Exhibit (h)(5)
FORM OF
SHAREHOLDER SERVICING AGREEMENT
THIS AGREEMENT dated as of , 2004 by and between Security Capital Real
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Estate Mutual Funds Incorporated ("Company"), a Maryland corporation, having its
principal place of business at 00 Xxxxx Xx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, on behalf of its single current series, Security Capital U.S. Real Estate
Shares ("Fund"), and One Group Administrative Services, Inc. ("Administrator"),
a Delaware corporation having its principal place of business at 0000 Xxxxxxx
Xxxxxxx, Xxxxxxxx, Xxxx 00000 ("Agreement"). This Agreement shall be effective
February 19, 2005.
WITNESSETH:
WHEREAS, the Company is an open-end, management investment company registered
with the Securities and Exchange Commission ("Commission") under the Investment
Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Company wishes to have the Shareholder Servicing Agent provide
certain services for holders of certain classes of shares ("Shares") of the Fund
and Shareholder Servicing Agent wishes to act as the Shareholder Servicing
Agent; and
WHEREAS, on September 8, 2004, the Board of Directors of the Company approved
the reorganization and redomiciliation of the Fund into a series of the One
Group Real Estate Fund, a series of One Group Mutual Funds, subject to the
approval of the Fund's shareholders at a meeting to be held January 20, 2005
("Reorganization"); and
WHEREAS, the Reorganization, if approved by shareholders, is expected to be
completed on or about February 18, 2005, or such later date as the parties to
the reorganization may agree ("Closing Date");
WHEREAS, the parties agree that this Agreement shall not become effective or
shall cease to be effective with respect to the Fund, effective as of the close
of business on the Closing Date, if shareholders of the Fund approve the
Reorganization; and
NOW, THEREFORE, the Company and Shareholder Servicing Agent hereby agree as
follows:
1. Appointment. Shareholder Servicing Agent hereby agrees to perform
certain services for holders or beneficial owners of Shares ("Shareholders")
with respect to certain classes of shares of the Fund as set forth on Schedule A
hereto as amended from time to time.
2. Services to be Performed.
2.1. Shareholder Services and Related Services. Shareholder Servicing
Agent shall provide or cause its agents to provide any combination of the
shareholder liaison and account maintenance services ("Shareholder Services") or
related services described in Sections 2.2 and 2.3 of this Agreement.
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2.2. Shareholder Services. For purposes of this Agreement, Shareholder
Services shall include: (a) answering Customer and registered representative
inquiries regarding account status and history, the manner in which purchases
and redemptions of the Shares may be effected and certain other matters
pertaining to the Company; (b) providing Customer account information through a
variety of electronic and non-electronic means; (c) assisting Shareholders in
designating and changing dividend options, account designations and addresses;
(d) arranging for or assisting Shareholders with respect to the wiring of the
funds to and from Customer accounts in connection with Customer orders to
purchase, redeem or exchange Shares; (e) transmitting and receiving funds in
connection with Customer orders to purchase, redeem or exchange shares; (f)
verifying shareholder requests for changes to account information; (g) handling
correspondence from Shareholders about their accounts; and (h) providing such
other shareholder services as the Company or a Customer may reasonably request,
to the extent permitted by applicable law.
2.3. Other Related Services. Other related services include: (a)
aggregating and processing purchase and redemption orders for Shares; (b)
providing Shareholders with account statements showing their purchases, sales,
and positions in the Fund; (c) processing dividend payments for the Fund; (d)
providing sub-accounting services to the Company for Shares held for the benefit
of Shareholders; (e) forwarding communications from the Company to Shareholders,
including proxy statements and proxy solicitation materials, shareholder
reports, dividend and tax notices, and updated Prospectuses and Statements of
Additional Information; (f) receiving, tabulating, and transmitting proxies
executed by Shareholders; and (g) providing support and related services to
financial intermediaries in order to facilitate their processing of orders and
communications with Shareholders.
2.4. Subcontracting by Shareholder Servicing Agent. Shareholder
Servicing Agent shall perform any combination of the Shareholder Services and
Other Related Services described in Sections 2.2 and 2.3 of this Agreement for
Shareholders and may subcontract for the performance of some or all of these
services with financial intermediaries: (a) who are record owners of Fund
shares; (b) with whom Shareholders have established an account that invests in
Shares; or (c) who otherwise provide Shareholder Services and Other Related
Services for Shareholders. Such financial intermediaries may include without
limitation any one or more persons, which is an affiliate of Shareholder
Servicing Agent. Unless a Company otherwise expressly agrees in writing,
Shareholder Servicing Agent shall be to the same extent responsible to the
Company for the acts or omissions of any subcontractor or sub-agent as it would
be liable to the Company for its own acts or omissions.
2.5. Provision of Services. Shareholder Servicing Agent shall provide
such office space and equipment, telephone facilities, and personnel (which may
be any part of the space, equipment, and facilities currently used in the
Shareholder Servicing Agent's business, or any personnel employed by the
Shareholder Servicing Agent) as may be reasonably necessary or beneficial in
order to provide the services specified in Sections 2.2 and 2.3 of this
Agreement to Shareholders. Shareholder Servicing Agent and its officers and
employees will, upon request, be available during normal business hours to
consult with the Company, the Board of Directors of the Company, or their
designees concerning the performance of the Shareholder Servicing Agent's
responsibilities under this Agreement. In addition, Shareholder Servicing Agent
will
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furnish such information to the Company, the Board of Directors of the Company,
or their designees as they may reasonably request concerning the provision of
the services specified in Sections 2.2 and 2.3 of this Agreement and will
otherwise cooperate with the Company, the Board of Directors and their designees
(including, without limitation any auditors or counsel designated by the Company
or its board members).
3. Fees. As full compensation for the Shareholder Services and Other
Related Services described in Sections 2.2 and 2.3 of this Agreement and
expenses incurred by the Shareholder Servicing Agent in providing such services,
the Company, with respect to each class of Shares of the Fund shall pay the
Shareholder Servicing Agent a fee at an annual rate of 0.25% of the average
daily net asset value of the Fund's Shares. This fee will be computed daily and
will be payable monthly in arrears.
4. Information Pertaining to the Shares; Etc. No person is authorized to
make any representations concerning the Company or any Shares except those
representations contained in the Fund's then-current Prospectuses and Statements
of Additional Information and in such printed information as the applicable
Company or the principal underwriter for the Company may prepare or approve.
Shareholder Servicing Agent further agrees to deliver to Shareholders, upon
request of the Company, copies of any amended Prospectuses and Statements of
Additional Information or other information prepared for distribution to
Shareholders or Shareholders.
During the term of this Agreement, the Company agrees to furnish
Shareholder Servicing Agent all Prospectuses, Statements of Additional
Information, proxy statements, proxy solicitation materials, reports to
shareholders, and other material the Company or its agents will distribute to
shareholders of the Fund.
5. Use of Shareholder Service Agent's Name. The Company shall not use the
name of Shareholder Servicing Agent in any Prospectus, sales literature or other
material relating to the Company in a manner not approved by Shareholder
Servicing Agent prior thereto in writing; provided, however, that the approval
of Shareholder Servicing Agent shall not be required for any use of its name in
a manner that merely refers in accurate and factual terms to its appointment
hereunder or which is required by the Commission or any state securities
authority or any other appropriate regulatory, governmental or judicial
authority; provided, further, that in no event shall such approval be
unreasonably withheld or delayed.
6. Use of the Company's Name. Shareholder Servicing Agent shall not use the
name of the Company or Fund on any checks, bank drafts, bank statements or forms
for other than internal use in a manner not approved by the Company prior
thereto in writing; provided, however, that the approval of the Company shall
not be required for the use of the Company's name in connection with
communications permitted by Sections 2 and 4 of this Agreement or for any use of
the Company's name in a manner that merely refers in accurate and factual terms
to Shareholder Servicing Agent's role hereunder or which is required by the
Commission or any state securities authority or any other appropriate
regulatory, governmental or judicial authority; provided, further, that in no
event shall such approval be unreasonably withheld or delayed.
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7. Security. Shareholder Servicing Agent represents and warrants that the
various procedures and systems that (a) it has implemented with regard to
safeguarding from loss or damage attributable to fire, theft or any other cause
any Company records and other data and Shareholder Servicing Agent's records,
data, equipment, facilities and other property used in the performance of its
obligations hereunder are adequate and (b) it will make such changes in such
procedures and systems that, from time to time, in its judgment are required for
the secure performance of its obligations hereunder. The parties shall review
such systems and procedures on a periodic basis, and the Company shall, from
time to time, specify the types of records and other data of the Company to be
safeguarded in accordance with this Section 7.
8. Compliance with Laws; Etc. Shareholder Servicing Agent shall comply with
all applicable federal and state securities laws and regulations. Shareholder
Servicing Agent represents and warrants to the Company that the performance of
all its obligations hereunder will comply with all applicable securities laws
and regulations, the provisions of its charter documents and by laws and all
material contractual obligations binding upon Shareholder Servicing Agent.
9. Liability and Force Majeure. Shareholder Servicing Agent shall not be
liable or responsible for any loss, interruption, delay or error including any
loss, interruption, delay or error by reason of circumstances beyond its control
(which includes but is not limited to, acts of civil or military authority,
national emergencies, labor difficulties, fire, equipment failure, mechanical
breakdown, flood or catastrophe, acts of God, insurrection, war, terrorism,
riots or failure of communication or power supply), provided, that any loss,
interruption, delay or error is not caused by the willful misfeasance, bad faith
or gross negligence of Shareholder Servicing Agent, its officers, employees or
agents in the performance of the Shareholder Servicing Agent's duties and
obligations under this Agreement or from the reckless disregard by the
Shareholder Servicing Agent, its officers, employees or agents of the
Shareholder Servicing Agent's duties or obligations under this Agreement.
10. Indemnification.
10.1. Indemnification of Shareholder Servicing Agent. Each Company
will indemnify and hold Shareholder Servicing Agent harmless, from all losses,
claims, damages, liabilities or expenses (including reasonable fees and
disbursements of counsel) from any claim, demand, action or suit (collectively,
"Claims") (a) arising in connection with material misstatements or material
omissions in the applicable Fund's Prospectuses, Statements of Additional
Information, proxy statements, proxy solicitation materials, reports to
shareholders or other materials prepared by the Company or its agents for
distribution to the shareholders of the Fund, actions or inactions by the
Company or any of its agents or contractors or the performance of Shareholder
Servicing Agent's obligations hereunder and (b) not resulting from the willful
misfeasance, bad faith, or gross negligence of Shareholder Servicing Agent, its
officers, employees or agents, in the performance of Shareholder Servicing
Agent's duties or obligations under this Agreement or from the reckless
disregard by Shareholder Servicing Agent, its officers, employees or agents of
Shareholder Servicing Agent's duties and obligations under this Agreement.
Notwithstanding anything herein to the contrary, the Company will indemnify and
hold Shareholder Servicing Agent harmless from any and all losses, claims,
damages, liabilities
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or expenses (including reasonable counsel fees and expenses) resulting from any
Claim as a result of Shareholder Servicing Agent's acting in accordance with any
written instructions reasonably believed by Shareholder Servicing Agent to have
been executed by any person duly authorized by the Company, or as a result of
acting in reliance upon any instrument or stock certificate reasonably believed
by Shareholder Servicing Agent to have been genuine and signed, countersigned or
executed by a person duly authorized by the Company.
In any case in which the Company may be asked to indemnify or hold
Shareholder Servicing Agent harmless, the Company shall be advised of all
pertinent facts concerning the situation in question and Shareholder Servicing
Agent shall use reasonable care to identify and notify the Company promptly
concerning any situation that presents or appears likely to present a claim for
indemnification by the Company. The Company shall have the option to defend
Shareholder Servicing Agent against any Claim which may be the subject of
indemnification under this Section 10.1. In the event that the Company elects to
defend against such Claim, the defense shall be conducted by counsel chosen by
the Company and reasonably satisfactory to Shareholder Servicing Agent.
Shareholder Servicing Agent may retain additional counsel at its expense. Except
with the prior written consent of the Company, Shareholder Servicing Agent shall
not confess any Claim or make any compromise in any case in which the Company
will be asked to indemnify Shareholder Servicing Agent.
10.2. Indemnification of the Company. Without limiting the rights of
the Company under applicable law, Shareholder Servicing Agent will indemnify and
hold the Company harmless from all losses, claims, damages, liabilities or
expenses (including reasonable fees and disbursements of counsel) from any Claim
(a) resulting from the willful misfeasance, bad faith or gross negligence of
Shareholder Servicing Agent, its officers, employees, or agents, in the
performance of Shareholder Servicing Agent's duties and obligations under this
Agreement or from the reckless disregard by Shareholder Servicing Agent, its
officers, employees, or agents of Shareholder Servicing Agent's duties and
obligations under this Agreement, and (b) not resulting from Shareholder
Servicing Agent's actions in accordance with written instructions reasonably
believed by Shareholder Servicing Agent to have been executed by any person duly
authorized by the Company, or in reliance upon any instrument or stock
certificate reasonably believed by Shareholder Servicing Agent to have been
genuine and signed, countersigned or executed by a person authorized by the
Company.
In any case in which Shareholder Servicing Agent may be asked to indemnify
or hold the Company harmless, Shareholder Servicing Agent shall be advised of
all pertinent facts concerning the situation in question and the Company shall
use reasonable care to identify and notify Shareholder Servicing Agent promptly
concerning any situation that presents or appears likely to present a claim for
indemnification by Shareholder Servicing Agent. Shareholder Servicing Agent
shall have the option to defend the Company against any Claim which may be the
subject of indemnification under this Section 10.2. In the event that
Shareholder Servicing Agent elects to defend against such Claim, the defense
shall be conducted by counsel chosen by Shareholder Servicing Agent and
reasonably satisfactory to the Company. The Company may retain additional
counsel at its expense. Except with the prior written consent of Shareholder
Servicing Agent, the Company shall not confess any Claim or make any compromise
in any case in which Shareholder Servicing Agent will be asked to indemnify the
Company.
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10.3. Survival of Indemnities. The indemnities granted by the parties
in this Section 10 shall survive the termination of this Agreement.
11. Insurance. Each of the parties shall maintain reasonable insurance
coverage against any and all liabilities that may arise in connection with the
performance of this Agreement.
12. Further Assurances. Each party agrees to perform such further acts and
execute further documents as are necessary to effectuate the purposes hereof.
13. Termination. This Agreement shall become effective February 19, 2005
and, unless sooner terminated as provided herein, shall continue until October
31, 2006. Thereafter, if not terminated, this Agreement shall continue
automatically for successive one year terms, provided that such continuance is
specifically approved at least annually by the vote of a majority of those
members of the Company's Board of Directors who are not parties to this
Agreement or interested persons of any such party. This Agreement may be
terminated without penalty, on not less than 60 days prior written notice, by
the Company's Board of Directors or by the Shareholder Servicing Agent. This
Agreement will also terminate automatically in the event of its assignment. (As
used in this Agreement, the terms "majority of the outstanding voting
securities", "interested persons" and "assignment" shall have the same meanings
as ascribed to such terms in the 1940 Act.)
14. Privacy. Shareholder Servicing Agent acknowledges and agrees on behalf
of itself and its directors, officers and employees that it may receive from
financial intermediaries or the Fund other information, or access to
information, about shareholders of the Fund who are "customers" or "consumers"
generally as such terms are defined under Regulation S-P (17 CFR 248.1 - 248.30)
(collectively, "Customer Information") including, but not limited to, non-public
personal information such as a customer's name, address, telephone number,
account relationships, account numbers, account balances and account histories.
All information, including Customer Information, obtained pursuant to this
Agreement shall be considered confidential information. Shareholder Servicing
Agent shall not disclose such confidential information to any other person or
entity or use such confidential information other than to carry out the purposes
of this Agreement, including its use under sections 248.14 and 248.15 of
Regulation S-P in the ordinary course of carrying out the purposes of this
Agreement. Shareholder Servicing Agent agrees to:
(a) Limit access to Customer Information which is obtained pursuant to
this Agreement to employees who have a need to know such Customer
Information to effect the purposes of this Agreement;
(b) Safeguard and maintain the confidentiality and security of Customer
Information which is obtained pursuant to this Agreement; and
(c) Use Customer Information obtained pursuant to this Agreement only to
carry out the purposes for which the Customer Information was
disclosed and for no other purpose.
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Shareholder Servicing Agent shall not, directly or through an affiliate,
disclose an account number or similar form of access number or access code for
an account for use in telemarketing, direct mail marketing, or marketing through
electronic mail, except as permitted in Section 248.12 of Regulation S-P or
applicable law.
15. Non-exclusivity. Nothing in this Agreement shall limit or restrict the
right of Shareholder Servicing Agent to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
16. Changes; Amendments. This Agreement may be amended only by mutual
written consent.
17. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to Shareholder Servicing Agent at 0000
Xxxxxxx Xxxxxxx, Xxxxx , Xxxxxxxx, Xxxx 00000, or (2) to the Company at 11
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Xxxxx Xx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other address as
either party may designate by notice to the other party.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware.
19. Execution of Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
SECURITY CAPITAL REAL ESTATE
MUTUAL FUNDS INCORPORATED
By:
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Title:
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Accepted by:
ONE GROUP DEALER SERVICES, INC.
By:
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Title:
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