SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of March, 2006, (the "Effective
Date") by and between Touchstone Advisors, Inc., an Ohio corporation
(the "Administrator") and Integrated Fund Services, Inc., an Ohio corporation
(the "Sub-Administrator").
WHEREAS, the Administrator and Constellation Institutional Portfolios (the
"Trust") have entered into a Management Agreement (the "Management Agreement")
pursuant to which the Administrator will provide administrative services to the
Trust; and
WHEREAS, the Administrator desires to retain the Sub-Administrator to
assist in performing certain administrative services to each of the portfolios
of the Trust, (individually a "Portfolio" and collectively the "Portfolios") and
the Sub-Administrator is willing to perform such services on the terms and
conditions hereinafter set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, Administrator and the Sub-Administrator hereby agree as
follows:
ARTICLE 1. Retention of the Sub-Administrator. Administrator hereby
retains the Sub-Administrator to furnish the Portfolios with administrative
services as set forth in Article 2 below. The Sub-Administrator hereby accepts
such employment to perform the duties set forth below. The Sub-Administrator
shall, for all purposes herein, be deemed to be an independent contractor.
ARTICLE 2. Sub-Administrative and Accounting Services. The
Sub-Administrator shall perform or supervise the performance by others of the
administrative services set forth in Schedule B hereto, including activities
related to the Portfolios fiscal year-end financial statement preparation, and
made a part of this Agreement. The Sub-Administrator may sub-contract with third
parties to perform certain of the services to be performed by the
Sub-Administrator hereunder; provided, however, that the Sub-Administrator shall
remain principally responsible to Administrator for the acts and omissions of
such other entities. In meeting its duties hereunder, Sub-Administrator shall
have the general authority to do all acts deemed in the Sub-Administrator's good
faith belief to be necessary and proper to perform its obligations under this
Agreement.
ARTICLE 3. Compensation of the Sub-Administrator. The Administrator shall
pay to the Sub-Administrator compensation at the annual rate specified in
Schedule A to this Agreement until this Agreement is terminated in accordance
with Article 5. Such compensation shall be calculated and accrued daily, and
paid to the Sub-Administrator monthly. If this Agreement becomes effective
subsequent to the first day of a month or terminates before the last day of a
month, the Sub-Administrator's compensation for that part of the month in which
this Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above. Payment of the Sub-Administrator's
compensation for the preceding month shall be made within 30 days after receipt
of invoice. In addition, the Administrator agrees to reimburse the
Sub-Administrator for the Sub-Administrator's reasonable out of pocket expenses
in providing services hereunder, so long as Sub-Administrator receives prior
consent in writing from Administrator.
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ARTICLE 4. Limitation of Liability of the Sub-Administrator. The duties of
the Sub-Administrator shall be confined to those expressly set forth herein, and
no implied duties are assumed by or may be asserted against the
Sub-Administrator hereunder. The Sub-Administrator shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties hereunder,
except a loss resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder. (As used in this Article 4, the term
"Sub-Administrator" shall include Trustees, officers, employees and other agents
of the Sub-Administrator as well as that entity itself.) Under no circumstances
shall the Sub-Administrator be liable to Administrator for consequential,
indirect or punitive damages.
So long as the Sub-Administrator, or its agents, acts without willful
misfeasance, bad faith or gross negligence in the performance of its duties, and
without reckless disregard of its obligations and duties hereunder,
Administrator assumes full responsibility and shall indemnify the
Sub-Administrator and hold it harmless from and against any and all actions,
suits and claims, whether groundless or otherwise, and from and against any and
all losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of any act or omission of Sub-Administrator
in carrying out its duties hereunder; provided, however, with respect to a
damage award of a court of competent jurisdiction in connection with a third
party claim that arises directly out of a negligent act or omission by
Sub-Administrator or its agents in breach of this Agreement (which act or
omission did not constitute willful misfeasance, bad faith or gross negligence
or willful disregard of obligations and duties hereunder), Sub-Administrator
shall be responsible for 20% of such damage award up to a maximum amount equal
to the aggregate amount of fees paid by Administrator to Sub-Administrator in
the twelve months immediately preceding the date on which the negligence of
Sub-Administrator occurred. The indemnity and defense provisions set forth
herein shall indefinitely survive the termination of this Agreement.
The indemnification rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provisions contained herein shall
apply, however, it is understood that if in any case the Administrator may be
asked to indemnify or hold the Sub-Administrator harmless, the Administrator
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Sub-Administrator
will use all reasonable care to identify and notify the Administrator promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Administrator, but
failure to do so shall not affect the rights hereunder. In no event and under no
circumstances shall either party to this Agreement be liable to anyone,
including, without limitation, the other party, for special damages for any act
or failure to act under any provision of this Agreement if advised of the
possibility thereof.
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Administrator shall be entitled to participate at its own expense or, if
it so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If Administrator elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
Administrator and satisfactory to the Sub-Administrator, whose approval shall
not be unreasonably withheld. In the event that Administrator elects to assume
the defense of any suit and retain counsel, the Sub-Administrator shall bear the
fees and expenses of any additional counsel retained by it. If Administrator
does not elect to assume the defense of a suit, it will reimburse the
Sub-Administrator for the fees and expenses of any counsel retained by the
Sub-Administrator.
The Sub-Administrator may apply to Administrator at any time for
instructions and may consult counsel for Administrator or its own counsel and
with accountants and other experts with respect to any matter arising in
connection with the Sub-Administrator's duties, and the Sub-Administrator 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.
Also, the Sub-Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Sub-Administrator be held to have
notice of any change of authority of any officers, employee or agent of
Administrator until receipt of written notice thereof from Administrator.
Nothing herein shall make Sub-Administrator liable for the performance or
omissions of unaffiliated third parties not under Sub-Administrator's reasonable
control such as, by way of example and not limitation, transfer agents,
custodians, investment advisers or sub-advisers, postal or delivery services,
telecommunications providers and processing and settlement services.
ARTICLE 5. Duration and Termination of this Agreement. This Agreement
shall be in full force and effect upon the Effective Date. The initial term of
this Agreement will end one (1) year after the Effective Date. ("Initial Term").
Upon conclusion of the Initial Term, this Agreement will automatically remain in
full force and effect for a one (1) year renewable term, and for succeeding one
(1) year renewable terms thereafter, unless the Agreement is terminated as
provided below. Administrator or Sub-Administrator may elect to terminate this
Agreement as of the last day of the Initial Term or any renewal term by
notifying the other in writing not less than ninety (90) days prior to the end
of the then current term.
This Agreement may be terminated only: (a) by either party hereto on such
date as is specified in written notice given by the terminating party, in the
event of a material breach of this Agreement by the other party, provided the
terminating party has notified the other party of such material breach at least
45 days prior to the specified date of termination and the breaching party has
not remedied such breach by the specified date; or (b) as to any Portfolio or
the Trust, effective upon the liquidation of such Portfolio or the Trust, as the
case may be. For purposes of this paragraph, the term "liquidation" shall mean a
transaction in which the assets of the Trust or a Portfolio are sold or
otherwise disposed of and proceeds there from are distributed in cash to the
shareholders in complete liquidation of the interests of such shareholders in
the entity. After termination of this Agreement for so long as the
Sub-Administrator in fact continues to perform any one or more services
contemplated by this Agreement, the provisions of this Agreement, including
without limitation the provisions regarding limitation of liability and
indemnification, shall continue in full force and effect
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Notwithstanding the foregoing, this Agreement shall terminate
automatically upon termination of the Administration Agreement; provided,
however, that no such termination of this Agreement shall occur if and to the
extent the Administrator or any control affiliate thereof is named as, or
otherwise becomes, the successor administrator to the Trust. If this Agreement
is terminated pursuant to this paragraph, and the Administrator proposes or
causes, directly or indirectly, the Trust to retain a third party other than the
Sub-Administrator to serve as successor administrator or sub-administrator to
the Trust, Sub-Administrator will be entitled to a one time cash payment equal
to the net present value of the profits Sub-Administrator would have earned
during the remainder of the then-current term of the contract based on the fee
rate set forth in Schedule A hereto applied to the average daily net assets of
the Trust during the six month period immediately preceding such termination.
ARTICLE 6. Activities of the Sub-Administrator. The services of the
Sub-Administrator rendered to Administrator are not to be deemed to be
exclusive. The Sub-Administrator is free to render such services to others and
to have other businesses and interests.
ARTICLE 7. Confidentiality. The Sub-Administrator agrees on behalf of
itself and its employees to treat confidentially all records and other
information relative to the Administrator and the Trust and its shareholders
received by the Sub-Administrator in connection with this Agreement, including
any non-public personal information as defined in Regulation S-P, and that it
shall not use or disclose any such information except for the purpose of
carrying out the terms of this Agreement; provided, however, that
Sub-Administrator may disclose such information as required by law or after
prior notification to and approval in writing by the Administrator or the Trust,
which approval may not be withheld where the Sub-Administrator may be exposed to
civil or criminal contempt proceedings or penalties for failure to comply.
ARTICLE 8. Certain Records. The Sub-Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the
Sub-Administrator on behalf of the Trust shall be prepared and maintained at the
expense of the Sub-Administrator, but shall be the property of the Trust and
will be made available to or surrendered promptly to Administrator or the Trust
on request.
In case of any request or demand for the inspection of such records by
another party, the Sub-Administrator shall notify the Administrator and follow
the Administrator's instructions as to permitting or refusing such inspection;
provided that the Sub-Administrator may exhibit such records to any person in
any case where it is advised by its counsel that it may be held liable for
failure to do so, unless (in cases involving potential exposure only to civil
liability) the Administrator has agreed to indemnify the Sub-Administrator
against such liability.
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ARTICLE 9. Compliance With Governmental Rules and Regulations. The
Sub-Administrator undertakes to comply in all material respects with applicable
requirements of the 1933 Act, the 1934 Act, the 1940 Act and any laws, rules and
regulations of governmental authorities having jurisdiction with respect to the
duties to be performed by the Sub-Administrator hereunder.
ARTICLE 10. Representations of the Administrator. The Administrator
certifies to the Sub-Administrator that this Agreement has been duly authorized
by the Administrator and, when executed and delivered by the Administrator, will
constitute a legal, valid and binding obligation of the Administrator,
enforceable against the Administrator in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
ARTICLE 11. Entire Agreement; Amendments. This Agreement constitutes the
entire agreement between the parties hereto and supersedes any prior agreement,
draft or proposal with respect to the subject matter hereof. This Agreement or
any part hereof may be changed or waived only by an instrument in writing signed
by the party against which enforcement of such change or waiver is sought.
ARTICLE 12. Assignment. This Agreement shall not be assignable by either
party without the prior written consent of the other party.
ARTICLE 13. Waiver. Any term or provision of this Agreement may be waived
at any time by the party entitled to the benefit thereof by written instrument
executed by such party. No failure of either party hereto to exercise any power
or right granted hereunder, or to insist upon strict compliance with any
obligation hereunder, and no custom or practice of the parties with regard to
the terms of performance hereof, will constitute a waiver of the rights of such
party to demand full and exact compliance with the terms of this Agreement.
ARTICLE 14. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or certified
mail, federal express (or substantially similar delivery service), postage
prepaid, addressed by the party giving notice to the other party at the last
address furnished by the other party to the party giving notice: if to
Administrator, at 000 Xxxxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxx 00000; and if to
the Sub-Administrator at 000 Xxxxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxx 00000.
ARTICLE 15. Force Majeure. No breach of any obligation of a party to this
Agreement will constitute an event of default or breach to the extent it arises
out of a cause, existing or future, that is beyond the control and without
negligence of the party otherwise chargeable with breach or default, including
without limitation: work action or strike; lockout or other labor dispute;
flood; war; riot; theft; earthquake or natural disaster. Either party desiring
to rely upon any of the foregoing as an excuse for default or breach will, when
the cause arises, give to the other party prompt notice of the facts which
constitute such cause; and, when the cause ceases to exist, give prompt notice
thereof to the other party.
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ARTICLE 16. Equipment Failures. In the event of equipment failures beyond
the Sub-Administrator's control, the Sub-Administrator shall, at no additional
expense to Administrator, take reasonable and prompt steps to minimize service
interruptions but shall have no liability with respect thereto. The
Administrator shall develop and maintain a plan for recovery from equipment
failures which may include contractual arrangements with appropriate parties
making reasonable provision for emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
ARTICLE 17. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 18. Headings. All Article headings contained in this Agreement are
for convenience of reference only, do not form a part of this Agreement and will
not affect in any way the meaning or interpretation of this Agreement. Words
used herein, regardless of the number and gender specifically used, will be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the contract requires.
ARTICLE 19. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Ohio and the applicable provisions of the 1940
Act. To the extent that the applicable laws of the State of Ohio, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
ARTICLE 20. Multiple Originals. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 21. Binding Agreement. This Agreement, and the rights and
obligations of the parties hereunder, shall be binding on, and inure to the
benefit of, the parties and their respective successors and assigns.
ARTICLE 22. Severability. If any part, term or provision of this Agreement
is held to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
TOUCHSTONE ADVISORS, INC.
By: /s/Xxxxx X. Xxxxx
---------------------
Name: Xxxxx X. Xxxxx
Title: President
INTEGRATED FUND SERVICES, INC.
By: /s/Xxx X. Xxxxxx
---------------------
Name: Xxx X. Xxxxxx
Title: President
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SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
DATED AS OF MARCH 1, 2006
BETWEEN
TOUCHSTONE ADVISORS, INC.
AND
INTEGRATED FUND SERVICES, INC.
Fees: Pursuant to Article 4, Administrator shall pay the Sub-Administrator
a fee at the following annual rate:
Asset Based Fee
The asset based fee will be calculated based on the daily net assets
for all of the Portfolios in the Trust. The asset based fee due to
Sub-Administrator will be deducted and paid to the Sub-Administrator
from the Administrator's monthly fee. The daily net asset fee is as
follows:
.02% of average net daily assets
Term: This Agreement shall become effective on March 1, 2006 and shall
be subject to the provisions under Article 5.
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SCHEDULE B
TO THE SUB-ADMINISTRATION AGREEMENT
DATED AS OF MARCH 1, 2006
BETWEEN
TOUCHSTONE ADVISORS, INC.
AND
INTEGRATED FUND SERVICES, INC.
LIST OF SERVICES
o Review and monitor service levels of other service providers to the
Trusts.
o Review and monitor expense accrual budgets for each Trust and provide
input on adjustments as required.
o Prepare and effect regulatory filings for each Trust as required.
o Monitor Fidelity Bond insurance coverage.
o Prepare and distribute materials for Board meetings.
o Work with the Administrator to resolve any daily processing issues that
may arise.
|X| Fund Accounting
o NAV generation
o Cash balancing
|X| Transfer Agent
o Shareholder trading activity
o Cash reconciliation
|X| Custody
o Securities settlement
o Provide consultation on workflow consistencies and efficiencies among
existing service providers.
o Review daily reports generated by existing service providers for
reasonableness.
o Perform other duties as requested by the Administrator.
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