Exhibit (e)(18)
Mutual Fund Sales and Service Agreement dated as of April 16, 2003
between Xxxxxxx, Xxxxx & Co. One Group Dealer Services, Inc.
and One Group Administrative Services, Inc.
ONE GROUP DEALER SERVICES, INC.
MUTUAL FUND SALES AND SERVICE AGREEMENT
This Agreement is entered into among the financial institution executing this
Agreement ("Financial Institution"), One Group Dealer Services, Inc. ("OGDS")
and One Group Administrative Services, Inc. ("OGA"), with respect to those
series of One Group Mutual Funds ("One Group") listed in Exhibit A hereto (each
series referred to individually as a "Fund" and collectively as the "Funds") for
whose shares of beneficial interest ("Shares") OGDS serves as Distributor and
for whom OGDS provides or coordinates shareholder services.
A. Financial Institution.
1. Status of Financial Institution as Registered Broker-Dealer or "Bank".
(a) Financial Institution represents and warrants to OGDS:
(i) That it is a broker or dealer as defined in Section
3(a)(4) or 3(a)(5) of the Securities Exchange Act of 1934
("Exchange Act"); that it is registered with the
Securities and Exchange Commission ("SEC") pursuant to
Section 15 of the Exchange Act; that it is a member of the
National Association of Securities Dealers, Inc. ("NASD").
Financial Institution's expulsion from the NASD will
automatically terminate this Agreement immediately without
notice. Suspension of Financial Institution from the NASD
for violation of any applicable federal or state law, rule
or regulation will terminate this Agreement effective
immediately upon OGDS' written notice of termination to
Financial Institution; or
(ii) That it is a "bank," as that term is defined in Section
3(a)(6) of the Exchange Act, that engages in activities
described in Section 3(a)(4) of the Exchange Act and that,
during the term of this Agreement, it will abide by the
rules and regulations of those state and federal
authorities with appropriate jurisdiction over the
Financial Institution, especially those regulations
dealing with the activities of the Institution as
described under this Agreement. Financial Institution
agrees to notify OGDS immediately of any action by or
communication from state or federal banking authorities,
state securities authorities, the SEC, or any other party
which may affect its status as a bank or which may
otherwise affect in any material way its ability to act in
accordance with the terms of this Agreement. Any action or
decision of any of the foregoing regulatory authorities or
any court of appropriate jurisdiction which affects
Financial Institution's ability to act in accordance with
the terms of this agreement, including the loss of its
exemption from registration as a broker or dealer, will
terminate this Agreement effective upon OGDS' written
notice of termination to Financial Institution; and
(b) That Financial Institution is registered with the appropriate
securities authorities in all states, territories and jurisdictions in
which its activities make such registration necessary.
2. Financial Institution Acts as Agent for its Customers.
The parties agree that in each transaction in the Shares of any Fund and
with regard to any services rendered pursuant to this Agreement:
(a) Financial Institution is acting as agent for the customer;
(b) The customer is for all purposes the customer of Financial
Institution;
(c) Each transaction is initiated solely upon the order of the customer;
1
(d) As between Financial Institution and its customer, the customer will
have full beneficial ownership of all Shares of the Funds;
(e) Each transaction shall be for the account of the customer and not for
Financial Institution's account; and
(f) Each transaction shall be without recourse to Financial Institution
provided that Financial Institution acts in accordance with the terms
of this Agreement.
Financial Institution will offer and sell the Shares of the Funds only in
accordance with the terms and conditions of the applicable current
Prospectus and Statement of Additional Information ("SAI") and will make no
representations not included in said Prospectus or SAI or in any authorized
supplemental material supplied by OGDS. Financial Institution shall not
have any authority in any transaction to act as agent for OGDS or One
Group.
B. Sales of Fund Shares.
1. Execution of Orders for Purchase and Redemption of Shares.
(a) All orders for the purchase of any Shares shall be executed at the
then-current public offering price per share (i.e., the net asset
value per share plus the applicable initial sales load, if any) and
all orders for the redemption of any Shares shall be executed at the
net asset value per share, in each case as described in the applicable
Fund prospectus. Any applicable deferred sales charges (contingent or
otherwise), redemption fee, or similar charge or fee will be deducted
by One Group prior to the transmission of the redemption proceeds to
Financial Institution or its customer. OGDS and One Group reserve the
right to reject any purchase request in their sole discretion.
The procedures relating to all orders will be subject to the terms of
the prospectus of each Fund and OGDS' written instructions to
Financial Institution from time to time. Specifically,
(i) orders to purchase and redeem shares received by Financial
Institution prior to the close of trading on the New York
Stock Exchange (generally, 4:00 p.m., Eastern Time ("ET"))
("Market Close") on any day that a Fund is open for business
("Day 1") will be electronically or otherwise transmitted to
One Group by 8:00 a.m., ET on the next day that the Fund is
open for business ("Day 2")(such orders are referred to as
"Day 1 Trades"); and
(ii) orders to purchase and redeem shares received by Financial
Institution after the Market Close on Day 1, but prior to the
Market Close on Day 2 ("Day 2 Trades") will be electronically
or otherwise transmitted to One Group on the second day that a
Fund is open for business following Day 1.
(iii) If the Financial Institution cannot electronically transmit
Day 1 Trades by 8:00 a.m. on Day 2, Financial Institution will
transmit such orders by facsimile prior to the beginning of
trading on the New York Stock Exchange (generally 9:30 a.m ET)
("Market Open") on Day 2.
(b) Day 1 Trades will be effected at the NAV calculated as of the Market
Close on Day 1and Day 2 Trades will be effected at the NAV calculated
as of the Market Close on Day 2. One Group agrees that, consistent
with the foregoing, Day 1 Trades will deemed to have been received by
One Group prior to the Market Close on Day 1 for all purposes,
including, without limitation, effecting distributions.
(c) Payments for Shares shall be made as specified in the applicable Fund
prospectus, (i.e., by wire directly to State Street Bank and Trust
Company, One Group's transfer agent). If payment for any purchase
order is not received in accordance with the terms of the applicable
Fund prospectus, OGDS reserves the right, without notice, to cancel
the sale and to hold Financial Institution responsible for any loss
sustained as a result thereof, including loss of profit, except to the
extent that failure to receive payment for a purchase order was caused
by circumstances or factors beyond the Financial Institutions
reasonable control.
2
C. Distribution Services.
1. Agreement to Provide Distribution Services.
(a) (a) The services to be provided under sub-section (a) may include, but
are not limited to, the following:
(i) Assisting OGDS in marketing shares of the Funds to Financial
Institution's prospective and existing customers;
(ii) Aggregating and processing purchase and redemption requests
for Shares from customers and placing net purchase and
redemption orders with the Funds or their transfer agent;
(iii) Providing periodic information to customers about their
holdings in the Funds;
(iv) Arranging for bank wires and federal funds wires to and from
customers' accounts;
(v) Responding to questions about the Funds from customers and
potential customers;
(vi) Processing dividend payments;
(vii) Assisting customers in changing dividend options, account
designations, and addresses;
(viii) Where required by law, forwarding Fund shareholder
communications (such as proxies, shareholder reports, annual
and semi-annual financial statements, and dividend,
distribution and tax notices) to Customers;
(ix) Advertising the availability of the Funds; and
(x) Providing other similar services as OGDS may reasonably
request to the extent permitted under applicable laws or
regulations.
(b) OGDS may, in its sole discretion, reduce the amount of, or terminate
entirely, Rule 12b-1 Fee payments. In addition, Rule 12b-1 Fees may be
reduced or eliminated at any time if the Distribution and Shareholder
Services Plans under which the fees are paid are materially amended or
terminated either by the Board of Trustees of One Group or by vote of
a majority of the outstanding shares of a Fund.
2. Asset-Based Sales Loads Payable to Financial Institution.
During the term of this Agreement, OGDS will pay Financial Institution Rule
12b-1 Fees for each Fund as set forth in the Fund's current prospectus. For
the payment period in which this Agreement becomes effective or terminates,
there shall be an appropriate pro-ration of the fee on the basis of the
number of days that this Agreement is in effect during the period.
D. Miscellaneous.
1. Delivery of Prospectuses and Reports to Customers.
Financial Institution will deliver or cause to be delivered to each
customer, at or prior to the time of any purchase of Shares, a copy of the
current prospectus of the Fund and, upon request by a customer or
shareholder, a copy of the Fund's current Statement of Additional
Information. At OGDS expense unless otherwise agreed by the parties,
Financial Institution agrees to deliver to Shareholder, upon the request of
OGDS, copies of amended prospectuses and to deliver or cause to be
delivered to shareholders proxy
3
solicitation materials and copies of the Funds' annual and semi-annual
reports. Financial Institution shall not make any representations
concerning any Shares other than those contained in the prospectus or
Statement of Additional Information of a Fund or in any promotional
materials or sales literature furnished to Financial Institution by OGDS or
One Group.
2. ERISA Assets.
(a) Financial Institution understands that the Department of Labor views
ERISA as prohibiting fiduciaries of discretionary ERISA assets from
receiving administrative service fees or other compensation from funds
in which the fiduciary's discretionary ERISA assets are invested. To
date, the Department of Labor has not issued any exemptive order or
advisory opinion that would exempt fiduciaries from this
interpretation. Without specific authorization from the Department of
Labor, fiduciaries should carefully avoid investing discretionary
assets in any fund pursuant to an arrangement where the fiduciary is
to be compensated by the fund for such investment. Receipt of such
compensation could violate ERISA provisions against fiduciary
self-dealing and conflict of interest and could subject the fiduciary
to substantial penalties.
(c) Financial Institution will not perform or provide any duties or
services that would cause it to be a fiduciary under Section 4975 of
the Internal Revenue Code, as amended. For purposes of that Section,
Financial Institution understands that any person who exercises any
discretionary authority or discretionary control with respect to any
individual retirement account or its assets, or who renders investment
advice for a fee, or has any authority or responsibility to do so, or
has any discretionary authority or discretionary responsibility in the
administration of such an account, is a fiduciary.
3. Blue Sky.
(a) Shares of the Funds have been qualified for sale under, or are exempt
from the requirements of the respective securities laws of the states
and jurisdictions listed on Exhibit A. OGDS will promptly notify
Financial Institution in the event shares of the Funds cease to be
qualified for sale under, or cease to qualify for an exemption from
the requirements of the respective securities laws of the states and
jurisdictions listed on Exhibit A to this Agreement.
(b) Financial Institution and OGDS agree and certify that they:
(i) Are licensed to offer and sell securities of open-end
investment companies in all jurisdictions in which it
plans to offer and sell such securities;
(ii) Will comply with all applicable state and federal laws and
the rules and regulations of authorized regulatory
agencies; and
(iii) Will not sell or offer for sale Shares of the Funds in any
state or jurisdiction where the Shares have not been
qualified for sale.
4. Customer Names Proprietary to Financial institution.
(a) All information, including "nonpublic personal information" as that
term in defined in Regulation S-P, relating to customers of the Funds
and Financial Institution are and shall remain the sole property of
the Funds and the Financial Institution and shall not be disclosed to
or used by the Funds, the Financial Institution, OGDS, OGA, or their
affiliates for any purpose except in the performance of their
respective duties and responsibilities under this Agreement and except
for servicing and informational mailings relating to the Funds or as
permitted by Rule 15 of Regulation S-P. Notwithstanding the foregoing,
this Section 5 shall not prohibit the Financial Institution, the
Funds, OGDS, OGA, or any of their affiliates from utilizing the names
of customers of Financial Institution, the Funds, OGDS, OGA, or any of
their affiliates for any purpose if the names are obtained in any
manner other than from Financial Institution pursuant to this
Agreement.
4
(b) If applicable, Financial Institution will deliver One Group's privacy
policy as required by Regulation S-P.
(c) Neither party shall use the name of the other party in any manner
without the other party's written consent, except as required by any
applicable federal or state law, rule or regulation, and except
pursuant to any mutually agreed upon promotional programs.
(d) The provisions of this Section 5 shall survive the termination of this
Agreement.
5. Security Against Unauthorized Use of Funds' Recordkeeping Systems.
Financial Institution agrees to provide such security as is necessary to
prevent any unauthorized use of the Funds' recordkeeping system, accessed
via (a) xxx.xxxxxxxx.xxx or any other URL maintained by One Group, (b) a
networking/data access arrangement or (c) computer hardware or software
provided to Financial Institution by OGDS or OGA.
6. Certification of Customers' Taxpayer Identification Numbers.
Financial Institution agrees to obtain any taxpayer identification number
certification from its customers required under the Internal Revenue Code
of 1986, as amended, and any applicable Treasury regulations, and to
provide OGDS, or its designee with timely written notice of any failure to
obtain such taxpayer identification number certification in order to enable
the implementation of any required backup withholding.
7. Notices.
(a) Except as otherwise specifically provided in this Agreement, all
notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by:
(i) personal delivery;
(ii) postage prepaid, registered or certified United States
first class mail, return receipt requested;
(iii) overnight courier services; or
(iv) facsimile or similar electronic means of delivery (with a
confirming copy by mail as provided herein).
(b) Unless otherwise notified in writing, all notices to OGDS or OGA shall
be given or sent to OGDS or OGA at their offices located at 0000
Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxx, 00000-0000, Attn: President, and all
notices to Financial Institution shall be given or sent to it at its
address shown below.
8. Records.
Financial Institution will maintain all records required to be kept by
state and federal law relating to transactions in Shares and, upon request
by One Group, will promptly make such records available to One Group.
9. Termination and Amendment.
(a) This Agreement shall become effective in this form as of the date
executed by OGDS or as of the first date thereafter upon which
Financial Institution executes any transaction, performs any service,
or receives any payment pursuant hereto. This Agreement supersedes any
prior sales, distribution, shareholder service, or administrative
service agreements between the parties.
(b) With respect to Rule 12b-1 Fees payable by each Fund, this Agreement
shall continue in effect for one year from the date of its execution,
and thereafter for successive periods of one year if the form of this
5
Agreement is approved at least annually by the Board of Trustees of
One Group, including a majority of the members of the Board of
Trustees of One Group who are not interested persons of the Funds and
have no direct or indirect financial interest in the operation of the
Funds' Distribution and Shareholder Services Plans or in any related
documents to such Plans ("Independent Trustees") cast in person at a
meeting called for that purpose.
(c) This Agreement, including Exhibit A hereto, may be amended, modified
or supplemented at any time only by mutual written agreement of the
parties.
(d) Notwithstanding the foregoing, this Agreement may be terminated as
follows:
(i) At any time, without the payment of any penalty, by the vote of
a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of the Fund as
defined in the Investment Company Act of 1940 on not more than
sixty (60) days' written notice to the parties to this
Agreement;
(ii) automatically in the event of the Agreement's assignment as
defined in the Investment Company Act of 1940, upon the
termination of the "Distribution Agreement" between One Group
and OGDS, upon termination of the "Management and
Administration Agreement" between One Group and OGA, or upon
the termination of the applicable Distribution and Shareholder
Services Plan(s); and
(iii) by any party to this Agreement without cause by giving the
other party at least sixty (60) days' written notice of its
intention to terminate.
(e) The termination of this Agreement with respect to any one Fund will
not cause the Agreement's termination with respect to any other Fund.
10. Anti-Money Laundering Procedures.
(a) Financial Institution will comply with all applicable laws and
regulations aimed at preventing, detecting, and reporting money
laundering and suspicious transactions and will take all necessary and
appropriate steps, consistent with applicable regulations and
generally accepted industry practices.
(b) Financial Institution will, to the extent permitted by applicable law
and regulations, notify One Group and/or OGDS of any concerns that
Financial Institution may have in connection with any investor in the
context of relevant anti-money laundering legislation/regulations.
11. Governing Law.
6
This Agreement shall be construed in accordance with the laws of the State
of Delaware.
ONE GROUP DEALER SERVICES, INC.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000-0000
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------
Title: President
-------------------------------
Date: 4/16/03
--------------------------------
ONE GROUP ADMINISTRATIVE SERVICES, INC.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000-0000
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------
Title: Vice President
-------------------------------
Date: 4/16/03
--------------------------------
Xxxxxxx, Sachs & Co.
-------------------------------------
Financial Institution Name
(Please Print or Type)
Address32 Old Slip
-------------------------------------------------------------------------
City: New York State New York Zip Code 10005
------------------------------- ------------------ ----------
By: /s/ Xxxxx XxXxxxxx
----------------------------------
Authorized Signature
Managing Director
-------------------------------------
Title
Xxxxx XxXxxxxx
-------------------------------------
Print Name or Type Name
_____________________________________
Dated
7
EXHIBIT A to
One Group Dealer Services, Inc. Mutual Fund Sales and Service Agreement
Admin. State
FUND Class A Class B Class C Class I Class S Class Qualification *
---- ------- ------- ------- ------- ------- ----- ---------------
1. Prime Money Market X X X X All
------------------------------------------------------------------------------------------------------------------------
2. U.S. Treasury Securities Money Market X X X X All
------------------------------------------------------------------------------------------------------------------------
3. Municipal Money Market X X All
------------------------------------------------------------------------------------------------------------------------
4. Michigan Municipal Money Market X X All except DC
------------------------------------------------------------------------------------------------------------------------
5. Ohio Municipal Money Market X X Note 1
------------------------------------------------------------------------------------------------------------------------
6. U.S. Government Securities Money Market X X All
------------------------------------------------------------------------------------------------------------------------
7 Institutional Prime Money Market X X X All
------------------------------------------------------------------------------------------------------------------------
8. Treasury Only Money Market X X X All
------------------------------------------------------------------------------------------------------------------------
9. Government Money Market X X X All
------------------------------------------------------------------------------------------------------------------------
* All = All 50 states plus Washington, D.C. and Puerto Rico
* State Qualification Notes
---------------------------------------------------------------------------------------------------------------------------------
Note 1 Ohio Municipal AL, AZ, CA, CO, FL, GA, X/X XX, XX, XX, XX, XX, XX, XX, CO, FL, GA, HI, IL, IN,
Money Market HI, IL, IN, KY, LA, MA, NH, NJ, OH, OK, OR, UT KY, LA, MA, MN, MO, MS, MT, NC,
MD, MI, MN, MO, MS, MT, NE, NH, NJ, NV, NY, OH OK, OR,
NC, NE, NH, NJ, NM, NV, PA, SC, UT, VA, WI, WV, WY
NY, OH OK, OR, PA, SC,
TN, TX, UT, VA, WI, WV,
WY
---------------------------------------------------------------------------------------------------------------------------------
8
