Exhibit (h)(iii)
FORM OF SUB-ADMINISTRATION AGREEMENT
------------------------------------
THIS AGREEMENT is made as of this 29th day of October, 2001, by and between
FIFTH THIRD BANK ("Fifth Third"), an Ohio state chartered bank, and BISYS FUND
SERVICES LIMITED PARTNERSHIP. ("BISYS"), an Ohio limited partnership.
WHEREAS, Fifth Third has entered into an Administration Agreement, dated
October 29, 2001 (the "Administration Agreement"), with Fifth Third Funds (the
"Company"), a Massachusetts business trust registered with the Securities and
Exchange Commission (the "Commission"), concerning the provision of various
services, including but not limited to administration services, for the
investment portfolio of the Company, all as now or hereafter may be established
from time to time (individually referred to herein as a "Fund" and collectively
as the "Funds");
WHEREAS, Fifth Third desires to retain BISYS to assist it in performing
certain administration services for the Funds; and
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, the Administrator and BISYS hereby agree as follows:
1. Retention of BISYS.
------------------
BISYS shall furnish the Funds with the Services that are more particularly
set forth in Schedule A heretoFunds. BISYS agrees to perform the services
described herein in accordance with the service standards set forth in Schedule
B hereto. BISYS also agrees to perform 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 are provided on an
amendment to this Agreement, in consideration of such fees as the parties hereto
may agree. In performing its duties under this Agreement, BISYS will act in
conformity with the Company's Declaration of Trust, By-Laws, Prospectuses and
Statements of Additional Information as in effect from time to time and will
conform to and comply with the requirements of the Investment Company Act of
1940 (the "1940 Act") and all other applicable federal and state laws and
regulations. BISYS shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent Fifth Third or the Company in
any way and shall not be deemed an agent of Fifth Third or the Company.
2. Allocation of Charges and Expenses.
----------------------------------
(A) BISYS. 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 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 BISYS or any affiliated company of BISYS; provided,
however, that unless otherwise specifically provided, BISYS shall not be
obligated to pay the compensation of any employee of the Company retained by the
Trustees of the Company to perform services on behalf of the Company.
(B) Fifth Third. Fifth Third hereby represents that the Company has
undertaken to pay or cause to be paid all other expenses of the Company not
otherwise allocated herein, 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 Fifth Third
or the Investment Adviser to the
15
Company or any affiliated corporation of Fifth Third or the Investment Adviser,
insurance, interest, brokerage costs, litigation and other extraordinary or
nonrecurring expenses, and all fees and charges of investment advisers to the
Company.
3. Compensation of BISYS.
---------------------
(A) Sub-Administration Fee. Fifth Third 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 C hereto . Fifth Third shall also reimburse BISYS for
reasonable travel and lodging expenses incurred by officers and employees of
BISYS in connection with attendance at Board meetings and other meetings at
which attendance is required or requested.
(B) Survival of Compensation Rights. All rights of compensation under this
Agreement for services performed as of the termination date shall survive the
termination of this Agreement.
4. Standard of Care; Reliance on Records and Instructions;
Indemnification.
-------------------------------------------------------
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 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 "BISYS" shall include directors, officers, employees and
other agents of BISYS as well as BISYS itself.) Any person, even though also an
officer, director, employee or agent of BISYS, who may be or become an officer,
Trustee, employee or agent of the Company, shall be deemed, when rendering
services to the Company or to any Fund, or acting on any business of the Company
or of any Fund (other than services or business in connection with BISYS' duties
hereunder) to be rendering such services to or acting solely for the Company or
the Fund and not as an officer, director, employee or agent or one under the
control or direction of BISYS even though paid by BISYS.
So long as BISYS acts in good faith and with due diligence and without
negligence, Fifth Third assumes full responsibility and 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 this Agreement or BISYS' actions taken or
nonactions with respect to the performance of services hereunder.
Except for actions, suits or claims brought or threatened against BISYS by
(i) the Company, (ii) Fifth Third, or (iii) one or more shareholders of the
Company, the 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 provision contained herein shall apply, however, it is
understood that if in any case Fifth Third may be asked to indemnify or hold
BISYS harmless, Fifth Third shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further understood that
BISYS will use all reasonable care to identify and notify Fifth Third promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against Fifth Third, but failure
to do so in good faith shall not affect the rights hereunder.
Fifth Third 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 Fifth Third elects to assume the defense
of any such claim, the defense shall be conducted by counsel chosen by Fifth
Third and satisfactory to BISYS, whose approval shall not be unreasonably
withheld. In the event that Fifth Third elects to assume the defense of any suit
and retain counsel, BISYS shall bear the fees and expenses of any additional
counsel retained by it. If Fifth Third does not elect to assume the defense of a
suit, it will reimburse BISYS for the reasonable fees and expenses of any
counsel retained by BISYS.
16
BISYS may apply to Fifth Third at any time for instructions and may consult
counsel for Fifth Third or its own counsel and with accountants and other
experts with respect to any matter arising in connection with BISYS' duties, and
BISYS shall not be liable or accountable for any reasonable action taken or
omitted by it in good faith in accordance with such instruction or with the
opinion of such counsel, accountants or other experts.
Also, BISYS shall be protected in acting in good faith upon any document
which 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 Fifth Third until
receipt of written notice thereof from Fifth Third.
5. Activities of BISYS.
-------------------
The services of BISYS rendered 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. To the extent BISYS renders services to another
investment company which are similar to the services BISYS is obligated to
perform under this Agreement, BISYS will take reasonable precautions to avoid
any conflict of interest between its obligations under this Agreement and its
obligations to any such other investment company. It is understood that
Trustees, officers, employees and shareholders of the Company are or may be or
become interested in BISYS, as officers, employees or otherwise and that
directors, officers and employees of BISYS and its counsel are or may be or
become similarly interested in the Company, and that BISYS may be or become
interested in the Company as a shareholder or otherwise.
6. Duration of this Agreement.
--------------------------
This Agreement shall become effective as of the date first written above
or, if a particular Fund is not in existence on that date, on the date such Fund
commences operation (the "Effective Date").
This Agreement shall continue in effect with respect to a Fund, unless
earlier terminated by either party hereto as provided hereunder, until October
31, 2004 (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 without
penalty (i) by provision of a notice of non-renewal in the manner set forth
below, (ii) by mutual agreement of the parties or (iii) for "cause," as defined
below, upon the provision of 60 days advance written notice by the party
alleging cause. Written notice of non-renewal must be provided at least 60 days
prior to the end of the Initial Term or any Rollover Period, as the case may be.
For purposes of this Agreement, "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; (d) any failure on the
part of the Company or Fifth Third to pay an amount that is due and payable to
BISYS or any of its affiliates under this Agreement or any other agreement to
which the Company or Fifth Third is a party within 60 days following the due
date; or (e) pursuant to an exercise of Fifth Third's right to terminate for a
"service standard deficiency" as outlined in Schedule B. For purposes of this
definition of "cause" a material breach shall include, but not be limited to,
any failure on the part of the Company or Fifth Third to pay fees due and
payable to BISYS pursuant to Sections 2 and 3 hereunder within 60 days following
the due date.
After such termination for so long as BISYS, with the written consent of
Fifth Third, in fact continues to perform any one or more of the services
contemplated by this Agreement or any schedule or exhibit hereto, the provisions
of this Agreement, including without limitation the provision dealing with
indemnification, shall continue in full force and effect. Compensation due BISYS
and unpaid by Fifth Third upon such termination
17
shall be immediately due and payable upon and notwithstanding such termination.
With the approval of Fifth Third (which approval shall not be unreasonably
withheld), BISYS shall be entitled to collect from Fifth Third, in addition to
the compensation described under Sections 2 and 3 hereof, the amount of all of
BISYS' reasonable cash disbursements for services in connection with BISYS'
activities in effecting such termination, including without limitation, the
delivery to the Company, Fifth Third, and/or their respective designees of the
Company's and Fifth Third's property, records, instruments and documents.
If, for any reason other than non-renewal, mutual agreement of the parties
or "cause", as defined above, BISYS is replaced as service provider, or if a
third party is added to perform all or a part of the services provided by BISYS
under this Agreement (excluding any sub-contractor appointed by BISYS as
provided in Section 7 hereof), then Fifth Third shall make a one-time cash
payment, in consideration of the fee structure and services to be provided under
this Agreement, and not as a penalty, to BISYS equal to fifty percent (50%) of
the lesser of (A) the balance due BISYS for the next two years of the
then-current term of this Agreement or (B) the balance due BISYS for the
remainder of the then-current term of this Agreement, assuming for purposes of
calculation of the payment that such balance shall be based upon the average
amount of the Company's assets for the twelve months prior to the date BISYS is
replaced or a third party is added.
The parties further acknowledge and agree that, in the event BISYS is
replaced, or a third party is added, as set forth above, (i) a determination of
actual damages incurred by BISYS would be extremely difficult, and (ii) the
liquidated damages provision contained herein is intended to adequately
compensate BISYS for damages incurred and is not intended to constitute any form
of penalty.
7. Assignment.
----------
This Agreement shall not be assignable by either party without the written
consent of the other party; provided, however, that BISYS may, at its expense,
subcontract with any entity or person concerning, reasonably acceptable to Fifth
Third, the provision of the services contemplated hereunder. BISYS shall not,
however, be relieved of any of its obligations under this Agreement by the
appointment of such subcontractor and provided further, that BISYS shall be
responsible, to the extent provided in Section 4 hereof, for all acts of such
subcontractor as if such acts were its own. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
8. Amendments.
----------
No provision of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the parties hereto.
9. Certain Records.
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BISYS shall maintain customary records in connection with its duties as
specified in this Agreement. Any records required to be maintained and preserved
pursuant to Rules 31a-1 and 31a-2 under the 1940 Act which are prepared or
maintained by BISYS on behalf of the Company shall be prepared and maintained at
the expense of BISYS, but shall be the property of the Company and will be made
available to or surrendered promptly to the Company on request.
In case of any request or demand for the inspection of such records by
another party, BISYS shall notify Fifth Third and follow Fifth Third's
instructions as to permitting or refusing such inspection; provided that BISYS
may exhibit such records to any person in any case where it is advised by its
counsel that it may be held liable for failure to do so, unless (in cases
involving potential exposure only to civil liability) Fifth Third or the Company
has agreed to indemnify BISYS against such liability.
10. Definitions of Certain Terms.
----------------------------
18
The terms "interested person" and "affiliated person," when used in this
Agreement, shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Commission.
11. Notice.
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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 Fifth Third, at 00 Xxxxxxxx Xxxxxx Xxxxx, Xxxx Drop
0000X0, 00xx Xxxxx, Xxxxxxxxxx, Xxxx 00000, Attention: Xxxx Xxxx; and if to
BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention: President; with a
copy to The BISYS Group, Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: General Counsel; or at such other address as such party may from time
to time specify in writing to the other party pursuant to this Section.
12. Governing Law.
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This Agreement shall be construed in accordance with the laws of the State
of Ohio and the applicable provisions of the 1940 Act. To the extent that the
applicable laws of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
13. Multiple Originals.
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This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
14. Confidentiality.
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BISYS 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 Fifth Third or the Company,
which approval shall not be unreasonably withheld and may not be withheld where
BISYS may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by Fifth Third or the Company.
15. Matters Relating to the Company as a Massachusetts Business
Trust.
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The names "Fifth Third" and "Trustees of Fifth Third" refer respectively to
the business trust created and the Trustees, as trustees but not individually or
personally, acting from time to time under a Declaration of Trust dated as of
September 15, 1988 to which reference is hereby made and a copy of which is on
file at the office of the Secretary of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of "Fifth Third" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders or representatives of the Company personally, but bind
only the assets of the Company, and all persons dealing with any Fund must look
solely to the assets of the Company belonging to such Funds for the enforcement
of any claims against the Company.
16. Limitation of Liability.
------------------------
BISYS WILL NOT BE LIABLE TO FIFTH THIRD, THE COMPANY, ANY FUND OR ANY THIRD
PARTY FOR ANY PUNITIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES,
INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR LOSS OR DAMAGE OF DATA, ARISING
OUT OF, OR IN CONNECTION WITH THIS AGREEMENT OR THE PROVISION OF SERVICES
HEREUNDER, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
19
DAMAGES. IN ADDITION, DESPITE ANY CONTRARY PROVISION IN THIS AGREEMENT, UNDER NO
CIRCUMSTANCES WILL BISYS' AGGREGATE LIABILITY TO FIFTH THIRD, ANY FUND, THE
COMPANY OR ANY THIRD PARTY EXCEED THE TOTAL AMOUNT OF COMPENSATION PAID TO BISYS
DURING THE 6 MONTHS IMMEDIATELY PRIOR TO THE DATE ON WHICH THE ALLEGED DAMAGES
WERE CLAIMED TO HAVE BEEN INCURRED, REGARDLESS OF THE CAUSE OR FORM OF ACTION.
17. Privacy
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Nonpublic personal financial information relating to consumers or customers
of the Funds provided by, or at the direction of Fifth Third or the Company to
BISYS, or collected or retained by BISYS in the course of performing its duties
as administrator 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 except at the direction of Fifth Third or
the Company or as required or permitted by law. BISYS shall have in place and
shall 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 Funds. Fifth Third represents to BISYS that Fifth
Third has adopted a Statement of its privacy policies and practices as required
by Securities and Exchange Commission Regulation S-P and agrees to provide BISYS
with a copy of such statement annually. In addition, Fifth Third has been
advised that the Company has adopted a Statement of its privacy policies and
practices as required by Securities and Exchange Commission Regulation S-P, and
Fifth Third agrees that BISYS will be provided with a copy of such statement
annually by Fifth Third or the Company.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
FIFTH THIRD BANK
By: _________________________________
Title: ______________________________
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: BISYS Fund Services, Inc.,
Its General Partner
By:__________________________________
Title: ______________________________
20
SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
FIFTH THIRD BANK
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
SERVICES
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BISYS 5/3
ADMINISTRATION
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X X 1. Maintain and manage annual regulatory filing calendar.
------------ -----
X 2. Manage the process of printing and distributing
prospectuses and prospectus supplements. This includes,
but is not limited to, information regarding quantities
and layout, price negotiation, invoice control and
management of the mailing process.
------------ -----
X 3. Manage the process of printing and distributing proxy
materials. This includes, but is not limited to,
information regarding quantities, compilation of
shareholder data, price negotiation and management of
the mailing process.
------------ -----
X 4. Prepare for and conduct shareholder meetings. This
includes, but is not limited to, solicitation of
shareholders, preparation of scripts, oversight of the
tabulation of votes and preparation of reports that
reflect voting results.
------------ -----
X 5. Prepare and file Form N24-F2.
------------ -----
X 6. Obtain tax identification numbers from the IRS for each
Fund portfolio.
------------ -----
X 7. Assist Fund's Independent Accountants with 17f-2 audit
process.
------------ -----
X X 8. Assist Fund in obtaining Fund ratings from NRSROs and
the NAIC.
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X 9. Obtain Fund CUSIPs.
------------ -----
X 10. Assist in the completion of trustee/officer
questionnaires.
------------ -----
X X 11. Assist the Fund in the preparation of appropriate
documentation and records relating to the contribution
of seed money capital.
------------ -----
X X 12. Maintain books and records on behalf of the Fund, as
agreed upon by the parties.
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X X 13. Review of N-SAR, Form N-1A and prospectuses, Prospectus
Supplements, N-14's and proxies.
------------ -----
X X 14. Make available persons to serve as officers of the
Fund.
------------ -----
X X 15. Provide support and services for fund and non-fund
mergers, conversions, and reorganizations.
------------ -----
X X 16. Review Account Applications and Shareholder Agreements.
------------ -----
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BISYS 5/3 COMPLIANCE
------------ -----
X X 1. Review monthly compliance reports that are prepared by
the investment adviser(s).
------------ -----
X 2. Perform independent monthly portfolio compliance
testing.
------------ -----
X X 3. Prepare quarterly tax compliance checklist for use by
investment adviser(s).
------------ -----
X 4. Notify appropriate Fund officers of xxxx-to-market
issues pursuant to Board-approved procedures.
------------ -----
X X 5. Provide appropriate assistance with respect to SEC
inspections including (i) 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, and (iv) meet with portfolio managers to
provide guidance on audit.
------------ -----
X X 6. Provide appropriate assistance with respect to audits
conducted by the Fund's independent accountants
including (i) compiling data and other information and
(ii) communicating with independent accountants, as
necessary.
------------ -----
A-1
------------ -----
X X 7. Consult with and advise, on a proactive basis, Fund
portfolio managers with respect to compliance matters.
------------ -----
X 8. Prepare quarterly brokerage allocation compliance
checklist and supporting documentation for use by
investment adviser(s).
------------ -----
X 9. Provide on-site compliance training for investment
advisory personnel, as requested.
------------ -----
X 10. Preparation of Fund-specific compliance manual.
------------ -----
X X 11. Provide investment adviser with portfolio compliance
checklists
------------ -----
X X 12. Provide Board with quarterly results of compliance
reviews and testing
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===============================================================================
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5/3 TAX AND FINANCIAL SERVICES
BISYS
------------ -----
X 1. Prepare semi-annual/annual financial statements.
------------ -----
X 2. Prepare and file Form N-SAR
------------ -----
X 3. Calculate/distribute all standard performance
information
------------ -----
X
4. Prepare annual Fund expense budget and monthly accrual
analyses
------------ -----
X 5. Validate/approve Fund expenses to be paid
------------ -----
X 6. Register Fund portfolios with NASDAQ
------------ -----
X X 7. Prepare financial materials for Board books.
------------ -----
X 8. Calculate declaration of income/capital gain
distributions in compliance with income/excise tax
distribution requirements.
------------ -----
X X
9. Review all dividend declarations to ensure that such
distributions are not "preferential" under the Internal
Revenue Code.
------------ -----
X 10. Review and file federal and state income tax returns
and federal excise tax returns within statutory
deadlines.
------------ -----
X 11. Prepare/distribute year-end shareholder tax information
letters and Forms 1099-MISC for trustee fees/vendor
payments within 30 days of calendar year-end.
------------ -----
X X 12. Provide on-site compliance/consulting for portfolio
managers focused on the impact of changes in tax laws
and managing a tax-efficient mutual fund.
------------ -----
X X 13. Provide on-site consulting services for conversions.
------------ -----
X X 14. Provide expense budgeting consulting to review expense
ratios/fee waivers.
------------ -----
X 15. Leverage BISYS' relationships with all "Big 5"
accounting firms for clients' benefit.
------------ -----
LEGAL SERVICES
------------ -----
BISYS 5/3 GENERAL
-------
------------ -----
X X 1. Maintain files of registration statements, Fund
contracts, Fund proxies and other Fund legal documents.
------------ -----
X 2. Provide legal consultation with respect to product
development issues.
------------ -----
X X 3. Provide assistance concerning matters pertaining to
Federal securities laws, bank regulatory issues,
tax-related issues and ERISA issues.
------------ -----
X 4. When BISYS is retained as Fund Distributor, prepare or
review broker-dealer agreements and agreements for
shareholder support services.
------------ -----
X X 5. Provide information concerning current legal and
regulatory developments.
------------ -----
X X 6. Provide comments, as appropriate, concerning regulatory
agency proposals.
------------ -----
X 7. Maintain appropriate insurance coverage on behalf of
the Fund in the form of (i) a Directors &
Officers/Errors & Omissions professional liability and
(ii) a Fidelity Bond.
------------ -----
X 8. Prepare memoranda and other correspondence that
outlines the terms and conditions of the insurance
policies described in item 7 above
------------ -----
A-2
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BISYS 5/3 BOARD MEETING MATTERS
------------ -----
X 1. Maintain calendar and files for all Board meetings,
including the maintenance of Fund minute books and
corporate records (e.g., Articles of
Incorporation/Declaration of Trust, Bylaws).
------------ -----
X X 2. Prepare quarterly Board meeting responsibility chart.
------------ -----
X 3. Provide appropriate personnel to attend Board meetings.
------------ -----
X 4. Prepare Board agendas and relevant sections of Board
materials.
------------ -----
X 5. Produce and distribute Board books.
------------ -----
X 6. Record minutes of Board meetings.
------------ -----
------------ -----
BISYS 5/3 REGISTRATION STATEMENTS
------------ -----
------------ -----
X X 1. Manage the process of updating and filing registration
statements by (i) reviewing or recommending proposed
disclosure changes, (ii) compiling data for purposes of
updating information, (iii) receiving disclosure
comments and communicating them to counsel to the Fund
and the financial printer and (iv) overseeing and
approving revisions that are made by the financial
printer.
------------ -----
X X 2. Prepare periodic supplements to Fund prospectuses or,
if the parties agree, review such supplements that are
prepared by counsel to the Fund.
------------ -----
i.
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BISYS 5/3 PROXY MATERIALS
------------ -----
X 1. Review proxy statements that are prepared by counsel to
the Fund.
------------ -----
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Yes No BLUE SKY
------------ -----
X 1. Qualify the Fund and its shares with appropriate state
blue sky authorities upon client authorization.
------------ -----
X 2. Amend and renew sales permits as required from time to
time.
------------ -----
X 3. Monitor the sales of shares in individual states on a
daily basis upon receipt of sales information and, when
required, report sales to appropriate states.
------------ -----
X 4. Maintain Fund blue sky filing calendars.
------------ -----
X 5. Address all blue sky audit and examination issues.
------------ -----
X 6. Conduct blue sky fee analysis, upon request.
------------ -----
X 7. Produce checks required for state filing fees.
------------ -----
X 8. Review of state institutional exemptions
------------ -----
X 9. File fund documents (N-1A's, prospectuses, financial
statements, etc.) as required under state law.
------------ -----
A-4
SCHEDULE B
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
FIFTH THIRD BANK
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
Pursuant to Section 1 of this Agreement, BISYS has agreed to perform the
services described in this Agreement in accordance with the service standards
set forth in this Schedule B. Such standards are contained on the page attached
hereto. 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
thirty-day period in order to be in compliance with the appropriate standard at
the end of such thirty-day period; provided, however, that the foregoing
requirement shall not apply in those instances in which BISYS's failure to meet
a service standard was due to circumstances beyond its control.
In the event BISYS fails to meet a particular service standard (except for
any failure due to circumstances beyond its control) in two consecutive months,
the fee payable to BISYS hereunder shall be reduced by one percent (1%) or such
lower amount as the parties shall agree upon for the second of those two months.
If such failure occurs in three consecutive months, the fee payable to BISYS
hereunder shall be reduced by a total of one and one-half percent (1.5%) or such
lower amount as the parties shall agree upon for the third of those three
months.
In the event BISYS fails to meet a particular service standard (except for
any failure due to circumstances beyond its control) for any three months within
a six-month period, such failure shall be deemed to be a service standard
deficiency for purposes of the "cause" definition set forth in Schedule B to the
Fee Agreement.
B-1
3
SERVICING STANDARDS
ITEM STANDARD
Fund Compliance Reviews Monthly
Financial
Reports Printed and mailed within sixty (60)
days following fiscal year end, or sixty
(60) days following semi-annual period
as long as BISYS can select financial printer
Review of accruals Monthly
Prospectus Updates
Prepared and ready to print within five
(5) days of the effective date of the
Registration Statement.
SCHEDULE C
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
FIFTH THIRD BANK
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
FEES
In consideration of the services rendered and the expenses incurred pursuant to
this Agreement, and subject to the annual minimum fees set forth below, BISYS
shall be paid by Fifth Third on the first business day of each month, or at such
other time(s) as the parties hereto shall agree, fees computed daily at the
annual rate set forth below:
One and one-half one-hundredths of one percent (.015%) of the Company's daily
net asset up to $15 billion.
One and one-quarter one-hundredths of one percent (.0125%) of the Company's
daily net assets in excess of $15 billion up to $20 billion.
One one-hundredths of one percent (.01%) of the Company's daily net assets in
excess of $20 billion up to $25 billion.
Seventy five one-thousandths of one percent (.0075%) of the Company's daily net
assets in excess of $25 billion.
In addition, any new Funds established after the Effective Date shall be subject
to an annual minimum fee of $20,000. Any new Funds acquired as a result of a
merger or other like acquisition and which is merged into the Company, shall not
be subject to this minimum fee; provided, however, that BISYS shall be entitled
to an agreed upon annual minimum fee with respect to any such Funds with assets
that are less than $50 million.
2
