EXHIBIT (h)(3)
SUB-ADMINISTRATION AGREEMENT
----------------------------
THIS AGREEMENT is made as of the 1st day of April, 2002 by and between
BISYS FUND SERVICES LIMITED PARTNERSHIP ("BISYS"), a limited partnership
organized under the laws of the State of Ohio and having its principal office at
0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx, and FIRST FINANCIAL CAPITAL ADVISORS LLC (the
"Service Company"), an Ohio limited liability company.
WHEREAS, BISYS has entered into an Administration Agreement dated April
1, 2002 (the "Administration Agreement") with Legacy Funds Group (the
"Company"), a Massachusetts business trust registered with the Securities and
Exchange Commission (the "Commission") as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
concerning the provision of various administration services for the Company and
its investment portfolios (individually referred to herein as a "Portfolio" and
collectively as the "Portfolios");
WHEREAS, BISYS desires to retain the Service Company to assist it in
performing certain administration services for the Company and the Portfolios;
and
WHEREAS, the Service Company is willing to perform such services, and
BISYS is willing to retain the Service Company, on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, BISYS and the Service Company agree as follows:
1. RETENTION OF THE SERVICE COMPANY.
BISYS hereby appoints the Service Company, subject to the supervision,
direction and control of the Company's Board of Trustees, to furnish the Company
and its Portfolios with the services described in Schedule A hereto (the
"Services").
2. ALLOCATION OF CHARGES AND EXPENSES.
(A) THE SERVICE COMPANY. The Service Company shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
the Services. The Service Company shall also provide the items which it is
obligated to provide under this Agreement, and shall pay all compensation, if
any, of officers of the Company as well as all Trustees of the Company who are
affiliated persons of the Service Company or any affiliated company of the
Service Company.
(B) BISYS. BISYS acknowledges that it will continue to perform all
services required to be performed by it as the Administrator under the
Administration Agreement, except those services as are required to be performed
by the Service Company hereunder, including the Services. The parties agree and
acknowledge that pursuant to the Administration Agreement, the Company has
undertaken to pay or cause to be paid all other expenses of the Company not
otherwise allocated to BISYS as the Administrator under the Administration
Agreement, including, without limitation, organization costs, taxes, expenses
for legal and auditing services, the expenses of preparing (including
typesetting), printing and mailing reports, prospectuses, statements of
additional information, proxy solicitation material and notices to existing
shareholders, all expenses incurred in connection with issuing and redeeming
shares, the costs of custodial services, the cost of initial and ongoing
registration of the shares under Federal and state securities laws, fees and
out-of-pocket expenses of Trustees who are not affiliated persons of BISYS or
the investment adviser to the Company or any affiliated corporation of BISYS or
such
15
investment adviser, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Company.
3. COMPENSATION OF THE SERVICE COMPANY.
BISYS shall pay the Service Company, for the services to be provided by
the Service Company under this Agreement, the fees set forth in Schedule B. Such
amounts shall be paid by BISYS from amounts it receives from the Company in
excess of its minimum omnibus fee provided for under the Omnibus Fee Agreement
between the Company, BISYS and BISYS Fund Services Ohio, Inc. dated as of April
1, 2002 (the "Omnibus Fee Agreement").
4. LIMITATION OF LIABILITY OF THE SERVICE COMPANY AND BISYS.
The duties of the Service Company shall be confined to those expressly
set forth herein, and no implied duties are assumed by or may be asserted
against it hereunder. The Service Company shall not be liable for any error of
judgment or mistake of law or for any loss arising out of any act or omission in
carrying out its duties hereunder, except a loss resulting from willful
misfeasance, bad faith or negligence in the performance of its duties, or by
reason of reckless disregard of its obligations and duties hereunder, except as
may otherwise be provided under provisions of applicable law which cannot be
waived or modified hereby. (As used in this Section 4, the term "the Service
Company" shall include directors, officers, employees and other agents of the
Service Company as well as the Service Company itself, to the extent such
persons' conduct relates to the performance of then Services hereunder.) Any
officer, director, employee or agent of the Service Company who is or who
becomes an officer, Trustee, employee or agent of the Company shall be deemed,
when engaged in rendering the Services hereunder in such capacity, to be
rendering services directly to or for the Company, and shall not be deemed to be
acting as an officer, director, employee or agent or one under the control or
direction of BISYS.
So long as the Service Company acts in good faith and with due
diligence and without negligence, BISYS shall indemnify Service Company 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 the Service Company's actions taken or nonactions with
respect to the performance of services hereunder; provided, however, that
BISYS's obligation under the foregoing indemnity and hold harmless shall apply
only to the extent that BISYS is in fact fully indemnified and held harmless by
the Company under the Administration Agreement for any and all losses, damages,
costs, charges, reasonable counsel fees and disbursements, payments, expenses
and liabilities (including reasonable investigation expenses) incurred by BISYS
(including, without limitation, any indemnification amounts payable to the
Service Company), and shall be due only if, as and when such amounts payable to
the Service Company by BISYS under this paragraph are in fact received by BISYS
from the Company.
The Service Company shall indemnify BISYS and hold it harmless from and
against any and all actions, suits and claims, whether groundless or otherwise,
and from and against any and
16
all losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of the Service Company's appointment as
sub-administrator, and any actions and omissions taken by thereunder involving
its negligence, willful misfeasance or reckless disregard of its obligations
under this Agreement.
5. ACTIVITIES OF THE SERVICE COMPANY.
The services of Service Company to be rendered hereunder are not to be
deemed to be exclusive. The Service Company is free to render such services to
others and to have other businesses and interests. It is understood that
Trustees, officers, employees and shareholders of the Company are or may be or
become interested in the Service Company, as officers, employees or otherwise
and that directors, officers and employees of the Service Company and its
counsel are or may be or become similarly interested in the Company, and that
the Service Company may be or become interested in the Company as a shareholder
or otherwise.
6. DURATION OF THIS AGREEMENT.
This Agreement shall become effective upon the date first upon written,
and shall continue in effect during the term of the Administration Agreement,
including any renewals thereof. This Agreement shall terminate automatically
upon the termination of the Administration Agreement. The Service Company
expressly agrees and acknowledges that the exercise by BISYS of any rights it
may have under the Administration Agreement, including, in particular, any
rights BISYS may have from time to time to terminate the Administration
Agreement, shall not be restricted or limited in any manner by this Agreement
and shall not give rise to any claim by the Service Company hereunder.
In addition to the foregoing, this Agreement may be terminated for
"cause." For these purposes, "cause" shall mean (a) a material breach of this
Agreement that has not been remedied for thirty (30) days following written
notice of such breach from the non-breaching party; (b) a final, unappealable
judicial, regulatory or administrative ruling or order in which the party to be
terminated has been found guilty of criminal or unethical behavior in the
conduct of its business; (c) financial difficulties on the part of the party to
be terminated which are evidenced by the authorization or commencement of, or
involvement by way of pleading, answer, consent or acquiescence in, a voluntary
or involuntary case under Title 11 of the United States Code, as from time to
time is in effect, or any applicable law, other than said Title 11, of any
jurisdiction relating to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors; or (d) any failure on the
part of the Company to pay an amount that is due and payable to BISYS or any of
its affiliates under any agreement to which the Company is a party within sixty
(60) days following the due date. For purposes of this definition of "cause," a
material breach shall include, but not be limited to, any failure on the part of
BISYS to pay the fees due and payable to the Service Company pursuant to Section
3 hereunder within sixty (60) days following the due date.
17
7. ASSIGNMENT.
This Agreement shall not be assignable by either party without the
written consent of the other party. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
8. AMENDMENTS.
No provision of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the parties hereto.
9. CERTAIN RECORDS.
The Service Company 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 Service Company shall be the property of the
Company and will be made available to or surrendered promptly to BISYS upon its
request or to the Company upon its request.
In case of any request or demand for the inspection of such
records by another party, the Service Company shall notify BISYS and follow
BISYS's instructions as to permitting or refusing such inspection; provided that
the Service Company may exhibit such records to any person in any case where it
is advised by counsel to the Company that the Company may be held liable for
failure of the Service Company to do so, or the Service Company could be held in
contempt for failure to do so.
18
10. 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 Commission.
11. 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,
postage prepaid, addressed by the party giving notice to the other party at the
following address: if to BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000,
ATTENTION: XXXXXXX X. XXXXX, facsimile number (000) 000-0000; and if to the
Service Company, at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, ATTENTION: XXXXXX
XXXXX; or at such other address as such party may from time to time specify in
writing to the other party pursuant to this Section.
12. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of Ohio, subject to any applicable provisions of the 1940 Act.
13. 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.
14. CONFIDENTIALITY/PRIVACY.
The Service Company agrees on behalf of itself and its employees to
treat confidentially and as the proprietary information of the Company, all
records and other information relative to the Company and prior, present or
potential shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except, after prior notification to and approval in writing by BISYS or the
Company, which approval shall not be unreasonably withheld.
The Service Company acknowledges that nonpublic personal financial
information relating to consumers or customers of the Company provided by, or at
the direction of the Company to BISYS, or collected or retained by BISYS to
perform its duties as administrator of the Funds shall be considered
confidential information. Service Company shall not give, sell or in any way
transfer such confidential information to any person or entity, except at the
direction of BISYS or as required or permitted by law. Service Company shall
have in place and maintain physical, electronic and procedural safeguards
reasonably designed to protect the security, confidentiality and integrity of,
and to prevent unauthorized access to or use of records and information relating
to consumers or customers of the Company. The Service Company acknowledges and
agrees to comply with the Company's Statement of its privacy policies and
practices as required by Securities and Exchange Commission Regulation S-P.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS FUND SERVICES OHIO, INC.,
its General Partner
19
By:
--------------------------------------
Title:
-----------------------------------
FIRST FINANCIAL CAPITAL ADVISORS LLC
By:
--------------------------------------
20
SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES LIMITED PARTNERSHIP
AND
---
FIRST FINANCIAL CAPITAL ADVISORS LLC
SERVICES
--------
(a) Review contractual Company expenses, yields, total return,
expense ratios, portfolio turnover rate and portfolio average
dollar-weighted maturity;
(b) (i) Review the annual update to the Company's registration
statement on Form N-1A, (ii) review supplements to the Company's
registration statement, (iii) review Notices of Annual or Special
Meetings of shareholders and proxy materials relating thereto,
(iv) assist with the solicitation and tabulation of proxies in
connection with meetings of shareholders and (v) assist with the
printing and distribution of prospectuses, supplements and proxy
materials, and (vi) produce and distribute materials for board
meetings pertaining to the responsibilities of the Company's
sub-administrator, as requested;
(c) Review such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with Federal and state securities
law) as may be necessary or desirable to register the Company's
Shares with state securities authorities;
(d) Develop and prepare communications to Shareholders, including
certain components of the annual report to Shareholders, assist
with the mailing of prospectuses, notices, proxy statements,
proxies and other reports to Company Shareholders, and monitor
the proxy solicitation process for all shareholder meetings,
including the tabulation of shareholder votes;
(e) Review contracts on behalf of the Company with, among others,
the Company's investment adviser, distributor, custodian,
transfer agent and fund accountant;
(f) Monitor the Company's transfer agent with respect to the
payment of dividends and other distributions to Shareholders;
A-1
(g) Review performance data of the Portfolios for dissemination
to information services companies covering the investment company
industry and identify those information services companies to be
in receipt of such data;
(h) Review the preparation and filing of the Company's tax
returns;
(i) Examine and review the operations and performance of the
various organizations providing services to the Company or any
Portfolio of the Company, including, without limitation, the
Company's investment adviser, distributor, custodian, fund
accountant, transfer agent, outside legal counsel and independent
public accountants, and at the request of the Trustees, report to
the Board on the performance of organizations;
(j) Assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and printing
of the Company's semi-annual and annual reports to Shareholders;
(k) Assist with the design, development, and operation of the
Portfolios, including new classes, investment objectives,
policies and structure;
(l) Advise the Company and its Trustees on industry developments
and other matters concerning the operation of the Company and its
Portfolios;
(m) Review the status of the Company and its Portfolios as
registered investment companies under the Internal Revenue Code
of 1986, as amended; and
(n) Furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Company and the sub-administrator shall determine desirable.
A-1
SCHEDULE B
----------
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES LIMITED PARTNERSHIP
AND
---
FIRST FINANCIAL CAPITAL ADVISORS LLC
SUB-ADMINISTRATION FEES
-----------------------
BISYS shall pay the Service Company the following sub-administration
fees:
On annual basis, for each Portfolio, the fee shall be the difference,
if any, between (a) the amount that BISYS receives from the Company as omnibus
fees under the Omnibus Fee Agreement between the Company, BISYS and BISYS Fund
Services Ohio, Inc. dated as of April 1, 2002 (the "Omnibus Fee Agreement") and
(b) whichever is larger, of the amounts determined under (i) and (ii) below:
(i) The minimum annual omnibus fee BISYS is entitled to retain for a
Portfolio as provided under the Omnibus Fee Agreement.
(ii) The sum of:
(x) a fee to be retained by BISYS from the Portfolio, determined
based upon the Portfolio's net assets relative to the net assets
of all Portfolios of the Company, according to the following
annual rates applicable to the aggregate average net assets of
all Portfolios of the Company:
0.14% (14 basis points) of average aggregate net assets up to
$500 million;
0.125% (12.5 basis points) of average aggregate net assets from
$500 - $700 million;
0.1125% (11.25 basis points) of average aggregate net assets from
$700 - $900 million;
0.10% (10 basis points) of average aggregate net assets from $900
million - $1 billion;
0.09% (9 basis points) of average aggregate net assets over $1
billion; plus
(y) a shareholder account charge of $25 for each shareholder
account in excess of 100 accounts in the relevant Portfolio, as
reflected on BISYS's transfer agent system at any time during the
relevant annual period.
