Exhibit (e)(13)
Mutual Fund Sales and Service Agreement dated as of April 4, 2002 between
Transamerica Life Insurance and Annuity Company, 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 a Life Insurance Company
(a) Financial Institution represents and warrants to OGDS:
(i) that it is a life insurance company domiciled in the State of
North Xxxxxxxx and has certificates of authority authorizing it
to conduct a life insurance business in all states except New
York;
(ii) that it has established separate accounts that are exempt from
registration with the Securities and Exchange Commission under
Section 3(a)(12)(iv) of the Securities Exchange Act of 1934
("`34 Act") that invest in shares of investment company
securities;
(iii) that it offers and sells shares of its separate accounts to
plans that meet the requirements for qualification under Section
401 of the Internal Revenue Code of 1986, as amended ("Plans");
(iv) that it has established, or will establish, a separate account
("Separate Account") that will invest in shares of One Group
Mutual Funds ("Fund" or "Funds"), and will offer and sell shares
of the Separate Account ("Separate Account Shares") to Plans
and/or to their participants ("Participants"); and,
(v) as and when it receives orders from Plans and/or Participants
for the purchase, redemption and/or exchange of Separate Account
Shares, it will aggregate these orders and net them and submit
orders to the Funds or to their transfer agent for the purchase,
redemption or exchange of shares of One Group Mutual Funds
("Shares") on behalf of the Separate Account.
2. Financial Institution's Purchases of Shares.
The parties agree that with regard to each transaction in which Financial
Institution purchases, redeems or exchanges Shares, and with regard to any
services rendered pursuant to this Agreement, the following will apply:
(a) Financial Institution will trade on behalf of the Separate Account.
(b) The Plans and Participants are customers of Financial Institution
("Customer" or "Customers").
(c) Each transaction in Shares by Financial Institution shall be initiated
by its receipt of orders from Customers for the purchase, redemption
or exchange of Separate Account Shares, which orders shall be
aggregated and netted, and based thereon Financial Institution shall
submit an order to the Funds or to their transfer agent for the
purchase, redemption or exchange of a corresponding number of Shares
determined on the basis of the then-current offering price per Share,
in the case of a net purchase of Shares, or at the then-current net
asset value ("NAV") per Share, in the case of a net redemption or a
net exchange of Shares.
(d) Financial Institution shall have legal ownership of all Shares and
Customers shall have legal ownership of all Separate Account Shares.
In offering and selling Separate Account Shares to Customers, Financial
Institution shall be authorized to disclose to Customers that the Separate
Account will invest in Shares as its underlying funding medium, and in so
doing will not make any representation that is not contained in the
then-current Prospectus or the then-
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current Statement of Additional Information for the Funds, 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, Redemption and/or Exchange of Shares.
(a) All orders for the purchase or redemption of Shares shall be executed
at the then-current NAV 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, redeem and/or exchange Separate Account
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 aggregated and netted, and
an order for the corresponding number of Shares to be purchased,
redeemed or exchanged shall be electronically 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");
(ii) orders to purchase, redeem and/or exchange Separate Account
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 aggregated and netted, and an order for the
corresponding number of Shares to be purchased, redeemed or
exchanged shall electronically transmitted to One Group on the
second day that a Fund is open for business following Day 1;and,
(iii) if 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 1, and 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 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.
C. Distribution Services.
1. Agreement to Provide Distribution Services.
(a) With regard to those Funds noted on Exhibit A which pay asset-based
sales charges under Distribution and Shareholder Services Plans
adopted pursuant to Rule 12b-1 under The Investment Company Act of
1940, as amended ("Rule 12b-1 Fees"), OGDS hereby appoints Financial
Institution to render or cause to be rendered distribution and sales
services to the Funds and their shareholders.
(b) The services to be provided under sub-section (a) may include, but are
not limited to, the following:
(i) Assisting OGDS to increase the number of issued and outstanding
Shares by marketing Separate Account Shares to Customers;
(ii) Aggregating, netting and processing purchase, redemption and/or
exchange orders for Separate Account Shares from Customers and
placing net purchase, redemption or exchange orders for Shares
with the Funds or their transfer agent;
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(iii) Providing periodic information to Customers about their holdings
of Separate Account Shares, including information about their
value based on the then-current NAV of the Shares owned by the
Separate Account;
(iv) Arranging for bank wires and federal funds wires to and from the
Separate Account;
(v) Responding to questions about the Funds from Customers and
potential Customers;
(vi) Advertising the Funds as the underlying investment medium of the
Separate Account; and,
(vii) Providing other similar services as OGDS may reasonably request
to the extent permitted under applicable laws or regulations.
(c) 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 make available to Customers, at or prior to the
time of any purchase of Separate Account Shares, copies of the Funds'
then-current prospectus and, upon request by a Customer, a copy of the
Funds' then-current Statement of Additional Information. Financial
Institution shall not make any representations concerning any Shares other
than those that are contained in the then-current prospectus or the
then-current Statement of Additional Information of the applicable Fund or
Funds, 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.
(b) 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.
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(b) Financial Institution agrees and certifies that, in connection with
offering and selling Separate Account Shares to Customers, it will:
(i) comply with all applicable state and federal laws and the rules
and regulations of authorized regulatory agencies; and,
(ii) will not engage in any activities in regard to the Shares that
would require it to be registered as a broker-dealer under
Section 15 of the `34 Act or under the securities laws of any
state or other jurisdiction, and will not offer for sale or sell
any Shares in any state or other jurisdiction.
4. Indemnification.
(a) Financial Institution shall indemnify and hold harmless OGDS, OGA,
each Fund, the transfer agent of the Funds, and their respective
subsidiaries, affiliates, officers, directors, agents and employees
from all direct or indirect liabilities, losses or costs (including
attorneys fees) arising from, related to or otherwise connected with:
(i) any material breach by Financial Institution of any
representations, covenants or warranties of this Agreement;
(ii) any actions or omissions of OGDS, OGA, any Fund, the transfer
agent of the Funds, and their subsidiaries, affiliates,
officers, directors, agents and employees in reliance upon any
oral, written or computer or electronically transmitted
instructions, documents or materials that are received by any
such persons and reasonably believed to be genuine and
reasonably believed to have been given by or on behalf of
Financial Institution; or
(iii) any willful misconduct or negligence (as measured by industry
standards) of Financial Institution, its agents and employees,
in the performance of, or failure to perform, its obligations
under this Agreement, or any reckless disregard of its
obligations under this Agreement.
(b) OGDS shall indemnify and hold harmless Financial Institution and its
subsidiaries, affiliates, officers, directors, agents and employees
from and against any and all direct or indirect liabilities, losses or
costs (including attorneys fees) arising from, related to or otherwise
connected with:
(i) any breach by OGDS of any of its representations, covenants or
warranties of this Agreement or any provision of this Agreement;
(ii) any alleged untrue statement of a material fact contained in any
Fund's Registration Statement, Prospectus, SAI, advertisements,
marketing materials or other similar documents (collectively,
the "Fund's Materials") that are provided to Financial
Institution by or on behalf of the Funds, or as a result of or
based upon any alleged omission to state a material fact in any
of the Fund's Materials required to be stated therein or
necessary to make the statements contained therein not
misleading; and
(iii) any willful misconduct or negligence (as measured by industry
standards) of OGDS, its agents and employees, in the performance
of, or failure to perform, its obligations under this Agreement,
or any reckless disregard of its obligations under this
Agreement
(c) OGA shall indemnify and hold harmless Financial Institution and its
subsidiaries, affiliates, officers, directors, agents and employees
from and against any and all direct or indirect liabilities, losses or
costs (including attorneys fees) arising from, related to or otherwise
connected with any breach by OGA of any provision of this Agreement.
(d) The agreement of the parties in this Section 4 to indemnify each other
is conditioned upon the party entitled to indemnification
("Indemnified Party") giving notice to the party required to provide
indemnification ("Indemnifying Party") promptly after the summons or
other first legal process for any claim as to which indemnity may be
sought is served on the Indemnified Party. Such notice will be given
by a means of prompt delivery that provides confirmation of receipt to
the address provided below in Paragraph 9. The Indemnified Party shall
permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting from it, provided that counsel for the
Indemnifying Party who shall conduct the defense of such claim or
litigation shall be approved by the Indemnified Party (which
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approval shall not be unreasonably be withheld), and that the
Indemnified Party may participate in such defense at its expense. If
the Indemnifying party does not elect to assume the defense, the
Indemnifying Party will reimburse the Indemnified Party for the
reasonable fees and expenses of any counsel retained by it. The
failure of the Indemnified Party to give notice as provided in this
Sub-section (d) shall not relieve the Indemnifying Party from any
liability other than its indemnity obligation under this Section. No
Indemnifying Party, in the defense of any such claim or litigation,
shall, without the written consent of the Indemnified Party, consent
to entry of any judgment or enter into any settlement that does not
include as an unconditional term the giving by the claimant or
plaintiff to the Indemnified Party of a release from all liability in
respect to such claim or litigation.
(e) The provisions of this Section 4 shall survive the termination of this
Agreement.
5. Customer Names Proprietary to Financial institution.
(a) All information, including "nonpublic personal information" as that
term in defined in Regulation S-P, relating to Financial Institution's
customers are and shall remain Financial Institution's sole property
and shall not be disclosed to or used by OGDS, OGA, or their
affiliates for any purpose except 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 OGDS, OGA, or any of their
affiliates from utilizing the names of Financial Institution's
customers for any purpose if the names are obtained in any manner
other than from Financial Institution pursuant to this Agreement and
other than as a direct or indirect result of Financial Institution
entering into this Agreement with OGDS and OGA.
(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.
6. 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.
7. Solicitation of Proxies.
Financial Institution agrees not to solicit or cause to be solicited
directly, or indirectly, at any time in the future, any proxies from the
shareholders of any or all of the Funds in opposition to proxies solicited
by management of the Fund or Funds, unless a court of competent
jurisdiction shall have determined that the conduct of a majority of the
Board of Directors or Trustees of the Fund or Funds constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard of their
duties. This Section 7 will survive the termination of this Agreement.
8. Certification of Financial Institution's Taxpayer Identification Number.
Financial Institution agrees to provide its taxpayer identification number
certification to OGDS as required under the Internal Revenue Code of 1986,
as amended, and any applicable Treasury regulations.
9. 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;
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(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.
10. 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.
11. 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
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 Customers ("Independent Trustees"), by votes cast in
person at a meeting called for that purpose.
(c) This Agreement, including Exhibit A hereto, may be amended by OGDS
from time to time by the following procedure. OGDS will mail a copy of
the amendment to Financial Institution's address, as shown below. If
Financial Institution does not object to the amendment within thirty
(30) days after its receipt, the amendment will become part of the
Agreement. Financial Institution's objection must be in writing and be
received by OGDS within such thirty days. Provided, however, that in
all cases in which OGDS sends an amendment to Financial Institution,
it will send the amendment by personal delivery, overnight courier
service, or registered or certified United States first class mail,
postage prepaid and return receipt requested.
(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
Customer(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.
12. Governing Law.
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This Agreement shall be construed in accordance with the laws of the State
of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers as of the dates set forth below.
ONE GROUP DEALER SERVICES, INC.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000-0000
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: President
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Date: 4/4/02
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ONE GROUP ADMINISTRATIVE SERVICES, INC.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000-0000
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Treasurer
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Date: 4/4/02
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TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
(Financial Institution)
0000 Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
By
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/s/ Xxxxx Xxxxxx
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Authorized Signature
VP Product Development
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Title
Xxxxx Xxxxxx
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Print Name or Type Name
April 4, 2002
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Dated
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