Exhibit H(vi)
MASTER SERVICES AGREEMENT
This Master Services Agreement ("Agreement") is made as of November 1,
2006, (the "Effective Date") between BISYS Fund Services Ohio, Inc. ("BISYS"),
an Ohio corporation having a place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000 and Commonwealth International Series Trust (the "Trust") a
Massachusetts Business trust, having a place of business at 0000 Xxx Xxxxxx
#000, Xxxxxxx, Xxxxx 00000.
WHEREAS, the Trust desires that BISYS perform administration, fund
accounting and transfer agency services for each of the investment portfolios of
the Trust listed on Schedule A to this Agreement, as well as such additional
investment portfolios as hereafter may be established by the Trust from time to
time (each a "Fund" and collectively, the "Funds");
WHEREAS, BISYS is legally qualified and has the requisite knowledge and
expertise to perform and is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in exchange for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Trust and BISYS hereby
agree as follows:
1. Retention of BISYS.
The Trust hereby retains BISYS to act as administrator, fund accountant
and transfer agent on behalf of the Trust and the Funds, and to furnish the
Trust and the Funds with administrative, fund accounting and transfer agency
services as set forth in Sections 2(a) through (c) below. BISYS and the Trust
hereby agree that BISYS will perform the services upon the terms set forth in
this Agreement and the Schedules attached thereto Agreement.
BISYS shall, for all purposes herein, be deemed to be an independent
contractor and, except as may otherwise expressly provided or authorized, shall
have no authority to act for or represent the Trust or Funds in any way, and
shall not be deemed an agent of the Trust or any Funds.
2. Services.
(a) Administration Services. BISYS shall perform the
administrative services set forth in Schedule B to this
Agreement and, on behalf of the Trust, shall investigate, and
conduct relations with, custodians, depositories,
underwriters, brokers and dealers, corporate fiduciaries,
insurers, banks and persons in any other capacity deemed to be
necessary or desirable for the Trust's operations. BISYS shall
provide the Board of Trustees of the Trust (the "Board") and
its committees with such reports regarding the Fund's
investment performance as the Board or its committees may
reasonably request, but shall have no responsibility for
supervising the performance by any investment adviser or
sub-adviser of its responsibilities. BISYS shall perform such
other administration services, and furnish such reports, for
the Trust and each of the Funds that are mutually agreed upon
by the parties from time to time, for which the Trust will pay
BISYS the amounts agreed upon between them.
(b) Fund Accounting Services. BISYS shall perform for the Trust
the fund accounting services set forth in Schedule C to this
Agreement. BISYS shall also perform such special accounting
services, and furnish such reports, for the Trust and the
Funds to the extent agreed upon by the parties from time to
time, for which the Trust will pay BISYS the amounts agreed
upon between them.
(c) Transfer Agency Services. BISYS shall perform for the Trust
the transfer agency services set forth in Schedule D to this
Agreement. BISYS also agrees to perform for the Trust such
special transfer agency services, and furnish such reports,
for the Trust and the Funds to the extent agreed upon by the
parties from time to time, for which the Trust will pay BISYS
the amounts agreed upon between them.
(d) Blue Sky Administration Services. BISYS shall also perform the
blue sky administration services in connection with the
registration and qualification of the shares of the Funds for
sale in the various jurisdictions. Utilizing sales data
provided by the Funds' transfer agent, BISYS will prepare such
reports, applications and documents as may be necessary to
register the shares of the Funds with state securities
authorities; BISYS will monitor the sale of shares for
compliance with state securities laws, as described in
Schedule D. BISYS shall perform such special blue sky
administration services for the Trust and each of the Funds
that are mutually agreed upon by the parties from time to
time, for which the Trust will pay BISYS the amounts agreed
upon between them.
Subject to the terms and provisions of this Agreement, BISYS shall
perform the services in accordance with the service standards set forth in
Schedule E.
BISYS shall provide the Trust with all necessary office space, equipment,
personnel and facilities (including facilities for shareholders' and Board
meetings) for handling the affairs of the Trust and Funds and such other
services as BISYS shall, from time to time, reasonably determine to be necessary
to perform its obligations under this Agreement. In addition, at the request of
the Board, BISYS shall make reports to the Board concerning the performance of
its obligations hereunder at least annually or at such times as the Board may
request.
BISYS shall perform such other services for the Trust or the Funds that
are mutually agreed upon by the parties from time to time, for which the Trust
will pay BISYS the amounts agreed upon between them, from time to time. Except
as explicitly set forth herein, BISYS shall only perform additional services as
are set forth in an amendment to this Agreement, in consideration of such fees
as the parties agree.
BISYS may use one or more third parties to perform some or all of its
obligations under this Agreement; provided, however, that BISYS shall not
utilize any third parties to communicate telephonically with investors or
shareholders of the Funds unless such third parties have been approved by the
Trust, which approval shall not be unreasonably conditioned, withheld or
delayed. 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.
3. Allocation of Charges and Expenses.
BISYS shall furnish at its own expense the executive, supervisory and
clerical personnel (and all facilities, equipment, and support required for such
personnel) necessary to perform its obligations under this Agreement. BISYS
shall pay all compensation, if any, of officers and trustees of the Trust who
are affiliated persons of BISYS or any affiliated entity of BISYS; provided,
however, that unless otherwise specifically provided, BISYS shall not be
obligated to pay the compensation of any employee or agent of the Trust (who is
not a BISYS agent or employee) retained by the Board to perform services on
behalf of the Trust.
The Trust assumes and shall pay or cause to be paid all other expenses of
the Trust not otherwise allocated to BISYS herein, including, without
limitation, organization costs, taxes, expenses for Trust legal and auditing
services, the expenses of preparing including typesetting, printing and mailing
reports, prospectuses, statements of additional information, proxy solicitation
material and notices to existing Shareholders (as defined below), all expenses
incurred in connection with issuing and redeeming shares of beneficial interest
in the Funds ("Shares"), the cost of custodial services, the cost of initial and
ongoing registration of the Shares under Federal and state securities laws, fees
and out-of-pocket expenses of trustees who are not affiliated persons of BISYS
or any affiliate of BISYS (fees for other "interested trustees" may be paid by
parties other than the Trust), insurance, interest, brokerage costs, litigation
and other extraordinary or nonrecurring expenses, and all fees and charges of
investment advisers.
4. Fees and Expenses.
(a) The Trust 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 F to this Agreement. Fees for
any additional services to be provided by BISYS pursuant to an
amendment to any of Schedules B, C or D shall be subject to
mutual agreement at the time such amendment is proposed.
(b) In addition to paying BISYS the fees set forth in Schedule F,
the Trust agrees to reimburse BISYS for all of its actual
out-of-pocket expenses reasonably incurred in providing
services hereunder, and not otherwise allocated herein,
including without limitation:
(i) All direct telephone, telephone transmission and
telecopy or other electronic transmission out of pocket
expenses incurred in communication with the Trust or the
Trust's investment adviser or custodian, broker-dealers,
shareholders or others as required for BISYS to perform
the services to be provided hereunder;
(ii) The cost of microfilm or microfiche of records or other
electronic storage of Trust records and other materials;
(iii) All freight and other delivery and bonding charges
incurred in delivering materials to and from the Trust,
its investment advisers and custodian;
(iv) All printing, production (including graphics support,
copying, and binding) and distribution expenses incurred
in relation to Board meeting materials;
(v) Check and payment processing fees;
(vi) Fulfillment;
(vii) XXX custody and other related fees;
(viii) NSCC and related costs;
(ix) Sales taxes;
(x) Costs of tax forms;
(xi) Cost of shareholder correspondence;
(xii) Costs of tax data services;
(xiii) Costs of rating agency services'
(xiv) All out of pocket costs incurred in connection with
BISYS' provision (if applicable, under Section 23 of
this Agreement) of Trust officers and in connection with
administration services, including, without limitation,
travel and lodging expenses incurred by officers and
employees of BISYS in connection with attendance at
Board or other Trust's meetings not held on BISYS'
premises for which such attendance is requested or
agreed upon by the parties; and
(xv) Any expenses incurred at the written direction of an
officer of the Trust; provided however, that such
officer is not an officer or employee of BISYS or its
affiliates.
BISYS agrees that it shall act in good faith to keep any increases in
out-of-pocket expenses reasonable, and BISYS shall notify the Trust of any
significant increases in out-of-pocket expenses that would have a material
impact on the Trust.
(c) In addition, BISYS shall be entitled to receive the following
miscellaneous fees and charges:
(i) Ad hoc reporting fees billed, when mutually agreed upon
between BISYS and the Trust in writing, according to
applicable rate schedules;
(ii) Fees for pricing information used in connection with
pricing the securities and other investments of each
Fund, provided that the Fund shall not be charged an
amount greater than the amount the Fund would be charged
if it obtained the information directly from the
relevant vendor or vendors, including costs incurred by
BISYS to Fair Value Information Vendors (as defined in
Schedule C) with respect to the provision of fair value
pricing information to BISYS for use in valuing the
portfolio holdings of a specific Fund or Funds that the
Trust designates as being subject to fair value
determinations and for which services are to be provided
by BISYS hereunder (such costs shall be incurred at the
discounted group rate made available to BISYS clients,
if applicable);
(iii) A fee for managing and overseeing the report, print and
mail functions performed by BISYS using third-party
vendors, not to exceed $.04 per page for Board meeting
materials; tax forms and statements of average cost, and
$.03 per page for daily confirmations, periodic
statements, new account letters and maintenance letters;
fees for programming in connection with creating or
changing the forms of statements, billed at a mutually
agreed upon 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 hereunder;
(iv) Fees and expenses associated with providing the "AML
Services," as defined in Section 23 of this Agreement,
and as set forth in further detail on Schedule E;
(v) System development fees, billed at a mutually agreed
upon rate as approved by the Trust, and all
systems-related expenses, as agreed upon in advance,
associated with the provision of special reports and
services;
(vi) Fees for development of any custom interfaces, billed at
a mutually agreed upon rate;
(vii) Interactive Voice Response System fees, charged
according to BISYS' standard rate schedule, and
applicable to the level of service (e.g., basic,
transaction, premium) selected; and
(viii) In the event that BISYS is requested or authorized by
the Trust 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 Trust or any Fund, the Trust 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.
(ix) In the event that the Trust or any Fund is requested or
authorized by BISYS 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
rendered by BISYS under this agreement, BISYS will, so
long as the Trust is not the subject of the
investigation or proceeding in which the information is
sought, pay the Trust for its professional time (at its
standard billing rates not to exceed BISYS' standard
rates) and reimburse the Trust for its out-of-pocket
expenses (including reasonable attorneys fees) incurred
in responding to such requests or requirements.
(x) Blue Sky check processing and payment fees.
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.
Upon reasonable advance request of the Trust, BISYS shall make available
for review by the Trust or its agent during normal business hours, at BISYS'
premises, supporting documentation for all fees and expenses charged under this
Agreement.
5. Effective Date.
This Agreement shall become effective as of the date first written above
(the "Effective Date"); provided, however, that only the services set forth in
Schedule B (except for Items 13 and 15) shall commence on the Effective Date.
The services set forth in Schedule C of this Agreement, Items 13 and 15 of
Schedule B of this Agreement, and Item 7 of Schedule D shall commence on
November 20, 2006, and the remainder of services set forth in Schedule D and all
other services (such as the provision of certifying officers) shall commence
upon completion of conversion, which is anticipated to be on or about February
28, 2007 (the "Conversion Date").
6. Term; Liquidated Damages; Termination.
(a) This Agreement shall continue in effect for an initial term ending
October 31, 2011 (the "Initial Term"). Thereafter, unless otherwise terminated
pursuant to this Agreement, this Agreement shall be renewed automatically for
successive one year periods ("Rollover Periods"). This Agreement may be
terminated only (i) by provision of a written notice of non-renewal provided at
least 90 days prior to the end of the Initial Term or any Rollover Period (which
notice of non-renewal will cause this Agreement to terminate as of the end of
the Initial Term or such Rollover Period, as applicable), (ii) by mutual
agreement of the parties, or (iii) for "cause," as defined below, upon the
provision of sixty (60) days advance written notice by the party alleging cause.
(b) For purposes of this Section 6, "cause" shall mean (a) 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; (b) 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; (c) 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; or (d) the sale or
transfer of a controlling interest in, or the sale or transfer of all or
substantially all of the assets of, the party to be terminated or its
parent-company if such sale or transfer either (i) has, or can reasonably be
expected to have (in the reasonable judgment of an objective third party), a
material adverse effect on such party's ability to perform its obligation under
this Agreement or (ii) causes or can reasonably be expected to cause (in the
reasonable judgment of an objective third party) material harm to the reputation
of the terminating party (in the case of either (i) or (ii), the 60-day
termination notice described above shall be provided within ninety (90) days
after the terminating party receives notice of such sale or transfer).
(c) In connection with the termination of this Agreement, if a successor
to BISYS' duties or responsibilities under this Agreement is designated by the
Fund by written notice to BISYS, BISYS will promptly on the Termination Date,
transfer to the successor all records which belong to the Fund and will provide
appropriate, reasonable and professional cooperation in transferring such
records and its functions to the named successor. Notwithstanding the foregoing,
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 (or any
Schedule or exhibit to this Agreement) with the consent of the Trust, the
provisions of this Agreement, including without limitation the provisions
dealing with compensation and indemnification, shall continue in full force and
effect. Fees and out-of-pocket expenses incurred by BISYS but unpaid by the
Trust upon such termination shall be immediately due and payable upon and
notwithstanding such termination. The Trust shall pay to BISYS, in addition to
the fees and expenses provided in Sections 3 and 4 of this Agreement, the amount
of all of BISYS' reasonable and approved by the Trust cash disbursements in
connection with BISYS' activities in effecting such termination, including
without limitation, the delivery to the Trust, its investment adviser and/or
other parties of the Trust's property, records, instruments and documents, such
amount to be paid on or before the date of such termination.
(d) If, after giving a notice of termination pursuant to Section 6(a)
above, the Trust desires to transfer to its new service provider certain of the
services in advance of the termination date stated in the notice, BISYS shall
make a good faith effort to facilitate such earlier conversion, to the extent
such facilitation does not negatively impact BISYS in any respect, whether by
virtue of loss of anticipated revenues, added expense or otherwise, and provided
that the Trust is not in breach of this Agreement.
(e) If the Trust terminates this Agreement for any reason other than (i)
non-renewal, (ii) mutual agreement of the parties, or (iii) "cause," or BISYS is
replaced as service provider to the Trust or some of the Funds, then the Trust
shall make a one-time cash payment to BISYS in consideration of the fee
structure and services to be provided under this Agreement, and not as a
penalty, as follows:
(i) if such triggering event occurs during the first two years of the
Agreement, an amount equal to 12 months of the fees that would be
due BISYS for its services under this Agreement; or
(ii) if such triggering event occurs during the third year of this
Agreement, an amount equal to 9 months of the fees that would be due
BISYS for its services under this Agreement; or
(iii) if such triggering event occurs during the fourth year of this
Agreement, an amount equal to 6 months of the fees that would be due
BISYS for its services under this Agreement;
(iv) if such triggering event occurs during the fifth year of this
Agreement, an amount equal to 3 months of the fees that would be due
BISYS for its services under this Agreement.
assuming for purposes of the calculation of the one-time payment that the fees
that would be due to BISYS shall be based upon the average fees payable to BISYS
monthly during the 12 months prior to the triggering event.
(f) In the event that the Trust or 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 in those instances in which BISYS
is not retained to provide fund accounting, administration and transfer agency
services consistent with this Agreement, including level of assets subject to
such services.
(g) 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 Trust shall be appropriately adjusted on a pro
rata basis.
(h) Any liquidated damages amount payable to BISYS shall be paid by the
Trust on or before the date of the event that triggers the payment obligation.
(i) 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.
7. Standard of Care; Force Majeure; Limitation of Liability.
(a) BISYS shall use reasonable professional diligence in the performance
of services under this Agreement, but shall not be liable to the Trust 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) BISYS shall maintain adequate and reasonably reliable computer and
other equipment necessary or appropriate to carry out its obligations under this
Agreement; provided that BISYS does not guaranty that the computer and other
equipment will function at all times. 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 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, it is understood that BISYS shall
follow its established applicable procedures in its disaster recovery and
business continuity plan and use all commercially reasonable efforts to minimize
any service interruption. Upon the Trust's reasonable request, BISYS shall
provide supplemental information concerning the aspects of its disaster recovery
and business continuity plan that are relevant to the services provided
hereunder.
(c) BISYS shall provide the Trust, at such times as the Trust 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 BISYS, 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, INCLUDING LOST REVENUE, LOST
PROFITS, AND LOST OR DAMAGED DATA, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT
OF THE PARTIES, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER A
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8. Legal Advice.
BISYS may apply to the Trust if BISYS reasonably determines that it is in
need of the advice of counsel to the Trust with regard to BISYS'
responsibilities and duties pursuant to this Agreement. If counsel to the Trust
believes that there would be a conflict of interest in rendering such advice,
then counsel shall so notify BISYS and shall not render such advice unless BISYS
then waives the conflict of interest in writing. BISYS may rely upon the advice
of counsel to the Trust; however, this Agreement shall not obligate counsel to
the Trust to render such advice. After so notifying the Trust, if BISYS does not
obtain the advice of counsel to the Trust (whether by virtue of an unwaived
conflict of interest or otherwise) 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 the reasonable expense of the Trust unless relating to a
matter involving BISYS' willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or reckless disregard of BISYS' failure to
perform its responsibilities and duties hereunder. BISYS shall in no event be
liable to the Trust or any Fund or any shareholder or beneficial owner of the
Trust for any action reasonably taken pursuant to legal advice rendered in
accordance with this paragraph. For the avoidance of doubt, but without limiting
the other provisions of this Agreement, without limitation, Section 10, it is
acknowledged that this Section 8 is not intended to require the Trust to
reimburse BISYS for its legal expenses incurred in connection with a dispute
with the Trust.
9. 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 Trust until receipt of
actual notice thereof from the Trust.
(b) Subject to Section 23(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 such shareholder's account in a Fund, BISYS shall be
entitled to rely upon any certificate, letter or other 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 Trust 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 Trust 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 Trust, to the extent that such
services are described therein unless BISYS receives written instructions to the
contrary in a timely manner from the Trust.
(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 Trust (other than an officer or
employee of BISYS or its affiliates) does not conflict with or violate any
requirements of the Trust's Declaration of Trust, By-Laws or then-current
Prospectus.
(e) The Trust acknowledges 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, but will provide prompt notice to the Trust of such
amendment. 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 Trust and furnished to BISYS by the
Trust.
(f) The Trust acknowledges and agrees that deviations from BISYS' written
transfer agent compliance procedures may involve a substantial risk of loss. In
the event an authorized representative of the Trust (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 16 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 Trust (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 the Trust's AML Program shall also be authorized
by the Trust's AML Compliance Officer (as defined in Section 16 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 Trust 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 liability for
any loss, liability, expenses or damages to the Trust resulting from the
Exception, and the Trust shall indemnify BISYS and hold BISYS harmless from any
loss, liability, expenses (including reasonable attorneys fees) and damages
resulting to BISYS therefrom.
(g) The Trust instructs and authorizes BISYS to provide information
pertaining to the Funds' investments to Fair Value Information Vendors (as
defined in Schedule C) in connection with the fair value determinations made
under the Trust's Valuation Procedures (as defined in Schedule C) and other
legitimate purposes related to the services to be provided hereunder. The Trust
acknowledges that while BISYS' services related to fair value pricing are
intended to assist the Trust and its Board in its obligations to price and
monitor pricing of Fund investments, BISYS does not assume responsibility for
the accuracy or appropriateness of pricing information or methodologies,
including any fair value pricing information or adjustment factors.
10. Indemnification.
(a) The Trust shall indemnify and hold harmless BISYS and its affiliates,
subsidiaries and parents, and their employees, agents, directors, officers and
nominees from and against any claims, demands, actions, suits, judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and other
expenses (collectively, "Losses") resulting directly and proximately from BISYS'
performance of services under this Agreement or, if applicable, upon BISYS'
reasonable reliance on information, records, instructions or requests pertaining
to services hereunder, that are given or made to BISYS by the Trust, the
investment adviser, or other authorized agents of the Trust; provided that this
indemnification shall not apply to actions or omissions of BISYS involving its
own bad faith, willful misfeasance, negligence in the performance or reckless
disregard by BISYS, of its obligations and duties under this Agreement.
(b) BISYS shall indemnify, defend, and hold the Trust and its affiliates,
subsidiaries and parents, and its trustees, 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 Trust involving
bad faith, willful misfeasance, negligence or reckless disregard by the Trust of
its 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 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) The provisions of this Section 10 are subject to the provisions of
Section 9 and Section 23(c) of this Agreement.
11. Record Retention and Confidentiality.
BISYS shall keep and maintain on behalf of the Trust all books and records
which are customary or which are required to be kept in connection with BISYS'
services pursuant to applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Trust Act of 1940,
as amended (the "1940 Act"). BISYS further agrees that all such books and
records shall be the property of the Trust and to make such books and records
available for inspection by the Trust at reasonable times or by the Securities
and Exchange Commission (the "Commission") promptly.
BISYS shall otherwise keep confidential all books and records relating to
the Fund and its shareholders, except when (i) disclosure is required by law,
(ii) BISYS is advised by Trust 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, (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 and a legal right to such information at such time
consistent with the Trust's Declaration of Trust , Prospectus and applicable
law, or (v) as requested or authorized by the Trust (including pursuant to its
policies and procedures). BISYS shall provide the Trust 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 11 are subject
to the provisions of Section 23(b) of this Agreement (Anti-Money Laundering
Provisions).
12. Reports.
BISYS shall furnish to the Trust and to its properly-authorized auditors,
investment advisers, examiners, distributors, broker-dealers, underwriters,
salesmen, insurance companies and others designated by the Trust in writing,
such reports at such times as are prescribed pursuant to this Agreement (or
schedules to this Agreement), or as subsequently agreed upon by the parties
pursuant to an amendment to this Agreement (or schedules to this Agreement). The
Trust agrees to examine each such report or copy provided to it promptly and
will report or cause to be reported to BISYS any errors or discrepancies
therein.
13. Rights of Ownership.
All computer programs, systems and procedures employed or developed by
BISYS, or on behalf of BISYS by system providers or vendors used by BISYS, to
perform services required to be provided by BISYS under this Agreement are the
property of BISYS. All records and other data maintained hereunder, excepting
such computer programs, systems and procedures, are the exclusive property of
the Trust. All such records and other data which is the property of the Trust
shall be furnished to the Trust in appropriate form as soon as practicable after
termination of this Agreement for any reason.
14. Return of Records.
BISYS shall promptly upon the Trust's demand, turn over to the Trust 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 Trust, such documents and records shall be retained by BISYS, at the
expense of the Trust, for six (6) years from the date of creation. At the end of
such six-year period, such records and documents shall be turned over to the
Trust unless the Trust authorizes in writing the destruction of such records and
documents.
15. Bank Accounts.
BISYS is hereby granted such power and authority as may be necessary to
establish one or more bank accounts for the Trust with such bank or banks as are
acceptable to the Trust, as may be necessary or appropriate from time to time in
connection with the transfer agency services to be performed hereunder. The
Trust shall be deemed to be the customer of such bank or banks for purposes of
such accounts. To the extent that the performance of such services hereunder
shall require BISYS to disburse amounts from such accounts in payment of
dividends, redemption proceeds or for other purposes hereunder, the Trust shall
provide such bank or banks with all instructions and authorizations necessary
for BISYS to effect such disbursements.
16. Representations and Warranties of the Trust.
The Trust represents and warrants to BISYS that:
(a) It is a Business Trust validly existing under the laws of the
jurisdiction of its formation, and has full capacity and
authority to enter into this Agreement and to carry out its
obligations hereunder;
(b) It has all necessary authorizations, licenses and permits to
carry out its business as currently conducted;
(c) To its knowledge, it is in compliance in all material respects
with all laws and regulations applicable to its business and
operations through the date hereof;
(d) This Agreement has been duly authorized by the Trust and, when
executed and delivered by the Trust, will constitute a legal,
valid and binding obligation of the Trust, enforceable against
the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of
general application affecting the right and remedies of
creditors and secured parties;
(e) By virtue of the Declaration of Trust, shares of each Fund
which are redeemed by the Trust may be resold by the Trust;
and
(f) The Trust has adopted a written anti-money laundering program,
which has been provided to BISYS pursuant to Section 19 of
this Agreement (the "AML Program"), and has appointed an
officer of the Trust as the Trust's anti-money laundering
compliance officer ("AML Compliance Officer"), (ii) the AML
Program and the designation of the AML Officer have been
approved by the Board, (iii) the delegation of certain
services thereunder to BISYS, as provided in Section 23 of
this Agreement, has been approved by the Board, and (iv) the
Trust will submit any material amendments to the AML Program
to BISYS for BISYS' review and consent prior to adoption, in
accordance with Section 21 of this Agreement. BISYS will
commence performing the AML services set forth herein at such
time as BISYS commences performing the transfer agency duties
and responsibilities set forth in this Agreement. -
(g) The Trust 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 Funds' investment adviser, and the
Trust hereby authorizes BISYS, acting in its capacity as
transfer agent, to provide the investment adviser with
information related to shareholder Suspicious Activity
Reports, upon request.
17. Representations and Warranties of BISYS.
BISYS represents and warrants to the Trust that:
(a) It is a corporation duly incorporated and validly existing
under the laws of the State of Ohio, and has full capacity and
authority to enter into this Agreement and to carry out its
obligations hereunder;
(b) It has and shall continue to have all necessary
authorizations, licenses and permits to carry out its business
as currently conducted and to discharge its obligations
hereunder;
(c) To its knowledge, it is, and shall continue to be, in
compliance in all material respects with all provisions of law
applicable to it in connection with its services hereunder,
including Section 17A(c) of the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(d) The various procedures and systems which it 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 Trust and BISYS' equipment, facilities,
and other property used in the performance of its obligations
hereunder are reasonable and adequate and that it will make
such changes therein from time to time as are reasonably
required for the secure performance of its obligations
hereunder; and
(e) 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 laws of
general application affecting the right and remedies of
creditors and secured parties;
(f) That, to its knowledge, it has no undisclosed, material
regulatory, civil, or criminal investigations, proceedings,
claims or lawsuits, filed or pending against it, that would
have a material adverse effect on its ability to provide the
services.
(g) That during the term of this Agreement, it will promptly
provide a copy to the Trust of any press release issued by
BISYS regarding any material regulatory, civil or criminal
investigation, proceeding, claim or lawsuit, filed or pending
against it, that would have a material adverse effect on
BISYS' ability to provide the services.
(h) The various procedures and systems which BISYS has implemented
with regard to safeguarding from loss or damage its records,
data, equipment, facilities, and other property used in the
performance of its obligations hereunder are reasonable and
adequate and it will make changes therein from time to time as
are required for the secure performance of its obligations
hereunder.
(i) It is duly registered with the appropriate regulatory agency
as a transfer agent and such registration will remain in full
force and effect for the duration of this agreement.
(j) It has not entered into any agreement with the Trust's
investment adviser with respect to marketing the shares of the
Funds that has not been disclosed to the Board, nor has BISYS
made any representations to the investment adviser or its
personnel regarding monetary or other compensation to be paid
to the investment adviser in connection with this Agreement
that has not been fully disclosed to the Board. From time to
time, upon written request of the Trust, BISYS shall submit a
written certification to the Trust with respect to the
accuracy of this representation, as of the time of such
certification.
(k) It has and will continue to have access to the necessary
facilities, equipment, and personnel to perform its duties and
obligations under this Agreement.
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.
The foregoing disclaimer does not negate indemnification obligations under
Section 10.
18. 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 hereunder. Upon the request of the Trust, BISYS shall provide
evidence that coverage is in place. BISYS shall notify the Trust should its
insurance coverage with respect to professional liability or errors and
omissions coverage be reduced or canceled. Such notification shall include the
date of cancellation or reduction and the reasons therefore. BISYS shall notify
the Trust promptly 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 Trust promptly should the total outstanding claims made by
BISYS under its insurance coverage materially impair, or threaten to materially
impair, the adequacy of its coverage.
19. Information to be Furnished by the Trust and Funds.
Upon the request of BISYS, the Trust agrees to furnish to BISYS the
following:
(a) A copy of the Declaration of Trust and any amendments thereto;
(b) A copy of the Trust's By-laws and any amendments thereto;
(c) A copy of the resolutions of the Board regarding (i) approval
of this Agreement and authorization of a specified officer of
the Trust to execute and deliver this Agreement and
authorization for specified officers of the Trust to instruct
BISYS hereunder; and (ii) authorization of BISYS to act as
administrator, fund accountant and transfer agent for the
Trust;
(d) A certified list of all officers of the Trust, with the
Trust's AML Compliance Officer included among the officers
therein, and any other persons (who may be associated with the
Trust 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) Copies of each of the following then-current documents
utilized by the Trust:
(i) Prospectuses and Statement of Additional Information;
(ii) Distribution Agreement; and
(iii) All other forms commonly used by the Trust or its
distributor with regard to their relationships and
transactions with shareholders of the Funds.
(f) A certificate as to shares of the Trust authorized, issued,
and outstanding as of the Effective Date and as to receipt of
full consideration by the Trust for all shares outstanding;
(g) A copy of the Trust's written AML Program, including any
related policies and procedures;
(h) A copy of the disclosure controls and procedures of the Funds
("Fund DCPs") as contemplated in Item 22 of Schedule B; and
(i) The Trust's Valuation Procedures as defined in Schedule C.
20. Information Furnished by BISYS.
BISYS agrees to furnish to the Trust, upon its 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, Fund
Accountant and Administrator for the Trust;
(c) The current BISYS As-of Trading Policy; and
(d) The current version of BISYS written polices and procedures
with respect to its provision on AML Services (as defined in
Section 23 below).
Upon request of the Trust, BISYS shall furnish a copy of the
relevant provisions of its internal policies on service of employees as
executive officers of funds ("BISYS Policies"), and any material
amendments thereto.
21. Amendments to Documents.
The Trust will provide BISYS with advance notice of any material
amendments to the items set forth in Section 19 of this Agreement. BISYS will
not be responsible for changing or conforming its services to any such
amendments until BISYS has reviewed and accepted responsibility for the relevant
changes in services; provided, however, that BISYS agrees to be responsible for
changing or conforming its services to any such amendments where such changes to
its services will not increase the burden (including, without limitation, cost
or risk) to BISYS, as reasonably determined by BISYS, subject to BISYS' receipt
of advance written notice of amendments, and further subject to BISYS' timetable
for the implementation of such changes, and the Trust's agreement to reimburse
BISYS for any costs of implementation. BISYS will consider changes to its
services in good faith. In the event that any amendment to the items set forth
in Section 19 of this Agreement, or any change in laws applicable to the Trust
would require BISYS to make specific changes to its service model, BISYS will
use reasonable good faith efforts to inform the Trust 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. BISYS
shall furnish the Trust with written copies of any amendments to, or changes in,
any of the items referred to in this Section 21.
22. 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 Trust pursuant to Sections 19 and 21 of this
Agreement and the indemnification provisions of Section 10 hereof are applicable
to BISYS' reasonable reliance upon such amendments and/or changes. 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 19 and 21 of
this Agreement, in the event the same relate to services provided by BISYS
hereunder, BISYS shall have no liability for failure to comply with or take any
action in conformity with such amendments or changes except as provided in
Section 21 of this Agreement or as otherwise agreed upon in writing.
23. Compliance with Laws.
(a) Prospectus and Public Offering. Except for information which is the
obligation of BISYS as set forth in Section 11 of this Agreement, and except as
provided in the services listed in the schedules to this Agreement which call
for information to be provided by BISYS for inclusion in the Prospectus, the
Trust assumes full responsibility for the preparation, contents, and
distribution of each Prospectus of the Trust in 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. Subject to its obligations herein with respect to "blue
sky" filings, BISYS shall have no obligation to take cognizance hereunder of
laws relating to the sale of the Funds' shares. The Trust represents and
warrants 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 1940 Act.
(b) Anti-Money Laundering Provisions. The Trust acknowledges that it is a
financial institution subject to the law entitled Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism ("USA PATRIOT") Act of 2001 and the Bank Secrecy Act (collectively,
the "AML Acts") and shall comply with the AML Acts and applicable regulations
adopted thereunder (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.
The Trust hereby delegates to BISYS the performance, on behalf of the
Trust, of the anti-money laundering services set forth under Item 6 of Schedule
D (the "AML Services") with respect to the shareholder accounts maintained by
BISYS pursuant to this Agreement, and BISYS agrees to the foregoing delegation
and agrees to perform such services in accordance with the Trust's AML Program
for the fee set forth on Schedule E to this Agreement. In connection therewith,
BISYS agrees to maintain policies and procedures, and related internal controls,
that are consistent with the Trust's AML Program and the requirement that the
Trust 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 19 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 prior to adoption.
The Trust agrees and acknowledges that, notwithstanding the delegation
provided for in the foregoing paragraph, the Trust maintains full responsibility
for ensuring that its 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 Trust, taking into account factors such as its size,
location, activities and risks or vulnerabilities to money laundering.
In connection with the foregoing delegation, the Trust also acknowledges
that the performance of the AML Services involves the exercise of discretion
which in certain circumstances may result in consequences to the Trust and its
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 consultation with Trust shall not be required in connection
therewith unless specifically required under the AML Program, and (ii) the Trust
instructs BISYS that it may avail the Trust of any safe harbor from civil
liability that may be available under Applicable AML Laws for making a
disclosure or filing a report thereunder.
As concerns Networked 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
(c) Provision of Certifying Officers.
Subject to the provisions of this Section 23(c) and Section 23(d) of this
Agreement, BISYS shall make BISYS employees 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 (each, a
"Certifying Officer"). 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 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 capacities as a Certifying Officer, in BISYS' reasonable
discretion, taking into account each such person's responsibilities concerning,
and familiarity with, the Trust's operations (but the designation of any such
person as a Certifying Officer shall be subject to the approval of the Trust).
The obligation of BISYS to provide an employee to serve in such capacity
is also subject to, and conditioned upon, the provisions of Item 19 of Schedule
B to this Agreement. Capitalized terms used but not defined in this Section
23(c) have the respective meanings ascribed to them in Item 19 of Schedule B.
The Fund DCPs shall contain (or the Trust and BISYS shall otherwise
establish) mutually agreeable procedures governing the certification process,
and the parties shall comply with such procedures in all material respects.
Among other things, the procedures shall provide as follows:
The Trust shall establish and maintain a Fund DCP Committee comprised of
persons including (at a minimum) the Trust's Principal Executive Officer, Chief
Financial Officer ("CFO") and Chief Legal Officer (if any), at least one BISYS
representative other than the CFO or Chief Compliance Officer, (if such officers
are provided by BISYS), at least one representative of the investment adviser,
and such other individuals as may be necessary or appropriate for the Fund 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
Trust Reports (or other information from which such information is derived),
including BISYS and the Other Service Providers to the Trust, such as the
investment adviser and custodian. In connection therewith, the Fund DCP
Committee shall assist the Certifying Officers by requiring that
sub-certifications acceptable to the Certifying Officers be provided by the
Other Service Providers. The CFO shall act as Chairman of the DCP Committee.
The Fund DCP Committee shall meet prior to the filing date of each Report
to review the accuracy and completeness of the relevant Report and record its
considerations and conclusions in a written memorandum sufficient to support
conclusions pertaining to Fund DCPs as required by the instructions to Form
N-CSR and Form N-Q. In conducting its review and evaluations, the Fund DCP
Committee shall:
(i) establish a schedule to ensure that all required
disclosures in Form N-CSR and Form N-Q, including the financial
statements, for the Trust are identified and prepared in a timeframe
sufficient to allow review;
(ii) 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 provider. In cases where the SAS 70 Report is dated more
than 90 days prior to the issuance of a Report, the DCP Committee
shall request a written representation from the service provider
regarding the continued application and effectiveness of internal
controls described in the report, or descriptions of any changes in
internal control structure, as of the date of the representation;
(iii) consider whether there are any significant deficiencies
or material weaknesses in the design or operation of the Fund DCPs
and internal control 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, the Trust's audit committee and its auditors;
(iv) consider whether, to the knowledge of each member of the
Fund DCP Committee, there has been or may have been any fraud,
whether or not material, and in the event that any such occurrence
is identified, ensure that this has been disclosed to the Certifying
Officers, so that Certifying Officers may inform the Trust's audit
committee and its auditors; and
(v) determine whether there was any change in internal control
over financial reporting that occurred during the Trust's second
fiscal quarter of the period covered by the Report (for Reports on
Form N-CSR) or during the most recent fiscal quarter (for Reports on
Form N-Q) 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.
(d) Additional Provisions Concerning Executive Officers.
It is mutually agreed and acknowledged by the parties that Certifying
Officers provided by BISYS under the provisions of this Section 23 will
constitute executive officers of the Trust ("Executive Officers"). The
provisions of Section 23(c) of this Agreement 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 the 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 other
officers holding positions of executive management.
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 violation of
Xxxxxxxx-Xxxxx, Applicable AML Laws or other Federal securities laws applicable
to the Trust (the "Applicable Securities Laws") by the Trust, or (b) a material
deviation by the Trust from the terms of this Agreement governing the services
of such Executive Officer, which (in either case) is not primarily caused by the
failure of such Executive Officer or BISYS to meet obligations under applicable
laws and this Agreement. 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 information or
cooperation from the Trust or its other service providers to appropriately
perform his or her duties.
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, the Trust's shareholders 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 this Agreement 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, the Applicable Securities Laws or Xxxxxxxx-Xxxxx, 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
resulting to the service of such Employee/Executive Officer as an Executive
Officer of the Trust.
24. Notices.
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, 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 Trust:
Commonwealth International Series Trust
0000 Xxx Xxxxxx, #000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxxx, President
with a copy to:
Xxxxxxxx X. Xxxxx, Esq.
Rabil & Ropka
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Fund Counsel - Commonwealth International Series Trust
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 hereunder shall not be assignable
by either of the parties without the prior written consent of the other party;
provided, however, that either party may assign this Agreement to an affiliate
of such party without the need for such consent. This Section 25 shall not limit
or in any way affect BISYS' right to use a third party to perform obligations
pursuant to Section 2 of this Agreement. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties and their respective successors
and permitted assigns.
26. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to Delaware's conflicts of laws
principles, and the applicable provisions of the 1940 Act. To the extent that
the laws of the State of Delaware 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 Trust hereunder 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, officers,
employees and shareholders of the Trust and/or Fund 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 Trust and/or Fund, and that BISYS may be or become
interested in the Trust and/or Fund as a shareholder or otherwise.
28. Privacy.
Nonpublic personal financial information relating to consumers or
customers of the Trust provided by, or at the direction of the Trust 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 involved in servicing the Trust except at
the direction of the Trust or as required or permitted by law (including
Applicable AML 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 Trust. The Trust represents to BISYS that it 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. Miscellaneous.
(a) Paragraph 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 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.
(e) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable
and not be affected, and the rights and obligations of the
parties shall be construed and enforced as if this Agreement
did not contain such part, term or provision.
[Signature page follows.]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed all as of the date first above written.
COMMONWEALTH INTERNATIONAL SERIES TRUST
By: /s Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
BISYS Fund Services Ohio, Inc.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Executive Vice President
SCHEDULE A
TO THE MASTER SERVICES AGREEMENT
between
BISYS FUND SERVICES OHIO, INC.
and
COMMONWEALTH INTERNATIONAL SERIES TRUST
Funds
Commonwealth Japan Fund
Commonwealth Australia/New Zealand Fund
Commonwealth Global Fund
Commonwealth Real Estate Securities Fund
SCHEDULE B
TO THE MASTER SERVICES AGREEMENT between
BISYS FUND SERVICES OHIO, INC. and
commonwealth international series trust
Administration Services
1. Calculate contractual Fund expenses and make and control all disbursements
for the Funds, subject to review and approval of an officer of the Trust
or other authorized person (designated on the list of authorized persons
approved by the Board), including administration of trustee and vendor
fees and compensation on behalf of the Trust, and as appropriate;
2. Prepare, subject to review by counsel to the Trust: (i) the annual update
to the Trust's registration statement on Form N-1A, and (ii) supplements
to its Prospectus and Statement of Additional Information; and file any of
the foregoing with the Commission upon the request of the Trust and
counsel to the Trust;
3. Coordinate and prepare, with the assistance and approval of the Fund's
investment adviser, counsel to the Trust and officers of the Trust, drafts
of communications to shareholders of record of the Funds ("Shareholders"),
including the annual report to Shareholders; prepare drafts of the
certified semi-annual report for each Fund; prepare and file the final
certified versions thereof on Form N-CSR; prepare and file the Fund's Form
N-SAR; and file all required notices pursuant to Rule 24f-2;
4. Coordinate the distribution of prospectuses, supplements, proxy materials
and reports to Shareholders; and coordinate the solicitation and
tabulation of proxies (including the annual meeting of Shareholders each
year, if one is held); and attend the Shareholder meetings
(telephonically) and record the minutes of the meetings;
5. Administer contracts on behalf of the Trust with, among others, the
Trust's investment adviser, distributor, custodian, transfer agent and
fund accountant;
6. Coordinate with the Trust's transfer agent with respect to the payment of
dividends and other distributions to Shareholders;
7. Calculate performance data of the Funds for dissemination to up to fifteen
(15) information services covering the investment Trust industry;
8. Prepare schedules for use by the Trust's auditors in connection with such
auditor's preparation of the Trust's tax returns;
9. Assist with the layout and printing of prospectuses and assist with and
coordinate layout and printing of the Funds' semi-annual and annual
reports to Shareholders;
10. Assist with the design, development, and operation of the Funds, including
new portfolios or classes, investment objectives, policies and structure,
and provide consultation related to legal and regulatory aspects of the
establishment, maintenance, and liquidation or dissolution of Funds;
11. Make available appropriate individuals to serve as officers of the Trust
(to serve only in ministerial or administrative capacities relevant to
BISYS' services hereunder, except as otherwise provided in this
Agreement), upon designation as such by the Board;
12. Obtain and maintain fidelity bonds and directors and officers/errors and
omissions insurance policies for the Trust and other named insured in
accordance with Rules 17g-1 and 17d-1 under this 1940 Act at the expense
(except as otherwise provided in this Agreement) of the Trust and Funds
and file the fidelity bonds and any notices with the Commission as
required under the 1940 Act, to the extent such bonds and policies are
approved by the Board;
13. Monitor and advise the Trust and its Funds on their regulated investment
company status under the Internal Revenue Code of 1986, as amended. In
connection with the foregoing, prepare and send quarterly reminder letters
related to such status, and prepare quarterly compliance checklist for use
by investment adviser(s) if requested;
14. Maintain corporate records on behalf of the Trust, including, but not
limited to, minute books, the Declaration of Trust of the Trust and
By-Laws for the Trust;
15. Assist the Trust in developing portfolio compliance procedures for each
Fund, and provide daily and periodic compliance monitoring services
incorporating certain of those procedures, which will include, among other
matters, compliance with investment restrictions imposed by the 1940 Act,
each Fund's investment objective, defined investment policies, and
restrictions, tax diversification, and distribution and income
requirements, provided such are determinable based upon the Fund's
accounting records. In connection with the foregoing, review quarterly
compliance reports that are prepared by the investment adviser(s), if any,
and notify appropriate Fund officers and advisor of xxxx-to-market issues
pursuant to Board-approved procedures. BISYS will also provide the Board
with quarterly results of compliance reviews;
16. Provide assistance and guidance to the Trust with respect to matters
governed by or related to regulatory requirements and developments
including: monitoring regulatory and legislative developments which may
affect the Trust, and assisting in strategic planning in response thereto;
assisting the Trust and providing on-site personnel in responding to and
providing documents for routine regulatory examinations or investigations;
and coordinating with and taking instructions from counsel to the Trust in
response to such routine or non-routine regulatory matters. The assistance
to be provided with respect to Commission inspections includes (i)
rendering advice regarding proposed responses (ii) compiling data and
other information in response to Commission requests for information and
(iii) communicating with Fund management and portfolio managers to provide
status updates. In addition, BISYS will provide appropriate assistance
with respect to audits conducted by the Funds' independent auditors
including compiling data and other information as necessary;
17. Manage the preparation for Board meetings by (i) coordinating Board book
preparation, production and distribution, (ii) subject to review and
approval by the Trust and its counsel, preparing Board agendas,
resolutions and minutes, (iii) preparing the relevant sections of the
Board materials required to be prepared by BISYS, (iv) assisting to gather
and coordinate special materials related to annual contract renewals and
approval of Rule 12b-1 for and as directed by the trustees or fund counsel
plans and related matters, (v) attending Board meetings (telephonically)
and recording the minutes, and (vi) performing such other Board meeting
functions as shall be agreed by the parties in writing;
18. Furnish advice and recommendations with respect to other aspects of the
business and affairs of the Funds as the Trust shall request and the
parties shall agree in writing; and
19. Assist the Trust in connection with its obligations under Sections 302 and
906 of the Xxxxxxxx-Xxxxx Act of 2002 and Rules 30a-2 and Rule 30a-3 under
the 1940 Act (collectively, with such other related regulatory provisions
applicable to the Trust, "Xxxxxxxx-Xxxxx"), BISYS will internally
establish and maintain controls and procedures ("BISYS internal controls")
designed to ensure that information recorded, processed, summarized, or
reported by BISYS and its affiliates on behalf of the Trust and included
in financial information certified by Trust officers ("Certifying
Officers") on Form N-CSR and Form N-Q ("Reports") is (a) recorded,
processed, summarized, and reported by BISYS within the time periods
specified in the Commission's rules and forms and corresponding disclosure
controls and procedures of the Funds ("Fund DCPs"), and (b) accumulated
and communicated to the relevant Certifying Officers consistent with the
Fund DCPs.
If requested by Certifying Officers with respect to a fiscal period during
which BISYS serves or served as financial administrator, BISYS will
provide a sub-certification consistent with the requirements of
Xxxxxxxx-Xxxxx pertaining to BISYS' services, solely for the purpose of
providing a basis of support (as to information which has been prepared,
processed and reported by BISYS, and as to BISYS internal controls) for
the Certifying Officers to render the certifications required by
Xxxxxxxx-Xxxxx (or, if applicable with respect to a Report, inform the
Certifying Officers of the reasons why the statements in such a
certification would not be accurate). In rendering such sub-certifications
concerning Trust Reports, BISYS may (a) limit its representations to
information prepared, processed and reported by BISYS; (b) rely upon and
assume the accuracy of the information provided by officers and other
authorized agents of the Trust, including all Other Service Providers to
the Trust, and compliance by such officers and agents with the Fund DCPs,
including but not limited to, the Trust's investment adviser(s) and
custodian; and (c) assume that the Trust has selected the appropriate
accounting policies for the Fund(s).
The Trust shall assist and cooperate with BISYS (and shall use its best
efforts to cause its officers, investment advisers 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
the Trust's Form N-CSR and Form N-Q, including Trust financial statements,
so that BISYS may submit a draft Report to the Trust's Disclosure Controls
and Procedures Committee ("Fund DCP Committee") prior to the date the
relevant Report is to be filed. The Certifying Officers and the Chief
Legal Officer (if any) of the Trust shall be deemed to constitute the Fund
DCP Committee in cases in which no other Fund DCP Committee has been
designated or is operative. In connection with its review and evaluations,
the Fund DCP Committee shall establish a schedule to ensure that all
required disclosures in Form N-CSR and in the financial statements for
each Fund are identified and prepared in a timeframe sufficient to allow
review by the Fund DCP Committee before the date the relevant report is to
be filed. At the request of the Trust or its Certifying Officers, BISYS
shall provide reasonable administrative assistance to the Trust in
connection with obtaining service provider sub-certifications, SAS-70
reports on internal controls, and any applicable representations to bring
such certifications current to the end of the reporting period, and in
preparing summaries of issues raised in such documents.
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 Fund DCP Committee in,
designing and maintaining the Fund DCPs in accordance with applicable
laws, including (a) ensuring that the Fund DCP Committee and/or Certifying
Officers obtain and review sub-certifications and reports on internal
controls from the Trust's investment adviser(s) and other service
providers, if any, sufficiently in advance of the date upon which the
relevant financial statements must be finalized by BISYS (in order to
print, distribute and/or file the same hereunder), (b) evaluating of the
effectiveness of the design and operation of the Fund DCP, under the
supervision, and with the participation of, the Certifying Officers,
within the requisite timeframe prior to the filing of each Report, and (c)
ensuring that its Certifying Officers render the requisite certifications
or take such other actions as may be permitted or required under
applicable laws.
22. Coordinate formulating and filing of the Funds' proxy voting records (as
approved by the investment adviser) on Form N-PX.
23. File holdings reports on Form N-Q as required at the end of the first and
third fiscal quarters of each year.
24. Prepare quarterly brokerage allocation compliance checklist and supporting
documentation for use by investment adviser(s), as requested.
25. Oversee/coordinate Trustee compensation.
26. Prepare and distribute Trustee/Officer Questionnaires, review completed
Questionnaires and resolve any open issues with the Trust and counsel.
27. Prepare and file amendments to the Articles of Incorporation as necessary.
28. Prepare amendments to the By-Laws.
29. Monitor wash sales.
30. Assist with updating policies and procedures.
31. A BISYS representative shall conduct a quarterly visit to the Trust, for
the purpose of in-person attendance at two meetings of the Board per year
and for the purpose of improving communications between the parties and
assisting in the integration and reporting with current and future
investors, particularly institutional investors and to address
enhancements to current services.
SCHEDULE C
TO THE MASTER SERVICES AGREEMENT between
BISYS FUND SERVICES OHIO, INC.
and
COMMONWEALTH INTERNATIONAL SERIES TRUST
FUND ACCOUNTING SERVICES
(a) BISYS will keep and maintain the following books and records of each Fund
pursuant to Rule 31a-1 (the "Rule") under the 1940 Act:
1. Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and
disbursements of cash and all other debits and credits, as
required by subsection (b)(1) of the Rule;
2. General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including
interest accrued and interest received, as required by
subsection (b)(2)(i) of the Rule;
3. Separate ledger accounts required by subsection (b)(2)(ii) and
(iii) of the Rule; and
4. A monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of the
Rule.
(b) In addition to the maintenance of the books and records specified above,
BISYS shall perform the following accounting services for each Fund:
Allocate income and expense and calculate the net asset value per
share ("NAV") of each class of shares offered by each Fund in
accordance with the relevant provisions of the applicable
Prospectus of each Fund and applicable regulations under the
1940 Act;
Apply securities pricing information as required or authorized under
the terms of the valuation policies and procedures of the
Trust ("Valuation Procedures"), including (A) pricing
information obtained from independent pricing services, with
respect to securities for which market quotations are readily
available, (B) if applicable to a particular Fund or Funds,
fair value pricing information or adjustment factors obtained
from independent fair value pricing services or other vendors
approved by the Trust (collectively, "Fair Value Information
Vendors") with respect to securities for which market
quotations are not readily available, for which a significant
event has occurred following the close of the relevant market
but prior to the Fund's pricing time, or which are otherwise
required to be made subject to a fair value determination
under the Valuation Procedures, and (C) prices obtained from
each Fund's investment adviser or other designee, as approved
by the Board;
Coordinate the preparation of reports that are prepared or provided
by Fair Value Information Vendors which help the Trust to
monitor and evaluate its use of fair value pricing information
under its Valuation Procedures;
Verify and reconcile with the Funds' custodian all daily trade
activity;
Compute, as appropriate, each Fund's net income and capital gains,
dividend payables, dividend factors, 7-day yields, 7-day
effective yields, 30-day yields, and weighted average
portfolio maturity; (and other yields or standard or
non-standard performance information as mutually agreed);
Review daily the net asset value calculation and dividend factor (if
any) for each Fund prior to release to shareholders, check and
confirm the net asset values and dividend factors for
reasonableness and deviations, and distribute net asset values
and yields to NASDAQ; and as agreed, in certain cases, to
newspapers;
If applicable, report to the Trust the periodic market pricing of
securities in any money market funds, with the comparison to
the amortized cost basis;
Determine and report unrealized appreciation and depreciation on
securities held in variable net asset value funds;
Amortize premiums and accrete discounts on fixed income securities
purchased at a price other than face value, if requested by
the Trust;
Update fund accounting system to reflect rate changes, as received
from a Fund's investment adviser, on variable interest rate
instruments;
Post Fund transactions to appropriate categories;
Accrue expenses of each Fund according to instructions received from
the Trust's Administrator, and submit changes to accruals and
expense items to authorized officers of the Trust (who are not
BISYS employees) for review and approval;
Determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income
and expense accounts;
Provide accounting reports in connection with and coordinate with
independent auditors concerning the Trust's regular annual
audit, and other audits and examinations by regulatory
agencies; and
Provide such periodic reports as the parties shall agree upon, as
set forth in a separate schedule.
Provide a representative (in a non-voting capacity) for the Trust's
Pricing Committee, if any; and
Assist the Trust in identifying instances where market prices are
not readily available, or are unreliable, within parameters
set forth in the Trust's Valuation Procedures.
(c) BISYS shall also perform the following additional accounting services for
each Fund:
1. Provide monthly a hard copy of the unaudited financial
statements described below, upon request of the Trust. The
unaudited financial statements will include the following
items:
A. Unaudited Statement of Assets and Liabilities,
B. Unaudited Statement of Operations,
C. Unaudited Statement of Changes in Net Assets, and
D. Unaudited Condensed Financial Information
E. Journal of securities sales and purchases;
F. Portfolio Holdings Reports.
2. Provide accounting information for the following: (in
compliance with Reg. S-X as applicable):
A. federal and state income tax returns and federal excise
tax returns;
B. the Trust's semi-annual reports with the Commission on
Form N-SAR and Form N-CSR;
C. the Trust's schedules of investments for filing with the
Commission on Form N-Q;
D. the Trust's annual and semi-annual shareholder reports
and quarterly Board meetings;
E. registration statements on Form N-1A and other filings
relating to the registration of shares;
F. BISYS' monitoring of each Fund's status as a regulated
investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended;
G. annual audit by the Trust's auditors; and
H. examinations performed by the Commission.
3. Calculate turnover and expense ratio.
4. Prepare schedule of Capital Gains and Losses.
5. Provide daily cash report.
6. Maintain and report security positions and transactions in
accounting system.
7. Prepare Broker Commission Report.
8. Monitor expense limitations.
9. Maintain list of failed trades.
10. Provide unrealized gain/loss report.
SCHEDULE D
TO THE MASTER SERVICES AGREEMENT between
BISYS FUND SERVICES OHIO, INC.
and
COMMONWEALTH INTERNATIONAL SERIES TRUST
TRANSFER AGENCY 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.
(g) Upon direction from the Funds, provide data to assist Funds in
identifying market timing activity (customized reporting
formats will be at an additional fee) based on information
contained on the transfer agent system.
(h) Administer redemption fee process when applicable.
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.
3. Compliance Reporting
(a) Provide reports to the 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.
(d) Report all redemption fee activity and any waivers to the
Trust and board for review. Upon instructions from an officer
of the Funds (who is not an employee of BISYS), BISYS will
communicate a decision to an owner of an account to freeze
such account.
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.
5. Shareholder Account Maintenance
(a) Maintain all shareholder records for each account in the
Trust.
(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. 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 Commission, the U.S. Treasury Department, the
Internal Revenue Service or each agency's designated agent, in
each case consistent with the Trust's AML Program.
(c) Place holds on transactions in shareholder accounts or freeze
assets in shareholder accounts, as provided in the Trust's 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 Trust's
AML Program, and make the same available for inspection by (i)
the Trust's AML Compliance Officer, (ii) any auditor of the
Trust's AML Program or related procedures, policies or
controls that has been designated by the Trust in writing, or
(iii) regulatory or law enforcement authorities, and otherwise
make said records or other documents available at the
direction of the Trust's AML Compliance Officer.
7. Blue Sky Services
Prepare such reports, applications and documents (including reports
regarding the sale and redemption of shares in the Funds as may be
required in order to comply with Federal and state securities laws) as may
be necessary or desirable to register the shares in the Funds ("Shares")
with state securities authorities, monitor the sale of Shares for
compliance with state securities laws, and file with the appropriate state
securities authorities the registration statements and reports for the
Funds and the Shares and all amendments thereto, as may be necessary or
convenient to register and keep effective the registration of the Funds
and the Shares with state securities authorities to enable the Funds to
make a continuous offering of their Shares. State securities ("Blue Sky")
exemption services are made available at an additional standard fee which
is earned by BISYS based on exemptions obtained by the Funds, including an
annual minimum.
Transfer Agency Representation
Following each quarterly period, BISYS will provide a representation to
the following effect pertaining to the AML Services rendered by BISYS hereunder
during such quarterly period:
1. Performance of good order review for all new and reregistered
accounts;
2. Performance of acceptance review for all monetary instruments
received;
3. Administration of signature guarantee policy in accordance with
prospectus requirements;
4. If applicable, administration of escrow hold policy in accordance
with prospectus requirements;
5. Verification of customer address changes;
6. Verification of customer identification for all new accounts and all
name changes on existing accounts;
7. Monitoring of all purchase transactions made with cash equivalents
totaling in excess of $10,000. The number of Form 8300 reports filed
during the period will be reported;
8. Monitoring of all accounts for suspicious activity. The number of
Form SAR reports filed during the period will be reported;
9. Review of shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental
organizations, such as the Office of Foreign Asset Control. The
number of accounts frozen and otherwise reported to authorities
during the period will be reported;
10. Creation of the documentation necessary to provide a basis for law
enforcement authorities to trace illicit funds; and
11. Maintenance all records and other documentation related to
shareholder accounts and transactions required to be prepared and
maintained pursuant to the Trust's AML program for all BISYS
transfer agent services.
The following will be provided in such representation if the Trust falls
under the related USA PATRIOT Act of 2001 provisions:
12. Performance of 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.
Performance of the required due diligence on any new correspondent
accounts opened during the period.
SCHEDULE E
TO THE MASTER SERVICES AGREEMENT between
BISYS FUND SERVICES OHIO, INC.
and
COMMONWEALTH INTERNATIONAL SERIES TRUST
In the event that BISYS fails to perform the same service standard listed below
during any three (3) consecutive months, the Trust may provide a notice
requiring BISYS to cure said failure. In the event BISYS fails to perform
pursuant to the relevant standard in the month following receipt of such notice,
the Trust shall have the right, exercisable within the next thirty (30) days
only, to terminate this Agreement upon sixty (60) days' notice to BISYS.
The service standards are subject to all terms and conditions of this Agreement,
including without limitation, Sections 7 and 9, and BISYS shall not be subject
to the service standards set forth herein when (i) BISYS has declared a disaster
and must operate pursuant to its disaster recovery and business continuity plan
and/or (ii) in the case of events beyond BISYS' reasonable control including,
without limitation, force majeure events. In addition, it is understood and
agreed that the service standards are dependent upon timely cooperation and
timely authorization by the Trust and its investment adviser. BISYS shall have
no liability for any failure to meet service standards that, directly or
indirectly, arises from actions, delays or failures of the Trust or its
investment adviser.
The required performance standard associated with a function will be measured by
dividing the total number of times that function was correctly performed during
the month by the total number of times that function occurred during the month.
With respect to transfer agency-related performance standards, calculations are
based on BISYS' service team level's performance where measurements are based on
overall performance of the team servicing multiple clients, including the Trust.
An inaccurate calculation of the NAV is defined as when the correct calculation
is $.01 per share or more difference from the originally stated NAV. Such
inaccuracy is considered one event and will only be counted on the day it first
occurred, unless the source of the inaccuracy changes during the relevant
period. An NAV error occurs at the Fund level and not the class level.
It is anticipated that the Funds would not wish to deliver an NAV to NASDAQ if
the accuracy of the NAV is in question at the time it is necessary to transmit
the NAV to NASDAQ. If BISYS has reason to believe that an NAV is or may be
incorrect, it may either "withhold" the NAV from NASDAQ or "withdraw" an NAV
previously submitted, and, assuming the Fund's pricing committee or appropriate
representatives can be reached, will do so in consultation and concurrence with
the Funds' pricing committee or the appropriate representative of the Funds. In
such event, BISYS shall not be deemed to have failed to report to NASDAQ by the
applicable cut-off time.
PERFORMANCE STANDARDS
---------------------------------------------------------------------------------------------------
FUNCTION/TASK STANDARD PERFORMANCE MEASURE
---------------------------------------------------------------------------------------------------
Fund Administration
- Monthly Compliance Checks Completed review 10 business days after receipt of
the IA's compliance reports
Daily Compliance Checks
- SEC and Prospectus By 5:00 PM on Trade Date + 2 business days
- IRS compliance Check By 5:00 PM on Trade Date + 2 business days
Fund Accounting
- NAV's accurately completed and reviewed 99% accurately completed and reviewed
- NAV's interfaced with T/A Target time is 6:15 p.m.
Transfer Agent
- Percentage of accurately processed manual 95% processed accurately the first time
financial transactions
---------------------------------------------------------------------------------------------------
Note: Business Days are days when the New York Stock Exchange is open and
trading.
SCHEDULE F
TO THE MASTER SERVICES AGREEMENT between
BISYS FUND SERVICES OHIO, INC.
and
COMMONWEALTH INTERNATIONAL SERIES TRUST
FEES
The Trust shall pay BISYS on the first business day of each month, or as
otherwise set forth below, fees for administration, fund accounting and transfer
agency services, determined at the annual rates set forth below.
Administration and Fund Accountings Services Fees:
Annual Asset-Based Fee
0.07% of the first $500 million in aggregate net assets of all
Funds; plus
0.05% of the aggregate net assets of all Funds in excess of $500
million.
This Asset-Based Fee is subject to an annual minimum, allocated among all
Funds, equal to the number of Funds multiplied by (i) $65,000 for the
period commencing with the Effective Date through December 31, 2007, (ii)
$70,000 for the period commencing with January 1, 2008 through December
31, 2008, (iii) $75,000 for the period commencing with January 1, 2009
through December 31, 2009, and (iv) $80,000 the period commencing with
January 1, 2010 and thereafter.
Annual Additional Class Fee
An additional class fee of $5,000 per class per year, applicable to
each additional Fund class of shares over the first class of shares per
Fund.
Transfer Agency Services Fee:
A per CUSIP fee of $17,000 per CUSIP per year commencing with the date on
which the services set forth on Schedule D commence; plus
The following per account fees (applied per year commencing with the date
on which the services set forth on Schedule D commence to each shareholder
account, open or closed, on BISYS' transfer agency system):
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The first 25,000 Open Each Open Non-Networked
Non-Networked Accounts Account in excess of
25,000
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Per Open Non-Networked Account $20 $19
--------------------------------------------------------------------------------
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The first 25,000 Open Each Open Networked
Networked Accounts Account in excess of
25,000
--------------------------------------------------------------------------------
Per Open Networked Account $15 $13.50
--------------------------------------------------------------------------------
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Per Closed Account $2
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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.
Annual Minimum Fee:
The Administration and Fund Accounting Services Fees and Transfer Agency
Services Fees set forth above are subject to an aggregate annual minimum
of $350,000, subject to adjustment as set forth below, commencing with the
date on which the services set forth on Schedule D commence. Other fees
payable to BISYS (such as compliance services, anti-money laundering (AML)
services, etc.) will not be applied towards satisfying this minimum. In
the event of a merger of two Funds, the aggregate annual minimum shall be
decreased by $75,000 for such merger, if any, not to exceed a total
life-time decrease of $150,000 (i.e., the aggregate annual minimum shall
never be less than $200,000). The aggregate annual minimum shall increase
by $75,000 for each Fund added.
AML Fees
Annual Fees
Program servicing: $4,500 for the first 50,000 accounts, plus
$2,500 for accounts in excess of 50,000
(to be billed in equal monthly installments)
Early Warning annual fee: $575.00
Early Warning per record cost: $0.22
Early Warning searches for all accounts except Networked Level III
accounts are conducted and fees applied every three weeks.
Equifax - per request cost: $5.00
Fair Value Support Services
As compensation for Fair Value Support Services (the services set forth in
subsections (b)2 and (b)3 (as they relate to fair value determinations) of
Schedule C to this Agreement). BISYS shall receive the following annual
servicing fee for each Fund that the Trust designates as being subject to fair
value determinations and for which Fair Value Support Services are to be
provided by BISYS hereunder, as follows:
One-time Development Fee, due upon the execution of this
Agreement: $10,000
Annual Fee for Fair Value Support Services to be provided by BISYS:
For each Fund with less than 200 securities: $5,000
For each Fund with at least 200 securities: $7,500
(The Annual Fee is to be billed in equal monthly installments) The
foregoing BISYS fee(s) do not include out of pocket costs. BISYS will also be
reimbursed by the Trust for the actual costs charged by Fair Value Information
Vendors with respect to the provision of fair value pricing information to BISYS
for use in valuing the portfolio holdings of a specific Fund or Funds.
Annual Fee Adjustment
Commencing March 1, 2008 , 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 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.
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.
