Exhibit 99.8.60
PRINCIPAL FUNDS
SERVICES AGREEMENT
This Services Agreement (the "AGREEMENT") is made and entered into this
27th day of March, 2017, between Principal Shareholder Services, Inc.
("PRINC1PAL"), a Washington corporation having a place of business at 000
Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, and the undersigned counterparty
("COUNTERPARTY").
WHEREAS, each investment company, or series thereof identified on SCHEDULE
A hereto (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 a series thereof, offers shares or units of beneficial interest
("SHARES") of the class(es) identified on Schedule A;
WHEREAS, Principal serves as transfer agent to the Funds;
WHEREAS, Counterparty provides, or contracts for the provision by another
administrator of, administrative services including, but not limited to,
recordkeeping, reporting and processing services for use by employee benefit
plans ("PLANS"). Administrative services for each Plan include establishing and
maintaining plan participant investment accounts and providing processing and
transfer arrangements for the investment and reinvestment of Plan assets in
investment media specified under the Plan;
WHEREAS, Counterparty or an affiliate of Counterparty, and Principal or a
designated affiliate of Principal are members in good standing of the National
Securities Clearing Corporation (the "NSCC") and have access to the NSCC's
NETWORKING system ("NETWORKING") and NSCC's Defined Contribution Clearance and
Settlement system ("DCC&S") and/or Fund/SERV system ("FUND/SERV") (collectively,
the "NSCC SYSTEMS");
WHEREAS, Principal and Counterparty desire to make Shares available to all
of Counterparty' s clients, including trust clients, the Plans and their
participants (collectively, "CLIENTS") and have Counterparty, directly or
through an affiliated company or other designee, maintain as shareholder of
record of Fund shares an omnibus account on the books of the Funds and provide,
or contract for the provision of, administrative services to Clients with
respect to Shares; and
WHEREAS, the Funds are expected to realize economies in transfer agency
and related expenses by having the Shares owned by Clients within omnibus
accounts on the books of the Funds;
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 ("SAI"), 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
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("NYSE") is open; the term "MARKET CLOSE" means the close of regular
trading on the NYSE on a Business Day, which close is generally 4:00p.m.
Eastern time; and the term "PRINCIPAL UNDERWRITER" has the definition
provided in the 1940 Act.
2. Counterparty will be responsible for proper instruction and training of
personnel employed by Counterparty. Counterparty understands and agrees
that the Shares can only be sold to eligible purchasers as indicated in
the Prospectus, which for some or all Share classes is limited to Plans.
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, except that Principal hereby designates Counterparty as
an authorized agent of the Fund for the limited purpose of receiving
purchase, exchange and redemption orders with respect to Shares on behalf
of the Funds in accordance with Section 7(b) of this Agreement.
3. Subject to the terms of the Prospectus, all orders for the purchase or
redemption of Shares of the Funds shall be executed at the next determined
net asset value per Share ("NAV"), determined in accordance with the
provisions of the Prospectus. To the extent the Prospectus as of the time
of sale allows for waiver of the initial sales charges, Counterparty
hereby waives any and all initial sales charges that otherwise would be
applicable to any transactions pursuant to this Agreement. Counterparty
agrees that upon receipt of confirmations of transactions, Counterparty
shall examine the same and promptly notify Principal of any errors or
discrepancies that Counterparty discovers.
In the event adjustments are required to correct any error in the
computation of NAV of any Fund's shares at the shareholder level as a
result of a pricing error that is deemed to be material under the pricing
policy of the Funds or which Funds otherwise deem necessary to correct at
the shareholder level, Funds will notify Counterparty as soon as
practicable after discovering the need for those adjustments. Notification
shall be made by facsimile or by direct or indirect systems access
acceptable to Counterparty. If one or more Clients received amounts from
any Fund in excess of the amounts to which it otherwise would have been
entitled due to an error, Counterparty shall use its best efforts to
collect such excess amounts from the applicable accounts. If an adjustment
is to be made in accordance with this paragraph to correct an error which
has caused an account to receive an amount less than that to which it is
entitled, the Fund shall make all necessary adjustments to the number of
shares owned in the account and/or distribute to Counterparty the amount
of such underpayment.
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 its actions under this Agreement shall comply
with all applicable federal and state laws, including the Employee
Retirement and Income Security Act of 1974, as amended ("ERISA") and the
rules and regulations of all applicable regulatory agencies or
authorities. Counterparty agrees to timely deliver or
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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 SAI, all in compliance with applicable laws, rules and
regulations.
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 the relevant Fund and 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 on whose behalf
Counterparty transmits any order for the purchase of 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.
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.
7.
(a) 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
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Principal or a Fund's principal underwriter from time to time. No
conditional orders will be accepted. Except to the extent Section
7(b) is applicable, 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
transmits orders on behalf of a third-party ("THIRD-PARTY"),
Counterparty agrees that it shall be responsible for any and all
acts or omissions of the Third-Party as if such acts or omissions
were its own. Counterparty shall place purchase orders from Clients
with Principal or 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.
(b) This section 7(b) shall only apply for purposes of transactions that
are eligible for transmission through DCC&S per NSCC rules, and are
normally transmitted by Counterparty to Principal after Market Close
("ELIGIBLE DCC&S TRANSACTIONS"). For purposes of Rule 22c-1 of the
1940 Act, Principal hereby appoints Counterparty as agent for the
limited purpose of receiving purchase, exchange and redemption
orders with respect to Shares purchased and held by Clients eligible
for transactions to be processed through DCC&S, and Counterparty
accepts such appointment, on the terms set forth herein.
Counterparty may not delegate such limited agency appointment to any
other entity or person without the express written consent of
Principal. With regard to Eligible DCC& S Transactions, on any
Business Day ("BUSINESS DAY ONE"), Counterparty may receive orders
in proper form prior to Market Close, for the transmittal to the
Funds via NSCC Systems, in accordance with the rules and procedures
of NSCC Systems established by the NSCC, on behalf of all Clients to
the Funds up to the latest time accepted by NSCC Systems, but in no
event later than 6:00 a.m. Eastern time on the following Business
Day ("BUSINESS DAY TWO"). The ability of Counterparty to transmit
such orders to the Funds after Market Close pursuant to Rule 22c-l
shall apply only with regard to Eligible DCC&S Transactions that are
normally processed through DCC&S. In the event NSCC Systems are
unavailable on any Business Day or if Counterparty is otherwise not
able to submit orders through NSCC, orders received by Counterparty
in proper form prior to Market Close on Business Day One will be
aggregated by Counterparty and transmitted to the Funds as soon as
reasonably practical by facsimile or through such other means as
Principal may from time to time agree in writing, but in no event
later than 6:00
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a.m. Eastern time on Business Day Two. On each Business Day
Counterparty shall transmit, at a minimum, a single order for the
aggregate purchase amount and a single order for the aggregate
redemption amount for Shares for each Fund for each account. Such
orders will be credited to the respective account at the NAV
calculated as of the Market Close on Business Day One. Dividends, if
applicable, will begin to accrue on Business Day Two. Counterparty
warrants all orders transmitted to the Funds as of a particular
Business Day will relate only to instructions received prior to the
Market Close on that Business Day. Counterparty agrees that orders
that it receives after Market Close on each Business Day will be
transmitted to Principal with orders received by Counterparty prior
to Market Close on the following Business Day, for processing at the
net asset value determined on such following Business Day.
Counterparty hereby represents and warrants that it has adopted and
implemented, and will maintain, internal controls reasonably
designed to prevent orders received after Market Close on any
Business Day from being aggregated with orders received prior to
Market Close on such Business Day, and to minimize errors that could
result in late transmissions of orders to the Funds.
8. Except to the extent caused by Principal's negligence or willful
misconduct, Counterparty shall 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
dissemination of information regarding Principal or a Fund that is
materially incorrect and that was not provided to Counterparty, or
approved, by Principal; (ii) Counterparty's willful misconduct or gross
negligence in the performance of, or failure to perform, its obligations
under this Agreement, except to the extent such Losses result from
Principal's gross negligence, willful misconduct or breach of this
Agreement; (iii) the failure to accurately or timely transmit any order to
the Funds; or (iv) Counterparty's breach of any of the terms and
conditions of this Agreement.
Except to the extent caused by Counterparty's negligence or willful
misconduct, Principal will indemnify, defend, hold harmless Counterparty
and all of its affiliates, and their officers, directors, employees,
agents, and assignees against all Losses, arising out of or in connection
with: (i) any untrue statement or alleged untrue statement of a 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 (a "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 Blue Sky Application
or which is necessary to make the statements or a part thereof not
misleading; (ii) Principal's willful misconduct or gross negligence in the
performance of, or failure to perform, its obligations under this
Agreement, except to the extent such Losses result from Counterparty's
gross negligence, willful misconduct or breach of this Agreement; or (iii)
Principal's breach of any terms and conditions of this Agreement.
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In any event, no party shall be liable for any special, consequential or
incidental damages.
The indemnification obligations contained in this Section 8 shall survive
the termination of this Agreement.
9.
(a) Counterparty agrees that payment for orders from Counterparty for
the purchase of Shares will be made in accordance with the terms of
the Prospectus.
(b) On or before the settlement date of each purchase order of Shares,
Counterparty shall remit to an account designated by Principal with
the transfer agent an amount equal to the then current NAV of such
Shares as determined by Principal in accordance with the terms of
the Prospectus. 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, Principal reserves 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
service fee by supplementing or otherwise revising the Prospectus or
statement of additional information, as applicable.
(c) Payment for net purchases of shares in the Funds will be forwarded
to the Funds' agent no later than Business Day Two under the
ordinary settlement methods of NSCC. Subject to the terms of the
Prospectus, payment for net redemptions of shares in the Funds will
be forwarded to Counterparty no later than Business Day Two under
the ordinary settlement methods of the NSCC. In the event NSCC
Systems are unavailable on any Business Day or the parties are
otherwise unable to settle transactions pursuant to this Agreement
through NSCC, then payment for net purchases of shares in the Funds
will be sent by federal funds wire transfer to the Funds' agent by
4:00 p.m. Eastern time on Business Day Two and, subject to the terms
of the Prospectus, payment for net redemptions of shares in the
Funds will be sent by federal funds wire transfer to Counterparty by
4:00 p.m. Eastern time on Business Day Two.
(d) Principal agrees, subject to the other terms and conditions of the
Prospectus this Agreement and any attached schedule, that Principal
or its affiliate will pay Counterparty a service fee as set forth in
SCHEDULE B of this agreement, and Counterparty agrees to accept the
same as full payment for the services undertaken by it as described
in Section 10 hereof, payable as set forth in the Prospectus or
statement of additional information. Counterparty agrees that it
shall fully disclose such fee to Clients. Counterparty agrees that
it shall timely invoice Principal for such fees as provided on
Schedule B. In no event shall Counterparty be entitled to any
payment for fees or fee corrections for which Principal has not
received the invoice from Counterparty within 6 months of the end of
the billing period indicated on Schedule B. Counterparty's failure
to provide, directly or indirectly by contract with another
administrator, services as agreed in Section 10 hereof will render
Counterparty ineligible to receive service fees with respect to such
Shares. The parties recognize that such fees are for
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administrative services provided, directly or indirectly, by
Counterparty, and are not for investment advisory or distribution
services.
(e) Termination or cancellation of this Agreement shall not relieve
Counterparty from the requirements of this Section.
10.
(a) Counterparty agrees to perform certain record keeping,
communication, transactional and other services with respect to the
Clients who are the beneficial owners of the shares of the Funds, as
more particularly set forth below. Counterparty represents and
warrants that it has and will continue at all times to maintain
necessary facilities, equipment, systems and personnel to perform
its services hereunder in a businesslike and competent manner and to
comply with applicable laws, rules and regulations related to the
services to be provided, including the maintenance and preservation
of all required records and registrations.
(b) Counterparty represents and warrants that all Clients are aware that
they are transacting business with Counterparty and not Principal or
the Funds, and that they will look only to the Counterparty and not
to Principal or the Funds for resolution of problems or
discrepancies in their accounts.
(c) Counterparty agrees to provide or arrange for the provision of
administrative support services to Clients who may from time to time
invest in the Funds. Such services include the following: (1) acting
either directly or through an affiliated company or other designee
as the sole shareholder of record for Clients on the books of the
Funds; (2) obtaining all required documentation from the Clients;
(3) settling transactions, reconciling transactions, obtaining
pricing, reinvesting distributions, and maintaining account records
for Clients, including (i) number and dollar value of shares; (ii)
date, price and amount of purchases and redemptions (including
dividend reinvestments) and dates and amounts of dividends paid for
at least the current year to date; (iii) name and address of the
Clients, including zip codes and social security numbers or taxpayer
identification numbers; and (iv) overall Client records; (4)
receiving, aggregating and processing Client purchase, exchange and
redemption orders in accounts and transmitting to the Funds'
transfer agent purchase, exchange, and redemption requests for
shares of the Funds; (5) producing and mailing statements to Clients
at least quarterly, and as required by applicable laws, rules and
regulations, and including such information as Principal may
reasonably request; (6) producing and mailing confirmations of
transactions; (7) answering questions and handling correspondence
from Clients about their accounts, providing them with information
concerning their accounts and the Funds, and other similar personal
services related to the maintenance of shareholder accounts; (8)
timely providing Clients with all legally required documents such as
Prospectuses, proxies and annual reports and, upon request by a
Client, a copy of the applicable SAI, all in compliance with
applicable laws, rules and regulations; (9) transmitting to
Principal or its designee such periodic reports as shall be
reasonably necessary to enable each Fund to comply with state blue
sky requirements; and (10) providing
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such other similar services as Principal may reasonably require to
the extent Counterparty is permitted to do so under applicable laws,
rules and regulations.
(d) Counterparty shall maintain all historical Client records consistent
with the requirements of all applicable laws, rules and regulations.
Upon request of Principal, Counterparty shall provide copies of
written communications regarding the Funds to or from such Clients.
Counterparty shall upon request make available to Principal such
records or communications as may be necessary to determine the
number of Clients in each Counterparty omnibus account.
(e) A Fund shall recognize Counterparty as a single shareholder and
unallocated account in the Fund and will not maintain separate
accounts for Plan participants or other Clients. Neither the Funds,
nor Principal shall be responsible for providing such recordkeeping
or administrative services to Plan participants or other Clients.
The official records of transactions of Counterparty's omnibus
accounts and the number of shares in such accounts shall be
determined by Principal. 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.
(f) Counterparty assumes sole responsibility for reconciliation of
Client accounts with its omnibus account at Principal. Principal
agrees to assist Counterparty with such reconciliation where
necessary.
(g) Counterparty shall have no authority to countersign securities of
the Funds, monitor the issuance of securities of the Funds with a
view to preventing unauthorized issuance, register the transfer of
securities of the Funds, exchange or convert securities of the Funds
or transfer record ownership of securities of the Funds by
bookkeeping entry.
(h) The parties acknowledge and agree that the services to be provided
by Counterparty under this Agreement are recordkeeping,
administrative and communication and related services only, and are
not the services of an underwriter or a principal underwriter of any
Fund within the meaning of the Securities Act of 1933, as amended,
or the 1940 Act.
(i) In the event that any omnibus account holds five percent (5%) or
more of the outstanding Fund shares, Principal will be responsible
for requesting Counterparty to confirm its status as shareholder of
record and to confirm whether any Client beneficially owns five
percent (5%) or more of the outstanding Fund shares. For this
purpose, Principal shall indicate in its inquiry the number of Fund
shares that equal five percent (5%) of outstanding Fund shares.
Counterparty shall reply to any such inquiries in a reasonably
prompt manner.
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 disclosed by
Counterparty to the Clients; and (v) the receipt of the fees described in
this Agreement by Counterparty will not constitute a non-exempt
"prohibited transaction" as such term is defined in Section 406 of ERISA
and Section 4975 of the Code.
12. Counterparty further agrees that it will not transmit orders for the
purchase of Shares of Funds that would require the Shares to be qualified
for sale in any jurisdiction where such Shares have not been qualified for
sale. Principal agrees to inform Counterparty, 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, but Principal shall have
no obligation or responsibility to make Shares available for sale to
Clients in any jurisdiction.
13. "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 as defined in Rule 3 of Regulation S-P), as 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 section 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 paragraph extend to all of a
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party's employees, agents, affiliates and contractors and each party shall
inform such persons of their obligations hereunder.
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.
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
any applicable 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 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.
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, rules 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 provision of the Agreement as Principal may
from time to time direct; provided however, that the appointment of any
such agent shall not relieve Principal of any of its responsibilities or
liabilities hereunder. 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 subcontractor
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
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all applicable privacy laws, rules and regulations. The provisions of this
Section 13 shall survive the termination of this Agreement.
14. 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 party hereto shall be,
act as, or represent itself as, the employee, agent or representative of
the other party hereto (except as provided in Section 2 of this
Agreement), 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. 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.
15. 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 its office, located at 000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx, XX 00000, Attn: President; and all notices to
Counterparty shall be given or sent to Counterparty at Counterparty's
address shown below.
16. 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 parties 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, transfer agent or manager. In the event of any conflict
between the terms of this Agreement and the Prospectus, the terms of the
Prospectus shall control.
17. This Agreement shall apply to the Shares of the classes of the Funds
listed on Schedule A, which Schedule may be amended from time to time upon
prior written notice from Principal to Counterparty.
18. Counterparty agrees to provide to Principal and each Fund each calendar
quarter such information as shall reasonably be requested by Principal or
a Fund with respect to the
11
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. Upon request, Counterparty agrees
to provide Principal with a copy of Counterparty's current Financial
Intermediary Controls and Compliance Assessments ("XXXXX") report or, if
not available, upon request Counterparty shall promptly complete and sign
Principal's form of annual certification regarding such matters. In
addition, Counterparty shall promptly respond to questions or concerns
Principal may have regarding such matters.
19. 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 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 is 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 of such pattern and shall cooperate fully with
Principal in investigation and, if deemed necessary or appropriate by
Principal, terminating any such pattern of trading, including, without
limitation, by refusing such Client's orders to purchase or exchange
Shares.
In addition, Counterparty agrees to cooperate with Principal and its
affiliates to effect such policies and procedures of the Funds as follows:
19.1 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.
19.1.1 Period Covered by Request. Requests must set forth a
specific period, not to exceed ninety (90) calendar days
from the date of the request, for which transaction
information is sought. The Fund may request transaction
information older than ninety (90) calendar days 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.
19.1.2 Form and Timing of Response. (a) Counterparty agrees to
provide, promptly upon request of the Fund or its designee,
the requested
12
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 in 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 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
paragraph 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.
19.1.3 Limitations on Use of Information. The Fund agrees not to
use the information received pursuant to this Section 19 for
marketing or any other similar purpose without the prior
written consent of Counterparty.
19.2 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.
19.2.1 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.
19.2.2 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.
19.2.3 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.
19.3 Definitions. For purposes of this section:
13
19.3.1 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.
19.3.2 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 the Counterparty.
19.3.3 The term "Shareholder" means the beneficial owner of Shares,
whether the Shares are held directly or by the 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.
19.3.4 The terms "written" and "writing" include electronic
writings and facsimile transmissions.
19.3.5 The term "intermediary" means a "financial intermediary" as
defined in SEC rule 22c-2.
19.3.6 The term "purchase" does not include the automatic
reinvestment of dividends.
19.3.7 The term "promptly" as used in 19.1.2 means as soon as
practicable, but in no event later than ten (10) Business
Days from Counterparty's receipt of request for information
from the Fund or its designee.
20. 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. Any action arising out of or relating to this Agreement shall be
brought only in the State of Iowa and Counterparty consents to venue and
personal jurisdiction in the State of Iowa.
21. 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 USA PATRIOT Act of 2001 (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.
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 OFAC compliance program that satisfies all
applicable laws, rules and regulations and sanctions programs
14
administered by the U.S. Treasury Department's Office of Foreign Laws and
Regulations.
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 on or after
October 1, 2003 and who invest in Shares.
Except to the extent restricted by applicable law, Counterparty hereby
agrees to notify Principal in writing at 000 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx
00000-0000, 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.
Counterparty hereby undertakes to notify Principal promptly if any of the
foregoing certifications cease to be true and correct for any reason.
22. 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.
23. 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.
IN WITNESS WHEREOF the parties hereto have caused the Agreement to be duly
executed as of the date first written above.
PRINCIPAL SHAREHOLDER SERVICES, INC. AMERICAN UNITED LIFE INSURANCE
COMPANY
COUNTERPARTY
By: /s/ Xxxx Xxxxx By: /s/ Xxxxx X. Xxxxx
------------------------------------------------ ---------------------------------------------------------------------------
Name: Xxxx Xxxxx Name: Xxxxx X. Xxxxx
------------------------------------------------ ---------------------------------------------------------------------------
Title: SVP Title: Assistant Vice President
------------------------------------------------ ---------------------------------------------------------------------------
Address: Xxx Xxxxxxxx Xxxxxx, X.X. Xxx 000 Xxxxxxxxxxxx, Xxxxxxx 00000
---------------------------------------------------------------------------
Tel.#: 000-000-0000
---------------------------------------------------------------------------
15
SCHEDULE A
PRINCIPAL FUNDS, INC.
SHARES AND FUNDS COVERED UNDER THIS AGREEMENT
The term "SHARES" shall mean the following:
R Class Shares:
R-3
R-4
R-5
R-6
shares 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.
16
SCHEDULE B
COMPENSATION
Principal or its affiliate shall pay Counterparty a fee at an annualized rate of
the number of basis points ("BPS") specified below of the average aggregate net
asset value of Fund Shares for the relevant share class held in an omnibus
account pursuant to this Agreement by Clients of Counterparty. This compensation
will be payable quarterly, as compensation for providing the services described
in this Agreement. At the end of each calendar quarter Counterparty will provide
Principal with a statement showing its calculation of the amount of the payment
to be made for such quarter, including the total billable assets, corresponding
number of participants or sub-accounts, billable rate, and share class by fund
account number, fund name and CUSIP, in a Microsoft Excel file or other mutually
acceptable file. Principal will remit the payment owing within 30 days after
receipt of such a statement. Counterparty shall not be entitled to collect, and
shall not xxxx Principal for, such fee for any Fund Shares for which a third
party recordkeeper or third party administrator receives compensation from
Principal.
R Class Shares:
R-3 30 bps
R-4 25 bps
R-5 25 bps
R-6 No compensation
17
