(h3)
AMENDMENT
TO
TRANSFER AGENCY AND SERVICE AGREEMENT
The Transfer Agency and Service Agreement dated as of November 1, 1996, as
amended (the "Agreement") by and between Investors Bank & Trust Company (the
"Bank"), a Massachusetts trust company, and the Merrimac Funds, a Delaware
Trust (the "Trust"), is hereby amended as of the date hereof in the manner set
forth below:
WHEREAS, the USA PATRIOT Act of 2001 and the regulations promulgated thereunder
(collectively, the "USA PATRIOT Act") imposes anti-money laundering
requirements on financial institutions;
WHEREAS, the Trust recognizes the importance of complying with the USA PATRIOT
Act and the Trust has developed and implemented a written anti-money laundering
policy, which incorporates customer identification procedures (the "CIP") and
Office of Foreign Asset Control ("OFAC") compliance, designed to satisfy the
requirements of the U.S. Department of the Treasury and U.S. Securities and
Exchange Commission's Joint Final Rule: Customer Identification Programs For
Mutual Funds (the "Rule"), (the "Trust's AML Program");
WHEREAS, the USA PATRIOT Act authorizes a mutual fund to delegate to a service
provider, including its transfer agent, the operation of certain aspects of the
Trust's AML Program;
WHEREAS, the Bank is regulated by a federal functional regulator as that term
is used in the Rule; and
WHEREAS, the Trust desires to delegate to the Bank the performance of certain
aspects of the Trust's AML Program, in accordance with applicable law or
regulation, and the Bank desires to accept such delegation.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter contained, the parties hereby agree to amend the
Agreement pursuant to the terms thereof by adding the following provisions:
1. Duties:
1.1 Duties of the Trust. The Trust shall perform the following functions of
its CIP:
(a) Notice. The Trust or its agent shall provide notice to the Trust's
prospective account holders that information is being requested to
verify their identity in order to combat money laundering and
terrorist financing.
1.2 Duties of the Bank. Subject to the terms and conditions set forth in
the Agreement, the Trust delegates to the Bank on behalf of the Trust
and its principal underwriter, and the Bank hereby assumes, the
functions set forth in this Section 1.2 with respect to new or existing
CIP Customers as required by the Trust's CIP, as described in 31 C.F.R.
ss. 103.131(b) and its OFAC compliance responsibilities (the "Delegated
Functions"):
(a) Information Collection. The Bank or its agent shall obtain the
following identifying information from each of its customers, as
defined in 31 C.F.R. 103.131(a), under applicable laws and
regulations (each a "CIP Customer"):
o Publicly Traded Corporation: Exchange symbol.
o Privately Held Corporation: Corporate Resolution or copy of
articles of incorporation.
o Partnership: Copy of the Partnership Agreement. Tax
identification (TIN) for the partnership or individual tax
identification number (ITIN).
o Limited Liability Company: Copy of the membership agreement
o Trust: A copy of the pages of the trust agreement naming the
Grantor/Settlor of the trust, currently acting trustees, the date
the trust was established and the signature page showing that the
trust was created.
o Individual: Full legal name, date of birth, street address (no
P.O. boxes allowed) and social security number.
(b) Documentary Identity Verification. To the extent the Trust's CIP
requires documentary identity verification for any CIP Customer,
such as review of government-issued identification cards, the Bank
or its agent shall be solely responsible for obtaining and
reviewing the appropriate documentation.
(1) If the Bank does not receive all CIP information required by
Section 1.2(a) or the account application is not accompanied by
the required documentation, a customer's purchase request will
not be considered in good order. If CIP information is missing,
the Bank will attempt to collect the missing information prior
to rejecting the purchase application in the normal course of
business. The Bank will report any such rejection to the
Trust's AML Officer who will consider whether to file a
suspicious activity report (a "SAR").
(c) Non-Documentary Identity Verification. In accordance with the
Bank's Transfer Agent Anti-Money Laundering Procedures - New
Account Reviews (the "Bank's CIP Program") the Bank shall use
non-documentary methods to verify the information collected by the
Bank under Section 1.2 (a) above for each CIP Customer.
(2) If the identity of a customer cannot be reasonably verified
through non-documentary methods, the account will be left open
but all customer activity other than redemptions will be
restricted. The Bank will report any such verification failure
to the Trust's AML Officer who will consider whether to file a
SAR.
(d) OFAC Compliance. The Bank shall screen name and address information
of new and existing Trust customers against lists of known or
suspected terrorists or terrorist organizations prepared by any
federal government agency and referred to the Bank in accordance
with the Bank's CIP Program and all Federal government directives
related to such lists. These lists include, but are not limited to,
those prepared by the OFAC of the U.S. Department of the Treasury
which administers and enforces economic and trade sanctions against
targeted foreign countries, terrorism sponsoring organizations and
international narcotics traffickers based on U.S. foreign policy
and national security goals. Such screening shall occur nightly. In
the event that a new or existing CIP Customer matches a name
contained on one of the foregoing lists and the Bank cannot resolve
such match in accordance with the Bank's CIP Program, the Bank
shall not open such customer's account, shall freeze such
customer's assets and will take such other action as may be
required by applicable law or regulation.
(e) Recordkeeping. The Bank will create and retain the required records
documenting the performance of the Delegated Functions in
accordance with, and for the periods required by, applicable law or
regulation.
2. Certification
The Bank shall certify to the Trust, on an annual basis, that the Bank has
performed the functions that it has agreed to perform set forth in Section 1.2
and 2 above. In addition, the Bank shall certify, on a quarterly basis, that:
(a) it has established and implemented policies, procedures and internal
controls reasonably designed to PREVENT THE BANK FROM BEING USED FOR
MONEY LAUNDERING OR THE FINANCING OF TERRORIST ACTIVITIES IN CONNECTION
WITH THE SERVICES IT PROVIDES TO THE TRUSTS, including, but not limited
to, all CIP related to all individuals and entities investing in the
Trust, AND TO achieve compliance with the USA Patriot Act (the
"Policies");
(b) it has designated an individual or individuals responsible for
implementing and monitoring the Policies;
(c) it has provided, and will continue to provide, ongoing training for the
appropriate personnel with respect to the Policies;
(d) (i) its Policies are functioning as intended, (ii) it has performed the
specified requirements of the Trust's CIP, and (iii) except as may have
been previously disclosed to the Trust's AML Compliance Officer in
writing, during the period covered by the certification, there was no
suspicious activity reportable under applicable law or regulation with
respect to the Trust and that none of the Trust's applicants or
shareholders failed any of the procedures enumerated in its Policies;
(e) it provides for periodic testing of those Policies by its internal
auditors and will notify the Trust's AML Compliance Officer in writing
about the results of any such testing that could be adverse to the
Trust's interests; and
(f) (i) there have been no amendments to amendments to the Bank's CIP
Program or OFAC compliance procedures that may materially affect the
Trust or, alternatively, (ii) that the Bank has materially amended the
Bank's CIP Program, which amendment may affect the Trust.
3. Consent to Examination
The Bank understands and acknowledges that the Trust remains responsible
for ensuring its compliance with the USA PATRIOT Act and that the records the
Bank maintains for the Trust relating to the Trust's AML Program may be
subject, from time to time, to examination and/or inspection by federal
regulators or the Trust's auditors as part of the periodic testing of the
Trust's AML Program. The Bank hereby consents to such examination and/or
inspection and agrees to cooperate with such federal examiners and auditors in
connection with their review. For purposes of such examination and/or
inspection, the Bank will use its best efforts to make available during normal
business hours, all required records and information concerning the functions
the Bank performs of the Trust's CIP for review by such examiners and auditors.
The Trust shall provide the Bank with notice of any pending or planned
examinations as soon as practicable after the Trust is notified of such
examination.
4. Limitation of Delegation
The Trust acknowledges and agrees that in accepting the delegation
hereunder, the Bank is agreeing to perform only those aspects of the Trust's
AML Program relating to the customer accounts as specified in Sections 1.2 and
2 above and the Bank is not undertaking and shall not be responsible for any
other aspect of the Trust's AML Program or for the overall compliance by the
Trust with the USA PATRIOT Act.
5. Miscellaneous
5.1 This Amendment applies solely to the matters discussed herein. In all
other regards, the terms and provisions of the Agreement shall continue
to apply with full force and effect.
5.2 In the event that the Bank materially amends its CIP program, it shall
promptly provide such amended CIP program to Trust's AML Compliance
Officer.
5.3 Each party represents to the other that the execution and delivery of
this Amendment has been duly authorized.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of
October 1, 2003.
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Managing Director
---------------------------------
Merrimac Funds
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
---------------------------------
Title: President
---------------------------------
