Exhibit (h)(3)
TRANSFER AGENCY AGREEMENT
AGREEMENT made this __ day of February, 2004, between CITIZENS FUNDS (the
"Trust"), a Massachusetts business trust having its principal place of business
at 000 Xxxxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000, and BISYS FUND SERVICES
OHIO, INC. ("BISYS"), a Delaware corporation having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust and BISYS entered into a Transfer Agency Agreement dated
October 18, 2000 (as amended, the "2000 Agreement"), whereby BISYS agreed to
perform transfer agency services for the Trust, which has continued in effect
through the date hereof;
WHEREAS, the Trust desires that BISYS continue to perform transfer agency
services for the Trust and each investment portfolio of the Trust (except
portfolios that are or offer one or more classes that are exchange-traded funds
("ETFs")), as now in existence and listed on Schedule A hereto, or as hereafter
may be established from time to time (individually referred to herein as the
"Fund" and collectively as the "Funds");
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement; and
WHEREAS, BISYS and the Trust wish to enter into a new Agreement in order to
set forth the terms under which BISYS will perform the transfer agency services
set forth herein for the Trust.
NOW, THEREFORE, in consideration of the covenants hereinafter contained,
the Trust and BISYS hereby agree as follows:
1. Services
BISYS shall perform for the Trust the transfer agent services set forth in
Schedule B hereto. BISYS also agrees to perform for the Trust such special
services incidental to the performance of the services enumerated herein as
agreed to by the parties from time to time. BISYS shall perform such additional
services as are provided on an amendment to Schedule B hereof, in consideration
of such fees as the parties hereto may agree.
BISYS may, at its expense and with prior notice to and approval of the
Trust, which approval shall not be unreasonably withheld, subcontract with any
entity or person concerning the provision of transfer agency services
contemplated hereunder (a "Sub-Transfer Agent"); provided, however, that BISYS
shall not be relieved of any of its duties and obligations under this Agreement
by the appointment of such Sub-Transfer Agency and provided further, that BISYS
shall be responsible, to the extent provided in Section 6 hereof, for all acts
of such subcontractor as if such acts were its own.
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2. Fees
The Trust shall pay BISYS for the services to be provided by BISYS under
this Agreement in accordance with, and in the manner set forth in, Schedule C
hereto. Fees for any additional services to be provided by BISYS pursuant to an
amendment to Schedule B hereto shall be subject to mutual agreement at the time
such amendment to Schedule B is proposed.
3. Reimbursement of Expenses and Miscellaneous Service Fees
(a) In addition to paying BISYS the fees and expenses set forth in Schedule
C, the Trust agrees to reimburse BISYS for BISYS's reasonable out-of-pocket
expenses in providing services hereunder, including without limitation the
following (subject to Schedule C):
(i) All freight and other delivery and bonding charges incurred by
BISYS in delivering materials to and from the Trust and in
delivering all materials to shareholders;
(ii) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by BISYS in
communication with the Trust, the Trust's investment adviser or
custodian, dealers, shareholders or others as required for BISYS
to perform the services to be provided hereunder;
(iii) The cost of microfilm or microfiche or other electronic
retention of records or other materials;
(iv) Check processing and other banking fees;
(v) Records retention / storage fees;
(vi) XXX custody and other related fees;
(vii) NSCC and related costs;
(viii) Sales taxes;
(ix) Costs of statements and confirmations, or of providing necessary
information to third-party vendor;
(x) Costs of tax forms;
(xi) Costs of special shareholder correspondence projects as
requested by the Trust and approved by both parties;
(xii) Any expenses BISYS shall incur at the written direction of an
officer of the Trust thereunto duly authorized.
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(b) In addition, BISYS shall be entitled to receive the following fees:
(i) A fee for managing and overseeing the report, print and mail
functions performed by BISYS's third-party vendors, not to
exceed $.03 per page for confirmations; fees for programming in
connection with creating or changing the forms of statements,
billed at the rate of $150 per hour; and costs for postage,
couriers, stock computer paper, computer disks, 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;
(ii) System development fees, billed at the rate of $150 per hour, as
approved by the Trust, and all systems-related expenses, agreed
in advance, associated with the provision of special reports and
services pursuant to Item 8 of Schedule D attached hereto;
(iii) Fees for development of custom interfaces, billed at a mutually
agreed upon rate;
(iv) Ad hoc reporting fees, billed at the rate of $150 per hour or as
otherwise mutually agreed;
(v) Changes or enhancements to BISYS's Interactive Voice Response
System as mutually agreed between the parties;
(vi) Expenses associated with BISYS's anti-fraud procedures and the
performance of delegated services under the written anti-money
laundering program ("AML Program") adopted by the Trust,
provided that any changes in or additional expenses shall be
mutually agreed between the parties.
4. Effective Date
This Agreement shall become effective as of the date first written above
(the "Effective Date").
5. Term
This Agreement shall continue in effect until February 28, 2007 (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 notice of nonrenewal in the manner set forth below, (ii) by mutual agreement
of the parties or (iii) for "cause," as defined below, upon the provision of
sixty (60) days advance written notice by the party alleging cause. Written
notice of nonrenewal must be provided at least ninety (90) days prior to the end
of the Initial Term or any Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean (a) a material breach of
this Agreement that has not been remedied for thirty (30) days following written
notice of such breach from the non-breaching party; (b) a final, unappealable
judicial, regulatory or
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administrative ruling or order in which the party to be terminated has been
found guilty of criminal or unethical behavior in the conduct of its business;
or (c) financial difficulties on the part of the party to be terminated which
are evidenced by the authorization or commencement of, or involvement by way of
pleading, answer, consent or acquiescence in, a voluntary or involuntary case
under Title 11 of the United States Code, as from time to time is in effect, or
any applicable law, other than said Title 11, of any jurisdiction relating to
the liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors. BISYS shall not terminate this Agreement
pursuant to clause (a) above based solely upon the Trust's failure to pay an
amount to BISYS which is the subject of a good faith dispute, if (i) the Trust
is attempting in good faith to resolve such dispute with as much expediency as
may be possible under the circumstances, and (ii) the Trust continues to perform
its obligations hereunder in all other material respects (including paying all
fees and expenses not subject to reasonable dispute hereunder).
Notwithstanding the foregoing, 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
consent of the Trust, the provisions of this Agreement, including without
limitation the provisions dealing with 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 disbursements provided by Schedule C and
Section 3 hereof, the amount of all of BISYS's cash disbursements in connection
with BISYS's activities in effecting such termination, including without
limitation, the delivery to the Trust and/or its distributor or investment
adviser and/or other parties of the Trust's property, records, instruments and
documents.
In addition, if, for any reason other than (i) nonrenewal, (ii) mutual
agreement of the parties or (iii) "cause" for termination of BISYS hereunder,
BISYS's services are terminated hereunder, BISYS is replaced as transfer agent,
or if a third party is added to perform all or a part of the services provided
by BISYS under this Agreement (excluding any Sub-Transfer Agent appointed as
provided in Section 1 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 its services hereunder (provided such amount shall not include
out of pocket expenses not incurred) 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 Funds and shareholder accounts and fees payable
to BISYS monthly during the twelve (12) months prior to the date that services
terminate (excluding out of pocket expenses), BISYS is replaced or a third party
is added. If BISYS is terminated or replaced or a third-party is added for less
than all of the Funds the one-time payment shall be calculated based only on the
fees that would be due with respect to such Funds. The one time fee shall not
apply in cases where the Trust's adviser or affiliated party provide services to
a Fund.
In the event the Trust or any Fund is merged into another legal entity
(other than another Fund) in part or in whole pursuant to any form of business
reorganization or is liquidated in part or in whole (other than liquidation in
accordance with a decision by the Board to terminate such
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Fund for reasons related to such Fund not being economically feasible) 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
transfer agency services consistent with this Agreement, including the number of
Funds and accounts subject to such services. 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.
Notwithstanding the foregoing, the Trust may transfer one Fund to a
different service provider if it intends to offer a class of such Fund that will
be an ETF, and BISYS will waive the one-time payment with regard to such Fund,
provided however, that if the Trust abandons or fails to diligently pursue
registration and launch of such ETF class, such waiver will be void and the
one-time payment will be immediately due and payable.
The parties further acknowledge and agree that, in the event 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.
6. Standard of Care; Uncontrollable Events; Limitation of Liability
BISYS shall use reasonable professional diligence to ensure the accuracy of
all services performed 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, 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's 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
require, 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.
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NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL BISYS, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, 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 EITHER PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
7. Legal Advice; Instructions; Certain Procedures, etc.
BISYS may apply to the Trust at any time for instructions and, with the
Trust's consent, which shall not be unreasonably withheld, may seek advice from
counsel and accountants for the Trust with respect to any matter arising in
connection with BISYS's duties, and BISYS shall not be liable nor accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel and accountants.
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, when concerning a
shareholder's account, by the shareholder or properly authorized agent of such
shareholder 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 Trust's Board of
Trustees (hereafter referred to as the "Board") or by the shareholder or
shareholder's agent, as the case may be. 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 written notice thereof from the Trust.
As to the services to be provided hereunder, BISYS may rely conclusively
upon the terms of the Prospectuses and Statement of Additional Information of
the Trust relating to the relevant Funds to the extent that such services are
described therein, as well as minutes of Board meetings (if applicable) and
other records of the Trust unless BISYS receives written 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 conclusively assume that any special procedure
which has been approved by an executive officer of the Trust (other than an
officer or employee of BISYS) does not conflict with or violate any requirements
of the Trust's Declaration of Trust, By-Laws or then-current prospectuses, or
any rule, regulation or requirement of any regulatory body.
The Trust acknowledges receipt of a copy of BISYS's 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 with
prior notification to the Trust. A copy of any such amendments shall be
delivered to the Trust upon request. BISYS may apply the BISYS As-Of Trading
Policy whenever applicable, unless BISYS agrees in writing to process trades
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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's written
transfer agent compliance procedures may involve a substantial risk of loss. In
the event an authorized representative of the Trust requests that an exception
be made from any written compliance or transfer agency procedures adopted by
BISYS, or any requirements of the AML Program, 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 employee of BISYS) and delivered to BISYS (an "Exception"); provided
that an Exception concerning the requirements of the Trust's AML Program shall
be authorized by the Trust's AML Compliance Officer (as defined in Section 14).
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.
8. Indemnification
The Trust agrees to indemnify and hold harmless BISYS, its employees,
agents, directors, officers and nominees from and against any and all claims,
demands, actions and suits, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising out of or in any way relating to BISYS's
actions taken or omissions with respect to the performance of services under
this Agreement or based, if applicable, upon reasonable reliance on information,
records, instructions or requests given or made to BISYS by a duly authorized
representative of the Trust, or its investment adviser, fund accountant,
custodian, or other service provider; provided that this indemnification shall
not apply to actions or omissions of BISYS in cases of its own bad faith,
willful misfeasance, negligence or reckless disregard by it of its obligations
and duties.
BISYS shall indemnify, defend, and hold the Trust harmless from and against
any and all claims, actions and suits and all losses, damages, costs, charges,
reasonable counsel fees and disbursements, payments, expenses and liabilities
(including reasonable investigation expenses) resulting directly and proximately
from BISYS's willful misfeasance, bad faith or negligence in the performance of
its duties or by reason of reckless disregard of its obligations and duties
hereunder.
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
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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, whose
approval shall not be unreasonably withheld. 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. 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.
9. Record Retention and Confidentiality
BISYS shall keep and maintain on behalf of the Trust all books and records
which the Trust or BISYS is, or may be, required to keep and maintain pursuant
to any 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"), relating to the maintenance of books and records in connection with
the services to be provided hereunder. BISYS further agrees that all such books
and records shall be the property of the Trust and will be surrendered promptly
to the Trust on request, and made available for inspection by the Trust or by
the Securities and Exchange Commission (the "Commission") at reasonable times.
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, or (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 or when requested by the Trust or the dealer of
record as to such account. 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, and BISYS will cooperate with the Trust (at
the Trust's expense) in any action the Trust may take to seek an injunction or
otherwise lawfully prevent such disclosure. The provisions of this Section 9 are
subject to the provisions of Section 21.
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10. 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 in Schedule D attached hereto, or as
subsequently agreed upon by the parties pursuant to an amendment to Schedule D.
The Trust agrees to examine each such report or copy promptly and will report or
cause to be reported any errors or discrepancies therein.
11. Rights of Ownership
All computer programs and procedures employed or developed by or on behalf
of BISYS to perform services required to be provided by BISYS under this
Agreement are the property of BISYS. All records and other data except such
computer programs and procedures are the exclusive property of the Trust and all
such other records and data shall be furnished to the Trust in appropriate form
as soon as practicable after termination of this Agreement for any reason.
12. Return of Records
BISYS may at its option at any time, and shall promptly upon the Trust's
demand, turn over to the Trust and cease to retain BISYS's files, records and
documents created and maintained by BISYS pursuant to this Agreement which are
no longer needed by BISYS in the performance of its services or for its legal
protection. If not so turned over to the Trust, such documents and records shall
be retained by BISYS for six years from the year of creation. At the end of such
six-year period, such records and documents shall be turned over to the Trust
unless the Trust authorizes in writing the destruction of such records and
documents.
13. Bank Accounts
BISYS is hereby granted, subject to prior Trust approval, 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 selected or approved by the Trust, as may
be necessary or appropriate from time to time in connection with the services
required to be performed hereunder. The Trust agrees to cooperate with BISYS in
obtaining services from such bank or banks as necessary to perform such
services. The Trust shall be deemed to be the customer of such Bank or Banks for
all purposes in connection with 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.
14. Representations and Warranties of the Trust
The Trust represents and warrants to BISYS that: (a) as of the close of
business on the Effective Date, each Fund which is in existence as of the
Effective Date has authorized unlimited shares, (b) by virtue of its Declaration
of Trust, shares of each Fund which are redeemed by the Trust may be sold by the
Trust from its treasury, and (c) 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
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terms, subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of creditors and
secured parties.
The Trust also represents and warrants that (a) the Trust has adopted the
written AML Program that has been submitted to BISYS pursuant to Section 17, and
has appointed an officer of the Trust as the Trust's anti-money laundering
compliance officer ("AML Compliance Officer"), (b) the AML Program and the
designation of the AML Officer have been approved by the Board, (c) the
delegation of certain services thereunder to BISYS, as provided in Section 21,
has been approved by the Board, and (d) the Trust will submit any material
amendments to the AML Program to BISYS in accordance with and subject to Section
19.
15. Representations and Warranties of BISYS
BISYS represents and warrants that: (a) BISYS has been in, and shall
continue to be in compliance in all material respects with all provisions of
law, including Section 17A(c) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), required in connection with the performance of its duties
under this Agreement; (b) the various procedures and systems which BISYS has
implemented with regard to safekeeping from loss or damage attributable to fire,
theft or any other cause of the blank checks, records, and other data of the
Trust and BISYS's records, data, equipment, facilities and other property used
in the performance of its obligations hereunder are 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; (c) it has sufficient personnel
and resources to carry out its duties under this Agreement, and (d) 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.
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.
16. 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. BISYS shall provide proof of such coverage, and the
Trust may request, no more than four times annually, that BISYS provide
continuing proof of such coverage . BISYS shall promptly notify the Trust should
its insurance coverage with respect to professional liability or errors and
omissions coverage be canceled or materially reduced. Such notification shall
include the date of the change or cancellation and the reasons therefore. BISYS
shall promptly notify the Trust of any material
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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
should the total outstanding claims made by BISYS under its insurance coverage
materially impair, or threaten to materially impair, the adequacy of its
coverage.
17. Information to be Furnished by the Trust and Funds
The Trust has furnished to BISYS the following, as amended and current as
of the Effective Date:
(a) A copy of the Declaration of Trust of the Trust and of any amendments
thereto, certified by the proper official of the state in which such Declaration
has been filed.
(b) A copy of the Trust's Bylaws and any amendments thereto;
(c) Certified copies of resolutions of the Board covering the following
matters:
(i) Approval of this Agreement and authorization of a specified officer 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 Transfer Agent for the Trust.
(d) A 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 the following (if such documents are employed by the
Trust):
(i) Prospectuses 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 beneficial interest 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, such statement to
be certified by the Treasurer of the Trust.
(g) A copy of the Trust's written AML Program, including related Policies
and Procedures.
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18. Information Furnished by BISYS
BISYS has furnished to the Trust 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 for the Trust;
(c) The current BISYS "As-of" Trading Policy;
(d) Proof of insurance coverage in accordance with Section 16 hereof; and
(e) BISYS's current written anti-money laundering program.
19. Amendments to Documents
The Trust shall furnish BISYS written copies of any amendments to, or
changes in, any of the items referred to in Section 17 hereof forthwith upon
such amendments or changes becoming effective. In addition, the Trust agrees
that no amendments will be made to the Prospectuses or Statement of Additional
Information of the Trust, or the AML Program, which would have the effect of
changing the procedures employed by BISYS in providing the services agreed to
hereunder or which amendment would affect the duties of BISYS hereunder (either
circumstance referred to as "Affect BISYS") unless the Trust first obtains
BISYS's approval of such amendments or changes, which approval shall not be
withheld unreasonably; provided, however, that if any such amendment is made
without BISYS's approval and does Affect BISYS, BISYS shall not be required to
comply with such amendment unless it consents thereto, which consent will not be
unreasonably withheld, provided further that this Section 19 shall not excuse
BISYS from complying with laws and regulations applicable to BISYS. Among other
instances, approval in any of the foregoing circumstances shall not be deemed
unreasonably withheld if BISYS would incur additional costs or expenses in
complying with the relevant amendment and the parties can not, in good faith,
reach mutual agreement on payment of additional fees to BISYS and allocation of
expenses related thereto.
20. 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 17 and 19 of this
Agreement and, subject to the provisions of Section 6 hereof, the Trust hereby
indemnifies and holds harmless BISYS from and against any and all claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, counsel fees and other expenses of every nature and character which may
result from actions or omissions on the part of BISYS in 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 17 and 19 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
unless the Trust first obtains BISYS's written consent to and approval of such
amendments or changes.
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21. Compliance with Laws
Except for the obligations of BISYS set forth in Section 9 hereof, the
Trust assumes full responsibility for the preparation, contents, and
distribution of each prospectus of the Trust as to 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. BISYS shall have no obligation to take
cognizance of any 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.
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 ("U.S.A. 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
B (the "AML Services") as concerns the shareholder accounts maintained by BISYS
pursuant to this Agreement (including direct accounts; accounts maintained
through FUND/SERV and Networking, to the extent provided below, and omnibus
accounts, to the extent provided below). 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, including the
requirement to have policies and procedures that can be reasonably expected to
detect and cause the reporting of transactions under Section 5318 of the Bank
Secrecy Act. BISYS's obligations under this delegation shall be subject to
Sections 19 and 20, including the provisions regarding prior approval.
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 some 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
13
of any safe harbor from civil liability 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 contemplated
under the interim final rule of the Department of the Treasury, 31 CFR 103,
effective April 24, 2002 (the "Interim Final Rule") and the performance by the
Trust of the risk-based evaluation of entities holding such accounts, as
contemplated under the Interim Final Rule. The foregoing reference to the
Interim Final Rule shall be deemed to include laws and regulations adopted
subsequent to the Interim Final Rule, if and to the extent consistent therewith.
22. 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 000 Xxxxxxxx Xxx, Xxxxxxxxxx, Xxx
Xxxxxxxxx 00000, with a copy to the Trust at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
00000 Attn: President; 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.
23. 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 23 shall not limit or in any way affect BISYS's right
to appoint a Sub-Transfer Agent pursuant to Section 1 hereof. This Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and permitted assigns.
24. Governing Law and Matters Relating to the Trust as a Massachusetts
Business Trust.
This Agreement shall be governed by and provisions shall be construed in
accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of Ohio, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Trust personally,
but shall bind only the trust property of the Trust. The execution and delivery
of this Agreement have been authorized by the Board, and this Agreement has been
signed and delivered by an authorized officer of the Trust, acting as such, and
neither such authorization by the Board nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in the Trust's Declaration of Trust.
25. 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 Trust are or
14
may be or 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
become similarly interested in the Trust, and that BISYS may be or become
interested in the Trust as a Shareholder or otherwise.
26. 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 affiliates of BISYS except at the direction of the Trust or
as required or permitted by law (including Applicable AML Laws). BISYS shall
have in place and 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.
27. 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 supercedes all prior
negotiations, understandings and agreements bearing upon the subject matter
covered herein, including, without limitation, the 2000 Agreement.
(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.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CITIZENS FUNDS
By:
------------------------------------
Name:
Title:
15
BISYS FUND SERVICES OHIO, INC.
By:
------------------------------------
Name:
Title:
16
SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN CITIZENS FUNDS
AND BISYS FUND SERVICES OHIO, INC.
Date February __, 2004
FUNDS
Citizens Money Market
Citizens Income
Citizens Emerging Growth
Citizens Global Equity
Citizens Small Cap Core Growth
Citizens Core Growth
Citizens Value
Citizens Balanced
Citizens Ultra Short Bond
Citizens 300 Fund
Citizens Small Cap Value
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SCHEDULE B
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN CITIZENS FUNDS
AND BISYS FUND SERVICES OHIO, INC.
Date February __, 2004
TRANSFER AGENCY SERVICES
1. Shareholder Transactions
(a) Process shareholder purchase and redemption orders.
(b) Set up account information, 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) Process transfers and exchanges.
(e) Process dividend payments, including the purchase of new shares,
through dividend reimbursement.
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.
(d) Notify on a timely basis the investment adviser, accounting agent, and
custodian of Fund activity.
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.
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4. Dealer/Load Processing (if applicable)
(a) Provide reports for tracking rights of accumulation and purchases made
under a Letter of Intent.
(b) Account for separation of shareholder investments from transaction
sale charges for purchase of Fund shares.
(c) Calculate fees due under 12b-1 plans for distribution and marketing
expenses.
(d) Track sales and commission statistics by dealer and provide for
payment of commissions on direct shareholder purchases in a load Fund.
5. Shareholder Account Maintenance
(a) Maintain all shareholder records for each account in the Trust.
(b) Record shareholder account information changes.
(c) Maintain account documentation files for each shareholder.
6. Anti-Money Laundering Services
(a) 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.
(f) Arrange for periodic reviews, at least annually, to be performed by
internal auditors or other auditors chosen by BISYS concerning the
BISYS operations related to the AML Services.
(g) Subject to Section 19, perform such other related services as are
required by the AML Program.
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SCHEDULE C
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN CITITZENS FUNDS
AND BISYS FUND SERVICES OHIO, INC.
Date February __, 2004
Annual Fees
Base annual Trust fee $10,000 x the number of Funds
Per open account
For each of the first 40,000 accounts $18.50
For each account >40,000 -60,000 $16.75
For each accounts >60,000 $15.50
Per closed account $2.50
AML Services
Annual program servicing $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
(for new account* registration review -
does not apply to Network Level III accounts
Equifax - per request cost $5.00
*Changes to account registration information or other account-related
information may result in characterizing the account as a "new account" for
these purposes.
Out-of-Pocket Expenses
Notwithstanding the provisions of Section 3 of this Agreement, the following
charges are allocated as described below:
The Trust shall pay BISYS expenses (as charged to BISYS unless otherwise noted)
for (or the successor or replacement for any specific vendor noted):
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CPU Charges: $300 per month shall cover (i) Debit Card In-Bound, (ii) Debit Card
Out-Bound, (iii) Citizens A1 (FISC file), and (iv) Citizens Monthly Statistical
Report. Any additional files will be priced separately and subject to prior
approval of the Trust. In addition, any system development projects will follow
the documented current protocol with regard to estimates, approval and payment.
DST Output (media for confirmations and tax statements)
Fifth Third Bank Charges (custodian/DDA cash management/BAI file costs),
provided that transact reporting will not be charged to the Trust.
Telecommunication Charges (T-1 cable access, routers, etc.), provided that when
the Trust moves to its new location BISYS will no longer cover the costs of a
second T-1 line.
Union Bank of California (NSCC clearing)
BISYS shall not charge the Trust for expenses from the following vendors or
their successors or replacements:
Xerox Federal Express
Shred-it XO Communications
USPS Presort America
Standard Register Safeguard Business Systems
AT&T Information Management Services (toner)
Ikon International Mailing Systems
DHL Xxxxxx Business Forms
Airborne Rainbow Express
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SCHEDULE D
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN CITIZENS FUNDS
AND BISYS FUND SERVICES OHIO, INC.
Date February __, 2004
REPORTS
1. Daily Shareholder Activity Journal
2. Daily Fund Activity Summary Report
(a) Beginning Balance
(b) Transactions
(c) Shareholder Transactions
(d) Reinvested Dividends
(e) Exchanges
(f) Adjustments
(g) Ending Balance
3. Daily Wire and Check Registers
4. Monthly Dealer Processing Reports
5. Monthly Dividend Reports
6. Sales Data Reports for Blue Sky Registration
7. A copy of the most recent report by independent public accountants
describing control structure policies and procedures relating to transfer
agency operations pursuant to AICPA Statement on Auditing Standards Number
70.
8. Such special reports and additional information that the parties may agree
upon, from time to time.
9. In addition to the forgoing, following each quarterly period, BISYS will
provide a report to the following effect pertaining to the AML Services
rendered by BISYS hereunder during such quarterly period:
(a) performed good order review for all new and reregistered accounts;
(b) performed acceptance review for all monetary instruments received;
(c) administered signature guarantee policy in accordance with prospectus
requirements;
22
(d) administered escrow hold policy in accordance with prospectus
requirements;
(e) verified customer address changes;
(f) verified customer identification for all new accounts and all name
changes on existing accounts;
(g) monitored all purchase transactions made with cash equivalents
totaling in excess of $10,000 resulting in the filing of [x] Form 8300
reports during the period. The Fund does not accept cash or currency;
(h) monitored all accounts for suspicious activity resulting in the filing
of [x] Form SAR reports during the period;
(i) reviewed shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental
organizations, such as the Office of Foreign Asset Control resulting
in the freezing and reporting of [x] accounts during the period;
(j) reviewed shareholder names in compliance with FinCEN 314(a) requests,
resulting in the reporting of accounts during the period;
(k) created the documentation necessary to provide a basis for law
enforcement authorities to trace illicit funds; and
(l) maintained all records and other documentation related to shareholder
accounts and transactions required to e 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 report if the Trust falls under the
related USA PATRIOT Act provisions:
(m) performed 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
(n) performed required due diligence on any new correspondent accounts
opened during the period.
23
