EXHIBIT 99(H)
MASTER SERVICES AGREEMENT
AGREEMENT made as of the 22nd day of June, 2005, between BISYS FUND
SERVICES OHIO, INC. ("BISYS"), an Ohio corporation having a place of business at
0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 and THE XXXXXXX, XXXXX FUNDS (the
"Trust") a Delaware statutory trust, having a place of business at 00000 Xxxxx
Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
WHEREAS, the Trust desires that BISYS perform administration, fund
accounting and transfer agency services for the investment portfolios of the
Trust listed on Schedule A hereto, as well as such additional investment
portfolios as hereafter may be established from time to time by the Trust
(collectively, the "Funds") and;
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the Trust and BISYS hereby agree as follows:
1. Retention of BISYS.
The Trust hereby retains BISYS to act as administrator, fund accountant
and transfer agent of the Trust, and to furnish the Trust with administrative,
fund accounting and transfer agency services as set forth in Sections 2(a)
through (c) below. In addition, the Trust hereby appoints BISYS as the non-bank
trustee/custodian to the XXX Accounts of the Trust (as defined in Section 2(d)
below) and to provide the non-bank trustee/custodian services as set forth in
Section 2(d) below. BISYS and the Trust hereby agree that BISYS will perform the
services upon the terms set forth in this Agreement and the Schedules hereto.
BISYS shall, for all purposes herein, be deemed to be an independent
contractor and, except as otherwise expressly provided or authorized, shall have
no authority to act for or represent the Trust or Funds in any way, and shall
not be deemed an agent of the Trust or any Funds.
2. Services.
(a) Administration Services. BISYS shall perform the
administrative services as set forth in Schedule B and, on
behalf of the Trust, shall investigate, assist in the
selection of and conduct relations with, custodians,
depositories, accountants, legal counsel, underwriters,
brokers and dealers, corporate fiduciaries, insurers, banks
and persons in any other capacity deemed to be necessary or
desirable for the Trust's operations. BISYS shall provide the
Board of Trustees of the Trust (the "Board") with such reports
regarding the Fund's investment performance as it may
reasonably request, but shall have no responsibility for
supervising the performance by any
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investment adviser or sub-adviser of its responsibilities.
BISYS shall perform such other administration services, and
furnish such reports, for the Trust and each of the Funds that
are mutually agreed upon by the parties from time to time, for
which the Trust will pay BISYS the amounts agreed upon between
them.
(b) Fund Accounting Services. BISYS shall perform for the Trust
the fund accounting services as set forth in Schedule C
hereto. BISYS shall also perform such special accounting
services, and furnish such reports, for the Trust and the
Funds to the extent agreed upon by the parties from time to
time, for which the Trust will pay BISYS the amounts agreed
upon between them.
(c) Transfer Agency Services. BISYS shall perform for the Trust
the transfer agency services as set forth in Schedule D
hereto. BISYS also agrees to perform for the Trust such
special transfer agency services, and furnish such reports,
for the Trust and the Funds to the extent agreed upon by the
parties from time to time, for which the Trust will pay BISYS
the amounts agreed upon between them.
(d) Trustee/Custodian Services.
(i) BISYS Fund Services, Inc. ("BFI"), an affiliate of
BISYS, has obtained a non-bank Trustee/Custodian Notice
of Approval letter from the Treasury Department,
Internal Revenue Service, dated December 31, 2003. BFI,
together with BISYS, has the knowledge and capabilities
to act as a passive non-bank trustee/custodian of
Traditional XXX, Xxxx XXX, Xxxxxxxxx Education Savings,
SIMPLE XXX, and 403(b)(7) accounts offered by the Trust
(collectively, "XXX Accounts") BISYS has the knowledge
and capabilities to perform the services undertaken by
BISYS under Schedule D-1.
(ii) BISYS agrees that BFI shall act as a non-bank
trustee/custodian for the XXX Accounts, and BISYS shall
perform the services undertaken by BISYS under Schedule
D-1, but only as long as (x) BISYS continues to act as
transfer agent to the Funds and retains all legal
qualifications to act as such and (y) BFI retains all
legal qualifications to act as non-bank
trustee/custodian. In this capacity, BFI will act only
as a passive non-bank trustee (within the meaning of
Section 1.408-2(e)(6)(i)(A) of the IRS regulations), and
neither BFI nor BISYS will have any discretion to direct
investments within any of the XXX Accounts.
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(iii) In the event that BFI ceases to act as non-bank
trustee/custodian, whether due to loss of legal
qualifications or otherwise, but BISYS continues to act
as transfer agent, BISYS shall no longer be entitled to
the entire share of the Custodial Fee, as set forth in
Schedule E hereto, but shall be entitled to a
proportionate share of the Custodial Fee taking into
account the period of time during such year that BFI was
the non-bank trustee/custodian for the XXX Accounts and
further taking into account the services (for which the
parties acknowledge an appropriate allocation of a
minimum of $12 to $13 per XXX Account) that BISYS
continues to perform with respect to the XXX Accounts
pursuant to Schedule D-1.
(iv) In the event that BFI ceases to act as non-bank
trustee/custodian whether due to loss of legal
qualifications or otherwise, and BISYS ceases to act as
transfer agent, BISYS shall be entitled to a
proportionate share of the Custodial Fee based on the
portion of the year for which BFI and BISYS provide
trustee/custodian and transfer agent services,
respectively.
(v) BISYS and BFI shall have the right to review and comment
upon the plan agreements and other documentation
relating to or affecting its services hereunder, and
shall have no liability for any modifications made
thereto without its express written consent. BISYS and
BFI may rely upon the most recent versions of the plan
agreement and such other documentation provided to it,
and shall render its services hereunder in a manner
consistent with the terms of such plan agreement and
such other documentation.
(vi) In relation to the XXX Accounts, BISYS will perform the
functions described in Schedule D-1 hereto.
BISYS shall provide the Trust with all necessary office space, equipment,
personnel, compensation and facilities (including facilities for shareholders'
and Board meetings) for handling the affairs of the Trust and Funds and such
other services as BISYS shall, from time to time, reasonably determine to be
necessary to perform BISYS' obligations under this Agreement or which BISYS and
the Trust shall mutually agree upon. In addition, at the request of the Board,
BISYS shall prepare and present reports to the Board concerning the performance
of BISYS' obligations hereunder.
BISYS shall perform such other services for the Trust or the Funds that
are mutually agreed upon by the parties from time to time, for which the Trust
will pay BISYS the amounts agreed upon between them. Except as explicitly set
forth herein, BISYS shall only perform additional services as are provided on an
amendment to this
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Agreement or to schedules hereto, in consideration of such fees as the parties
hereto agree.
BISYS may utilize agents in its performance of its services and, with
prior notice to the Trust, may appoint in writing other parties qualified to
perform transfer agency, administration or fund accounting services
(individually, a "Sub-Agent") to carry out some or all of its responsibilities
under this Agreement; provided, however, that (i) the Board's approval shall be
required to establish an arrangement in which a Sub-Agent acts as
sub-administrator, sub-fund accountant, or sub-transfer agent; (ii) any agent
(including any Sub-Agent) retained by BISYS shall be the agent of BISYS and not
the agent of the Trust, and that BISYS shall be fully responsible for the acts
of such agent (or Sub-Agent) and shall not be relieved of any of its
responsibilities hereunder by the appointment of an agent (or Sub-Agent); and
(iii) any fees or expenses of any Sub-Agents shall be borne exclusively by
BISYS, except to the extent such expenses would be reimbursable hereunder if
incurred by BISYS. In the event that a Sub-Agent is retained by the Trust
(and/or by BISYS at the request or instruction of the Trust), the foregoing
shall not apply to the extent it is inconsistent with any written agreement(s)
entered into by the parties with respect thereto.
3. Allocation of Charges and Expenses.
BISYS shall furnish at its own expense the executive, supervisory and
clerical personnel necessary to perform its obligations under this Agreement.
BISYS shall also provide all items which it is obligated to provide under this
Agreement, and shall pay all compensation, if any, of officers of the Trust and
Trustees (as defined below) of the Trust who are affiliated persons of BISYS or
any affiliated entity of BISYS; provided, however, that unless otherwise
specifically provided, BISYS shall not be obligated to pay the compensation of
any employee or agent of the Trust (who is not a BISYS employee) retained by the
Board to perform services on behalf of the Trust.
The Trust assumes and shall pay or cause to be paid all other expenses of
the Trust not otherwise allocated herein, including, without limitation,
organization costs, taxes, expenses for Trust legal and auditing services, the
expenses of preparing (including typesetting), printing and mailing reports,
prospectuses, statements of additional information, proxy solicitation material
and notices to existing Shareholders (as defined below), all expenses incurred
in connection with issuing and redeeming shares of beneficial interest in the
Trust ("Shares"), the cost of custodial services, the cost of initial and
ongoing registration of the Shares under Federal and state securities laws, fees
and out-of-pocket expenses of Trustees who are not affiliated persons of BISYS
or any affiliate of BISYS (fees for other "interested Trustees" may be paid by
parties other than the Trust), insurance, interest, brokerage costs, litigation
and other extraordinary or nonrecurring expenses, and all fees and charges of
investment advisers.
4. Fees and Expenses.
(a) The Trust shall pay BISYS for the services to be provided by
BISYS under this Agreement in accordance with, and in the
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manner set forth in, Schedule E. Fees for any additional
services to be provided by BISYS pursuant to an amendment to
any of Schedules B, C, D or D-1 shall be subject to mutual
agreement at the time such amendment is proposed.
(b) In addition to paying BISYS the fees set forth in Schedule E,
the Trust agrees to reimburse BISYS for all of its actual
out-of-pocket third party expenses (e.g., excluding internal
overhead, administrative and compensation expenses), excluding
fees and expenses of Sub-Agents (except to the extent such
expenses would be reimbursable hereunder if incurred by
BISYS), reasonably incurred in providing services hereunder,
including:
(i) All direct telephone, telephone transmission and
telecopy or other electronic transmission expenses
incurred in communication with the Trust or the Trust's
investment adviser or custodian, dealers, shareholders
or others as required for BISYS to perform the services
to be provided hereunder;
(ii) The cost of microfilm or microfiche of records or other
electronic storage of Trust records and other materials;
(iii) All printing, production (including graphics support,
copying, and binding) and distribution expenses incurred
in relation to Board meeting materials;
(iv) All freight and other delivery and bonding charges
incurred in delivering materials to and from the Trust,
its investment advisers and custodian;
(v) Check and payment processing fees;
(vi) Fulfillment;
(vii) XXX custody and other related fees;
(viii) NSCC and related costs;
(ix) Sales taxes;
(x) Costs of tax forms;
(xi) Costs of shareholder correspondence;
(xii) Costs of tax data services;
(xiii) Costs of rating agency services;
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(xiv) All out of pocket third party costs, excluding fees and
expenses of Sub-Agents, (except to the extent such
expenses would be reimbursable hereunder if incurred by
BISYS), incurred by Trust officers affiliated with BISYS
in connection with compliance services, including
without limitation, travel and lodging expenses incurred
by officers and employees of BISYS in connection with
attendance at (x) Board meetings and (y) other meeting
for which such attendance is requested by the Trust; and
(xv) Any expenses incurred at the written direction of an
officer of the Trust; provided however, that such
officer is not an officer or employee of BISYS or its
affiliates.
(c) In addition, BISYS shall be entitled to receive the following
miscellaneous fees and charges:
(i) Ad hoc reporting fees billed, when mutually agreed upon,
according to applicable rate schedules;
(ii) Fees for pricing information used in connection with
pricing the securities and other investments of each
Fund, provided that the Fund shall not be charged an
amount greater than the amount the Fund would be charged
if it obtained the information directly from the
relevant vendor or vendors, including costs incurred by
BISYS to Fair Value Information Vendors (as defined on
Schedule C) with respect to the provision of fair value
pricing information to BISYS for use in valuing the
portfolio holdings of a specific Fund or Funds that the
Trust designates as being subject to fair value
determinations and for which services are to be provided
by BISYS hereunder (such costs shall be incurred at the
discounted group rate made available to BISYS clients,
if applicable);
(iii) A fee for managing and overseeing the report, print and
mail functions performed by BISYS using third-party
vendors; not to exceed $.04 per image for statements and
$.03 per image for confirmations; fees for programming
in connection with creating or changing the forms of
statements, billed at a mutually agreed upon rate; and
costs for postage, couriers, stock computer paper,
computer disks, statements, labels, envelopes, checks,
reports, letters, tax forms, proxies, notices or other
forms of printed material (including the costs of
preparing and printing all printed materials) which
shall be required for the performance of the services to
be provided hereunder;
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(iv) Fees and expenses associated with providing the "AML
Services," as defined in Section 23, and as set forth in
further detail on Schedule E;
(v) System development fees, billed at mutually agreed upon
rate, and all systems-related expenses, as agreed upon
in advance, associated with the provision of special
reports and services;
(vi) Fees for development of any custom interfaces, billed at
a mutually agreed upon rate; and
(vii) Interactive Voice Response System fees, charged
according to BISYS' standard rate schedule, and
applicable to the level of service (e.g., basic,
transaction, premium) selected.
All rights of compensation under this Agreement for services performed and
for expense reimbursement and for payment of miscellaneous fees and charges
incurred through the date of termination of this Agreement (and thereafter as
provided in Section 6 below, if applicable) shall survive the termination of
this Agreement.
5. Effective Date.
This Agreement shall become effective as of the date of the conversion of
the Funds to BISYS' systems, which shall take place on or about June 25, 2005
(the "Effective Date").
6. Term.
This Agreement shall continue in effect for a period of three (3) years,
until June 30, 2008 (the "Initial Term"). Thereafter, unless otherwise
terminated as provided herein, this Agreement shall be renewed automatically for
successive one year periods ("Rollover Periods"). This Agreement may be
terminated only (i) by provision of a written notice of nonrenewal at least
ninety (90) days prior to the end of the Initial Term or any Rollover Period, as
the case may be, (ii) by mutual agreement of the parties, or (iii) for "Cause,"
as defined below, upon the provision of thirty (30) days advance written notice
by the party alleging Cause, other than in the case of a material breach of this
Agreement, in which case no additional written notice is required.
For purposes of this Section 6, "Cause" shall mean (a) a material breach
of this Agreement by the party receiving notice of termination of this Agreement
(the "Terminated Party") that has not been remedied for sixty (60) days (or such
longer period of time if required and the Terminated Party is diligently
pursuing a cure) following written notice of such breach from the non-breaching
party; (b) a final, unappealable judicial, regulatory or administrative ruling,
order or settlement in which the Terminated Party has been found guilty of, or
has consented to a finding of, criminal or unethical behavior in the conduct of
its business; or (c) financial difficulties on the part of the Terminated Party
which are evidenced by the authorization or commencement of, or
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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, provided, however, that
in the event of an involuntary case the party to be terminated shall not be
terminated if such party diligently contests the case within thirty (30) days of
service of notice of the filing of such case and for so long as such diligent
contest continues.
Notwithstanding the foregoing termination provisions, following any such
termination, in the event that BISYS in fact continues to perform any one or
more of the services contemplated by this Agreement (or any Schedule or exhibit
hereto) with the written consent of the Trust, the provisions of this Agreement,
including without limitation the provisions relating to the services being
performed and those dealing with compensation for such services and
indemnification, shall continue in full force and effect. Fees and out-of-pocket
expenses incurred by BISYS but unpaid by the Trust upon such termination shall
be immediately due and payable upon and notwithstanding such termination. BISYS
shall be entitled to collect from the Trust, in addition to the fees and
expenses provided in the Sections 3 and 4 of this Agreement, the amount of all
of BISYS' reasonable cash disbursements in connection with BISYS' activities in
effecting such termination, including without limitation, the delivery to the
Trust, its investment adviser and/or other parties of the Trust's property,
records, instruments and documents.
If, for any reason other than (i) nonrenewal, (ii) mutual agreement of the
parties or (iii) "Cause" for termination of BISYS hereunder, BISYS' services are
terminated by the Trust hereunder, BISYS is replaced by the Trust as service
provider, or if a third party is added by the Trust to perform all or a part of
the services provided by BISYS under this Agreement (excluding any Sub-Agent
appointed as provided in Section 2 hereof), then the Trust shall make a one-time
cash payment, in consideration of the fee structure and services to be provided
under this Agreement, and not as a penalty, to BISYS equal to the balance that
would be due BISYS for the services it is no longer providing hereunder during
(x) the next twelve (12) months or (y) if less than twelve (12), the number of
months remaining in the then-current term of this Agreement, assuming for
purposes of the calculation of the one-time payment that the fees that would be
earned by BISYS for each month shall be based upon the average number of
shareholder accounts and fees payable to BISYS monthly during the twelve (12)
months prior to the date that services terminate, BISYS is replaced or a third
party is added.
In the event the Trust or any Fund is merged into another legal entity in
part or in whole pursuant to any form of business reorganization or is
liquidated in part or in whole prior to the expiration of the then-current term
of this Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which BISYS
is not retained to provide services consistent with this Agreement; provided,
however, that this provision shall not be construed to require a payment of
liquidated damages in circumstances where any Fund is merged, reorganized or
liquidated, in whole or in part, due to legitimate economic, regulatory, legal
or marketing reasons (that do not include any attempt to remove BISYS
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as a transfer agent, fund accountant or administrator (or BFI as a named
trustee/custodian to the XXX Accounts) or to reduce the fees due to BISYS
hereunder) and BISYS continues to provide such services with respect to the
resulting Fund and the assets that had been held by the predecessor Fund, even
if the number of accounts diminishes due to such merger, reorganization or
liquidation. The one-time cash payment referenced above shall be due and payable
on the day prior to the first day in which services are terminated, BISYS is
replaced or a third party is added.
The parties further acknowledge and agree that, in the event BISYS'
services are terminated, BISYS is replaced, or a third party is added, as set
forth above, (i) a determination of actual damages incurred by BISYS would be
extremely difficult, and (ii) the liquidated damages provision contained herein
is intended to adequately compensate BISYS for damages incurred and is not
intended to constitute any form of penalty.
7. Standard of Care; Uncontrollable Events; Limitation of Liability.
BISYS shall use reasonable professional diligence in the performance of
services under this Agreement, but shall not be liable to the Trust for any
action taken or omitted by BISYS in the absence of bad faith, willful
misfeasance, negligence or reckless disregard by it of its obligations and
duties. The duties of BISYS shall be confined to those expressly set forth
herein or any amendments or additional services mutually agreed upon by the
parties in writing, and no implied duties are assumed by or may be asserted
against BISYS hereunder.
BISYS shall maintain adequate and reliable computer and other equipment
necessary or appropriate to carry out its obligations under this Agreement. Upon
the Trust's reasonable request, BISYS shall provide supplemental information
concerning the aspects of its disaster recovery and business continuity plan
that are relevant to the services provided hereunder. Notwithstanding the
foregoing or any other provision of this Agreement, BISYS assumes no
responsibility hereunder, and shall not be liable for, any damage, loss of data,
delay or any other loss whatsoever caused by events beyond its reasonable
control. Events beyond BISYS' reasonable control include, without limitation,
force majeure events. Force majeure events include natural disasters, actions or
decrees of governmental bodies, and communication lines failures that are not
the fault of either party. In the event of force majeure, computer or other
equipment failures or other events beyond its reasonable control, BISYS shall
follow applicable procedures in its disaster recovery and business continuity
plan and use all commercially reasonable efforts to minimize any service
interruption.
BISYS shall provide the Trust, at such times as the Trust may reasonably
request, copies of reports rendered by independent public accountants on the
internal controls and procedures of BISYS relating to the services provided by
BISYS under this Agreement.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL THE TRUST AND BISYS, OR THEIR RESPECTIVE AFFILIATES OR ANY OF THEIR
TRUSTEES, DIRECTORS,
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OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR EXEMPLARY, PUNITIVE,
SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR LOST PROFITS, EACH OF
WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH
DAMAGES WERE FORESEEABLE OR WHETHER A PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
8. Legal Advice.
BISYS may notify the Trust if BISYS reasonably determines that BISYS is in
need of the advice of counsel to the Trust with regard to BISYS'
responsibilities and duties pursuant to this Agreement. BISYS may rely upon the
advice of counsel to the Trust; however, this Agreement shall not obligate
counsel to the Trust to render such advice. After so notifying the Trust, if
BISYS does not obtain the advice of counsel to the Trust within a reasonable
period of time, BISYS shall be entitled to seek, receive and act upon advice of
legal counsel of its choosing, at BISYS' expense. BISYS shall in no event be
liable to the Trust or any Fund or any shareholder or beneficial owner of the
Trust for any action reasonably taken in conformity with legal advice rendered
in accordance with this paragraph.
9. Instructions/Certain Procedures, etc.
BISYS shall be protected in acting upon any document that it reasonably
believes to be genuine and to have been signed or presented by the proper person
or persons. BISYS will not be held to have notice of any change of authority of
any officers, employees or agents of the Trust until receipt of actual notice
thereof from the Trust.
Subject to Section 23(b), whenever BISYS is requested or authorized to
take action hereunder pursuant to instructions from a shareholder, or a properly
authorized agent of a shareholder ("shareholder's agent"), concerning an account
in a Fund, BISYS shall be entitled to rely upon any certificate, letter or other
instrument or communication (including electronic mail), reasonably believed by
BISYS to be genuine and to have been properly made, signed or authorized by an
officer or other authorized agent of the Trust or by the shareholder or
shareholder's agent, as the case may be, and shall be entitled to receive as
conclusive proof of any fact or matter required to be ascertained by it
hereunder a certificate signed by an officer of the Trust or any other person
authorized by the Board or by the shareholder or shareholder's agent, as the
case may be.
As to the services to be provided hereunder, BISYS may rely conclusively
upon the terms of the relevant then-current Prospectus and Statement of
Additional Information of the Trust, to the extent that such services are
described therein unless BISYS receives instructions to the contrary in a timely
manner from the Trust.
The parties hereto may amend any procedures adopted, approved or set forth
herein by written agreement as may be appropriate or practical under the
circumstances, and BISYS may reasonably assume that any special procedure which
has been approved by an executive officer of the Trust (other than an officer or
employee of BISYS or its
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affiliates) does not conflict with or violate any requirements of the Trust's
Amended and Restated Trust Instrument, By-Laws or then-current Prospectus.
The Trust acknowledges receipt of a copy of BISYS' policy related to the
acceptance of trades for prior day processing (the "BISYS As-of Trading
Policy"). BISYS may amend the BISYS As-of Trading Policy from time to time in
its sole discretion, but will provide prompt notice to the Trust of such
amendment. BISYS may apply the BISYS As-of Trading Policy whenever applicable,
unless BISYS agrees in writing to process trades according to such other as-of
trading policy as may be adopted by the Trust and furnished to BISYS by the
Trust.
The Trust acknowledges and agrees that deviations from BISYS' written
transfer agent compliance procedures may involve a substantial risk of loss. In
the event an authorized representative of the Trust (other than an officer or
employee of BISYS or its affiliates) requests that an exception be made from any
written compliance or transfer agency procedures adopted by BISYS, or any
requirements of the AML Program (as defined in Section 16), BISYS may in its
sole discretion determine whether to permit such exception. In the event BISYS
determines to permit such exception, the same shall become effective when set
forth in a written instrument executed by an authorized representative of the
Trust (other than an officer or employee of BISYS or its affiliates) and
delivered to BISYS (an "Exception"); provided that an Exception concerning the
requirements of the Trust's AML Program shall also be authorized by the Trust's
AML Compliance Officer (as defined in Section 16). An Exception shall be deemed
to remain effective until the relevant instrument expires according to its terms
(or if no expiration date is stated, until BISYS receives written notice from
the Trust that such instrument has been terminated and the Exception is no
longer in effect). Notwithstanding any provision in this Agreement that
expressly or by implication provides to the contrary, as long as BISYS acts in
good faith, BISYS shall have no liability for any loss, liability, expenses or
damages to the Trust resulting from the Exception, and the Trust shall indemnify
BISYS and hold BISYS harmless from any loss, liability, expenses (including
reasonable attorneys fees) and damages resulting to BISYS therefrom.
The Trust instructs and authorizes BISYS to provide information pertaining
to the Fund's portfolio to Fair Value Information Vendors (as defined in
Schedule C) in connection with the fair value determinations made under the
Trust's Valuation Procedures (as defined in Schedule C) and other legitimate
purposes related to the services to be provided hereunder. The Trust
acknowledges that while BISYS' services related to fair value pricing are
intended to assist the Trust and its Board in its obligations to price and
monitor pricing of Fund portfolios, BISYS does not assume responsibility for the
accuracy or appropriateness of pricing information or methodologies, including
any fair value pricing information or adjustment factors.
10. Indemnification.
The Trust agrees to indemnify and hold harmless BISYS, BFI and their
respective employees, agents, directors, officers and nominees from and against
any claims, demands, actions, suits, judgments, liabilities, losses, damages,
costs, charges, counsel
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fees and other expenses including reasonable investigation expenses
(collectively, "Losses") resulting directly and proximately from BFI's
appointment as non-bank trustee/custodian, BISYS' performance of services under
this Agreement or based, if applicable, upon BISYS' or BFI's reasonable reliance
on information, records, instructions or requests pertaining to services
hereunder, that are given or made to BISYS or BFI by the Trust, the investment
adviser, or other authorized agents of the Trust with which BISYS or BFI must
interface in providing services; provided that this indemnification shall not
apply to actions or omissions of BISYS involving bad faith, willful misfeasance,
negligence or reckless disregard by it of its obligations and duties.
BISYS shall indemnify, defend, and hold harmless the Trust, and its
Trustees, officers, agents and nominees from and against Losses resulting
directly or proximately from BISYS' willful misfeasance, bad faith or negligence
in the performance of, or the reckless disregard of, its duties or obligations
hereunder or any amendments or additional services mutually agreed upon by the
parties in writing.
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 a party may be asked to
indemnify or hold the other party harmless, the indemnifying party shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the indemnified party will use all
reasonable care to identify and notify the indemnifying party promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the indemnifying party,
but failure to do so in good faith shall not affect the rights hereunder except
to the extent the indemnifying party is materially prejudiced thereby. As to any
matter eligible for indemnification, an indemnified party shall act reasonably
and in accordance with good faith business judgment and shall not effect any
settlement or confess judgment without the consent of the indemnifying party,
which consent shall not be withheld or delayed unreasonably.
The indemnifying party 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 the indemnifying party elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by it and reasonably satisfactory to the indemnified party. In the event
that the indemnifying party elects to assume the defense of any suit and retain
counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by it unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying party in connection
with the defense of such action, (ii) the indemnifying party shall not have
employed counsel to take charge of the defense of such action within a
reasonable time or (iii) the defenses available to the indemnifying party and
indemnified party are likely to present a conflict of interest for one counsel
to represent both the indemnified party and indemnifying party, in any of which
events the reasonable fees and expenses of counsel for the indemnified party
shall be borne by the indemnifying party and paid as incurred.. An indemnifying
party shall not effect any settlement without the consent of the
12
indemnified party (which shall not be withheld or delayed unreasonably by the
indemnified party) unless such settlement imposes no liability, responsibility
or other obligation upon the indemnified party and relieves it of all fault or
culpability. If the indemnifying party does not elect to assume the defense of
suit, it will reimburse the indemnified party for the reasonable fees and
expenses of any counsel retained by the indemnified party. The indemnity and
defense provisions set forth herein shall indefinitely survive the termination
of this Agreement.
The provisions of this Section 10 are subject to the provisions of Section
9 Section 23(c).
11. Record Retention and Confidentiality.
BISYS shall keep and maintain on behalf of the Trust all books and records
which are customary or which are required to be kept in connection with BISYS'
services pursuant to applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act"). BISYS further agrees that all such books and
records shall be the property of the Trust and to make such books and records
available for inspection by the Trust at reasonable times or by the Securities
and Exchange Commission (the "Commission") promptly.
BISYS shall otherwise keep confidential all books and records relating to
the Trust and its shareholders, except when (i) disclosure is required by law,
(ii) BISYS is advised by counsel that it may incur liability for failure to make
a disclosure, (iii) BISYS is requested to divulge such information by
duly-constituted authorities or court process, (iv) BISYS is requested to make a
disclosure by a shareholder or shareholder's agent with respect to information
concerning an account as to which such shareholder has either a legal or
beneficial interest and a legal right to such information at such time
consistent with the Trust's Amended and Restated Trust Instrument, Prospectus
and applicable law, or (v) as requested or authorized by the Trust (including
pursuant to its policies and procedures). BISYS shall provide the Trust with
reasonable advance notice of disclosure pursuant to items (i) - (iii) of the
previous sentence, to the extent reasonably practicable. The provisions of this
Section 11 are subject to the provisions of Section 23(b) (Anti-Money Laundering
Provisions).
12. Reports.
BISYS shall furnish to the Trust and to its properly-authorized auditors,
investment advisers, examiners, distributors, dealers, underwriters, salesmen,
insurance companies and others designated by the Trust in writing, such reports
at such times as are prescribed pursuant to this Agreement (or schedules
hereto), or as subsequently agreed upon by the parties pursuant to an amendment
to this Agreement (or schedules hereto). The Trust agrees to examine each such
report or copy provided to it promptly and will report or cause to be reported
to BISYS any errors or discrepancies therein.
13
13. Rights of Ownership.
All computer programs, systems and procedures employed or developed by
BISYS, or on behalf of BISYS by system providers or vendors used by BISYS, to
perform services required to be provided by BISYS under this Agreement are the
property of BISYS. All records and other data maintained hereunder, excepting
such computer programs, systems and procedures, are the exclusive property of
the Trust. All such records and other data which is the property of the Trust
shall be furnished to the Trust in appropriate form as soon as practicable after
termination of this Agreement for any reason.
14. Return of Records.
BISYS shall promptly upon the Trust's demand, turn over to the Trust and
cease to retain BISYS' files, records and documents created and maintained by
BISYS pursuant to this Agreement. BISYS may maintain copies of any such files,
records and documents to the extent required by the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the 1940 Act, the AML Acts (as defined
below), any of the rules and regulations promulgated thereunder, and any rules
and regulations of the NASD.
15. Bank Accounts.
BISYS is hereby granted such power and authority as may be necessary to
establish one or more bank accounts for the Trust with such bank or banks as are
acceptable to the Trust, as may be necessary or appropriate from time to time in
connection with the transfer agency services to be performed hereunder. The
Trust shall be deemed to be the customer of such bank or banks for purposes of
such accounts. To the extent that the performance of such services hereunder
shall require BISYS to disburse amounts from such accounts in payment of
dividends, redemption proceeds or for other purposes hereunder, the Trust shall
provide such bank or banks with all instructions and authorizations necessary
for BISYS to effect such disbursements.
16. Representations, Warranties and Covenants of the Trust.
The Trust represents, warrants and covenants to BISYS that:
(a) It is a Trust duly incorporated and validly existing under the
laws of the jurisdiction of its formation, and has full
capacity and authority to enter into this agreement and to
carry out its obligations hereunder;
(b) It has all necessary authorizations, licenses and permits to
carry out its business as currently conducted;
(c) It is, and shall continue to be, in compliance in all material
respects with all provisions of law applicable to its business
and operations, including provisions governing the disclosure
controls and procedures of the Funds ("Fund DCPs");
14
(d) This Agreement has been duly authorized by the Trust and, when
executed and delivered by the Trust, will constitute a legal,
valid and binding obligation of the Trust, enforceable against
the Trust 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;
(e) By virtue of the Amended and Restated Trust Instrument, shares
of each Fund which are redeemed by the Trust may be resold by
the Trust; and
(f) (i) The Trust has adopted a written anti-money laundering
program, which has been provided to BISYS pursuant to Section
19 (the "AML Program"), and has appointed an officer of the
Trust as the Trust's anti-money laundering compliance officer
("AML Compliance Officer"), (ii) the AML Program and the
designation of the AML Officer have been approved by the
Board, (iii) the delegation of certain services thereunder to
BISYS, as provided in Section 23, has been approved by the
Board, and (iv) the Trust will submit any material amendments
to the AML Program to BISYS for BISYS' review prior to
adoption, in accordance with Section 21. In the event that any
such amendment makes BISYS' performance under this Agreement
impossible or commercially unreasonable, BISYS will notify the
Trust and the parties will in good faith attempt to agree upon
modifications to such amendment prior to adoption. If the
parties are unable to agree upon modifications to such
amendment prior to adoption, BISYS will not be obligated to
perform, and will have no liability related to, AML services
affected by such amendment.
17. Representations and Warranties of BISYS.
BISYS represents and warrants to the Trust that:
(a) It is a corporation duly incorporated and validly existing
under the laws of the state of Ohio, and has full capacity and
authority to enter into this Agreement and to carry out its
obligations hereunder;
(b) It has all necessary authorizations, licenses and permits to
carry out its business as currently conducted;
(c) It is, and shall continue to be, in compliance in all material
respects with all provisions of law applicable to it in
connection with its services hereunder, including Section
17A(c) of the Exchange Act;
(d) The various procedures and systems which it has implemented
with regard to safekeeping from loss or damage attributable to
fire,
15
theft or any other cause of the blank checks, records, and
other data of the Trust and BISYS' equipment, facilities, and
other property used in the performance of its obligations
hereunder are reasonable and adequate and that it will make
such changes therein from time to time as are reasonably
required for the secure performance of its obligations
hereunder; and
(e) This Agreement has been duly authorized by BISYS and, when
executed and delivered by BISYS, will constitute a legal,
valid and binding obligation of BISYS, enforceable against
BISYS in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of
general application affecting the right and remedies of
creditors and secured parties; and
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL REPRESENTATIONS AND
WARRANTIES, 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) CONCERNING THE
SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO THE SERVICES PROVIDED UNDER THIS
AGREEMENT BY BISYS ARE COMPLETELY DISCLAIMED.
18. Insurance.
BISYS shall maintain a fidelity bond covering larceny and embezzlement and
an insurance policy with respect to directors and officers errors and omissions
coverage, in amounts that are appropriate in light of its duties and
responsibilities hereunder and with carriers rated by AM Best with a minimum "A"
rating. Upon the request of the Trust, BISYS shall provide evidence that
coverage is in place. BISYS shall notify the Trust should its insurance coverage
with respect to professional liability or errors and omissions coverage be
reduced or canceled. Such notification shall include the date of cancellation or
reduction and the reasons therefore. BISYS shall notify the Trust promptly of
any material claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance, and shall notify the
Trust promptly should the total outstanding claims made by BISYS under its
insurance coverage materially impair, or threaten to materially impair, the
adequacy of its coverage.
19. Information to be Furnished by the Trust and Funds.
The Trust has furnished to BISYS, or will furnish upon request, the
following, as amended and current as of the Effective Date:
(a) A copy of the Amended and Restated Trust Instrument of the
Trust and any amendments thereto;
(b) A copy of the Trust's By-laws and any amendments thereto;
16
(c) A copy of the resolutions of the Board regarding (i) approval
of this Agreement and authorization of officers of the Trust
to execute and deliver this Agreement and authorization for
specified officers of the Trust to instruct BISYS hereunder;
and (ii) authorization of BISYS to act as administrator, fund
accountant and transfer agent for the Trust;
(d) A certified list of all officers of the Trust, with the
Trust's AML Compliance Officer included among the officers
therein, and any other persons (who may be associated with the
Trust or its investment advisor), together with specimen
signatures of those officers and other persons who (except as
otherwise provided herein to the contrary) shall be authorized
to instruct BISYS in all matters;
(e) Two copies of each of the following documents employed by the
Trust:
(i) Prospectus and Statement of Additional Information;
(ii) Distribution Agreement; and
(iii) All other forms commonly used by the Trust or its
distributor with regard to their relationships and
transactions with shareholders of the Funds.
(f) A certificate as to shares of the Trust authorized, issued,
and outstanding as of the Effective Date and as to receipt of
full consideration by the Trust for all shares outstanding;
(g) A copy of the Trust's written AML Program, including any
related policies and procedures;
(h) A copy of the Fund DCPs as contemplated in Item 20 of Schedule
B; and
(i) The Trust's Valuation Procedures as defined in Schedule C.
20. Information Furnished by BISYS.
BISYS has furnished to the Trust, or will furnish upon request, evidence
of the following:
(a) Approval of this Agreement by BISYS, and authorization of a
specified officer of BISYS to execute and deliver this
Agreement;
(b) Authorization of BISYS to act as transfer agent, fund
accountant and administrator for the Trust;
17
(c) The current BISYS As-of Trading Policy; and
(d) The current version of BISYS written polices and procedures
with respect to its provision on AML Services (as defined in
Section 23 below).
(e) So long as it is not prohibited by law from disclosing such
information, BISYS shall give the Trust notice, as soon as
reasonably practicable upon receipt, of any orders, sanctions
or publicly available inquiries made by the Commission or any
other federal or state regulatory authority directly
applicable to the provisions of services hereunder and
reasonably likely to have a material adverse effect on the
provision of such services hereunder.
BISYS shall furnish a copy of the relevant provisions of its internal
policies on service of employees as officers of funds ("BISYS Policies"), and
any material amendments thereto, to the Trust.
21. Amendments to Documents.
The Trust will provide BISYS with advance notice of any material
amendments to the items set forth in Section 19. BISYS will not be responsible
for changing or conforming its services to any such amendments until BISYS has
reviewed and accepted responsibility for the relevant changes in services. BISYS
will consider such changes in good faith. In the event that any such amendment,
or change in laws applicable to the Trust, would require BISYS to make specific
changes to its service model, BISYS will use reasonable good faith efforts to
inform the Trust of the changes that would be necessary, and set out the
estimated costs and estimated implementation timetable for any additional
services. The parties shall then in good faith agree to mutually agreeable terms
applicable to such additional service. BISYS shall furnish the Trust with
written copies of any amendments to, or changes in, any of the items referred to
in this Section 21.
22. Reliance on Amendments.
BISYS may rely on any amendments to or changes in any of the documents and
other items to be provided by the Trust pursuant to Sections 19 and 21 of this
Agreement and, the indemnification provisions of Section 10 hereof are
applicable to BISYS' reasonable reliance upon such amendments and/or changes.
Although BISYS is authorized to rely on the above-mentioned amendments to and
changes in the documents and other items to be provided pursuant to Sections 19
and 21 hereof, in the event the same relate to services provided by BISYS
hereunder, BISYS shall have no liability for failure to comply with or take any
action in conformity with such amendments or changes except as provided in
Section 21 or as otherwise agreed upon in writing.
23. Compliance with Laws.
(a) Prospectus and Public Offering. Except for information which is the
obligation of BISYS as set forth in Section 11 hereof, and except as provided in
the
18
services listed in the schedules hereto which call for information to be
provided by BISYS for inclusion in the Prospectus, the Trust assumes full
responsibility for the preparation, contents, and distribution of each
Prospectus of the Trust in compliance with all applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act, and any other
laws, rules and regulations of governmental authorities having jurisdiction.
Subject to its obligations herein with respect to "blue sky" filings, BISYS
shall have no obligation to take cognizance hereunder of laws relating to the
sale of the Trust's shares. The Trust represents and warrants that all shares of
the Trust that are offered to the public are covered by an effective
registration statement under the 1933 Act and the 1940 Act.
(b) Anti-Money Laundering Provisions. The Trust acknowledges that it is a
financial institution subject to the law entitled Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism ("USA PATRIOT") Act of 2001 and the Bank Secrecy Act (collectively,
the "AML Acts") and shall comply with the AML Acts and applicable regulations
adopted thereunder (collectively, the "Applicable AML Laws") in all relevant
respects, subject to the delegation of certain responsibilities to BISYS, as
provided in the next paragraph below.
The Trust hereby delegates to BISYS the performance, on behalf of the
Trust, of the anti-money laundering services set forth under Item 6 of Schedule
D (the "AML Services") with respect to the shareholder accounts maintained by
BISYS pursuant to this Agreement, and BISYS agrees to the foregoing delegation
and agrees to perform such services in accordance with the Trust's AML Program.
In connection therewith, BISYS agrees to maintain policies and procedures, and
related internal controls, that are consistent with the Trust's AML Program and
the requirement that the Trust employ procedures reasonably designed to achieve
compliance with the Applicable AML Laws. BISYS' obligations under this
delegation shall be subject to Sections 19 and 21, which require that the AML
Program and any material amendments thereto be submitted to BISYS for its review
prior to adoption.
The Trust agrees and acknowledges that, notwithstanding the delegation
provided for in the foregoing paragraph, the Trust maintains full responsibility
for ensuring that its AML Program is, and shall continue to be, reasonably
designed to ensure compliance with the Applicable AML Laws, in light of the
particular business of the Trust, taking into account factors such as its size,
location, activities and risks or vulnerabilities to money laundering.
In connection with the foregoing delegation, the Trust also acknowledges
that the performance of the AML Services involves the exercise of discretion
which in certain circumstances may result in consequences to the Trust and its
shareholders (such as in the case of the reporting of suspicious activities and
the freezing of shareholder accounts). In this regard, (i) under circumstances
in which the AML Program authorizes the taking of certain actions, BISYS is
granted the discretion to take any such action as may be authorized under the
AML Program, and consultation with Trust shall not be required in connection
therewith unless specifically required under the AML Program, and (ii) the Trust
instructs BISYS that it may avail the Trust of any safe harbor from civil
liability
19
that may be available under Applicable AML Laws for making a disclosure or
filing a report thereunder.
As concerns Networking Level III accounts and omnibus accounts, the AML
Services performed by BISYS are subject to a more limited scope, as discussed in
the Release concerning the final rule of the Department of the Treasury, 31 CFR
103 and of the Commission, 17 CFR 270, entitled Customer Identification Programs
for Mutual Funds issued on May 9, 2003 and subsequent guidance issued jointly by
such agencies entitled Question and Answer Regarding the Mutual Fund Customer
Identification Program Rule (31 CFR 103.131) issued on August 11, 2003.
(c) Provision of Certifying Officers.
In the event that the Trust elects to have BISYS make BISYS employees
available to the Trust to serve, upon designation as such by the Board if the
Board so elects, as the Chief Financial Officer of the Trust or under such other
title to perform similar functions (each officer who is required to provide a
certification pursuant to Xxxxxxxx-Xxxxx, whether or not a BISYS employee, is
referred to herein as a "Certifying Officer"), BISYS shall do so, subject to the
provisions of this Section 23(c) and Section 23(d), and subject to the payment
of such additional fees as the parties may agree. As of the date of this
Agreement, the Trust has determined that BISYS will not provide any Certifying
Officers to the Trust. BISYS' obligation in this regard shall be met by
providing an appropriately qualified employee 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 to be in the best interests of the Trust. BISYS
shall select, and may replace, the specific employee that it makes available to
serve in the designated capacity as a Certifying Officer, in BISYS' reasonable
discretion, taking into account each such person's responsibilities concerning,
and familiarity with, the Trust's operations (but the description of any such
person as a Certifying Officer shall be subject to the approval of the Trust).
The obligation of BISYS to provide an employee to serve in such capacity
is also subject to, and conditioned upon, the provisions of Item 20 of Schedule
B hereto. Capitalized terms used but not defined in this Section 23(c) have the
respective meanings ascribed to them in Item 21 of Schedule B.
The Fund DCPs shall contain (or the Trust and BISYS shall otherwise
establish) mutually agreeable procedures governing the certification process,
and the parties shall comply with such procedures in all material respects.
Among other things, the procedures shall provide that a Certifying Officer shall
have the full discretion to decline to certify a particular Report (as defined
in Schedule B to this Agreement) that fails to meet the standards set forth in
the Certification, and to report matters involving fraud or other failures to
meet the standards of applicable law to the audit committee of the Board.
20
(d) Additional Provisions Concerning Officers.
It is mutually agreed and acknowledged by the parties that Certifying
Officers provided by BISYS under the provisions of this Section 23 will
constitute officers of the Trust ("Officers"). The provisions of Section 23(c)
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's governing documents (including its Agreement and Amended and
Restated Trust Instrument and By-Laws) and/or resolutions of the Board shall
contain mandatory indemnification provisions that are applicable to each
Officer, that are designed and intended to have the effect of fully indemnifying
him or her and holding him or her harmless with respect to any claims,
liabilities and costs arising out of or relating to his or her service in good
faith in a manner reasonably believed to be in the best interests of the Trust,
except to the extent he or she would 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. BISYS will notify the Trust
in the event that (a) a third party alleges that an officer of the Trust
provided by BISYS failed to exercise his or her obligations to the Trust, or (b)
an audit conducted by or on behalf of BISYS contains a finding that an officer
of the Trust provided by BISYS failed to exercise his or her obligations to the
Trust in any material respect; provided, however, that a failure of BISYS to so
notify the Trust in good faith shall not affect the rights hereunder except to
the extent the Trust is materially prejudiced thereby.
The Trust shall provide coverage to each Officer under its directors and
officers liability policy that is appropriate to the Officer's role and title,
and consistent with coverage applicable to other officers holding positions of
executive management.
In appropriate circumstances, each 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 violation of
Xxxxxxxx-Xxxxx, Applicable AML Laws or other Federal securities laws applicable
to the Trust (the "Applicable Securities Laws") by the Trust, or (b) a material
deviation by the Trust from the terms of this Agreement governing the services
of such Officer, which (in either case) is not primarily caused by the failure
of such Officer or BISYS to meet obligations under applicable laws and this
Agreement. In addition, each 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 to make an informed
determination regarding any of the matters listed above.
Each 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, the Trust's shareholders or any third party which involves an allegation
that any 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 Xxxxxxxx-Xxxxx and other
applicable laws). Upon becoming aware in the normal course of business that any
Certifying Officer who is an employee of BISYS has failed to
21
exercise his or her obligations to the Trust in a manner consistent with
applicable laws (including but not limited to any claim that a filing with the
Commission failed to meet the standards of Xxxxxxxx-Xxxxx and other applicable
laws), BISYS shall promptly notify the Trust of such fact.
Notwithstanding any provision of the Agreement 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, the Applicable Securities Laws or Xxxxxxxx-Xxxxx, and (b) whenever an
employee or agent of BISYS serves as an Officer of the Trust, as long as such
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 Officer and hold the Officer harmless from any loss, liability, expenses
(including reasonable attorneys fees) and damages incurred by such Officer
arising out of or resulting to the service of such Employee/Officer as an
Officer of the Trust.
24. Notices.
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 The Xxxxxxx Xxxxx Funds, 00000
Xxxxx Xxxxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 Attn: Xxxxxx
Xxxxxxx; and if to BISYS, to it at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000;
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.
25. Assignment.
This Agreement and the rights and duties hereunder shall not be assignable
by either of the parties hereto except by the specific written consent of the
other party. This Section 25 shall not limit or in any way affect BISYS' right
to appoint a Sub-Agent pursuant to Section 2 hereof. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
26. Governing Law.
This Agreement shall be governed by and provisions shall be construed in
accordance with the laws of the State of New York and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of New
York, or any of the provisions herein, conflict with the applicable provisions
of the 1940 Act, the latter shall control.
27. Activities of BISYS.
The services of BISYS rendered to the Trust hereunder are not to be deemed
to be exclusive. BISYS is free to render such services to others and to have
other businesses and interests. It is understood that Trustees, officers,
employees and Shareholders of the
22
Trust are or may be or may become interested in BISYS, as officers, employees or
otherwise and that partners, officers and employees of BISYS and its counsel are
or may be or may become similarly interested in the Trust, and that BISYS may be
or may become interested in the Trust as a shareholder or otherwise.
28. Privacy.
Nonpublic personal financial information relating to consumers or
customers of the Trust provided by, or at the direction of the Trust to BISYS,
or collected or retained by BISYS in the course of performing its duties as
transfer agent, shall be considered confidential information. BISYS shall not
give, sell or in any way transfer such confidential information to any person or
entity, other than (a) the Trust's investment adviser and the investment
adviser's affiliates, and (b) affiliates of BISYS involved in servicing the
Trust except at the direction of the Trust or as required by law (including
Applicable AML Laws). BISYS represents, warrants and agrees 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. The Trust represents to BISYS that it has
adopted a Statement of its privacy policies and practices as required by the
Commission's Regulation S-P and agrees to provide BISYS with a copy of that
statement annually and shall promptly provided BISYS with copies of any
amendments thereto. The Trust hereby consents to BISYS providing information
about the Funds and consumers or customers of the Funds, including nonpublic
personal financial information, to the Trust's investment adviser and the
investment adviser's affiliates as necessary or appropriate in connection with
the services provided by BISYS pursuant to this Agreement and/or upon request of
the investment adviser or its affiliates.
29. Miscellaneous.
(a) Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or
interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the
parties hereto as to the subject matter covered by this
Agreement, and supersedes all prior negotiations,
understandings and agreements bearing upon the subject matter
covered herein.
(c) 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.
(d) No amendment to this Agreement shall be valid unless made in
writing and executed by both parties hereto.
(e) If any part, term or provision of this Agreement is held to be
legal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable
and not be affected, and
23
the rights and obligations of the parties shall be construed
and enforced as if this Agreement did not contain such part,
term or provision.
* * * * *
24
enforced as if this Agreement did not contain such part, term
or provision.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE XXXXXXX, XXXXX FUNDS
By: /s/ G. Xxxxxx Xxxxxxx
----------------------------------
Name: G. XXXXXX XXXXXXX
Title: Co President
BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxxx X. Xxx
----------------------------------
Name: XXXXX X. XXX
Title: Executive Vice President
EXECUTION VERSION (June 22, 2005) 24
SCHEDULE A
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND THE XXXXXXX, XXXXX FUNDS
FUNDS
Xxxxxxx, Xxxxx Mid Cap Growth Fund
Xxxxxxx, Xxxxx Micro-Cap Growth Fund
Xxxxxxx, Xxxxx Small Cap Growth Fund
26
SCHEDULE B
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND THE XXXXXXX, XXXXX FUNDS
ADMINISTRATION SERVICES
1. Calculate contractual Trust expenses and make and control all
disbursements for the Trust, subject to review and approval of an officer
of the Trust or other authorized person (designated on the list of
authorized persons approved by the Board), including administration of
director and vendor fees and compensation on behalf of the Trust, and as
appropriate;
2. Assist counsel to the Trust with preparation of (i) the annual update to
the Trust's registration statement on Form N-1A, and (ii) supplements to
its Prospectus and Statement of Additional Information, and file any of
the foregoing with the Securities and Exchange Commission (the "SEC") upon
the request of the Trust or counsel to the Trust;
3. Coordinate and prepare, with the assistance and approval of the Funds'
investment adviser, counsel and officers, drafts of communications to
shareholders of record of the Funds ("Shareholders"), including the annual
report to Shareholders; prepare drafts of the certified semi-annual report
for each Fund; prepare and file the final certified versions thereof on
Form N-CSR; prepare and file the Trust's Form N-SAR; and file all required
notices pursuant to Rule 24f-2;
4. Coordinate the distribution of prospectuses, supplements, proxy materials
and reports to Shareholders; coordinate the solicitation and tabulation of
proxies (including the annual meeting of Shareholders each year, if one is
held) and attend the Shareholder meetings and record the minutes of the
meetings;
5. Review contracts on behalf of the Trust with, among others, the Trust's
investment adviser, distributor, custodian, transfer agent and fund
accountant;
6. Review policies/procedures on behalf of the Trust;
27
7. Coordinate with the Trust's transfer agent with respect to the payment of
dividends and other distributions to Shareholders;
8. Calculate performance data of the Funds for dissemination to up to fifteen
(15) information services covering the investment company industry;
9. Prepare and file the Trust's tax returns;
10. Assist with the layout and printing of prospectuses and assist with and
coordinate layout and printing of the Funds' semi-annual and annual
reports to Shareholders;
11. Assist with the design, development, and operation of the Funds, including
new classes, investment objectives, policies and structure, and provide
consultation related to legal and regulatory aspects of the establishment,
maintenance, and liquidation or dissolution of Funds;
12. Make available appropriate individuals to serve as officers of the Trust
(to serve only in ministerial or administrative capacities relevant to
BISYS' services hereunder, except as otherwise provided in this
Agreement), upon designation as such by the Board;
13. Obtain and maintain fidelity bonds and directors and officers/errors and
omissions insurance policies for the Trust in accordance with Rules 17g-1
and 17d-1 under this 1940 Act at the expense (except as otherwise provided
in the Agreement) of the Trust and Funds and file the fidelity bonds and
any notices with the SEC as required under the 1940 Act, to the extent
such bonds and policies are approved by the Board;
14. Monitor and advise the Trust and its Funds on their regulated investment
company status under the Internal Revenue Code of 1986, as amended. In
connection with the foregoing, prepare and send quarterly reminder letters
related to such status, and prepare quarterly compliance checklist for use
by investment adviser(s) if requested;
15. Maintain corporate records on behalf of the Trust, including, but not
limited to, minute books, the Declaration of Trust and By-Laws for the
Trust, and BISYS shall retain such records for the periods and in the
places required by Rule 31a-2 under the 1940 Act;
16. Assist the Trust in developing portfolio compliance procedures for each
Fund, and provide daily and periodic compliance monitoring services
incorporating certain of those procedures, which will include, among other
matters, compliance with investment restrictions imposed by the Investment
Company Act of 1940, each Fund's investment objective, defined investment
policies, and restrictions, tax diversification, and distribution and
income requirements, provided such are determinable based upon the Fund's
accounting records. In connection with the
28
foregoing, review quarterly compliance reports that are prepared by the
investment adviser(s), and notify appropriate Fund officers and advisor of
xxxx-to-market issues pursuant to Board-approved procedures. BISYS will
also provide the Board with quarterly results of compliance reviews;
17. Provide assistance and guidance to the Trust with respect to matters
governed by or related to regulatory requirements and developments
including: monitoring regulatory and legislative developments which may
affect the Trust, and assisting in strategic planning in response thereto;
assisting the Trust and providing on-site personnel in responding to and
providing documents for routine regulatory examinations or investigations;
and coordinating with and taking instructions from counsel to the Trust in
response to such routine or non-routine regulatory matters. The assistance
to be provided with respect to SEC inspections includes (i) rendering
advice regarding proposed responses (ii) compiling data and other
information in response to SEC requests for information and (iii)
communicating with Fund management and portfolio managers to provide
status updates. In addition, BISYS will provide appropriate assistance
with respect to audits conducted by the Fund's independent accountants
including compiling data and other information as necessary;
18. Manage the preparation for Board meetings by (i) coordinating Board book
preparation, production and distribution, (ii) reviewing Board agendas,
resolutions and minutes, (iii) preparing the relevant sections of the
Board materials required to be prepared by BISYS, (iv) assisting to gather
and coordinate special materials related to annual contract renewals and
approval of Rule 12b-1 plans and related matters, including assisting to
compile data for fee comparisons for annual contract renewals, and (v)
performing such other Board meeting functions as shall be agreed by the
parties in writing;
19. Attend such meetings of the Board and committees thereof as shall be
requested by the Board and perform in the capacity of secretary for
meetings of the Board and committees thereof and prepare agendas,
resolutions and minutes for such meetings;
20. Furnish advice and recommendations with respect to other aspects of the
business and affairs of the Funds as the Trust shall request and the
parties shall agree in writing; and
21. To assist the Trust in connection with its obligations under Sections 302
and 906 of the Xxxxxxxx-Xxxxx Act of 2002 and Rules 30a-2 and Rule 30a-3
under the 1940 Act (collectively, with such other related regulatory
provisions applicable to the Trust, "Xxxxxxxx-Xxxxx"), BISYS will
internally establish and maintain controls and procedures ("BISYS internal
controls") designed to ensure that information recorded, processed,
summarized, or reported by BISYS and its affiliates on behalf of the Trust
29
and included in financial information certified by the Certifying Officers
on Form N-CSR and Form N-Q ("Reports") is (a) recorded, processed,
summarized, and reported by BISYS within the time periods specified in the
Commission's rules and forms and corresponding to the Fund DCPs, and (b)
accumulated and communicated to the relevant Certifying Officers
consistent with the Fund DCPs.
With respect to a fiscal period during which BISYS serves or served as
financial administrator, BISYS will provide a sub-certification consistent
with the requirements of Xxxxxxxx-Xxxxx pertaining to BISYS' services,
solely for the purposes of (i) providing a basis of support (as to
information which has been prepared, processed and reported by BISYS, and
as to BISYS internal controls) for the Certifying Officers to render the
certifications required by Xxxxxxxx-Xxxxx (or, if applicable with respect
to a Report, inform the Certifying Officers of the reasons why the
statements in such a certification would not be accurate), (ii) responding
to an audit or investigation by a governmental or regulatory body, (iii)
defending or responding to a lawsuit or claim against the Trust, or (iv)
any other use approved by BISYS in writing in advance, such approval not
to be unreasonably withheld. In rendering such sub-certifications
concerning reports to the Trust, BISYS may (a) limit its representations
to BISYS' internal controls over financial reporting, disclosure controls
and procedures, and information prepared, processed and reported by BISYS;
(b) rely upon and assume the accuracy of the information provided by
officers and other authorized agents of the Trust, including all other
service providers to the Trust, and compliance by such officers and agents
with the Fund DCPs, including but not limited to, the Trust's investment
adviser(s) and custodian; and (c) assume that the Trust has selected the
appropriate accounting policies for the Fund(s).
The Trust shall assist and cooperate with BISYS (and shall use
commercially reasonable efforts to cause its officers, investment advisers
and other service providers to assist and cooperate with BISYS) to
facilitate the delivery of information requested by BISYS in connection
with the preparation of the Trust's Form N-CSR and Form N-Q, including the
delivery of Trust financial statements, so that BISYS may submit a draft
Report to the Trust (or to any committee established by the Trust to
oversee the Trust's Fund DCPs) at least 15 days prior to the date the
relevant Report is to be filed. BISYS shall assist and cooperate with the
Trust (and shall use its commercially reasonable efforts to cause the
Certifying Officers who are employees of BISYS to assist and cooperate
with the Trust) to facilitate the delivery of information required by this
Agreement and requested by the Trust in connection with the preparation of
the Trust's Form N-CSR and Form N-Q, including the delivery of the Trust's
financial statements and the draft Report. At the request of the Trust or
its Certifying Officers, BISYS shall provide reasonable administrative
assistance to the Trust in connection with obtaining service
30
provider sub-certifications, SAS-70 reports on internal controls, and any
applicable representations to bring such certifications current to the end
of the reporting period, and in preparing summaries of issues raised in
such documents.
22. Coordinate formulating and filing of the Funds' voting records (as
approved by the investment adviser) on Form N-PX.
23. File holdings reports on Form N-Q as required at the end of the first and
third fiscal quarters of each year.
24. Prepare quarterly brokerage allocation compliance checklist and supporting
documentation for use by investment adviser(s), as requested.
25. Oversee/coordinate Trustee compensation.
26. Distribute Trustee/Officer Questionnaires prepared by counsel to the Trust
and resolve any open issues with the Trust and counsel.
27. Review proxy statements.
28. Review and file amendments to the Amended and Restated Trust
Instrument/Articles of Incorporation as necessary.
29. Review amendments to the By-Laws.
30. Promptly after receipt, provide BISYS' SAS-70 reports on internal controls
for its most recently completed fiscal year.
31. Provide the following additional services to assist the Trust in
connection with its obligations under Rule 38a-1 of the Investment Company
Act of 1940:
A. Perform risk-based testing and annual assessment of the compliance
procedures of each BISYS service group, as applicable (i.e.,
transfer agency, fund accounting, administration) that provides
services to the Trust and of any BISYS affiliate acting as the
Trust's distributor.
B. Provide information reasonably requested by the Board in connection
with the Board's determination regarding the adequacy and
effectiveness of the compliance procedures described in "A" above.
31
C. Provide reports to the Trust's Chief Compliance Officer regarding
the risk-based testing and annual assessment described in "A" above.
32
SCHEDULE C
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND THE XXXXXXX, XXXXX FUNDS
FUND ACCOUNTING SERVICES
(a) BISYS will maintain the financial statements of the Trust in accordance
with generally accepted accounting principles in the U.S. ("GAAP") and in
accordance with the 1940 Act and the Rules and Regulations thereunder.
(b) BISYS will keep and maintain the following books and records of each Fund
pursuant to Rule 31a-1 (the "Rule") under the 1940 Act:
1. Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and
disbursements of cash and all other debits and credits, as
required by subsection (b)(1) of the Rule;
2. General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including
interest accrued and interest received, as required by
subsection (b)(2)(i) of the Rule;
3. Separate ledger accounts required by subsection (b)(2)(ii) and
(iii) of the Rule; and
4. A monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of the
Rule.
(c) In addition to the maintenance of the books and records specified above,
BISYS shall perform the following accounting services for each Fund:
1. Allocate income and expense and calculate the net asset value
per share ("NAV") of each class of shares offered by each Fund
in accordance with the relevant provisions of the applicable
Prospectus and Statement of Additional Information of each
Fund, applicable regulations under the 1940 Act and
instructions from the Trust so long as they are consistent
with applicable law and GAAP;
2. Apply securities pricing information as required or authorized
under the terms of the valuation policies and procedures of
the Trust ("Valuation Procedures"), including (A) pricing
information
33
from independent pricing services, with respect to securities
for which market quotations are readily available, (B) if
applicable to a particular Fund or Funds, fair value pricing
information or adjustment factors from independent fair value
pricing services or other vendors approved by the Trust
(collectively, "Fair Value Information Vendors") with respect
to securities for which market quotations are not readily
available, for which a significant event has occurred
following the close of the relevant market but prior to the
Fund's pricing time, or which are otherwise required to be
made subject to a fair value determination under the Valuation
Procedures, and (C) prices obtained from each Fund's
investment adviser or other designee, as approved by the
Board;
3. Coordinate the preparation of reports that are prepared or
provided by Fair Value Information Vendors which help the
Trust to monitor and evaluate its use of fair value pricing
information under its Valuation Procedures;
4. Verify and reconcile with the Funds' custodian all daily trade
activity;
5. Compute, as appropriate, each Fund's net income and capital
gains, dividend payables, dividend factors, 7-day yields,
7-day effective yields, 30-day yields, and weighted average
portfolio maturity; (and other yields or standard or
non-standard performance information as mutually agreed);
6. Review daily the net asset value calculation and dividend
factor (if any) for each Fund prior to release to
shareholders, check and confirm the net asset values and
dividend factors for reasonableness and deviations, and
distribute net asset values and yields to NASDAQ; and as
agreed, in certain cases, to newspapers;
7. If applicable, report to the Trust the periodic market pricing
of securities in any money market Funds, with the comparison
to the amortized cost basis;
8. Determine and report unrealized appreciation and depreciation
on securities held in variable net asset value Funds;
9. Amortize premiums and accrete discounts on fixed income
securities purchased at a price other than face value, if
requested by the Trust;
10. Update fund accounting system to reflect rate changes, as
received from a Fund's investment adviser, on variable
interest rate instruments;
34
11. Post Fund transactions to appropriate categories;
12. Accrue expenses of each Fund according to instructions
received from the Trust's Administrator, and submit changes to
accruals and expense items to authorized officers of the Trust
(who are not BISYS employees) for review and approval;
13. Determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income
and expense accounts;
14. Provide accounting reports in connection with and coordinate
with independent auditors concerning the Trust's regular
annual audit, and other audits and examinations by regulatory
agencies; and
15. Provide such periodic reports as the parties shall agree upon,
as set forth in a separate schedule.
16. Provide a representative (in a non-voting capacity) for the
Trust's Pricing Committee, if any;
17. Assist the Trust in identifying instances where market prices
are not readily available, or are unreliable, within
parameters set forth in the Trust's Valuation Procedures;
18. Prepare and maintain complete, accurate and current records
with respect to the Trust required to be maintained by the
Trust under the Internal Revenue Code of 1986, as amended (the
"Code"), and under the rules and regulations of the 1940 Act,
and preserve said records in the manner and for the periods
prescribed in the Code and the 1940 Act.
(d) BISYS shall also perform the following additional accounting services for
each Fund:
1. Provide monthly a hard copy of the unaudited financial
statements described below, upon request of the Trust. The
unaudited financial statements will include the following
items:
A. Unaudited Statement of Assets and Liabilities,
B. Unaudited Statement of Operations,
C. Unaudited Statement of Changes in Net Assets, and
D. Unaudited Condensed Financial Information
2. Provide accounting information for the following: (in
compliance with Reg. S-X as applicable):
35
A. federal and state income tax returns and federal excise
tax returns;
B. the Trust's semi-annual reports with the Securities and
Exchange Commission ("SEC") on Form N-SAR and Form
N-CSR;
C. the Trust's schedules of investments for filing with the
SEC on Form N-Q;
D. the Trust's annual and semi-annual shareholder reports
and quarterly Board meetings;
E. registration statements on Form N-1A and other filings
relating to the registration of shares;
F. BISYS' monitoring of each Fund's status as a regulated
investment company under Subchapter M of the Internal
Revenue Code, as amended;
G. annual audit by the Trust's auditors; and
H. examinations performed by the SEC.
3. Calculate turnover and expense ratios.
4. Prepare schedule of Cap Gains and Losses.
5. Provide daily cash report.
6. Maintain and report security positions and transactions in
accounting system.
7. Prepare Broker Commission Report.
8. Monitor expense limitations.
9. Monitor wash sales.
10. Provide financial information otherwise maintained by BISYS
that may be relevant to the investment adviser's reports on
soft dollar brokerage transactions.
11. Maintain list of failed trades.
12. Provide unrealized gain/loss report.
36
SCHEDULE D
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND THE XXXXXXX, XXXXX FUNDS
TRANSFER AGENCY SERVICES
1. Shareholder Transactions
(a) Process shareholder purchase and redemption orders.
(b) Set up account information for each shareholder of each class
of shares offered by each Fund of the Trust, including
address, dividend option, taxpayer identification numbers and
wire instructions.
(c) Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.
(d) Issue periodic statements for shareholders.
(e) Process transfers and exchanges.
(f) Process dividend payments, including the purchase of new
shares through dividend reinvestment.
(g) Calculate redemption fees, as appropriate.
2. Shareholder Information Services
(a) Make information available to shareholder servicing unit and
other remote access units regarding trade date, share price,
current holdings, yields, and dividend information.
(b) Produce detailed history of transactions through duplicate or
special order statements upon request.
(c) Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to
current shareholders upon request.
37
3. Compliance Reporting
(a) Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc. and the
States in which the Fund is registered.
(b) Prepare and distribute appropriate Internal Revenue Service
forms for corresponding Fund and shareholder income and
capital gains.
(c) Issue tax withholding reports to the Internal Revenue Service.
4. Dealer/Load Processing (if applicable)
(a) Calculate fees due under 12b-1 plans for distribution and
marketing expenses.
5. Shareholder Account Maintenance
(a) Maintain all shareholder records for each account in the
Trust.
(b) Issue customer statements on scheduled cycle, providing
duplicate second and third party copies if required.
(c) Record shareholder account information changes.
(d) Maintain account documentation files for each shareholder.
38
6. Anti-Money Laundering Services
(a) Where appropriate and information is available, verify
shareholder identity upon opening new accounts.
(b) Monitor, identify and report shareholder transactions and
identify and report suspicious activities that are required to
be so identified and reported, and provide other required
reports to the Securities and Exchange Commission, the U.S.
Treasury Department, the Internal Revenue Service or each
agency's designated agent, in each case consistent with the
Trust's AML Program.
(c) Place holds on transactions in shareholder accounts or freeze
assets in shareholder accounts, as provided in the Trust's AML
Program.
(d) Create documentation to provide a basis for law enforcement
authorities to trace illicit funds.
(e) Maintain all records or other documentation related to
shareholder accounts and transactions therein that are
required to be prepared and maintained pursuant to the Trust's
AML Program, and make the same available for inspection by (i)
the Trust's AML Compliance Officer, (ii) any auditor of the
Trust's AML Program or related procedures, policies or
controls that has been designated by the Trust in writing, or
(iii) regulatory or law enforcement authorities, and otherwise
make said records or other documents available at the
direction of the Trust's AML Compliance Officer.
7. Services Related to Shareholder Service Agreements
Coordinate the implementation of service arrangements covered by
Shareholder Service Plans adopted by the Board with the financial
institutions that serve, or propose to serve, as shareholder
services agents thereunder ("Shareholder Service Agents"); review
the qualifications of Shareholder Service Agents to serve as such
under the relevant Shareholder Service Plan; coordinate and assist
in the Trust's execution and delivery of Shareholder Service
Agreements; report to the Board regarding amounts paid under
Shareholder Service Agreements and the nature of Services provided
by the Shareholder Service Agents thereunder; and maintain
appropriate records in connection with the foregoing.
TRANSFER AGENCY REPRESENTATION
Following each quarterly period, BISYS will provide a representation to
the following effect pertaining to the AML Services rendered by BISYS hereunder
during such quarterly period:
1. Performance of good order review for all new and reregistered
accounts;
39
2. Performance of acceptance review for all monetary instruments
received;
3. Administration of signature guarantee policy in accordance with
prospectus requirements;
4. If applicable, administration of escrow hold policy in accordance
with prospectus requirements;
5. Verification of customer address changes;
6. Verification of customer identification for all new accounts and all
name changes on existing accounts;
7. Monitoring of all purchase transactions made with cash equivalents
totaling in excess of $10,000. The number of Form 8300 reports filed
during the period will be reported;
8. Monitoring of all accounts for suspicious activity. The number of
Form SAR reports filed during the period will be reported;
9. Review of shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental
organizations, such as the Office of Foreign Asset Control. The
number of accounts frozen and otherwise reported to authorities
during the period will be reported;
10. Creation of the documentation necessary to provide a basis for law
enforcement authorities to trace illicit funds; and
11. Maintain all records and other documentation related to shareholder
accounts and transactions required to be prepared and maintained
pursuant to the Fund's anti-money laundering program for all BISYS
transfer agent services.
The following will be provided in such representation if the Trust falls
under the related USA PATRIOT Act of 2001 provisions:
12. Perform the required due diligence to help prevent the opening of
any accounts for foreign shell banks during the period either
directly or through correspondent accounts; and
13. Perform required due diligence on any new correspondent accounts
opened during the period.
40
SCHEDULE D-1
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND THE XXXXXXX, XXXXX FUNDS
ADDITIONAL SERVICES FEES RELATED TO XXX ACCOUNTS
BISYS shall act as the XXX custodian for the Funds' XXX Accounts, and will
perform the additional recordkeeping and administrative functions listed below
with respect to those accounts (in addition to any applicable services already
set forth on Schedule B of the Agreement.
Account Processing
1. Opening new XXX Accounts
2. Processing dividends and capital gain distributions
3. Notification of distribution requirements related to age 70
1/2
4. Maintaining beneficiary information on system
5. Calculating distributions, withdrawals, required withholding
and other payments to the holders of XXX Accounts (the
"Account Holders")
6. Process contributions and distributions for Account Holders
7. Process annual XXX Custodial Fee withdrawals, and collect any
pre-paid XXX Custodial Fees.
Account Maintenance
1. Maintaining Account Holder records
2. Changing addresses for Account Holders
3. Preparing periodic reports on accounts, number of shares, etc.
4. Preparation and filing of federal tax forms (1099-R, 5498)
5. Replying to shareholder correspondence and inquiries
6. Responding to all telephone inquiries about XXX Accounts
7. Complete annual W4P federal withholding solicitation
41
SCHEDULE E
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND THE XXXXXXX, XXXXX FUNDS
FEES
The Trust shall pay BISYS on the first business day of each month, or at
such time(s) as BISYS shall request and the parties hereto shall agree, a fee
for administration, fund accounting and transfer agency services comprised of
the following components, determined at the annual rates set forth below (to be
billed in equal monthly amounts). For these purposes, the rate at which the
asset-based fees are applied is determined by aggregating the assets of all
"Funds" together.
ADMINISTRATION, FUND ACCOUNTING AND FUND ADMINISTRATION SERVICES
An asset-based fee determined as follows:
Average Daily Net
Assets of the Funds Fee Amount
------------------- ----------
$0 - $900 million Sixty-Two and one-half one-thousandths of
one percent (.0625%) of the Funds' average
daily net assets
All assets exceeding $900 million Fifty-Five one-thousandths of one percent
(.055%) of the Funds' average daily net
assets
The foregoing asset-based fees are subject to an annual minimum fee of
$195,000.00, based on the current Fund complex, consisting of 3 Funds. The
annual minimum amount will increase (or decrease) by $65,000.00 for each Fund
that is added (or subtracted) from the total number of Funds.
Plus
An additional class fee of $5,000.00 per class per annum, applicable to each
additional class of shares over the first class of shares per Fund.
Plus
42
N-Q Filing Fees equal to $3,000.00 per Fund per N-Q filed on such Fund's behalf.
TRANSFER AGENCY AND SHAREHOLDER SERVICES
A per Cusip fee of $17,000.00 per Cusip per annum; plus
The following per-account fees, applied per annum to each shareholder account
(open or closed) on BISYS' transfer agency system:
Per Open Non-Networked Level III Accounts $18.00
Per Open Networked Level III Accounts $15.00
Per Closed Accounts $ 2.00
For these purposes, the following categories constitute an open account on the
BISYS system in any one month: open account with balance, open account with zero
balance, open account with negative balance and closed account with activity.
Closed accounts with no activity in the month are considered a closed account
for billing purposes.
COMPLIANCEEDGE-SERVICE PROVIDER PROGRAM FOR 38A-1
$20,000.00 per annum, payable in equal monthly installments.
43
CPI ADJUSTMENT
The fixed fees and other fees expressed as stated dollar amounts in this
schedule and in the Agreement shall be increased annually commencing on the
one-year anniversary date of the Effective Date by the percentage increase since
the Effective Date 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 mutually agreed to should such index no longer be published; but
under no circumstances may an annual increase exceed six percent (6%).
OUT OF POCKET EXPENSES AND MISCELLANEOUS CHARGES
The out of pocket expenses and miscellaneous services fees and charges provided
for under the Agreement are not included in the above fees and shall also be
payable to BISYS in accordance with the provisions of the Agreement.
AML Annual program servicing $4,000.00 for up to the first 50,000 accounts (to
be billed in equal monthly amounts of $333.33)
If over 50,000 accounts, the AML Annual program servicing fee is increased to
$7,000.00 (to be billed in equal monthly amounts of $583.33)
Systems costs
Early Warning annual fee $575.00
Early Warning per record cost $ 0.22
Early Warning searches for Network Level III are conducted and fees applied
every three weeks
Equifax - per request cost $ 5.00
FAIR VALUE SUPPORT SERVICES, IF APPLICABLE
As compensation for Fair Value Support Services, if applicable the
services set forth in subsections (b)2 and (b)3 (as they relate to fair value
determinations) of Schedule C hereto), BISYS shall receive the annual servicing
fee for each Fund that the Trust designates as being subject to fair value
determinations and for which Fair Value Support Services are to be provided by
BISYS hereunder, as follows:
One-time Development Fee, due upon the execution of this Agreement: $10,000
Annual Fee for Fair Value Support Services to be provided by BISYS:
For each Fund with less than 200 securities $5,000
For each Funds with at least 200 securities $7,500
(The Annual Fee is to be billed in equal monthly installments)
44
The foregoing BISYS fee(s) do not include out of pocket costs. BISYS will also
be reimbursed by the Trust for the actual costs charged by Fair Value
Information Vendors with respect to the provision of fair value pricing
information to BISYS for use in valuing the portfolio holdings of a specific
Fund or Funds.
TRUSTEE/CUSTODIAN SERVICES.
In addition, as provided in Section 4(a) of this Agreement, BISYS shall be
entitled to fifteen dollars ($15.00) per social security number, for each plan
or account type, per year (the "Custodial Fee"), to be paid within the month
prior to December 31 of each such year (or, if an XXX Account is to be closed,
prior to the closing of such XXX Account , for the services provided to the XXX
Account or XXX Accounts. BISYS will collect the Custodial Fee from each XXX
Account.
45
