COMPLIANCE SERVICES ADDENDUM TO MASTER SERVICES AGREEMENT
COMPLIANCE
SERVICES ADDENDUM
TO
This
Addendum, (the “Addendum”) is made this February 23, 2007 between COMMONWEALTH
INTERNATIONAL SERIES TRUST (the “Trust”), a Massachusetts Business Trust, having
its principal place of business at 0000
Xxx Xxxxxx #000, Xxxxxxx, Xxxxx 00000,
and
BISYS Fund Services Ohio, Inc. (“BISYS”), an Ohio corporation having a place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS,
the Trust is a registered investment company, and will become subject to the
requirements of Rule 38a-1 under the 1940 Act, which requires each registered
investment company to adopt policies and procedures that are reasonably designed
to prevent it from violating the federal securities laws;
WHEREAS,
BISYS performs certain administration and other services for the Trust pursuant
to that certain Master Services Agreement (the “Agreement”) dated as of November
1, 2006 between BISYS and the Trust;
WHEREAS,
BISYS offers compliance services through its ComplianceEDGE program, which
may
be tailored to create a compliance program for the Trust;
WHEREAS,
the Trust desires that BISYS provide its ComplianceEDGE program services in
connection with the institution of a more comprehensive compliance program
for
the Trust;
WHEREAS,
BISYS is legally
qualified and has the requisite knowledge and expertise to perform and
is willing
to perform the services enumerated in this Addendum on the terms and conditions
set forth in this Addendum; and
WHEREAS,
BISYS and the Trust wish to enter into this Addendum in order to set forth
the
terms under which BISYS will perform the services enumerated herein on behalf
of
the Trust, and to supplement and clarify certain provisions of the
Agreement.
NOW,
THEREFORE, in consideration of the covenants herein contained, the Trust and
BISYS hereby agree as follows:
1. Compliance
Services.
(a) The
parties mutually agree to coordinate and cooperate in connection with the
maintenance of written compliance polices and procedures (the “Fund Compliance
Program”) which, in the aggregate, shall be deemed by the Trust’s Board of
Trustees (the “Board”) to be reasonably designed to prevent the Trust from
violating the provisions of the Federal securities laws applicable to the Trust
(the “Applicable Securities Laws”), as required under Rule 38a-1 under the 1940
Act.
(b) BISYS
will provide the following services in relation to the Fund Compliance Program
during the term of this Addendum: (i) assist the Trust in maintaining the Fund
Compliance Program; (ii) assist the Trust’s Chief Compliance Officer (the “Chief
Compliance Officer” or “CCO”) in the preparation and evaluation of the results
of annual reviews of the compliance policies and procedures of the service
providers to the Trust as provided in Rule 38a-1 (“Service Providers”); (iii)
provide support services to the Chief Compliance Officer, including support
for
conducting an annual review of the Fund Compliance Program; (iv) assist the
Chief Compliance Officer in developing standards for reports to the Board by
BISYS and other Service Providers; (v) assist the Chief Compliance Officer
in
developing standards for reports to the Board by the Chief Compliance Officer;
(vi) assist the Chief Compliance Officer in preparing or providing documentation
for the Board to make findings and conduct reviews pertaining to the Fund
Compliance Program and compliance programs and related policies and procedures
of Service Providers; (vii) perform risk-based testing and reporting of the
compliance policies and procedures of each service (other than the services
set
forth in this Addendum) provided to the Trust by BISYS and any BISYS affiliate
acting as the Trust’s distributor, taking into account reasonable requests from
the CCO to the extent practicable; (viii) provide copies of any compliance
policies and procedures and any amendments thereto relating to BISYS and any
BISYS affiliate acting as the Trust’s distributor as the Trust or the CCO may
reasonably request in connection with the Fund Compliance Program; (ix) provide
copies of BISYS’ SAS 70 reports and SEC deficiency letters to the extent
comments relate specifically to the Fund, and upon the periodic request of
the
Trust, redacted copies of SEC deficiency letters of BISYS or its affiliates
that
provide services to the Trust, to the extent that comments relate and are
applicable to the services provided to the Trust (BISYS may redact client names
and such other information it deems confidential); and (x) provide such
information reasonably requested by the CCO, or the Board in connection with
the
Board’s determination regarding the adequacy and effectiveness of the compliance
policies and procedures of BISYS and any BISYS affiliate acting as the Trust’s
distributor.
(c)
The
Trust will provide or arrange for the provision of the Chief Compliance Officer.
The Trust acknowledges that BISYS will not be responsible for providing the
Chief Compliance Officer, and that if the Trust elects to have BISYS provide
the
Chief Compliance Officer in the future, additional terms and conditions and
additional fees will apply. The Trust will provide to BISYS copies of the Fund
Compliance Program, related policies and procedures, and all other books and
records of the Trust as BISYS deems necessary or desirable in order to perform
its obligations under this Addendum.
(d)
Notwithstanding any provision of the Agreement or any other agreement or
instrument that expressly or by implication provides to the contrary, it is
expressly agreed and acknowledged that BISYS cannot ensure that the Trust
complies with the Applicable Securities Laws.
2. Fees
and Expenses.
(a)
BISYS
shall be entitled to receive from the Trust an annual fee of $40,000.00 (“Annual
Fee”) paid in equal monthly installments (subject to the last sentence of this
section) reflecting the amounts charged by BISYS for the performance of services
under this Addendum. The fees hereunder shall be in addition to all fees and
expenses charged by BISYS under the Agreement. BISYS and Commonwealth hereby
agree that the monthly fee for the first month of service shall be one-half
of
the usual monthly fee. Thereafter, the monthly fee for services shall be the
full monthly fee.
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(b)
Commencing on the one-year anniversary of the Effective Date, BISYS may annually
increase the above fees by up to an amount equal to the most recent annual
percentage increase in consumer prices for services as measured by the United
States Consumer Price Index entitled “All Services Less Rent of Shelter” or a
similar index mutually agreed upon by the parties should such index no longer
be
published.
(c)
In
addition to paying BISYS the fees, the Trust agrees to reimburse BISYS for
all
of its actual out-of-pocket expenses reasonably incurred in providing services
under this Addendum not paid under the Agreement, including but not limited
to
the following:
(i)
All
out-of-pocket travel costs for attending Board meetings if and when such
attendance was requested by the Board, and conducting due diligence of Service
Providers at the direction of the Board, and attending training conferences
and
seminars (plus the costs of training) if and when such attendance was requested
by the Board; and
(ii)
The
out-of-pocket costs incurred by BISYS in connection with the Fund Compliance
Program, including those incurred by or with respect to other service providers,
in assisting the Chief Compliance Officer under the Fund Compliance
Program.
(d)
All
rights of compensation under this Addendum for services performed and for
expense reimbursement shall survive the termination of this
Addendum.
3. Information
to be Furnished by the Trust.
(a) The
Trust
has furnished or shall promptly furnish to BISYS copies of the following, as
amended and current as of the date of this Addendum:
The
Fund
Compliance Program or the various policies and procedures of the Trust that
have
been adopted through the date hereof which pertain to compliance matters that
are required to be covered by the Fund Compliance Program, including the
compliance programs of Service Providers other than BISYS, as necessary under
Rule 38a-1 for inclusion in the Fund Compliance Program in accordance with
Section 1(b) of this Agreement.
(b) The
Trust
shall furnish BISYS written copies of any amendments to, or changes in, the
Fund
Compliance Program or the various policies and procedures of the Trust,
forthwith upon such amendments or changes becoming effective. In addition,
the
Trust agrees that no amendments will be made to the Fund Compliance Program,
which might have the effect of changing the procedures employed by BISYS in
providing the services agreed to hereunder or which amendment might affect
the
duties of BISYS hereunder unless the Trust first obtains BISYS’ approval of such
amendments or changes, which approval shall not be withheld
unreasonably.
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(c) BISYS
may
rely on all documents furnished to it by the Trust and its agents in connection
with the services to be provided under this Addendum, including any amendments
to or changes in any of the items to be provided by the Trust pursuant to
Section 4(a), and shall be entitled to indemnification with regard to such
reliance, provided that such indemnification shall not apply to the extent
of
actions or omissions of BISYS involving its own bad faith, willful misfeasance,
negligence in the performance or reckless disregard by BISYS, of its obligations
and duties under this Addendum .
4. Term
and Termination.
(a)
The
compliance services to be rendered by BISYS under this Addendum shall commence
on November 20, 2006, the Effective Date of this Addendum and shall continue
in
effect for
an initial term of one year (the “Initial Term”). Thereafter, unless otherwise
terminated pursuant to this Addendum, this Addendum shall be renewed
automatically for successive one year periods (“Rollover Periods”). This
Addendum may be terminated (i) after the Initial Term, upon the provision of
ninety (90) days advance written notice by either party, (ii) by mutual
agreement of the parties, or (iii) for “cause,” as defined in the Agreement,
upon the provision of sixty (60) days advance written notice by the party
alleging cause. This Addendum may be terminated as set forth above, without
terminating the Agreement.
(b) Notwithstanding
anything
in this Addendum to the contrary, including but not limited to the provisions
of
Section 4(a), all of the obligations of the parties under this Addendum shall
terminate automatically upon any termination of the Agreement.
5.
Miscellaneous.
(a) Except
as
expressly set forth in this Addendum, the terms of the Agreement shall apply
to
the services rendered under this Addendum and the definition of terms and the
general provisions of the Agreement shall be used on a residual basis to define
any term or construe any issues arising under this Addendum that are not
addressed by the express terms of this Addendum. Except as expressly set forth
in this Addendum, the provisions of the Agreement remain unchanged and in full
force and effect.
(b) The
provisions set forth in this Addendum supersede all prior negotiations,
understandings and agreements bearing upon the subject matter covered herein,
including any conflicting provisions of the Agreement.
(c) No
Addendum or modification to this Addendum shall be valid unless made in writing
and executed by both parties hereto.
(d) Paragraph
headings in this Addendum are included for convenience only and are not to
be
used to construe or interpret this Addendum.
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(e) This
Addendum may be executed in counterparts, each of which shall be an original
but
all of which, taken together, shall constitute one and the same
agreement.
* * * * *
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IN
WITNESS WHEREOF, the parties hereto have caused this Addendum to be duly
executed all as of the day and year first above written.
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COMMONWEALTH
INTERNATIONAL
SERIES
TRUST
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By:
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/s/
Xxxxxx Xxxxxxx
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Name:
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Xxxxxx
Xxxxxxx
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Title:
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President
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BISYS
FUND SERVICES OHIO, INC.
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By:
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/s/
Xxxx Xxxxxxx
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Name:
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Xxxx
Xxxxxxx
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Title:
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President
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