Exhibit (h)(7)
AMENDMENT TO
TRANSFER AGENCY AGREEMENT
AMENDMENT made as of the 24th day of July, 2002, between Citizens
Funds (the "Trust"), a Massachusetts business trust having its principal place
of business at 000 Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000, and
BISYS FUND SERVICES OHIO, INC. ("BISYS"), an Ohio corporation having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, to that
certain Transfer Agency Agreement dated October 18, 2000, under which BISYS
performs transfer agency services for the Trust (as amended and in effect on the
date hereof, the "Agreement").
WHEREAS, under the Agreement BISYS is designated as the Trust's
transfer agent and performs the transfer agency services for the Trust that are
enumerated in the Agreement or a Schedule thereto;
WHEREAS, the Agreement provides that BISYS shall perform such
additional services as are mutually agreed upon and provided in an amendment to
the Agreement or its schedules, in consideration of such fees as the parties may
agree upon;
WHEREAS, the Trust desires that BISYS perform certain additional
services for the Trust related to anti-money laundering and fraud prevention;
WHEREAS, BISYS is willing to perform the services enumerated in this
Amendment on the terms and conditions set forth in this Amendment (the "AML
Services");
WHEREAS, the Trust and BISYS wish to amend the account-based transfer
agency fees payable under the Agreement and provide that certain expenses that
are currently reimbursable separately to BISYS shall be assumed by BISYS; and
WHEREAS, BISYS and Trust wish to enter into this Amendment to the
Agreement in order to set forth the terms under which BISYS will perform the AML
Services enumerated herein on behalf of the Trust, to provide in Schedule B for
the amended account-based transfer agency fees and delineate the expenses deemed
to be included therein, and to supplement and clarify certain other provisions
of the Agreement.
NOW, THEREFORE, in consideration of the covenants herein contained,
the Trust and BISYS hereby agree as follows:
1. Compliance with Laws / Delegation to BISYS.
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 ("U.S.A. PATRIOT") Act of
2001 and the Bank Secrecy Act (collectively, the "AML Acts") and shall comply
with the AML Acts and applicable regulations adopted 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 AML Services set forth in Schedule A to this Amendment as concerns
the shareholder accounts maintained by BISYS pursuant to the Agreement
(including direct accounts; accounts maintained through FUND/SERV and
Networking, to the extent provided below; and omnibus accounts, to the extent
provided below). BISYS agrees to the foregoing delegation and agrees to perform
the delegated services in accordance with the anti-money laundering program that
has been adopted by the Trust (the "AML Program"). 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 5 and 6 of this Amendment,
which require that the AML Program adopted by the Trust and any material
amendments thereto be submitted to BISYS.
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 enumerated in Schedule A
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, and consultation with the Trust shall not be
required in connection therewith unless expressly required by 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 Networking Level III accounts and omnibus accounts, the
AML Services performed by BISYS are subject to a more limited scope, as
contemplated under the interim final rule of the Department of the Treasury, 31
CFR 103, effective April 24, 2002 (the "Interim Final Rule") and the performance
by the Trust of the risk-based evaluation of entities
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holding such accounts, as contemplated under the Interim Final Rule. The
foregoing reference to the Interim Final Rule shall be deemed to include laws
and regulations adopted subsequent to the Interim Final Rule, if and to to the
extent consistent therewith.
The provisions of the Agreement concerning recordkeeping and
confidentiality are subject to the provisions of this Section.
2. REIMBURSEMENT OF EXPENSES AND MISCELLANEOUS SERVICE FEES.
BISYS shall be entitled to receive from the Trust the amounts set
forth on Exhibit B hereto for the performance of delegated AML Services under
this Amendment with respect to the Trust's AML Program. Effective upon the date
of this Amendment, Schedule B also amends the transfer agency fees payable
pursuant to Section 2 of the Agreement, and the provisions governing the
Company's reimbursement to BISYS of out-of-pocket expenses pursuant to Section 3
of the Agreement.
3. BANK ACCOUNTS.
BISYS is hereby granted, subject to prior Trust approval, 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 selected or approved by the Trust, as may
be necessary or appropriate from time to time in connection with the services
performed by BISYS. The Trust agrees to cooperate with BISYS in obtaining
services from such bank or banks as necessary to perform such services. The
Trust shall be deemed to be the customer of such Bank or Banks for all purposes
in connection with such accounts. To the extent that the performance of such
services hereunder shall require BISYS to disburse amounts from such accounts in
payment of dividends, redemption proceeds or for other purposes, the Trust shall
provide such bank or banks with all instructions and authorizations necessary
for BISYS to effect such disbursements.
4. INSTRUCTIONS / PROCEDURES.
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 requests that an exception
be made from any written compliance or transfer agency procedures adopted by
BISYS, or adopted by the Trust and approved by BISYS (including any requirements
of the Trust's AML Program), BISYS may in its sole discretion determine whether
to permit such exception and such permission shall not be unreasonably withheld.
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 employee of BISYS) and delivered to
BISYS (an "Exception"); provided that an Exception concerning the requirements
of the Trust's AML Program shall be authorized by the Trust's anti-money
laundering compliance officer ("AML Compliance Officer"). 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 of the Agreement or this
Amendment that expressly or by
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implication provides to the contrary, as long as BISYS acts in good faith and
without willful misconduct, 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.
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 with
prior notification to the Trust. The Trust reserves the right to propose a
"Trust As-Of Trading Policy" in place of the BISYS As-Of Trading Policy. BISYS
reserves the right to approve such policy which shall not be unreasonably
withheld. A copy of any such amendments shall be delivered to the Trust. 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.
The parties may amend any procedures adopted, approved or set forth
under the Agreement by mutual written agreement as may be appropriate or
practical under the circumstances. BISYS may conclusively assume that any
special procedure which has been approved by an executive officer of the Trust
(other than an officer or employee of BISYS) does not conflict with or violate
any requirements of the Trust's Declaration of Trust, By-Laws or then-current
prospectuses, or any rule, regulation or requirement of any regulatory body.
5. REPRESENTATIONS AND WARRANTIES.
The Trust represents and warrants that (a) the Trust has adopted the
written AML Program that has been submitted to BISYS pursuant to Section 6, and
has appointed the Trust's AML Compliance Officer, who is, or who will be
appointed at the next regularly scheduled meeting of the Board of Trustees of
the Trust (the "Board"), an officer of the Trust; (b) the AML Program and the
designation of the AML Officer have been approved by the Board; (c) the
delegation of certain services thereunder to BISYS, as provided in Section 1 of
this Amendment, has been approved by the Board; and (d) the Trust will submit
any material amendments to the AML Program to BISYS for BISYS' review. Any
amendment that would have a material impact upon the AML Services to be rendered
by BISYS or the responsibilities of BISYS shall be subject to approval by BISYS
prior to adoption. BISYS shall not unreasonably withhold its consent to material
amendments to the AML Program that are proposed in order for the Trust to comply
with Applicable AML Laws . The Trust's AML Compliance Officer need not be an
officer of the Trust if not required by applicable laws and regulations.
BISYS represents and warrants to the Trust that it has adopted and
will maintain a written program concerning the anti-money laundering services it
provides to its various clients, and that its policies and procedures are
reasonably adequate for it to provide the AML Services and comply with its
obligations under this Amendment.
6. INFORMATION TO BE FURNISHED BY THE TRUST.
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The Trust has furnished to BISYS the following, as amended and current
as of the date of this Amendment:
(a) A 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.
(b) A copy of the Trust's written AML Program, as defined in Section
1 of this Amendment, including related Policies and Procedures.
7. INFORMATION FURNISHED BY BISYS.
BISYS has furnished to the Trust the following:
(a) The currently effective BISYS "As-of" Trading Policy.
(b) The written program concerning anti-money laundering services
rendered by BISYS to its various clients.
8. 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 transfer
agency duties, 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 for the sole purposes of carrying out the
Agreement, 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
Securities and Exchange Commission's Regulation S-P and agrees to provide BISYS
with a copy of that statement annually.
9. ACCESS TO BE PROVIDED.
BISYS shall grant reasonable access to each of the Trust, the AML
Compliance Officer, and regulators having jurisdiction over the Trust, to the
books and records maintained by BISYS as the same relates to the services
performed hereunder on behalf of the Trust. Records may be edited or redacted to
maintain confidentiality of information that is not related to the Trust and is
related to other clients of BISYS. BISYS shall make its relevant personnel
available
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to meet with the Board concerning the AML Services at least annually and at such
other intervals as may be reasonably requested by the Board.
10. REPORTS TO BE FURNISHED TO THE TRUST.
At least quarterly, BISYS shall provide a report to the Trust
containing the information listed on Schedule C hereto.
11. MISCELLANEOUS.
(a) This Amendment supplements and amends the Agreement. The
provisions set forth in this Amendment supersede all prior
negotiations, understandings and agreements bearing upon the
subject matter covered herein, including any conflicting
provisions of the Agreement or any provisions of the Agreement
that directly cover or indirectly bear upon matters covered under
this Amendment.
(b) Each reference to the Agreement in the Agreement (as it existed
prior to this Amendment) and in every other agreement, contract
or instrument to which the parties are bound, shall hereafter be
construed as a reference to the Agreement as amended by this
Amendment. Except as provided in this Amendment, the provisions
of the Agreement remain in full force and effect (including,
without limitation, the term of the Agreement). No amendment or
modification to this Amendment shall be valid unless made in
writing and executed by both parties hereto.
(c) Paragraph headings in this Amendment are included for convenience
only and are not to be used to construe or interpret this
Amendment.
(d) This Amendment 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.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed all as of the day and year first above written.
CITIZENS FUNDS
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Title: Treasurer
-----------------------------
BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Title: President
-----------------------------
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SCHEDULE A
TO THE AMENDMENT (DATED JULY 24, 2002) TO THE
TRANSFER AGENCY AGREEMENT
BETWEEN
CITIZENS FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
SERVICES
a. Verify shareholder identity upon opening new accounts.
b. Monitor, identify and report shareholder transactions and identify and
report suspicious activities that are required to be so identified and
reported, and provide other required reports to the Securities and Exchange
Commission, the U.S. Treasury Department, the Internal Revenue Service or
each agency's designated agent, in each case consistent with the 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.
f. Arrange for periodic reviews, at least annually, to be performed by
internal auditors or other auditors chosen by BISYS concerning the BISYS
operations related to the AML Services.
g. Perform such other related services as are required by the AML Program.
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SCHEDULE B
TO THE AMENDMENT (DATED JULY 24, 2002) TO THE
TRANSFER AGENCY AGREEMENT
BETWEEN
CITIZENS FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
CHARGES FOR THE SERVICES SET FORTH
UNDER SCHEDULE A OF THIS AMENDMENT
One-time set up program cost $8,500.00
Annual program servicing $7,000.00
(to be billed in equal monthly amounts of $583.33)
Systems costs
Early Warning annual fee $575.00
Early Warning per record cost $0.17
for new account* registration review - does not apply to Network Level III
accounts
Equifax - per request cost $5.00
* CHANGES TO ACCOUNT REGISTRATION INFORMATION MAY RESULT IN CHARACTERIZING
THE ACCOUNT AS A "NEW ACCOUNT" FOR THESE PURPOSES.
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ADDITIONAL CHANGES TO SCHEDULE B
Pursuant to Section 2 of this Amendment, this section amends the provisions of
Schedule B to the Agreement to (i) set forth an amended open account fee and
(ii) set forth a list of the categories of out of pocket expense items that may
be billed, and may not be billed, to the Trust pursuant to Section 3 of the
Agreement during the remaining term of the Agreement, absent the written
authorization of the Trust to incur the relevant charges.
AMENDED OPEN ACCOUNT TRANSFER AGENCY FEES
Open Accounts (annual per account fee) $16.00
EXPENSES
The following expense items shall be paid by the Trust to BISYS in
accordance with the schedule set forth below:
CPU Charges (Per month) $300.00*
Internet Services (Per month) $7,500.00
Internet Trades (Per transaction per month) $0.75
Internet Users (Per user per month) $0.50
Internet Setup Cost (Per month ending in December 2003) $2000.00
AML Servicing (Per month) $583.33
AML Early Warning Report (Annual fee) $575.00
AML Early Warning Report (Per record) $0.17
AML Equifax (Per record) $5.00
PIT Reports (Per request) $150.00
* The $300.00 CPU Charges (Per month) covers only the files listed in (i) -
(iv) below. Any additional files will be priced separately and subject to
approval by the Trust prior to production. In addition, any system development
projects will follow the documented current protocol with regard to estimates,
approval and payment.
(i) Debit Card InBound
(ii) Debit Card Outbound
(iii) Citizens A1 (FISC file)
(iv) Citizens Monthly Statistical Report
In addition, expenses incurred by BISYS for the following items shall be
reimbursed by the Trust to BISYS:
DST Output (media for confirmations and tax statements)
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Fifth Third Bank Charges (custodian/DDA cash management)
Telecommunication Charges (T-1 cable access, routers, etc.)
NSCC Charges
Union Bank of California Charges(NSCC clearing)
Invoices from the following companies or their successors or replacements
providing the same or replacement services shall no longer be charged to the
Trust:
Xerox Federal Express
Shred-it XO Communications
USPS Presort America
Standard Register Safeguard Business Systems
AT&T Information Management Services (toner)
Ikon International Mailing Systems
DHL Xxxxxx Business Forms
Airborne Rainbow Express
Except as expressly amended above, all provisions of Schedule B to the Agreement
remain in full force and effect (including the annual per account fee for closed
accounts stated therein). Nothing set forth herein shall be construed to limit
BISYS' right to reimbursement of any expenses incurred upon or due to a
termination of the Agreement or a breach of the Agreement by the Trust.
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SCHEDULE C
TO THE AMENDMENT (DATED JULY 24, 2002) TO THE
TRANSFER AGENCY AGREEMENT
BETWEEN
CITIZENS FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
REPORTS
Following each quarterly period, BISYS will provide a report to the following
effect pertaining to the AML Services rendered by BISYS hereunder during such
quarterly period:
- performed good order review for all new and reregistered accounts;
- performed acceptance review for all monetary instruments received;
- administered signature guarantee policy in accordance with prospectus
requirements;
- administered escrow hold policy in accordance with prospectus requirements;
- verified customer address changes;
- verified customer identification for all new accounts and all name changes
on existing accounts;
- monitored all purchase transactions made with cash equivalents totaling in
excess of $10,000, resulting in the filing of [x] Form 8300 reports during
the period. The Fund does not accept cash or currency;
- monitored all accounts for suspicious activity resulting in the filing of
[x] Form SAR reports during the period;
- reviewed shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental organizations,
such as the Office of Foreign Asset Control resulting in the freezing and
reporting of [x] accounts during the period;
- created the documentation necessary to provide a basis for law enforcement
authorities to trace illicit funds;
- maintained all records and other documentation related to shareholder
accounts and transactions required to be prepared and maintained pursuant
to the Trust's anti-money laundering program for all BISYS transfer agent
services;
[The following items will be provided if the Trust falls under the related
U.S.A. PATRIOT Act provisions:]
- performed the required due diligence to help prevent the opening of any
accounts for foreign shell banks during the period either directly or
through correspondent accounts; and
- performed required due diligence on any new correspondent accounts opened
during the period.
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