Exhibit h(12)
TRANSFER AGENCY AND BLUE SKY SERVICES AGREEMENT
THIS AGREEMENT is made as of ______________, 2006 by and between PFPC INC.,
a Massachusetts corporation ("PFPC"), and BB&T FUNDS, a Massachusetts business
trust (the "Trust").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust wishes to retain PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to its
investment portfolios listed on Exhibit A attached hereto and made a part
hereof, as such Exhibit A may be amended from time to time (each a "Fund"), and
PFPC wishes to furnish such services; and
WHEREAS, the Trust wishes to retain PFPC to provide blue sky services as
set forth herein, and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. As used in this Agreement.
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Trust and any other
person duly authorized by the Trust's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Trust. An
Authorized Person's scope of authority may be limited by setting forth
such limitation in a written document signed by both parties hereto.
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(d) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be
an Authorized Person. PFPC may, in its sole discretion in each
separate instance, consider and rely upon instructions it receives
from an Authorized Person via electronic mail as Oral Instructions.
(e) "SEC" means the Securities and Exchange Commission.
(f) "Securities Laws" mean the 1933 Act, the 1934 Act and the 0000 Xxx.
(g) "Shares" mean the shares of beneficial interest of any series or class
of the Trust.
(h) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PFPC or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic
transaction reporting system access to which requires use of a
password or other authorized identifier. The instructions may be
delivered electronically (with respect to sub-item (ii) above) or by
hand, mail, tested telegram, cable, telex or facsimile sending device.
2. APPOINTMENT. As of the date first set forth above, the Trust hereby
appoints PFPC to serve as transfer agent, registrar, dividend disbursing
agent and shareholder servicing agent to the Trust with respect to each of
the Funds identified as "2006 Converted Funds" on Exhibit A in accordance
with the terms set forth in this Agreement. Effective as of __________,
2007 (or such other date as the parties may mutually agree in writing (the
"2007 Effective Date")), the Trust hereby appoints PFPC to serve as
transfer agent, registrar, dividend disbursing agent and shareholder
servicing agent to the Trust with respect to each of the Funds identified
as "2007 Converted Funds" on Exhibit A in accordance with the terms set
forth in this Agreement. PFPC accepts such appointment
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and agrees to furnish such services. For clarification, PFPC has no, nor
shall it deemed to have any, responsibility under this Agreement with
respect to the Funds identified as 2007 Converted Funds until the 2007
Effective Date.
3. COMPLIANCE WITH RULES AND REGULATIONS. PFPC undertakes to comply with all
applicable laws, rules and regulations, including, without limitation,
applicable requirements of the Securities Laws and all applicable rules and
regulations promulgated by the SEC thereunder. Except as specifically set
forth herein, PFPC assumes no responsibility for such compliance by the
Trust or any other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon
Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to
this Agreement. PFPC may assume that any Oral Instructions or Written
Instructions received hereunder is not in any way inconsistent with
the provisions of organizational documents or of any vote, resolution
or proceeding of the Trust's Board of Trustees or of the Trust's
shareholders, unless and until PFPC receives Written Instructions to
the contrary.
(c) The Trust agrees to forward to PFPC Written Instructions confirming
Oral Instructions so that PFPC receives Written Instructions by the
close of business on the same day that such Oral Instructions are
received. The fact that such confirming Written Instructions are not
received by PFPC or differ from the Oral Instructions shall in no way
invalidate the transactions or enforceability of the
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transactions authorized by the Oral Instructions or PFPC's ability to
rely upon such Oral Instructions.
5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Trust. If PFPC is in doubt as to any action it should or
should not take, PFPC may request Written Instructions from the Trust.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question of law
pertaining to any action it should or should not take with respect to
the Trust, PFPC may (i) upon prior written notice to and after
receiving written approval from, the Trust, request advice from the
Trust's counsel ("Trust Counsel") at the Trust's expense; or (ii) upon
prior notice to the Trust, request advice from PFPC's counsel ("PFPC
Counsel") at PFPC's own expense.
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC receives from
the Trust and the advice PFPC receives from Trust Counsel, PFPC may,
in good faith, rely upon and follow the advice of such Trust Counsel,
provided that reasonable prior written notice has been given to the
Trust. In the event of a conflict between directions or advice or Oral
Instructions or Written Instructions PFPC receives from the Trust and
the advice PFPC receives from PFPC Counsel, PFPC shall notify the
Trust in writing regarding such conflict. The Trust shall, within a
reasonable period of time after receipt of such notice, notify PFPC in
writing of its agreement or disagreement to any actions or any
omissions to act PFPC proposes to take pursuant to PFPC Counsel's
advice. If the Trust (i) does not
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respond to PFPC within a reasonable time; or (ii) responds with
agreement to PFPC's proposed actions or omissions PFPC proposes to
take pursuant to PFPC Counsel's advice; then PFPC may, in good faith,
rely upon and follow the advice of PFPC Counsel. However, in the event
where the Trust has timely notified PFPC in writing of its
disagreement with PFPC's proposed actions or omissions, PFPC and the
Trust shall consult with each other in good faith to reach agreement
on the actions or omissions that are the subject of the Trust's
objection. If, after such consultations, PFPC and the Trust are unable
to agree on the actions or omissions in question, PFPC and the Trust
shall consult independent counsel reasonably acceptable to both
parties ("Independent Counsel"), the expense of such Independent
Counsel to be split 50/50 between PFPC and the Trust, and PFPC may,
after such advice is delivered to PFPC and the Trust, follow and rely
upon the advice of such Independent Counsel.
(d) Protection of PFPC. PFPC shall be indemnified by the Trust and without
liability for any action PFPC takes or does not take in reliance upon
directions or advice or Oral Instructions or Written Instructions PFPC
receives from or on behalf of the Trust or from Trust Counsel or, if
PFPC follows and acts in accordance with the provisions of paragraph
(c) hereof, PFPC Counsel or Independent Counsel, as applicable;
provided PFPC believes, in good faith, that such action or inaction is
consistent with those directions or advice and Oral Instructions or
Written Instructions. Nothing in this section shall be construed so as
to impose an obligation upon PFPC (i) to seek such directions or
advice or Oral Instructions or Written Instructions, or (ii) to act in
accordance with such directions or advice or
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Oral Instructions or Written Instructions.
6. RECORDS; VISITS. The books and records pertaining to the Trust, which are
in the possession or under the control of PFPC, shall be the property of
the Trust. Such books and records shall be prepared and maintained pursuant
to the applicable Securities Laws and the rules and regulations promulgated
by the SEC thereunder. The Trust and Authorized Persons shall have access
to such books and records at all times during PFPC's normal business hours.
Upon the reasonable request of the Trust, copies of any such books and
records shall be provided by PFPC to the Trust or to an Authorized Person,
at the Trust's expense.
7. CONFIDENTIALITY.
(a) Each party shall keep confidential any information relating to the other
party's business ("Confidential Information"). Confidential Information
shall include (a) any data or information that is competitively sensitive
material, and not generally known to the public, including, but not limited
to, information about investments, investment strategies, investment
research, research and portfolio management methodologies, product plans,
marketing strategies, finances, operations, customer relationships,
customer profiles (including nonpublic financial and other information
relating to customers), customer lists, sales estimates, business plans,
and internal performance results relating to the past, present or future
business activities of the Trust or PFPC or their respective subsidiaries
and affiliated companies; (b) any scientific or technical information,
design, process, procedure, formula, or improvement that is commercially
valuable and secret in the sense that its confidentiality affords the Trust
or PFPC a competitive advantage over its competitors; (c) all confidential
or proprietary concepts,
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documentation, reports, data, specifications, computer software, source
code, object code, flow charts, databases, inventions, know-how, and trade
secrets, whether or not patentable or copyrightable, of the Trust or PFPC;
and (d) anything designated as confidential, by the Trust or PFPC.
Notwithstanding the foregoing information shall not be Confidential
Information and shall not be subject to such confidentiality obligations if
it: (1) is already known to the receiving party at the time it is obtained;
(2) is or becomes publicly known or available through no wrongful act of
the receiving party; (3) is rightfully received from a third party who, to
the best of the receiving party's knowledge, is not under a duty of
confidentiality; or (4) is released by the protected party to a third party
without restriction.
Confidential Information may be disclosed by the receiving party (the party
that received the Confidential Information from the protected party) where
the Confidential Information: (1) is required to be disclosed by the
receiving party pursuant to a court order, subpoena, governmental or
regulatory agency request or order made pursuant to applicable law,
provided that the receiving party has provided the protected party prior
written notice of the same, to the extent such notice is not prohibited by
law; or (2) is reasonably relevant to the defense of any claim or cause of
action asserted against the receiving party provided that the receiving
party has provided the protected party prior written notice of the same, to
the extent such notice is not prohibited by law; (3) is Trust information
provided by PFPC in connection with an independent third party compliance
or other review; provided that the recipient is bound by a duty of
confidentiality; or (4) release of such information by PFPC is necessary in
connection with the provision of services under this Agreement, provided
that the recipient is bound by a duty of
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confidentiality. The provisions of this Section 7 shall survive termination
of this Agreement for a period of three (3) years after such termination.
8. COOPERATION WITH ACCOUNTANTS. PFPC shall cooperate with the Trust's
independent public accountants and shall take all reasonable actions in the
performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the
expression of their opinion, as required by the Trust.
9. PFPC SYSTEM. PFPC shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by PFPC in connection with
the services provided by PFPC to the Trust. Notwithstanding the foregoing,
the parties acknowledge the Trust shall retain all ownership rights in
Trust data which resides on PFPC System.
10. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures,
PFPC shall, at no additional expense to the Trust, take reasonable steps to
minimize service interruptions. PFPC shall have no liability with respect
to the loss of data or service interruptions caused by equipment failure,
provided such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties or obligations under this Agreement.
11. COMPENSATION.
(a) As compensation for services rendered by PFPC during the term of this
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Agreement, the Trust will pay to PFPC a fee or fees as may be agreed
to from time to time in writing by the Trust and PFPC. In addition,
the Trust agrees to pay, and will be billed separately in arrears for,
reasonable expenses incurred by PFPC in the performance of its duties
hereunder. Subject to payment of filing fees to PFPC in advance, PFPC
will remit to the respective jurisdictions the requisite blue sky
filing fees for the shares of the relevant Fund(s) (or classes
thereof), and any fees for qualifying or continuing the qualification
of any Fund(s) (or classes thereof).
(b) PFPC shall establish certain cash management accounts ("Service
Accounts") required to provide services under this Agreement. The
Trust acknowledges (i) PFPC may receive investment earnings from
sweeping the funds in such Service Accounts into investment accounts
including, but not limited, investment accounts maintained at an
affiliate or client of PFPC; (ii) balance credits earned with respect
to the amounts in such Service Accounts ("Balance Credits") will be
used to offset the banking service fees imposed by the cash management
service provider (the "Banking Service Fees"); (iii) PFPC shall retain
any excess Balance Credits for its own use; (iv) Balance Credits will
be calculated and applied toward the Trust's Banking Service Fees
regardless of the Service Account balance sweep described in
Sub-Section (i); and (v) PFPC may use the services of third-party
vendors in connection with the issuance of redemption and distribution
checks and shall retain any benefits obtained from any arrangements
with such vendors, including any commission or return on float paid to
it by any such vendors. PFPC shall report to the Funds the total
Balance Credits earned annually.
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12. INDEMNIFICATION.
(a) The Trust agrees to indemnify and hold harmless PFPC and its
affiliates from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, attorneys' fees and
disbursements and liabilities arising under the Securities Laws and
any state and foreign securities and blue sky laws) ("Losses") arising
directly or indirectly from any appropriate and reasonable action or
omission to act which PFPC takes in connection with the provision of
services to the Trust. Neither PFPC, nor any of its affiliates, shall
be indemnified against any liability (or any expenses incident to such
liability) caused by PFPC's or its affiliates' material and uncured
breach of any term of this Agreement or PFPC's or its affiliates'
willful misfeasance, bad faith, gross negligence or reckless disregard
in the performance of PFPC's activities under this Agreement. Any
amounts payable by the Trust hereunder shall be satisfied only against
the relevant Fund's assets and not against the assets of any other
investment portfolio of the Trust.
(b) PFPC agrees to indemnify and hold harmless the Trust and its
affiliates from all Losses arising from PFPC's or its affiliates'
material and uncured breach of any term of this Agreement or PFPC's or
its affiliates' willful misconduct, bad faith, gross negligence or
reckless disregard in the performance of PFPC's activities under this
Agreement.
(c) In any case in which one party hereto (the "Indemnifying Party") may
be asked to indemnify or hold the other party hereto (the "Indemnified
Party") harmless, the Indemnified Party will notify the Indemnifying
Party promptly after identifying
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any situation which it believes presents or appears likely to present
a claim for indemnification (an "Indemnification Claim") against the
Indemnifying Party, although the failure to do so shall not prevent
recovery by the Indemnified Party (except to the extent the
Indemnifying Party shows that the delay prejudiced the defense of the
action), and shall keep the Indemnifying Party advised with respect to
all developments concerning such situation. The Indemnifying Party may
participate in the defense of against, and shall have the option to
defend the Indemnified Party against, any Indemnification Claim which
may be the subject of this indemnification, and, in the event that the
Indemnifying Party so elects to assume the defense, such defense shall
be conducted by counsel chosen by the Indemnifying Party and
satisfactory to the Indemnified Party, and thereupon the Indemnifying
Party shall take over complete defense of the Indemnification Claim
and the Indemnified Party shall sustain no further legal or other
expenses in respect of such Indemnification Claim (except for
reasonable investigation costs). In the event that the Indemnifying
Party does not elect to assume the defense of any such suit within 15
days of its receipt of notice of the Indemnification Claim, or in case
the Indemnified Party reasonably does not approve of counsel chosen by
the Indemnifying Party, or in case there is a conflict of interest
between the Indemnifying Party or the Indemnified Party, the
Indemnifying Party will reimburse the Indemnified Party for the fees
and expenses of any counsel retained by the Indemnified Party. The
Indemnified Party will not confess any Indemnification Claim or make
any compromise in any case in which the Indemnifying Party will be
asked to provide indemnification,
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except with the Indemnifying Party's prior written consent (which
shall not be unreasonably withheld, delayed or conditioned); provided
that if the Indemnifying Party fails to participate in or assume the
defense within 15 days after receiving notice of the action, the
Indemnifying Party is bound by any determination made in the action or
by any compromise or settlement made by the other party.
(d) The provisions of this Section 12 shall survive termination of this
Agreement.
13. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action hereunder on behalf of
the Trust except as specifically set forth herein or as may be
specifically agreed to by PFPC and the Trust in a written amendment
hereto. PFPC shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith in
performing services provided for under this Agreement. PFPC shall be
liable only for any damages arising out of PFPC's failure to perform
its duties under this Agreement to the extent such damages arise out
of PFPC' material and uncured breach of this Agreement, willful
misfeasance, bad faith, gross negligence or reckless disregard of such
duties; provided that in the absence of a finding to the contrary the
acceptance, processing and/or negotiation of a fraudulent payment for
the purchase of Shares shall be presumed not to have been the result
of PFPC's or its affiliates own willful misfeasance, bad faith, gross
negligence or reckless disregard of such duties and obligations under
this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC
shall not be liable for losses, delays, failure, errors, interruption
or loss of data occurring
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directly or indirectly by reason of circumstances beyond its
reasonable control, including without limitation acts of God; action
or inaction of civil or military authority; public enemy; war;
terrorism; riot; fire; flood; sabotage; epidemics; labor disputes;
civil commotion; interruption, loss or malfunction of utilities,
transportation, computer or communications capabilities; insurrection;
elements of nature; or non-performance by a third party (unless such
third party was engaged by PFPC); provided that PFPC has adopted and
implemented a commercially reasonable Disaster Recovery Plan; and (ii)
PFPC shall not be under any duty or obligation to inquire into and
shall not be liable for the validity or invalidity, authority or lack
thereof, or truthfulness or accuracy or lack thereof, of any
instruction, direction, notice, instrument or other information which
PFPC reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC nor its affiliates shall be liable for any consequential, special
or indirect losses or damages, whether or not the likelihood of such
losses or damages was known by PFPC or its affiliates.
(d) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(e) Notwithstanding anything in this Agreement to the contrary, PFPC shall
have no liability either for (i) any error or omission of any of its
predecessors as servicer on behalf of the Trust or (ii) for any
failure to discover any such error or omission, provided that, once
PFPC has performed the services under this Agreement and in the
ordinary course of performing the services should
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reasonably have discovered such an error or omission, PFPC will no
longer be protected under this Section 13(e)(ii) for damages caused by
such failure.
(f) The provisions of this Section 13 shall survive termination of this
Agreement.
14. DESCRIPTION OF SERVICES.
(a) Services Provided on an Ongoing Basis
(i) Calculate 12b-1 payments;
(ii) Maintain shareholder registrations;
(iii) Review new applications and correspond with shareholders and/or
financial intermediaries to complete or correct information;
(iv) Direct payment processing of checks or wires;
(v) Prepare and certify shareholder lists in conjunction with proxy
solicitations;
(vi) Prepare and mail to shareholders confirmation of activity;
(vii) Provide toll-free lines for direct shareholder use, plus
customer liaison staff for on-line inquiry response;
(viii) Mail duplicate confirmations to financial intermediaries of
their clients' activity, whether executed through the
broker-dealer or directly with PFPC;
(ix) Provide periodic shareholder lists and statistics to the Trust;
(x) Provide detailed data for underwriter/broker confirmations;
(xi) Prepare periodic mailing of year-end tax and statement
information;
(xii) Notify on a timely basis the investment adviser, accounting
agent, and custodian of fund activity;
(xiii) Perform other participating financial intermediary shareholder
services as may be agreed upon from time to time;
(xiv) Accept and post daily Share purchases and redemptions;
(xv) Accept, post and perform shareholder transfers and exchanges;
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(xvi) Make information available to shareholder servicing unit and
other remote access units regarding trade date, share price,
current holdings, yields and dividend information;
(xvii) Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to current
shareholders;
(xviii) Perform certain administrative and ministerial duties relating
to opening, maintaining and processing transactions for
shareholders or financial intermediaries that trade shares
through the NSCC; and
(xix) Issue confirmations in accordance with Rule 10b-10 under the
1934 Act; and
(xx) Issue periodic statements for shareholders.
(b) Purchase of Shares. PFPC shall issue and credit an account of an
investor, in the manner described in the Trust's prospectus, once it
receives:
(i) A purchase order in completed proper form;
(ii) Proper information to establish a shareholder account; and
(iii) Confirmation of receipt or crediting of funds for such order to
the Trust's custodian.
(c) Redemption of Shares. PFPC shall process requests to redeem Shares as
follows:
(i) All requests to transfer or redeem Shares and payment therefor
shall be made in accordance with the Trust's prospectus, when the
shareholder tenders Shares in proper form, accompanied by such
documents as PFPC reasonably may deem necessary.
(ii) PFPC reserves the right to refuse to transfer or redeem Shares
until it is satisfied that the endorsement on the instructions is
valid and genuine and that the requested transfer or redemption
is legally authorized, and it shall incur no liability for the
refusal, in good faith, to process transfers or
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redemptions which PFPC, in its good judgment, deems improper or
unauthorized, or until it is reasonably satisfied that there is
no basis to any claims adverse to such transfer or redemption.
(iii) When Shares are redeemed, PFPC shall deliver to the Trust's
custodian and fund accountant (the "Custodian") and the Trust or
its designee a notification setting forth the number of Shares
and cash redeemed. Such redeemed Shares shall be reflected on
appropriate accounts maintained by PFPC reflecting outstanding
Shares of the Trust and Shares attributed to individual accounts.
(iv) PFPC shall, upon receipt of the monies provided to it by the
Custodian for the redemption of Shares, pay such monies as are
received from the Custodian, all in accordance with the
procedures established from time to time between PFPC and the
Trust.
(v) When a broker-dealer notifies PFPC of a redemption desired by a
customer, and the Custodian provides PFPC with funds, PFPC shall
prepare and send the redemption check to the broker-dealer and
made payable to the broker-dealer on behalf of its customer,
unless otherwise instructed in writing by the broker-dealer.
(vi) PFPC shall not process or effect any redemption requests with
respect to Shares of the Trust after receipt by PFPC or its agent
of notification of the suspension of the determination of the net
asset value of the Trust.
(d) Dividends and Distributions. Upon a resolution of the Trust's Board of
Directors authorizing the declaration and payment of dividends and
distributions and
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Written Instructions to PFPC, PFPC shall issue dividends and
distributions declared by the Trust in Shares, or, upon shareholder
election, pay such dividends and distributions in cash, if provided
for in the Trust's prospectus. Such issuance or payment, as well as
payments upon redemption as described above, shall be made after
deduction and payment of the required amount of funds to be withheld
in accordance with any applicable tax laws or other laws, rules or
regulations. PFPC shall mail to the Trust's shareholders such tax
forms and other information, or permissible substitute notice,
relating to dividends and distributions paid by the Trust as are
required to be filed and mailed by applicable law, rule or regulation.
PFPC shall prepare, maintain and file with the IRS and other
appropriate taxing authorities reports relating to all dividends above
a stipulated amount paid by the Trust to its shareholders as required
by tax or other law, rule or regulation.
(e) Shareholder Account Services.
(i) PFPC may arrange, in accordance with the prospectus, for issuance
of Shares obtained through:
- Any pre-authorized check plan; and
- Direct purchases through broker wire orders, checks and
applications.
(ii) PFPC may arrange, in accordance with the prospectus, for a
shareholder's:
- Exchange of Shares for shares of another fund with which the
Trust has exchange privileges;
- Automatic redemption from an account where that shareholder
participates in a automatic redemption plan; and/or
- Redemption of Shares from an account with a checkwriting
privilege.
(f) Communications to Shareholders. Upon timely Written Instructions, PFPC
shall mail all communications by the Trust to its shareholders,
including:
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(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of Trust shares;
(iii) Monthly or quarterly statements;
(iv) Dividend and distribution notices; and
(v) Tax form information.
(g) Records. PFPC shall maintain records of the accounts for each
shareholder showing the following information:
(i) Name, address and United States Tax Identification or Social
Security number;
(ii) Number and class of Shares held and number and class of Shares
for which certificates, if any, have been issued, including
certificate numbers and denominations;
(iii) Historical information regarding the account of each
shareholder, including dividends and distributions paid and the
date and price for all transactions on a shareholder's account;
(iv) Any stop or restraining order placed against a shareholder's
account;
(v) Any correspondence relating to the current maintenance of a
shareholder's account;
(vi) Information with respect to withholdings; and
(vii) Any information required in order for PFPC to perform any
calculations required by this Agreement.
(h) Compliance Reporting. PFPC shall
(i) Prepare and distribute appropriate Internal Revenue Service forms
for corresponding Fund and shareholder income and capital gains;
and
(ii) Issue tax withholding reports to the Internal Revenue Service.
(i) Shareholder Inspection of Stock Records. Upon a request from any Trust
shareholder to inspect stock records, PFPC will notify the Trust and
the Trust will issue instructions granting or denying each such
request. Unless PFPC has acted contrary to the Trust's instructions,
the Trust
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agrees to and does hereby release PFPC from any liability for refusal
of permission for a particular shareholder to inspect the Trust's
stock records.
(j) Lost Shareholders. PFPC shall perform such services as are required in
order to comply with rule 17Ad-17 of the 1934 Act (the "Lost
Shareholder Rule"), including, but not limited to, those set forth
below. PFPC may, in its sole discretion, use the services of a third
party to perform some of or all such services.
(i) documentation of search policies and procedures;
(ii) execution of required searches;
(iii) tracking results and maintaining data sufficient to comply with
the Lost Shareholder Rules; and
(iv) preparation and submission of data required under the Lost
Shareholder Rules.
"Lost Shareholder" services will not be performed by PFPC on any
shareholder accounts that are broker-controlled accounts where PFPC is
not able to identify and depict "RPO" status. Except as set forth
above, PFPC shall have no responsibility for any escheatment services.
(k) Retirement Plans.
(i) In connection with the individual retirement accounts, simplified
employee pension plans, rollover individual retirement plans,
educational IRA's and XXXX individual retirement accounts ("XXX
Plans"), 403(b) Plans and money purchase and profit sharing plans
("Qualified Plans") (collectively, the "Retirement Plans") within
the meaning of Section 408 of the Internal Revenue Code of 1986,
as amended (the "Code") sponsored by the Trust for which
contributions of the Trust's shareholders (the "Participants")
are invested solely in Shares of the Trust, PFPC shall provide
the following administrative services:
(A) Establish a record of types and reasons for distributions
(i.e., attainment of age 59-1/2, disability, death, return
of excess contributions, etc.);
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(B) Record method of distribution requested and/or made;
(C) Receive and process designation of beneficiary forms
requests;
(D) Examine and process requests for direct transfers between
custodians/trustees, transfer and pay over to the successor
assets in the account and records pertaining thereto as
requested;
(E) Prepare any annual reports or returns required to be
prepared and/or filed by a custodian of a Retirement Plan,
including, but not limited to, an annual fair market value
report, Forms 1099R and 5498; and file same with the IRS and
provide same to Participant/Beneficiary, as applicable; and
(F) Perform applicable federal withholding and send
Participants/Beneficiaries an annual TEFRA notice regarding
required federal tax withholding.
(ii) PFPC shall arrange for PFPC Trust Company to serve as custodian
for the Retirement Plans sponsored by the Trust.
(iii) With respect to the Retirement Plans, PFPC shall provide the
Trust with the associated Retirement Plan documents for use by
the Trust and PFPC shall be responsible for the maintenance of
such documents in compliance with all applicable provisions of
the Code and the regulations promulgated thereunder.
(l) Print Mail. The Trust hereby engages PFPC as its print/mail service
provider with respect to those items and for such fees as may be
agreed to from time to time in writing by the Trust and PFPC.
(m) Proxy Advantage. The Trust hereby engages PFPC as its exclusive proxy
solicitation service provider with respect to those items and for such
fees as may be agreed to from time to time in writing by the Trust and
PFPC.
(n) Blue Sky Services. PFPC will monitor the Trust's compliance with the
amounts and conditions of each state qualification and perform
appropriate blue sky filings. In connection with blue sky filings, the
Trust hereby grants PFPC a limited power of attorney on behalf of the
Trust to sign all blue sky filings and
20
other related documents in order to effect such filings. The Trust
will provide PFPC a listing of all jurisdictions in which each Fund
(and class thereof) is lawfully available for sale and in which the
Trust desires PFPC to effect a blue sky filing.
15. PRIVACY. Each party hereto acknowledges and agrees that, subject to the
reuse and re-disclosure provisions of Xxxxxxxxxx X-X, 00 XXX Part 248.11,
it shall not disclose the non-public personal information of investors in
the Trust obtained under this Agreement, except as necessary to carry out
the services set forth in this Agreement or as otherwise permitted by law
or regulation. PFPC represents and warrants that it has in place and will
maintain physical, electronic and procedural safeguards reasonably designed
to protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of records and information relating to
consumers or customers of the Trust.
16. ANTI-MONEY LAUNDERING. In addition, to the services listed in Section 14,
to the extent the other provisions of this Agreement require PFPC to
establish, maintain and monitor accounts of investors in the Fund
consistent with securities laws, PFPC shall perform reasonable actions
necessary to help the Trust be in compliance with Section 352 of the USA
PATRIOT Act, as follows: PFPC shall: (a) establish and implement written
internal policies, procedures and controls reasonably designed to help
prevent the Trust from being used to launder money or finance terrorist
activities; (b) provide for independent testing, by an employee who is not
responsible for the operation of PFPC's AML program or by an outside party,
for compliance with PFPC's established policies and procedures; (c)
designate a person or persons responsible for implementing and monitoring
the operation and internal controls of PFPC's AML program; and (d) provide
ongoing
21
training of PFPC personnel relating to the prevention of money-laundering
activities. Upon the reasonable request of the Trust, PFPC shall provide to
the Trust: (x) a copy of PFPC's written AML policies and procedures (it
being understood such information is to be considered confidential and
treated as such and afforded all protections provided to confidential
information under this Agreement); (y) at the option of PFPC, a copy of a
written assessment or report prepared by the party performing the
independent testing for compliance, or a summary thereof, or a
certification that the findings of the independent party are satisfactory;
and (z) a summary of the AML training provided for appropriate personnel.
PFPC agrees to permit inspections relating to its AML program by U.S.
Federal departments or regulatory agencies with appropriate jurisdiction
and to make available to examiners from such departments or regulatory
agencies such information and records relating to its AML program as such
examiners shall reasonably request. Without limiting or expanding the
foregoing, the parties agree the provisions herein do not apply to Section
326 of the USA PATRIOT Act (or other sections other than Section 352) or
regulations promulgated thereunder.
17. CUSTOMER IDENTIFICATION PROGRAM ("CIP") SERVICES.
(a) To help the Trust comply with its Customer Identification Program
(which the Trust is required to have under regulations issued under
Section 326 of the USA PATRIOT Act) PFPC will do the following:
(i) Implement procedures under which new accounts in the Trust are
not established unless PFPC has obtained the name, date of birth
(for natural persons only), address and government-issued
identification number (collectively, the "Data Elements") for
each corresponding Customer (as defined in 31 CFR 103.131).
(ii) Use collected Data Elements to attempt to reasonably verify the
identity of each new Customer promptly before or after each
corresponding new
22
account is opened. Methods may consist of non-documentary methods
(for which PFPC may use unaffiliated information vendors to
assist with such verifications) and documentary methods (as
permitted by 31 CFR 103.131), and may include procedures under
which PFPC personnel perform enhanced due diligence to verify the
identities of Customers the identities of whom were not
successfully verified through the first-level (which will
typically be reliance on results obtained from an information
vendor) verification process(es).
(iii) Record the Data Elements and maintain records relating to
verification of new Customers consistent with 31 CFR
103.131(b)(3).
(iv) Regularly report to the Trust about measures taken under (a)-(c)
above.
(v) If PFPC provides services by which prospective Customers may
subscribe for shares in the Trust via the Internet or telephone,
work with the Trust to notify prospective Customers, consistent
with 31 CFR 103.(b)(5), about the Trust's CIP.
(b) Notwithstanding anything to the contrary, and without expanding the
scope of the express language above, PFPC need not collect the Data
Elements for (or verify) prospective customer (or accounts) beyond the
requirements of relevant regulation (for example, PFPC will not verify
customers opening accounts through NSCC) and PFPC need not perform any
task that need not be performed for the Trust to be in compliance with
relevant regulation.
(c) PFPC agrees to permit inspections relating to the CIP Services
provided hereunder by U.S. Federal departments or regulatory agencies
with appropriate jurisdiction and to make available to examiners from
such departments or regulatory agencies such information and records
relating to the CIP Services provided hereunder as such examiners
shall reasonably request.
(d) Notwithstanding anything to the contrary, PFPC need not perform any of
the steps described above with respect to persons purchasing Shares
xxx xxxxxxxx xxxxxxxxxx.
00
00. DURATION AND TERMINATION.
(a) This Agreement shall be effective (a) on the date first written above
with respect to the 2006 Converted Funds and (b) on the 2007 Effective
Date with respect to the 2007 Converted Funds. Unless terminated
pursuant to its terms, this Agreement shall continue for a period of
three (3) years from the 2007 Effective Date (the "Initial Term").
(b) Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal
Terms") each, unless the Trust or PFPC provides written notice to the
other party of its intent not to renew or unless otherwise terminated
as provided herein. Such notice must be received not less than sixty
(60) days prior to the expiration of the Initial Term or the then
current Renewal Term.
(c) In the event of termination, all reasonable expenses associated with
movement of records and materials and conversion thereof to a
successor transfer agent will be borne by the Trust and paid to PFPC
prior to any such conversion.
(d) This Agreement may be terminated (i) by mutual agreement of the
parties or (ii) for "cause" upon the provision of sixty (60) days
advance written notice by the party alleging cause. For purposes of
this Agreement, "cause" shall mean (i) 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; (ii) a
final finding or determination of fault or culpability the party not
alleging cause (the "Affected Party") or its affiliates following
formal proceedings against said
24
Affected Party or its affiliates by the SEC, NASD, or any federal or
state regulatory body, which finding or determination, relates to or
affects PFPC's or the Trust's obligations under this Agreement, if the
party seeking termination reasonably determines that such finding or
determination, or the facts on which such finding or determination are
based (A) has a material likelihood of preventing or materially and
adversely impacting PFPC's or the Trust's performance of, or ability
to perform, its obligations under this Agreement or (B) relates to or
involves criminal or unethical behavior in the conduct of the Affected
Party's conduct of services to be provided by this Agreement; (iii) a
final, unappealable judicial, regulatory or administrative ruling or
order in which the party to be terminated has been found guilty or
criminal or unethical behavior in the conduct of its business; or (iv)
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. PFPC shall not terminate this Agreement pursuant
to clause (i) above based solely on the Trust's failure to pay an
amount to PFPC which is the subject of a bond fide good faith dispute,
if (A) the Trust is attempting in good faith to resolve such dispute
with as much expediency as may be possible under the circumstances,
and (B) the Trust continues to perform its obligations hereunder in
all other material respects (including paying all fees and
25
expenses not subject to such a dispute hereunder); and (C) promptly
upon resolution of such a dispute, the Trust promptly pays PFPC the
amount mutually agreed was due PFPC, if any.
(e) Notwithstanding anything contained in this Agreement to the contrary,
should a merger, acquisition, change in control, re-structuring,
re-organization result in the Trust's desire to cease to use PFPC as
the provider of the services set forth hereunder in favor of another
service provider prior to the expiration of the then current Initial
or Renewal Term, PFPC shall make a good faith effort to facilitate a
conversion of services to the Trust's successor service provider,
however, there can be no guarantee that PFPC will be able to
facilitate such a conversion of services on the conversion date
requested by the Trust. In connection with the foregoing and prior to
such conversion to the successor service provider, the payment of all
fees to PFPC as set forth herein shall be accelerated to a date prior
to the conversion or termination of services and calculated as if the
services had remained with PFPC until the expiration of the then
current Initial or Renewal Term and calculated at the asset and/or
Shareholder account levels, as the case may be, on the date notice of
termination was given to PFPC.
19. NOTICES. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President (or such other
address as PFPC may inform the Trust in writing); (b) if to the Trust, at
000 Xxxxxxxxxxxx Xx., 0xx Xxxxx, Xxxxxxx, XX 00000, Attention: President
(or such other address as the Trust may inform PFPC in writing) or (c) if
to neither of the foregoing, at such other address as shall have been
26
given by like notice to the sender of any such notice or other
communication by the other party. If notice is sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been
given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given three days after it has been mailed. If notice is
sent by messenger, it shall be deemed to have been given on the day it is
delivered.
20. AMENDMENTS. No amendment to this Agreement shall be valid unless made in
writing and executed by both parties hereto.
21. DELEGATION; ASSIGNMENT. PFPC may assign its rights and delegate its duties
hereunder to any majority-owned direct or indirect subsidiary of PFPC or of
The PNC Financial Services Group, Inc., provided that PFPC gives the Trust
thirty (30) days' prior written notice of such assignment or delegation. To
the extent required by the rules and regulations of the NSCC and in order
for PFPC to perform the NSCC-related services, the Trust agrees that PFPC
may delegate its duties to any affiliate of PFPC that is a member of the
NSCC.
22. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
23. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
24. INSURANCE. PFPC, or an affiliate of PFPC, shall maintain for PFPC a
fidelity bond covering larceny and embezzlement and an insurance policy
with respect to directors and officers and errors and omissions coverage of
not less than $25 million. Upon the request of the Trust, PFPC shall
provide evidence that coverage is in place. PFPC shall notify
27
the Trust should the insurance coverage with respect to professional
liability errors and omissions and fidelity bond coverage be canceled. PFPC
shall notify the Trust of any material claims against it with respect to
service performed under this Agreement.
24. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties.
(b) Non-Solicitation. During the term of this Agreement and for one year
thereafter, the Trust shall not knowingly solicit or recruit for
employment or hire any of PFPC's employees. To "knowingly" solicit,
recruit or hire within the meaning of this provision does not include,
and therefore does not prohibit, solicitation, recruitment or hiring
of a PFPC employee by the Trust if PFPC employee was identified by
such entity solely as a result of PFPC employee's response to a
general advertisement by such entity in a publication of trade or
industry interest or other similar general solicitation by such
entity.
(c) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Trust agrees not to
make any modifications to its registration statement or adopt any
policies which would affect materially the obligations or
responsibilities of PFPC hereunder without the prior written approval
of PFPC, which approval shall not be unreasonably withheld or delayed.
(d) Captions. The captions in this Agreement are included for convenience
of
28
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(e) Information. The Trust will provide such information and documentation
as PFPC may reasonably request in connection with services provided by
PFPC to the Trust.
(f) Governing Law. This Agreement shall be deemed to be a contract made in
Massachusetts and governed by Massachusetts law, without regard to
principles of conflicts of law.
(g) Partial Invalidity. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(h) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(i) No Representations or Warranties. Except as expressly provided in this
Agreement, PFPC hereby disclaims all representations and warranties,
express or implied, made to the Fund or any other person, including,
without limitation, any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of trade), of
any services or any goods provided incidental to services provided
under this Agreement. PFPC disclaims any warranty of title or
non-infringement except as otherwise set forth in this Agreement.
(j) Facsimile Signatures. The facsimile signature of any party to this
Agreement
29
shall constitute the valid and binding execution hereof by such party.
(k) Customer Identification Program Notice. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S.
Federal law requires each financial institution to obtain, verify, and
record certain information that identifies each person who initially
opens an account with that financial institution on or after October
1, 2003. Certain of PFPC's affiliates are financial institutions, and
PFPC may, as a matter of policy, request (or may have already
requested) the Trust's name, address and taxpayer identification
number or other government-issued identification number, and, if such
party is a natural person, that party's date of birth. PFPC may also
ask (and may have already asked) for additional identifying
information, and PFPC may take steps (and may have already taken
steps) to verify the authenticity and accuracy of these data elements.
(l) Matters Relating to the Trust as a Massachusetts Business Trust. 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 shall bind only the
trust property of the Trust. The execution and delivery of this
Agreement have been authorized by the Trustees, and this Agreement has
been signed and delivered by an authorized officer of the Trust,
acting as such, and neither such authorization by the 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
them personally, but shall bind only the trust property of the Trust
as provided in the Trust's Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed
30
as of the day and year first above written.
PFPC INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BB&T Funds
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
31
EXHIBIT A
THIS EXHIBIT A, dated as of ____________, 2006, is Exhibit A to that
certain Transfer Agency and Blue Sky Services Agreement dated as of
____________, 2006, between PFPC Inc. and BB&T Funds.
FUNDS
2006 Converted Funds
2007 Converted Funds
32
