Exhibit 99.1h(3)
TRANSFER AGENCY AGREEMENT
TRANSFER AGENCY AGREEMENT (the "Agreement") dated as of December 18, 2006
between TD Asset Management USA Funds Inc., a Maryland corporation, ("the
"Company"), on its own behalf and on behalf of its separate series listed on
Schedule A to this Agreement (collectively, the "Funds") and BISYS Fund Services
Ohio, Inc. ("BISYS").
WHEREAS, each of the Funds is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company desires that BISYS perform transfer agency services
for the Funds and their classes listed on Schedule A ("Classes"); and
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants hereinafter contained,
the Company and BISYS hereby agree as follows:
1. Services
(a) BISYS shall perform for the Funds and their Classes the transfer agent
services set forth in Schedule B to this Agreement.
(b) BISYS may, with prior written consent of the Company or a Fund, which
consent shall not be unreasonably withheld, conditioned or delayed, to delegate
some or all of its obligations under this Agreement to one or more third parties
that, after reasonable inquiry, BISYS deems to be competent to assume such
obligation. BISYS shall be fully responsible for the acts of such third parties
and shall not be relieved of any of its responsibilities under this Agreement by
virtue of the use of such third parties.
2. Fees
The Funds shall pay BISYS for the services to be provided by BISYS under
this Agreement in accordance with, and in the manner set forth in, Schedule C to
this Agreement.
3. Reimbursement of Expenses and Miscellaneous Service Fees
(a) In addition to paying BISYS the fees set forth in Schedule C, the
Funds shall reimburse BISYS for BISYS' reasonable out-of-pocket expenses
incurred in providing services under this Agreement, including without
limitation, the following:
(i) All freight and other delivery and bonding charges incurred by
BISYS in delivering materials to and from the Funds and in
delivering all materials to shareholders;
(ii) All printing, production (including graphics support, copying,
and binding) and distribution expenses incurred in relation to
materials for meetings of each of the Funds' Board of
Directors (the "Board");
(iii) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by BISYS in
communication with the Company, the Funds, the Funds'
investment adviser or custodian, dealers, shareholders or
others as required for BISYS to perform the services to be
provided under this Agreement;
(iv) Sales taxes;
(v) The cost of microfilm or microfiche or other electronic
retention of records or other materials;
(vi) Courier (delivery expenses);
(vii) Check and payment processing fees;
(viii) Records retention / storage fees;
(ix) Fulfillment;
(x) MA custody and other related fees;
(xi) NSCC and related costs;
(xii) Costs of statements and confirmations;
(xiii) Costs of tax forms;
(xiv) Costs of all other shareholder correspondence;
(xv) Post office boxes; and
(xvi) Any expenses BISYS shall incur at the written direction of an
officer of the Company or the Funds; provided, however, that
such officer is not an officer or employee of BISYS or its
affiliates.
(b) In addition, BISYS shall be entitled to receive the following fees:
(i) A fee for managing and overseeing the report, print and mail
functions performed by BISYS' third-party vendors, not to
exceed
2
$.04 per page for statements and $.03 per page for
confirmations; fees for programming in connection with
creating or changing the forms of statements, billed at BISYS'
then-current rate; and costs for postage, couriers, stock
computer paper, computer disks, statements, labels, envelopes,
checks, reports, letters, tax forms, proxies, notices or other
forms of printed material (including the costs of preparing
and printing all printed materials) which shall be required
for the performance of the services to be provided under this
Agreement;
(ii) System development fees, billed at BISYS' then-current rate,
and all systems-related expenses, billed at BISYS'
then-current rate, associated with the provision of special
reports and services;
(iii) Fees for development of custom interfaces, billed at BISYS'
then-current rate;
(iv) Ad hoc reporting fees billed at BISYS' then-current rate;
(v) Interactive Voice Response System fees charged according to
BISYS' then current rates, and applicable to level of service
(e.g., basic, transaction, premium) selected;
(vi) Expenses associated with the tracking of "as-of" trades;
(vii) Fees and Expenses associated with providing the "AML Services"
as defined in Section 22 of this Agreement, and set forth in
Schedule B; and
(viii) In the event that BISYS is requested or authorized by the
Company or the Funds or is required by governmental
regulation, summons, subpoena, investigation, examination or
other legal or regulatory process to produce documents or
personnel with respect to services provided by BISYS to the
Funds, the Funds will, so long as BISYS is not the subject of
the investigation or proceeding in which the information is
sought, pay BISYS for its professional time (at its standard
billing rates) and reimburse BISYS for its out-of-pocket
expenses (including reasonable attorneys fees) incurred in
responding to such requests or requirements.
All rights of compensation under this Agreement for services
performed and for expense reimbursement and for payment of
miscellaneous fees and charges shall survive the termination
of this Agreement.
4. Effective Date
3
This Agreement shall commence and become effective upon the conversion of
the Funds which is anticipated to occur on or before [December 18, 2006] (the
"Effective Date").
5. Term
(a) This Agreement shall continue in effect for an initial term of three
years from the Effective Date (the "Initial Term"). Thereafter, unless otherwise
terminated pursuant to this Agreement, this Agreement shall be renewed for
successive one year periods ("Rollover Periods") so long as neither party has
given written notice of nonrenewal at least ninety (90) days in advance of the
end of the then current term, and provided that such renewal is specifically
approved at least annually (i) by the Fund's Board or (ii) by a vote of a
majority (as defined in the 0000 Xxx) of the Shares of the relevant Fund,
provided that in either event its renewal also is approved by a majority of the
Board members who are not "interested persons" (as defined in said Act) of any
party to this Agreement and who have no direct or indirect financial interest in
this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable by the Company with
respect to any Fund or class thereof, but subject to the provisions of
Subsection (d) below, on not less than ninety (90) days' advance written notice
to BISYS. This Agreement shall terminate automatically in the event of its
"assignment" (as defined in the 1940 Act). This Agreement may be terminated for
"cause," as defined below, upon the provision of at least ninety (90) days
advance written notice by the party alleging cause.
(b) For purposes of this Section 5, "cause" shall mean (i) a material
breach of this Agreement that has not been remedied within 30 days following
written notice of such breach from the non-breaching party; (ii) a final,
unappealable judicial, regulatory or administrative ruling or order in which the
party to be terminated has been found guilty of criminal or unethical behavior
in the conduct of its business; or (iii) financial difficulties on the part of
the party to be terminated which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors.
(c) Notwithstanding the foregoing termination provisions, following any
such termination, in the event that BISYS in fact continues to perform any one
or more of the services contemplated by this Agreement with the consent of the
Company or the Funds, the provisions of this Agreement, including without
limitation the provisions dealing with compensation and indemnification, shall
continue in full force and effect. Fees and outof-pocket expenses incurred by
BISYS but unpaid by the Funds upon such termination shall be immediately due and
payable upon and notwithstanding such termination. The Funds shall pay to BISYS,
in addition to the fees and expenses provided in Sections 2 and 3 of this
Agreement, the amount of all of BISYS' reasonable cash disbursements in
connection with BISYS' activities in effecting such termination, including
without limitation, the delivery to the Company, the Funds, its investment
adviser and/or other
4
parties of the Funds' property, records, instruments and documents, such amount
to be paid on or before the date of such termination.
(d) If, for any reason during the Initial Term other than (i) non-renewal,
(ii) mutual agreement of the parties, (iii) "cause," or (iv) "assignment," the
Company terminates this Agreement, or BISYS is replaced as service provider to
the Funds, then the Funds shall make a one-time cash payment to BISYS, in
consideration of the fee structure and services to be provided under this
Agreement, equal to: (i) if such triggering event occurs during the first year
of the term of this Agreement, an amount equal to $25,000.000, (ii) if such
triggering event occurs during the second year of the term of this Agreement, an
amount equal to $17,500.00, or (iii) if such triggering event occurs during the
third year of the term of this Agreement, an amount equal to $10,000.00.
(e)In the event that any Fund is, in part or in whole, liquidated,
dissolved, merged into a third party, acquired by a third party, or involved in
any other transaction that materially reduces the assets and/or accounts
serviced by BISYS pursuant to this Agreement, the liquidated damages provision
set forth above shall be applicable.
(f)If one of the events described above is partial (e.g., a termination of
BISYS as provider of some but not all of the services set forth in this
Agreement, or a liquidation of some but not all of the Funds), the liquidated
damages amount payable by the Funds shall be appropriately adjusted on a pro
rata basis.
(g) Any liquidated damages amount payable to BISYS shall be paid by the
Funds on or before the date of the event that triggers the payment obligation.
(h) The parties further acknowledge and agree that, upon the occurrence of
any of the events described above: (i) a determination of actual damages
incurred by BISYS would be extremely difficult, and (ii) the liquidated damages
payment described above is intended to adequately compensate BISYS for damages
incurred and is not intended to constitute any form of penalty.
6. Standard of Care; Force Majeure; Limitation of Liability
(a) BISYS shall provide its services as transfer agent in accordance with
the applicable provisions of Section 17A of the Securities Exchange Act of 1934
("Exchange Act"). In providing services under this Agreement, BISYS shall use
reasonable professional diligence in the performance of services under this
Agreement, but shall not be liable to the Company or the Funds for any action
taken or omitted by BISYS in the absence of bad faith, willful misfeasance,
negligence or reckless disregard by it of its obligations and duties. The duties
of BISYS shall be confined to those expressly set forth in this Agreement, and
no implied duties are assumed by or may be asserted against BISYS under this
Agreement.
(b) Notwithstanding any other provision of this Agreement, BISYS assumes
no responsibility hereunder, and shall not be liable for, any damage, loss of
data, delay or any other loss whatsoever caused by events beyond BISYS' control.
Events beyond BISYS' control include, without limitation, force majeure events,
such as natural
5
disasters, actions or decrees of governmental bodies, and communication lines
failures that are not the fault of either party. In the event of force majeure,
computer or other equipment failures or other events beyond its control, BISYS
shall follow applicable procedures in its disaster recovery and business
continuity plan and use all commercially reasonable efforts to minimize any
service interruption.
(c) BISYS shall provide the Company, at such times as the Company may
reasonably request, copies of reports rendered by independent auditors on the
internal controls and procedures of BISYS relating to the services provided by
BISYS under this Agreement.
(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR EXEMPLARY, PUNITIVE,
SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR LOST PROFITS, EACH OF
WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH
DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
7. Legal Advice
BISYS may notify the Company or the Funds if BISYS reasonably determines
that it is in need of the advice of counsel to the Company or the Funds with
regard to BISYS' responsibilities and duties pursuant to this Agreement. BISYS
may rely upon the advice of counsel to the Company or the Funds; however, this
Agreement shall not obligate counsel to the Company or the Funds to render such
advice. After so notifying the Company or the Funds, if BISYS does not obtain
the advice of counsel to the Company within a reasonable period of time, BISYS
shall be entitled to seek, receive and act upon advice of legal counsel of its
reasonable choosing at its own expense. BISYS shall in no event be liable to the
Company or any Fund, or any shareholder or beneficial owner of the Funds for any
action reasonably taken pursuant to legal advice rendered in accordance with
this paragraph.
8. Instructions/Certain Procedures, etc.
(a) BISYS shall be protected in acting upon any document that it
reasonably believes to be genuine and to have been signed or presented by the
proper person or persons. BISYS will not be held to have notice of any change of
authority of any officers, employees or agents of the Company or the Funds until
receipt of actual notice thereof from the Company or the Funds.
(b) Subject to Section 22(b) of this Agreement, whenever BISYS is
requested or authorized to take action hereunder pursuant to instructions from a
shareholder, or a properly authorized agent of a shareholder ("shareholder's
agent"), concerning an account in a Fund, BISYS shall be entitled to rely upon
any certificate, letter or other
6
instrument or communication (including electronic mail), reasonably believed by
BISYS to be genuine and to have been properly made, signed or authorized by an
officer or other authorized agent of the Company or such Fund or by the
shareholder or shareholder's agent, as the case may be, and shall be entitled to
receive as conclusive proof of any fact or matter required to be ascertained by
it hereunder a certificate signed by an officer of the Company or such Fund or
any other person authorized by the Board or by the shareholder or shareholder's
agent, as the case may be.
(c) As to the services to be provided hereunder, BISYS may rely
conclusively upon the terms of the relevant then-current Prospectus and
Statement of Additional Information of the Funds, to the extent that such
services are described therein unless BISYS receives written instructions to the
contrary in a timely manner from the Company or the Funds.
(d) The parties may amend any procedures adopted, approved or set forth
herein by written agreement as may be appropriate or practical under the
circumstances, and BISYS may reasonably assume that any special procedure which
has been approved by an executive officer of the Funds (other than an officer or
employee of BISYS or its affiliates) does not conflict with or violate any
requirements of the Funds' Charter, ByLaws or then-current Prospectus.
(e) The Funds acknowledge receipt of a copy of BISYS' policy related to
the acceptance of trades for prior day processing (the "BISYS As-of Trading
Policy"). BISYS may amend the BISYS As-of Trading Policy from time to time in
its sole discretion. A copy of any such amendments shall be delivered to the
Company upon request. BISYS may apply the BISYS As-of Trading Policy whenever
applicable, unless BISYS agrees in writing to process trades according to such
other as-of trading policy as may be adopted by the Funds and furnished to BISYS
by the Funds.
(f) The Company and the Funds acknowledge and agree that deviations from
BISYS' written transfer agent compliance procedures may involve a substantial
risk of loss. In the event an authorized representative of the Company or the
Funds (other than an officer or employee of BISYS or its affiliates) requests
that an exception be made from any written compliance or transfer agency
procedures adopted by BISYS, or any requirements of the AML Program (as defined
in Section 15 of this Agreement), BISYS may in its sole discretion determine
whether to permit such exception. In the event BISYS determines to permit such
exception, the same shall become effective when set forth in a written
instrument executed by an authorized representative of the Company or the Funds
(other than an officer or employee of BISYS or its affiliates) and delivered to
BISYS (an "Exception"); provided that an Exception concerning the requirements
of a Fund's AML Program shall also be authorized by such Fund's AML Compliance
Officer (as defined in Section 22 of this Agreement). An Exception shall be
deemed to remain effective until the relevant instrument expires according to
its terms (or if no expiration date is stated, until BISYS receives written
notice from the Company or the Fund that such instrument has been terminated and
the Exception is no longer in effect). Notwithstanding any provision in this
Agreement that expressly or by implication provides to the contrary, as long as
BISYS acts in good faith, BISYS shall have no
7
liability for any loss, liability, expenses or damages to the Company or to the
Funds resulting from the Exception, and the Company and the Funds, jointly and
severally, shall indemnify BISYS and hold BISYS harmless from any loss,
liability, expenses (including reasonable attorneys fees) and damages resulting
to BISYS therefrom.
9. Indemnification
(a) Each Fund, severally and not jointly, shall indemnify and hold
harmless BISYS and its employees, agents, directors, officers and nominees from
and against any claims, demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses including reasonable
investigation expenses (collectively, "Losses") resulting directly and
proximately from BISYS' performance of services under this Agreement with
respect to that Fund or based, if applicable, upon BISYS' reasonable reliance on
information, records, instructions or requests pertaining to services hereunder
with respect to that Fund, that are given or made to BISYS by the Fund, its
investment adviser, or other authorized agents of the Fund; provided that this
indemnification shall not apply to actions or omissions of BISYS involving bad
faith, willful misfeasance, negligence or reckless disregard by BISYS of its
obligations and duties under this Agreement.
(b) BISYS shall indemnify, defend, and hold the Funds, and their
directors, officers, agents and nominees harmless from and against Losses
resulting directly and proximately from BISYS' willful misfeasance, bad faith or
negligence in the performance of, or the reckless disregard of, its duties or
obligations hereunder; provided that this indemnification shall not apply to
actions or omissions of the Company or the Funds involving bad faith, willful
misfeasance, negligence or reckless disregard by the Company or the Funds of
their obligations and duties.
(c) In order that the indemnification provisions contained herein shall
apply, if in any case a party may be asked to indemnify or hold the other party
harmless, the other party shall fully and promptly advise the indemnifying party
in writing of all pertinent facts concerning the situation in question. The
party seeking indemnification will use all reasonable care to identify and
notify the indemnifying party in writing promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification against the indemnifying party, but failure to do so in good
faith shall not affect the rights hereunder except to the extent the
indemnifying party is materially prejudiced thereby. As to any matter eligible
for indemnification, an indemnified party shall act reasonably and in accordance
with good faith business judgment and shall not effect any settlement or confess
judgment without the consent of the indemnifying party, which consent shall not
be withheld or delayed unreasonably.
(d) The indemnifying party shall be entitled to participate in, at its own
expense or, if it so elects, to assume, the defense of any claim or suit subject
to this indemnity provision. If the indemnifying party elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
it and reasonably satisfactory to the indemnified party. In the event that the
indemnifying party elects to assume the
8
defense of any suit and retain counsel, the indemnified party shall bear the
fees and expenses of any additional counsel retained by it. An indemnifying
party shall not effect any settlement without the consent of the indemnified
party (which shall not be withheld or delayed unreasonably by the indemnified
party) unless such settlement imposes no liability, responsibility or other
obligation upon the indemnified party and relieves it of all fault. If the
indemnifying party does not elect to assume the defense of suit, it will
reimburse the indemnified party for the reasonable fees and expenses of counsel
retained by the indemnified party and reasonably satisfactory to the
indemnifying party. The indemnity and defense provisions set forth herein shall
survive the termination of this Agreement.
(e) This Section 9 is subject to the provisions of Section 6 of this
Agreement.
10. Record Retention and Confidentiality
BISYS shall keep and maintain on behalf of the Funds all books and records
which the Funds or BISYS is, or may be, required to keep and maintain pursuant
to any applicable statutes, rules and regulations, including without limitation
Rules 31 a-1 and 31 a-2 under the 1940 Act, relating to the maintenance of books
and records in connection with the services to be provided under this Agreement.
BISYS further agrees that all such books and records shall be the property of
the Company and the Funds and to make such books and records available for
inspection by the Company, the Funds or by the Commission at reasonable times.
BISYS shall otherwise keep confidential all books and records relating to the
Funds and their shareholders, except when (i) disclosure is required by law,
(ii) BISYS is advised by counsel that it may incur liability for failure to make
a disclosure, (iii) BISYS is requested to divulge such information by
duly-constituted authorities or court process, or (iv) BISYS is requested to
make a disclosure by a shareholder or shareholder's agent with respect to
information concerning an account as to which such shareholder has either a
legal or beneficial interest or when requested by the Funds or the dealer of
record as to such account. BISYS shall provide the Funds with reasonable advance
notice of disclosure pursuant to items (i) - (iii) of the previous sentence, to
the extent reasonably practicable. The provisions of this Section 10 are subject
to the provisions of Section 22 of this Agreement.
11. Reports
BISYS shall furnish to the Company and to the Funds' properly-authorized
auditors, investment advisers, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and others designated by the Company or the Funds
in writing, such reports at such times as are prescribed in Schedule D to this
Agreement, or as subsequently agreed upon by the parties pursuant to an
amendment to Schedule D. the Company agrees to examine each such report or copy
within 20 days and will report or cause to be reported any errors or
discrepancies therein. In the event that errors or discrepancies, except such
errors and discrepancies as may not reasonably be expected to be discovered by
the recipient within 20 days after conducting a diligent examination, are not so
reported within the aforesaid period of time, a report will for all purposes be
accepted by and binding upon the Company, the Funds and any other recipient, and
9
BISYS shall have no liability for errors or discrepancies therein and shall have
no further responsibility with respect to such report except to perform
reasonable corrections of such errors and discrepancies within a reasonable time
after requested to do so by the Company.
12. Rights of Ownership
All computer programs and procedures employed or developed by or on behalf
of BISYS to perform services required to be provided by BISYS under this
Agreement are the property of BISYS. All records and other data except such
computer programs and procedures are the exclusive property of the Funds and all
such other records and data shall be furnished to the Company or the Funds in
appropriate form as soon as practicable after termination of this Agreement for
any reason.
13. Return of Records
BISYS may at its option at any time, and shall promptly upon the Company
or the Funds' demand, at the Funds' expense, turn over to the Funds and cease to
retain BISYS' files, records and documents created and maintained by BISYS
pursuant to this Agreement which are no longer needed by BISYS in the
performance of its services or for its legal protection. If not so turned over
to the Company or the Funds, such documents and records shall be retained by
BISYS for six years from the year of creation, at the expense of the Funds. At
the end of such six-year period, such records and documents shall be turned over
to the Company or the Funds unless the Company or the Funds authorizes in
writing the destruction of such records and documents.
14. Bank Accounts
BISYS is hereby granted such power and authority as may be necessary to
establish one or more bank accounts for the Funds with such bank or banks as are
selected or approved by the Funds, as may be necessary or appropriate from time
to time in connection with the services required to be performed under this
Agreement. The Funds shall be deemed to be the customer of such bank or banks
for all purposes in connection with such accounts. To the extent that the
performance of such services under this Agreement shall require BISYS to
disburse amounts from such accounts in payment of dividends, redemption proceeds
or for other purposes under this Agreement, the Funds shall provide such bank or
banks with all instructions and authorizations necessary for BISYS to effect
such disbursements.
15. Representations and Warranties of the Company
(a) The Company represents and warrants to BISYS that: (i) each of the
Funds is registered with the Commission as an open-end management investment
company under the 1940 Act; (ii) as of the close of business on the Effective
Date, each Fund which is in existence as of the Effective Date has a limited
number of authorized shares as set forth in Schedule A ; (iii) by virtue of its
Charter, shares of each Fund which are redeemed by the Funds may be sold by the
Funds from its treasury; (iv) this Agreement has been duly authorized by the
Company and, when executed and delivered
10
by the Company, will constitute a legal, valid and binding obligation of the
Company, enforceable against the Company 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;
(v) it has all necessary authorizations, licenses and permits to carry out its
business as currently conducted; (vi) it is in compliance in all material
respects with all laws and regulations applicable to its business and
operations; (vii) this Agreement has been disclosed to and approved by the Board
with respect to each Fund, and that the Company has provided all such
information to the Board with respect to each Fund as may be appropriate (or has
been requested by the Board) in connection with the review and approval by the
Board of this Agreement and the arrangements contemplated under this Agreement,
including amounts expended under this Agreement; and (viii) BISYS either has
been, or will be, given a copy of the resolutions evidencing such approvals of
this Agreement.
(b)Each of the Funds has entered into a confidentiality agreement, in
accordance with U.S. Department of the Treasury, Financial Crimes Enforcement
Network ("FinCEN") release FIN-2006-G013, dated October 4, 2006, with the Funds'
investment adviser, and the Funds have authorized BISYS, acting in its capacity
as transfer agent, to provide the Company, the investment adviser with
information related to shareholder Suspicious Activity Reports, upon request.
(c) The Company also represents and warrants to BISYS that: (i) each Fund
has adopted a written anti-money laundering program that has been submitted to
BISYS pursuant to Section 18 of this Agreement (the "AML Program"), and has
appointed an officer of the Funds as the Funds' anti-money laundering compliance
officer ("AML Compliance Officer"); (ii) the AML Program and the designation of
the AML Compliance Officer have been approved by the Board; and (iii) the
delegation of certain services under this Agreement to BISYS, as provided in
Section 22 of this Agreement, has been approved by the Board of each Fund; and
(iv) the Company will submit any material amendments to the AML Program to BISYS
for BISYS' review and consent before adoption in accordance with Section 20 of
this Agreement.
16. Representations and Warranties of BISYS
(a) BISYS represents and warrants to the Company that: (i) BISYS has been
in, and shall continue to be in compliance in all material respects with all
provisions of law, including Section 17A(c) of the Exchange Act, required in
connection with the performance of its duties under this Agreement; (ii) the
various procedures and systems which BISYS has implemented with regard to
safekeeping from loss or damage attributable to fire, theft or any other cause
of the blank checks, records, and other data of the Funds and BISYS' records,
data, equipment, facilities and other property used in the performance of its
obligations under this Agreement are adequate and that it will make such changes
therein from time to time as are reasonably required for the secure performance
of its obligations under this Agreement; (iii) this Agreement has been duly
authorized by BISYS and, when executed and delivered by BISYS, will constitute a
legal, valid and binding obligation of BISYS, enforceable against BISYS in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other
11
laws of general application affecting the right and remedies of creditors and
secured parties; (iv) it has all necessary authorization, licenses and permits
to carry out its business as currently conducted; (v) its compliance policies
and procedures adopted pursuant to Rule 38a-1 under the 1940 Act are reasonably
designed to prevent violations of the federal securities laws; and (vi) it is in
compliance in all material respects with all laws and regulations applicable to
its business and operations.
(b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL REPRESENTATIONS
AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY,
SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
(IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) CONCERNING THE
SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO THE SERVICES PROVIDED UNDER THIS
AGREEMENT BY BISYS ARE COMPLETELY DISCLAIMED.
17. Insurance
BISYS shall maintain a fidelity bond covering larceny and embezzlement and
an insurance policy with respect to directors and officers errors and omissions
coverage in amounts that are appropriate in light of its duties and
responsibilities under this Agreement. Upon the request of the Company or the
Funds, BISYS shall provide evidence that coverage is in place. BISYS shall
notify the Company should its insurance coverage with respect to professional
liability or errors and omissions coverage be canceled. Such notification shall
include the date of cancellation and the reasons therefore. BISYS shall notify
the Company of any material claims against it with respect to services performed
under this Agreement, whether or not they may be covered by insurance, and shall
notify the Company should the total outstanding claims made by BISYS under its
insurance coverage materially impair, or threaten to materially impair, the
adequacy of its coverage.
18. Information to be Furnished by the Company
The Company has furnished to BISYS, or will furnish upon request, the
following, as amended and current as of the effective date of this Agreement:
(a) A copy of the Charter of the Funds and of any amendments thereto,
certified by the proper official of the state in which such Charter has been
filed.
(b) A copy of the Funds' Bylaws and any amendments thereto;
(c) Certified copies of resolutions of the Board covering the following
matters:
(i) Approval of this Agreement and authorization of a specified
officer of the Company to execute and deliver this Agreement
and authorization for specified officers of the Company and
the Funds to instruct BISYS under this Agreement; and
12
(ii) Authorization of BISYS to act as Transfer Agent for the Funds.
(d) A list of all officers of the Company and the Funds, with each Fund's
AML Compliance Officer included among the officers therein, and any other
persons (who may be associated with the Funds or the Company or its investment
advisor), together with specimen signatures of those officers and other persons
who (except as otherwise provided herein to the contrary) shall be authorized to
instruct BISYS in all matters.
(e)Two copies of the following (if such documents are employed by the
Funds):
(i) Prospectus and Statement of Additional Information;
(ii) Distribution Agreement; and
(iii) All other forms commonly used by a Fund or its Distributor
with regard to their relationships and transactions with
shareholders of the Funds.
(f) A certificate as to shares of common stock of the Funds authorized,
issued, and outstanding as of the Effective Date and as to receipt of full
consideration by the Funds for all shares outstanding, such statement to be
certified by the Treasurer of the Funds.
(g) A copy of the Fund's written AML Program, including related Policies
and Procedures.
19. Information to be Furnished by BISYS
BISYS has furnished to the Company, or will furnish upon request, evidence
of the following:
(a) Approval of this Agreement by BISYS, and authorization of a specified
officer of BISYS to execute and deliver this Agreement.
(b) Authorization of BISYS to act as Transfer Agent for the Funds.
(c) The current BISYS "As-of Trading Policy."
(d) The written program concerning anti-money laundering services rendered
by BISYS to its various clients.
20. Amendments to Documents
The Company will provide BISYS with advance notice of any material
amendments to the items set forth in Section 18 of this Agreement. BISYS will
not be responsible for changing or conforming its services to any such
amendments until BISYS
13
has reviewed and accepted responsibility for the relevant changes in services.
BISYS will consider such changes in good faith. In the event that any such
amendment, or change in laws applicable to the Funds would require BISYS to make
specific changes to its service model, BISYS will use reasonable good faith
efforts to inform the Company of the changes that would be necessary, and set
out the estimated costs and estimated implementation timetable for any
additional services. The parties shall then in good faith agree to mutually
agreeable terms applicable to such additional service.
21. Reliance on Amendments
BISYS may rely on any amendments to or changes in any of the documents and
other items to be provided by the Company and the Funds pursuant to Sections 17
and 20 of this Agreement and, subject to the provisions of Section 6 of this
Agreement, each Fund hereby, severally and not jointly, agrees to indemnify and
hold harmless BISYS from and against any and all claims, demands, actions,
suits, judgments, liabilities, losses, damages, costs, charges, counsel fees and
other expenses of every nature and character which may result from actions or
omissions on the part of BISYS in reasonable reliance upon such amendments
and/or changes in respect of such Fund. Although BISYS is authorized to rely on
the above-mentioned amendments to and changes in the documents and other items
to be provided pursuant to Sections 18 and 20 of this Agreement, in the event
the same relate to services provided by BISYS under this Agreement, BISYS shall
have no liability for failure to comply with or take any action in conformity
with such amendments or changes unless the Company first obtains BISYS' written
consent to and approval of such amendments or changes.
22. Compliance with Laws
(a) Except for the obligations of BISYS set forth in Section 10 of this
Agreement, the Company and the Funds assume full responsibility for the
preparation, contents, and distribution of each prospectus of each of the Funds
as to compliance with all applicable requirements of the Securities Act of 1933,
as amended (the "1933 Act"), the 1940 Act, and any other laws, rules and
regulations of governmental authorities having jurisdiction. BISYS shall have no
obligation to take cognizance of any laws relating to the sale of the Funds'
shares. The Funds represent and warrant that all shares of the Funds that are
offered to the public are covered by an effective registration statement under
the 1933 Act and the 0000 Xxx.
(b) The Company and the Funds acknowledge that each Fund is a financial
institution subject to the law entitled Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
("U.S.A. Patriot") Act of 2001 and the Bank Secrecy Act (collectively, the "AML
Acts") and shall comply with the AML Acts and applicable regulations adopted
under this Agreement ( collectively, the "Applicable AML Laws") in all relevant
respects, subject to the delegation of certain responsibilities to BISYS, as
provided in the next paragraph below.
(c) The Company hereby delegates to BISYS the performance, on behalf of
the Funds, of the anti-money laundering services set forth under Item 6 of
Schedule B
14
(the "AML Services") as concerns the shareholder accounts maintained by BISYS
pursuant to this Agreement (including direct accounts; accounts maintained
through FUND/SERV and Networking, to the extent provided below, and omnibus
accounts, to the extent provided below). BISYS agrees to the foregoing
delegation and agrees to perform such services in accordance with the AML
Program. In connection therewith, BISYS agrees to maintain policies and
procedures, and related internal controls, that are consistent with the AML
Program and the requirement that the Funds employ procedures reasonably designed
to achieve compliance with the Applicable AML Laws, including the requirement to
have policies and procedures that can be reasonably expected to detect and cause
the reporting of transactions under Section 5318 of the Bank Secrecy Act. BISYS'
obligations under this delegation shall be subject to Sections 20 and 21 of this
Agreement, which require that the AML Program and any material amendments
thereto be submitted to BISYS for its review and consent.
(d) The Company agrees and acknowledges that, notwithstanding the
delegation provided for in the foregoing paragraph, the Company and the Funds
maintain full responsibility for ensuring that the AML Program is, and shall
continue to be, reasonably designed to ensure compliance with the Applicable AML
Laws, in light of the particular business of the Funds, taking into account
factors such as their size, location, activities and risks or vulnerabilities to
money laundering.
(e) In connection with the foregoing delegation, the Company also
acknowledges that the performance of the AML Services involves the exercise of
discretion which in some circumstances may result in consequences to the Funds
and their shareholders (such as in the case of the reporting of suspicious
activities and the freezing of shareholder accounts). In this regard, (i) under
circumstances in which the AML Program authorizes the taking of certain actions,
BISYS is granted the discretion to take any such action as may be authorized
under the AML Program, and in consultation with the Company or the Funds shall
not be required in connection therewith unless specifically required under the
AML Program, and (ii) the Company and the Funds instruct BISYS that it may avail
the Funds of any safe harbor from civil liability that may be available under
Applicable AML Laws for making a disclosure or filing a report under this
Agreement.
(f) As concerns Networking Level III accounts and omnibus accounts, the
AML Services performed by BISYS are subject to a more limited scope, as
discussed in the Release concerning the final rule of the Department of the
Treasury, 31 CFR 103 and of the Commission, 17 CFR 270, entitled Customer
Identification Programs for Mutual Funds issued on May 9, 2003 and subsequent
guidance issued jointly by such agencies entitled Question and Answer Regarding
the Mutual Fund Customer Identification Program Rule (31 CFR 103.131) issued on
August 11, 2003.
23. Disaster Recovery
BISYS shall enter into and shall maintain in effect with appropriate
parties one or more agreements making reasonable provisions for periodic backup
of computer files and data with respect to a Fund and emergency use of
electronic data processing equipment.
15
In the event of equipment failures, BISYS shall, at no additional expense to a
Fund, take reasonable steps to minimize service interruptions caused by
equipment failure, provided such loss or interruption is not caused by BISYS'
own willful malfeasance, bad faith, negligence or reckless disregard of its
duties or obligations under this Agreement and provided further that BISYS has
complied with the Provisions of this Section 23.
24. Notices
Any notice provided under this Agreement 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, or at such other address as such party may
from time to time specify in writing to the other party pursuant to this Section
24:
If to the Company:
TD Asset Management USA Funds, Inc.
c/o TD Asset Management USA, Inc.
00 X. 00xx Xxxxxx, 00Xx Xxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
If to BISYS:
BISYS Fund Services Ohio, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: President
with a copy to:
The BISYS Group, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attn: General Counsel
25. Assignment.
This Agreement and the rights and duties under this Agreement shall not be
assignable by either of the parties to this Agreement except with the written
consent of the other party, which consent shall not be unreasonably withheld or
delayed. This Section 25 shall not limit or in any way affect BISYS' right to
appoint third parties pursuant to Section 1 of this Agreement. This Agreement
shall be binding upon, and shall inure to the benefit of, the parties to this
Agreement and their respective successors and permitted assigns.
16
26. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to New York's conflicts of laws
principles, and the applicable provisions of the 1940 Act. To the extent that
the laws of the State of New York conflict with the applicable provisions of the
1940 Act, the applicable provisions of 1940 Act shall control.
27. Activities of BISYS
The services of BISYS rendered to the Funds under this Agreement are not
to be deemed to be exclusive. BISYS is free to render such services to others
and to have other businesses and interests. It is understood that trustees,
directors, officers, employees and Shareholders of the Funds are or may be or
become interested in BISYS, as officers, employees or otherwise and that
partners, officers and employees of BISYS and its counsel are or may be or
become similarly interested in the Funds, and that BISYS may be or become
interested in the Funds as a shareholder or otherwise.
28. Privacy
Nonpublic personal financial information relating to consumers or
customers of the Funds provided by, or at the direction of the Company or the
Funds to BISYS, or collected or retained by BISYS in the course of performing
its duties as transfer agent, shall be considered confidential information.
BISYS shall not give, sell or in any way transfer such confidential information
to any person or entity, other than affiliates of BISYS, except at the direction
of the Company or the Funds or as required or permitted by law (including
applicable anti-money laundering laws). BISYS represents, warrants and agrees
that it has in place and will maintain physical, electronic and procedural
safeguards reasonably designed to protect the security, confidentiality and
integrity of, and to prevent unauthorized access to or use of records and
information relating to consumers or customers of the Funds. The Company
represents to BISYS that, to the extent applicable, each of the Funds has
adopted a statement of its privacy policies and practices as required by the
Commission's Regulation S-P and agrees to provide BISYS with a copy of that
statement annually.
29. Access to be Provided
BISYS shall grant reasonable access to each of the Funds, the AML
Compliance Officer, and regulators having jurisdiction over the Funds, to the
books and records maintained by BISYS as the same relates to the services
performed under this Agreement on behalf of the Funds. Records may be edited or
redacted to maintain confidentiality of materials related to other clients of
BISYS. BISYS shall make its relevant personnel available to meet with the Board
concerning the AML Services at least annually or at such other intervals as may
be reasonably necessary or appropriate.
30. Miscellaneous
17
(a) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the parties to
this Agreement as to the subject matter covered by this Agreement, and
supersedes all prior negotiations, understandings and agreements bearing upon
the subject matter covered herein.
(c) 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.
(d) No amendment to this Agreement shall be valid unless made in writing
and executed by both parties to this Agreement.
(e) The provisions of Sections 5, 6(d), 9, 10, 12, 13, 28 and this 30
shall survive the termination of this Agreement.
(f) This Agreement shall be construed to be made by the Company as a
separate Agreement with respect to each Fund, and under no circumstances shall
the rights, obligations or remedies with respect to a particular Fund be deemed
to constitute a right, obligation or remedy applicable to any other Fund.
* * * * *
IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to
be duly executed all as of the day and year first above written.
TD ASSET MANAGEMENT USA FUNDS,
INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxx
Title: EVP
18
SCHEDULE A
FUNDS
FUNDS AUTHORIZED SHARES
TDAM Institutional Money Market Fund
Institutional Service Class 2,000,000,000
Institutional Class 3,000,000,000
TDAM U.S. Government Fund
Institutional Service Class 2,000,000,000
Institutional Class 2,000,000,000
TDAM Short Term Investment Fund 3,000,000,000
TDAM Short Term Bond Fund 5,000,000,000
19
SCHEDULE B
SERVICES
1. Shareholder Transactions
(a) Process shareholder purchase and redemption orders.
(b) Set up account information, including address, dividend
option, taxpayer identification numbers and wire instructions.
(c) Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.
(d) Issue periodic statements for shareholders.
(e) Process transfers and exchanges.
(f) Process dividend payments, including the purchase of new
shares, through dividend reimbursement.
2. Shareholder Information Services
(a) Make information available to shareholder servicing unit and
other remote access units regarding trade date, share price,
current holdings, yields, and dividend information.
(b) Produce detailed history of transactions through duplicate or
special order statements upon request.
(c) Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to
current shareholders, upon request.
(d) Provide toll-free telephone line and respond to shareholder
requests for Prospectuses.
20
3. Compliance Reporting
(a) Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc. and the
states in which the Fund is registered.
(b) Prepare and distribute appropriate Internal Revenue Service
forms for corresponding Fund and shareholder income and
capital gains.
(c) Issue tax withholding reports to the Internal Revenue Service.
4. Dealer/Load Processing (if applicable)
(a) Where appropriate information is available, provide reports
for tracking rights of accumulation and purchases made under a
Letter of Intent.
(b) Calculate fees due under 12b-1 plans for distribution and
marketing expenses.
(c) Provide for payment of commission on direct shareholder
purchases in a load fund.
(d) Calculate redemption fees, as appropriate.
(e) To the extent applicable, calculate fees due under shareholder
servicing agreements.
5. Shareholder Account Maintenance
(a) Maintain all shareholder records for each account in the
Funds.
(b) Issue customer statements on scheduled cycle, providing
duplicate second and third party copies if required.
(c) Record shareholder account information changes.
(d) Maintain account documentation files for each shareholder.
6. Blue Sky
(a) generate and maintain reports of Fund sales, and transmit to
the Fund's blue sky administrator, in standard file format.
(b) provide to each Fund standard escheatment reports as
reasonably requested by a Fund with respect to the status of
the Fund's accounts and outstanding checks.
21
7. Anti-Money Laundering Services
(a) Where appropriate and information is available, verify
shareholder identity upon opening new accounts.
(b) Monitor, identify and report shareholder transactions and
identify and report suspicious activities that are required to
be so identified and reported, and provide other required
reports to the Securities and Exchange Commission, the U.S.
Treasury Department, the Internal Revenue Service or each
agency's designated agent, in each case consistent with the
AML Program
(c) Place holds on transactions in shareholder accounts or freeze
assets in shareholder accounts, as provided in the AML Program
(d) Create documentation to provide a basis for law enforcement
authorities to trace illicit funds.
(e) Maintain all records or other documentation related to
shareholder accounts and transactions therein that are
required to be prepared and maintained pursuant to the AML
Program and make the same available for inspection by (i) the
Fund's AML Compliance Officer, (ii) any auditor of the AML
Program or related procedures, policies or controls that has
been designated by the Fund in writing, or (iii) regulatory or
law enforcement authorities, and otherwise make said records
or other documents available at the direction of the AML
Compliance Officer.
22
SCHEDULE C
FEES
The Company shall pay BISYS on the first business day of each month, or as
otherwise set forth below, fees for transfer agency services, determined at the
annual rates set forth below.
ANNUAL ACCOUNT BASED FEES
The following per-account fees, applied per year to each shareholder account
(open or closed) on BISYS' transfer agency system:
Per Non-Networked Accounts $20.00
Per Open Networked Accounts $15.00
Per Closed Accounts $2.00
For these purposes, the following categories constitute an open account on the
BISYS system in any one month: open account with balance, open account with zero
balance, or open account with negative balance and closed account with activity.
Closed accounts with no activity in the month are considered a closed account
for billing purposes.
The account-based fees above are subject to a minimum per Fund of $25,000 per
annum. An additional class fee of $10,000 per class per year, applicable to each
additional class of shares over the second class of shares per Fund.
ANNUAL BASIS POINT FEE:
In addition, BISYS shall be paid .01% of the aggregate net assets in the fund
complex in all non-networked ("direct") institutional accounts.
AML COSTS:
Early Warning annual fee $575.00
Early Warning per record cost $0.22
for new account* registration review - does not apply to Network
Level III accounts
Equifax - per request cost $5.00
23
*Changes to account registration information or other account-related
information may result in characterizing the account as a "new account" for
these purposes.
Annual Fee Adiustment
Commencing on the two-year anniversary of the Effective Date, BISYS may annually
increase the fixed fees and other fees expressed as stated dollar amounts in
this Agreement by up to an amount equal to the greater of (a) 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 should such index no longer be published, and (b) 10%.
Out of Pocket Expenses and Miscellaneous Charges
The out of pocket expenses and miscellaneous services fees and charges provided
for under this Agreement are not included in the above fees and shall also be
payable to BISYS in accordance with the provisions of this Agreement.
24
SCHEDULE D
REPORTS
1. Daily Shareholder Activity Journal
2. Daily Fund Activity Summary Report
(a) Beginning Balance
(b) Transactions
(c) Shareholder Transactions
(d) Reinvested Dividends
(e) Exchanges
(f) Adjustments
(g) Ending Balance
3. Daily Wire and Check Registers
4. Monthly Dealer Processing Reports
5. Monthly Dividend Reports
6. A copy of the most recent report by independent public accountants
describing control structure policies and procedures relating to transfer
agency operations pursuant to AICPA Statement on Auditing Standards Number
70.
7. Such special reports and additional information that the parties may agree
upon, from time to time.
In addition to the forgoing, following each quarterly period, BISYS will provide
a report to the following effect pertaining to the AML Services rendered by
BISYS under this Agreement during such quarterly period:
o performed good order review for all new and reregistered accounts;
o performed acceptance review for all monetary instruments received;
o administered signature guarantee policy in accordance with prospectus
requirements;
o administered escrow hold policy in accordance with prospectus
requirements;
o verified customer address changes;
o verified customer identification for all new accounts and all name changes
on existing accounts;
25
o monitored all purchase transactions made with cash equivalents totaling in
excess of $10,000 resulting in the filing of Form 8300 reports during the
period. The Fund does not accept cash or currency;
o monitored all accounts for suspicious activity resulting in the filing of
Form SAR reports during the period;
o reviewed shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental organizations,
such as the Office of Foreign Asset Control resulting in the freezing and
reporting of accounts during the period;
o reviewed shareholder names in compliance with FinCEN 314(a) requests,
resulting in the reporting of accounts during the period;
o created the documentation necessary to provide a basis for law enforcement
authorities to trace illicit funds; and
o maintained all records and other documentation related to shareholder
accounts and transactions required to e prepared and maintained pursuant
to the Fund's anti-money laundering program for all BISYS transfer agent
services.
The following will be provided in such report if a Fund falls under the related
USA PATRIOT Act provisions:
o performed the required due diligence to help prevent the opening of any
accounts for foreign shell banks during the period either directly or
through correspondent accounts; and
o performed required due diligence on any new correspondent accounts opened
during the period.
