Exhibit 99.8.59
PRINCIPAL FUNDS DISTRIBUTOR, INC.
SELLING AGREEMENT
This Selling Agreement (the "Agreement") is made and entered into as of
this 22nd day of March, 2017, between Principal Funds Distributor, Inc.
("Principal"), a Washington corporation having a place of business at 000
Xxxxxxxx Xx., Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 and the undersigned
counterparty ("Counterparty").
WHEREAS, each investment company, or investment portfolio or series
thereof, for which Principal acts as distributor (each a "Fund" and jointly the
"Funds") is a management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), or an investment portfolio or
series thereof, offers shares or units of beneficial interest for which
Principal has been, or shall have been, designated as principal underwriter;
WHEREAS, each Fund has entered into one or more distribution agreements
with Principal (the "Distribution Agreement") for the distribution by Principal
of those shares of the Funds listed in Schedule A of this Agreement (the
"Shares"). To the extent provided in the Prospectus, certain classes of Shares
may also be subject to a distribution plan ("Distribution Plan") adopted
pursuant to Rule 12b-1 under the 1940 Act;
WHEREAS, Counterparty desires to agree with Principal to sell the Shares,
as the same may from time to time be amended by Principal by written notice to
Counterparty, to certain clients of Counterparty ("Clients");
WHEREAS, Principal and Counterparty desire to provide for the payment of
sales loads, commissions, distribution fees and/or shareholder service fees to
Counterparty with respect to sales of Shares and related shareholder services,
in accordance with the applicable Prospectus (defined below) and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is hereby agreed by and between the parties hereto as follows:
1. Definition of Terms. As used herein, the term "Prospectus" means the
then current prospectus and, unless the context otherwise requires,
related statement of additional information ("XXx"), as the same are
amended and supplemented from time to time, of each of the
respective Funds and each of the respective classes of Shares of the
respective Funds; the term "Business Day" means any day on which the
New York Stock Exchange ("NYSE") is open; the term "Market Close"
means the close of regular trading on the NYSE on a Business Day,
which close is generally 4:00 p.m. Eastern time; and the term
"principal underwriter" has the definition provided in the 1940 Act.
2. Counterparty shall sell Shares that are now or hereafter available
for sale to Clients, and Counterparty will be responsible for proper
instruction and training of sales personnel employed by
Counterparty. Counterparty understands and agrees that the Shares
can only be sold to eligible purchasers as indicated in the
Prospectus. Counterparty understands and agrees that, if R class
Shares are covered by this Agreement, X-0, X-0, X-0, X-0, X-0 and
R-6 class Shares are for sale to employee benefit plans ("Plans").
Counterparty shall be responsible for opening, approving and
monitoring accounts for its
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Clients that purchase Shares and for the review and supervision of
these accounts, all in accordance with the rules of the Securities
and Exchange Commission ("SEC") and the NASD Conduct Rules of the
Financial Industry Regulatory Authority ("FINRA") to the extent
applicable to each account. This Agreement does not grant
Counterparty any right to purchase Shares from the Fund (although it
does not preclude Counterparty from purchasing any such Shares for
which Counterparty is an eligible purchaser), nor does it constitute
Counterparty an employee or agent of Principal or any Fund for any
purpose.
3. Subject to the terms of the Prospectus, all orders for the purchase
of Shares of the Funds shall be executed at the then current public
offering price per Share (i.e., the next determined net asset value
per Share plus any applicable sales charge), determined in
accordance with the provisions of the Prospectus. All orders for the
redemption of Shares of the Funds shall be executed at the
redemption price (i.e., the net asset value per Share less any
applicable contingent deferred sales charge) determined in
accordance with the provisions of the Prospectus. The minimum
initial purchase order shall be as set forth in the appropriate
Prospectus. Unless otherwise mutually agreed in writing between
Principal and Counterparty, each transaction for Shares shall be
promptly confirmed in writing by the transfer agent to the
registered holder of the Shares. To the extent Counterparty receives
a copy of confirmations of transactions, Counterparty agrees that
upon receipt of such confirmations, Counterparty shall examine the
same and promptly notify the transfer agent of any errors or
discrepancies that Counterparty discovers. Counterparty shall
promptly bring to the attention of the transfer agent any errors in
such confirmations claimed by any Clients.
4. The Funds and Principal have each reserved the right to refuse at
any time or times to sell any of the Shares for any reason, and the
Funds and Principal have each reserved the right to refuse at any
time to accept an order for purchase of Shares for any reason.
Counterparty agrees that it has not relied and will not rely on any
representations regarding the Funds other than those contained in
the Prospectus of the relevant Fund. Counterparty agrees that
Counterparty shall not offer or sell any Shares, except in
compliance with the Prospectus, the NASD Conduct Rules of FINRA, the
USA PATRIOT Act of 2001, as amended (the "Patriot Act") and all
applicable federal and state laws and the rules and regulations of
applicable regulatory agencies or authorities including, but not
limited to, in the case of offers made to or through Plans, any
written directives of the sponsor of such Plan, and in the case of
an account intended to qualify under Section 408 of the Internal
Revenue Code of 1986, as amended (the "Code"), any written
directives of the owner or beneficiary of such account, and in the
case of an account intended to qualify under Section 530 of the Code
or Section 220 of the Code, the individual designated in the
agreement as responsible for investment decisions. In connection
with offers to sell, and sales of, Shares, Counterparty agrees to
timely deliver or cause to be delivered to each Client or beneficial
owner, to the extent required, to whom any offer or sale is made, at
or prior to the time of such offer or sale, a copy of the relevant
Prospectus, and upon request, the relevant XXx, all in compliance
with applicable laws and regulations.
Unless otherwise mutually agreed in writing between Principal and
Counterparty, Principal shall deliver or cause to be delivered to
each Client that purchases Shares through Counterparty and is a
registered holder of Shares in the records of the Funds,
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copies of all annual and interim reports, proxy solicitation
materials and any such other information and materials relating to
the relevant Fund or class of Shares thereof and prepared by or on
behalf of Principal, a Fund, its investment adviser, investment
sub-adviser, custodian, transfer agent or dividend disbursing agent
for the purpose of distribution to such Client. Principal agrees to
supply Counterparty with copies of the Prospectus, annual reports,
interim reports, proxy solicitation materials and any such other
information and materials relating to each Fund and each class of
Shares in reasonable quantities upon request. Counterparty
acknowledges that any materials or information that Principal
furnishes to Counterparty, other than Prospectuses, annual and
interim reports to shareholders and proxy solicitation materials
prepared by the Fund, are the sole responsibility of Principal and
not the responsibility of the Fund.
Counterparty further agrees to obtain for each Client (including
each Plan participant) to whom Counterparty sells Shares any
taxpayer identification number certification required under Section
3406 of the Code or any successor provision, and the regulations
thereunder, and to implement any required backup withholding in
accordance with Section 3406 of the Code or any successor provision
and the regulations thereunder. Counterparty is responsible for
Counterparty's compliance with all applicable tax laws, rules and
regulations governing Counterparty's performance under the
Agreement.
5. Counterparty shall not make any representation concerning any Shares
or class of Shares other than those contained in the relevant
Prospectus or in any promotional materials or sales literature
furnished to Counterparty by Principal. Counterparty shall not
furnish, or cause to be furnished, to any person, or display or
publish, or cause to be displayed or published, any information or
materials relating to Principal, an affiliated advisor of Principal,
any Fund or class of Shares (including, without limitation,
promotional materials and sales literature, advertisements, press
releases, announcements, statements, posters, signs, correspondence
or other similar materials), except such information and materials
as may be furnished to Counterparty by Principal and such other
information and materials as may be approved in writing by Principal
prior to use by Counterparty. Rather than requiring Counterparty to
submit all such information and materials to Principal for review,
Counterparty will submit to Principal for review samples of the
kinds of information and materials, and the consent by Principal
need only be obtained once with respect to future use of such
information and materials if future versions are not materially
changed in terms of how information and materials about Principal,
its affiliate, any Fund or class of Shares are presented. And
provided that Counterparty will not use such information or
materials without then current performance information to the extent
such updating would be necessary. Counterparty acknowledges that
Clients choosing between classes should carefully consider the fee
structures of the classes in order to determine the most appropriate
investment class. Counterparty is solely responsible for determining
whether a Fund, and which Share class of that Fund, is suitable for
Counterparty's Client.
6. Each exchange of Shares (the investment of the proceeds from the
redemption of Shares of one class of a Fund into the Shares of
another class of the same Fund or the same or another class of
another Fund) shall, where available, be made in accordance with,
and subject to, the terms of the Prospectus, including the right of
a Fund to suspend sales.
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7. The procedures relating to orders and the handling thereof will be
subject to the terms of the Prospectus and to instructions received
by Counterparty from Principal or the Funds' transfer agent from
time to time. No conditional orders will be accepted. Except as may
otherwise be agreed in writing by Counterparty and Principal, all
orders will be processed on the Business Day they are received in
proper form by the transfer agent, except that orders received by
the transfer agent after Market Close on each Business Day will be
processed on the following Business Day. Receipt of orders in
"proper form" means received in "good order" according to industry
standards as reasonably determined by Principal. Counterparty agrees
that purchase orders placed by Counterparty will be made only for
the purpose of covering purchase orders already received from
Clients. In the event that Counterparty makes purchases of Shares on
behalf of a third-party securities dealer or broker ("Third-Party
Selling Agent"), Counterparty agrees that it shall be responsible
for any and all acts or omissions of the Third-Party Selling Agent,
including without limitation any obligation with respect to
determining the suitability of transactions for the Client, as if
such acts or omissions were its own. Counterparty shall place
purchase orders from Clients with the transfer agent immediately and
shall not withhold the placement of such orders so as to profit
Counterparty; provided, however, that the foregoing shall not
prevent the purchase of Shares by Counterparty for bona fide
investment by Counterparty itself, and provided further that any
Shares purchased for Counterparty's bona fide investment will not
be resold except through redemption by the Funds. Counterparty
agrees that it shall not effect any transactions (including, without
limitation, any purchases and redemptions) in any Shares registered
in the name of, or beneficially owned by, any Client unless such
Client has granted Counterparty full right, power and authority to
effect such transactions on behalf of such Client.
8.
8.1 Except to the extent caused by Principal's negligence or
willful misconduct, Counterparty will indemnify and hold
harmless Principal, the Funds and all of their affiliates, and
their officers, directors, employees, agents, and assignees
against all losses, claims, demands, liabilities, and
expenses, including reasonable legal and other expenses
incurred in defending such claims or liabilities, whether or
not resulting in any liability to any of them, or which they
or any of them may incur, including but not limited to alleged
violations of the Securities Act of 1933, as amended and/or
the Securities Exchange Act of 1934, as amended ("Losses"),
arising out of or in connection with: (i) Counterparty's
offer or sale of any securities pursuant to this Agreement; or
(ii) Counterparty's breach of any representations,
warranties, terms or conditions of this Agreement, other than
any Losses arising from any untrue statement or alleged untrue
statement of material fact contained in a Prospectus or in any
application filed with any state regulatory agency in order to
register or qualify under the securities laws thereof (the
"Blue Sky Applications"), or which shall arise out of or be
based upon any omission or alleged omission to state therein a
material fact required to be stated in the Prospectus or any
of the Blue Sky Applications or which is necessary to make the
statements or a part thereof not misleading.
8.2 Except to the extent caused by Counterparty's negligence or
willful misconduct, Principal will indemnify, defend and hold
harmless Counterparty and all of its
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affiliates, and their officers, directors, employees, agents,
and assignees against all Losses, arising out of or in
connection with: (i) Principal's breach of any
representations, warranties, terms or conditions of this
Agreement; or (ii) any untrue statement or alleged untrue
statement of a material fact contained in a Prospectus, or in
any Blue Sky Application, or which shall arise out of or be
based upon any omission or alleged omission to state therein a
material fact required to be stated in the Prospectus or any
of the Blue Sky Applications or which is necessary to make the
statements or a part thereof not misleading.
8.3 In any event, no party shall be liable for any special,
consequential or incidental damages.
8.4 The indemnification obligations contained in this Section 8
shall survive the termination of this Agreement.
9.
9.1 Counterparty agrees that payment for orders from Counterparty
for the purchase of Shares will be made in accordance with the
terms of this Agreement and the Prospectus.
9.2 On or before the settlement date of each purchase order of
Shares, Counterparty shall either (i) remit to an account
designated by Principal with the transfer agent an amount
equal to the then current public offering price of such Shares
being purchased, less any dealer allowance, if any, that shall
be payable by Principal to Counterparty with respect to such
purchase order as determined by Principal in accordance with
the terms of the Prospectus; or (ii) remit to an account
designated by Principal with the transfer agent an amount
equal to the then-current public offering price of such Shares
as determined by Principal in accordance with the terms of the
applicable Prospectus, in which case the dealer allowance, if
any, with respect to such purchase order, as determined by
Principal in accordance with the terms of the Prospectus,
shall be payable to Counterparty within one month of
Counterparty's remittance. If payment for any purchase order
for the Shares is not received in accordance with the terms of
the Prospectus, this Agreement and applicable law (and, in the
case of Institutional Class, Class X-0, X-0, X-0, X-0, X-0,
R-6 and Class P Shares, within one (1) Business Day after
acceptance of the order, if any such Share classes are covered
by this Agreement), Principal and the Funds reserve the right,
without notice, to cancel the sale or redeem the Shares
ordered, and Counterparty shall be responsible for any loss
sustained as a result thereof. Principal and the Funds reserve
the right to change any sales charge, dealer allowance and/or
service fee by supplementing or otherwise revising the
Prospectus or XXx, as applicable.
9.3 If any Shares sold under the terms of this Agreement are
tendered for redemption within seven (7) Business Days after
confirmation of Counterparty's purchase order for such
Shares, or if Shares that would otherwise be subject to a
contingent deferred sales charge are redeemed in a transaction
on which such contingent deferred sales charge is waived,
Counterparty shall forthwith refund to Principal
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the full dealer allowance or sales commission received by
Counterparty on the sale of such Shares.
9.4 In addition to the fees set forth above in this Section 9,
Principal agrees, subject to the other terms and conditions of
the Prospectus, this Agreement and any attached schedule, to
pay Counterparty a service fee, and Counterparty agrees to
accept the same as full payment for the services undertaken by
it as described in this Agreement, accrued daily and payable
monthly as set forth in the Prospectus or SAI. Counterparty
acknowledges that such fee will be paid solely from monies
received by Principal under the Distribution Agreement entered
into pursuant to the respective Distribution Plan;
accordingly, any obligation of Principal to pay Counterparty
any service fee shall not arise unless and until Principal
receives from the relevant Fund monies intended to be used by
Principal for such purpose and in amounts sufficient for such
purpose. Under the Distribution Plans, each Fund is authorized
to make expenditures of Fund assets for various distribution
and support services. Counterparty understands and agrees that
(i) all service fees are subject to the limitations contained
in the Distribution Agreement and the respective Distribution
Plans, which may be amended or terminated at any time, and
(ii) Counterparty's failure to provide services as agreed in
this Agreement will render Counterparty ineligible to receive
service fees.
9.5 Any sales charge applicable to any sale of Shares by
Counterparty and any dealer discount applicable to any order
from Counterparty for the purchase of Shares accepted by
Principal or transfer agent shall be that percentage of the
applicable public offering price determined as set forth in
the Funds' then current Prospectus and/or SAI. The rates of
any sales charge and/or dealer discount for Shares are
subject to change by Principal, and any orders placed after
the effective date of such change will be subject to the
rate(s) in effect at the time of receipt of the purchase
payment by Principal.
9.6 In determining the amount of any dealer allowance or sales
commission payable to Counterparty hereunder, Principal
reserves the right to exclude any sales which Principal
reasonably determines are not made in accordance with the
terms of the applicable Prospectus and the provisions of this
Agreement. Counterparty shall be solely responsible for
identifying to Principal or transfer agent any orders which
are or may be eligible for reductions in or eliminations of
sales charges in accordance with the Prospectus. Unless, at
the time of transmitting an order, Counterparty advises the
transfer agent to the contrary in writing, such transmission
will be deemed a representation by Counterparty that the
Shares ordered will be the total holdings of the Client for
whom the order is transmitted. In each case where a sales
charge reduction or elimination is applicable, Counterparty
agrees to furnish to the transfer agent sufficient information
to permit confirmation of qualification for the sales charge
reduction or elimination, and acceptance of the order is
subject to such confirmation. Sales charge reductions or
eliminations may be modified or terminated at any time at the
sole discretion of each Fund.
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9.7 Termination or cancellation of this Agreement shall not
relieve Counterparty from the requirements of this Section 9.
10.
10.1 Counterparty agrees to provide distribution assistance and
administrative support services in connection with the
purchase, exchange and redemption of Shares by Clients
including, but not limited to, distributing sales literature,
answering routine telephone or written Client inquiries
regarding the Funds, assisting in the establishment and
maintenance of accounts in the Funds and in the processing of
purchases, exchanges and redemptions of Shares, making the
Funds' investment plans and dividend options available, and
assisting the shareholders with tax information. Counterparty
shall also provide such other information and services in
connection with the Shares as may be reasonably requested from
time to time. Counterparty shall assess the suitability of
transactions for the Client. If X-0, X-0, X-0, X-0, X-0 and/or
R-6 class Shares are covered by this Agreement, such accounts
on the Funds records shall be either Plan level omnibus
accounts or super omnibus accounts. If Institutional class
Shares are covered by this Agreement, such accounts on the
Funds records shall be either Plan level omnibus accounts or
super omnibus accounts, or will need to meet Principal's
minimum investment or other eligibility requirement as
provided in the Prospectus.
10.2 For omnibus accounts, Counterparty shall maintain all
historical Client records consistent with the requirements of
all applicable laws, rules and regulations. Upon request of
Principal or transfer agent, Counterparty shall provide copies
of written communications regarding the Funds to or from such
Clients in omnibus accounts. Counterparty shall upon request
make available to Principal or transfer agent such records or
communications as may be necessary to determine the number of
Clients in each Counterparty omnibus account.
10.3 For omnibus accounts, a Fund shall recognize Counterparty, or
a custodian, as a single shareholder and unallocated account
in the Fund and the Fund will not maintain separate accounts
for Clients in such omnibus accounts. Neither the Funds, nor
transfer agent, nor Principal shall be responsible for
providing recordkeeping or administrative services to Clients
in omnibus accounts. The official records of transactions of
Counterparty's omnibus accounts and the number of shares in
such accounts shall be determined by transfer agent.
Counterparty shall bear responsibility for any discrepancies
between its omnibus accounts and the Client accounts and for
the maintenance of all records regarding the Clients, the
Client's transactions, and the Clients' interest in the
omnibus accounts.
10.4 For omnibus accounts, Counterparty assumes sole responsibility
for reconciliation of Client accounts with its omnibus account
at transfer agent. Principal will have transfer agent assist
Counterparty with such reconciliation where necessary.
11. Counterparty hereby represents and warrants that: (i) Counterparty
is a corporation, partnership or other business entity duly
organized and validly existing in good standing under the laws of
the jurisdiction in which it is organized; (ii) the execution and
delivery
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of this Agreement and the performance of the transactions
contemplated hereby have been duly authorized by all necessary
action and all other authorizations and approvals (if any) required
for Counterparty's lawful execution and delivery of this Agreement
and Counterparty's performance hereunder have been obtained; (iii)
upon execution and delivery by Counterparty, and assuming due and
valid execution and delivery by Principal, this Agreement will
constitute a valid and binding agreement, enforceable against
Counterparty in accordance with its terms; (iv) any and all fees
provided for in this Agreement will be promptly disclosed by
Counterparty to its Clients including, if applicable, to any Plans;
and (v) the receipt of the fees described in this Agreement by
Counterparty will not be a non-exempt "prohibited transaction" as
such term is defined in Section 406 of ERISA and Section 4975 of the
Code. Principal is not and does not hold itself out to be a Plan
fiduciary, and Counterparty agrees not to use Principal's name or
any of the information it provides in a manner to suggest otherwise.
12. Counterparty further represents and warrants that: (i) Counterparty
is a member of FINRA or is exempt from registration as a
broker-dealer under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and (ii) Counterparty is duly registered under all
applicable state securities laws, rules and regulations or is exempt
from such registration. Counterparty agrees to give written notice
to Principal if it shall cease to be registered or exempt from
registration as a broker-dealer under the 1934 Act. With respect to
all sales of Shares, Counterparty agrees to abide by the FINRA
rules, including without limitation the NASD Conduct Rules of FINRA,
as amended from time to time. Counterparty and Principal agree to
comply with all applicable federal and state laws, rules and
regulations. Counterparty is not a foreign dealer. Counterparty
further agrees that it will not sell, offer for sale or solicit
offers to purchase Shares of Funds in any jurisdiction where such
Shares have not been qualified for sale. Principal agrees to inform
Counterparty, from time to time and upon request, as to the
jurisdictions in which Principal believes the Shares have been
registered or qualified for sale under, or are exempt from the
requirements of, the respective securities laws of such
jurisdictions. Principal shall have no obligation or responsibility
to make Shares available for sale to Clients in any jurisdiction.
Counterparty agrees to notify Principal immediately in the event of
Counterparty's expulsion or suspension from FINRA. Counterparty's
expulsion from FINRA will automatically terminate this Agreement
immediately without notice by Principal. Counterparty's suspension
from FINRA will terminate this Agreement effective immediately upon
written notice of termination to Counterparty by Principal.
Counterparty represents that it is currently a member of the
Securities Investor Protection Corporation ("SIPC") and, while this
Agreement is in effect, will continue to be a member of SIPC.
Counterparty agrees to notify Principal immediately if its SIPC
membership status changes.
13.
13.1 "Confidential Information" of any party shall mean such
party's ideas, expressions, trade secrets, customer lists,
products, policies, forms, business methods, business plans,
software and information from third parties (such as software
and its related documentation) in respect of which such party
has a duty of confidentiality, "nonpublic personal
information" of such party's "customers" (each, for purposes
of this Section 13, as defined in Rule 3 of Regulation S-P),
as
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well as information which from all relevant circumstances
should reasonably be assumed by a party to be confidential
information of the other party, whether or not marked
"Confidential Information." Confidential Information of a
party shall be held in confidence by the other party to the
same extent and in at least the same manner as such party
protects its own Confidential Information, but in no case to a
lesser extent or manner than a reasonable degree of care under
the circumstances. Except as otherwise permitted by law, each
party agrees not to use or disclose to any affiliate or third
party, either orally or in writing, any Confidential
Information for any purpose other than the purpose for which
the Confidential Information was provided to that party.
Without limiting any of the foregoing, each party agrees to
take all precautions that are reasonably necessary to protect
the security of the Confidential Information. Each party
agrees to restrict access to the Confidential Information to
its employees who need to know that information to perform
that respective party's duties under this agreement. Each
party agrees, upon the other party's request, either to return
to the requesting party or destroy all tangible items
containing any Confidential Information it received or learned
from the requesting party, including all copies, abstractions
and compilations thereof and to destroy, delete or otherwise
render unreadable all electronic or computer copies or records
of or relating to same, without retaining any copies of the
items required to be returned except to the extent that
retention of such copies is required by applicable law or
regulation; provided, however, that the obligations set forth
in this sentence shall not apply to any Confidential
Information that is or becomes relevant to an individual's
status as a consumer or customer of the receiving party. The
obligations of this Section 13.1 extend to all of a party's
employees, agents, affiliates and contractors and each party
shall inform such persons of their obligations hereunder.
13.2 Each party will, upon learning of any unauthorized disclosure
or use of the other party's Confidential Information, notify
the other party promptly and cooperate fully with that party
to protect such Confidential Information.
13.3 The obligations in this Section 13 shall not restrict any
disclosure by either party pursuant to any applicable state or
federal laws, subpoena, by order of any court or government
agency (provided that the disclosing party shall give prompt
written notice to the non-disclosing party of such subpoena,
order or other demand for disclosure and shall make all
reasonable efforts to allow the other party an opportunity to
seek a protective order or other judicial relief), or pursuant
to a request from FINRA or other self-regulatory organization
or to audits or inquiries from any other state or federal
regulatory agency if a party is legally required to provide
such agency with access to such records. Information shall not
be considered Confidential Information under this Agreement
and the restrictions on disclosure under this Section 13 shall
not apply to the extent such information (1) is independently
developed by the other party without violating the disclosing
party's proprietary rights, (2) is or becomes publicly known
(other than through unauthorized disclosure), (3) is
intentionally disclosed by the owner of such information to a
third party free of any obligation of confidentiality, (4) is
already known by such party without an obligation of
confidentiality other than pursuant to this Agreement or of
any confidentiality agreements entered into before the
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effective date of this Agreement as evidenced by the written
records of such party, or (5) is rightfully received by a
party free of any obligation of confidentiality.
13.4 The parties agree that they shall abide by the applicable
provisions of all applicable privacy laws, rules and
regulations and shall each establish commercially reasonable
controls to ensure the confidentiality of the Confidential
Information and to ensure that the Confidential Information is
not disclosed contrary to the provisions of this Agreement or
any applicable privacy laws and regulations. Without limiting
the foregoing, each party shall implement such physical and
other security measures as are necessary to (i) ensure the
security and confidentiality of the Confidential Information,
(ii) protect against any threats or hazards to the security
and integrity of the Confidential Information and (iii)
protect against any unauthorized access to or use of the
Confidential Information. In addition, each party shall use
the Confidential Information of the other party solely for the
purpose of providing services to Clients investing in one or
more Funds. Counterparty may contract with others, at its own
expense, for data systems, processing services and other
technical or administrative services. Principal may at any
time or times in its discretion appoint (and may at any time
remove) other parties including parties with which Principal
is affiliated, as its agent to carry out such provisions of
the Agreement as Principal may from time to time direct;
provided however, that the appointment of any such agent shall
not relieve Principal or any of its responsibilities or
liabilities hereunder. Each party shall have the right, during
regular office hours and upon reasonable notice, to audit the
other party to ensure compliance with the terms of this
Agreement and all applicable privacy laws and regulations. The
provisions of this Section 13 shall survive the termination of
this Agreement.
14. To the extent that any duties and responsibilities under the
Agreement are delegated to an agent or subcontractor, the party
shall take reasonable steps to ensure that such agents and
subcontractors adhere to the same requirements. Each party shall
have the right, during regular office hours and upon reasonable
notice, to audit the records of the other party to ensure compliance
with the terms of this Agreement and all applicable privacy laws and
regulations.
15. Principal hereby represents and warrants that: (i) it is a
corporation duly organized and validly existing in good standing
under the laws of the jurisdiction in which it is organized; (ii)
the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby have been duly authorized by
all necessary action and all other authorizations and approvals (if
any) required for Principal's lawful execution and delivery of this
Agreement and Principal's performance hereunder have been obtained;
(iii) upon execution and delivery by Principal, and assuming due and
valid execution and delivery by Counterparty, this Agreement will
constitute a valid and binding agreement, enforceable against
Principal in accordance with its terms.
16. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an
exclusive arrangement, or to create a partnership, association or
joint venture between Principal and Counterparty. Neither
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party hereto shall be, act as, or represent itself as, the employee,
agent or representative of the other party hereto, nor shall either
party hereto have the right or authority to make any representation
or assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of, or on behalf
of, the other party hereto. Except as specifically stated in this
Agreement, this Agreement is not intended to, and shall not, create
any rights against either party hereto by any third party (other
than the Funds) solely on account of this Agreement. Neither party
hereto shall use the name of any other party hereto in any manner
without the other party's prior written consent, except as required
by any applicable federal or state law, rule or regulation.
17. Except as otherwise specifically provided herein, all notices
required or permitted to be given pursuant to this Agreement shall
be given in writing and delivered by personal or overnight delivery,
first class mail or facsimile (with confirming copy by delivery or
mail as provided herein). Unless otherwise notified in writing, all
notices to Principal shall be given or sent to Principal at 000
Xxxxxxxx Xx., Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, Attn: President;
and all notices to Counterparty shall be given or sent to
Counterparty at Counterparty' s address shown below.
18. This Agreement shall become effective upon written acceptance by
Principal and may be terminated at any time by either party hereto
upon prior written notice to the other party hereto. To the extent
not prohibited by law, this Agreement, including any schedules
hereto, may be amended as provided in any written notice delivered
by Principal to Counterparty and otherwise may be amended only by a
written instrument signed by both of the parties hereto. This
Agreement may not be assigned by either party without prior written
consent of the other party hereto, provided, however, that a change
in control of Principal or assignment by Principal to an affiliate
shall not constitute an assignment of this Agreement, and a change
in control of Counterparty shall not constitute an assignment of
this Agreement provided that Principal receives written notice at
least thirty (30) days prior to such change in control. This
Agreement, including any schedules hereto, constitutes the entire
agreement and understanding between the parties hereto relating to
the subject matter hereof and supersedes any and all prior or
contemporaneous agreements, representations and warranties, written
or oral, regarding such subject matter between the parties or
between Counterparty and a Fund's principal underwriter.
Counterparty agrees that Principal shall have no obligations to
Counterparty other than those expressly provided herein. In the
event of any conflict between the terms of this Agreement and the
Prospectus, the terms of the Prospectus shall control.
19. This Agreement shall apply to the Shares of the classes of Funds
listed on Schedule A. Principal may amend Schedule A by written
notice to Counterparty.
20. Counterparty agrees to provide to Principal and each Fund such
information as shall reasonably be requested by Principal or a Fund
with respect to the service fees paid to Counterparty under this
Agreement. Counterparty will permit representatives of Principal and
each Fund reasonable access to its personnel and records to monitor
the quality of services being provided by Counterparty pursuant to
this Agreement. Counterparty shall promptly deliver to each Fund
such information as shall reasonably be necessary to permit the Fund
directors of each Fund to make an informed determination to continue
the respective Distribution Plans.
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21. Counterparty agrees that it shall be responsible for monitoring its
Clients' accounts for a pattern of purchases, redemptions and/or
exchanges of Shares that potentially indicates excessive trading or
"market timing," to effect either such policies and procedures of
the Funds or such similar policies and procedures of Counterparty as
may be acceptable to the Funds. Counterparty agrees that, in the
event that it should come to the attention of Counterparty that any
of its Clients are engaging in a pattern of purchases, redemptions
and/or exchanges of Shares that potentially indicates excessive
trading or "market timing," Counterparty shall promptly notify
Principal and the Funds of such pattern and shall cooperate fully
with Principal and the Funds in investigation and, if deemed
necessary or appropriate by Principal and the Funds, terminating any
such pattern of trading, including, without limitation, by refusing
such Client's orders to purchase or exchange Shares.
22. Principal hereby advises Counterparty that the Funds have adopted
written policies and procedures reasonably designed to detect and
prevent frequent and/or disruptive trading in Shares. Counterparty
agrees to cooperate with Principal and its affiliates to effect such
policies and procedures of the Funds as follows:
22.1 Agreement to Provide Information. Counterparty agrees to
provide the Fund, upon written request, the taxpayer
identification number ("TIN"), the Individual/International
Taxpayer Identification number ("ITIN"), or other
government-issued identifier ("GII"), if known, of any or all
Shareholder(s) (as defined below) of each account held of
record by Counterparty and the amount, date, name or other
identifier of any investment professional(s) associated with
the Shareholder(s) or account (if known), and transaction
type (purchase, redemption, transfer, or exchange) of every
purchase, redemption, transfer or exchange of Shares held
through an account maintained by Counterparty during the
period covered by the request.
22.1.1 Period Covered by Request. Requests must set forth a
specific period, generally not to exceed six (6) months
from the date of the request, for which transaction
information is sought. The Fund may request transaction
information older than six (6) months from the date of
the request as it deems necessary to investigate
compliance with policies established by the Fund for
the purpose of eliminating or reducing any dilution of
the value of the outstanding shares issued by the Fund.
22.1.2 Form and Timing of Response. (a) Counterparty agrees to
provide, promptly upon request of the Fund or its
designee, the requested information specified above. If
requested by the Fund or its designee, Counterparty
agrees to use best efforts to determine promptly
whether any specific person about whom it has received
identification and transaction information specified
above is itself a financial intermediary ("Indirect
Intermediary") and, upon further request of the Fund or
its designee, promptly either (i) provide (or arrange
to have provided) the information set forth above for
those shareholders who hold an account with an Indirect
Intermediary or (ii) restrict or prohibit the Indirect
Intermediary
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from purchasing, in nominee name on behalf of other
persons, securities issued by the Fund. Counterparty
additionally agrees to inform the Fund whether it plans
to perform (i) or (ii). (b) Responses required by this
Section 22 must be communicated in writing in a format
mutually agreed upon by the parties; and (c) To the
extent practicable, the format for any transaction
information provided to the Fund should be consistent
with the National Securities Clearing Corporation
("NSCC") Standardized Data Reporting Format.
22.1.3 Limitations on Use of Information. The Fund agrees not
to use the information received pursuant to this
Section 22 for marketing or any other similar purpose
without the prior written consent of Counterparty.
22.2 Agreement to Restrict Trading. Counterparty agrees to execute
written instructions from the Fund to restrict or prohibit
further purchases or exchanges of Shares by a Shareholder who
has been identified by the Fund as having engaged in
transactions of the Fund's Shares (directly or indirectly
through the Counterparty's account) that violates policies
established or utilized by the Fund for the purpose of
eliminating or reducing any dilution of the value of the
outstanding Shares issued by the Fund.
22.2.1 Form of Instructions. Instructions to restrict or
prohibit trading must include the TIN, ITIN, or GII, if
known, and the specific restriction(s) to be executed.
If the TIN, ITIN, or GII is not known, the instructions
must include an equivalent identifying number of the
Shareholder(s) or account(s) or other agreed upon
information to which the instruction relates.
22.2.2 Timing of Response. Counterparty agrees to execute
instructions from the Fund to restrict or prohibit
trading as soon as reasonably practicable, but not
later than five (5) Business Days after receipt of the
instructions by the Counterparty.
22.2.3 Confirmation by Counterparty. Counterparty must provide
written confirmation to the Fund that instructions from
the Fund to restrict or prohibit trading have been
executed. Counterparty agrees to provide confirmation
as soon as reasonably practicable, but not later than
ten (10) Business Days after the instructions have been
executed.
22.3 Definitions. For purposes of this Section 22:
22.3.1 The term "Fund" includes the fund's principal
underwriter and transfer agent. The term does not
include any "excepted funds" as defined in SEC Rule
22c-2(b) under the Investment Company Act of 1940.
22.3.2 The term "Shares" means the interests of Shareholders
corresponding to the redeemable securities of record
issued by the Fund under the Investment Company Act of
1940 that are held by Counterparty.
13
22.3.3 The term "Shareholder" means the beneficial owner of
Shares, whether the Shares are held directly or by
Counterparty in nominee name. The term "Shareholder"
means the Plan participant notwithstanding that the
Plan may be deemed to be the beneficial owner of
Shares.
22.3.4 The terms "written" and "writing" include electronic
writings and facsimile transmissions.
22.3.5 The term "intermediary" means a "financial
intermediary" as defined in SEC Rule 22c-2.
22.3.6 The term "purchase" does not include the automatic
reinvestment of dividends.
22.3.7 The term "promptly" as used in 22.1.2 means as soon as
practicable but in no event later than ten (10)
Business Days from Counterparty's receipt of the
request for information from the Fund or its designee.
23. In the event of any dispute arising out of or relating to this
Agreement, the parties agree to attempt in good faith to resolve the
dispute first by direct negotiation and then, if that is not
successful, by mediation with a neutral third-party mediator
acceptable to both parties. Mediation expenses will be shared
equally by the parties. Any dispute arising out of or relating to
this Agreement which is not settled by agreement of the parties
within a reasonable time will be settled exclusively in a binding
arbitration. The parties further agree that any contract, agreement
or understanding between a party and its affiliates, subsidiaries,
agents, delegates and designees shall contain a provision binding
the affiliate, subsidiary, agent, delegate or designee to the terms
of this Arbitration Provision.
23.1 The location of any arbitration proceeding will be in Polk
County, Iowa. The arbitration will be governed by the rules
and regulations of the Code of Arbitration Procedure adopted
by FINRA, except in the event that FINRA is unwilling to
accept jurisdiction of the matter, such arbitration will be
held in accordance with the rules and regulations of the
American Arbitration Association ("AAA") under the Commercial
Arbitration Procedures then in effect. The arbitrators will be
selected and the arbitration conducted in accordance with the
FINRA or AAA rules, as appropriate, except that the provisions
of this Agreement will control over the FINRA or AAA rules.
The number of arbitrators will be three (3). To the extent
practicable, the arbitrators shall be attorneys or retired
attorneys specializing in securities law.
23.2 The parties will share equally in the fees and expenses of the
arbitrators and the cost of the facilities used for the
arbitration hearing, but will otherwise bear their respective
costs incurred in connection with the arbitration. Depositions
will not be allowed, but information may be exchanged by other
means. The parties agree to use their best efforts to ensure
that the arbitrators are selected promptly and that
14
the arbitration hearing is conducted no later than 3 months
after the arbitrators are selected.
23.3 The arbitrators must decide the dispute in accordance with the
substantive law which would govern the dispute had it been
litigated in court. This requirement does not, however, mean
that the award is reviewable by a court for errors of law or
fact. Following the arbitration hearing, the arbitrators will
issue an award and a separate written decision which
summarizes the reasoning behind the award and the legal basis
for the award. Any award of the arbitrators will be limited to
compensatory damages and will be conclusive and binding on
each party. Judgment upon the award may be entered in any
federal district court. The arbitration shall be governed by
the Federal Arbitration Act, 9 U.S.C. Sections 1-16, to the
exclusion of state laws inconsistent therewith, and judgment
upon the award may be entered in any court having
jurisdiction.
23.4 The dispute resolution procedures set forth above will be the
sole and exclusive procedures for the resolution by the
parties of any disputes which arise out of or are related to
this Agreement, except that a party may seek preliminary or
temporary injunctive relief from a court if, in the party's
sole judgment, such action is necessary to avoid irreparable
harm or to preserve the status quo. If a party seeks judicial
injunctive relief as described in this paragraph, the parties
will continue to participate in good faith in the dispute
resolution procedures described above. The parties agree that
no court which a party petitions to grant the type of
preliminary injunctive relief described in this paragraph may
award damages or resolve the dispute. Venue for any judicial
proceeding for preliminary or temporary injunctive relief will
be in Polk County, Iowa, and any objections or defenses based
on lack of personal jurisdiction or venue are hereby expressly
waived
24. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Iowa, without giving effect to
principles of conflict of laws.
25.
25.1 Counterparty hereby represents and certifies to Principal that
it is aware of, and in compliance with, all applicable
anti-money laundering laws, regulations, rules and government
guidance, including the reporting, recordkeeping and
compliance requirements of the Bank Secrecy Act ("BSA"), as
amended by the Patriot Act, its implementing regulations, and
related Securities and Exchange Commission and self-regulatory
organization rules and regulations. Counterparty hereby
certifies to Principal that, to the extent required by the
Patriot Act, it has a comprehensive anti-money laundering
compliance program that includes: internal policies,
procedures and controls for complying with the Patriot Act; a
designated compliance officer or officers; an ongoing training
program for appropriate employees; and an independent audit
function.
25.2 Counterparty also hereby certifies to Principal that, to the
extent applicable, it is in compliance with the economic
sanctions programs administered by the U.S. Treasury
Department's Office of Foreign Assets Control ("OFAC"), and
has an
15
OFAC compliance program that satisfies all applicable laws,
regulations and sanctions programs administered by the U.S.
Treasury Department's Office of Foreign Laws and Regulations.
25.3 Counterparty represents that it adopted a Customer
Identification Program in compliance with applicable laws,
rules and regulations and will verify the identity of
customers who open accounts with Principal and who invest in
Shares.
25.4 Except to the extent restricted by applicable law,
Counterparty hereby agrees to notify Principal in writing at
000 Xxxxxxxx Xx., Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, Attn:
Anti-Money Laundering Compliance Officer, or such other
address as provided in writing by Principal to Counterparty,
promptly whenever questionable activity or potential
indications of suspicious activity or OFAC matches are
detected with respect to the Funds.
25.5 Counterparty hereby undertakes to notify Principal promptly if
any of the foregoing certifications cease to be true and
correct for any reason.
26. Counterparty and Principal, or an affiliate, are members in good
standing of the National Securities Clearing Corporation ("the
NSCC") and have access to the NSCC's NETWORKING system
("NETWORKING"), NSCC's Defined Contribution Clearance and Settlement
system ("DCC&S") and/or Fund/SERV system ("Fund/SERV")
(collectively, the "NSCC Systems"). Except as otherwise specified in
this Agreement, Principal and Counterparty hereby agree to abide by
all terms and conditions set forth in the Investment Company
Institute's Standardized Networking Agreement ("Networking
Agreement"). In the event of any conflict between the terms of this
Agreement and the terms of the Networking Agreement, the terms of
this Agreement shall control.
27. 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 and the same instrument. If any provision of this
Agreement should be invalid, illegal or in conflict with any
applicable state or federal law or regulation, such law or
regulation shall control, to the extent of such conflict, without
affecting the remaining provisions of this Agreement.
[Remainder of page intentionally left blank.]
16
IN WITNESS WHEREOF the parties hereto have caused the Agreement to be duly
executed as of the day and year first written above.
PRINCIPAL FUNDS DISTRIBUTOR, INC. ONEAMERICA SECURITIES, INC.
(COUNTERPARTY)
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------- ---------------------------------------------------
Name: Xxxx Xxxxx Name: Xxxxxxx X. Xxxxxxxxx
--------------------------------------- ---------------------------------------------------
Title: SVP Title: President
--------------------------------------- ---------------------------------------------------
Date: 3/22/17 Address: 000 X Xxxxxxx Xxx, Xxxxxxxxxxxx, XX 00000
--------------------------------------- ---------------------------------------------------
Tel.#: 000-000-0000
---------------------------------------------------
Fax #: 000-000-0000
---------------------------------------------------
Date: 2/21/17
---------------------------------------------------
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SCHEDULE A
PRINCIPAL FUNDS, INC.
SHARES AND FUNDS COVERED UNDER THIS AGREEMENT
The term "Shares" shall mean the following classes of shares:
R-1 (formerly known as Advisors Signature),
R-2 (formerly known as Advisors Select),
R-3 (formerly known as Advisors Preferred),
R-4 (formerly known as Select),
R-5 (formerly known as Preferred),
R-6
Class A
Class C
Class I
Class P
of each investment portfolio or series (each a "Fund") of Principal Funds, Inc.
Counterparty understands and agrees that the Shares may only be made available
to eligible purchasers, as described in the Prospectus.
18
