EX-99.(H)(1)
MASTER SERVICES AGREEMENT
AGREEMENT made as of the 16th day of July, 2004, between BISYS FUND
SERVICES OHIO, INC. ("BISYS"), an Ohio corporation having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 (and an indirect
wholly-owned subsidiary of The BISYS Group, Inc., a Delaware corporation ("BISYS
Group")); and STI CLASSIC FUNDS (the "Trust") a Massachusetts business trust,
c/o Trusco Capital Management, Inc., 00 Xxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX
00000.
WHEREAS, the Trust desires that BISYS perform administration, fund
accounting and transfer agency services for the investment portfolios of the
Trust listed on Schedule A hereto, as well as such additional investment
portfolios as hereafter may be established from time to time by the Trust
(collectively, the "Funds") and;
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the Trust and BISYS hereby agree as follows:
1. Retention of BISYS.
The Trust hereby retains BISYS to act as administrator, fund accountant
and transfer agent of the Trust, and to furnish the Trust with administrative,
fund accounting and transfer agency services as set forth in Sections 2(a)
through (c) below. BISYS and the Trust hereby agree that BISYS will perform the
services upon the terms set forth in this Agreement and the Schedules hereto.
BISYS shall, for all purposes herein, be deemed to be an independent
contractor and, except as otherwise expressly provided or authorized, shall have
no authority to act for or represent the Trust or Funds in any way, and shall
not be deemed an agent of the Trust or any Funds.
2. Services.
(a) Administration Services. BISYS shall perform the
administrative services set forth in Schedule B and, on behalf
of the Trust, shall investigate, assist in the selection of
and conduct relations with, custodians, depositories,
accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any
other capacity deemed to be necessary or desirable for the
Trust's operations. BISYS shall provide the Board of Trustees
of the Trust (the "Board") with such reports regarding
investment performance as it may reasonably request, but shall
have no responsibility for supervising the performance by any
investment adviser or sub-adviser of its responsibilities.
BISYS shall perform such other administration services for the
Trust and
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each of the Funds that are mutually agreed upon by the parties
from time to time, for which the Trust will pay BISYS the
amounts agreed upon between them.
(b) Fund Accounting Services. BISYS shall perform for the Trust
the fund accounting services set forth in Schedule C hereto.
BISYS shall also perform such special accounting services, and
furnish such reports, for the Trust and the Funds to the
extent agreed upon by the parties from time to time, for which
the Trust will pay BISYS the amounts agreed upon between them.
(c) Transfer Agency Services. BISYS shall perform for the Trust
the transfer agency services set forth in Schedule D hereto.
BISYS also agrees to perform for the Trust such special
services incidental to the performance of the services
enumerated herein as agreed to by the parties from time to
time. BISYS shall perform such additional services as the
parties mutually agree, for which the Trust will pay BISYS the
amounts agreed upon between them.
BISYS shall provide the Trust with all necessary office space, equipment,
personnel, compensation and facilities (including facilities for shareholders'
and Board meetings) for handling the affairs of the Trust and Funds and such
other services as BISYS shall, from time to time, reasonably determine to be
necessary to perform its obligations under this Agreement. In addition, at the
request of the Board, BISYS shall make reports to the Board concerning the
performance of its obligations hereunder.
BISYS shall perform services in accordance with the quality standards, and
deadlines applicable in accordance with Schedule F hereto. The standards,
deadlines and financial penalties included in Schedule F will remain in effect
during the term of this Agreement unless subsequently modified or terminated
with the written consent of the parties. Subject to BISYS' general standard of
care as set forth in Section 7 and the definition of "cause" as set forth in
Section 6, the financial penalties or other remedies explicitly provided in
Schedule F shall be the exclusive remedies for any failure or failures to meet
the specific standards or deadlines provided for thereunder, and the quality
standards and deadlines set forth therein shall not be determinative of the
parties' rights and obligations under the provisions of this Agreement (such as,
for example, in construing whether in any particular instance BISYS has met its
standard of care). A determination by BISYS in a particular instance to agree to
a financial or other penalty provided for in Schedule F shall be without
prejudice to BISYS and shall not by itself be construed as an admission of
wrongdoing or a waiver of any rights generally under this Agreement.
BISYS shall perform such other services for the Trust or the Funds that
are mutually agreed upon by the parties from time to time, for which the Trust
will pay BISYS the amounts agreed upon between them. Except as explicitly set
forth herein, BISYS shall only perform additional services as are provided on an
amendment to this
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Agreement or to schedules hereto, in consideration of such fees as the parties
hereto agree.
BISYS may, in its discretion and at its own expense (except as otherwise
provided hereunder), utilize agents in its performance of its services and, with
prior notice to the Trust, may appoint in writing other parties qualified to
perform transfer agency, administration or fund accounting services reasonably
acceptable to the Trust (individually, a "Sub-Agent") to carry out some or all
of its responsibilities under this Agreement; provided, however, that (i) the
Board's approval shall be required to establish an arrangement in which a
Sub-Agent acts as sub-administrator, sub-fund accountant, or sub-transfer; and
(ii) any agent (including any Sub-Agent) retained by BISYS shall be the agent of
BISYS and not the agent of the Trust, and that BISYS shall be fully responsible
for the acts of such agent (or Sub-Agent) and shall not be relieved of any of
its responsibilities hereunder by the appointment of an agent (or Sub-Agent). In
the event that a Sub-Agent is retained by the Trust (and/or by BISYS at the
request or instruction of the Trust), the foregoing shall not apply to the
extent it is inconsistent with any written agreement(s) entered into by the
parties with respect thereto.
3. Allocation of Charges and Expenses.
BISYS shall furnish at its own expense the executive, supervisory and
clerical personnel necessary to perform its obligations under this Agreement.
BISYS shall also provide all items which it is obligated to provide under this
Agreement, and shall pay all compensation, if any, of officers of the Trust and
Trustees of the Trust who are affiliated persons of BISYS or any affiliated
entity of BISYS; provided, however, that unless otherwise specifically provided,
BISYS shall not be obligated to pay the compensation of any employee or agent of
the Trust (who is not a BISYS employee) retained by the Board to perform
services on behalf of the Trust.
The Trust assumes and shall pay or cause to be paid all other expenses of
the Trust not otherwise allocated herein, including, without limitation,
organization costs, taxes, expenses for Trust 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 of beneficial interest in the Trust ("Shares"), the
cost 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 any affiliate of BISYS
(fees for other "interested Trustees" may be paid by parties other than the
Trust), insurance, interest, brokerage costs, litigation and other extraordinary
or nonrecurring expenses, and all fees and charges of investment advisers.
4. Fees and Expenses.
(a) The Trust shall pay BISYS for the services to be provided by
BISYS under this Agreement in accordance with, and in the
manner set forth in, Schedule E. Fees for any additional
services
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to be provided by BISYS pursuant to an amendment to any of
Schedules B, C or D shall be subject to mutual agreement at
the time such amendment is proposed.
(b) In addition to paying BISYS the fees set forth in Schedule E,
the Trust agrees to reimburse BISYS for all of its actual
out-of-pocket expenses reasonably incurred in providing
services hereunder, including:
(i) All direct telephone, telephone transmission and
telecopy or other electronic transmission expenses
incurred in communication with the Trust or the Trust's
investment adviser or custodian, dealers, shareholders
or others as required for BISYS to perform the services
to be provided hereunder;
(ii) The cost of microfilm or microfiche of records or other
electronic storage of Trust records and other materials;
(iii) All freight and other delivery and bonding charges
incurred in delivering materials to and from the Trust,
its investment advisers and custodian;
(iv) Check and payment processing fees;
(v) Fulfillment;
(vi) XXX custody and other related fees;
(vii) NSCC and related costs;
(viii) Sales taxes;
(ix) Costs of tax forms;
(x) Costs of shareholder correspondence;
(xi) All out of pocket costs incurred in connection with
BISYS' provision (if applicable, under Section 23) of
Trust officers and in connection with compliance
services; and
(xii) Any expenses incurred at the written direction of an
officer of the Trust; provided however, that such
officer is not an officer or employee of BISYS or its
affiliates.
(c) In addition, BISYS shall be entitled to receive the following
miscellaneous fees and charges:
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(i) Ad hoc reporting fees billed, when mutually agreed upon,
according to applicable rate schedules;
(ii) Fees for pricing information used in connection with
pricing the securities and other investments of each
Fund, provided that the Fund shall not be charged an
amount greater than the amount the Fund would be charged
if it obtained the information directly from the
relevant vendor or vendors, including costs incurred by
BISYS to Fair Value Information Vendors (as defined on
Schedule C) with respect to the provision of fair value
pricing information to BISYS for use in valuing the
portfolio holdings of a specific Fund or Funds that the
Trust designates as being subject to fair value
determinations and for which services are to be provided
by BISYS hereunder (such costs shall be incurred at the
discounted group rate made available to BISYS clients,
if applicable);
(iii) A fee for managing and overseeing the report, print and
mail functions performed by BISYS using third-party
vendors; not to exceed $.04 per page for statements and
$.03 per page for confirmations; fees for programming in
connection with creating or changing the forms of
statements, billed at the rate of $150 per hour; and
costs for postage, couriers, stock computer paper,
computer disks, statements, labels, envelopes, checks,
reports, letters, tax forms, proxies, notices or other
forms of printed material (including the costs of
preparing and printing all printed materials) which
shall be required for the performance of the services to
be provided hereunder;
(iv) Fees and expenses associated with providing the "AML
Services," as defined in Section 23, and as set forth in
further detail on Schedule E;
(v) System development fees, billed at the rate of $150 per
hour, as approved by the Trust, and all systems-related
expenses, as agreed upon in advance, associated with the
provision of special reports and services;
(vi) Fees for development of any custom interfaces, billed at
a mutually agreed upon rate;
(vii) Interactive Voice Response System fees, charged
according to BISYS' standard rate schedule, and
applicable to the level of service (e.g., basic,
transaction, premium) selected; and
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(viii) Expenses associated with the tracking of "as-of"
trades, billed at the rate of $50 per hour, as approved
by the Trust.
All rights of compensation under this Agreement for services performed and
for expense reimbursement and for payment of miscellaneous fees and charges
shall survive the termination of this Agreement.
5. Effective Date.
This Agreement shall become effective as of the date of the conversion of
the Funds to BISYS' systems, which shall take place on or about July 26, 2004
(the "Effective Date").
6. Term.
This Agreement shall continue in effect for a period of five (5) years,
until July 31, 2009 (the "Initial Term"). Thereafter, unless otherwise
terminated as provided herein, this Agreement shall be renewed automatically for
successive one year periods ("Rollover Periods"). This Agreement may be
terminated only (i) by provision of a written notice of nonrenewal at least
ninety (90) days prior to the end of the Initial Term or any Rollover Period, as
the case may be, (ii) by mutual agreement of the parties, (iii) for "cause," as
defined below, upon the provision of sixty (60) days advance written notice by
the party alleging cause, or (iv) in the event of a BISYS Change of Control
Transaction, under the terms provided below.
For purposes of this Section 6, "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; or (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.
For purposes of this Section 6, "BISYS Change of Control Transaction"
means (a) the sale or transfer of a controlling interest in BISYS or BISYS
Group, (b) the merger or other consolidation of BISYS or BISYS Group with
another person or entity, the controlling interests in which, following such
merger or consolidation, are held by persons or entities other than those with
controlling interests in BISYS or BISYS Group prior to such transaction, or (c)
the sale of all or substantially all of the assets of BISYS or BISYS Group. For
these purposes, fifty percent (50%) or more of the total equity interest in an
entity shall be deemed to be a controlling interest in such entity. A change of
a controlling interest in BISYS shall not be a considered a BISYS Change of
Control if the ultimate controlling interest in BISYS continues to be held by
BISYS Group and no change in a controlling interest occurs with respect to BISYS
Group.
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In the event that a BISYS Change of Control Transaction occurs during the
term of this Agreement, BISYS shall provide notice of such transaction to the
Trust within five (5) business days after the closing of such transaction
("BISYS Notice"). Within one hundred eighty (180) days of its receipt of the
BISYS Notice, the Trust may elect to terminate this Agreement by providing BISYS
with a written notice of its election to terminate ("Termination Notice"). A
Termination Notice shall set forth an effective date for the termination, which
effective date shall be no less than one hundred eighty (180) days after the
date the Termination Notice is given to BISYS by the Trust.
Notwithstanding the foregoing termination provisions, following any such
termination, in the event that BISYS in fact continues to perform any one or
more of the services contemplated by this Agreement (or any Schedule or exhibit
hereto) with the consent of the Trust, the provisions of this Agreement,
including without limitation the provisions dealing with compensation and
indemnification, shall continue in full force and effect. Fees and out-of-pocket
expenses incurred by BISYS but unpaid by the Trust upon such termination shall
be immediately due and payable upon and notwithstanding such termination. BISYS
shall be entitled to collect from the Trust, in addition to the fees and
expenses provided in the Section 3 and 4 of this Agreement, the amount of all of
BISYS' reasonable cash disbursements in connection with BISYS' activities in
effecting such termination, including without limitation, the delivery to the
Trust, its investment adviser and/or other parties of the Trust's property,
records, instruments and documents.
7. Standard of Care; Uncontrollable Events; Limitation of Liability.
BISYS shall use reasonable professional diligence in the performance of
all services under this Agreement, but shall not be liable to the Trust for any
action taken or omitted by BISYS in the absence of bad faith, willful
misfeasance, negligence or reckless disregard by it of its obligations and
duties. The duties of BISYS shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against BISYS
hereunder.
BISYS shall maintain adequate and reliable computer and other equipment
(including back-ups) necessary or appropriate to carry out its obligations under
this Agreement. Upon the Trust's reasonable request, BISYS shall provide
supplemental information concerning the aspects of its disaster recovery and
business continuity plan that are relevant to the services provided hereunder.
Notwithstanding the foregoing or any other provision of this Agreement, BISYS
assumes no responsibility hereunder, and shall not be liable for, any damage,
loss of data, delay or any other loss whatsoever caused by events beyond its
reasonable control. Events beyond BISYS' reasonable control include, without
limitation, force majeure events. Force majeure events include natural
disasters, actions or decrees of governmental bodies, and communication lines
failures that are not the fault of either party. In the event of force majeure,
computer or other equipment failures or other events beyond its reasonable
control, BISYS shall follow applicable procedures in its disaster recovery and
business continuity plan and use all commercially reasonable efforts to minimize
any service interruption.
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BISYS shall provide the Trust, at such times as the Trust may reasonably
request, copies of reports rendered by independent public accountants on the
internal controls and procedures of BISYS relating to the services provided by
BISYS under this Agreement.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL BISYS, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR EXEMPLARY, PUNITIVE, SPECIAL,
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR LOST PROFITS, EACH OF WHICH IS
HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH DAMAGES
WERE FORESEEABLE OR WHETHER A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
8. Legal Advice.
BISYS shall notify the Trust at any time BISYS reasonably determines that
it is in need of the advice of counsel to the Trust with regard to BISYS'
responsibilities and duties pursuant to this Agreement. BISYS may rely upon the
advice of counsel to the Trust; however, this Agreement shall not obligate
counsel to the Trust to render such advice. After so notifying the Trust, if
BISYS does not obtain the advice of counsel to the Trust within a reasonable
period of time, BISYS shall be entitled to seek, receive and act upon advice of
legal counsel of its reasonable choosing at the reasonable expense of the Trust
unless relating to a matter involving BISYS' willful misfeasance, bad faith,
negligence or reckless disregard of BISYS' responsibilities and duties
hereunder. BISYS shall in no event be liable to the Trust or any Fund or any
shareholder or beneficial owner of the Trust for any action reasonably taken
pursuant to legal advice rendered in accordance with this paragraph.
9. Instructions / Certain Procedures, etc.
BISYS shall be protected in acting upon any document that it reasonably
believes to be genuine and to have been signed or presented by the proper person
or persons. BISYS will not be held to have notice of any change of authority of
any officers, employees or agents of the Trust until receipt of actual notice
thereof from the Trust.
Subject to Section 23(b), whenever BISYS is requested or authorized to
take action hereunder pursuant to instructions from a shareholder, or a properly
authorized agent of a shareholder ("shareholder's agent"), concerning an account
in a Fund, BISYS shall be entitled to rely upon any certificate, letter or other
instrument or communication (including electronic mail), reasonably believed by
BISYS to be genuine and to have been properly made, signed or authorized by an
officer or other authorized agent of the Trust or by the shareholder or
shareholder's agent, as the case may be, and shall be entitled to receive as
conclusive proof of any fact or matter required to be ascertained by it
hereunder a certificate signed by an officer of the Trust or any other person
authorized by the Board or by the shareholder or shareholder's agent, as the
case may be.
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As to the services to be provided hereunder, BISYS may rely conclusively
upon the terms of the relevant then-current Prospectus and Statement of
Additional Information of the Trust, to the extent that such services are
described therein unless BISYS receives written instructions to the contrary in
a timely manner from the Trust.
The parties hereto may amend any procedures adopted, approved or set forth
herein by written agreement as may be appropriate or practical under the
circumstances, and BISYS may reasonably assume that any special procedure which
has been approved by an executive officer of the Trust (other than an officer or
employee of BISYS or its affiliates) does not conflict with or violate any
requirements of the Trust's Declaration of Trust, By-Laws or then-current
Prospectus.
The Trust acknowledges receipt of a copy of BISYS' policy related to the
acceptance of trades for prior day processing (the "BISYS As-of Trading
Policy"). BISYS may amend the BISYS As-of Trading Policy from time to time in
its sole discretion, but will provide prompt notice to the Trust of such
amendment. BISYS may apply the BISYS As-of Trading Policy whenever applicable,
unless BISYS agrees in writing to process trades according to such other as-of
trading policy as may be adopted by the Trust and furnished to BISYS by the
Trust.
The Trust acknowledges and agrees that deviations from BISYS' written
transfer agent compliance procedures may involve a substantial risk of loss. In
the event an authorized representative of the Trust (other than an officer or
employee of BISYS or its affiliates) requests that an exception be made from any
written compliance or transfer agency procedures adopted by BISYS, or any
requirements of the AML Program (as defined in Section 16), BISYS may in its
sole discretion determine whether to permit such exception. In the event BISYS
determines to permit such exception, the same shall become effective when set
forth in a written instrument executed by an authorized representative of the
Trust (other than an officer or employee of BISYS or its affiliates) and
delivered to BISYS (an "Exception"); provided that an Exception concerning the
requirements of the Trust's AML Program shall also be authorized by the Trust's
AML Compliance Officer (as defined in Section 16). An Exception shall be deemed
to remain effective until the relevant instrument expires according to its terms
(or if no expiration date is stated, until BISYS receives written notice from
the Trust that such instrument has been terminated and the Exception is no
longer in effect). Notwithstanding any provision in this Agreement that
expressly or by implication provides to the contrary, as long as BISYS acts in
good faith, BISYS shall have no liability for any loss, liability, expenses or
damages to the Trust resulting from the Exception, and the Trust shall indemnify
BISYS and hold BISYS harmless from any loss, liability, expenses (including
reasonable attorneys fees) and damages resulting to BISYS therefrom.
The Trust instructs and authorizes BISYS to provide information pertaining
to the Fund's portfolio to Fair Value Information Vendors (as defined in
Schedule C) in connection with the fair value determinations made under the
Trust's Valuation Procedures (as defined in Schedule C) and other legitimate
purposes related to the services to be provided hereunder. The Trust
acknowledges that while BISYS' services related to fair value pricing are
intended to assist the Trust and its Board in its obligations
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to price and monitor pricing of Fund portfolios, BISYS does not assume
responsibility for the accuracy or appropriateness of pricing information or
methodologies, including any fair value pricing information or adjustment
factors.
10. Indemnification.
The Trust agrees to indemnify and hold harmless BISYS, its employees,
agents, directors, officers and nominees from and against any claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs, charges, counsel
fees and other expenses (including reasonable investigation expenses) of every
nature and character (collectively, "Losses") resulting directly and proximately
from BISYS' performance of services under this Agreement or based, if
applicable, upon BISYS' reasonable reliance on information, records,
instructions or requests pertaining to services hereunder, that are given or
made to BISYS by the Trust, the investment adviser, or other authorized agents
of the Trust with which BISYS must interface in providing services; provided
that this indemnification shall not apply to actions or omissions of BISYS
involving bad faith, willful misfeasance, negligence or reckless disregard by it
of its obligations and duties.
BISYS shall indemnify, defend, and hold the Trust, and its directors,
officers, agents and nominees harmless from and against any Losses resulting
directly and proximately from BISYS' willful misfeasance, bad faith or
negligence in the performance of, or the reckless disregard of, its duties or
obligations hereunder.
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 a party may be asked to
indemnify or hold the other party harmless, the indemnifying party shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the indemnified party will use all
reasonable care to identify and notify the indemnifying party promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the indemnifying party,
but failure to do so in good faith shall not affect the rights hereunder except
to the extent the indemnifying party is materially prejudiced thereby. As to any
matter eligible for indemnification, an indemnified party shall act reasonably
and in accordance with good faith business judgment and shall not effect any
settlement or confess judgment without the consent of the indemnifying party,
which consent shall not be withheld or delayed unreasonably.
The indemnifying party 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 the indemnifying party elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by it and reasonably satisfactory to the indemnified party. In the event
that the indemnifying party elects to assume the defense of any suit and retain
counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by it. An indemnifying party shall not effect any
settlement without the consent of the indemnified party (which shall not be
withheld
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or delayed unreasonably by the indemnified party) unless such settlement imposes
no liability, responsibility or other obligation upon the indemnified party and
relieves it of all fault. If the indemnifying party does not elect to assume the
defense of suit, it will reimburse the indemnified party for the reasonable fees
and expenses of any counsel retained by the indemnified party. The indemnity and
defense provisions set forth herein shall indefinitely survive the termination
of this Agreement.
The provisions of this Section 10 are subject to the provisions of Section
9 and Section 23(e).
11. Record Retention and Confidentiality.
BISYS shall keep and maintain on behalf of the Trust all books and records
which are customary or which are required to be kept in connection with BISYS'
services pursuant to applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act"). BISYS further agrees that all such books and
records shall be the property of the Trust and to make such books and records
available for inspection by the Trust at reasonable times or by the Securities
and Exchange Commission (the "Commission") promptly.
BISYS shall otherwise keep confidential all books and records relating to
the Trust and its shareholders including non-public information on trust
holdings or proxy votes, except when (i) disclosure is required by law, (ii)
BISYS is advised by counsel that it may incur liability for failure to make a
disclosure, (iii) BISYS is requested to divulge such information by
duly-constituted authorities or court process, (iv) BISYS is requested to make a
disclosure by a shareholder or shareholder's agent with respect to information
concerning an account as to which such shareholder has either a legal or
beneficial interest and a legal right to such information at such time
consistent with the Trust's Declaration of Trust, Prospectus and applicable law,
or (v) as requested or authorized by the Trust (including pursuant to its
policies and procedures). BISYS shall provide the Trust with reasonable advance
notice of disclosure pursuant to items (i) - (iii) of the previous sentence, to
the extent reasonably practicable. The provisions of this Section 11 are subject
to the provisions of Section 23(b) (Anti-Money Laundering Provisions).
12. Reports.
BISYS shall furnish to the Trust and to its properly-authorized auditors,
investment advisers, examiners, distributors, dealers, underwriters, salesmen,
insurance companies and others designated by the Trust in writing, such reports
at such times as are prescribed pursuant to this Agreement (or schedules
hereto), or as subsequently agreed upon by the parties pursuant to an amendment
to this Agreement (or schedules hereto). The Trust agrees to examine each such
report or copy provided to it promptly and will report or cause to be reported
any errors or discrepancies therein.
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13. Rights of Ownership.
All computer programs, systems and procedures employed or developed by
BISYS, or on behalf of BISYS by system providers or vendors used by BISYS, to
perform services required to be provided by BISYS under this Agreement are the
property of BISYS. All records and other data maintained hereunder, excepting
such computer programs, systems and procedures, are the exclusive property of
the Trust. All such records and other data which is the property of the Trust
shall be furnished to the Trust in appropriate form as soon as practicable after
termination of this Agreement for any reason.
14. Return of Records.
BISYS shall promptly upon the Trust's demand, turn over to the Trust and
cease to retain BISYS' files, records and documents created and maintained by
BISYS pursuant to this Agreement which are no longer needed by BISYS in the
performance of its services or for its legal protection. If not so turned over
to the Trust, such documents and records shall be retained by BISYS for six (6)
years from the year of creation. At the end of such six-year period, such
records and documents shall be turned over to the Trust unless the Trust
authorizes in writing the destruction of such records and documents.
15. Bank Accounts.
BISYS is hereby granted such power and authority as may be necessary to
establish one or more bank accounts for the Trust with such bank or banks as are
acceptable to the Trust, as may be necessary or appropriate from time to time in
connection with the transfer agency services to be performed hereunder. The
Trust shall be deemed to be the customer of such Bank or Banks for purposes of
such accounts. To the extent that the performance of such services hereunder
shall require BISYS to disburse amounts from such accounts in payment of
dividends, redemption proceeds or for other purposes hereunder, the Trust shall
provide such bank or banks with all instructions and authorizations necessary
for BISYS to effect such disbursements.
16. Representations and Warranties of the Trust.
The Trust represents and warrants to BISYS that:
(a) It is a Trust duly incorporated and validly existing under the
laws of the jurisdiction of its formation, and has full
capacity and authority to enter into this agreement and to
carry out its obligations hereunder;
(b) It has all necessary authorizations, licenses and permits to
carry out its business as currently conducted;
(c) It is in compliance in all material respects with all laws and
regulations applicable to its business and operations;
12
EX-99.(H)(1)
(d) This Agreement has been duly authorized by the Trust and, when
executed and delivered by the Trust, will constitute a legal,
valid and binding obligation of the Trust, enforceable against
the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of
general application affecting the right and remedies of
creditors and secured parties;
(e) By virtue of the Declaration of Trust, shares of each Fund
which are redeemed by the Trust may be resold by the Trust;
and
(f) (i) The Trust has adopted a written anti-money laundering
program, which has been provided to BISYS pursuant to Section
19 (the "AML Program"), and has appointed an officer of the
Trust as the Trust's anti-money laundering compliance officer
("AML Compliance Officer"), (ii) the AML Program and the
designation of the AML Officer have been approved by the
Board, (iii) the delegation of certain services thereunder to
BISYS, as provided in Section 23, has been approved by the
Board, and (iv) the Trust will submit any material amendments
to the AML Program to BISYS for BISYS' review and consent
prior to adoption, in accordance with Section 21.
17. Representations and Warranties of BISYS.
BISYS represents and warrants to the Trust that:
(a) It is a corporation duly incorporated and validly existing
under the laws of the state of Ohio, and has full capacity and
authority to enter into this agreement and to carry out its
obligations hereunder;
(b) It has all necessary authorizations, licenses and permits to
carry out its business as currently conducted;
(c) It is, and shall continue to be, in compliance in all material
respects with all provisions of law applicable to it,
including Section 17A(c) of the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(d) The various procedures and systems which it has implemented
with regard to safekeeping from loss or damage attributable to
fire, theft or any other cause of the blank checks, records,
and other data of the Trust and BISYS' equipment, facilities,
and back-ups and other property used in the performance of its
obligations hereunder are reasonable and adequate and that it
will make such changes therein from time to time as are
reasonably required for the secure performance of its
obligations hereunder;
13
EX-99.(H)(1)
(e) this Agreement has been duly authorized by BISYS and, when
executed and delivered by BISYS, will constitute a legal,
valid and binding obligation of BISYS, enforceable against
BISYS in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of
general application affecting the right and remedies of
creditors and secured parties; and
(f) BISYS will adopt procedures and monitor personal trading in
fund share by BISYS employees who are access persons (as
defined in BISYS' Code of Ethics), and report any violations
to the Trust.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL REPRESENTATIONS AND
WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY,
SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
(IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) CONCERNING THE
SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO THE SERVICES PROVIDED UNDER THIS
AGREEMENT BY BISYS ARE COMPLETELY DISCLAIMED.
18. Insurance.
BISYS shall maintain a fidelity bond covering larceny and embezzlement and
an insurance policy with respect to directors and officers errors and omissions
coverage, in amounts that are appropriate in light of its duties and
responsibilities hereunder. Aggregate coverage amounts are currently not less
than $15 million for the fidelity bond and $25 million for the E&O / D&O policy.
Upon the request of the Trust, BISYS shall provide evidence that coverage is in
place. BISYS shall notify the Trust should its insurance coverage with respect
to professional liability or errors and omissions coverage be reduced or
canceled. Such notification shall include the date of cancellation or reduction
and the reasons therefore. BISYS shall notify the Trust promptly of any material
claims against it with respect to services performed under this Agreement,
whether or not they may be covered by insurance, and shall notify the Trust
promptly should the total outstanding claims made by BISYS under its insurance
coverage materially impair, or threaten to materially impair, the adequacy of
its coverage.
BISYS agrees to pay a total of $325,000 per annum towards the insurance
premiums payable annually by the Trust, such total amount to be paid as follows:
$300,000 will be paid towards the premium for the Trust's Directors and Officers
Liability / Errors and Omissions Insurance Policy, and $25,000 will be paid
towards the premium for the Trust's Fidelity Bond.
14
EX-99.(H)(1)
19. Information to be Furnished by the Trust and Funds.
The Trust has furnished to BISYS the following, as amended and current as
of the Effective Date:
(a) A copy of the Declaration of Trust of the Trust and any
amendments thereto;
(b) A copy of the Trust's By-laws and any amendments thereto;
(c) A copy of the resolutions of the Board regarding (i) approval
of this Agreement and authorization of a specified officer of
the Trust to execute and deliver this Agreement and
authorization for specified officers of the Trust to instruct
BISYS hereunder; and (ii) authorization of BISYS to act as
administrator, fund accountant and transfer agent for the
Trust;
(d) A certified list of all officers of the Trust, with the
Trust's AML Compliance Officer included among the officers
therein, and any other persons (who may be associated with the
Trust or its investment advisor), together with specimen
signatures of those officers and other persons who (except as
otherwise provided herein to the contrary) shall be authorized
to instruct BISYS in all matters;
(e) Two copies of each of the following documents employed by the
Trust:
(i) Prospectuses and Statement of Additional Information;
(ii) Distribution Agreement; and
(iii) All other forms commonly used by the Trust or its
distributor with regard to their relationships and
transactions with shareholders of the Funds.
(f) A certificate as to shares of the Trust authorized, issued,
and outstanding as of the Effective Date and as to receipt of
full consideration by the Trust for all shares outstanding;
(g) A copy of the Trust's written AML Program, including any
related policies and procedures; and
(h) A copy of the disclosure controls and procedures of the Funds
("Fund DCPs") as contemplated in Item 22 of Schedule B.
15
EX-99.(H)(1)
20. Information Furnished by BISYS.
BISYS has furnished to the Trust evidence of the following:
(a) Approval of this Agreement by BISYS, and authorization of a
specified officer of BISYS to execute and deliver this
Agreement;
(b) Authorization of BISYS to act as Transfer Agent, Fund
Accountant and Administrator for the Trust; and
(c) The current BISYS As-of Trading Policy.
(d) The current version of BISYS written polices and procedures
with respect to its provision on AML Services (as defined in
Section 23 below).
Upon request, BISYS shall furnish a copy of the relevant provisions of its
internal policies on service of employees as executive officers of funds ("BISYS
Policies"), and any material amendments thereto, to the Trust.
21. Amendments to Documents.
The Trust shall furnish BISYS written copies of any amendments to, or
changes in, any of the items referred to in Section 19 hereof forthwith upon
such amendments or changes becoming effective. In addition, the Trust agrees
that no amendments will be made to the Prospectuses or Statement of Additional
Information of the Trust, the AML Program, or the Fund DCPs which might have the
effect of changing the procedures employed by BISYS in providing the services
agreed to hereunder or which amendment might affect the duties of BISYS
hereunder unless the Trust first obtains BISYS' approval of such amendments or
changes, which approval shall not be withheld unreasonably. BISYS shall furnish
the Trust with written copies of any amendments to, or changes in, any of the
items referred to in this Section 21.
22. Reliance on Amendments.
BISYS may rely on any amendments to or changes in any of the documents and
other items to be provided by the Trust pursuant to Sections 19 and 21 of this
Agreement and, the indemnification provisions of Section 7 hereof are applicable
to BISYS' reasonable reliance upon such amendments and/or changes. Although
BISYS is authorized to rely on the above-mentioned amendments to and changes in
the documents and other items to be provided pursuant to Sections 19 and 21
hereof, in the event the same relate to services provided by BISYS hereunder,
BISYS shall have no liability for failure to comply with or take any action in
conformity with such amendments or changes unless the Trust first obtains BISYS'
written consent to and approval of such amendments or changes.
23. Compliance with Laws.
16
EX-99.(H)(1)
(a) Prospectus and Public Offering. Except for information which is the
obligation of BISYS as set forth in Section 11 hereof, and except as provided in
the services listed in the schedules hereto which specify services of BISYS in
connection with the preparation of the Prospectus and certain information to be
provided by BISYS for inclusion in the Prospectus, the Trust assumes full
responsibility for the preparation, contents, and distribution of each
Prospectus of the Trust in compliance with all applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act, and any other
laws, rules and regulations of governmental authorities having jurisdiction.
Subject to its obligations herein with respect to "blue sky" filings, BISYS
shall have no obligation to take cognizance hereunder of laws relating to the
sale of the Trust's shares. The Trust represents and warrants that all shares of
the Trust that are offered to the public are covered by an effective
registration statement under the 1933 Act and the 1940 Act.
(b) Anti-Money Laundering Provisions. The Trust acknowledges that it is a
financial institution subject to the law entitled Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism ("U.S.A. Patriot") Act of 2001 and the Bank Secrecy Act (collectively,
the "AML Acts") and shall comply with the AML Acts and applicable regulations
adopted thereunder (collectively, the "Applicable AML Laws") in all relevant
respects, subject to the delegation of certain responsibilities to BISYS, as
provided in the next paragraph below.
The Trust hereby delegates to BISYS the performance, on behalf of the
Trust, of the anti-money laundering services set forth under Item 6 of Schedule
D (the "AML Services") with respect to the shareholder accounts maintained by
BISYS pursuant to this Agreement, and BISYS agrees to the foregoing delegation
and agrees to perform such services in accordance with the Trust's AML Program.
In connection therewith, BISYS agrees to maintain policies and procedures, and
related internal controls, that are consistent with the Trust's AML Program and
the requirement that the Trust employ procedures reasonably designed to achieve
compliance with the Applicable AML Laws. BISYS' obligations under this
delegation shall be subject to Sections 19 and 21, which require that the AML
Program and any material amendments thereto be submitted to BISYS for its review
and consent prior to adoption.
The Trust agrees and acknowledges that, notwithstanding the delegation
provided for in the foregoing paragraph, the Trust maintains full responsibility
for ensuring that its AML Program is, and shall continue to be, reasonably
designed to ensure compliance with the Applicable AML Laws, in light of the
particular business of the Trust, taking into account factors such as its size,
location, activities and risks or vulnerabilities to money laundering.
In connection with the foregoing delegation, the Trust also acknowledges
that the performance of the AML Services involves the exercise of discretion
which in certain circumstances may result in consequences to the Trust and its
shareholders (such as in the case of the reporting of suspicious activities and
the freezing of shareholder accounts). In this regard, (i) under circumstances
in which the AML Program authorizes the taking of certain actions, BISYS is
granted the discretion to take any such action as may be
17
EX-99.(H)(1)
authorized under the AML Program, and consultation with Trust shall not be
required in connection therewith unless specifically required under the AML
Program, and (ii) the Trust instructs BISYS that it may avail the Trust of any
safe harbor from civil liability that may be available under Applicable AML Laws
for making a disclosure or filing a report thereunder.
As concerns Networking Level III accounts and omnibus accounts, the AML
Services performed by BISYS are subject to a more limited scope, as discussed in
the Release concerning the final rule of the Department of the Treasury, 31 CFR
103 and of the Commission, 17 CFR 270, entitled Customer Identification Programs
for Mutual Funds issued on May 9, 2003 and subsequent guidance issued jointly by
such agencies entitled Question and Answer Regarding the Mutual Fund Customer
Identification Program Rule (31 CFR 103.131) issued on August 11, 2003.
(c) Provision of AML Compliance Officer.
Subject to the provisions set forth above in Section 23(b) and below in
this Section 23(c) and in Section 23(e), BISYS agrees to make available to the
Trust a person to serve as the Trust's AML Compliance Officer. BISYS' obligation
in this regard shall be met by providing an appropriately qualified employee or
agent of BISYS (or its affiliates) who, in the exercise of his or her duties to
the Trust, shall act in good faith and in a manner reasonably believed by him or
her to be in the best interests of the Trust. Subject to the Trust's cooperation
in implementing and complying with its AML Program, the AML Compliance Officer
will assist the Trust in operating its AML Program, and shall perform the duties
assigned to the AML Compliance Officer which are set forth in the AML Program.
The Trust shall provide copies of all books and records of the Trust, as
the AML Compliance Officer deems necessary or desirable in order to carry out
his or her duties hereunder on behalf of the Trust. Each party agrees to provide
promptly to the other party (and to the AML Compliance Officer), upon request,
copies of such other records and documentation relating to the compliance by
such party with Applicable AML Laws, and each party also agrees otherwise to
assist the other party (and the AML Compliance Officer) in complying with the
requirements of the AML Program and Applicable AML Laws.
As to transactions in Fund Shares and the opening and maintenance of
Shareholder accounts, each party agrees to retain a copy of all documents and
records prepared, maintained or obtained by it relating to compliance with the
AML Program and Applicable AML Laws for a period of at least five (5) years
after either the relationship with the Shareholder has ended or the execution of
the transaction. The foregoing is not intended to limit any obligation to retain
any specified records for any other period that may be specified in the AML
Program or under Applicable AML Laws.
(d) Provision of Certifying Officers.
18
EX-99.(H)(1)
Subject to the provisions of this Section 23(d) and Section 23(e), BISYS
shall make BISYS employees available to the Trust to serve, upon designation as
such by the Board, as the Chief Executive Officer and Chief Financial Officer of
the Trust or under such other titles to perform similar functions (each, a
"Certifying Officer"). BISYS' obligation in this regard shall be met by
providing appropriately qualified employees of BISYS (or its affiliates) who, in
the exercise of their duties to the Trust, shall act in good faith and in a
manner reasonably believed by them to be in the best interests of the Trust.
BISYS shall select, and may replace, the specific employees that it makes
available to serve in the designated capacities as a Certifying Officer, in
BISYS' reasonable discretion, taking into account each such person's
responsibilities concerning, and familiarity with, the Trust's operations (but
the designation of any such person or their replacement as a Certifying Officer
shall be subject to the approval of the Trust).
The obligation of BISYS to provide an employee to serve in such capacity
is also subject to, and conditioned upon, the provisions of Item 22 of Schedule
B hereto. Capitalized terms used but not defined in this Section 23(d) have the
respective meanings ascribed to them in Item 22 of Schedule B.
The Fund DCPs shall contain (or the Trust and BISYS shall otherwise
establish) mutually agreeable procedures governing the certification process,
and the parties shall comply with such procedures in all material respects.
Among other things, the procedures shall provide as follows:
The Trust shall establish and maintain a Fund DCP Committee comprised of
persons including (at a minimum) the Trust's Principal Executive Officer, Chief
Financial Officer and Chief Legal Officer (if any), at least one BISYS
representative other than the CFO or CEO of the Trust, at least one
representative of the investment adviser, and such other individuals as may be
necessary or appropriate for the Fund DCP Committee to ensure the cooperation
of, and to oversee, each of the Trust's agents that records, processes,
summarizes, or reports information contained in Trust Reports (or other
information from which such information is derived), including BISYS and the
Other Service Providers to the Trust, such as the investment adviser and
custodian. In connection therewith, the Fund DCP Committee shall assist the
Certifying Officers by requiring that sub-certifications acceptable to the
Certifying Officers be provided by the Other Service Providers.
The Fund DCP Committee shall meet at least ten (10) days prior to the
filing date of each Report to review the accuracy and completeness of the
relevant Report and record its considerations and conclusions in a written
memorandum sufficient to support conclusions pertaining to Fund DCPs as required
by Item 10 of Form N-CSR. In conducting its review and evaluations, the Fund DCP
Committee shall:
(i) establish a schedule to ensure that all required disclosures in
Form N-CSR, including the financial statements, for the Trust are
identified and prepared in a timeframe sufficient to allow review;
19
EX-99.(H)(1)
(ii) review SAS 70 Reports pertaining to BISYS and Other Service
Providers, if applicable, or in the absence of any such reports, consider
the adequacy of the sub-certifications supplied by the service provider.
In cases where the SAS 70 report is dated more than 90 days prior to the
issuance of a Report, the DCP Committee shall request a written
representation from the service provider regarding the continued
application and effectiveness of internal controls described in the
report, or descriptions of any changes in internal control structure, as
of the date of the representation;
(iii) consider whether there are any significant deficiencies or
material weaknesses in the design or operation of the Fund DCPs and
internal control over financial reporting that could adversely affect the
Trust's ability to record, process, summarize, and report financial
information, and in the event that any such weaknesses or deficiencies are
identified, disclose them to the Trust's Certifying Officers, the Trust's
audit committee and its auditors;
(iv) consider whether, to the knowledge of each member of the Fund
DCP Committee, there has been or may have been any fraud, whether or not
material, and in the event that any such occurrence is identified, ensure
that this has been disclosed to the Certifying Officers, so that
Certifying Officers may inform the Trust's audit committee and its
auditors; and
(v) determine whether there was any change in internal control over
financial reporting that occurred during the Trust's most recent fiscal
half-year (the Trust's second fiscal half year in the case of an annual
report) that has materially affected or is reasonably likely to materially
affect, the Trust's internal control over financial reporting.
A Certifying Officer shall have the full discretion to decline to certify
a particular Report that fails to meet the standards set forth in the
Certification, and to report matters involving fraud or other failures to meet
the standards of applicable law to the audit committee of the Board.
(e) Additional Provisions Concerning Executive Officers.
It is mutually agreed and acknowledged by the parties that and any
Certifying Officer provided by BISYS under the provisions of this Section 23
will constitute executive officers of the Trust ("Executive Officers"). In
addition, the parties agree that an AML Compliance Officer provided by BISYS
shall be treated as an Executive Officer of the Trust for purposes of this
Section 23(e). The provisions of Sections 23(c) and (d) are subject to the
internal policies of BISYS concerning the activities of its employees and their
service as officers of funds (the "BISYS Policies"), a copy of which shall be
provided to the Trust upon request.
The Trust's governing documents (including its Agreement and Declaration
of Trust and By-Laws) and/or resolutions of the Board shall contain mandatory
indemnification provisions that are applicable to each Executive Officer, that
are
20
EX-99.(H)(1)
designed and intended to have the effect of fully indemnifying him or her and
holding him or her harmless with respect to any claims, liabilities and costs
arising out of or relating to his or her service in good faith in a manner
reasonably believed to be in the best interests of the Trust, except to the
extent he or she would otherwise be liable to the Trust by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
The Trust shall provide coverage to each Executive Officer under its
directors and officers liability policy that is appropriate to the Executive
Officer's role and title, and consistent with coverage applicable to other
officers holding positions of executive management.
In appropriate circumstances, each Executive Officer shall have the
discretion to resign from his or her position, in the event that he or she
reasonably determines that there has been or is likely to be (a) a violation of
Xxxxxxxx-Xxxxx, Applicable AML Laws or Applicable Securities Laws by the Trust,
or (b) a material deviation by the Trust from the terms of this Agreement
governing the services of such Executive Officer, which (in either case) is not
primarily caused by the failure of such Executive Officer or BISYS to meet
obligations under applicable laws and this Agreement. In addition, each
Executive Officer shall have reasonable discretion to resign from his or her
position in the event that he or she determines that he or she has not received
sufficient cooperation from the Trust or its Other Service Providers to make an
informed determination regarding any of the matters listed above.
Each Executive Officer may, and the Trust shall, promptly notify BISYS of
any issue, matter or event that would be reasonably likely to result in any
claim by the Trust, the Trust's shareholders or any third party which involves
an allegation that any Executive Officer failed to exercise his or her
obligations to the Trust in a manner consistent with applicable laws (including
but not limited to any claim that a Report failed to meet the standards of
Xxxxxxxx-Xxxxx and other applicable laws).
Notwithstanding any provision of the Agreement that expressly or by
implication provides to the contrary, (a) it is expressly agreed and
acknowledged that BISYS cannot ensure that the Trust complies with Applicable
AML Laws, the Applicable Securities Laws or Xxxxxxxx-Xxxxx, and (b) whenever an
employee or agent of BISYS serves as an Executive Officer of the Trust, as long
as such Executive Officer acts in good faith and in a manner reasonably believed
to be in the best interests of the Trust (and would not otherwise be liable to
the Trust by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office),
the Trust shall indemnify the Executive Officer and BISYS and hold the Executive
Officer and BISYS harmless from any loss, liability, expenses (including
reasonable attorneys fees) and damages incurred by them arising out of or
resulting to the service of such Employee/Executive Officer as an Executive
Officer of the Trust.
21
EX-99.(H)(1)
(f) Changes to Services to Take Account of Regulatory Developments.
In the event that regulatory developments applicable to the Trust
necessitate or implicate additional services or an enhancement to the services
hereunder ("Additional Services"), BISYS agrees to review the anticipated
regulatory needs of the Trust and provide information concerning the feasibility
of implementing the Additional Services, including operational and commercial
aspects that are or should be apparent to BISYS concerning the same. BISYS shall
use best efforts to identify the specific changes (if any) to BISYS' service
model that would be necessary to accomplish the Additional Services, and set out
the estimated costs and estimated implementation timetable for such Additional
Service. The parties shall then in good faith agree to mutually agreeable terms
applicable to such Additional Service.
24. Notices.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Trust, to c/o Trusco Capital Management,
Inc., 00 Xxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 Attn: Xxxxxxx Xxxx; and if to
BISYS, to it at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000; Attn: President, or at
such other address as such party may from time to time specify in writing to the
other party pursuant to this Section.
25. Assignment.
This Agreement and the rights and duties hereunder shall not be assignable
by either of the parties hereto except by the specific written consent of the
other party. This Section 25 shall not limit or in any way affect BISYS' right
to appoint a Sub-Agent pursuant to Section 2 hereof. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
26. Governing Law.
This Agreement shall be governed by and provisions 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.
27. Activities of BISYS.
The services of BISYS rendered to the Trust hereunder are not to be deemed
to be exclusive. BISYS 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 Trust are or may be or become interested in
BISYS, as officers, employees or otherwise and that partners, officers and
employees of BISYS and its counsel are or may be or become similarly interested
in the Trust, and that BISYS may be or become interested in the Trust as a
shareholder or otherwise.
22
EX-99.(H)(1)
28. Privacy.
Nonpublic personal financial information relating to consumers or
customers of the Trust provided by, or at the direction of the Trust to BISYS,
or collected or retained by BISYS in the course of performing its duties as
transfer agent, shall be considered confidential information. BISYS shall not
give, sell or in any way transfer such confidential information to any person or
entity, other than affiliates of BISYS involved in servicing the Trust except at
the direction of the Trust or as required or permitted by law (including
Applicable AML Laws). BISYS represents, warrants and agrees that it has in place
and will 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 Trust. The Trust represents to BISYS that it has
adopted a Statement of its privacy policies and practices as required by the
Commission's Regulation S-P and agrees to provide BISYS with a copy of that
statement annually.
29. Miscellaneous.
(a) Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or
interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the
parties hereto as to the subject matter covered by this
Agreement, and supercedes all prior negotiations,
understandings and agreements bearing upon the subject matter
covered herein. The terms of the letter of intent dated April
2, 2004 among Trusco Capital Management, Inc., the Trust, STI
Classic Variable Trust and BISYS remain in effect, except that
the obligation to prepare and execute a definitive Master
Services Agreement covering services to the Trust shall be
satisfied by the execution of this Agreement.
(c) This Agreement may be executed in counterparts, each of which
shall be an original but all of which, taken together, shall
constitute one and the same agreement.
(d) No amendment to this Agreement shall be valid unless made in
writing and executed by both parties hereto.
* * * * *
23
EX-99.(H)(1)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
STI CLASSIC FUNDS
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
24
EX-99.(H)(1)
SCHEDULE A
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND STI CLASSIC FUNDS
FUNDS
Balanced Fund
Capital Appreciation Fund
Growth and Income Fund
Information and Technology Fund
International Equity Fund
International Equity Index Fund
Mid-Cap Equity Fund
Mid-Cap Value Equity Fund
Small Cap Growth Stock Fund
Small Cap Value Equity Fund
Strategic Quantitative Equity Fund
Tax Sensitive Growth Stock Fund
Value Income Stock Fund
Aggressive Growth Stock Fund
Emerging Growth Stock Fund
Classic Institutional U.S. Government Securities Super Short Income Plus Fund
Classic Institutional High Quality Bond Fund
Classic Institutional Super Short Income Plus Fund
Classic Institutional Total Return Bond Fund
Classic Institutional Short-Term Bond Fund
Florida Tax-Exempt Bond Fund
Georgia Tax-Exempt Bond Fund
High Income Fund
Investment Grade Bond Fund
Investment Grade Tax-Exempt Bond Fund
Limited-Term Federal Mortgage Securities Fund
Maryland Municipal Bond Fund
Short-Term Bond Fund
Short-Term U.S. Treasury Securities Fund
Strategic Income Fund
U.S. Government Securities Fund
Virginia Intermediate Municipal Bond Fund
Virginia Municipal Bond Fund
25
EX-99.(H)(1)
Prime Quality Money Market Fund
Tax-Exempt Money Market Fund
U.S. Government Securities Money Market Fund
U.S. Treasury Money Market Fund
Virginia Tax-Free Money Market Fund
Classic Institutional Cash Management Money Market Fund
Classic Institutional U.S. Government Securities Money Market Fund
Classic Institutional U.S. Treasury Securities Money Market Fund
Life Vision Aggressive Growth Fund
Life Vision Conservative Fund
Life Vision Growth and Income Fund
Life Vision Moderate Growth Fund
Classic Institutional Core Bond Fund
Classic Institutional Intermediate Bond Fund
Seix Institutional High Yield Fund, and
Classic Institutional Limited Duration Fund
26
EX-99.(H)(1)
SCHEDULE B
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND STI CLASSIC FUNDS
ADMINISTRATION SERVICES
1. Calculate contractual Trust expenses and make and control all
disbursements for the Trust, subject to review and approval of an
authorized person (designated on the list of authorized persons
approved by the Board), including administration of director and
vendor fees and compensation on behalf of the Trust, and as
appropriate;
2. Prepare, subject to review by counsel to the Trust, (i) the annual
update to the Trust's registration statement on Form N-1A, (ii)
other amendments to the Trust's registration statement and
supplements to its Prospectus and Statement of Additional
Information, and (iii) Notices of Annual or Special Meetings of
shareholders of the Trust and proxy materials relating thereto, and
file any of the foregoing with the Securities and Exchange
Commission (the "SEC") upon the request of the Trust or counsel to
the Trust;
3. Prepare such reports, applications and documents (including reports
regarding the sale and redemption of shares in the Trust as may be
required in order to comply with Federal and state securities laws)
as may be necessary or desirable to register the shares in the Trust
("Shares") with state securities authorities, monitor the sale of
Shares for compliance with state securities laws, and file with the
appropriate state securities authorities the registration statements
and reports for the Trust and the Shares and all amendments thereto,
as may be necessary or convenient to register and keep effective the
registration of the Trust and the Shares with state securities
authorities to enable the Trust to make a continuous offering of its
Shares. State securities ("Blue Sky") exemption services are made
available at a standard fee which is earned by BISYS based on
savings obtained by the Trust;
4. Coordinate and prepare, with the assistance and approval of the
Funds' investment adviser, counsel and officers, drafts of
communications to shareholders of record of the Funds
("Shareholders"), including the annual report to Shareholders;
prepare drafts of the certified semi-annual report for each Fund;
prepare and file the final certified versions thereof on Form
27
EX-99.(H)(1)
N-CSR; prepare and file the Trust's Form N-SAR; and file all
required notices pursuant to Rule 24f-2;
5. Coordinate the distribution of prospectuses, supplements, proxy
materials and reports to Shareholders; and coordinate the
solicitation and tabulation of proxies in connection with the annual
meeting of Shareholders each year, if one is held;
6. Administer contracts on behalf of the Trust with, among others, the
Trust's investment adviser, distributor, custodian, transfer agent
and fund accountant;
7. Coordinate with the Trust's transfer agent with respect to the
payment of dividends and other distributions to Shareholders;
8. Calculate performance data of the Funds for dissemination to up to
fifteen (15) information services covering the investment company
industry;
9. Prepare and file the Trust's tax returns;
10. Assist with the layout and printing of prospectuses and assist with
and coordinate layout and printing of the Funds' semi-annual and
annual reports to Shareholders;
11. Assist with the design, development, and operation of the Funds,
including new classes, investment objectives, policies and
structure, and provide consultation related to legal and regulatory
aspects of the establishment, maintenance, and liquidation or
dissolution of Funds;
12. Make available appropriate individuals to serve as officers of the
Trust (to serve only in ministerial or administrative capacities
relevant to BISYS' services hereunder, except as otherwise provided
in this Agreement), upon designation as such by the Board;
13. Obtain and maintain fidelity bonds and directors and officers/errors
and omissions insurance policies for the Trust in accordance with
Rules 17g-1 and 17d-1 under this 1940 Act at the expense (except as
otherwise provided in the Agreement) of the Trust and Funds and file
the fidelity bonds and any notices with the SEC as required under
the 1940 Act, to the extent such bonds and policies are approved by
the Board;
14. Monitor and advise the Trust and its Funds on their regulated
investment company status under the Internal Revenue Code of 1986,
as amended. In connection with the foregoing, prepare and send
quarterly reminder letters related to such status, and prepare
quarterly compliance checklist for use by investment adviser(s) if
requested;
28
EX-99.(H)(1)
15. Perform required additional administrative services and functions of
the Trust and each Fund to the extent administrative services and
functions are not provided to the Trust or such Fund pursuant to the
Trust's or such Fund's investment advisory agreement, distribution
agreement, custodian agreement, transfer agent agreement or fund
accounting agreement as specifically agreed between the parties;
16. Maintain corporate records on behalf of the Trust, including, but
not limited to, minute books, the Declarations of Trust and By-Laws
for the Trust;
17. Develop portfolio compliance procedures for each Fund, and provide
daily and periodic compliance monitoring services incorporating
certain of those procedures, which will include, among other
matters, compliance with investment restrictions imposed by the
Investment Company Act of 1940, each Fund's investment objective,
defined investment policies, and restrictions, tax diversification,
and distribution and income requirements, provided such are
determinable based upon the Fund's accounting records. In connection
with the foregoing, review quarterly compliance reports that are
prepared by the investment adviser(s), and notify appropriate Fund
officers and advisor of xxxx-to-market issues pursuant to
Board-approved procedures. BISYS will consult with and advise, on a
proactive basis, Fund portfolio managers with respect to compliance
matters. BISYS will also provide on-site compliance training for
investment advisory personnel, as requested, and provide the Board
with quarterly results of compliance reviews;
18. Coordinate the implementation of service arrangements covered by
Shareholder Service Plans adopted by the Board with the financial
institutions that serve, or propose to serve, as shareholder
services agents thereunder ("Shareholder Service Agents"); review
the qualifications of Shareholder Service Agents to serve as such
under the relevant Shareholder Service Plan; coordinate and assist
in the Trust's execution and delivery of Shareholder Service
Agreements; report to the Board regarding amounts paid under
Shareholder Service Agreements and the nature of Services provided
by the Shareholder Service Agents thereunder; and maintain
appropriate records in connection with the foregoing;
19. Provide assistance and guidance to the Trust with respect to matters
governed by or related to regulatory requirements and developments
including: monitoring regulatory and legislative developments which
may effect the Trust, and assisting in strategic planning in
response thereto; assisting the Trust and providing on-site
personnel in responding to and providing documents for routine
regulatory examinations or investigations; and coordinating with and
taking instructions from counsel to the Trust in response to such
routine or non-routine regulatory matters. The assistance to be
provided with respect to SEC inspections includes (i)
29
EX-99.(H)(1)
rendering advice regarding proposed responses (ii) compiling data
and other information in response to SEC requests for information
(iii) communicating with SEC staff members as necessary, (iv)
providing a representative to interface with the regulator, and (v)
meeting with portfolio managers to provide status updates. In
addition, BISYS will provide appropriate assistance with respect to
audits conducted by the Fund's independent accountants and advisor
including (i) compiling data and other information and (ii)
communicating with independent accountants, as necessary;
20. Manage the preparation for and conducting of Board meetings by (i)
coordinating Board book production and distribution, (ii) subject to
review and approval by the Trust and its counsel, preparing Board
agendas and minutes, (iii) preparing the relevant sections of the
Board materials required to be prepared by BISYS, (iv) assisting to
gather and coordinate special materials related to annual contract
renewals and approval of rule 12b-1 for and as directed by the
Trustees or fund counsel plans and related matters, (v) attending
Board meetings and recording the minutes, and (vi) performing such
other Board meeting functions as shall be agreed by the parties in
writing;
21. Furnish advice and recommendations with respect to other aspects of
the business and affairs of the Funds as the Trust shall request and
the parties shall agree in writing; and
22. To assist the Trust in connection with its obligations under
Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002 and Rule
30a-2 under the 1940 Act (collectively, with such other related
regulatory provisions applicable to the Trust, "Xxxxxxxx-Xxxxx"),
BISYS will internally establish and maintain controls and procedures
("BISYS internal controls") designed to ensure that information
recorded, processed, summarized, or reported by BISYS and its
affiliates on behalf of the Trust and included in financial
information certified by Trust officers ("Certifying Officers") on
Form N-CSR ("Reports") is (a) recorded, processed, summarized, and
reported by BISYS within the time periods specified in the
Commission's rules and forms and corresponding disclosure controls
and procedures of the Funds ("Fund DCPs"), and (b) accumulated and
communicated to the relevant Certifying Officers consistent with the
Fund DCPs.
If requested by Certifying Officers with respect to a fiscal period
during which BISYS serves or served as financial administrator,
BISYS will provide a sub-certification consistent with the
requirements of Xxxxxxxx-Xxxxx pertaining to BISYS' services, solely
for the purpose of providing a basis of support (as to information
which has been prepared, processed and reported by BISYS, and as to
BISYS internal controls) for the Certifying Officers to render the
certifications required by Xxxxxxxx-Xxxxx (or, if applicable with
respect to a Report, inform the Certifying Officers
30
EX-99.(H)(1)
of the reasons why the statements in such a certification would not
be accurate). In rendering such sub-certifications concerning Trust
Reports, BISYS may (a) limit its representations to information
prepared, processed and reported by BISYS; (b) rely upon and assume
the accuracy of the information provided by officers and other
authorized agents of the Trust, including all Other Service
Providers to the Trust, and compliance by such officers and agents
with the Fund DCPs, including but not limited to, the Trust's
investment adviser(s) and custodian; and (c) assume that the Trust
has selected the appropriate accounting policies for the Fund(s).
The Trust shall assist and cooperate with BISYS (and shall use its
best efforts to cause its officers, investment advisers and other
service providers to assist and cooperate with BISYS) to facilitate
the delivery of information requested by BISYS in connection with
the preparation of the Trust's Form N-CSR, including Trust financial
statements, so that BISYS may submit a draft Report to the Trust's
Disclosure Controls and Procedures Committee ("Fund DCP Committee")
prior to the date the relevant Report is to be filed. The Certifying
Officers and the Chief Legal Officer (if any) of the Trust shall be
deemed to constitute the Fund DCP Committee in cases in which no
other Fund DCP Committee has been designated or is operative. In
connection with its review and evaluations, the Fund DCP Committee
shall establish a schedule to ensure that all required disclosures
in Form N-CSR and in the financial statements for each Fund are
identified and prepared in a timeframe sufficient to allow review by
the Fund DCP Committee at least 10 days prior to the date the
relevant report is to be filed. At the request of the Trust or its
Certifying Officers, BISYS shall provide reasonable administrative
assistance to the Trust in connection with obtaining service
provider sub-certifications, SAS-70 reports on internal controls,
and any applicable representations to bring such certifications
current to the end of the reporting period, and in preparing
summaries of issues raised in such documents.
The Trust shall, in its own capacity, take all reasonably necessary
and appropriate measures to comply with its obligations under
Xxxxxxxx-Xxxxx. Without limitation of the foregoing, except for
those obligations which are expressly delegated to or assumed by
BISYS in this Agreement, the Trust shall maintain responsibility
for, and shall support and facilitate the role of each Certifying
Officer and the Fund DCP Committee in, designing and maintaining the
Fund DCPs in accordance with applicable laws, including (a) ensuring
that the Fund DCP Committee and/or Certifying Officers obtain and
review sub-certifications and reports on internal controls from the
Trust's investment adviser(s) and other service providers, if any,
sufficiently in advance of the date upon which the relevant
financial statements must be finalized by BISYS (in order to print,
distribute and/or file the same hereunder), (b) evaluation of the
effectiveness of the design and operation of the Fund DCP, under the
supervision, and with the participation of, the Certifying Officers,
within
31
EX-99.(H)(1)
the requisite timeframe prior to the filing of each Report, and (c)
ensuring that its Certifying Officers render the requisite
certifications or take such other actions as may be permitted or
required under applicable laws.
23. Coordinate formulating and filing of the Funds' voting records (as
approved by the investment adviser) on Form N-PX.
24. File holdings reports on Form N-Q as required at the end of the
first and third fiscal quarters of each year.
25. Prepare quarterly brokerage allocation compliance checklist and
supporting documentation for use by investment adviser(s), as
requested.
26. Oversee/coordinate Trustee compensation.
27. Prepare and distribute Trustee/Officer Questionnaires, review
completed Questionnaires and resolve any open issues with the Trust
and counsel.
28. Review proxy statements prepared by counsel.
29. Prepare and file amendments to the Declaration of Trust/Articles of
Incorporation as necessary.
30. Prepare amendments to the By-Laws.
31. Prepare and file Form MT-1 for Massachusetts Business Trusts.
32. Prepare and maintain fund policies and procedures.
33. Provide consultation in relation to certain other matters, including
establishment of seed capital accounts, establishment of foreign
custody accounts, foreign tax reclaim matters, and class action
lawsuits.
32
SCHEDULE C
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND STI CLASSIC FUNDS
FUND ACCOUNTING SERVICES
(a) BISYS will keep and maintain the following books and records of each Fund
pursuant to Rule 31a-1 (the "Rule") under the 1940 Act, in electronic form
to the extent required by law:
1. Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and
disbursements of cash and all other debits and credits, as
required by subsection (b)(1) of the Rule;
2. General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including
interest accrued and interest received, as required by
subsection (b)(2)(i) of the Rule;
3. Separate ledger accounts required by subsection (b)(2)(ii) and
(iii) of the Rule; and
4. A monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of the
Rule.
(b) In addition to the maintenance of the books and records specified above,
BISYS shall perform the following accounting services for each Fund:
1. Allocate income and expense and calculate the net asset value
per share ("NAV") of each class of shares offered by each Fund
in accordance with the relevant provisions of the applicable
Prospectus of each Fund and applicable regulations under the
1940 Act;
2. Apply securities pricing information as required or authorized
under the terms of the valuation policies and procedures of
the Trust ("Valuation Procedures"), including (A) pricing
information from independent pricing services, with respect to
securities for which market quotations are readily available,
(B) if applicable to a particular Fund or Funds, fair value
pricing information or adjustment factors from independent
fair value pricing services or
33
other vendors approved by the Trust (collectively, "Fair Value
Information Vendors") with respect to securities for which
market quotations are not readily available, for which a
significant event has occurred following the close of the
relevant market but prior to the Fund's pricing time, or which
are otherwise required to be made subject to a fair value
determination under the Valuation Procedures, and (C) prices
obtained from each Fund's investment adviser or other
designee, as approved by the Board;
3. Coordinate the preparation of reports that are prepared or
provided by Fair Value Information Services which help the
Trust to monitor and evaluate its use of fair value pricing
information under its Valuation Procedures;
4. Verify and reconcile with the Funds' custodian all daily trade
activity;
5. Compute, as appropriate, each Fund's net income and capital
gains, dividend payables, dividend factors, 7-day yields,
7-day effective yields, 30-day yields, and weighted average
portfolio maturity; (and other yields or standard or
non-standard performance information as mutually agreed);
6. Review daily the net asset value calculation and dividend
factor (if any) for each Fund prior to release to
shareholders, check and confirm the net asset values and
dividend factors for reasonableness and deviations, and
distribute net asset values and yields to NASDAQ; and as
agreed, in certain cases, to newspapers;
7. Report to the Trust the daily market pricing of securities in
any money market Funds, with the comparison to the amortized
cost basis;
8. Determine and report unrealized appreciation and depreciation
on securities held in variable net asset value Funds;
9. Amortize premiums and accrete discounts on fixed income
securities purchased at a price other than face value, if
requested by the Trust;
10. Update fund accounting system to reflect rate changes, as
received from a Fund's investment adviser, on variable
interest rate instruments;
11. Post Fund transactions to appropriate categories;
12. Accrue expenses of each Fund according to instructions
received from the Trust's Administrator, and submit changes to
accruals and
34
expense items to authorized officers of the Trust (who are not
BISYS employees) for review and approval;
13. Determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income
and expense accounts;
14. Provide accounting reports in connection with and coordinate
with independent auditors concerning the Trust's regular
annual audit, and other audits and examinations by regulatory
agencies; and
15. Provide such periodic reports as the parties shall agree upon,
as set forth in a separate schedule.
16. Provide a representative (in a non-voting capacity) for
Pricing Committee; and
17. Assist the Trust in identifying instances where market prices
are not readily available, or are unreliable, within
parameters set forth in the Trust's policies and procedures.
(c) BISYS shall also perform the following additional accounting services for
each Fund:
1. Provide monthly a hard copy of the unaudited financial
statements described below, upon request of the Trust. The
unaudited financial statements will include the following
items:
A. Unaudited Statement of Assets and Liabilities,
B. Unaudited Statement of Operations,
C. Unaudited Statement of Changes in Net Assets, and
D. Unaudited Condensed Financial Information
2. Provide accounting information for the following: (in
compliance with Reg. S-X as applicable):
A. federal and state income tax returns and federal excise
tax returns;
B. the Trust's semi-annual reports with the Securities and
Exchange Commission ("SEC") on Form N-SAR and Form
N-CSR;
C. the Trust's annual and semi-annual shareholder reports
and quarterly Board meetings;
D. registration statements on Form N-1A and other filings
relating to the registration of shares;
35
E. BISYS' monitoring of each Fund's status as a regulated
investment company under Subchapter M of the Internal
Revenue Code, as amended;
F. annual audit by the Trust's auditors; and
G. examinations performed by the SEC.
3. Calculate turnover and expense ratio.
4. Prepare schedule of Cap Gains and Losses.
5. Provide daily cash report.
6. Maintain and report security positions and transactions in
accounting system.
7. Prepare Broker Commission Report.
8. Monitor expense limitations.
9. Monitor wash sales.
10. Provide financial information otherwise maintained by BISYS
that may be relevant to Adviser's reports on soft dollar
brokerage transactions.
11. Maintain list of failed trades.
12. Provide unrealized gain/loss report.
36
SCHEDULE D
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND STI CLASSIC FUNDS
TRANSFER AGENCY SERVICES
1. Shareholder Transactions
(a) Process shareholder purchase and redemption orders.
(b) Set up account information, including address, dividend
option, taxpayer identification numbers and wire instructions.
(c) Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.
(d) Issue periodic statements for shareholders.
(e) Process transfers and exchanges.
(f) Process dividend payments, including the purchase of new
shares, through dividend reimbursement.
(g) Review account applications to determine whether they are in
"good order" and completeness.
2. Shareholder Information Services
(a) Make information available to shareholder servicing unit and
other remote access units regarding trade date, share price,
current holdings, yields, and dividend information.
(b) Produce detailed history of transactions through duplicate or
special order statements upon request.
(c) Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to
current shareholders.
37
3. Compliance Reporting
(a) Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc. and the
States in which the Fund is registered.
(b) Prepare and distribute appropriate Internal Revenue Service
forms for corresponding Fund and shareholder income and
capital gains.
(c) Issue tax withholding reports to the Internal Revenue Service.
4. Dealer/Load Processing (if applicable)
(a) Provide reports for tracking rights of accumulation and
purchases made under a Letter of Intent.
(b) Account for separation of shareholder investments from
transaction sale charges for purchase of Fund shares.
(c) Calculate fees due under 12b-1 plans for distribution and
marketing expenses.
(d) Track sales and commission statistics by dealer and provide
for payment of commissions on direct shareholder purchases in
a load Fund.
(e) Calculate redemption fees.
5. Shareholder Account Maintenance
(a) Maintain all shareholder records for each account in the
Trust.
(b) Issue customer statements on scheduled cycle, providing
duplicate second and third party copies if required.
(c) Record shareholder account information changes.
(d) Maintain account documentation files for each shareholder.
(e) Work with intermediaries to coordinate the approach to
handling investments or transactions by persons suspected of
engaging in market timing.
6. Anti-Money Laundering Services
(a) Verify shareholder identity upon opening new accounts.
(b) Monitor, identify and report shareholder transactions and
identify and report suspicious activities that are required to
be so identified and reported, and provide other required
reports to the Securities and Exchange Commission, the U.S.
Treasury Department, the
38
Internal Revenue Service or each agency's designated agent, in
each case consistent with the Trust's AML Program.
(c) Place holds on transactions in shareholder accounts or freeze
assets in shareholder accounts, as provided in the Trust's AML
Program.
(d) Create documentation to provide a basis for law enforcement
authorities to trace illicit funds.
(e) Maintain all records or other documentation related to
shareholder accounts and transactions therein that are
required to be prepared and maintained pursuant to the Trust's
AML Program, and make the same available for inspection by (i)
the Trust's AML Compliance Officer, (ii) any auditor of the
Trust's AML Program or related procedures, policies or
controls that has been designated by the Trust in writing, or
(iii) regulatory or law enforcement authorities, and otherwise
make said records or other documents available at the
direction of the Trust's AML Compliance Officer.
TRANSFER AGENCY REPORTS
1. Daily Shareholder Activity Journal
2. Daily Fund Activity Summary Report
(a) Beginning Balance
(b) Transactions
(c) Shareholder Transactions
(d) Reinvested Dividends
(e) Exchanges
(f) Adjustments
(g) Ending Balance
3. Daily Wire and Check Registers
4. Monthly Dealer Processing Reports
5. Monthly Dividend Reports
6. Sales Data Reports for Blue Sky Registration
7. A copy of the most recent report by independent public accountants
describing control structure policies and procedures relating to
transfer agency operations pursuant to AICPA Statement on Auditing
Standards Number 70.
39
8. Such special reports and additional information that the parties may
agree upon, from time to time.
In addition to the forgoing, following each quarterly period, BISYS will
provide a report to the following effect pertaining to the AML Services rendered
by BISYS hereunder during such quarterly period:
9. Performance of good order review for all new and reregistered
accounts;
10. Performance of acceptance review for all monetary instruments
received;
11. Administration of signature guarantee policy in accordance with
prospectus requirements;
12. Administration of escrow hold policy in accordance with prospectus
requirements;
13. Verification of customer address changes;
14. Verification of customer identification for all new accounts and all
name changes on existing accounts;
15. Monitoring of all purchase transactions made with cash equivalents
totaling in excess of $10,000. The number of Form 8300 reports filed
during the period will be reported;
16. Monitoring of all accounts for suspicious activity. The number of
Form SAR reports filed during the period will be reported;
17. Review of shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental
organizations, such as the Office of Foreign Asset Control. The
number of accounts frozen and otherwise reported to authorities
during the period will be reported;
18. Creation of the documentation necessary to provide a basis for law
enforcement authorities to trace illicit funds; and
19. Maintain all records and other documentation related to shareholder
accounts and transactions required to be prepared and maintained
pursuant to the Fund's anti-money laundering program for all BISYS
transfer agent services.
The following will be provided in such report if the Trust falls under the
related U.S.A. Patriot Act of 2001 provisions:
40
20. Perform the required due diligence to help prevent the opening of
any accounts for foreign shell banks during the period either
directly or through correspondent accounts.
21. Perform required due diligence on any new correspondent accounts
opened during the period.
22. Maintain toll-free 1-800 number.
23. Review and address shareholder correspondence, and maintain file of
any customer complaints and provide reports to the Trust concerning
the handling of customer complaints.
41
SCHEDULE E
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND STI CLASSIC FUNDS
FEES
The Trust shall pay BISYS on the first business day of each month, or at
such time(s) as BISYS shall request and the parties hereto shall agree, a fee
for administration, fund accounting and transfer agency services comprised of
the following components, determined at the annual rates set forth below. For
these purposes, the Funds of the Trust shall be treated collectively with the
funds of the STI Classic Variable Trust, and for purposes of this Schedule E,
the term "Funds" includes such other funds, so that, for example, the rate at
which the asset-based fees are applied is determined by aggregating the assets
of all such "Funds" together.
An asset-based fee determined as follows:
2.75 basis points (0.0275%) on the first $25 billion in aggregate net assets of
all Funds;
2.25 basis points (0.0225%) on the next $5 billion in aggregate net assets of
all Funds; and
1.75 basis points (0.0175%) on the aggregate net assets of all Funds over $30
billion; plus
An additional class fee of $2,500 per class per annum, applicable to each
additional class of shares over 145 classes of shares; plus
The following per-account fees, applied per annum to each shareholder account on
BISYS' transfer agency system that exceeds the first 275,000 (open or closed)
shareholder accounts on BISYS' transfer agency system:
Account Type Annual Fee Account Type Annual Fee
Retail $20.00 Networked $13.50
Retail Networked
Closed $ 2.00 Closed $ 2.00
For these purposes, the following categories constitute an open account on the
BISYS system in any one month: open account with balance, open account with zero
balance,
42
open account with negative balance and closed account with activity. Closed
accounts with no activity in the month are considered a closed account for
billing purposes.
The foregoing fees are subject to an annual minimum fee of $5,400,000, based on
the current Fund complex, consisting of 56 Funds. The annual minimum amount will
increase (or decrease) by $50,000 for each Fund that is added (or subtracted)
from the total number of Funds.
CPI ADJUSTMENT
The fixed fees and other fees expressed as stated dollar amounts in this
schedule and in the Agreement shall be increased annually commencing on the
one-year anniversary date of the Effective Date by the percentage increase since
the Effective Date in consumer prices for services as measured by the United
States Consumer Price Index entitled "All Services Less Rent of Shelter" or a
similar index should such index no longer be published.
OUT OF POCKET EXPENSES AND MISCELLANEOUS CHARGES
The out of pocket expenses and miscellaneous services fees and charges provided
for under the Agreement are not included in the above fees and shall also be
payable to BISYS in accordance with the provisions of the Agreement.
AML Fees and Expenses are as follows:
Annual program servicing: $2,000.00
(to be billed in equal monthly amounts of $166.67)
Systems costs:
Early Warning annual fee $575.00
Early Warning per record cost $ 0.22
(for new account* registration
review - does not apply to
Network Level III accounts)
Equifax - per request cost $ 5.00
AML Audit:
BISYS will perform the AML audit for the first year of the Agreement for a
fee of $15,000. In subsequent years, BISYS will perform the audit, at the
election of the Trust, at a fee to be agreed by the parties.
*CHANGES TO ACCOUNT REGISTRATION INFORMATION OR OTHER ACCOUNT-RELATED
INFORMATION MAY RESULT IN CHARACTERIZING THE ACCOUNT AS A "NEW ACCOUNT"
FOR THESE PURPOSES.
43
SCHEDULE F
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND STI CLASSIC FUNDS
SERVICE STANDARDS
Pursuant to Section 2 of this Agreement, BISYS has agreed to perform the
services described in this Agreement in accordance with the service standards
set forth on this Schedule F. The parties agree that such service standards may
be revised, from time to time, by mutual agreement.
Each of the service standards will be monitored by a Quality Assurance team. In
the event BISYS fails to meet a service standard in any particular month, BISYS
agrees to take appropriate corrective measures within the following month in
order to be in compliance with the appropriate standard at the end of such
month; provided, however, that the foregoing requirement shall not apply in
those instances in which BISYS' failure to meet a service standard was due to
circumstances beyond its control.
For purposes of measurement, a rolling quarter is defined as three consecutive
months. Examples would be as follows: rolling quarter one: January, February,
March; rolling quarter two: February, March, April; and rolling quarter three:
March, April, May. Measurement shall commence at the completion of the first
rolling quarter.
In the event BISYS fails to meet three or more items that are within the same
category (i.e., category 1, 2 or 3) in the table below in a particular month,
this will constitute a service deficiency for that month (a "Deficiency").
In the event that there is a Deficiency for two of three non-consecutive months
of any rolling quarter, the fee payable to BISYS hereunder for the next
succeeding month shall be reduced by 1.0% or such lower amount as the parties
agree upon.
In the event that there is a Deficiency for two consecutive months of any
rolling quarter, the fee payable to BISYS hereunder for the next succeeding
month shall be reduced by 1.5% or such lower amount as the parties agree upon.
In the event that there is a Deficiency for three consecutive months of any
rolling quarter, the fee payable to BISYS hereunder for the next succeeding
month shall be reduced by 2.5% or such lower amount as the parties agree upon.
Additionally, the Trust reserves the right, based on an overall assessment of
the severity of the failure, to have BISYS provide the Board of Trustees with a
written summary of deficiency issues and an action
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plan detailing immediate corrective measures as well as specific initiatives
designed to prevent such failures from occurring in the future.
The following provides an example:
Assuming the first full month of services is in August, the first measurement
period would consist of August, September and October. For purposes of this
example, it will be assumed, hypothetically, that for the first 6 months there
is a Deficiency (as defined above) for the months of August, September,
November, December, and January.
Under the foregoing scenario, BISYS' fee for the months indicated below would be
reduced by the amounts indicated below:
November - 1.5%
December - 1%
January - 1.5%
February - 2.5%
For purposes of this Schedule F, the services that BISYS renders to STI Classic
Variable Trust shall be aggregated with the services rendered to the Trust, and
BISYS' performance shall be determined accordingly.
CATEGORY 1
ITEM STANDARD
Greater than 99%, according to ICI materiality
NAV Calculation Accuracy guidelines.
Completed and filed with the SEC by the 60th day
N-SARs following the report date.
Calculated and declared income and capital gain
Excise Tax Distributions distributions prior to December 31.
Daily Bulletin 95% delivered by 6:30 pm (EST).
98% delivered by 11:00 am (EST) (this assumes any
Cash Availability transactions received from platforms that may be authorized
by the Trust to submit late-day trade information will be
received by 9.30am (EST)).
Analyzed and adjusted expense accruals, as needed, on a
Expense Budgeting and Analysis monthly basis.
All invoices paid accurately within 3 weeks of receipt of
Payment of Invoices invoice by BISYS.
Prepared financial data for inclusion in the Form 24f-2
24f-2 Share Registration filing within 90 days of fiscal year-end.
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Daily Dividend Rate Completion Greater than 99% accuracy rate
Daily Dividend Rate Accuracy Greater than 99.9% accuracy rate
Non-Daily Dividend Rate Accuracy Greater than 99.9% accuracy rate
Non-Daily Dividend Processing Accuracy Greater than 99.9% accuracy rate
NASDAQ Reporting Accuracy, excluding money funds Greater than 99.9% accuracy rate
Asset Reconciliation Frequency (weekly) Greater than 99% accuracy rate
Cash Reconciliation Frequency (daily) Greater than 99% accuracy rate
Corporate Actions Processing Completion Greater than 99% accuracy rate
Security Valuation Review Completion Greater than 99% accuracy rate
Preparation of Audit Packages 100% accuracy rate
Shareholder Report Preparation Cycle 46 calendar days
Mutual Fund Performance Calculation Greater than 99.9% accuracy rate
Mutual Fund Performance Accuracy Greater than 99.9% accuracy rate
SEC Yield Calculation Deadline Greater than 99% accuracy rate
SEC Yield Accuracy Greater than 99% accuracy rate
SEC Yield Calculation Frequency Greater than 99% accuracy rate
Preparation of Budget Packages Greater than 99% accuracy rate
SEC Filings, by type 100% accuracy rate
Board Reports Produced, by type 100% accuracy rate
CATEGORY 2
ITEM STANDARD
Financial Transaction Quality 98% accuracy rate
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Maintenance Items Quality 98% accuracy rate
New Account Transactions Quality 95% accuracy rate
Incoming Calls 85% answered within twenty (20) seconds
Average Answer Speed Within twenty (20) seconds
Abandon Rate Under 2.5%
Correspondence 100% responded to in three (3) business days
Confirmations 100% mailed in three (3) days
Statements 100% mailed in five (5) days
Form 1099-DIV Year-End Tax Information Prepared and mailed notices to shareholders and vendors
within 30 calendar days of calendar year-end.
Form 1099-MIS Additional Year-End Tax Information Prepared and mailed notices to shareholders and vendors
within 45 calendar days of calendar year-end.
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CATEGORY 3
ITEM STANDARD
LEGAL SERVICES
Provide Updated Quarterly Authorized Signer List to Within 2 business days following board meeting
BISYS financial administration department and to Fund
custodian.
Registration Statements
- Review Annual Updates Within 120 calendar days of fund's fiscal year-end
- Review New Funds, N-14s & Other Filings Within pre-established timeframes with client
- 497 Filings 5 calendar days after N-1A effectiveness
Prospectus & Supplement Printing 2 - 4 business days after N-1A effective date
Notify the transfer agent and ADP of the record date Within seven (7) business days of being notified that
for shareholder meeting record date has been set
Send Trustee Questionnaires to all Trustees Within seven (7) business days of after receipt of form
of Questionnaire from fund counsel
Preparation of Draft Board Meeting Agenda 6 weeks prior to Board meeting
Preparation of Board Resolutions 2 weeks prior to Board meeting
Mailing of Board Meeting Materials 10 calendar days prior to meeting
Preparation of Draft Board Meeting Minutes 30 calendar days after Board meeting
COMPLIANCE SERVICES
Perform Daily Compliance Checks:
- Specified SEC & Prospectus Checks
- Specified IRS Checks
Notify the Trust of Issues Detected By 5:00 PM on date of detection
Quarterly Compliance Checks 2 business days after receipt of IA compliance reports
Other Quarterly Compliance Services
- IRS Qualification Letters 10 business days prior to tax quarter-end
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- Broker Allocation Letters 2 business days after receipt of FA reports (based on
fiscal quarters)
- BISYS Compliance Representation Letter 10 calendar days prior to Board meeting
N-SARs
- Preparation and Review Completed by 60th calendar day following the report date
N-CSRs
- Review Completed by 10th calendar day following transmission of
shareholder report
Provide Compliance Training to Portfolio Managers Annually
BLUE SKY REGISTRATION SERVICES
State Renewal Notifications for Designated States Prior to expiration
Perform Annual Audit 15 calendar days prior to expiration of registration
Weekly Warning Report Weekly
Monthly Audit of Sales vs. Registration Levels Monthly
REGULATORY SERVICES
Initial Advertising & Sales Literature Review 2 business days after receipt from client
Communication of NASD Comments to Client Within 1 business day of receipt from NASD
Code of Ethics Review Trustee/Director quarterly questionnaire: within 5
business days prior to quarter-end
Quarterly Report Summary: within 50 calendar days after
quarter-end
These service standards are subject to all of the terms of the Master Service
Agreement (including, without limitation, Standard of Care, Section 7).
NAV calculations are measured by total number of NAVs calculated monthly.
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The required Standard (performance level) associated with an item or function
will be measured by dividing the total number of times that item or function was
correctly performed during the month by the total number of times that item or
function occurred during the month.
EXAMPLE: With respect to the calculation of NAVs, assuming 22 business days and
9 non-money market funds in existence in Month 1, there should be 198 NAV
calculations in Month 1. If there are 2 NAV errors in Month 1, the Performance
Level for the month is 98.9% (196/198).
For purposes of the foregoing, a failure to perform a particular function
properly includes only those failures for which BISYS would not be excused and
for which BISYS would be responsible under the Agreement (including, without
limitation, under Section 7, Standard of Care).
An inaccurate calculation of the NAV (an error greater than 1 cent per share of
the net asset value) is considered one event and will only be counted on the day
it first occurred, unless the source of the inaccuracy changes during the
relevant period.
It is anticipated that the Funds would not wish to deliver an NAV to NASDAQ if
the accuracy of the NAV is in question at the time it is necessary to transmit
the NAV to NASDAQ. If BISYS has reason to believe that an NAV is or may be
incorrect, it may either "withhold" the NAV from NASDAQ or "withdraw" an NAV
previously submitted, in consultation with an appropriate representative of the
Funds. In such event, BISYS shall not be deemed to have failed to report to
NASDAQ by the applicable cut-off time.
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