Exhibit 23(h)(5)
COMPLIANCE SERVICES AGREEMENT
AGREEMENT effective as of the 1st day of October, 2004, between The Empire
Builder Tax Free Bond Fund, a Massachusetts business trust having its principal
place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and BISYS FUND
SERVICES OHIO, INC. ("BISYS"), an Ohio corporation having its principal 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 management and administration services for
the Trust under an administration agreement between BISYS and the Trust dated
October 1, 1996 and as amended to date (the "Administration Agreement");
WHEREAS, BISYS offers compliance services through its ComplianceEDGE
program, which may be tailored to create a compliance program for the Trust;
WHEREAS, the Trust desires that BISYS provide its Compliance EDGE program
services in connection with the institution of a more comprehensive compliance
program for the Trust;
WHEREAS, BISYS is willing to perform the services enumerated in this
Agreement on the terms and conditions set forth in this Agreement; and
WHEREAS, BISYS and the Trust wish to enter into this Agreement in order to
set forth the terms under which BISYS will perform the services enumerated
herein on behalf of the Trust, and to supplement and clarify certain provisions
of the Administration Agreement.
NOW, THEREFORE, in consideration of the covenants herein contained, the
Trust and BISYS hereby agree as follows:
1. Compliance Services.
(a) The parties mutually agree to coordinate and cooperate in connection
with the creation and implementation of written compliance polices and
procedures which, in the aggregate, shall be deemed by the Board of Trustees of
the Trust (the "Board") to be reasonably designed to prevent the Trust from
violating the provisions of the Federal securities laws applicable to the Trust
(the "Applicable Securities Laws"), as required under Rule 38a-1 under the 1940
Act.
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(b) The Trust agrees to provide BISYS with copies of its current
compliance policies and procedures and furnish (and cause its investment
advisers and other service providers to furnish) all such additional information
as may reasonably relate to the design and implementation of the Fund Compliance
Program. Such additional information shall include compliance and related
information pertaining to the investment adviser and any other service providers
to the Trust other than BISYS. BISYS shall review and evaluate all such existing
information and coordinate the creation of a written document or documents
designed to embody the overall fund compliance program and the oversight of the
compliance programs of the service providers to the Trust as provided in Rule
38a-1 ("Service Providers"). Drafts shall be prepared by BISYS in consultation
with the Trust and its counsel and shall be submitted for review and comment.
Upon approval by the Board, such documents or documents shall become effective
as the fund compliance program required under Rule 38a-1 (as amended from time
to time upon the approval of the Board, the "Fund Compliance Program").
(c) BISYS will provide the following services in relation to the Fund
Compliance Program during the term of this Agreement: (i) make an individual
available to serve as the Trust's Chief Compliance Officer to administer the
Fund Compliance Program, to the extent provided in Section 3(a) below; (ii)
assist the Trust in developing and implementing the written policies and
procedures comprising the Fund Compliance Program, as contemplated above and as
may be necessary in connection with amendments from time to time; (iii) assist
the Trust in the preparation and evaluation of the results of annual reviews of
the compliance policies and procedures of Service Providers; (iv) provide
support services to the Chief Compliance Officer of the Trust, including support
for conducting an annual review of the Fund Compliance Program; (v) assist in
developing standards for reports to the Board by BISYS and other Service
Providers; (vi) assist in developing standards for reports to the Board by the
Chief Compliance Officer; and (vi) assist in preparing or providing
documentation for the Board to make findings and conduct reviews pertaining to
the Fund Compliance Program and compliance programs and related policies and
procedures of Service Providers.
2. Other Services.
(a) Sub-Certifications. To assist the Trust in connection with its
obligations under the Xxxxxxxx-Xxxxx Act of 2002, Rule 30a-2 under the 1940 Act,
and related laws (collectively, "Xxxxxxxx-Xxxxx"), BISYS will internally
establish and maintain its own controls and procedures designed to ensure that
information recorded, processed, summarized, or reported by BISYS on behalf of
the Trust and included in the Trust's reports on Form N-CSR and any other
reports required to be certified pursuant to Xxxxxxxx-Xxxxx (collectively,
"Reports") is (i) recorded, processed, summarized, and reported by BISYS within
the time periods specified in the Commission's rules and forms and the trust's
disclosure and control procedures (the "Trust DCPs"), and (ii) communicated to
the relevant officers of the Trust who are required to certify Reports under
Xxxxxxxx-Xxxxx ("Certifying Officers"), in a manner consistent with the Trust
DCPs.
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Solely for the purpose of providing a Certifying Officer with a basis for
his or her certification of any Report, BISYS will (i) provide a
sub-certification with respect to BISYS' services during any fiscal period in
which BISYS served as a financial administrator to the Trust consistent with the
requirements of the certification required under Xxxxxxxx-Xxxxx and/or (ii)
inform the Certifying Officers of any reason why all or part of such required
certification would be inaccurate. In rendering any such sub-certification,
BISYS may (i) limit its representations to information prepared, processed and
reported by BISYS; (ii) rely upon and assume the accuracy of the information
provided by officers (other than employees or officers of BISYS) and other
authorized agents of the Trust, including all other Service Providers, and
compliance by such officers and agents with the Trust DCPs; and (iii) assume
that the Trust has selected appropriate accounting policies for the Fund(s).
The Trust shall assist and cooperate with BISYS (and shall cause its
officers 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 any Report, so that BISYS may submit a draft of such Report to
the Trust's DCP Committee prior to the date it is to be filed.
3. Provision of Executive Officers
(a) Provision of Chief Compliance Officer. At the election of the Trust,
in connection with the compliance services to be rendered by BISYS pursuant to
Section 1 above, and subject to the provisions of this Section 3(a) and to
Section 3(d) below, BISYS agrees to make available to the Trust a person to
serve as the Trust's chief compliance officer responsible for administering the
Fund Compliance Program as provided in paragraph (a)(4) of Rule 38a-1 (the
"Chief Compliance Officer"). BISYS' obligation in this regard shall be met by
providing an appropriately qualified employee or agent of BISYS (or its
affiliates) who, in the exercise of his or her duties to the Trust, shall act in
good faith and in a manner reasonably believed by him or her to be in the best
interests of the Trust. In the event that the employment relationship or
independent contractor agency relationship between BISYS and any person made
available by BISYS to serve as Chief Compliance Officer terminates for any
reason, BISYS shall have no further responsibility to provide the services of
that particular person, and shall have no responsibility whatsoever for the
services to the Trust or other activities of such person provided or occurring
after such termination regardless of whether or not the Board terminates such
person as Chief Compliance Officer. In such event, upon the request of the
Trust, BISYS will employ reasonable good faith efforts to make another person
available to serve as the Chief Compliance Officer.
In connection with BISYS' commitment to make an appropriately qualified
person available to serve as Chief Compliance Officer, BISYS shall pay a level
of total compensation to such person as is consistent with BISYS' compensation
of employees having similar duties, similar seniority, and working at the same
or similar geographical location. BISYS shall not be obligated to pay any
compensation to a Chief Compliance Officer which exceeds that set forth in the
previous sentence.
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The Trust will provide copies of the Fund Compliance Program, related
policies and procedures, and all other books and records of the Trust as the
Chief Compliance Officer deems necessary or desirable in order to carry out his
or her duties hereunder on behalf of the Trust. The Trust shall cooperate with
the Chief Compliance Officer and ensure the cooperation of the investment
adviser, the custodian and any other Service Providers to the Trust, as well as
Trust counsel, independent Trustee counsel and the Trust's independent
accountants (collectively, the "Other Providers"), and assist the Chief
Compliance Officer and BISYS in preparing, implementing and carrying out the
duties of the Chief Compliance Officer under the Fund Compliance Program and
Rule 38a-1. In addition, the Trust shall provide the Chief Compliance Officer
with appropriate access to the executive officers and trustees of the Trust, and
to representatives of and to any records, files and other documentation prepared
by, Service Providers and Other Providers, which are or may be related to the
Fund Compliance Program.
Each party agrees to provide promptly to the other party (and to the Chief
Compliance Officer), upon request, copies of other records and documentation
relating to the compliance by such party with Applicable Securities Laws (as
related to the Fund Compliance Program of the Trust), and each party also agrees
otherwise to assist the other party (and the Chief Compliance Officer) in
complying with the requirements of the Fund Compliance Program and Applicable
Securities Laws.
BISYS agrees to provide the services set forth in Section 1 pertaining to
the Fund Compliance Program, whether or not the person serving as Chief
Compliance Officer is an employee or agent of BISYS. In the event that the
employment relationship or independent contractor agency relationship between
BISYS and a person made available by BISYS serving as Chief Compliance Officer
terminates for any reason, BISYS shall have no further responsibility to make
that particular person available, and shall have no responsibility concerning
such person's services after the date the Trust is notified of such termination.
In such event, upon the request of the Trust, BISYS will employ reasonable good
faith efforts to make another person available to serve as the Chief Compliance
Officer.
(b) Provision of Certifying Officer(s). Subject to the provisions of this
Section 3(b) and Section 3(d) below, BISYS shall make a BISYS employee available
to the Trust to serve, upon designation as such by the Board, as the Chief
Financial Officer of the Trust or under such other title to perform similar
functions, and which is a Certifying Officer under Xxxxxxxx-Xxxxx. 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 by him
or her 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's reasonable discretion,
taking into account such person's responsibilities concerning, and familiarity
with, the Trust's operations.
For so long as BISYS provides a Certifying Officer, the Trust DCPs shall
contain (or the Trust and BISYS shall otherwise establish) mutually agreeable
procedures
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governing the certification of Reports by Certifying Officers, and the parties
shall comply with such procedures in all material respects. Among other things,
the procedures shall provide as follows:
(i) The Trust shall establish and maintain a Disclosure Controls and
Procedures Committee (the "DCP Committee") to evaluate the Trust
DCPs in accordance with Rule 30a-3 under the 1940 Act. The DCP
Committee shall include (at a minimum) the Trust's Principal
Executive Officer, Chief Financial Officer, and Chief Legal Officer
(if any) and such other individuals as may be necessary or
appropriate to enable the DCP Committee to ensure the cooperation
of, and to oversee, each of the Trust's agents that records,
processes, summarizes, or reports information contained in Reports
(or any information from which such information is derived),
including the Funds' Other Providers.
(ii) The Trust shall require (a) Service Providers to provide
sub-certifications on internal controls, upon which the Certifying
Officers may rely in certifying Reports, in form and content
reasonably acceptable to the Certifying Officers and consistent with
Xxxxxxxx-Xxxxx, and (b) that such sub-certifications are delivered
to the DCP Committee and the Certifying Officers sufficiently in
advance of the DCP Committee meeting described in (iii) below.
(iii) The DCP Committee shall (a) establish a schedule to ensure that all
required disclosures in any Report, including the financial
statements, are identified and prepared in a timeframe sufficient
for it to review such disclosures, (b) meet prior to the filing date
of each Report to review the accuracy and completeness of the
relevant Report, and (c) record its considerations and conclusions
in a written memorandum sufficient for it to adequately to support
conclusions pertaining to Trust DCPs as required by Item 9 of Form
N-CSR or other Report. In conducting its review and evaluations, the
DCP Committee shall:
(A) review SAS 70 reports pertaining to BISYS and other Service
Providers, if applicable, or in the absence of any such
reports, consider the adequacy of the sub-certifications
supplied by the Service Providers;
(B) consider whether there are any significant deficiencies or
material weaknesses in the design or operation of the Trust
DCPs or internal controls over financial reporting that could
adversely affect the Trust's ability to record, process,
summarize, and report financial information, and in the event
that any such weaknesses or deficiencies are identified,
disclose them to the Trust's Certifying Officers, audit
committee, and auditors;
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(C) consider whether, to the knowledge of any member of the DCP
Committee, there has been or may have been any fraud, whether
or not material, and, if so, disclose the facts and
circumstances thereof to the Certifying Officers, and the
Trust's audit committee and auditors; and
(D) determine whether there was any change in internal controls
over financial reporting that occurred during the Trust's most
recent fiscal half-year that has materially affected or is
reasonably likely to materially affect, the Trust's internal
control over financial reporting.
A Certifying Officer shall have the full discretion to decline to certify
a particular Report 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.
The Trust shall, in its own capacity, take all reasonably necessary and
appropriate measures to comply with its obligations under Xxxxxxxx-Xxxxx.
Without limitation of the foregoing, except for those obligations which are
expressly delegated to or assumed by BISYS in this Agreement, the Trust shall
maintain responsibility for, and shall support and facilitate the role of each
Certifying Officer and the DCP Committee in, designing and maintaining the
Trust's DCPs in accordance with applicable laws.
(c) INTENTIONALLY OMMITTED.
(d) Additional Provisions Concerning Executive Officers. It is mutually
agreed and acknowledged by the parties that the Chief Compliance Officer and the
Chief Financial Officer contemplated under the provisions of this Section 3 of
this Agreement will be executive officers of the Trust ("Executive Officers").
The provisions of Sections 3(a) - (b) are subject to the internal policies of
BISYS concerning the activities of its employees and their service as officers
of funds (the "BISYS Policies"), a copy of which shall be provided to the Trust
upon request. The Trust's governing documents (including its Agreement and
Declaration of Trust and By-Laws) and/or resolutions of its Board shall contain
mandatory indemnification provisions that are applicable to each Executive
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.
The Trust shall provide coverage to each Executive Officer under its
directors and officers liability policy that is appropriate to the Executive
Officer's role and title, and consistent with coverage applicable to the other
officers holding positions of executive management.
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In appropriate circumstances, each Executive Officer shall have the
discretion to resign from his or her position, in the event that he or she
reasonably determines that there has been or is likely to be (a) a material
deviation from the BISYS Policies, (b) an ongoing pattern of conduct involving
the continuous or repeated violation of Applicable AML Laws or Applicable
Securities Laws, or (c) a material deviation by the Trust from the terms of this
Agreement governing the services of such Executive Officer that is not caused by
such Executive Officer or BISYS. In addition, each Executive Officer shall have
reasonable discretion to resign from his or her position in the event that he or
she determines that he or she has not received sufficient cooperation from the
Trust or its Other Providers to make an informed determination regarding any of
the matters listed above.
Each Executive Officer may, and the Trust shall, promptly notify BISYS of
any issue, matter or event that would be reasonably likely to result in any
claim by the Trust, one or more Trust shareholder(s) or any third party which
involves an allegation that any Executive Officer failed to exercise his or her
obligations to the Trust in a manner consistent with applicable laws (including
but not limited to any claim that a Report failed to meet the standards of
Xxxxxxxx-Xxxxx and other applicable laws).
Notwithstanding any provision of the Administration Agreement or any other
agreement or instrument that expressly or by implication provides to the
contrary, (a) it is expressly agreed and acknowledged that BISYS cannot ensure
that the Trust complies with Applicable AML Laws or the Applicable Securities
Laws, and (b) whenever an employee or agent of BISYS serves as an Executive
Officer of the Trust, as long as such Executive Officer acts in good faith and
in a manner reasonably believed to be in the best interests of the Trust (and
would not otherwise be liable to the Trust by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office), the Trust shall indemnify the Executive Officer
and BISYS and hold the Executive Officer and BISYS harmless from any loss,
liability, expenses (including reasonable attorneys fees) and damages incurred
by them arising out of or related to the service of such employee or agent of
BISYS as an Executive Officer of the Trust.
4. Fees and Expenses
(a) BISYS shall be entitled to receive from the Trust the amounts set
forth on Schedule A hereto, reflecting the amounts charged by BISYS for the
performance of services under this Agreement. The fees hereunder shall be in
addition to all fees and expenses charged by BISYS under the Administration
Agreement.
(b) In addition to paying BISYS the fees set forth in Schedule A, the
Trust agrees to reimburse BISYS for all of its actual out-of-pocket expenses
reasonably incurred in providing services under this Agreement, including but
not limited to the following:
(i) All out of pocket costs incurred in connection with BISYS'
provision of Executive Officers to the Trust in connection with
compliance services, including travel costs for attending Board
meetings, conducting due
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diligence of Service Providers, and attending training conferences
and seminars (plus the costs of training);
(ii) If applicable initially or from time to time hereafter, upon
the approval of the Trust, costs to recruit a Chief Compliance
Officer; and
(iii) The costs incurred by BISYS in connection with the Fund
Compliance Program, including those incurred by or with respect to
Other Providers, in providing reports to the Chief Compliance
Officer under the Fund Compliance Program.
(c) All rights of compensation under this Agreement for services performed
and for expense reimbursement shall survive the termination of this Agreement.
5. Information to be Furnished by the Trust
a. The Trust has furnished or shall promptly furnish to BISYS
copies of the following, as amended and current as of the date
of this Agreement:
(i) The Fund Compliance Program or the various policies and
procedures of the Trust that have been adopted through
the date hereof which pertain to compliance matters that
are required to be covered by the Fund Compliance
Program, including the compliance programs of Service
Providers other than BISYS, as necessary under Rule
38a-1 for inclusion in the Fund Compliance Program; and
(ii) The Trust DCPs.
(b) The Trust shall furnish BISYS written copies of any amendments to, or
changes in, any of the items referred to in Section 5(a) hereof, forthwith upon
such amendments or changes becoming effective. In addition, the Trust agrees
that no amendments will be made to the Fund Compliance Program or the Trust DCPs
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's approval of
such amendments or changes, which approval shall not be withheld unreasonably.
(c) BISYS may rely on all documents furnished to it by the Trust and its
agents in connection with the services to be provided under this Agreement,
including any amendments to or changes in any of the items to be provided by the
Trust pursuant to Section 5(a), and shall be entitled to indemnification in
accordance with Section 6 below with regard to such reliance.
The Trust represents and warrants that (i) the provision of certain
officers of the Trust by BISYS, as provided in Section 3 of this Agreement, has
been approved by the Board, and (ii) each of the individuals nominated by BISYS
as the Trust's Chief
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Compliance Officer or Financial Officer has been approved and appointed as an
officer of the Trust by the Board.
6. Term and Termination
(a) The compliance services to be rendered by BISYS under this Agreement
(the "Compliance Services") shall commence upon the date of this Agreement and
shall continue in effect for one (1) year, until September 30, 2005, unless
earlier terminated pursuant to the terms of this Agreement. During such one year
term, the Compliance Services may be terminated upon thirty (30) days notice in
the event there is "cause," as defined in the Administration Agreement.
Following the one year anniversary of the date of this Agreement, the Compliance
Services may be terminated by either party for "cause," as provided above, or by
providing the other party with ninety (90) days written notice of termination.
(b) Notwithstanding anything in this Agreement to the contrary, including
but not limited to the provisions of Section 6(a), all of the obligations of
BISYS hereunder shall terminate automatically upon any termination of the
Administration Agreement.
7. Notice
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Trust, to Attn: ____________, at 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000; and if to BISYS, 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.
8. Governing Law and Matters Relating to the Trust as a Massachusetts
Business Trust
This Agreement shall be construed in accordance with the laws of the State
of Ohio and the applicable provisions of the 1940 Act. To the extent that the
applicable laws of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the Investment Company Act of 1940, as
amended, the latter shall control. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Trust personally,
but shall bind only the trust property of the Trust. The execution and delivery
of this Agreement have been authorized by the Trustees, and this Agreement has
been signed and delivered by an authorized officer of the Trust, acting as such,
and neither such authorization by the Trustees nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on them personally, but shall bind only the trust
property of the Trust as provided in the Trust's Declaration of Trust.
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9. Representations and Warranties
Each party represents and warrants to the other that this Agreement has
been duly authorized and, when executed and delivered by it, will constitute a
legal, valid and binding obligation of it, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies of
creditors and secured parties.
10. Miscellaneous
(a) Except as expressly provided in this Agreement, the terms of
the Administration Agreement shall apply to the services
rendered under this Agreement and the general provisions
thereof shall be used on a residual basis to construe any
issues arising under this Agreement that are not addressed by
the express terms of this Agreement. Except as provided in
this Agreement, the provisions of the Administration Agreement
remain in full force and effect (including, without
limitation, the term of the Agreement).
(b) The provisions set forth in this Agreement supersede all prior
negotiations, understandings and agreements bearing upon the
subject matter covered herein, including any conflicting
provisions of the Administration Agreement.
(c) No amendment or modification to this Agreement shall be valid
unless made in writing and executed by both parties hereto.
(d) Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or
interpret this Agreement.
(e) This Agreement may be executed in counterparts, each of which
shall be an original but all of which, taken together, shall
constitute one and the same agreement.
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* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
EMPIRE BUILDER TAX FREE BOND FUND
By: /s/ Xxxx X. Xxxxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: President
BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: President
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SCHEDULE A
TO COMPLIANCE SERVICES AGREEMENT
Dated October 1, 2004
Compliance Services Fees
Compliance Services provided under this Agreement:
$ 50,000 one-time implementation fee*
and $ 50,000 annual fee per year
o One half of the implementation fee is due upon the execution of this
Agreement and represents a non-refundable payment for services described
in Section 1(b) of the Agreement, including access to policies and
procedures developed by BISYS in connection with its fund compliance
program services. The balance shall be paid upon the initial approval by
the Board of the Fund Compliance Program prepared by BISYS, as
contemplated in Section 1(b) above.
All annual fees set forth above shall be payable in equally monthly
installments.
All recurring fees set forth above shall be subject to adjustment annually
commencing on the one-year anniversary of the date of this Agreement by the
percentage increase in consumer prices for services as measured by the United
States Consumer Price Index entitled "All Services Less Rent of Shelter" or a
similar index should such index no longer be published.
Out of Pocket Expenses
Out of pocket expenses are not included in the above fees and shall also be paid
to BISYS in accordance with the provisions of this Agreement.
