Exhibit (h)(2)
FORM OF
SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the ____ day of _____________, 2005 by and
between and BB&T Asset Management, Inc., an investment adviser registered with
the Securities and Exchange Commission, _________________________________ and
BISYS FUND SERVICES LIMITED PARTNERSHIP (the "Service Company"), a limited
partnership organized under the laws of the State of Ohio and having its
principal office at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx.
WHEREAS, BB&T has entered into an Administration Agreement dated
__________, 2005 (the "Administration Agreement"), with 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, BB&T 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 BB&T
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, BB&T and the Service Company agree as follows:
1. Retention of the Service Company.
BB&T 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 who are affiliated persons of the Service
Company or any affiliated company of the Service Company.
(B) BB&T. BB&T 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 BB&T 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 BB&T or
the investment adviser to the Company or any affiliated corporation of BB&T 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.
3. Compensation of the Service Company.
BB&T 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 BB&T from amounts it receives from the Company under
the Administration Agreement.
4. Limitation of Liability of the Service Company and BB&T.
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 BB&T.
So long as the Service Company acts in good faith and with due diligence
and without negligence, BB&T 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 BB&T's
obligation under the foregoing indemnity and hold harmless shall apply only to
the extent that BB&T is in fact fully indemnified and held harmless by the
Company under the Administration Agreement for any and
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all losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
incurred by BB&T (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 BB&T under this paragraph are in fact
received by BB&T from the Company.
The Service Company shall indemnify BB&T 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.
5. Activities of the Service Company.
The services of Service Company to be rendered hereunder are not to be
deemed to be exclusive. The Service Company is free to render such services to
others and to have other businesses and interests. It is understood that
Trustees, officers, employees and shareholders of the Company are or may be or
become interested in the Service Company, as officers, employees or otherwise
and that directors, officers and employees of the Service Company and its
counsel are or may be or become similarly interested in the Company, and that
the Service Company may be or become interested in the Company as a shareholder
or otherwise.
6. Duration of this Agreement.
This Agreement shall become effective upon the date first upon written,
and shall continue in effect during the term of the Administration Agreement,
including any renewals thereof. This Agreement shall terminate automatically
upon the termination of the Administration Agreement. The Service Company
expressly agrees and acknowledges that the exercise by BB&T of any rights it may
have under the Administration Agreement, including, in particular, any rights
BB&T 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 parry 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
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payable to BB&T 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 BB&T 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.
7. Assignment.
This Agreement shall not be assignable by either party without the written
consent of the other party. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns.
8. Amendments.
No provision of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the parties hereto.
9. Certain Records.
The Service Company shall maintain customary records in connection with
its duties as specified in this Agreement. Any records required to be maintained
and preserved pursuant to Rules 31a-1 and 31a-2 under the 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 BB&T 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 BB&T and follow BB&T'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.
10. Definitions of Certain Terms.
The terms "interested person" and "affiliated person," when used in this
Agreement, shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Commission.
11. Notice.
Any notice required or permitted to be given by either party to the other
shall be deemed sufficient if sent by registered or certified mail, postage
prepaid, addressed by the party giving notice to the other party at the
following address: if to Service Company, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
00000, Attention: Xxxx Xxxxxxx facsimile number (000) 000-0000; and if to BB&T,
at 000 Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx; Xxxxxxx, XX 00000, Attention: Xxxxx
Xxxxxxxxx; or at
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such other address as such party may from time to time specify in writing to the
other party pursuant to this Section.
12. Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of Ohio, subject to any applicable provisions of the 1940 Act.
13. Multiple Originals.
This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
14. Confidentiality/Privacy.
The Service Company agrees on behalf of itself and its employees to treat
confidentially and as the proprietary information of the Company, all records
and other information relative to the Company and prior, present or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except, after
prior notification to and approval in writing by BB&T 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 BB&T, or collected or retained by BB&T 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 BB&T 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.
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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
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES LIMITED PARTNERSHIP
AND
SERVICES
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SCHEDULE B
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
BISYS FUND SERVICES LIMITED PARTNERSHIP
AND BB&T ASSET MANAGEMENT INC.
SUB-ADMINISTRATION FEES
BB&T shall pay BISYS a sub-administration fee, at an annual rate
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