ADMINISTRATION, ACCOUNTING SERVICES AND
TRANSFER AGENCY AGREEMENT
AGREEMENT dated as of December 31, 2002 between Touchstone Variable Series
Trust (the "Trust"), a Massachusetts business trust, and Integrated Fund
Services, Inc. ("Integrated"), an Ohio corporation.
WHEREAS, the Trust is a management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, shares of beneficial interest in the Trust are divided into
separate series (each, along with any series which may in the future be
established, a "Fund," collectively, the Funds"); and
WHEREAS, the Trust wishes to employ Integrated to serve as its
administrative, accounting services and transfer, shareholder servicing and
dividend disbursing agent on behalf of the Funds; and
WHEREAS, Integrated wishes to provide such services to the Trust under the
conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and Integrated agree as follows:
1. APPOINTMENT.
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The Trust hereby employs Integrated as agent to perform those services
described in this Agreement for the Trust. Integrated shall act under such
appointment and perform the obligations thereof upon the terms and conditions
hereinafter set forth.
2. DOCUMENTATION.
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The Trust will furnish from time to time the following documents:
A. Each resolution of the Board of Trustees of the Trust authorizing
the original issue of the shares of the Funds;
B. Each Registration Statement filed with the Securities and Exchange
Commission (the "SEC") and amendments thereof;
C. A certified copy of the Agreement and Declaration of Trust and the
Bylaws of the Trust and each amendment thereto;
D. Certified copies of each resolution of the Board of Trustees
authorizing officers to give instructions to Integrated;
E. Copies of all agreements with service providers on behalf of the
Funds, including advisory agreements, sub-advisory agreements,
underwriting and dealer agreements and custody agreements in effect;
F. Copies of all documents relating to special investment or
withdrawal plans which are offered or may be offered in the future by
the Trust and for which Integrated is to act as plan agent; and
G. Such other certificates, documents or opinions that Integrated may,
in its discretion, deem necessary or appropriate in the proper
performance of its duties.
ADMINISTRATION
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3. TRUST ADMINISTRATION.
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Subject to the direction and control of the Trustees of the Trust,
Integrated shall perform the services to the Trust detailed in Schedule A.
4. TAXES.
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Integrated will prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and make available for
mailing to shareholders of the Trust such returns for reporting dividends and
distributions paid by the Funds as are required to be so prepared, filed and
mailed.
5. FORM N-SAR.
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Integrated shall maintain such records within its control and shall be
requested by the Trust to assist the Trust in fulfilling the requirements of
Form N-SAR.
ACCOUNTING
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6. CALCULATION OF NET ASSET VALUE.
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Integrated will maintain and keep current the general ledger for the
Funds, recording all income and expenses, capital share activity and security
transactions of the Funds. Integrated will calculate the net asset value of each
of the Funds and the per share net asset value of each of the Funds, in
accordance with the Trust's current prospectus and statement of additional
information, once daily as of the time selected by the Trust's Board of
Trustees. Integrated will prepare and maintain a daily valuation of all
securities and other assets of the Funds in accordance with instructions from a
designated officer of the Trust and in the manner set forth in the Trust's
current prospectus and statement of additional information. In valuing
securities of the Funds, Integrated may contract with, and rely upon market
quotations provided by, outside services.
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7. PAYMENT OF TRUST EXPENSES.
--------------------------
Integrated shall process each request received from the Trust or its
authorized agents for payment of the Funds' expenses. Upon receipt of written
instructions signed by an officer or other authorized agent of the Trust,
Integrated shall prepare checks in the appropriate amounts which shall be signed
by an authorized officer of Integrated and mailed to the appropriate party.
8. OTHER SERVICES.
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Subject to the direction and control of the Trustees of the Trust,
Integrated shall perform the services to the Trust detailed in Schedule B.
TRANSFER AGENCY
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9. INTEGRATED TO RECORD SHARES.
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Integrated shall record the issuance of shares of the Funds and
maintain pursuant to applicable rules of the SEC a record of the total number of
shares of the Funds which are authorized, issued and outstanding, based upon
data provided to it by the Trust. Integrated shall also provide the Trust on a
regular basis or upon reasonable request the total number of Fund shares which
are authorized, issued and outstanding, but shall have no obligation when
recording the issuance of Fund shares, except as otherwise set forth herein, to
monitor the issuance of such shares or to take cognizance of any laws relating
to the issue or sale of such shares, which functions shall be the sole
responsibility of the Trust. Integrated shall not handle physical shares.
10. INTEGRATED TO VALIDATE TRANSFERS.
---------------------------------
Upon receipt of a proper request for transfer and upon surrender to
Integrated of certificates, if any, in proper form for transfer, Integrated
shall approve such transfer and shall take all necessary steps to effectuate the
transfer as indicated in the transfer request. Upon approval of the transfer,
Integrated shall notify the Trust in writing of each such transaction and shall
make appropriate entries on the shareholder records maintained by Integrated.
11. RECEIPT OF FUNDS.
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Upon receipt of any check or other instrument drawn or endorsed to it
as agent for, or identified as being for the account of, the Trust or a Fund,
Integrated shall stamp the check or instrument with the date of receipt,
determine the amount thereof due each Fund and shall forthwith process the same
for collection. Upon receipt of notification of receipt of funds eligible for
share purchases in accordance with the Trust's then current prospectus and
statement of additional information, Integrated shall notify the Trust, at the
close of each business day, in writing of the amount of said funds credited to
the Trust and deposited in its account with the Custodian.
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12. PURCHASE ORDERS.
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Upon receipt of an order for the purchase of shares of a Fund,
accompanied by sufficient information to enable Integrated to establish a
shareholder account, Integrated shall, as of the next determination of net asset
value after receipt of such order in accordance with the Trust's then current
prospectus and statement of additional information, compute the number of shares
due to the shareholder, credit the share account of the shareholder, subject to
collection of the funds, with the number of shares so purchased, shall notify
the Trust in writing or by computer report at the close of each business day of
such transactions and shall mail to the shareholder and/or dealer of record a
notice of such credit when required by applicable securities laws or
regulations.
13. RETURNED CHECKS.
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In the event that Integrated is notified by the Trust's Custodian that
any check or other order for the payment of money is returned unpaid for any
reason, Integrated will:
A. Give prompt notification to the Trust of the non-payment of said
check;
B. In the absence of other instructions from the Trust, take such
steps as may be necessary to redeem any shares purchased on the basis of such
returned check and cause the proceeds of such redemption plus any dividends
declared with respect to such shares to be credited to the account of each Fund
and to request the Trust's Custodian to forward such returned check to the
person who originally submitted the check; and
C. Notify the Trust of such actions and correct the Trust's records
maintained by Integrated pursuant to this Agreement.
14. DIVIDENDS AND DISTRIBUTIONS.
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The Trust shall furnish Integrated with appropriate evidence of
Trustee action authorizing the declaration of dividends and other distributions.
Integrated shall establish procedures in accordance with the Trust's then
current prospectus and statement of additional information and with other
authorized actions of the Trust's Board of Trustees under which it will have
available from the Custodian or the Trust any required information for each
dividend and other distribution. After deducting any amount required to be
withheld by any applicable laws, Integrated shall, as agent for each shareholder
who so requests, invest the dividends and other distributions in full and
fractional shares in accordance with the Trust's then current prospectus and
statement of additional information. If a shareholder has elected to receive
dividends or other distributions in cash, then Integrated shall disburse
dividends to shareholders of record in accordance with the Trust's then current
prospectus and statement of additional information. Integrated shall, on or
before the mailing date of such checks, notify the Trust and the Custodian of
the estimated amount of cash required to pay such dividend or distribution, and
the Trust shall instruct the Custodian to make available sufficient funds
therefore in the appropriate account of the Trust. Integrated shall mail to the
shareholders periodic statements, as requested by the Trust, showing the number
of full and fractional shares and the net asset value per share of shares
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so credited. When requested by the Trust, Integrated shall prepare and file with
the Internal Revenue Service, and when required, shall address and mail to
shareholders, such returns and information relating to dividends and
distributions paid by the Trust as are required to be so prepared, filed and
mailed by applicable laws, rules and regulations.
15. UNCLAIMED DIVIDENDS AND UNCLAIMED REDEMPTION PROCEEDS.
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Integrated shall, at least annually, furnish in writing to the Trust
the names and addresses, as shown in the shareholder accounts maintained by
Integrated, of all shareholders for which there are, as of the end of the
calendar year, dividends, distributions or redemption proceeds for which checks
or share certificates mailed in payment of distributions have been returned.
Integrated shall use its best efforts to contact the shareholders affected and
to follow any other written instructions received from the Trust concerning the
disposition of any such unclaimed dividends, distributions or redemption
proceeds.
16. REDEMPTIONS AND EXCHANGES.
--------------------------
A. Integrated shall process, in accordance with the Trust's then
current prospectus and statement of additional information, each order for the
redemption of shares accepted by Integrated. Upon its approval of such
redemption transactions, Integrated, if requested by the Trust, shall mail to
the shareholder and/or dealer of record a confirmation showing trade date,
number of full and fractional shares redeemed, the price per share and the total
redemption proceeds. For each such redemption, Integrated shall either: (a)
prepare checks in the appropriate amounts for approval and verification by the
Trust and signature by an authorized officer of Integrated and mail the checks
to the appropriate person, or (b) in the event redemption proceeds are to be
wired through the Federal Reserve Wire System or by bank wire, cause such
proceeds to be wired subject to approval and verification of the appropriate
amounts by the Trust in federal funds to the bank account designated by the
shareholder, or (c) effectuate such other redemption procedures which are
authorized by the Trust's Board of Trustees or its then current prospectus and
statement of additional information. The requirements as to instruments of
transfer and other documentation, the applicable redemption price and the time
of payment shall be as provided in the then current prospectus and statement of
additional information, subject to such supplemental instructions as may be
furnished by the Trust and accepted by Integrated. If Integrated or the Trust
determines that a request for redemption does not comply with the requirements
for redemptions in accordance with the Trust's then current prospectus and
statement of additional information, Integrated shall notify the shareholder
indicating the reason therefore.
B. If shares of a Fund are eligible for exchange with shares of any
other investment company, Integrated, in accordance with the then current
prospectus and statement of additional information and exchange rules of the
Trust, shall review and approve all exchange requests and shall, on behalf of
the Fund's shareholders, process such approved exchange requests.
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C. Integrated shall notify the Trust and the Custodian on each
business day of the amount of cash required to meet payments made pursuant to
the provisions of this Paragraph, and, on the basis of such notice, the Trust
shall instruct the Custodian to make available from time to time sufficient
funds therefore in the appropriate account of the Trust. Procedures for
effecting redemption orders accepted from shareholders or dealers of record by
telephone or other methods shall be established by mutual agreement between
Integrated and the Trust consistent with the Trust's then current prospectus and
statement of additional information.
D. The authority of Integrated to perform its responsibilities under
Xxxxxxxxx 0, Xxxxxxxxx 11, and this Paragraph 16 shall be suspended with respect
to any Fund upon receipt of notification by it of the suspension of the
determination of such Fund's net asset value.
17. AUTOMATIC WITHDRAWAL PLANS.
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Integrated will process automatic withdrawal orders pursuant to the
provisions of the withdrawal plans duly executed by shareholders and the current
prospectus and statement of additional information of the Trust. Payments upon
such withdrawal order shall be made by Integrated from the appropriate account
maintained by the Trust with the Custodian on approximately the last business
day of each month in which a payment has been requested, and Integrated will
withdraw from a shareholder's account and present for repurchase or redemption
as many shares as shall be sufficient to make such withdrawal payment pursuant
to the provisions of the shareholder's withdrawal plan and the current
prospectus and statement of additional information of the Trust. From time to
time on new automatic withdrawal plans a check for payment date already past may
be issued upon request by the shareholder.
18. WIRE-ORDER PURCHASES.
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Integrated will send written confirmations to the dealers of record
containing all details of the wire-order purchases placed by each such dealer by
the close of business on the business day following receipt of such orders by
Integrated. Upon receipt of any check drawn or endorsed to the Trust or a Fund
(or Integrated, as agent) or otherwise identified as being payment of an
outstanding wire-order, Integrated will stamp said check with the date of its
receipt and deposit the amount represented by such check to Integrated's deposit
accounts maintained with the Custodian. Integrated will cause the Custodian to
transfer federal funds in an amount equal to the net asset value of the shares
so purchased to the Trust's account with the Custodian, and will notify the
Trust before noon of each business day of the total amount deposited in the
Trust's deposit accounts, and in the event that payment for a purchase order is
not received by Integrated or the Custodian on the tenth business day following
receipt of the order, prepare a National Association of Securities Dealers
("NASD") "notice of failure of dealer to make payment."
19. TAXES.
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Integrated shall withhold such sums as are required to be withheld
under applicable federal and state income tax laws, rules and regulations.
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20. OTHER PLANS.
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Integrated will process such accumulation plans, automatic withdrawal
plans, group programs and other plans or programs for investing in shares of the
Funds mutually agreed upon by Integrated and the Trust in accordance with the
Trust's current prospectus and statement of additional information and will act
as plan agent for shareholders pursuant to the terms of such plans and programs
duly executed by such shareholders, if so agreed upon by Integrated and the
Trust.
21 RECORDKEEPING AND OTHER INFORMATION.
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A. Prior to the commencement of Integrated's responsibilities under
this Agreement, if applicable, the Trust shall deliver or cause to be delivered
over to Integrated (i) an accurate, certified list of shareholders of each Fund,
showing each shareholder's address of record, number of shares owned and whether
such shares are represented by outstanding share certificates and (ii) all
shareholders records, files, and other materials necessary or appropriate for
proper performance of the functions assumed by Integrated under this Agreement
including, without limitation, special instructions regarding withholding,
dividend options and householding (collectively referred to as the "Materials").
The Trust shall on behalf of each applicable Fund or class indemnify and hold
Integrated harmless from and against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to any error, omission, inaccuracy or other deficiency of the
Materials, or out of the failure of the Trust to provide any portion of the
Materials or to provide any information in the Trust's possession or control
reasonably needed by Integrated to perform the services described in this
Agreement.
B. Integrated shall create and maintain all records required by
applicable laws, rules and regulations, including but not limited to records
required by Section 31(a) of the 1940 Act and the rules thereunder, as the same
may be amended from time to time, pertaining to the various functions performed
by it and not otherwise created and maintained by another party pursuant to
contract with the Trust. All such records shall be the property of the Trust at
all times and shall be available for inspection and use by the Trust. Where
applicable, such records shall be maintained by Integrated for the periods and
in the places required by Rules 31a-1 and 31a-2 under the 1940 Act. The
retention of such records shall be at the expense of the Trust. Integrated shall
make available during regular business hours all records and other data created
and maintained pursuant to this Agreement for reasonable audit and inspection by
the Trust or its agents, or any regulatory agency having authority over the
Trust.
22. SHAREHOLDER RECORDS.
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Integrated shall maintain records for each shareholder account showing
the following:
A. Names, addresses and tax identifying numbers;
B. Name of the dealer of record, if any;
C. Number of shares held of each Fund;
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D. Historical information regarding the account of each shareholder,
including dividends and distributions in cash or invested in shares;
E. Information with respect to the source of all dividends and
distributions allocated among income, realized short-term gains and
realized long-term gains;
F. Any instructions from a shareholder including all forms furnished by
the Trust and executed by a shareholder with respect to (i) dividend
or distribution elections and (ii) elections with respect to payment
options in connection with the redemption of shares;
G. Any correspondence relating to the current maintenance of a
shareholder's account;
H. Certificate numbers and denominations for any shareholder holding
certificates;
I. Any stop or restraining order placed against a shareholder's account;
J. Information with respect to withholding in the case of a foreign
account or any other account for which withholding is required by the
Internal Revenue Code of 1986, as amended; and
K. Any information required in order for Integrated to perform the
calculations contemplated under this Agreement.
23. SHAREHOLDER SERVICE AND CORRESPONDENCE.
---------------------------------------
Integrated will provide and maintain adequate personnel, records and
equipment to receive and answer all shareholder and dealer inquiries relating to
account status, share purchases, redemptions and exchanges and other investment
plans available to Trust shareholders. Integrated will answer written
correspondence from shareholders relating to their share accounts and such other
written or oral inquiries as may from time to time be mutually agreed upon, and
Integrated will notify the Trust of any correspondence or inquiries which may
require an answer from the Trust. Integrated will maintain all NASD
correspondence necessary to adhere to all NASD regulations.
24. OTHER SERVICES.
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Subject to the direction and control of the Trustees of the Trust,
Integrated will perform the services to the Trust detailed in Schedule C.
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GENERAL
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25. DATA ACCESS AND PROPRIETARY INFORMATION.
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The Trust acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals furnished to the Trust by Integrated as part of the Trust's ability to
access certain Trust-related data ("Customer Data") maintained by Integrated on
data bases under the control and ownership of Integrated or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of substantial
value to Integrated or other third party. In no event shall Proprietary
Information be deemed Customer Data. The Trust agrees to treat all Proprietary
Information as proprietary to Integrated and further agrees that it shall not
divulge any Proprietary Information to any person or organization except as may
be provided hereunder.
26. COOPERATION WITH ACCOUNTANTS.
-----------------------------
Integrated shall cooperate with the Trust's independent public
accountants and shall take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their unqualified
opinion where required for any document for the Trust.
27. SPECIAL SERVICES AND EXCEPTION PROCESSING.
------------------------------------------
A. Integrated may provide additional special reports upon the request
of the Trust or the Trust's investment adviser, which may result in an
additional charge, the amount of which shall be agreed upon between the parties.
B. Integrated may provide such other services with respect to the
Trust as may be reasonably requested by the Trust, which may result in an
additional charge, the amount of which shall be agreed upon between the parties.
C. Integrated may provide exception processing upon the request of the
Trust or the Trust's investment adviser, which may result in an additional
charge, the amount of which shall be agreed upon between the parties. Exception
processing includes, but is not limited to, processing which:
(a) requires Integrated to use methods and procedures other than
those usually employed by Integrated to perform its obligations under this
Agreement;
(b) involves the provision of information to Integrated after the
commencement of the nightly processing cycle of Integrated's transfer
agency, administration and/or fund accounting processing system; or
(c) requires more manual intervention by Integrated, either in
the entry of data or in the modification or amendment of reports generated
by Integrated's transfer agency, administration and/or fund accounting
processing system than is usually required.
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28. FURTHER ACTIONS.
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Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof.
29. SUBCONTRACTING.
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Integrated may, at its expense, and, upon prior written approval from
the Trust, subcontract with any entity or person concerning the provision of the
services contemplated hereunder; provided, however, that Integrated shall not be
relieved of any of its obligations under this Agreement by the appointment of
such subcontractor and provided further, that Integrated shall be responsible
for all acts of such subcontractor as if such acts were its own.
30. COMPENSATION.
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For performing its services under this Agreement, the Trust shall pay
Integrated a monthly fee with respect to each Fund in accordance with the
schedule attached hereto as Schedule D.
31. EXPENSES.
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Integrated shall furnish, at its expense and without cost to the Trust
the services of its personnel to the extent that such services are required to
carry out its obligations under this Agreement. All costs and expenses not
expressly assumed by Integrated under this Paragraph shall be paid by the Trust,
including, but not limited to, costs and expenses of, including costs and
expenses of officers and employees of Integrated in attending or conducting,
meetings of the Board of Trustees and shareholders of the Trust and portfolio
compliance training, as well as costs and expenses for all regulatory filings,
postage, envelopes, checks, drafts, continuous forms, bank charges, reports,
communications, proxies, statements and other materials, file interface expenses
(e.g., Fanmail, Broker Browser, Expeditor, other distribution partners), label
file creation, Blue Sky filing fees, telephone, telegraph and remote
transmission lines, EDGARization, printing, confirmations, fulfillment and any
other shareholder correspondence, use of outside pricing services, use of
outside solicitation, tabulation and mailing firms, necessary outside record
storage, media for storage of records (e.g., microfilm, microfiche, computer
tapes), pro rata expenses for preparation of Integrated's Fund Accounting and
Transfer Agent SAS 70 reports, costs and fees, including employee time and
system expenses, associated with exception processing and resolution of errors
not caused by Integrated, and any and all assessments, taxes or levies assessed
on Integrated for services provided under this Agreement. Postage for mailings
of dividends, proxies, reports and other mailings to all shareholders shall be
advanced to Integrated three business days prior to the mailing date of such
materials.
32. REFERENCES TO INTEGRATED OR THE TRUST.
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A. Neither the Trust nor its agents shall circulate any printed matter
which contains any reference to Integrated without the prior written approval of
Integrated, excepting solely such printed matter as merely identifies Integrated
as Administrative Services Agent, Transfer, Shareholder Servicing and Dividend
Disbursing Agent and Accounting Services Agent. The Trust will submit printed
matter requiring approval to Integrated in draft form, allowing sufficient time
for review by Integrated and its counsel prior to any deadline for printing.
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B. Integrated shall not circulate any printed matter that contains any
reference to the Trust without the prior written approval of the Trust,
excepting solely such printed matter as merely identifies the Trust as a client
of Integrated. Integrated will submit printed matter requiring approval to the
Trust in draft form, allowing sufficient time for review by the Trust and its
counsel prior to any deadline for printing.
33. EQUIPMENT FAILURES.
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In the event of equipment failures beyond Integrated's control,
Integrated shall take all steps necessary to minimize service interruptions but
shall have no liability with respect thereto. Integrated shall endeavor to enter
into one or more agreements making provision for emergency use of electronic
data processing equipment to the extent appropriate equipment is available.
34. INDEMNIFICATION OF INTEGRATED.
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A. Integrated may rely on information reasonably believed by it to be
accurate and reliable. Except as may otherwise be required by the 1940 Act and
the rules thereunder, neither Integrated nor its directors, officers, employees,
shareholders, agents, control persons or affiliates of any thereof shall be
subject to any liability for, or any damages, including consequential damages,
expenses or losses incurred by the Trust in connection with, any error of
judgment, mistake of law, any act or omission connected with or arising out of
any services rendered under or payments made pursuant to this Agreement or any
other matter to which this Agreement relates, except by reason of willful
misfeasance, bad faith or gross negligence on the part of any such persons in
the performance of the duties of Integrated under this Agreement or by reason of
reckless disregard by any of such persons of the obligations and duties of
Integrated under this Agreement. Integrated may apply to the Trust at any time
for instructions and may consult counsel for the Trust, or its own counsel, and
with accountants and other experts with respect to any matter arising in
connection with its duties hereunder, and Integrated shall not be liable or
accountable for any 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. Integrated shall not be held to have notice of any change of
authority of any officers, employees, or agents of the Trust until receipt of
written notice thereof have been received by Integrated from the Trust.
B. Any person, even though also a director, officer, employee,
shareholder or agent of Integrated, or any of its affiliates, who may be or
become an officer, trustee, employee or agent of the Trust, shall be deemed,
when rendering services to the Trust or acting on any business of the Trust, to
be rendering such services to or acting solely as an officer, trustee,
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employee or agent of the Trust and not as a director, officer, employee,
shareholder or agent of or one under the control or direction of Integrated or
any of its affiliates, even though paid by one of these entities.
C. Notwithstanding any other provision of this Agreement, the Trust
shall indemnify and hold harmless Integrated, its directors, officers,
employees, shareholders, agents, control persons and affiliates of any thereof
from and against any and all losses, damages, claims, suits, actions, demands,
expenses and liabilities (whether with or without basis in fact or law),
including legal fees and expenses and investigation expenses, of any and every
nature which Integrated may sustain or incur or which may be asserted against
Integrated by any person by reason of, or as a result of: (i) any action taken
or omitted to be taken by Integrated in good faith in reliance upon any
certificate, instrument, order or share certificate believed by it to be genuine
and to be signed, countersigned or executed by any duly authorized person, upon
the oral instructions or written instructions of an authorized person of the
Trust or upon the opinion of legal counsel for the Trust or its own counsel; or
(ii) any action taken or omitted to be taken by Integrated in connection with
its appointment in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed. However, indemnification under this
subparagraph shall not apply to actions or omissions of Integrated or its
directors, officers, employees, shareholders or agents in cases of its or their
own gross negligence, willful misconduct, bad faith, or reckless disregard of
its or their own duties hereunder.
D. Notwithstanding anything to the contrary in this Agreement, in no
event shall Integrated be liable to the Trust or any third party for any
special, consequential, punitive or incidental damages, even if advised of the
possibility of such damages.
35. TERMINATION
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A. The provisions of this Agreement shall be effective on the date
first above written, shall continue in effect for two years ("Initial Term")
from that date and shall continue in force for one year thereafter ("Renewal
Term"), but only so long as such continuance is approved (1) by Integrated, (2)
the Trust, (3) by a vote of a majority of the Trust's Trustees who are not
parties to this Agreement or interested persons (as defined in the 0000 Xxx) of
any such party, and (4) by vote of a majority of the Trust's Board of Trustees
or a majority of the Trust's outstanding voting securities.
B. Any party may terminate this Agreement at the end of the Initial
Term or at the end of any subsequent Renewal Term by giving the other parties at
least one hundred twenty (120) days' prior written notice of such termination
specifying the date fixed therefor. In the event this Agreement is terminated by
the Trust prior to the end of the Initial Term or any subsequent Renewal Term,
the Trust shall make a one-time cash payment to Integrated in consideration of
services provided under this Agreement, and not as a penalty, equal to the
remaining balance of the fees payable to Integrated under this Agreement through
the end of the Initial Term or Renewal Term, as applicable. The Trust shall
likewise reimburse Integrated for any out-of-pocket expenses and disbursements
("out-of-pocket expenses") reasonably incurred by Integrated in connection with
the services provided under this Agreement within 30 days of notification to the
Trust of such out-of-pocket expenses regardless of whether such out-of-pocket
expenses were incurred before or after the termination of this Agreement.
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C. If a party materially fails to perform its duties and obligations
hereunder (a "Defaulting Party") resulting in a material loss to another party
or parties, such other party or parties (the "Non-Defaulting Party") may give
written notice thereof to the Defaulting Party, which such notice shall set
forth with sufficient detail the nature of the breach. The Defaulting Party
shall have ninety (90) days from its receipt of notice to cure the breach. If
such material breach shall not have been remedied to commercially reasonable
operating standards, the Non-Defaulting Party may terminate this Agreement by
giving sixty (60) days written notice of such termination to the Defaulting
Party. If Integrated is the Non-Defaulting Party, its termination of this
Agreement shall not constitute a waiver of any rights or remedies with respect
to services it performed prior to such termination, or the right of Integrated
to receive such compensation as may be due as of the date of termination or to
be reimbursed for all reasonable out-of-pocket expenses. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against a Defaulting Party.
D. In the case of the following transactions, not in the ordinary
course of business, namely, the merger of the Trust, or a Fund, into or the
consolidation of the Trust, or a Fund, with another investment company, the sale
by the Trust, or a Fund, of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Trust, or a Fund,
and distribution of its assets, this Agreement will terminate with respect to
the applicable Fund or Funds and Integrated shall be released from any and all
obligations hereunder upon the payment of the fees, disbursements and expenses
due to Integrated through the end of the then current term of this Agreement.
The parties acknowledge and agree that the damages provision set forth above in
paragraph B shall be applicable in those instances in which Integrated is not
retained to provide administration, fund accounting or transfer agency services
subsequent to the transactions listed above.
E. Integrated will be entitled to collect from the Trust all
reasonable expenses incurred in conjunction with termination of this Agreement,
including but not limited to out-of-pocket expenses, employee time, system fees
and fees charged by third parties with whom Integrated has contracted.
36. SERVICES FOR OTHERS.
--------------------
Nothing in this Agreement shall prevent Integrated or any affiliated
person (as defined in the 0000 Xxx) of Integrated from providing services for
any other person, firm or corporation (including other investment companies);
provided, however, that Integrated expressly represents that it will undertake
no activities which, in its judgment, will adversely affect the performance of
its obligations to the Trust under this Agreement.
37. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
---------------------------------------------------
The parties hereto acknowledge and agree that nothing contained herein
shall be construed to require Integrated to perform any services for the Trust
which services could cause Integrated to be deemed an "investment adviser" of
the Trust within the meaning of Section 2(a)(20) of the 1940 Act or to supersede
or contravene the Trust's prospectus or statement of additional information or
any provisions of the 1940 Act and the rules thereunder. Except as otherwise
provided in this Agreement and except for the accuracy of information furnished
to it
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by Integrated, the Trust assumes full responsibility for complying with all
applicable requirements of the 1940 Act, the Securities Act of 1933, as amended,
and any other laws, rules and regulations of governmental authorities having
jurisdiction, it being acknowledged that the Trust is relying on the best
efforts of Integrated.
38. LIMITATION OF LIABILITY.
------------------------
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust.
39. SEVERABILITY.
-------------
In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
40. QUESTIONS OF INTERPRETATION.
----------------------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States Courts or in the absence of any controlling decision of any such court,
by rules, regulations or orders of the SEC issued pursuant to said 1940 Act. In
addition, where the effect of a requirement of the 1940 Act, reflected in any
provision of this Agreement, is revised by rule, regulation or order of the SEC,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
41. CONFIDENTIALITY
---------------
Both parties hereto agree that any non-public information obtained
hereunder concerning the other party is confidential and may not be disclosed
without the consent of the other party, except as may be required by applicable
law or at the request of a governmental agency. The parties further agree that a
breach of this provision would irreparably damage the other party and
accordingly agree that each of them is entitled, in addition to all other
remedies at law or in equity to an injunction or injunctions without bond or
other security to prevent breaches of this provision.
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42. NOTICES.
--------
All notices required or permitted under this Agreement shall be in
writing (including telex and telegraphic communication) and shall be (as elected
by the person giving such notice) hand delivered by messenger or courier
service, telecommunicated, or mailed (airmail if international) by registered or
certified mail (postage prepaid), return receipt requested, addressed to:
To the Trust: Touchstone Variable Series Trust
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
To Integrated: Integrated Fund Services, Inc.
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
or to such other address as any party may designate by notice complying with the
terms of this Paragraph. Each such notice shall be deemed delivered (a) on the
date delivered if by personal delivery; (b) on the date telecommunicated if by
telegraph; (c) on the date of transmission with confirmed answer back if by
telex, telefax or other telegraphic method or e-mail; and (d) on the date upon
which the return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the case may be, if
mailed.
43. AMENDMENT.
----------
This Agreement may not be amended or modified except by a written
agreement executed by all parties.
44. BINDING EFFECT.
---------------
Each of the undersigned expressly warrants and represents that he has
the full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
45. COUNTERPARTS.
-------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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46. FORCE MAJEURE.
--------------
Integrated 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 control, including and without limitation, acts of God,
interruption of power or other utility, transportation, mail, or communication
services, acts of civil or military authority, sabotages, war, insurrection,
riots, national emergencies, explosion, flood, accident, earthquake or other
catastrophe, fire, strike or other labor problems, legal action, present or
future law, governmental order, rule or regulation, or shortages of suitable
parts, materials, labor or transportation.
47. MISCELLANEOUS.
--------------
The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
TOUCHSTONE VARIABLE SERIES TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Its: President
INTEGRATED FUND SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Its: President
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SCHEDULE A
In consideration of the compensation detailed in this Agreement, Integrated
shall perform the following Administrative services:
1. Prepare and file post-effective amendments to the registration
statements and other documents on behalf of the Funds with the
Securities and Exchange Commission and other federal and state
regulatory authorities as required by law.
2. Coordinate the scheduling of Board of Trustees' meetings, prepare the
appropriate reports to the trustees and record and maintain the
minutes.
3. Qualify each Fund for sale in various states ("blue sky" filings).
4. Maintain all books and records of each Fund as required by federal and
state laws.
5. Coordinate the preparation, filing and distribution of proxy materials
and periodic reports as required by law.
6. Coordinate and monitor third-party services.
7. Establish and maintain procedures for compliance with federal and
state rules and regulations.
8. Provide reports necessary for the Trust's investment adviser to
monitor compliance with federal and state rules and regulations.
9. Provide officers for the Trust, if desired.
10. Prepare and maintain the necessary journals and schedules to report
the required information on Form N-SAR.
11. Prepare financial statements and supporting statements, footnotes, per
share information and schedule of investments for the inclusion in the
semiannual and annual reports.
12. Conduct portfolio compliance training for Fund management and the
investment adviser.
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SCHEDULE B
In consideration of the compensation detailed in this Agreement, Integrated
shall perform the following Accounting services:
1. Calculate net asset value and per share net asset value in
accordance with the 1940 Act and the Trust's prospectus.
2. Record all security transactions including appropriate gains and
losses from the sale of portfolio securities.
3. Record interest income and dividend income.
4. Record each Fund's capital share activities based upon purchase and
redemption transactions received by the transfer agent.
5. Calculate a daily cash figure for investment purposes.
6. Monitor and seek authorization for payment of expenses of each Fund.
7. Periodically report to the Trust or its authorized agents share
purchases and redemptions and trial balances of each Fund.
8. Prepare the necessary supporting computations on a book and tax basis
to ensure each Fund complies with the requirements of Section 851 of
the Internal Revenue Code.
9. Facilitate and perform tax planning and administration.
10. Monitor all tax compliance calculations to ensure that each Fund
qualifies as a regulated investment company pursuant to Subchapter M
of the Internal Revenue Code.
11. Assist independent accountants with the annual audit by preparing
necessary annual audit work papers.
12. Generate fund performance calculations (including after-tax returns)
and automated report dissemination.
13. Maintain complete, accurate and current all records with respect to
the Trust required to be maintained by the Trust under the Internal
Revenue Code of 1986, as amended (the "Code"), and under the rules and
regulations of the 1940 Act, and preserve said records in the manner
and for the periods prescribed in the Code and the 1940 Act.
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SCHEDULE C
In consideration of the compensation detailed in this Agreement, Integrated
shall perform the following Transfer Agency services:
1. Provide core transfer agency services including, but not limited to,
receiving and distributing mail, making bank deposits, RPO processing,
record retention, broker/dealer services, account resolution and
quality control.
2. Answer telephone inquiries and accept financial transactions from
shareholders and their financial advisors.
3. Offer full NSCC functionality.
4. Provide shareholder recordkeeping across multiple share classes and
load schedules.
5. Provide inquiry and transaction processing via the internet for
shareholders.
6. Pay commissions, if required.
7. Reconcile transfer agent cash and commission accounts, as well as the
demand deposit accounts.
8. Provide reports that illustrate sales, redemptions and trends in
shareholder and broker/dealer activity.
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SCHEDULE D
DECEMBER 31, 2002
TOUCHSTONE VARIABLE SERIES TRUST
COMPENSATION FOR ADMINISTRATION, ACCOUNTING AND
-----------------------------------------------
TRANSFER AGENCY SERVICES
------------------------
ADMINISTRATION AND ACCOUNTING SERVICES
--------------------------------------
For the performance of Integrated's obligations under this Agreement with
respect to Administration and Accounting Services, each Fund of Touchstone
Variable Series Trust will pay Integrated, on the first business day following
the end of each month, a fee at the annual rate of 0.100% of the Fund's average
daily net assets up to and including $100 million and 0.080% of such assets in
excess of $100 million; provided, however, that the minimum monthly fee is
$3,333 per Fund if the Fund is a single class fund, and $3,333 per class if the
Fund is a multi-class fund.
TRANSFER AGENCY SERVICES
------------------------
Each money market fund will pay Integrated, on the first business day following
the end of each month, a fee at the annual rate of $25 per account for open
accounts and $12 per account for closed accounts.
Each bond fund will pay Integrated, on the first business day following the end
of each month, a fee at the annual rate of $21 per account for open accounts and
$12 per account for closed accounts.
Each equity fund will pay Integrated, on the first business day following the
end of each month, a fee at the annual rate of $17 per account for open accounts
and $12 per account for closed accounts.
Each Fund offering a single class of shares will be subject to a minimum charge
of $1,000 per month. Each class of shares of a Fund offering multiple classes of
shares will be subject to a minimum charge per class of $1,000 per month.
Each Fund will reimburse Integrated for out-of-pocket expenses incurred in the
performance of its services under this Agreement.
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