Exhibit (h)(43)
Agreement dated as of June, 2001
Between
One Group Mutual Funds,
One Group Administrative Services
And
Board of Trade Clearing Corporation
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AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of
June__, 2001 by and between ONE GROUP MUTUAL FUNDS, a business trust organized
and existing under the laws of the State of Massachusetts, having its principal
office at 0000 Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxx 00000-0000 ("One Group"), ONE
GROUP ADMINISTRATIVE SERVICES, INC., a corporation organized and existing under
the laws of the State of Delaware, having its principal office at 0000 Xxxxxxx
Xxxxxxx, Xxxxxxxx, Xxxx 00000-0000 ("OGA"), (collectively, One Group and OGA are
referred to herein as the "Fund"), and the BOARD OF TRADE CLEARING CORPORATION,
a corporation organized and existing under the laws of the State of Delaware,
having its principal place of business at 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxxxx,
Xxxxxxxx 00000 ("Clearing Corporation").
RECITALS
A. The Clearing Corporation acts as a clearing organization for
certain futures contracts and options on futures contracts traded on exchanges
designated by the Commodity Futures Trading Commission pursuant to the Commodity
Exchange Act as contract markets or on electronic trading facilities.
B. The rules of the Clearing Corporation provide that its clearing
members may invest in shares of One Group to be used as margin for transactions
settled and cleared by the Clearing Corporation ("Securities"), and the Clearing
Corporation desires to use the Securities as margin for such transactions.
AGREEMENT
The Fund agrees to hold, administer, deliver and exchange such
Securities, and the cash income and proceeds thereof, as directed by the
Clearing Corporation, either herein, or by notice as provided for herein,
subject to the following terms and conditions:
1. The terms and conditions contained in this Agreement shall apply
to all Securities, and all cash income and proceeds thereof, including
additional Securities purchased with such cash income, held under this
Agreement. The Fund will not provide supervision, recommendations or advice to
the Clearing Corporation with respect to the investment, purchase, sale,
retention or other disposition of the Securities held under this Agreement.
2. The Fund shall establish and maintain, at no cost to the Clearing
Corporation, certain Clearing Corporation accounts at the Fund to hold
Securities as
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margin as the Clearing Corporation shall direct, which shall be identified on
the records of the Fund as the Clearing Corporation shall specify, including
identification of accounts as customer segregated, where appropriate (the
"Accounts"). Each such Account shall have as many subaccounts as the Clearing
Corporation shall direct, which shall be identified on the records of the Fund
as the Clearing Corporation shall specify. The record of each subaccount shall
contain a description (including CUSIP number) of, and the aggregate net asset
value and share quantity of, each issue of Securities therein.
3. (a) Unless the Fund receives written authenticated instructions
from the Clearing Corporation to the contrary, it is authorized and directed to
take the following actions with respect to the Securities held in Accounts
pursuant to this Agreement:
(i) collect all income payable with respect to any Security and
credit such income to the account designated by the Clearing
Corporation clearing member who transferred such Securities to the
Clearing Corporation, but the Fund shall bear no responsibility for
losses resulting from its failure to make such collections except such
losses as are the result of the Fund's failure to exercise reasonable
care; and
(ii) pay any proceeds received in accordance with subparagraph 3(c).
(b) The Fund shall redeem Securities upon receipt of written
authenticated instructions from the Clearing Corporation and pay any proceeds
received in accordance with subparagraph 3(c).
(c) The Fund shall credit all funds received with respect to any
Security in any transaction under subparagraph 3(b) to such account(s) as the
Clearing Corporation may direct from time to time.
(d) Securities that are in the Accounts shall be held in the
subaccounts thereof subject to the exclusive control of the Clearing
Corporation. The Fund shall transfer, deposit, distribute or otherwise dispose
of Securities held in any subaccount in accordance with written authenticated
instructions from the Clearing Corporation, and shall comply with such
instructions notwithstanding any pending proceeding under the Bankruptcy Code
with respect to the Clearing Corporation clearing member by or on whose behalf
Securities were deposited in such subaccount, except only to the extent that
there is an effective written order issued otherwise than at the request of the
Fund by a court of competent jurisdiction, which order is legally binding on the
Fund and specifically orders the Fund not to transfer or otherwise dispose of
Securities or funds held in a Account or subaccount thereof. The Fund agrees
that it will not take any action to cause the issuance of an order described in
the
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preceding sentence. No Securities shall be transferred from the Accounts except
upon written authenticated instructions from the Clearing Corporation.
(e) If the Fund, in accepting Securities for investment in a
Account, makes any error in recording the investment of such Securities on its
books, or, in making the credits required with respect to income and proceeds
from Securities in accordance with paragraphs 3(a) and 3(c), credits an
incorrect amount to any account, or credits an incorrect account, or fails to
make a required credit, then (i) if the Fund detects its error on the same
Business Day, it shall correct such error forthwith and if it has delivered to
the Clearing Corporation or a clearing member any notice, statement or report
("Report") that reflects such error, it shall promptly deliver to the parties
receiving such Report a correction thereto, or (ii) if the Fund fails to detect
its error in time to correct it on the same Business Day, it shall advise the
Clearing Corporation before taking corrective action. If the error resulted in
an overpayment in any Account and the correction would result in a negative
balance in such account, the Clearing Corporation, upon notice from the Fund,
shall promptly return sufficient funds to the account to permit correction of
the error, regardless of any claim that the Clearing Corporation may have
against a particular clearing member.
(f) The Fund shall execute on behalf of the Clearing Corporation
such certificates as may be required to obtain payment with respect to, or to
effect the sale, transfer or other disposition of, any Securities.
4. (a) The Fund is authorized to accept and rely on all written
instructions executed and authenticated by the Clearing Corporation with respect
to the Securities, or the cash income and proceeds thereof, whether given by
hand delivery, U.S. mail, courier, messenger, message via the Society for
Worldwide Interbank Financial Telecommunications (S.W.I.F.T.), cable, telex or
facsimile transmission, which the Fund reasonably believes to be genuine.
(b) The Clearing Corporation assumes responsibility for any
loss, claim or expense the Fund incurs in following the authenticated
instructions of the Clearing Corporation except in the event of the Fund's
failure to act in accordance with the reasonable commercial standards of the
money market mutual fund business. The Fund shall not be liable for delays or
failure to carry out such instructions due to circumstances beyond the Fund's
control. Notice of all claims against the Fund for failure to properly carry out
such instructions must be given to the Fund within 45 days from the date on
which such instructions are executed.
(c) The Fund undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement, it being expressly
understood that there are no implied duties hereunder. The Fund shall not be
liable to the Clearing Corporation, directly or indirectly, for any damages or
expenses arising out of the services provided hereunder other than damages which
result from the Fund's failure to act in good faith in accordance with
reasonable commercial standards of the money
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market mutual fund business; and the Fund shall not be liable for special or
consequential damages (whether or not foreseen). The Fund has no duty to make
investment decisions or to pay dividends on securities except such dividends as
are received on the Securities.
(d) (i) The Clearing Corporation agrees to indemnify the Fund, its
officers and employees and hold them harmless for and from all
claims, losses, liabilities and expenses, including, without
limitation, reasonable legal fees and expenses and amounts paid
or payable in settlement of any action proceeding or
investigation, arising from any claim of any person or entity
resulting from actions the Fund takes in accordance with
provisions of this Agreement (including, without limitation, the
disposition of Securities at the direction of the Clearing
Corporation), except claims, losses, liabilities or expenses
arising from the Fund's failure to act in good faith in
accordance with reasonable commercial standards of the money
market mutual fund business. The Fund may elect to be represented
by its in-house legal department with respect to any matter to
which the indemnification set forth in this paragraph is
applicable, in which case "reasonable legal fees and expenses"
shall not exceed the fully allocated cost to the Fund for the
services of its legal department in connection with the matter.
(ii) Within a reasonable period of time after an indemnified
party receives notice of the commencement of any action, that
indemnified party shall, if it intends to make a claim against
the Clearing Corporation under this paragraph 4(d), notify the
Clearing Corporation of its commencement and provide it with a
copy of the summons and complaint. The Clearing Corporation
shall be entitled to assume the defense of such action with
counsel of its choice, reasonably acceptable to the Fund;
provided, however, that if the Clearing Corporation is a party to
the action, the indemnified party may retain the defense if
advised by counsel that there are legal defenses available to the
indemnified party which are different from or additional to those
available to the Clearing Corporation.
(iii) If the Clearing Corporation assumes the defense of any
action pursuant to the foregoing sentence, the following
additional provisions shall apply: (A) the Clearing Corporation
shall provide the Fund with copies of all documents received by
it or its counsel with respect to the
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indemnified matter promptly upon receipt thereof and with copies
of all documents proposed to be delivered by it or its counsel
with respect to the indemnified matter, and shall use its best
efforts to provide such documents sufficiently in advance of any
deadline for delivery of such documents to allow the Fund to
review and comment thereon prior to such deadline and prior to
actual delivery; (B) the Clearing Corporation shall consult with
the Fund in good faith as to the conduct of such defense and
shall give due regard to any comments or suggestions made by the
Fund; and (C) in the event the Fund disagrees with the Clearing
Corporation about the conduct of the defense, the Fund may assume
such defense, and upon such assumption by the Fund, the Clearing
Corporation shall be released from its obligation to indemnify
the Fund with respect to such action.
(iv) The Clearing Corporation shall not be required to indemnify
or reimburse any indemnified party for any amount paid or payable
by such indemnified party in the settlement of any action,
proceeding or investigation unless the Clearing Corporation gives
its written consent to such settlement, which consent shall not
be unreasonably withheld.
5. (a) The Fund shall be responsible for the protection of the
records it prepares in connection with this Agreement and Securities held
hereunder, excepting only loss or destruction caused by an act of God, the
public enemy, any government, governmental agency or military body, by any riot
or civil commotion or by any other cause or condition beyond the control of the
Fund.
(b) The Fund will maintain records for each subaccount of each
Account so as to enable the individual investments to be identified with
specificity.
(c) The Fund will not accept in any subaccount of a Account
hereunder any Securities of which the Fund has actual knowledge that they are
not free and clear of all liens, security interests, charges, encumbrances and
rights of third parties of whatever kind or nature, except only the rights of
the Clearing Corporation. Notwithstanding the foregoing, the Fund shall have no
obligation to make any independent investigation as to, or to search for, the
existence of any third party rights referred to in the preceding sentence.
(d) The Fund shall not assert any lien on or security interest
in, or exercise any right of set-off against, any Securities held under this
Agreement.
6. The Fund acknowledges and agrees that:
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(a) The Securities invested into any Account hereunder, and any
proceeds thereof, are held for the account of the Clearing Corporation as
margin.
(b) The Securities invested in any Account that the Clearing
Corporation has identified to the Fund as being subject to CFTC segregation
requirements are required to be segregated in accordance with the provisions of
the Commodity Exchange Act and the regulations promulgated thereunder, and the
Fund shall have executed an acknowledgment as required therein substantially in
the form attached as Exhibit A to the applicable agreement.
(c) The Securities and the Fund's records attendant thereto may
be examined during regular banking hours by the Clearing Corporation or its
agents or representatives, and by authorized representatives of the Commodities
Futures Trading Commission, upon prior written notice by the Clearing
Corporation to the Fund.
(d) The Securities invested in any Account hereunder are
maintained exclusively for the benefit of the Clearing Corporation and do not
constitute general assets of the Fund.
(e) (i) The Fund shall treat the Clearing Corporation as
entitled to exercise the rights that comprise the Securities credited to the
Accounts; (ii) the Securities credited to the Accounts shall be deemed to be
"financial assets" (as defined in Section 8-102(a)(9) of the Uniform Commercial
Code, ("UCC")); and (iii) the Fund shall identify the Clearing Corporation in
the Fund's records as the "entitlement holder" (as defined in Section 8-
102(a)(8) of the UCC) with respect to the Securities in the Accounts.
7. The Fund and the Clearing Corporation shall observe the
procedures identified in Exhibit B to this Agreement with respect to the
Accounts on each Business Day.
8. No later than 12:00 noon on the first business day of each week,
the Fund shall deliver to the Clearing Corporation a current list, by
subaccount, of the Securities held in each Account, showing as to each such
Security (i) the CUSIP number, (ii) the net asset value and share quantity, and
(iii) description.
9. The Clearing Corporation is authorized to, and the Fund
acknowledges that the Clearing Corporation may, rely on the confirmations,
notices and reports given by the Fund pursuant to this Agreement.
10. Any delay or failure of either party hereto at any time to
require performance by the other party of any provision of this Agreement shall
in no way affect the right of such party to require future performance of that
or any other provision of this Agreement and shall not be construed as a waiver
of any subsequent breach of any
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provision, a waiver of this provision itself or a waiver of any other right
under this Agreement.
11. (a) Except as provided in paragraph 4(a) or any other provision
of this Agreement setting forth the means by which certain notices, instructions
or other communications are required or permitted to be given, any written
notice, instruction or other communication required or permitted under this
Agreement shall be given by hand delivery or United States mail, and shall be
deemed delivered upon delivery by hand to, or on the second day (disregarding
Saturdays, Sundays and holidays) after deposit in the United States mail,
postage prepaid, return receipt requested, addressed to, the following address:
If to the Fund:
One Group Administrative Services, Inc.
Suite J/K/L
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxx Xxxxxxxx
If to the Clearing Corporation:
Board of Trade Clearing Corporation
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or such other address as the party to be so addressed may hereafter designate by
notice.
(b) The term "authenticated" as used herein means verified by
use of a pre-authorized signature or facsimile signature on a writing, or by the
use of one or more of the following as from time to time agreed to in writing
between the Clearing Corporation and the Fund to be proof of the authorization
of such communication by the sender: algorithms, other codes, identifying words
or numbers, other identifying devices or procedures or call-back procedures.
(c) The term "Business Day" means (i) the period of time during
which both the Clearing Corporation and the Fund are open for business on a
calendar day and (ii) such other days and times as may be agreed upon from time
to time in writing by the Clearing Corporation and the Fund.
12. If any of the provisions of this Agreement are invalid under any
applicable statute or rule of law, they are, to that extent, to be deemed
omitted.
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13. This Agreement, and all amendments and supplements hereto, if
any, constitute the entire agreement between the parties relating to the subject
matter hereof and supersede all proposals and agreements, oral or written, and
all other communications, oral or written, between the parties relating to the
subject matter hereof, and may not be modified except in a writing signed by the
party against whom the modification is to be enforced.
14. This Agreement may be terminated at any time by the mutual
agreement of the parties. Additionally, any party may terminate this Agreement
upon sixty (60) days prior written notice delivered to the other parties as
provided for herein.
15. In all matters set forth in this Agreement controlled by state
law, the internal laws of the State of Illinois shall govern.
16. Times specified herein refer to, in the absence of a contrary
specification, Central Standard or Central Daylight Time as in effect in
Chicago, Illinois on the date involved.
17. This Agreement, including the exhibits attached hereto, as the
same may be amended from time to time, is: (i) the sole and controlling
agreement between the parties hereto concerning the subject matter hereof; and
(ii) supersedes all prior negotiations, agreements, understandings,
representations, or communications, whether written or oral with respect to such
subject matter.
18. The names 'One Group Mutual Funds' and 'Trustees of the One Group
Mutual Funds' refer respectively to the Trust created and the Declaration of
Trust dated May 23, 1985 to which reference is hereby made and a copy of which
is on file at the office of the Secretary of the Commonwealth of Massachusetts
and elsewhere as required by law, and to any and all amendments thereto so filed
or hereafter filed. The obligations of 'One Group Mutual Funds' entered into in
the name or on behalf thereof by any of the Trustees, representatives or agents
are made not individually, but in such capacities, and are not binding upon any
of the Trustees, Shareholders or representatives of the Trust personally, but
bind only the assets of the Trust, and all persons dealing with any series of
Shares of the Trust must look solely to the assets of the Trust belonging to
such series for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
ONE GROUP MUTUAL FUNDS
By: /s/ Xxxx X. Xxxxxx
---------------------
Name (Typed): Xxxx X. Xxxxxx
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Title: President
ONE GROUP ADMINISTRATIVE SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------
Name (Typed): Xxxxxx X. Xxxxx
Title: Managing Director
BOARD OF TRADE CLEARING CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------
Name (Typed): Xxxxx X. Xxxxx
Title: Vice President, Treasurer and Chief
Financial Officer
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Exhibit A
___________, 2001
[Address]
Re: BOARD OF TRADE CLEARING CORPORATION CUSTOMER
SEGREGATED MARGIN ACCOUNT, ACCOUNT NO. _________________
Ladies and Gentlemen:
The Board of Trade Clearing Corporation has or may have certain sums of money or
securities (hereinafter referred to as "funds") credited to the Board of Trade
-----
Clearing Corporation Customer Segregated Margin Account, Account No.
_______________ (the "Account") established and maintained with you.
-------
You are hereby informed that funds deposited in the Account, and subsequent
additions thereto and accruals therein, represent and include funds belonging to
customers of the clearing members ("Clearing Members") of the Board of Trade
----------------
Clearing Corporation.
Such funds have been transferred to the Account as initial margin by the
customers of Clearing Members, who are trading in commodity futures and option
contracts listed on the Board of Trade of the City of Chicago and its affiliates
(collectively the "Exchange"), which funds are regulated by Section 4d(2) of the
--------
Commodity Exchange Act and Regulations of the Commodity Futures Trading
Commission ("CFTC"). Such funds are held, and are required to be held, in
----
accordance with the provisions of the Commodity Exchange Act and CFTC
Regulations.
Section 4d(2) of the Commodity Exchange Act and CFTC Regulations 1.20(b) and
1.26(b) provide that such commodity customers' funds shall be segregated and
treated as belonging to the Clearing Members' commodity customers, rather than
as belonging to the Exchange or Clearing Members.
228
Accordingly, funds held in the Account shall be separately accounted for and
segregated as belonging to the commodity customers of Clearing Members; no
portion of the funds in the Account may be obligated to any person (including
you), except to purchase, margin, guarantee, secure, transfer, adjust or settle
trades, or contracts of commodity customers; and no person (including you) may
hold, dispose of, or use any funds in the Account as belonging to any person
other than commodity customers. Without limiting the generality of the
foregoing, the funds in the Account will not be subject to any lien or offset or
liability which may now or hereafter be owing to you by the Clearing
Corporation, the Exchange or any other person other than customers, and such
funds shall not be applied by you upon any such indebtedness or liability.
Please acknowledge the foregoing and your agreement thereto by signing in the
space provided below.
Very truly yours,
BOARD OF TRADE
CLEARING CORPORATION
By: _________________________
Its: _________________________
Accepted and Agreed to as of
___________________, 2001
One Group Mutual Funds
By:
Its:
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Exhibit B
---------
1. The Fund will only accept for investment to any sub-account of a Account
shares of a money market mutual fund approved in writing in advance by the
Clearing Corporation ("MMMF Shares") that are fully and finally paid for
and, to the Fund's actual knowledge, are free and clear of liens, security
interests, charges, encumbrances and rights of third parties.
2. The Fund shall not assert any lien on or security interest in, or exercise
any right of set-off against, any MMMF Shares in its custody.
3. MMMF Shares shall be deposited only in 1000 share increments.
4. Dividend reinvestments and income accruals related to, and income earned
from, MMMF Shares shall not be credited to the Clearing Corporation's
Accounts or to a specific member sub-account. All such income will only be
credited to the account of the clearing member firm, except in the event
the Clearing Corporation notifies the Fund that the clearing member firm is
in default, in which case the Fund shall credit all such dividend
reinvestments and income accruals related to, and income earned from, MMMF
Shares that accrue after receipt of such notice from the Clearing
Corporation to the Clearing Corporation's Accounts.
5. The Fund shall notify the Clearing Corporation by facsimile transmission no
later than 10:00 a.m. each day of all purchase orders or advices that the
Fund has received from all clearing member firms prior to 9:00 a.m. on that
day.
6. The Fund shall notify the Clearing Corporation by facsimile transmission no
later than 10:00 a.m. each day if there are no purchase orders for that day
from all clearing member firms.
7. Between 11:00 a.m. - 2:35 p.m. each day the Fund shall promptly send
written confirmation, via facsimile transmission, of each delivery of MMMF
Shares into a Account that is deemed delivered between 10:00 a.m. and 2:30
p.m. on that day.
8. The Fund shall produce and make available to the Clearing Corporation sub-
accounted daily transaction statements or advices indicating all deposits
and withdrawals of MMMF Shares from any Account at 9:30 a.m. on the
immediately preceding day.
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10. No later than 12:00 noon on the first business day of each week, the Fund
shall deliver a current list as of the previous week's last business day,
by sub-account, of all MMMF Shares held in each Account, showing the
aggregate net asset value and share quantity.
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