MASTER SERVICES AGREEMENT
AGREEMENT made this 1st day of July, 2003, between BISYS FUND SERVICES
OHIO, INC. ("BISYS"), a Delaware corporation having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 and the XXXXX VALUE FUND,
INC. (the "Company"), with its principal place of business at 000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx, XX 00000.
WHEREAS, the Company desires that BISYS perform administrative, fund
accounting and transfer agent services for the investment portfolio of the
Company listed on Schedule A hereto (the "Fund"), as well as such additional
investment portfolios as hereafter may be established from time to time by the
Company (collectively with the Fund, the "Funds") and;
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the Company and BISYS hereby agree as follows:
1. RETENTION OF BISYS
The Company hereby retains BISYS to act as transfer agent, fund accountant
and administrator of the Company, and to furnish the Company with
administrative, fund accounting and transfer agent services set forth in
Sections 2(a) through (c) below. BISYS and the Company hereby agree that BISYS
will perform the services upon the terms set forth in this Agreement.
BISYS shall, for all purposes herein, be deemed to be an independent
contractor and, unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Company or Fund in any way, and shall not
be deemed an agent of the Company or any Funds.
2. SERVICES
(a) TRANSFER AGENCY SERVICES. BISYS shall perform for the
Company the transfer agency services set forth in Schedule
B hereto. BISYS also agrees to perform for the Company
such special services incidental to the performance of the
services enumerated herein as agreed to by the parties
from time to time. BISYS shall perform such additional
services as the parties mutually agree, for which the
Company will pay BISYS the amounts agreed upon between
them.
(b) FUND ACCOUNTING SERVICES. BISYS shall perform for the
Company the fund accounting services described in Schedule
C hereto. BISYS shall also perform such special accounting
services, and furnish such reports, for the Company and
the Funds to the extent
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agreed upon by the parties from time to time, for which
the Company will pay BISYS the amounts agreed upon between
them.
(c) ADMINISTRATIVE SERVICES. BISYS shall perform the
administrative services described in Schedule D, and, on
behalf of the Company, shall investigate, assist in the
selection of and conduct, oversee and monitor relations
with custodians, depositories, accountants, legal counsel,
underwriters, brokers and dealers, corporate fiduciaries,
insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Company's operations.
BISYS shall provide the Board of Directors of the Company
(the "Board") with such reports regarding investment
performance as it 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 administrative services for
the Company and each of the Funds that are mutually agreed
upon by the parties from time to time, for which the
Company will pay BISYS the amounts agreed upon between
them.
BISYS shall provide the Company with all necessary office space, equipment,
personnel, compensation and facilities (including facilities for shareholders'
and Board meetings) for handling the affairs of the Company and Funds and such
other services as BISYS shall, from time to time, 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.
Except as explicitly set forth herein, BISYS shall only perform additional
services as are provided on an amendment to the relevant Schedule, in
consideration of such fees as the parties hereto agree.
BISYS may utilize agents in its performance of services and, with prior
notice to the Company, appoint in writing other parties qualified to perform
specific transfer agency, administration or fund accounting services reasonably
acceptable to the Company (individually, a "Sub-Agent") to carry out some or all
of its responsibilities under this Agreement with respect to a Fund; provided,
however, that the Sub-Agent shall be the agent of BISYS and not the agent of the
Company or such Fund, and that BISYS shall be fully responsible for the acts of
such Sub-Agent and shall not be relieved of any of its responsibilities
hereunder by the appointment of such Sub-Agent.
3. ALLOCATION OF CHARGES AND EXPENSES.
BISYS shall furnish at its own expense the executive, supervisory and
clerical personnel necessary to perform its obligations under this Agreement.
BISYS shall also provide the items which it is obligated to provide under this
Agreement, and shall pay all compensation, if any, of officers of the Company
and Directors of the Company 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
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compensation of any employee of the Company retained by the Board to perform
services on behalf of the Company.
The Company assumes and shall pay or cause to be paid all other expenses of
the Company not otherwise allocated herein, including, without limitation,
organization costs, taxes, expenses for 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, all expenses incurred in connection with
issuing and redeeming Shares, the costs 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 Directors who are not
affiliated persons of BISYS or any affiliated corporation of BISYS (fees for
other "interested Directors" may be paid by parties other than the Company),
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 Company 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 E. 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 described in Schedule
E, the Company agrees to reimburse BISYS for all of its
out-of-pocket expenses reasonably incurred in providing
services hereunder, including:
(i) All direct telephone, telephone transmission and
telecopy or other electronic transmission expenses
incurred in communication with the Company or
others as required;
(ii) The cost of microfilm or microfiche of records or
other materials;
(iii) Any expenses incurred at the written direction of
an officer of the Company; provided however, that
such officer is not an officer or employee of
BISYS or its affiliates.
(c) In addition, BISYS shall be entitled to receive the
following miscellaneous fees and charges:
(i) Ad hoc reporting fees billed at an agreed upon
rate;
(ii) Fees for pricing information used in connection
with pricing the securities and other investments
of the Funds;
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(iii) A fee for managing and overseeing the report,
print and mail functions performed by BISYS using
third-party vendors; and
(iv) Cost of postage, couriers, stock computer paper,
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 by BISYS for the
performance of the services to be provided
hereunder; and
(v) All freight and other delivery and bonding charges
incurred in delivering materials to and from the
Company;
(vi) Fees associated with providing the AML Services,
as defined in Section 23;
(vii) System development fees, billed at the rate of
$150 per hour, as approved by the Company, and all
systems-related expenses, as agreed upon in
advance, associated with the provision of special
reports and services;
(viii) Fees for development of custom interfaces, billed
at a mutually agreed upon rate; and
(ix) Expenses associated with the tracking of "as-of"
trades, billed at the rate of $50 per hour, as
approved by the Company.
All rights of compensation under this Agreement for services performed and
for expense reimbursement shall survive the termination of this Agreement.
5. EFFECTIVE DATE
This Agreement shall become effective as of the date first written above
(the "Effective Date").
6. TERM
This Agreement shall continue in effect for a period of two (2) years,
until June 30, 2005 (the "Initial Term"). Thereafter, unless otherwise
terminated as provided herein, 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 nonrenewal at least
ninety (90) days prior to the end of the Initial Term or any Rollover Period, as
the case may be, (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.
For purposes of this Agreement, "cause" shall mean (a) a material breach of
this Agreement that has not been remedied for thirty (30) days following written
notice of such breach from the non-breaching party; (b) a final, unappealable
judicial, regulatory or
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administrative ruling or order in which the party to be terminated has been
found guilty of criminal or unethical behavior in the conduct of its business;
or (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.
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 hereto) with the
consent of the Company, 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 Company upon such termination shall be immediately due
and payable upon and notwithstanding such termination. BISYS shall be entitled
to collect from the Company, in addition to the fees and expenses provided in
the Section 3 and 4 of this Agreement, the amount of all of BISYS's cash
disbursements in connection with BISYS's activities in effecting such
termination, including without limitation, the delivery to the Company and/or
its distributor or investment adviser and/or other parties of the Company's
property, records, instruments and documents.
If, for any reason other than (i) nonrenewal, (ii) mutual agreement of the
parties or (iii) "cause" for termination of BISYS hereunder, BISYS's services
are terminated hereunder, BISYS is replaced as transfer agent fund accountant or
administrator, or if a third party is added to perform all or a part of the
services provided by BISYS under this Agreement (excluding any Sub-Agent
appointed as provided in Section 2 hereof), then the Company shall make a
one-time cash payment, in consideration of the fee structure and services to be
provided under this Agreement, and not as a penalty, to BISYS equal to the
balance that would be due BISYS for its services hereunder during the lesser of
(x) the next six (6) months, or (y) the number of months remaining in the
then-current term of this Agreement, assuming for purposes of the calculation of
the one-time payment that the fees that would be earned by BISYS for each month
shall be based upon the average assets, number of shareholder accounts and
corresponding fees that had been payable to BISYS monthly prior to the date that
services terminate, BISYS is replaced or a third party is added.
In the event the Company or any Fund is merged into another legal entity in
part or in whole pursuant to any form of business reorganization or is
liquidated in part or in whole prior to the expiration of the then-current term
of this Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which BISYS
is not retained to provide transfer agency services consistent with this
Agreement, including the number of accounts subject to such services. The
one-time cash payment referenced above shall be due and payable on the day prior
to the first day in which services are terminated, BISYS is replaced or a third
party is added.
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The parties further acknowledge and agree that, in the event services are
terminated, BISYS is replaced, or a third party is added, as set forth above,
(i) a determination of actual damages incurred by BISYS would be extremely
difficult, and (ii) the liquidated damages provision contained herein is
intended to adequately compensate BISYS for damages incurred and is not intended
to constitute any form of penalty.
7. STANDARD OF CARE; UNCONTROLLABLE EVENTS; LIMITATION OF LIABILITY
BISYS shall use reasonable professional diligence to ensure the accuracy of
all services performed under this Agreement, but shall not be liable to the
Company 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
herein, and no implied duties are assumed by or may be asserted against BISYS
hereunder.
BISYS shall maintain adequate and reliable computer and other equipment
necessary or appropriate to carry out its obligations under this Agreement. Upon
the Company'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. Notwithstanding the
foregoing or 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 its reasonable
control. Events beyond BISYS's reasonable control include, without limitation,
force majeure events. Force majeure events include 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 reasonable control, BISYS shall
follow applicable procedures in its disaster recovery and business continuity
plan and use all commercially reasonable efforts to minimize any service
interruption.
BISYS shall provide the Company, at such times as the Company may
reasonably require, copies of reports rendered by independent public accountants
on the internal controls and procedures of BISYS relating to the services
provided by BISYS under this Agreement.
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, OR LOST PROFITS, EACH OF WHICH IS
HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH DAMAGES
WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
8. LEGAL ADVICE
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BISYS may apply to the Company at any time for instructions and may consult
with counsel for the Company and with accountants and other experts with respect
to any matter arising in connection with BISYS's duties, and BISYS shall not be
liable nor accountable for any action taken or omitted by it in good faith in
accordance with such instruction or with the opinion of such counsel,
accountants or other experts. BISYS shall notify the Company at any time BISYS
believes that it is in need of the advice of counsel (other than counsel in the
regular employ of BISYS or any affiliated companies) with regard to BISYS's
responsibilities and duties pursuant to this Agreement. After so notifying the
Company, BISYS, at its discretion, shall be entitled to seek, receive and act
upon advice of legal counsel of its choosing, such advice to be at the expense
of the Company unless relating to a matter involving BISYS's willful
misfeasance, bad faith, negligence or reckless disregard of BISYS's
responsibilities and duties hereunder, and BISYS shall in no event be liable to
the Company or any Fund or any shareholder or beneficial owner of the Company
for any action reasonably taken pursuant to such advice.
9. INSTRUCTIONS / CERTAIN PROCEDURES, ETC.
BISYS shall be protected in acting upon any document that it reasonably
believes to be genuine and to have been signed or presented by the proper person
or persons. BISYS will not be held to have notice of any change of authority of
any officers, employees or agents of the Company until receipt of actual notice
thereof from the Company.
Whenever BISYS is requested or authorized to take action hereunder pursuant
to instructions from a shareholder, or a properly authorized agent of a
shareholder ("shareholder's agent"), concerning an account in a Fund, BISYS
shall be entitled to rely upon any certificate, letter or other instrument or
communication (including electronic mail), reasonably believed by BISYS to be
genuine and to have been properly made, signed or authorized by an officer or
other authorized agent of the Company or by the shareholder or shareholder's
agent, as the case may be, and shall be entitled to receive as conclusive proof
of any fact or matter required to be ascertained by it hereunder a certificate
signed by an officer of the Company or any other person authorized by the Board
or by the shareholder or shareholder's agent, as the case may be.
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 Company relating to the extent that such services
are described therein unless BISYS receives written instructions to the contrary
in a timely manner from the Company.
The parties hereto 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 Company (other than an officer
or employee of BISYS or its affiliates) does not conflict with or violate any
requirements of the Company's
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Articles of Incorporation, By-Laws or then-current prospectuses, or any rule,
regulation or requirement of any regulatory body.
The Company acknowledges receipt of a copy of BISYS's 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 endeavor to provide notice to the Company 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 Company and furnished to BISYS by the
Company.
The Company acknowledges and agrees that deviations from BISYS's written
transfer agent compliance procedures may involve a substantial risk of loss. In
the event an authorized representative of the Company 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 19), BISYS
may in its sole discretion determine whether to permit such exception. In the
event BISYS determines to permit such exception, the same shall become effective
when set forth in a written instrument executed by an authorized representative
of the Company (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 Company's AML Program shall be authorized by the
Company's AML Compliance Officer (as defined in Section 16). An Exception shall
be deemed to remain effective until the relevant instrument expires according to
its terms (or if no expiration date is stated, until BISYS receives written
notice from the Company 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 Company resulting from the Exception, and the Company
shall indemnify BISYS and hold BISYS harmless from any loss, liability, expenses
(including reasonable attorneys fees) and damages resulting to BISYS therefrom.
10. INDEMNIFICATION
The Company agrees to indemnify and hold harmless BISYS, its employees,
agents, directors, officers and nominees from and against any and all claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, counsel fees and other expenses (including reasonable investigation
expenses) of every nature and character (collectively, "Losses") directly and
proximately arising out of or in any way relating to BISYS's actions taken or
omissions with respect to the performance of services under this Agreement or
based, if applicable, upon reasonable reliance on information, records,
instructions or requests pertaining to Services hereunder, that are given or
made to BISYS by the Company, or the investment adviser, or other authorized
agents of the Company with which BISYS must interface in providing Services;
provided that this indemnification shall not apply to actions or omissions of
BISYS in cases of its own bad faith, willful misfeasance, negligence or reckless
disregard by it of its obligations and duties.
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BISYS shall indemnify, defend, and hold the Company, and its directors,
officers, agents and nominees harmless from and against any and all Losses
resulting directly and proximately from BISYS's willful misfeasance, bad faith
or negligence in the performance of its duties or obligations hereunder.
The indemnification rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provisions contained herein shall
apply, however, it is understood that if in any case a party may be asked to
indemnify or hold the other party harmless, the indemnifying party shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the indemnified party will use all
reasonable care to identify and notify the indemnifying party 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.
The indemnifying party shall be entitled to participate at its own expense
or, if it so elects, to assume the defense of any suit brought to enforce any
claims 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 indemnified party shall not effect any
settlement without the consent of the indemnifying party unless such settlement
imposes no liability, responsibility or other obligation upon the indemnifying
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 any counsel retained by the indemnified party.
The indemnity and defense provisions set forth herein shall indefinitely survive
the termination of this Agreement.
11. RECORD RETENTION AND CONFIDENTIALITY
BISYS shall keep and maintain on behalf of the Company all books and
records which are customary or which BISYS is required to keep and maintain in
connection with its services pursuant to applicable statutes, rules and
regulations, including without limitation Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, as amended (the "1940 Act"). BISYS further
agrees that all such books and records shall be the property of the Company and
to make such books and records available for inspection by the Company or by the
Securities and Exchange Commission (the "Commission") at reasonable times.
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BISYS shall otherwise keep confidential all books and records relating to
the Company and its shareholders, except when (i) disclosure is required by law,
(ii) BISYS is advised by counsel that it may incur liability for failure to make
a disclosure, (iii) BISYS is requested to divulge such information by
duly-constituted authorities or court process, or (iv) BISYS is requested to
make a disclosure by a shareholder or shareholder's agent with respect to
information concerning an account as to which such shareholder has either a
legal or beneficial interest or when requested by the Company or the dealer of
record as to such account. BISYS shall provide the Company 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.
12. REPORTS
BISYS shall furnish to the Company and to its properly-authorized auditors,
investment advisers, examiners, distributors, dealers, underwriters, salesmen,
insurance companies and others designated by the Company in writing, such
reports at such times as are prescribed pursuant to this Agreement, or as
subsequently agreed upon by the parties pursuant to an amendment to this
Agreement. The Company agrees to examine each such report or copy promptly and
will report or cause to be reported any errors or discrepancies therein. In the
event that errors or discrepancies, except such errors and discrepancies as may
not reasonably be expected to be discovered by the recipient after a reasonable
examination, are not so reported promptly, a report will for all purposes be
accepted by and binding upon the Company and any other recipient, and BISYS
shall have no liability for errors or discrepancies therein and shall have no
further responsibility with respect to such report except to perform reasonable
corrections of such errors and discrepancies within a reasonable time after
requested to do so by the Company.
13. RIGHTS OF OWNERSHIP
All computer programs and procedures employed or developed by or on behalf
of BISYS to perform services required to be provided by BISYS under this
Agreement are the property of BISYS. All records and other data except such
computer programs and procedures are the exclusive property of the Company and
all such other records and data shall be furnished to the Company in appropriate
form as soon as practicable after termination of this Agreement for any reason.
14. RETURN OF RECORDS
BISYS may at its option at any time, and shall promptly upon the Company's
demand, turn over to the Company and cease to retain BISYS's files, records and
documents created and maintained by BISYS pursuant to this Agreement which are
no longer needed by BISYS in the performance of its services or for its legal
protection. If not so turned over to the Company, such documents and records
shall be retained by BISYS for six years from the year of creation. At the end
of such six-year period, such
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records and documents shall be turned over to the Company unless the Company
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 Company with such bank or banks as
are acceptable to the Company, as may be necessary or appropriate from time to
time in connection with the transfer agency services to be performed hereunder.
The Company 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 Company
shall provide such bank or banks with all instructions and authorizations
necessary for BISYS to effect such disbursements.
16. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to BISYS that:
(a) It is a company duly incorporated and 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) It has been in compliance in all material respects with
all laws and regulations applicable to its business and
operations;
(d) This Agreement has been duly authorized by the Company
and, when executed and delivered by the Company, will
constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general
application affecting the right and remedies of creditors
and secured parties;
(e) As of the opening of business on the Effective Date of
this Agreement each Fund has authorized the number of
shares set forth on Schedule F and has registered an
indefinite number of shares with the SEC.
(f) By virtue of its Charter, shares of each Fund which are
redeemed by the Company may be sold by the Company from
its treasury.
The Company also represents and warrants that (i) the Company has adopted
the written AML Program that has been submitted to BISYS pursuant to Section 19,
and has
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appointed an officer of the Company as the Company'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,
has been approved by the Board, and (d) the Company will submit any material
amendments to the AML Program to BISYS for BISYS' review and consent prior to
adoption in accordance with Section 21.
17. REPRESENTATIONS AND WARRANTIES OF BISYS
BISYS represents and warrants to the Company that:
(a) It is a company duly incorporated and 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) It has been in, and shall continue to be in compliance in
all material respects with all provisions of law,
including Section 17A(c) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), required in
connection with the performance of its duties under this
Agreement;
(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 Company and
BISYS's records, data, equipment, facilities and other
property used in the performance of its obligations
hereunder are adequate and that it will make such changes
therein from time to time as are reasonably required for
the secure performance of its obligations 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.
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
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INCIDENTAL TO THE SERVICES PROVIDED UNDER THIS AGREEMENT BY BISYS ARE COMPLETELY
DISCLAIMED.
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 Company, BISYS shall provide
evidence that coverage is in place. BISYS shall notify the Company should its
insurance coverage with respect to professional liability or errors and
omissions coverage be reduced or canceled. Such notification shall include the
date of cancellation or reduction and the reasons therefore. BISYS shall notify
the Company 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 Company 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 COMPANY AND FUNDS
The Company has furnished to BISYS the following, as amended and current as
of the Effective Date:
(a) A copy of the Charter of the Company and of any amendments
thereto, certified by the proper official of the state in
which such Declaration has been filed.
(b) A copy of the Company's Bylaws and any amendments thereto;
(c) A copy of the resolutions of the Board regarding (A)
approval of this Agreement and authorization of a
specified officer of the Company to execute and deliver
this Agreement and authorization for specified officers of
the Company to instruct BISYS hereunder; and (B)
authorization of BISYS to act as Transfer Agent for the
Company.
(d) A certified list of all officers of the Company, with the
Company's AML Compliance Officer included among the
officers therein, and any other persons (who may be
associated with the Company or its investment advisor),
together with specimen signatures of those officers and
other persons who (except as otherwise provided herein to
the contrary) shall be authorized to instruct BISYS in all
matters.
(e) Two copies of the following (if such documents are
employed by the Company):
(i) Prospectuses and Statement of Additional
Information;
13
(ii) Distribution Agreement; and
(iii) All other forms commonly used by the Company or
its Distributor with regard to their relationships
and transactions with shareholders of the Funds.
(f) A certificate as to shares of the Company authorized,
issued, and outstanding as of the Effective Date and as to
receipt of full consideration by the Company for all
shares outstanding, such statement to be certified by the
Treasurer of the Company.
(g) A copy of the Company's written AML Program, including any
related Policies and Procedures.
(h) A copy of the Fund DCP, as defined in Item 22 of Schedule
D.
20. INFORMATION FURNISHED BY BISYS
BISYS has furnished to the Company 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 Company; and
(c) The current BISYS "As-of" Trading Policy.
(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, 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, to the Company.
21. AMENDMENTS TO DOCUMENTS
The Company shall furnish BISYS written copies of any amendments to, or
changes in, any of the items referred to in Section 19 hereof forthwith upon
such amendments or changes becoming effective. In addition, the Company agrees
that no amendments will be made to the Prospectuses or Statement of Additional
Information of the Company, or the AML Program, which might have the effect of
changing the procedures employed by BISYS in providing the services agreed to
hereunder or which amendment might affect the duties of BISYS hereunder unless
the Company first obtains BISYS' approval of such amendments or changes, which
approval shall not be withheld unreasonably. BISYS shall furnish the Company
with written copies of any amendments to, or changes in, any of the items
referred to in this Section 21.
14
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 Company pursuant to Sections 19 and 21 of this
Agreement and, subject to the provisions of Section 7 hereof, the Company hereby
indemnifies and holds harmless BISYS from and against any and all claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, counsel fees and other expenses of every nature and character which may
result from actions or omissions on the part of BISYS in reasonable reliance
upon such amendments and/or changes. 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 hereof, 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
unless the Company first obtains BISYS's written consent to and approval of such
amendments or changes.
23. COMPLIANCE WITH LAWS
Except for information which is the obligation of BISYS set forth in
Section 11 hereof, the Company assumes full responsibility for the preparation,
contents, and distribution of each prospectus of the Company 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. BISYS shall have no obligation to take
cognizance of any laws relating to the sale of the Company's shares. The Company
represents and warrants that all shares of the Company that are offered to the
public are covered by an effective registration statement under the 1933 Act and
the 1940 Act.
The Company acknowledges that it is a financial institution subject to the
law entitled United 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 Company hereby delegates to BISYS the performance, on behalf of the
Company, of the anti-money laundering services set forth under Item 6 of
Schedule B (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 Company's
AML Program. In connection therewith, BISYS agrees to maintain policies and
procedures, and related internal controls, that are consistent with the
Company's AML Program and the requirement that the Company 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's obligations under this delegation shall be
15
subject to Sections 19 and 21, which require that the AML Program and any
material amendments thereto be submitted to BISYS for its review and consent.
The Company agrees and acknowledges that, notwithstanding the delegation
provided for in the foregoing paragraph, the Company 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 Company, taking into account factors such as
its size, location, activities and risks or vulnerabilities to money laundering.
In connection with the foregoing delegation, the Company also acknowledges
that the performance of the AML Services involves the exercise of discretion
which in some circumstances may result in consequences to the Company 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 Company shall not be required in connection
therewith unless specifically required under the AML Program, and (ii) the
Company instructs BISYS that it may avail the Company 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 release concerning 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 Company of the risk-based evaluation of entities holding
such accounts, as contemplated under the release pertaining to 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 the extent consistent therewith.
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: if to the Company, to the XXXXX VALUE FUND, INC., 000
Xxxxx Xxxx Xxxxxx; Xxxxxxx, XX 00000; Attn: Xxxxxxxx Xxxxxxx, with a copy to
Xxxxxxx X Xxxxxx, Esq., Xxxx and Xxxx, LLP; 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000;
and if to BISYS, to it at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000; Attn:
President, or at such other address as such party may from time to time specify
in writing to the other party pursuant to this Section.
25. ASSIGNMENT
This Agreement and the rights and duties hereunder shall not be assignable
by either of the parties hereto except by the specific written consent of the
other party. This Section 25 shall not limit or in any way affect BISYS's right
to appoint a Sub-Agent
16
pursuant to Section 2 hereof. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns.
26. GOVERNING LAW
This Agreement shall be governed by and provisions shall be construed in
accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of Ohio, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
27. ACTIVITIES OF BISYS
The services of BISYS rendered to the Company 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 Directors, officers,
employees and Shareholders of the Company 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 Company, and that BISYS may be or become interested in the Company as a
Shareholder or otherwise
28. PRIVACY
Nonpublic personal financial information relating to consumers or customers
of the Company provided by, or at the direction of the Company to BISYS, or
collected or retained by BISYS in the course of performing its duties as
transfer agent, shall be considered confidential information. BISYS shall not
give, sell or in any way transfer such confidential information to any person or
entity, other than affiliates of BISYS except at the direction of the Company or
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
Company. The Company 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 hereto as to the subject matter covered by this
Agreement, and supercedes all prior negotiations,
understandings and agreements bearing upon the subject
matter covered herein, including, without limitation, the
Prior Agreements.
17
(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 hereto.
* * * * *
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
XXXXX VALUE FUND, INC.
By: /s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxxx X. Xxx
Name: Xxxxx X. Xxx
Title: President
19
SCHEDULE A
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND XXXXX VALUE FUND, INC.
FUNDS
Xxxxx Value Fund
20
SCHEDULE B
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND XXXXX VALUE FUND, INC.
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.
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.
3. COMPLIANCE REPORTING
(a) Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc. and the States in
which the Fund is registered.
(b) Prepare and distribute appropriate Internal Revenue Service forms
for corresponding Fund and shareholder income and capital gains.
(c) Issue tax withholding reports to the Internal Revenue Service.
21
4. DEALER/LOAD PROCESSING (IF APPLICABLE)
(a) Provide reports for tracking rights of accumulation and purchases
made under a Letter of Intent.
(b) Account for separation of shareholder investments from transaction
sale charges for purchase of Fund shares.
(c) Calculate fees due under 12b-1 plans for distribution and marketing
expenses.
(d) Track sales and commission statistics by dealer and provide for
payment of commissions on direct shareholder purchases in a load
Fund.
5. SHAREHOLDER ACCOUNT MAINTENANCE
(a) Maintain all shareholder records for each account in the Company.
(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) 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 Company's AML Program.
(c) Place holds on transactions in shareholder accounts or freeze assets
in shareholder accounts, as provided in the Company'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 Company's AML Program, and make the
same available for inspection by (i) the Company's AML Compliance
Officer, (ii) any auditor of the Company's AML Program or related
procedures, policies or controls that has been designated by the
Company in writing, or (iii) regulatory or law enforcement
authorities, and otherwise make said records or other documents
available at the direction of the Company's AML Compliance Officer.
22
TRANSFER AGENCY REPORTS
1. Daily Shareholder Activity Journal
2. Daily Fund Activity Summary Report
(a) Beginning Balance
(b) Transactions
(c) Shareholder Transactions
(d) Reinvested Dividends
(e) Exchanges
(f) Adjustments
(g) Ending Balance
3. Daily Wire and Check Registers
4. Monthly Dealer Processing Reports
5. Monthly Dividend Reports
6. Sales Data Reports for Blue Sky Registration
7. A copy of the most recent report by independent public accountants
describing control structure policies and procedures relating to transfer
agency operations pursuant to AICPA Statement on Auditing Standards Number
70.
8. Such special reports and additional information that the parties may agree
upon, from time to time.
In addition to the forgoing, following each quarterly period, BISYS will
provide a report to the following effect pertaining to the AML Services rendered
by BISYS hereunder during such quarterly period:
1. performed good order review for all new and reregistered accounts;
2. performed acceptance review for all monetary instruments received;
3. administered signature guarantee policy in accordance with prospectus
requirements;
4. administered escrow hold policy in accordance with prospectus requirements;
5. verified customer address changes;
23
6. verified customer identification for all new accounts and all name changes
on existing accounts;
7. monitored all purchase transactions made with cash equivalents totaling in
excess of $10,000 resulting in the filing of Form 8300 reports during the
period. The Fund does not accept cash or currency;
8. monitored all accounts for suspicious activity resulting in the filing of
[x] Form SAR reports during the period;
9. reviewed shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental organizations,
such as the Office of Foreign Asset Control resulting in the freezing and
reporting of accounts during the period;
10. created the documentation necessary to provide a basis for law enforcement
authorities to trace illicit funds; and
11. maintained all records and other documentation related to shareholder
accounts and transactions required to be prepared and maintained pursuant
to the Fund's anti-money laundering program for all BISYS transfer agent
services.
The following will be provided in such report if the Company falls under
the related USA PATRIOT Act provisions:
1. 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
2. performed required due diligence on any new correspondent accounts opened
during the period.
24
SCHEDULE C
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND XXXXX VALUE FUND, INC.
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 Investment Company Act of
1940, as amended (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 daily for each Fund:
1. Calculate the net asset value per share utilizing prices obtained
from the sources described in subsection (b) (2) below;
2. Obtain security prices from independent pricing services, or if such
quotes are unavailable, then obtain such prices from each Fund's
investment adviser or its designee, as approved by the Company's
Board;
3. Verify and reconcile with the Funds' custodian all daily trade
activity;
4. 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;
5. 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;
25
6. Report to the Company the daily market pricing of securities in any
money market Funds, with the comparison to the amortized cost basis;
7. Determine unrealized appreciation and depreciation on securities
held in variable net asset value Funds;
8. Amortize premiums and accrete discounts on securities purchased at a
price other than face value, if requested by the Company;
9. Update fund accounting system to reflect rate changes, as received
from a Fund's investment adviser, on variable interest rate
instruments;
10. Post Fund transactions to appropriate categories;
11. Accrue expenses of each Fund according to instructions received from
the Company's Administrator, and submit changes to accruals and
expense items to authorized officers of the Company (who are not
BISYS employees) for review and approval;
12. Determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income and
expense accounts;
13. Provide accounting reports in connection with the Company's regular
annual audit and other audits and examinations by regulatory
agencies; and
14. Provide such periodic reports as the parties shall agree upon, as
set forth in a separate schedule.
(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 Company. 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
2. Provide accounting information for the following:
(a) federal and state income tax returns and federal excise
tax returns;
(b) the Company's semi-annual reports with the Securities and
Exchange Commission ("SEC") on Form N-SAR and the N-CSR;
26
(c) the Company's annual and semi-annual shareholder reports
and quarterly Board meetings;
(d) registration statements on Form N-1A and other filings
relating to the registration of shares;
(e) the Administrator's monitoring of the Company's status as
a regulated investment Company under Subchapter M of the
Internal Revenue Code, as amended;
(f) annual audit by the Company's auditors; and
(g) examinations performed by the SEC.
27
SCHEDULE D
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND XXXXX FUND, INC
ADMINISTRATIVE SERVICES
1. Calculate contractual Company expenses and control all disbursements for
the Company, subject to review and approval of an authorized officer of the
Company (who is not a BISYS employee), including administration of director
compensation on behalf of the Company, and as appropriate;
2. Provide information and assistance to counsel to the Company in preparing
(i) the annual update to the Company's registration statement on Form N-1A,
(ii) other amendments to the Company's registration statement and
supplements to its Prospectus and Statement of Additional Information, and
(iii) Notices of Annual or Special Meetings of shareholders of the Company
and proxy materials relating thereto, and file any of the foregoing with
the Securities and Exchange Commission (the "SEC") upon the request of the
Company or counsel to the Company;
3. Prepare such reports, applications and documents (including reports
regarding the sale and redemption of shares in the Company 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 Company ("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
Company and the Shares and all amendments thereto, as may be necessary or
convenient to register and keep effective the registration of the Company
and the Shares with state securities authorities to enable the Company to
make a continuous offering of its Shares;
4. Coordinate and prepare, with the assistance and approval of the Funds'
investment adviser and officers, 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; and file the final certified versions thereof on Form N-CSR and file
all required notices pursuant to Rule 24f-2;
5. Coordinate the distribution of prospectuses, supplements, proxy materials
and reports to Shareholders; and coordinate the solicitation and tabulation
of proxies in connection with the annual meeting of Shareholders each year,
if one is held;.
28
6. Administer contracts on behalf of the Company with, among others, the
Company's investment adviser, distributor, custodian, transfer agent and
fund accountant;
7. Supervise the Company's transfer agent with respect to the payment of
dividends and other distributions to Shareholders;
8. Calculate performance data of the Funds for dissemination to up to six (6)
information services covering the investment company industry;
9. Coordinate and supervise the preparation and filing of the Company's tax
returns;
10. 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;
11. Assist with the design, development, and operation of the Funds, including
new classes, investment objectives, policies and structure;
12. Make available appropriate individuals to serve as officers of the Company
(to serve only in ministerial or administrative capacities relevant to
BISYS' services hereunder, upon designation as such by the Board with the
understanding and expectation that, subject to Item 22 of this Schedule and
the BISYS Policies referred to therein, one or more individual employees of
BISYS shall serve as the Chief Financial Officer and Principal Executive
Officer of the Company and in that capacity provide certifications required
by Sections 302 and 906 of the Sarbanes Oxley Act on behalf of the Company;
13. Obtain, maintain and file fidelity bonds and directors and officers/errors
and omissions insurance policies for the Company at the expense of the
Company and Funds in accordance with the requirements of Rules 17g-1 and
17d-1(7) under the 1940 Act, to the extent such bonds and policies are
approved by the Board;
14. Monitor and advise the Company and its Funds on their regulated investment
company status under the Internal Revenue Code of 1986, as amended;
15. Perform required additional administrative services and functions of the
Company and each Fund to the extent administrative services and functions
are not provided to the Company or such Fund pursuant to the Company's or
such Fund's investment advisory agreement, distribution agreement,
custodian agreement, transfer agent agreement or fund accounting agreement
as agreed between the parties;
16. Maintain corporate records on behalf of the Company, including, but not
limited to, minute books, Declaration of Company, Company or Certificate of
Incorporation and By-Laws;
17. Assist in developing compliance procedures for each Fund, and provide
compliance monitoring services incorporating certain of those procedures,
which
29
will include, among other matters, compliance with each Fund's investment
objective, defined investment policies, restrictions, and tax
diversification, distribution and income requirements, as are determinable
based upon the Fund's accounting records;
18. Monitor services provided under Shareholder Service Plans adopted by the
Board and financial institutions that serve, or propose to serve, as
shareholder services agents thereunder ("Shareholder Service Agents");
coordinate the services to be rendered by Shareholder Service Agents
pursuant to Shareholder Service Agreements under Shareholder Service Plans,
and review the qualifications of Shareholder Service Agents to serve as
such under the relevant Shareholder Service Plan; coordinate and assist in
the Company's execution and delivery of Shareholder Service Agreements;
report to the Board regarding amounts paid under Shareholder Service
Agreements and the nature of Services provided by the Shareholder Service
Agents thereunder; and maintain appropriate records in connection with the
foregoing;
19. Provide assistance and guidance to the Company with respect to matters
governed by or related to regulatory requirements and developments
including: monitoring regulatory and legislative developments which may
effect the Company, and assisting in strategic planning in response
thereto; assisting the Company in responding to and providing documents for
routine regulatory examinations or investigations; and working closely with
counsel to the Company in response to such routine or non-routine
regulatory matter;
20. Assist the Company in preparing for and conducting Board meetings by (i)
coordinating Board book production and distribution, (ii) subject to review
and approval by the Company and its counsel, preparing Board agendas and
minutes, (iii) preparing the relevant sections of the Board materials
pertaining to the responsibilities of BISYS, (iv) assisting and
coordinating special materials related to annual contract approvals and
approval of rule 12b-1 plans and related matters, (v) attending Board
meetings and recording the minutes, and (vi) performing such other Board
meeting functions as agreed by the parties; and
21. Furnish advice and recommendations with respect to other aspects of the
business and affairs of the Funds as the Company and BISYS shall determine
desirable.
22. To assist the Company in connection with its obligations under Sections 302
and 906 of the Sarbanes Oxley Act of 2002 and Rule 30a-2 under the 1940 Act
(collectively, with such other related regulatory provisions applicable to
the Company, "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 Company and included in financial
information certified by Company officers ("Certifying Officers") on Form
N-CSR ("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
30
controls and procedures of the Funds ("Fund DCPs"), and (b) accumulated and
communicated to the relevant Certifying Officers consistent with the Fund
DCPs (it being contemplated that BISYS employees will serve as Certifying
Officers, as provided herein).
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 Company 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 Company, including
all other service providers to the Company (other than BISYS and its
affiliates) and compliance by such officers and agents with the Fund DCPs,
including but not limited to, the Company's investment adviser(s) and
custodian; and (c) assume that the Company has selected the appropriate
accounting policies for the Fund(s).
The Company shall assist and cooperate with BISYS (and shall 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 Company's Form N-CSR,
including Company financial statements, so that BISYS may submit a draft
Report to the Company's Disclosure Controls and Procedures Committee ("Fund
DCP Committee") at least 10 days prior to the date the relevant Report is
to be filed.
The Company 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, the Company 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 Company'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) evaluation 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
31
Subject to the internal policies of BISYS concerning the activities of its
employees and their service as officers of funds (the "BISYS Policies"),
BISYS shall make a BISYS employee available to the Company to serve, upon
designation as such by the Board, as the Chief Executive Officer and Chief
Financial Officer of the Company or under such other title to perform
similar functions. The parties acknowledge that as of the date hereof, the
BISYS Policies have not yet been submitted to the Company for review. The
BISYS Policies shall be consistent with the intentions of the parties and
the more specific terms herein governing the service of any BISYS employee
as Certifying Officer(s) or Chief Legal Officer of the Company (an
"Employee/Executive Officer"). The service rendered by BISYS under the
first sentence of this paragraph is limited to providing an
Employee/Executive Officer who, in the exercise of his or her duties to the
Company, shall act in good faith and in a manner reasonably believed by him
or her to be in the best interests of the Company. BISYS shall select, and
may replace, the specific employee that it makes available to serve in the
designated capacity as an Employee/Executive Officer, in BISYS' reasonable
discretion, taking into account such person's responsibilities concerning,
and familiarity with, the Company's operations.
The obligation of BISYS to provide an employee to serve in such capacity is
also subject to, and conditioned upon, the following:
The Fund DCPs shall contain (or the Company 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 Company shall establish and maintain a Fund DCP Committee comprised of
persons including (at a minimum) the Company's Principal Executive Officer,
Chief Financial Officer and Chief Legal Officer (if any) 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 Company's agents
that records, processes, summarizes, or reports information contained in
Company Reports (or other information from which such information is
derived), including the investment adviser and custodian (each, a "Service
Provider"). 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 Service Providers.
The Fund DCP Committee shall (i) meet within 10 days before the filing date
of each Report to review the accuracy and completeness of the relevant
Report and (ii) record its considerations and conclusions in a written
memorandum sufficient to support conclusions pertaining to Fund DCPs as
required by Item 9 of Form N-CSR. In conducting its review and evaluations,
the Fund DCP Committee shall:
32
(i) establish a schedule to ensure that all required disclosures in Form
N-CSR, including the financial statements, for the Company are identified
and prepared in a timeframe sufficient to allow review;
(ii) review SAS 70 Reports pertaining to 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 bring-down certification;
(iii) consider whether there are any significant deficiencies in the
design or operation of the Fund DCPs that could adversely affect a
Company's ability to record, process, summarize, and report financial data,
and in the event that any such deficiencies are identified, disclose them
to the Company's Certifying Officers, the Company'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 and Chief Legal
Officer (collectively, the "Executive Officers"), so that the Executive
Officers may inform the Company's audit committee and its auditors; and
(v) determine whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of the most recent evaluation of internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses, and if there were any, take all steps
necessary so that such changes and corrective actions are reflected in the
Report.
The Company's governing documents (including its Articles of Incorporation
and By-Laws) and/or resolutions of its Board of Directors shall contain
mandatory indemnification provisions that are applicable to each
Employee/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 Company, except to the extent
he or she would otherwise be liable to the Company 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 Company shall provide coverage to each Employee/Executive Officer under
its directors and officers liability policy that is appropriate to the
33
Employee/Executive Officer's role and title, and consistent with coverage
applicable to other management-level officers;
An Employee/Executive Officer that serves as 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, to report
matters involving fraud or other failure to meet the standards of
applicable law to the audit committee of the Board, or in appropriate
circumstances, 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
material deviation from the BISYS Policies, (b) a violation of
Xxxxxxxx-Xxxxx or other applicable laws, or (c) a material deviation by the
Company from the terms of this Agreement governing the services of such
Certifying Officer that is not caused by such Certifying Officer or BISYS.
Each Employee/Executive Officer that serves as a Certifying Officer may,
and the Company shall, promptly notify BISYS of any issue, matter or event
that would be reasonably likely to result in any claim by the Company, the
Company's shareholders or any third party which involves an allegation that
any Report failed to meet the standards of applicable laws or that any of
the Company's Certifying Officers failed to exercise their obligations to
the Company in a manner consistent with Xxxxxxxx-Xxxxx and other applicable
laws.
Notwithstanding any provision of the Agreement that expressly or by
implication provides to the contrary, (a) it is expressly agreed and
acknowledged that BISYS cannot ensure that the Company complies with
Xxxxxxxx-Xxxxx, and (b) if a BISYS employee serves as an Executive Officer
of the Company, as long as such Executive Officer acts in good faith and in
a manner reasonably believed to be in the best interests of the Company
(and would not otherwise be liable to the Company 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 Company 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 Company.
34
SCHEDULE E
TO THE MASTER SERVICES AGREEMENT
BETWEEN
BISYS FUND SERVICES OHIO, INC.
AND XXXXX FUND, INC
FEES
The Company shall pay BISYS on the first business day of each month, or at
such time(s) as BISYS shall request and the parties hereto shall agree, an
Administration, Fund Accounting and Transfer Agent Service fee computed daily at
the annual rates set forth below:
ADMINISTRATION SERVICES
0 - $500 Million 10 basis points
$500 Million - $1.0 Billion 8.5 basis points
$1.0 Billion - $1.5 Billion 7.0 basis points
Over $1.5 Billion 5.0 basis points
Minimum Complex Fee $42,500 per fund
Additional fee for providing
Employee/Executive Officers who
will serve as Certifying Officers $12,500
FUND ACCOUNTING SERVICES
0 - $500 Million 3.0 basis points
$500 Million - $1.0 Billion 2.5 basis points
$1.0 Billion - $1.5 Billion 1.0 basis points
Over $1.5 Billion .08 basis points
Minimum Complex Fee $37,500 per domestic fund
TRANSFER AGENT SERVICES
Base Cusip Fee $20,000 plus
Open Retail Account $25
Open Institutional Account $20
Open Matrix Level #3 Account $15
Closed Account $5
35
CONVERSION FEE
In addition to the foregoing, a conversion fee of $30,000 shall be payable
to BISYS with respect to all services and expenses in connection with the
conversion of Shareholder accounts and other information to BISYS and its
systems. Such amount shall be payable as follows: $15,000 upon the execution of
this Agreement, and $15,000 one (1) year following the Effective Date hereof.
TRANSITION OF SERVICES - SERVICES FEES
In the event that one or more categories of services are transitioned
subsequent to the initial conversion date (e.g., transfer agency services
commence two weeks subsequent to commencement of other services) the fees for
such services (as determined by the categories above) shall commence on the date
of the commencement of the relevant services.
OUT OF POCKET EXPENSE AND MISCELLANEOUS CHARGES
The Out of Pocket Expenses and Miscellaneous Charges provided for under
Sections 4(b) and (c) of the Agreement are not included in the above fees and
shall also be payable to BISYS in accordance with such provisions of the
Agreement.
36
