(h)(2)
FORM OF SUB-ADMINISTRATION AGREEMENT
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FORM OF
SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the 1st day of September, 2004 by and between BISYS
FUND SERVICES LIMITED PARTNERSHIP ("BISYS"), a limited partnership organized
under the laws of the State of Ohio and having its principal office at 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx, and BB&T Asset Management, Inc. (the "Service
Company"), a wholly-owned subsidiary of Branch Banking & Trust Company, a
national bank organized under the laws of the United States.
WHEREAS, BISYS has entered into an Administration Agreement dated June 1, 2000
(the "Administration Agreement"), with the BB&T Funds (the "Company"), a
Massachusetts business trust registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"), concerning the
provision of various administration services for the investment portfolios known
as the BB&T Funds (individually referred to herein as a "Portfolio" and
collectively as the "Portfolios");
WHEREAS, BISYS desires to retain the Service Company to assist it in performing
certain administration services for the Portfolios; and
WHEREAS, the Service Company is willing to perform such services, and BISYS is
willing to retain the Service Company, on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, BISYS and the Service Company agree as follows:
Retention of the Service Company.
BISYS hereby appoints the Service Company, subject to the supervision, direction
and control of the Company's Board of Trustees, to furnish the Portfolios with
the services described in Schedule A hereto (the "Services").
2. Allocation of Charges and Expenses.
(A) The Service Company. The Service Company shall furnish at its own expense
the executive, supervisory and clerical personnel necessary to perform the
Services. The Service Company shall also provide the items which it is obligated
to provide under this Agreement, and shall pay all compensation, if any, of
officers of the Company as well as all Trustees of the Company who are
affiliated persons of the Service Company or any affiliated company of the
Service Company.
(B) BISYS. BISYS acknowledges that it will continue to perform all services
required to be performed by it as the Administrator under the Administration
Agreement, except those services as are required to be performed by the Service
Company hereunder, including the Services. The parties agree and acknowledge
that pursuant to the Administration Agreement, the Company has undertaken to pay
or cause to be paid all other expenses of the Company not otherwise allocated to
BISYS as the Administrator under the Administration Agreement, including,
without limitation, organization costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing shareholders, all expenses
incurred in connection with issuing and redeeming shares, the costs of custodial
services, the cost of initial and ongoing registration of the shares under
Federal and state securities laws, fees and out-of-pocket expenses of Trustees
who are not affiliated persons of BISYS or the investment adviser to the Company
or any affiliated corporation of BISYS or such investment adviser, insurance,
interest, brokerage costs, litigation and other extraordinary or nonrecurring
expenses, and all fees and charges of investment advisers to the Company.
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3. Compensation of the Service Company.
BISYS shall pay the Service Company, for the services to be provided by the
Service Company under this Agreement, the fees set forth in Schedule B. Such
amounts shall be paid by BISYS from amounts it receives from the Company under
the Administration Agreement.
Limitation of Liability of the Service Company and BISYS.
The duties of the Service Company shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against it
hereunder. The Service Company shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby. (As used in this Section 4, the term "the Service Company" shall include
directors, officers, employees and other agents of the Service Company as well
as the Service Company itself, to the extent such persons' conduct relates to
the performance of then Services hereunder.) Any officer, director, employee or
agent of the Service Company who is or who becomes an officer, Trustee, employee
or agent of the Company shall be deemed, when engaged in rendering the Services
hereunder in such capacity, to be rendering services directly to or for the
Company, and shall not be deemed to be acting as an officer, director, employee
or agent or one under the control or direction of BISYS.
So long as the Service Company acts in good faith and with due diligence and
without negligence, BISYS shall indemnify Service Company and hold it harmless
from and against any and all actions, suits and claims, whether groundless or
otherwise, and from and against any and all losses, damages, costs, charges,
reasonable counsel fees and disbursements, payments, expenses and liabilities
(including reasonable investigation expenses) arising directly or indirectly out
of the Service Company's actions taken or nonactions with respect to the
performance of services hereunder; provided, however, that BISYS's obligation
under the foregoing indemnity and hold harmless shall apply only to the extent
that BISYS is in fact fully indemnified and held harmless by the Company under
the Administration Agreement for any and all losses, damages, costs, charges,
reasonable counsel fees and disbursements, payments, expenses and liabilities
(including reasonable investigation expenses) incurred by BISYS (including,
without limitation, any indemnification amounts payable to the Service Company),
and shall be due only if, as and when such amounts payable to the Service
Company by BISYS under this paragraph are in fact received by BISYS from the
Company.
The Service Company shall indemnify BISYS and hold it harmless from and against
any and all actions, suits and claims, whether groundless or otherwise, and from
and against any and all losses, damages, costs, charges, reasonable counsel fees
and disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of the Service
Company's appointment as sub-administrator, and any actions and omissions taken
by it involving its negligence, willful misfeasance or reckless disregard of its
obligations under this Agreement.
Activities of the Service Company.
The services of Service Company to be rendered hereunder are not to be deemed to
be exclusive. The Service Company is free to render such services to others and
to have other businesses and interests. It is understood that Trustees,
officers, employees and shareholders of the Company are or may be or become
interested in the Service Company, as officers, employees or otherwise and that
directors, officers and employees of the Service Company and its counsel are or
may be or become similarly interested in the Company, and that the Service
Company may be or become interested in the Company as a shareholder or
otherwise.
Duration of this Agreement.
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This Agreement shall become effective upon the date first upon written, and
shall continue in effect during the term of the Administration Agreement,
including any renewals thereof. This Agreement shall terminate automatically
upon the termination of the Administration Agreement. The Service Company
expressly agrees and acknowledges that the exercise by BISYS of any rights it
may have under the Administration Agreement, including, in particular, any
rights BISYS may have from time to time to terminate the Administration
Agreement, shall not be restricted or limited in any manner by this Agreement
and shall not give rise to any claim by the Service Company hereunder.
In addition to the foregoing, this Agreement may be terminated for "cause." For
these purposes, "cause" shall mean (a) a material breach of this Agreement that
has not been remedied for thirty (30) days following written notice of such
breach from the non-breaching party; (b) a final, unappealable judicial,
regulatory or administrative ruling or order in which the party to be terminated
has been found guilty of criminal or unethical behavior in the conduct of its
business; (c) financial difficulties on the part of the party to be terminated
which are evidenced by the authorization or commencement of, or involvement by
way of pleading, answer, consent or acquiescence in, a voluntary or involuntary
case under Title 11 of the United States Code, as from time to time is in
effect, or any applicable law, other than said Title 11, of any jurisdiction
relating to the liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors; or (d) any failure on the part of the
Company to pay an amount that is due and payable to BISYS or any of its
affiliates under any agreement to which the Company is a party within sixty (60)
days following the due date. For purposes of this definition of "cause," a
material breach shall include, but not be limited to, any failure on the part of
BISYS to pay the fees due and payable to the Service Company pursuant to Section
3(A) hereunder within sixty (60) days following the due date.
Assignment.
This Agreement shall not be assignable by either party without the written
consent of the other party. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns.
Amendments.
No provision of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the parties hereto.
Certain Records.
The Service Company shall maintain customary records in connection with its
duties as specified in this Agreement. Any records required to be maintained and
preserved pursuant to Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act") which are prepared or maintained by the
Service Company shall be the property of the Company and will be made available
to or surrendered promptly to BISYS upon its request or to the Company upon its
request.
In case of any request or demand for the inspection of such records by another
party, the Service Company shall notify BISYS and follow BISYS's instructions as
to permitting or refusing such inspection; provided that the Service Company may
exhibit such records to any person in any case where it is advised by counsel to
the Company that the Company may be held liable for failure of the Service
Company to do so, or the Service Company could be held in contempt for failure
to do so.
Definitions of Certain Terms.
The terms "interested person" and "affiliated person," when used in this
Agreement, shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Commission.
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Notice.
Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
following address: if to BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000,
Attention: Xxxx Xxxxxxx (facsimile number (000) 000-0000); and if to the Service
Company, at 000 Xxxxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, XX 00000, Attention:
E.G. Xxxxxxx; or at such other address as such party may from time to time
specify in writing to the other party pursuant to this Section.
Governing Law.
This Agreement shall be construed in accordance with the laws of the State of
Ohio, subject to any applicable provisions of the 1940 Act.
Multiple Originals.
This Agreement may be executed in two or more counterparts, each of which when
so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
Confidentiality/ Privacy.
The Service Company agrees on behalf of itself and its employees to treat
confidentially and as the proprietary information of the Company, all records
and other information relative to the Company and prior, present or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except, after
prior notification to and approval in writing by BISYS or the Company, which
approval shall not be unreasonably withheld.
The Service Company acknowledges that nonpublic personal financial information
relating to consumers or customers of the Company provided by, or at the
direction of the Company to BISYS, or collected or retained by BISYS to perform
its duties as administrator of the Funds shall be considered confidential
information. Service Company shall not give, sell or in any way transfer such
confidential information to any person or entity, except at the direction of
BISYS or as required or permitted by law. Service Company shall have in place
and maintain physical, electronic and procedural safeguards reasonably designed
to protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of records and information relating to consumers
or customers of the Company. The Service Company acknowledges and agrees to
comply with the Company's Statement of its privacy policies and practices as
required by Securities and Exchange Commission Regulation S-P.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
BISYS FUND SERVICES LIMITED PARTNERSHIP
BY: BISYS FUND SERVICES OHIO, INC.,
ITS GENERAL PARTNER
By: _______________________________
Title: ______________________________
BB&T ASSET MANAGEMENT, INC.
By: ______________________________
Title:_____________________________
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SCHEDULE A
BISYS BB&T
ADMINISTRATOR SUBADMINISTRATOR Service(1)
------------- ---------------- ----------
FINANCIAL ADMINISTRATION
X Prepare MD&A disclosure for shareholder reports
X X Review all standard performance information prior to
distribution to existing shareholders for accuracy and
legal compliance purposes
X Review annual Trust budget and monthly accrual analysis
FUND ADMINISTRATION
X X Provide appropriate personnel to attend the Board
meetings
X X Provide Trustees with reports regarding operations of
the Funds
X Provide Funds with regulatory reporting pursuant to SEC
requirements
X X Assist in the preparation of relevant sections of Board
materials and agendas
X X Provide Funds with necessary office space, equipment,
personnel, compensation and facilities for handling
business affairs of Funds
X X Review the operations and performance of the Funds'
other service providers including Transfer Agent, Fund
Accountant, Custodian and Distributor
X X Provide individuals to serve as officers of the Funds
X X Advise the Fund and Trustees on matters concerning the
Funds' business affairs
X X Distribute Board materials to appropriate personnel
X Review prospectuses, prospectus supplements, and proxies
X X Negotiate, prepare and administer contracts on behalf
of the Trust
X X Coordinate activities of Fund counsel
X X Review performance data for collateral material
insertion for existing shareholders
X Coordinate data compilation for monthly performance
reports, for existing shareholders
X Coordinate printing process for quarterly fact sheets
and broker/dealer guide for existing shareholders
BISYS BB&T
ADMINISTRATOR SUBADMINISTRATOR Service(1)
------------- ---------------- ----------
X Coordinate printing process for monthly performance
reports and fact sheets for existing shareholders
X Proof all production pieces for existing shareholders
back to data provided
X Distribute printed pieces to appropriate distribution
channels for existing shareholders
X Xk Assist Investment Counselors and wholesalers in
preparing for client appointments
X Provide performance data for sales literature and
advertising
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X Xk Maintain information pertaining to sales of BB&T Funds
X X Assist in fulfillment of prospectuses to new
shareholders,
X X Acquire and maintain inventory of fulfillment materials
for supply to shareholders
X X Monitor relationship with BB&T's transfer agent to
assure high quality service to BB&T's shareholders
COMPLIANCE SERVICES
X X Review monthly compliance reports that are
prepared by the portfolio managers
X X Provide appropriate assistance with respect to SEC
examinations
X X Provide appropriate assistance with respect to audits
by the Trust's independent auditors
BLUE SKY SERVICES
X Determine in which states fund shares should be
registered
FUND WEB SITE MANAGEMENT
X Direct web site enhancements
X Develop Intranet applications with internal business
partners
X Develop or direct development of site content
1. List of services may not be exhaustive of services provided by either party;
certain services, or aspects of certain services, may be provided by both the
Administrator and Sub-Administrator.
SCHEDULE B
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES LIMITED PARTNERSHIP
AND
BB&T ASSET MANAGEMENT, INC.
Sub-Administration Fee
BISYS shall pay the Service Company a sub-administration fee, at an annual rate
for each Portfolio, of 0.045% (4.5 basis points) of the average net assets of
the Portfolio.
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