SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of March, 2006 (the "Effective
Date") by and between Touchstone Advisors, Inc., an Ohio corporation (the
"Administrator") and Integrated Fund Services, Inc., an Ohio corporation (the
"Sub-Administrator").
THIS AGREEMENT has been amended as of January 1, 2007 to (i) reflect that
the Administrator will provide administrative services to Touchstone Strategic
Trust, Touchstone Tax-Free Trust, Touchstone Investment Trust and Touchstone
Variable Series Trust and the Administrator desires to retain the
Sub-Administrator to assist in performing certain administrative services to
these Trusts, (ii) amend Schedules A and B (iii) change the Effective Date to
January 1, 2007 and (iv) reflect the name changes of Integrated Fund Services,
Inc. to Integrated Investment Services, Inc. and Constellation Funds to
Touchstone Funds Group Trust.
WHEREAS, the Administrator and Touchstone Funds Group Trust, Touchstone
Strategic Trust, Touchstone Tax-Free Trust, Touchstone Investment Trust and
Touchstone Variable Series Trust, (individually a "Trust" and collectively the
"Trusts") have entered into an Administration Agreement, as amended (the
"Administration Agreement") pursuant to which the Administrator will provide
administrative services to the Trusts; and
WHEREAS, the Administrator desires to retain the Sub-Administrator to
assist in performing certain administrative services to each series of the Trust
(individually a "Fund" and collectively the "Funds") and the Sub-Administrator
is willing to perform such services on the terms and conditions hereinafter set
forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, Administrator and the Sub-Administrator hereby agree as
follows:
ARTICLE 1. Retention of the Sub-Administrator. Administrator hereby
retains the Sub-Administrator to furnish the Funds with administrative services
as set forth in Article 2 below. The Sub-Administrator hereby accepts such
employment to perform the duties set forth below. The Sub-Administrator shall,
for all purposes herein, be deemed to be an independent contractor.
ARTICLE 2. Sub-Administrative and Accounting Services. The
Sub-Administrator shall perform or supervise the performance by others of the
administrative services set forth in Schedule B hereto, including activities
related to the Funds' fiscal year-end financial statement preparation, and made
a part of this Agreement. The Sub-Administrator may sub-contract with third
parties to perform certain of the services to be performed by the
Sub-Administrator hereunder; provided, however, that the Sub-Administrator shall
remain principally responsible to Administrator for the acts and omissions of
such other entities. In meeting its duties hereunder, the Sub-Administrator
shall have the general authority to do all acts deemed in the
Sub-Administrator's good faith belief to be necessary and proper to perform its
obligations under this Agreement.
ARTICLE 3. Compensation of the Sub-Administrator. The Administrator shall
pay to the Sub-Administrator compensation at the annual rate specified in
Schedule A to this Agreement until this Agreement is terminated in accordance
with Article 5. Such compensation shall be calculated and accrued daily, and
paid to the Sub-Administrator monthly. If this Agreement becomes effective
subsequent to the first day of a month or terminates before the last day of a
month, the Sub-Administrator's compensation for that part of the month in which
this Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above. Payment of the Sub-Administrator's
compensation for the preceding month shall be made within 30 days after receipt
of invoice. In addition, the Administrator agrees to reimburse the
Sub-Administrator for the Sub-Administrator's reasonable out of pocket expenses
in providing services hereunder, so long as Sub-Administrator receives prior
consent in writing from the Administrator.
ARTICLE 4. Limitation of Liability of the Sub-Administrator. The duties of
the Sub-Administrator shall be confined to those expressly set forth herein, and
no implied duties are assumed by or may be asserted against the
Sub-Administrator hereunder. The Sub-Administrator shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties hereunder,
except a loss resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder. (As used in this Article 4, the term
"Sub-Administrator" shall include Trustees, officers, employees and other agents
of the Sub-Administrator as well as that entity itself.) Under no circumstances
shall the Sub-Administrator be liable to Administrator for consequential,
indirect or punitive damages.
So long as the Sub-Administrator, or its agents, acts without willful
misfeasance, bad faith or gross negligence in the performance of its duties, and
without reckless disregard of its obligations and duties hereunder, the
Administrator assumes full responsibility and shall indemnify the
Sub-Administrator and hold it harmless from and against any and all actions,
suits and claims, whether groundless or otherwise, and from and against any and
all losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of any act or omission of the
Sub-Administrator in carrying out its duties hereunder; provided, however, with
respect to a damage award of a court of competent jurisdiction in connection
with a third party claim that arises directly out of a negligent act or omission
by the Sub-Administrator or its agents in breach of this Agreement (which act or
omission did not constitute willful misfeasance, bad faith or gross negligence
or willful disregard of obligations and duties hereunder), the Sub-Administrator
shall be responsible for 20% of such damage award up to a maximum amount equal
to the aggregate amount of fees paid by the Administrator to the
Sub-Administrator in the twelve months immediately preceding the date on which
the negligence of the Sub-Administrator occurred. The indemnity and defense
provisions set forth herein shall indefinitely survive the termination of this
Agreement.
The indemnification rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provisions contained herein shall
apply, however, it is understood that if in any case the Administrator may be
asked to indemnify or hold the Sub-Administrator harmless, the Administrator
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Sub-Administrator
will use all reasonable care to identify and notify the Administrator promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Administrator, but
failure to do so shall not affect the rights hereunder. In no event and under no
circumstances shall either party to this Agreement be liable to anyone,
including, without limitation, the other party, for special damages for any act
or failure to act under any provision of this Agreement if advised of the
possibility thereof.
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The Administrator shall be entitled to participate at its own expense or,
if it so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If Administrator elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
Administrator and satisfactory to the Sub-Administrator, whose approval shall
not be unreasonably withheld. In the event that Administrator elects to assume
the defense of any suit and retain counsel, the Sub-Administrator shall bear the
fees and expenses of any additional counsel retained by it. If Administrator
does not elect to assume the defense of a suit, it will reimburse the
Sub-Administrator for the fees and expenses of any counsel retained by the
Sub-Administrator.
The Sub-Administrator may apply to Administrator at any time for
instructions and may consult counsel for the Administrator or its own counsel
and with accountants and other experts with respect to any matter arising in
connection with the Sub-Administrator's duties, and the Sub-Administrator shall
not be liable or accountable for any action taken or omitted by it in good faith
in accordance with such instruction or with the opinion of such counsel,
accountants or other experts.
Also, the Sub-Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Sub-Administrator be held to have
notice of any change of authority of any officers, employee or agent of the
Administrator until receipt of written notice thereof from the Administrator.
Nothing herein shall make the Sub-Administrator liable for the performance
or omissions of unaffiliated third parties not under the Sub-Administrator's
reasonable control such as, by way of example and not limitation, transfer
agents, custodians, investment advisers or sub-advisers, postal or delivery
services, telecommunications providers and processing and settlement services.
ARTICLE 5. Duration and Termination of this Agreement. This Agreement
shall be in full force and effect upon the Effective Date. The initial term of
this Agreement will end one (1) year after the Effective Date. ("Initial Term").
Upon conclusion of the Initial Term, this Agreement will automatically remain in
full force and effect for a one (1) year renewable term, and for succeeding one
(1) year renewable terms thereafter, unless the Agreement is terminated as
provided below. The Administrator or the Sub-Administrator may elect to
terminate this Agreement as of the last day of the Initial Term or any renewal
term by notifying the other in writing not less than ninety (90) days prior to
the end of the then current term.
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This Agreement may be terminated only: (a) by either party hereto on such
date as is specified in written notice given by the terminating party, in the
event of a material breach of this Agreement by the other party, provided the
terminating party has notified the other party of such material breach at least
45 days prior to the specified date of termination and the breaching party has
not remedied such breach by the specified date; or (b) as to any Fund or any
Trust, effective upon the liquidation of such Fund or Trust, as the case may be.
For purposes of this paragraph, the term "liquidation" shall mean a transaction
in which the assets of the Trust or a Fund are sold or otherwise disposed of and
proceeds there from are distributed in cash to the shareholders in complete
liquidation of the interests of such shareholders in the entity. After
termination of this Agreement for so long as the Sub-Administrator in fact
continues to perform any one or more services contemplated by this Agreement,
the provisions of this Agreement, including without limitation the provisions
regarding limitation of liability and indemnification, shall continue in full
force and effect.
Notwithstanding the foregoing, this Agreement shall terminate
automatically upon termination of the Administration Agreement; provided,
however, that no such termination of this Agreement shall occur if and to the
extent the Administrator or any control affiliate thereof is named as, or
otherwise becomes, the successor administrator to a Trust. If this Agreement is
terminated pursuant to this paragraph, and the Administrator proposes or causes,
directly or indirectly, a Trust to retain a third party other than the
Sub-Administrator to serve as successor administrator or sub-administrator to
the Trust, the Sub-Administrator will be entitled to a one time cash payment
equal to the net present value of the profits the Sub-Administrator would have
earned during the remainder of the then-current term of the contract based on
the fee rate set forth in Schedule A hereto applied to the average daily net
assets of the Trust during the six month period immediately preceding such
termination.
ARTICLE 6. Activities of the Sub-Administrator. The services of the
Sub-Administrator rendered to the Administrator are not to be deemed to be
exclusive. The Sub-Administrator is free to render such services to others and
to have other businesses and interests.
ARTICLE 7. Confidentiality. The Sub-Administrator agrees on behalf of
itself and its employees to treat confidentially all records and other
information relative to the Administrator and each Trust and its shareholders
received by the Sub-Administrator in connection with this Agreement, including
any non-public personal information as defined in Regulation S-P, and that it
shall not use or disclose any such information except for the purpose of
carrying out the terms of this Agreement; provided, however, that the
Sub-Administrator may disclose such information as required by law or after
prior notification to and approval in writing by the Administrator or a Trust,
which approval may not be withheld where the Sub-Administrator may be exposed to
civil or criminal contempt proceedings or penalties for failure to comply.
ARTICLE 8. Certain Records. The Sub-Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the
Sub-Administrator on behalf of the Trusts shall be prepared and maintained at
the expense of the Sub-Administrator, but shall be the property of the Trusts
and will be made available to or surrendered promptly to the Administrator or
the Trusts on request.
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In case of any request or demand for the inspection of such records by
another party, the Sub-Administrator shall notify the Administrator and follow
the Administrator's instructions as to permitting or refusing such inspection;
provided that the Sub-Administrator may exhibit such records to any person in
any case where it is advised by its counsel that it may be held liable for
failure to do so, unless (in cases involving potential exposure only to civil
liability) the Administrator has agreed to indemnify the Sub-Administrator
against such liability.
ARTICLE 9. Compliance With Governmental Rules and Regulations. The
Sub-Administrator undertakes to comply in all material respects with applicable
requirements of the 1933 Act, the 1934 Act, the 1940 Act and any laws, rules and
regulations of governmental authorities having jurisdiction with respect to the
duties to be performed by the Sub-Administrator hereunder.
ARTICLE 10. Representations of the Administrator. The Administrator
certifies to the Sub-Administrator that this Agreement has been duly authorized
by the Administrator and, when executed and delivered by the Administrator, will
constitute a legal, valid and binding obligation of the Administrator,
enforceable against the Administrator in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
ARTICLE 11. Entire Agreement; Amendments. This Agreement constitutes the
entire agreement between the parties hereto and supersedes any prior agreement,
draft or proposal with respect to the subject matter hereof. This Agreement or
any part hereof may be changed or waived only by an instrument in writing signed
by the party against which enforcement of such change or waiver is sought.
ARTICLE 12. Assignment. This Agreement shall not be assignable by either
party without the prior written consent of the other party.
ARTICLE 13. Waiver. Any term or provision of this Agreement may be waived
at any time by the party entitled to the benefit thereof by written instrument
executed by such party. No failure of either party hereto to exercise any power
or right granted hereunder, or to insist upon strict compliance with any
obligation hereunder, and no custom or practice of the parties with regard to
the terms of performance hereof, will constitute a waiver of the rights of such
party to demand full and exact compliance with the terms of this Agreement.
ARTICLE 14. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or certified
mail, federal express (or substantially similar delivery service), postage
prepaid, addressed by the party giving notice to the other party at the last
address furnished by the other party to the party giving notice: if to
Administrator, at 000 Xxxxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxx 00000; and if to
the Sub-Administrator at 000 Xxxxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxx 00000.
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ARTICLE 15. Force Majeure. No breach of any obligation of a party to this
Agreement will constitute an event of default or breach to the extent it arises
out of a cause, existing or future, that is beyond the control and without
negligence of the party otherwise chargeable with breach or default, including
without limitation: work action or strike; lockout or other labor dispute;
flood; war; riot; theft; earthquake or natural disaster. Either party desiring
to rely upon any of the foregoing as an excuse for default or breach will, when
the cause arises, give to the other party prompt notice of the facts which
constitute such cause; and, when the cause ceases to exist, give prompt notice
thereof to the other party.
ARTICLE 16. Equipment Failures. In the event of equipment failures beyond
the Sub-Administrator's control, the Sub-Administrator shall, at no additional
expense to the Administrator, take reasonable and prompt steps to minimize
service interruptions but shall have no liability with respect thereto. The
Administrator shall develop and maintain a plan for recovery from equipment
failures which may include contractual arrangements with appropriate parties
making reasonable provision for emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
ARTICLE 17. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 18. Headings. All Article headings contained in this Agreement are
for convenience of reference only, do not form a part of this Agreement and will
not affect in any way the meaning or interpretation of this Agreement. Words
used herein, regardless of the number and gender specifically used, will be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the contract requires.
ARTICLE 19. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Ohio and the applicable provisions of the 1940
Act. To the extent that the applicable laws of the State of Ohio, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
ARTICLE 20. Multiple Originals. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 21. Binding Agreement. This Agreement, and the rights and
obligations of the parties hereunder, shall be binding on, and inure to the
benefit of, the parties and their respective successors and assigns.
ARTICLE 22. Severability. If any part, term or provision of this Agreement
is held to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the Effective Date.
TOUCHSTONE ADVISORS, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
INTEGRATED INVESTMENT SERVICES, INC.
By: /s/ Xxx X. Xxxxxx
----------------------------------
Name: Xxx X. Xxxxxx
Title: President
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SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
DATED JANUARY 1, 2007
BETWEEN
TOUCHSTONE ADVISORS, INC.
AND
INTEGRATED INVESTMENT SERVICES, INC.
FEES: Pursuant to Article 3, the Administrator shall pay the Sub-Administrator
an asset based fee calculated based on the daily net assets of the Trusts. The
asset based fee due to the Sub-Administrator will be deducted and paid to the
Sub-Administrator from the Administrator's monthly fee. The daily net asset fee
is at the following annual rates:
TOUCHSTONE FUNDS GROUP TRUST, TOUCHSTONE STRATEGIC TRUST, TOUCHSTONE TAX-FREE
TRUST, TOUCHSTONE INVESTMENT TRUST (EXCLUDING INSTITUTIONAL MONEY MARKET FUND)
0.08% of the average daily net assets of the aggregate of Touchstone Funds Group
Trust, Touchstone Strategic Trust, Touchstone Tax-Free Trust and Touchstone
Investment Trust (excluding the Institutional Money Market Fund) up to and
including $6 billion; 0.0575% of the next $4 billion of average daily net assets
and 0.0350% of all such assets in excess of $10 billion.
INSTITUTIONAL MONEY MARKET FUND. 0.02% of the Fund's average daily net assets
for sub-administrative services. For fund accounting services, an annual fee
based on average daily net assets as follows:
Asset Size Annual Fee
---------- ----------
0 - $100,000,000 $24,000
$100,000,000 - $200,000,000 $30,000
$200,000,000 - $300,000,000 $36,000
$300,000,000 - $400,000,000 $42,000
Over $400,000,000 $54,000
TOUCHSTONE VARIABLE SERIES TRUST
0.08% of the average daily net assets of Touchstone Variable Series Trust up to
and including $1 billion; 0.0575% of the next $1 billion of average daily net
assets and 0.035% of all such assets in excess of $2 billion.
TERM: This amended Agreement shall become effective on January 1, 2007 and shall
be subject to the provisions under Article 5.
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SCHEDULE B
TO THE SUB-ADMINISTRATION AGREEMENT
DATED JANUARY 1, 2007
BETWEEN
TOUCHSTONE ADVISORS, INC.
AND
INTEGRATED INVESTMENT SERVICES, INC.
LIST OF SERVICES
ADMINISTRATIVE SERVICES
1. Prepare and file post-effective amendments to the registration statements
and other documents on behalf of the Funds with the Securities and
Exchange Commission and other federal and state regulatory authorities as
required by law.
2. Coordinate the scheduling of Board of Trustees' meetings, prepare the
appropriate reports to the trustees and record and maintain the minutes.
3. Maintain all books and records of each Fund as required by federal and
state laws.
4. Coordinate the preparation, filing and distribution of proxy materials and
periodic reports as required by law.
5. Coordinate and monitor third-party services.
6. Establish and maintain procedures for compliance with federal and state
rules and regulations.
7. Provide reports necessary for the Trusts' investment adviser to monitor
compliance with federal and state rules and regulations.
8. Provide officers for the Trusts, if desired.
9. Prepare financial statements and supporting statements, footnotes, per
share information and schedule of investments for the inclusion in the
semiannual and annual reports.
10. Conduct portfolio compliance training for Fund management and the
investment adviser.
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ACCOUNTING SERVICES
1. Calculate net asset value and per share net asset value in accordance with
the 1940 Act and the Trusts' prospectuses.
2. Record all security transactions including appropriate gains and losses
from the sale of portfolio securities.
3. Record interest income and dividend income.
4. Record each Fund's capital share activities based upon purchase and
redemption transactions received by the transfer agent.
5. Calculate a daily cash figure for investment purposes.
6. Monitor and seek authorization for payment of expenses of each Fund.
7. Periodically report to each Trust or its authorized agents share purchases
and redemptions and trial balances of each Fund.
8. Prepare the necessary supporting computations on a book and tax basis to
ensure each Fund complies with the requirements of Section 851 of the
Internal Revenue Code.
9. Facilitate and perform tax planning and administration.
10. Monitor all tax compliance calculations to ensure that each Fund qualifies
as a regulated investment company pursuant to Subchapter M of the Internal
Revenue Code.
11. Assist independent accountants with the annual audit by preparing
necessary annual audit work papers.
12. Generate fund performance calculations (including after-tax returns) and
automated report dissemination.
13. Maintain complete, accurate and current all records with respect to the
Trusts required to be maintained by the Trusts under the Internal Revenue
Code of 1986, as amended (the "Code"), and under the rules and regulations
of the 1940 Act, and preserve said records in the manner and for the
periods prescribed in the Code and the 1940 Act.
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