EXHIBIT (h)(2)
ADDENDUM TO TRANSFER AGENCY AND SERVICES AGREEMENT
THIS ADDENDUM, dated as of July 24, 2002, modifies the Transfer Agency and
Services Agreement by and between _____________ (the "Transfer Agent") and
_______ Funds, Inc. (the "Funds"), such Agreement being hereinafter referred to
as the "Agreement."
WHEREAS, Section 352 of the USA Patriot Act (the "Act") and the Interim Final
Rule (Section 103.130) adopted by the Department of the Treasury's Financial
Crimes Enforcement Network (the "Rule") require the Funds to develop and
implement an anti-money laundering program (the "AML Program") and monitor the
operation of the program and assess the effectiveness; and
WHEREAS, Section 326 of the Act, as proposed, requires the Funds to develop and
implement a Customer Identification Program ("CIP") as part of the Funds' AML
Program to ensure, among other things, that the Funds obtain certain information
from each of its customers and to be reasonably sure it knows each of its
customers; and
WHEREAS, in order to assist its transfer agent clients with their anti-money
laundering compliance responsibilities under the Act and the Rule, the Transfer
Agent has agreed to implement and operate the Funds' AML Program, including the
development and implementation of procedures designed to promote the detection
and reporting of potential money laundering activity by monitoring shareholder
activities and verify a shareholder's identity (the "Procedures"); and
WHEREAS, the Funds desire to delegate to the Transfer Agent the implementation
and day-to-day operation of the AML Program and the Procedures on behalf of the
Funds, subject to the supervision of the compliance officer of the AML Program
(the "Compliance Officer").
NOW THEREFORE, the parties agree, and the Agreement is hereby modified, as
follows:
1. Pursuant to the Funds' AML Program, the Transfer Agent agrees to develop
Procedures reasonably designed to prevent the Funds from being used for
money laundering or the financing of terrorist activities and to ensure
compliance with the applicable provision of the Bank Secrecy Act and the
implementing regulations thereunder.
2. The Transfer Agent agrees to provide the Compliance Officer with written
copies of the Procedures, as may be amended from time to time by the
Transfer Agent, and agrees to implement and monitor such Procedures,
subject to the oversight and approval of the Compliance Officer.
3. The parties to this Agreement contemplate that the Procedures will be
amended from time to time by the Transfer Agent based on the Transfer
Agent's experience implementing and monitoring the AML Program and the
Procedures and as additional regulations are adopted and/or regulatory
guidance is provided relating to the Funds' anti-money laundering
responsibilities. The Transfer Agent agrees to promptly advise the
Compliance Officer regarding amended Procedures, as necessary.
4. The Transfer Agent agrees to provide to the Compliance Officer (a) prompt
written notification of any transaction or combination of transactions that
the Transfer Agent believes, based on the Procedures, evidence possible
money laundering activity in connection with the Funds or any shareholder
of the Funds ("Suspicious Activity"), (b) prompt written notification of
any shareholder(s) of the Funds that the Transfer Agent reasonably
believes, based upon the Procedures, to be engaged in Suspicious Activity,
(c) any reports received by the Transfer Agent from any government agency
or applicable industry self-regulatory organization pertaining to the AML
Program or the Procedures as provided in this Addendum, (d) prompt written
notification of any action taken in response to Suspicious Activity as
described in (a), (b) or reports received as described in (c), and (e) an
annual report of the effectiveness of the AML Program and the Procedures,
as amended, including recommendations to improve the effectiveness of the
AML Program and the Procedures. The Transfer Agent
shall provide such other reports on the AML Program and the Procedures at
the direction of the Compliance Officer as may be agreed to from time to
time by the Transfer Agent and the Compliance Officer.
5. The Funds hereby direct, and the Transfer Agent acknowledges, that the
Transfer Agent shall (a) permit federal regulators access to such
information and records maintained by the Transfer Agent and relating to
the Transfer Agent's implementation of the Procedures on behalf of the
Funds, as they may request, and (b) permit such federal regulators to
inspect the Transfer Agent's implementation of the AML Program and the
Procedures on behalf of the Funds.
6. Fees and expenses (other than those already set forth in the Agreement) for
services to be provided by the Transfer Agent hereunder shall be set forth
in a fee schedule agreed upon by the Funds and the Transfer Agent from time
to time. A copy of the initial fee schedule is attached hereto as Exhibit
A.
7. This Addendum constitutes the written instructions of the Funds pursuant to
the terms of the Agreement. Except to the extent supplemented hereby, the
Agreement shall remain in full force and effect.
IN WITNESS HEREOF, the undersigned have executed this Addendum as of the date
and year first above written.
(the "Funds")
By:
--------------------------------------
Authorized Officer
-----------------------------
(the "Transfer Agent")
By:
Authorized Officer
EXHIBIT A
The fees associated with the Transfer Agent's assigned duties and
responsibilities are threefold: a base annual fee based on the number of
shareholder accounts, a new account fee, and out-of-pocket fees for required
database searches on both new and existing accounts. These fees are set forth
below:
AML BASE SERVICE (EXCLUDING NETWORK LEVEL THREE ACCOUNTS)
---------------------------------------------------------
0-999 accounts $500.00 per year
1,000-4,999 accounts $ 1,000 per year
5,000-9,999 accounts $ 2,500 per year
10,000 + accounts $ 5,000 per year
AML NEW ACCOUNT SERVICE
-----------------------
$1.00 per new domestic account
$2.00 per new foreign account
OUT-OF-POCKET EXPENSES
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Pass through cost of database searches
Any other out-of-pocket expenses
