Exhibit 99(h)(3)
ADDENDUM TO TRANSFER AGENT AGREEMENT
THIS ADDENDUM, dated as of August 29, 2003, modifies the amended Transfer
Agent Agreement by and between US Bancorp Fund Services, LLC (the "Transfer
Agent"), Skyline Funds (the "Funds"), and Skyline Asset Management, L.P.,
(the "Manager"), 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 and monitor the operation of the
program and assess the effectiveness; and
WHEREAS, the regulations implementing Section 326 of the Act require the
Funds to implement a Customer Identification Program ("CIP") that contains
procedures for (1) verifying the identity of any person seeking to open an
account, to the extent reasonable and practicable, (2) maintaining records
of the information used to verify the person's identity, including name,
address, and other identifying information and (3) determining whether the
person appears on any lists of known or suspected terrorists or terrorist
organizations provided to the Funds by any governmental agency; 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 provided to the Funds for their consideration and approval
written procedures describing various tools designed to promote the detection
and reporting of potential money laundering activity by monitoring certain
aspects of shareholder activity (the "Monitoring Procedures") as well as a
written CIP together referred to as the "Procedures"; and
WHEREAS, the Funds desire to implement the Procedures as part of their overall
anti-money laundering program and, subject to the terms of the Act and the Rule,
delegate to the Transfer Agent the day-to-day operation of the Procedures on
behalf of the Funds.
WHEREAS, the Transfer Agent meets the definition of "financial institution"
under the Act, and is therefore subject to a rule implementing certain
anti-money laundering compliance requirements under the Act, and is regulated
by a federal functional regulator (as defined by the Act); and
NOW THEREFORE, the parties agree, and the Agreement is hereby modified, as
follows:
1. The Funds acknowledge that they have had an opportunity to review, consider
and comment upon the Procedures provided by the Transfer Agent and the Funds
have determined that the Procedures, as part of the Funds' overall anti-money
laundering program, are reasonably designed to prevent the Funds from being
used for money laundering or the financing of terrorist activities and to
achieve compliance with the applicable provision of the Bank Secrecy Act and
the implementing regulations thereunder.
2. Based on this determination, the Funds hereby instruct and direct the
Transfer Agent to implement the Procedures on the Funds' behalf, as such may
be amended or revised from time-to-time.
3. It is contemplated that these Procedures will be amended from time-to-time by
the parties as additional regulations are adopted and/or regulatory guidance
is provided relating to the Funds' anti-money laundering responsibilities.
4. The Transfer Agent agrees to provide to the Funds (a) prompt written
notification of any transaction or combination of transactions that the
Transfer Agent believes, based on the Procedures, evidence money laundering
activity in connection with the Funds or any shareholder of the Funds, (b)
prompt written notification of any customer(s) that the Transfer Agent
reasonably believes, based upon the Procedures, to be engaged in money
laundering activity, provided that the Funds agree not to communicate this
information to the customer, (c) any reports received by the Transfer Agent
from any government agency or applicable industry self-regulatory
organization pertaining to the Transfer Agent's anti-money laundering
monitoring on behalf of the Funds as provided in this Addendum, (d) prompt
written notification of any action taken in response to anti-money laundering
violations as described in (a), (b) or (c), and (e) an annual report of its
monitoring and customer identification activities on behalf of the Funds. The
Transfer Agent shall provide such other reports on the monitoring and
activities conducted at the direction of the Funds as may be agreed to from
time-to-time by the Transfer Agent and the Funds.
5. The Transfer Agent represents and covenants that it will certify at least
annually to the Funds that it has implemented its anti-money laundering
program, and that it (or its agent(s)) will perform the specific requirements
of the Funds' CIP.
6. 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 Procedures on behalf of the Funds.
7. 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, the Manager, and the Transfer Agent
from time-to-time.
8. 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.
Skyline Funds
(the "Funds")
Xxxxxxx X. Xxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxx
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Executive Vice President, Treasurer and Secretary
Skyline Asset Management, L.P.
(the "Manager")
Xxxxxxx X. Xxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxx
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Partner and Chief Operating Officer
US Bancorp Fund Services, LLC
(the "Transfer Agent")
Xxxx XxXxx
By: /s/ Xxxx XxXxx
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Authorized Officer
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