affiliated
companies, and all of the divisions, subsidiaries, directors, officers, agents,
employees and assigns of each of the foregoing (collectively, "Indemnified Fund
Parties"), against and from any and all demands, damages, liabilities, and
losses, or any pending or completed actions, claims, suits, complaints,
proceedings, or investigations (including reasonable attorneys fees and other
costs, including all expenses of litigation or arbitration, judgments, fines or
amounts paid in any settlement consented to by the Firm) to which any of them
may be or become subject as a result or arising out of (a) any negligent act or
omission by the Firm, the Firm's Correspondents, or their agents relating to
NETWORKING; (b) any breach of the Firm's representations or warranties contained
in this Agreement; (c) the failure of the Firm or the Firm's Correspondents to
comply with any of the terms of this Agreement; or (d) the Fund Agent's
acceptance of any transaction or account maintenance information from the Firm
through NETWORKING. The Firm represents and warrants that at all times it has
sufficient financial resources, whether through a fidelity bond or otherwise, to
meet all of its indemnification obligations arising under this Agreement.
3. Notice and Opportunity to Defend.
If any action, suit, proceeding, or investigation is initiated, or any
claim or demand is made, against any Party indemnified heretby with respect to
which such Party ("Indemnified Party") may make a claim against any other Party
hereto ("Indemnifying Party") pursuant to this Section III, then the Indemnified
Party shall give prompt written notice of such action, suit, proceeding,
investigation, claim or demand to the Indemnifying Party. Thereafter, the
Indemnifying Party shall have the opportunity, at its own expense and with its
own counsel, to defend or settle such action, suit, proceeding, investigation,
claim or demand; provided, however, that: (a) the Indemnifying Party shall keep
the Indemnified Party informed of all material developments and events relating
to such action, suit, proceeding, investigation, claim or demand; (b) the
Indemnified Party shall have the right to participate, at its own expense in the
defense of such action, suit, proceeding, investigation, claim or demand and
shall cooperate as reasonably requested by the Indemnifying Party in the defense
thereof; and (c) the Indemnifying
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Party shall not settle such action, suit, proceeding, investigation, claim or
demand without the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld.
V. IV. MISCELLANEOUS
1. Effective Date of Agreement.
This Agreement shall become effective on the date first above written. A
fully executed copy of this Agreement must be provided to the NSCC.
2. NSCC Provisions.
NSCC rules and procedures relating to NETWORKING shall govern any matter in
which any provision contained in this Agreement conflicts with any such NSCC
rule or procedure; provided however, this Paragraph 2 shall not prohibit
modifications to the NSCC's standard Matrix Levels that are agreed to by the
Parties.
3. Conversion to NETWORKING.
If the Firm, as part of its conversion to NETWORKING, requires that
outstanding certificates be deposited with any of the Funds or that street name
house accounts be divided into individual accounts, the Firm shall submit to the
Fund Agent a "Conversion Plan" and shall obtain prior written consent from the
Fund Agent for the Conversion Plan. The Conversion Plan shall detail volumes for
certificates or individual accounts, procedures for processing, documentary
requirements, procedures and reasonable time frames for resolving discrepancies,
and such other matters, including the classes of shareholder accounts eligible
for NETWORKING, ongoing procedures for the entry and removal of individual
accounts to and from NETWORKING, and changes with respect to the Matrix Levels
utilized by a Shareholder, as may be agreed to by the Parties. The Fund Agent
will assist the Firm in formulating the Conversion Plan.
4. Reconciling to Fund Records.
The official records of each NETWORKING Account shall be as determined by
the Fund Agent. For all Matrix Levels in which the Firm also maintains
Shareholder records regarding the Funds, the Firm and the Fund Agent shall
reconcile any differences between the Firm's records and the Fund Agent's
records. The Firm and the Fund Agent shall each designate liaison personnel to
communicate, control and execute any required corrections or reconciliations
with respect to any NETWORKING Account. In the event of any discrepancy between
the records of the Firm and the Fund Agent regarding a NETWORKING Account, the
records of the Fund Agent shall control pending resolution of the discrepancy.
5. Fund Shares Held on Behalf of Firm Clients.
All Fund Shares held by the Firm on behalf of a client of the Firm or the
Firm's Correspondents shall be carried in a custody account for the exclusive
benefit of clients of the
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Firm or the Firm's Correspondents and shall not be subject to any right, charge,
security interest, lien or other claim against the Firm in favor of the Funds or
the Fund Agent.
6. Overpayments to the Firm.
In the event any overpayment is made to the Firm by the Fund Agent, the
Firm shall promptly repay such overpayment to the Fund Agent, but in no event
more than fifteen (15) days after the Firm receives notice of such overpayment.
If any overpayment is not timely repaid to the Fund Agent, the Firm authorizes
the Fund Agent, the Funds, or any of their affiliates, to offset any such
overpayment against any funds otherwise payable to the Firm for the Firm's own
account by the Fund Agent, the Funds or their affiliates, including, without
limitation, commissions and service fees; provided, however, that an overpayment
to the Firm shall not be subject to such offset if the overpayment was the
result of an error or other negligent act or omission on the part of the Funds
or the Fund Agent; and provided further, that the Firm shall not be required to
repay, out of its own funds, an overpayment forwarded to a Shareholder that is a
client of the Firm or the Firm's Correspondents, and the Firm shall instead
provide the Fund Agent with the name and address of such client, if (a) the
overpayment to the Firm is not the result of an error or other negligent act or
omission on the part of the Firm or a Correspondent, and (b) such client is no
longer a Shareholder of any Fund.
7. Termination.
Either the Fund Agent or the Firm may terminate this Agreement with the
other Party by written notice to that Party. Commencing from the date of receipt
of such notice ("Notification Date"), the Fund Agent and the Firm shall proceed
with the termination of this Agreement in accordance with the following schedule
unless otherwise agreed to by the Parties: (a) the opening of new NETWORKING
Accounts shall cease within thirty (30) days of the Notification Date; (b) a
plan which sets forth the procedures that must be followed to effect the
termination of this Agreement ("Unwinding Plan") must be agreed upon by the
Parties within sixty (60) days of the Notification Date; (c) the Unwinding Plan
must be fully implemented within ninety (90) days of the Notification Date; and
(d) the Unwinding Plan must be fully completed within one hundred eighty (180)
days of the Notification Date. The obligations of the Parties under Section III
of this Agreement shall survive any termination hereof with respect to any
transactions occurring, or circumstances arising out of any information provided
or omitted, or other actions or omissions to act, before the effective date of
any termination hereof. Termination of this Agreement with respect to a Party
shall not constitute termination of the Agreement with respect to any other Fund
Agent or Firm, as applicable.
8. Conflicting Agreements.
Except with respect to the provisions of this Agreement contained in
Paragraphs 3, 12 and 13 of this Section IV, any provision of any agreement or
other understanding between the Fund Agent and the Firm relating to NETWORKING
that is inconsistent with this Agreement shall be null and void. Nothing
contained in this Agreement, however, shall be construed to limit or restrict
either Party's compliance with any law, regulation or order to which the Party
is subject or to prevent the Parties from supplementing this Agreement by
agreeing to additional
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duties, obligations, representations, warranties and/or higher standards of care
with respect thereto.
9. Firm Not Acting as Agent.
In the performance of its duties and obligations pursuant to NETWORKING and
this Agreement, the Firm shall not act, or be deemed to act, on behalf of or as
an agent for the Funds, the Fund Agent or the Underwriter.
10. Assignment.
Neither the Fund Agent nor the Firm may assign this Agreement without the
prior written consent of the other Party, and any attempted assignment without
such consent shall be null and void; provided, however, a change in control of
either Party shall not constitute an assignment of this Agreement.
11. Headings; Entire Agreement.
The paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. This Agreement, including any document explicitly incorporated
herein by reference and any written supplemental agreement between the Fund
Agent and the Firm, shall contain the full understanding of the Parties with
respect to the subject matter hereof and shall supersede any other previous
agreement or understanding of the Parties relating thereto. No waiver,
alteration or modification of any of the provisions hereof shall be binding
unless in writing and signed by duly authorized representatives of the Fund
Agent and the Firm. Neither the course of conduct between the Parties nor trade
usage shall act to modify or alter the provisions of this Agreement.
12. Law.
This Agreement shall be governed by and its provisions shall be construed
in accordance with the laws of the State of New York. New York City shall be the
proper venue for resolution of any and all disputes arising hereunder.
13. Arbitration.
In the event of a dispute between the Fund Agent and the Firm with respect
to this Agreement, and in the event the Parties are unable to resolve the
dispute between them, such dispute shall be settled by arbitration in accordance
with the then-existing NASD Code of Arbitration Procedure ("NASD Code"). The
Parties agree that, to the extent permitted by the NASD Code, the arbitrator(s)
shall be selected from the securities industry.
14. Severability.
If any provision of this Agreement is held to be invalid, the remaining
provisions of the Agreement shall continue to be valid and enforceable.
15. Notice.
Any notice required or permitted hereunder shall be in writing and shall be
given by personal service, mail, telex, or facsimile to the other Party at such
address as a Party may specify
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by written notice to the other. Notice shall be effective upon receipt if by
mail, on the date of personal delivery (by private messenger, courier service or
otherwise), or upon receipt of telex or facsimile, whichever occurs first.
16. Waiver.
The failure of a Party to insist upon strict adherence to any provision of
this Agreement on any occasion shall not be considered a waiver nor shall it
deprive such Party of the right thereafter to insist upon strict adherence to
that provision or any other provision of this Agreement. Any waiver must be in
writing signed by the waiving Party.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
ATTEST:
/s/ Xxxx Xxxxxxxxx
---------------------------------------
By: Xxxx Xxxxxxxxx
Title: Authorized Signature
One Group Dealer Services, Inc.
By: /s/ Xxxxxx X. Xxxxx
Title: Vice President
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EXHIBIT A
1. Matrix
Elements Level
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1 2 3 4
(a) Reporting Responsibilities XXX CUST BRKR FUND
---------------------------------------------------------
Trade Confirmations B B B F
---------------------------------------------------------
Statements B B B F
---------------------------------------------------------
Tax Reporting F F B F
---------------------------------------------------------
Shareholder Privileges
---------------------------------------------------------
Direct Purchase Y Y N Y
---------------------------------------------------------
Direct Liquidations N Y N Y
---------------------------------------------------------
Direct Exchange Y Y N Y
---------------------------------------------------------
Systematic Xxxxxxxxxxx X X X X
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Xxxxx Xxxxxxx X C B C
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Legend: B = Broker; C = Custodian; F = Fund; N = No; Y = Yes
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Level 1 - XXX/Margin Accounts Level 3 - Broker Controlled
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.. Brokers assume primary . Brokers assume total
responsibility for client responsibility for client
communication. communication.
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.. Clients are prohibited from going . Clients deal only with brokers
directly to funds to authorize and have no direct contact with
any outflow of money; other funds.
client activities (Direct
Purchase, Liquidations,
Exchanges, Systematic Withdrawals
and Payee Changes) are not
restricted.
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.. Brokers issue confirms and . Funds have no direct contact with
statements. clients.
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.. Funds are responsible for all tax
reporting except wire order
liquidations.
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Level 4 - Fund Controlled
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Level 2 - Customer Name
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. Funds assume primary
responsibility for client
communication.
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.. Brokers assume primary . Brokers may also issue
responsibility for client statements.
communication.
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.. Client transactions with funds . Clients can deal directly with
are not restricted. funds or brokers.
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.. Brokers issue confirms and
statements.
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.. Funds provide some client support
including tax reporting
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