EXHIBIT H(13)
COMPLIANCE SERVICES AGREEMENT
AGREEMENT effective as of the 18th day of August, 2004, between
Performance Funds Trust, a Delaware business Trust having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and BISYS FUND SERVICES
OHIO, INC. ("BISYS"), an Ohio corporation having its principal place of business
at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Trust is a registered investment company, and will become
subject to the requirements of Rule 38a-1 under the Investment Company Act of
1940 ("▇▇▇ ▇▇▇▇ ▇▇▇"), which requires each registered investment company to
adopt policies and procedures that are reasonably designed to prevent it from
violating the federal securities laws;
WHEREAS, BISYS performs certain management and administration services
for the Trust under an administration agreement between BISYS and the Trust
dated December 1, 2003 (the "Administration Agreement");
WHEREAS, BISYS offers compliance services through its ComplianceEDGE
program, which may be tailored to create a compliance program for the Trust;
WHEREAS, the Trust desires that BISYS provide its ComplianceEDGE
program services in connection with the institution of a more comprehensive
compliance program for the Trust;
WHEREAS, BISYS is willing to perform the services enumerated in this
Agreement on the terms and conditions set forth in this Agreement; and
WHEREAS, BISYS and the Trust wish to enter into this Agreement in order
to set forth the terms under which BISYS will perform the services enumerated
herein on behalf of the Trust, and to supplement and clarify certain provisions
of the Administration Agreement.
NOW, THEREFORE, in consideration of the covenants herein contained, the
Trust and BISYS hereby agree as follows:
1. Compliance Services.
(a) The parties mutually agree to coordinate and cooperate in
connection with the creation and implementation of written compliance polices
and procedures which, in the aggregate, shall be deemed by the Board of Trustees
of the Trust (the "Board") to be reasonably designed to prevent the Trust from
violating the provisions of the Federal securities laws applicable to the Trust
(the "Applicable Securities Laws"), as required under Rule 38a-1 under the ▇▇▇▇
▇▇▇.
(b) The Trust agrees to provide BISYS with copies of its current
compliance policies and procedures and furnish (and cause its investment
advisers and other service
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providers to furnish) all such additional information as may reasonably relate
to the design and implementation of the Fund Compliance Program. Such additional
information shall include compliance and related information pertaining to the
investment adviser and any other service providers to the Trust other than
BISYS. BISYS shall review and evaluate all such existing information and
coordinate the creation of a written document or documents designed to embody
the overall fund compliance program and the oversight of the compliance programs
of the service providers to the Trust as provided in Rule 38a-1 ("Service
Providers"). Drafts shall be prepared by BISYS in consultation with the Trust
and its counsel and shall be submitted for review and comment. Upon approval by
the Board, such documents or documents shall become effective as the fund
compliance program required under Rule 38a-1 (as amended from time to time upon
the approval of the Board, the "Fund Compliance Program").
(c) BISYS will provide the following services in relation to the Fund
Compliance Program during the term of this Agreement: (i) make an individual
available to serve as the Trust's Chief Compliance Officer to administer the
Fund Compliance Program, to the extent provided in Section 2(a) below; (ii)
assist the Trust in developing and implementing the written policies and
procedures comprising the Fund Compliance Program, as contemplated above and as
may be necessary in connection with amendments from time to time; (iii) assist
the Trust in the preparation and evaluation of the results of annual reviews of
the compliance policies and procedures of Service Providers; (iv) provide
support services to the Chief Compliance Officer of the Trust, including support
for conducting an annual review of the Fund Compliance Program; (v) assist in
developing standards for reports to the Board by BISYS and other Service
Providers; (vi) assist in developing standards for reports to the Board by the
Chief Compliance Officer; and (vi) assist in preparing or providing
documentation for the Board to make findings and conduct reviews pertaining to
the Fund Compliance Program and compliance programs and related policies and
procedures of Service Providers.
2. Provision of Executive Officers
(a) Provision of Chief Compliance Officer. At the election of the
Trust, in connection with the compliance services to be rendered by BISYS
pursuant to Section 1 above, and subject to the provisions of this Section 2(a)
and to Section 2(d) below, BISYS agrees to make available to the Trust a person
to serve as the Trust's Chief Compliance Officer responsible for administering
the Fund Compliance Program as provided in of Rule 38a-1 (the "Chief Compliance
Officer"). BISYS' obligation in this regard shall be met by providing an
appropriately qualified employee or agent of BISYS (or its affiliates) who, in
the exercise of his or her duties to the Trust, shall act in good faith and in a
manner reasonably believed by him or her to be in the best interests of the
Trust. In the event that the employment relationship between BISYS and any
person made available by BISYS to serve as Chief Compliance Officer terminates
for any reason, BISYS shall have no further responsibility to provide the
services of that particular person. In such event, upon the request of the
Trust, BISYS will employ reasonable good faith efforts to make another person
available to serve as the Chief Compliance Officer. In addition, should the
Trust no longer require the services of the
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Chief Compliance Officer as contemplated by this Agreement, the other services
enumerated in Section 1 (c) shall continue in effect for the remaining term of
the contract, but BISYS' obligation shall be to provide the resources and
support that is reasonably necessary for a Chief Compliance Officer (who is not
provided by BISYS) to fulfill any of the services set forth in this Section that
are not fulfilled by BISYS.
In connection with BISYS' commitment to make an appropriately qualified
person available to serve as Chief Compliance Officer, BISYS shall pay a level
of total compensation to such person as is consistent with BISYS' compensation
of employees having similar duties, similar seniority, and working at the same
or similar geographical location. BISYS shall not be obligated to pay any
compensation to a Chief Compliance Officer which exceeds that set forth in the
previous sentence.
The Trust will provide copies of the Fund Compliance Program, related
policies and procedures, and all other books and records of the Trust as the
Chief Compliance Officer deems necessary or desirable in order to carry out his
or her duties hereunder on behalf of the Trust. The Trust shall cooperate with
the Chief Compliance Officer and ensure the cooperation of the investment
adviser, the custodian and any other Service Providers to the Trust, as well as
Trust counsel, Independent Trustee counsel and the Trust's independent
accountants (collectively, the "Other Providers"), and assist the Chief
Compliance Officer and BISYS in preparing, implementing and carrying out the
duties of the Chief Compliance Officer under the Fund Compliance Program and
Rule 38a-1. In addition, the Trust shall provide the Chief Compliance Officer
with appropriate access to the executive officers and trustees of the Trust, and
to representatives of and to any records, files and other documentation prepared
by, Service Providers and Other Providers, which are or may be related to the
Fund Compliance Program.
Each party agrees to provide promptly to the other party (and to the
Chief Compliance Officer), upon request, copies of other records and
documentation relating to the compliance by such party with Applicable
Securities Laws (as related to the Fund Compliance Program of the Trust), and
each party also agrees otherwise to assist the other party (and the Chief
Compliance Officer) in complying with the requirements of the Fund Compliance
Program and Applicable Securities Laws.
BISYS agrees to provide the services set forth in Section 1 pertaining
to the Fund Compliance Program, whether or not the person serving as Chief
Compliance Officer is an employee or agent of BISYS.
(b) AML Compliance Officer. It is understood that the Trust is a
financial institution subject to the law entitled Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism ("U.S.A. Patriot") Act of 2001 and the Bank Secrecy Act (collectively,
the "AML Acts"), and is required to comply with the AML Acts and applicable
regulations thereunder (collectively, the "Applicable AML Laws").
Subject to the provisions of this Section 2(b) and Section 2(c) below,
BISYS agrees to make available to the Trust a person to serve as the Trust's
anti-money
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laundering compliance officer ("AML Compliance Officer"). BISYS' obligation in
this regard shall be met by providing an appropriately qualified employee or
agent of BISYS (or its affiliates) who, in the exercise of his or her duties to
the Trust, shall act in good faith and in a manner reasonably believed by him or
her to be in the best interests of the Trust. Subject to the relevant terms of
the transfer agency or other services agreement under which BISYS provides
certain anti-money laundering services to the Trust, the AML Compliance Officer
will assist the Trust in operating the written anti-money laundering program
adopted by the Board of the Trust and provided to BISYS (the "AML Program"), and
shall perform the duties assigned to the AML Compliance Officer which are set
forth in the AML Program.
The Trust shall provide copies of its anti-money laundering compliance
reports and such other books and records of the Trust as the AML Compliance
Officer deems necessary or desirable in order to carry out his or her duties
hereunder on behalf of the Trust. Each party also agrees to provide promptly to
the other party (and to the AML Compliance Officer), upon request, copies of
other records and documentation relating to the compliance by such party with
Applicable AML Laws (in relation to the Trust), and each party also agrees
otherwise to assist the other party (and the AML Compliance Officer) in
complying with the requirements of the AML Program and Applicable AML Laws. Each
party agrees to retain a copy of all documents and records prepared, maintained
or obtained by it relating to shareholders and transactions for a period of at
least five (5) years from the termination of the relationship with each such
shareholder or the date of execution of each such transaction. The foregoing is
not intended to limit any obligation to retain any specified records for any
other period that may be specified in the AML Program or under Applicable AML
Laws.
(c) Additional Provisions Concerning Executive Officers. It is mutually
agreed and acknowledged by the parties that the Chief Compliance Officer and the
AML Compliance Officer contemplated under the provisions of this Section 2 of
this Agreement will be executive officers of the Trust ("Executive Officers").
The provisions of Sections 2(a) - (b) are subject to the internal policies of
BISYS concerning the activities of its employees and their service as officers
of funds (the "BISYS Policies"), a copy of which shall be provided to the Trust
upon request.
The Trust shall provide coverage to each Executive Officer under its
directors and officers liability policy that is consistent with coverage
applicable to the other officers holding positions of executive management.
In appropriate circumstances, each Executive Officer shall have the
discretion to resign from his or her position, in the event that he or she
reasonably determines that there has been or is likely to be (a) a material
deviation from the BISYS Policies, (b) an ongoing pattern of conduct involving
the continuous or repeated violation of Applicable AML Laws or Applicable
Securities Laws, or (c) a material deviation by the Trust from the terms of this
Agreement governing the services of such Executive Officer that is not caused by
such Executive Officer or BISYS. In addition, each Executive Officer shall have
reasonable discretion to resign from his or her position in the event that he or
she determines that he or she has not received sufficient cooperation from the
Trust or its
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Other Providers to make an informed determination regarding any of the matters
listed above.
Each Executive Officer may, and the Trust shall, promptly notify BISYS
of any issue, matter or event that would be reasonably likely to result in any
claim by the Trust, one or more Trust shareholder(s) or any third party which
involves an allegation that any Executive Officer failed to exercise his or her
obligations to the Trust in a manner consistent with applicable laws (including
but not limited to any claim that a Report failed to meet the standards of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and other applicable laws).
Notwithstanding any provision of the Administration Agreement or any
other agreement or instrument that expressly or by implication provides to the
contrary, (a) it is expressly agreed and acknowledged that BISYS cannot ensure
that the Trust complies with Applicable AML Laws or the Applicable Securities
Laws, and (b) whenever an employee or agent of BISYS serves as an Executive
Officer of the Trust, as long as such Executive Officer acts in good faith and
in a manner reasonably believed to be in the best interests of the Trust (and
would not otherwise be liable to the Trust by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office), the Trust shall indemnify the Executive Officer
and BISYS and hold the Executive Officer and BISYS harmless from any loss,
liability, expenses (including reasonable attorneys fees) and damages incurred
by them arising out of or related to the service of such employee or agent of
BISYS as an Executive Officer of the Trust.
3. Fees and Expenses
(a) BISYS shall be entitled to receive from the Trust the amounts set
forth on Schedule A hereto, reflecting the amounts charged by BISYS for the
performance of services under this Agreement. The fees hereunder shall be in
addition to all fees and expenses charged by BISYS under the Administration
Agreement.
(b) In addition to paying BISYS the fees set forth in Schedule A, the
Trust agrees to reimburse BISYS for all of its actual out-of-pocket expenses
reasonably incurred in providing services under this Agreement, including but
not limited to the following:
(i) All out of pocket costs incurred in connection with BISYS'
provision of Executive Officers to the Trust in connection
with compliance services, including travel costs for attending
Board meetings, conducting due diligence of Service Providers,
and attending training conferences and seminars (plus the
costs of training);
(ii) If applicable initially or from time to time hereafter,
upon the approval of the Trust, costs to recruit a Chief
Compliance Officer; and
(iii) The costs incurred by BISYS in connection with the Fund
Compliance Program, including those incurred by or with
respect to Other
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Providers, in providing reports to the Chief Compliance
Officer under the Fund Compliance Program.
(c) All rights of compensation under this Agreement for services
performed and for expense reimbursement shall survive the termination of this
Agreement.
4. Information to be Furnished by the Trust
(a) The Trust has furnished or shall promptly furnish to BISYS copies
of the following, as amended and current as of the date of this Agreement:
(i) The Fund Compliance Program or the various policies
and procedures of the Trust that have been adopted
through the date hereof which pertain to compliance
matters that are required to be covered by the Fund
Compliance Program, including the compliance programs
of Service Providers other than BISYS, as necessary
under Rule 38a-1 for inclusion in the Fund Compliance
Program; and
(ii) The Trust Anti-Money Laundering Policy.
(b) The Trust shall furnish BISYS written copies of any amendments to,
or changes in, any of the items referred to in Section 4(a) hereof, forthwith
upon such amendments or changes becoming effective. In addition, the Trust
agrees that no amendments will be made to the AML Program or the Fund Compliance
Program which might have the effect of changing the procedures employed by BISYS
in providing the services agreed to hereunder or which amendment might affect
the duties of BISYS hereunder unless such changes are required by law or the
Trust first obtains BISYS's approval of such amendments or changes, which
approval shall not be withheld unreasonably.
(c) BISYS may rely on all documents furnished to it by the Trust and
its agents in connection with the services to be provided under this Agreement,
including any amendments to or changes in any of the items to be provided by the
Trust pursuant to Section 4(a), and shall be entitled to indemnification in
accordance with Section 9 below with regard to such reliance.
The Trust represents and warrants that (i) the provision of certain
officers of the Trust by BISYS, as provided in Section 2 of this Agreement, has
been approved by the Board, and (ii) each of the individuals nominated by BISYS
as the Trust's AML Compliance Officer or Chief Compliance Officer has been
approved and appointed as an officer of the Trust by the Board.
5. Term and Termination
(a) The compliance services to be rendered by BISYS under this
Agreement (the "Compliance Services") shall commence upon the date of this
Agreement and shall
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continue in effect for one (1) year, from the date hereof, unless earlier
terminated pursuant to the terms of this Agreement. During such one year term,
the Compliance Services may be terminated upon thirty (30) days notice in the
event there is "cause," as defined in the Administration Agreement. Following
the one year anniversary of the date of this Agreement, the Compliance Services
may be terminated by either party for "cause," as provided above, or for any or
no reason by providing the other party with ninety (90) days written notice of
termination.
(b) The obligations of BISYS set forth in Section 2(b) above shall
terminate automatically upon any termination of the transfer agency agreement
under which BISYS provides transfer agency services to the Trust.
(c) Notwithstanding anything in this Agreement to the contrary,
including but not limited to the provisions of Section 5(a), all of the
obligations of BISYS hereunder shall terminate automatically upon any
termination of the Administration Agreement.
6. Notice
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Trust, to ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman of
the Audit Committee, at ▇▇▇▇▇▇▇▇ College, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇; with a copy Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, Attn: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, at One ▇▇▇▇▇ Square, 18th and ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇; and if to BISYS, at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇; Attn:
President, or at such other address as such party may from time to time specify
in writing to the other party pursuant to this Section.
7. Governing Law and Matters Relating to the Trust as a Massachusetts
Business Trust
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, as amended, the latter
shall control. 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.
8. Representations and Warranties
Each party represents and warrants to the other that this Agreement has
been duly authorized and, when executed and delivered by it, will constitute a
legal, valid and
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binding obligation of it, enforceable against it 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.
9. Miscellaneous
(a) Except as expressly provided in this Agreement, the terms of the
Administration Agreement shall apply to the services rendered under this
Agreement and the general provisions thereof shall be used on a residual basis
to construe any issues arising under this Agreement that are not addressed by
the express terms of this Agreement. Except as provided in this Agreement, the
provisions of the Administration Agreement remain in full force and effect
(including, without limitation, the term of the Agreement).
(b) The provisions set forth in this Agreement supersede all prior
negotiations, understandings and agreements bearing upon the subject matter
covered herein, including any conflicting provisions of the Administration
Agreement.
(c) No amendment or modification to this Agreement shall be valid
unless made in writing and executed by both parties hereto.
(d) Paragraph headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(e) This Agreement may be executed in counterparts, each of which shall
be an original but all of which, taken together, shall constitute one and the
same agreement.
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* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
PERFORMANCE FUNDS TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
BISYS FUND SERVICES OHIO, INC.
By: /s/ ▇▇▇▇ Naddeff
-------------------------------
Name: ▇▇▇▇ Naddeff
Title: President
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SCHEDULE A
TO COMPLIANCE SERVICES AGREEMENT
DATED AUGUST 18, 2004
COMPLIANCE SERVICES FEES
Compliance Services provided under this Agreement:
$ 50,000 one-time implementation fee*
and $100,000 annual fee
* One half of the implementation fee is due upon the execution of this
Agreement. The balance shall be paid upon the initial approval by the Board of
the Fund Compliance Program prepared by BISYS, as contemplated in Section 1(b)
above.
All recurring fees set forth above shall be subject to adjustment annually
commencing on the one-year anniversary of the date of this Agreement by the
percentage increase in consumer prices for services as measured by the United
States Consumer Price Index entitled "All Services Less Rent of Shelter" or a
similar index should such index no longer be published.
OUT OF POCKET EXPENSES
Out of pocket expenses are not included in the above fees and shall also be paid
to BISYS in accordance with the provisions of this Agreement.
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