Exhibit (h)(3)
FIRST AMENDED AND RESTATED
MASTER SERVICES AGREEMENT
This FIRST AMENDED AND RESTATED MASTER SERVICES AGREEMENT ("Agreement") is
made as of this 1st day of July, 2005, between BISYS FUND SERVICES OHIO, INC.
("BISYS"), a Delaware corporation having its principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and each entity that has executed this
Agreement, as listed on the signature page hereto (each, the "Company"), each of
which has its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇. This Agreement shall be considered a separate agreement between BISYS and
each Company, and references to "the Company", etc., shall refer to each Company
separately. No Company shall be liable for the obligations of, nor entitled to
the benefits of, any other Company under this Agreement.
WHEREAS, BISYS and certain Companies had entered into various agreements
(the "Prior Agreements"), whereby BISYS agreed to perform transfer agency, fund
accounting and administration services for such Companies, which continued in
effect through April 1, 2003;
WHEREAS, BISYS and the Company entered into a Master Services Agreement
(the "Original Master Agreement") dated April 1, 2003 under which the Company
engaged BISYS to perform, or continue to perform, transfer agency, fund
accounting, administration and certain other services, for the Company and
certain investment portfolios of the Company;
WHEREAS, BISYS and the Company wish to amend and restate the Original
Master Agreement to provide for BISYS to be engaged solely to perform transfer
agency, fund accounting and certain other services (but excluding administration
services) on an ongoing basis on behalf of the Company and each investment
portfolio of the Company set forth on Schedule A to this Agreement and such
investment portfolios of the Company as are established from time to time (each
such investment portfolio of the Company individually referred to herein as the
"Fund" and collectively as the "Funds"); and
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the covenants hereinafter contained,
the Company and BISYS hereby agree as follows:
1. Retention of BISYS
The Company hereby retains BISYS to act as transfer agent and fund
accountant of the Company and each of the Funds and to furnish the Company and
each of the Funds with the transfer agency and fund accounting services set
forth in Sub-Sections 2(a) and
1
Exhibit (h)(3)
(b) 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 the Funds in any way, and shall
not be deemed an agent of the Company or the Funds.
2. Services
(a) Transfer Agency Services. BISYS shall perform for the Company the
various 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 agreed upon by the parties from time to time, for which
the Company will pay BISYS the amounts agreed upon between them.
(c) Legal Services. BISYS shall perform for the Company the legal services
described in Schedule D hereto. BISYS shall also perform such special legal
services for the Company and the Funds to the extent agreed upon by the parties
from time to time, for which the Company will pay BISYS the amounts agreed upon
between them.
(d) Administration Services. BISYS will no longer directly provide, and
the Company will be responsible for obtaining, administration services for the
Company and/or the Funds.
(e) Additional Services. 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.
(f) Sub-Agents. BISYS may, with prior notice to the Company, appoint in
writing other parties qualified to perform specific 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.
(a) BISYS. BISYS shall furnish at its own expense the executive,
supervisory and clerical personnel necessary to perform its obligations under
this Agreement. BISYS
2
Exhibit (h)(3)
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 Trustees of the Company who are affiliated persons of BISYS or any
affiliated corporation of BISYS; provided, however, that unless otherwise
specifically provided, BISYS shall not be obligated to pay the compensation of
any employee of the Company retained by the Board to perform services on behalf
of the Company.
(b) 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 Trustees
who are not affiliated persons of BISYS or any affiliated corporation of BISYS
(fees for other "interested Trustees" 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 and administrators.
4. Fees and Expenses
The Company shall pay BISYS (and/or at the direction of BISYS one or more
Sub-Agents) for the services to be provided by BISYS under this Agreement in
accordance with, and in the manner set forth in, that certain Omnibus Fee
Agreement (as such agreement has been amended to date and may be in the future
amended in accordance with its terms, the "Omnibus Fee Agreement") dated as of
April 1, 2003 between BISYS, BISYS Fund Services (Cayman) Limited, the Company,
and certain other investment portfolios affiliated with the Company. 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. The Company shall also reimburse BISYS (and/or at the
direction of BISYS one or more Sub-Agents) for its reasonable out-of-pocket
expenses as set forth in the Omnibus Fee Agreement. All rights of compensation
under this Agreement for services performed as of the termination date 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 until March 31, 2006 (the "Initial
Term"). Thereafter, unless otherwise terminated as provided herein, this
Agreement shall continue in effect unless and until it is terminated as set
forth in this paragraph. This Agreement may be terminated without penalty (i) by
provision of advance written notice of
3
Exhibit (h)(3)
nonrenewal to the other party at least 60 days prior to the end of the Initial
Term, (ii) by mutual agreement of the parties, (iii) for "cause," as defined
below, upon the provision of 60 days' advance written notice by the party
alleging cause, or (iv) by provision of 60 days' advance written notice to the
other party following the Initial Term.
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 administration ruling or order in which the
party to be terminated has been found guilty of criminal or unethical behavior
in the conduct of its business; (c) financial difficulties on the part of the
party to be terminated which are evidenced by the authorization or commencement
of, or involvement by way of pleading, answer, consent or acquiescence in, a
voluntary or involuntary case under Title 11 of the United States Code, as from
time to time in effect, or any applicable law, other than said Title 11, of any
jurisdiction relating to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors or (d) a decision by the
Board to terminate the Fund because it is not economically feasible. BISYS shall
not terminate this Agreement pursuant to clause (a) above based solely upon the
Company's failure to pay an amount to BISYS which is the subject of a good faith
dispute, if (i) the Company is attempting in good faith to resolve such dispute
with as much expediency as may be possible under the circumstances, and (ii) the
Company continues to perform its obligations hereunder in all other material
respects (including paying all fees and expenses not subject to reasonable
dispute hereunder).
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 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 Omnibus Fee
Agreement, the amount of all of BISYS's reasonable 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, during the Initial Term, for any reason other than (i) mutual
agreement of the parties or (ii) "cause" for termination of BISYS hereunder,
BISYS's services are terminated hereunder, BISYS is replaced as transfer agent
and/or fund accountant, 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(d) 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 hereunder for the terminated services during the
lesser of (x) the next six (6) months or (y) the number of months remaining in
the then-
4
Exhibit (h)(3)
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 fees
payable to BISYS monthly during the twelve (12) months 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 (other than as permitted above) prior to the
expiration of the Initial 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 services consistent
with this Agreement, including the number of funds, classes, accounts and net
assets 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.
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.
5
Exhibit (h)(3)
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
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, gross 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 written 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
6
Exhibit (h)(3)
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 Company's Board of Trustees (hereafter referred to as
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 prospectuses and statements of additional information of
the Company relating to the relevant Funds to the extent that such services are
described therein unless BISYS receives written instructions to the contrary in
a timely manner from the Company.
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 conclusively assume that any special procedure
which has been approved by an executive officer of the Company (other than an
officer or employee of BISYS) does not conflict with or violate any requirements
of the Company's Declaration of Trust, 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. A copy of any such amendments shall be delivered to the
Company upon request. BISYS may apply the BISYS As-of Trading Policy whenever
applicable, unless BISYS agrees in writing to process trades according to such
other as-of trading policy as may be adopted by the 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 written anti-money laundering program adopted
by the Company (the "AML Program"), 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 employee of BISYS) 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(g)
hereof). 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
7
Exhibit (h)(3)
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") 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 given or
made to BISYS by the Company, the investment adviser, or custodian thereof;
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.
BISYS shall indemnify, defend, and hold the Company, its employees,
agents, directors, officers and nominees harmless from and against any and all
Losses arising out of or in any way relating to BISYS's willful misfeasance, bad
faith or negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties hereunder.
The indemnification rights under this Section 10 are subject to the
limitations of liability in Section 7 of this Agreement.
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
8
Exhibit (h)(3)
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. The
indemnifying party shall not effect any settlement without the consent of the
indemnified party unless such settlement imposes no liability, responsibility or
other obligation upon the indemnified party and relieves the indemnified party
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 that are customary or that the Company or BISYS is, or may be, required
to keep and maintain pursuant to any 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"), relating to the maintenance of books
and records in connection with the services to be provided hereunder. 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.
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, so that the Company may seek a
protective order or other appropriate remedy. 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, administrators, 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 diligent examination, are not so reported promptly, a
report will
9
Exhibit (h)(3)
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 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 selected or approved by the Company, as may be necessary or appropriate from
time to time in connection with the services required to be performed hereunder.
The Company 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
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
(a) The Company represents and warrants to BISYS that:
(i) It is duly organized 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;
10
Exhibit (h)(3)
(ii) It has all necessary authorizations, licenses and permits to carry
out its business as currently conducted;
(iii) It has been in, and shall continue to be in compliance in all
material respects with all laws and regulations applicable to its
business and operations;
(iv) 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;
(v) as of the close of business on the Effective Date, each Fund that is
in existence as of the Effective Date has authorized unlimited
shares; and
(vi) shares of each Fund which are redeemed by the Company may be sold by
the Company from its treasury.
(b) 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 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's review and
consent, in accordance with Section 21, prior to its adoption.
17. Representations and Warranties of BISYS
(a) BISYS represents and warrants to the Company that:
(i) 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;
(ii) It has all necessary authorizations, licenses and permits to carry
out its business as currently conducted;
(iii) 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;
11
Exhibit (h)(3)
(iv) 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 (including its disaster recovery and business continuity
plan) 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
(v) 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.
(b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL REPRESENTATIONS
AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY,
SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
(IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) CONCERNING THE
SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO THE SERVICES PROVIDED UNDER THIS
AGREEMENT BY BISYS ARE COMPLETELY DISCLAIMED.
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 canceled. Such notification shall include the date of
cancellation and the reasons therefore. BISYS shall notify the Company of any
material claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance, and shall notify the
Company should the total outstanding claims made by BISYS under its insurance
coverage materially impair, or threaten to materially impair, the adequacy of
its coverage.
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 Declaration of Trust of the Company and of any
amendments thereto, certified by the proper official of the state in which such
document has been filed.
12
Exhibit (h)(3)
(b) Copies of:
(i) The Company's by-laws and any amendments thereto;
(ii) resolutions of the Board regarding (A) approval of this Agreement
and authorization of officers 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 for the Company in the capacities designated herein.
(c) A 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 adviser), 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.
(d) Two copies of the following (if such documents are employed by the
Company):
(i) Prospectuses and statements of additional information;
(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.
(e) A copy of the Company's written AML Program, including related
Policies and Procedures.
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 for the Company in the capacities
designated herein; and
(c) The current BISYS "As-of" Trading Policy.
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
13
Exhibit (h)(3)
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's approval of such amendments or changes, which approval
shall not be withheld unreasonably.
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 Losses 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 approval of such amendments or
changes.
23. Compliance with Laws
Except for the obligations 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 as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), the 1940 Act, and any other laws, rules and regulations of governmental
authorities having jurisdiction. BISYS shall have no obligation to take
cognizance of any laws relating to the sale of the Company's shares in
performing its obligations under this Agreement, provided that nothing herein is
intended to limit the obligations of BISYS or its applicable affiliate under any
Distribution Agreement between BISYS or such affiliate and the Company. 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") as concerns the shareholder accounts maintained
by BISYS pursuant to this Agreement (including direct accounts; accounts
maintained through
14
Exhibit (h)(3)
FUND/SERV and Networking, to the extent provided below, and omnibus accounts, to
the extent provided below). BISYS agrees to the foregoing delegation and agrees
to perform such services in accordance with the 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 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 interim final rule of the Department of the Treasury, 31 CFR 103.130,
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 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 it c/o HSBC Investments (USA)
Inc., ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇; with a copy to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
Attn: President; and if to
15
Exhibit (h)(3)
BISYS, to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇; Attn: President, with a
copy to The BISYS Group, Inc., ▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇,
Attn: General Counsel, 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 pursuant to Section 2(e) 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 and Matters Relating to the Company.
This Agreement shall be governed by and provisions shall be construed in
accordance with the laws of the State of New York and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of New
York, or any of the provisions herein, conflict with the applicable provisions
of the 1940 Act, the latter shall control. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Company
personally, but shall bind only the trust property of the Company. The execution
and delivery of this Agreement have been authorized by the Board, and this
Agreement has been signed and delivered by an authorized officer of the Company,
acting as such, and neither such authorization by the Board nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Company as provided in the Company's
Declaration of Trust.
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 Trustees, 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,
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,
16
Exhibit (h)(3)
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. Past Administrative Services
BISYS and the Company agree that each party shall to retain the rights,
obligations and privileges, including the rights, obligations and privileges
relating to the indemnification provisions set forth in Section 10 of the
Original Master Agreement, with respect to the administration services BISYS
provided under the Original Master Agreement, as if the Original Master
Agreement remains in effect, for such time as this Agreement remains in effect.
30. 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, except as
provided in Section 29, supercedes all prior negotiations, understandings and
agreements bearing upon the subject matter covered herein, including, without
limitation, the Original Master Agreement and the Prior Agreements.
(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.
* * * * *
17
Exhibit (h)(3)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
HSBC INVESTOR FUNDS HSBC ADVISOR FUNDS TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------- -----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President Title: President
HSBC INVESTOR PORTFOLIOS BISYS FUND SERVICES OHIO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- ----------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President Title: President
18
Exhibit (h)(3)
SCHEDULE A
TO THE FIRST AMENDED AND RESTATED
MASTER SERVICES AGREEMENT
Dated as of July 1, 2005
Funds
HSBC Investor Portfolios
HSBC Investor Fixed Income Portfolio
HSBC Investor Growth Portfolio
HSBC Investor High Yield Fixed Income Portfolio
HSBC Investor International Equity Portfolio
HSBC Investor Limited Maturity Portfolio
HSBC Investor Small Cap Equity Portfolio
HSBC Investor Value Portfolio
HSBC Advisor Funds Trust
HSBC Investor Fixed Income Fund
HSBC Investor International Equity Fund
HSBC Investor Small Cap Equity Fund
HSBC Investor Funds
HSBC Investor Aggressive Growth Strategy Fund
HSBC Investor Bond Fund
HSBC Investor California Tax-Free Money Market Fund
HSBC Investor Conservative Growth Strategy Fund
HSBC Investor Conservative Income Strategy Fund
HSBC Investor Growth and Income Fund
HSBC Investor Growth Fund
HSBC Investor Growth Strategy Fund
HSBC Investor High Yield Fixed Income Fund
HSBC Investor Limited Maturity Fund
HSBC Investor Mid-Cap Fund
HSBC Investor Moderate Growth Strategy Fund
HSBC Investor Money Market Fund
HSBC Investor New York Tax-Free Bond Fund
HSBC Investor New York Tax-Free Money Market Fund
HSBC Investor Opportunity Fund
HSBC Investor Overseas Equity Fund
HSBC Investor Tax-Free Money Market Fund
HSBC Investor U.S. Government Money Market Fund
HSBC Investor U.S. Treasury Money Market Fund
HSBC Investor Value Fund
HSBC Investor Cash Management Money Market Fund
19
Exhibit (h)(3)
SCHEDULE B
TO THE FIRST AMENDED AND RESTATED
MASTER SERVICES AGREEMENT
Dated as of July 1, 2005
Transfer Agency Services
1. Shareholder Transactions
(a) Process shareholder purchase and redemption orders.
(b) Set up account information, including address, dividend option,
taxpayer identification numbers and wire instructions.
(c) Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.
(d) Issue periodic statements for shareholders.
(e) Process transfers and exchanges.
(f) Process dividend payments, including the purchase of new shares,
through dividend reimbursement.
(g) Calculate and deduct applicable redemption fees from redemption
payments.
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.
20
Exhibit (h)(3)
(c) Issue tax withholding reports to the Internal Revenue Service.
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
21
Exhibit (h)(3)
records or other documents available at the direction of the
Company's AML Compliance Officer.
Transfer Agency Reports
7. Daily Shareholder Activity Journal
8. Daily Fund Activity Summary Report
(a) Beginning Balance
(b) Transactions
(c) Shareholder Transactions
(d) Reinvested Dividends
(e) Exchanges
(f) Adjustments
(g) Ending Balance
9. Daily Wire and Check Registers
10. Monthly Dealer Processing Reports
11. Monthly Dividend Reports
12. Sales Data Reports for Blue Sky Registration
13. 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.
14. Such special reports and additional information that the parties may agree
upon, from time to time.
15. 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:
(a) performed good order review for all new and reregistered accounts;
(b) performed acceptance review for all monetary instruments received;
(c) administered signature guarantee policy in accordance with
prospectus requirements;
22
Exhibit (h)(3)
(d) administered escrow hold policy in accordance with prospectus
requirements;
(e) verified customer address changes;
(f) verified customer identification for all new accounts and all name
changes on existing accounts;
(g) 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;
(h) monitored all accounts for suspicious activity resulting in the
filing of Form SAR reports during the period;
(i) 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;
(j) created the documentation necessary to provide a basis for law
enforcement authorities to trace illicit funds; and
(k) maintained all records and other documentation related to
shareholder accounts and transactions required to e prepared and
maintained pursuant to the Fund's anti-money laundering program for
all BISYS transfer agent services.
(l) *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
(m) *performed required due diligence on any new correspondent accounts
opened during the period.
* The last two items will be provided in such report if the Company falls under
the related USA PATRIOT Act provisions.
23
Exhibit (h)(3)
SCHEDULE C
TO THE FIRST AMENDED AND RESTATED
MASTER SERVICES AGREEMENT
Dated as of July 1, 2005
Fund Accounting Services
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"):
(a) 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;
(b) 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;
(c) Separate ledger accounts required by subsection (b)(2)(ii) and (iii)
of the Rule; and
(d) A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b)(8) of the Rule.
In addition to the maintenance of the books and records specified above, BISYS
shall perform the following accounting services daily for each Fund:
(a) Calculate the net asset value per share utilizing prices obtained
from the sources described in item (b) below;
(b) 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;
(c) Monitor security prices in accordance with the Company's fair value
policies and notify the Company of any deviations, and reasonably
assist the Company in obtaining alternate fair value prices as
requested;
(d) Verify and reconcile security positions with the Funds' custodian;
(e) Compute, as appropriate, each Fund's net income and capital gains,
7-day yields, 7-day effective yields, 30-day yields, and weighted
average portfolio maturity;
24
Exhibit (h)(3)
(f) 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;
(g) Report to the Board, or otherwise at the Company's request, the
daily market pricing of securities in any money market Funds, with
the comparison to the amortized cost basis;
(h) Determine unrealized appreciation and depreciation on securities
held in variable net asset value Funds;
(i) Amortize premiums and accrete discounts on securities purchased at a
price other than face value, if requested by the Company;
(j) Update fund accounting system to reflect rate changes, as received
from a Fund's investment adviser or authorized pricing service, on
variable interest rate instruments;
(k) Post Fund transactions to appropriate categories;
(l) Accrue expenses of each Fund according to instructions received from
the Company's administrator;
(m) Determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income and
expense accounts;
(n) Provide accounting reports in connection with the Company's regular
annual audit and other audits and examinations by regulatory
agencies;
(o) Provide such periodic reports as the parties shall agree upon, as
set forth in a separate schedule; and
(p) Prepare semi-annual and annual financial statements for each Fund
for review by the Company's independent auditors.
BISYS shall also perform the following additional accounting services for each
Fund:
(a) 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:
o Unaudited Statement of Assets and Liabilities,
o Unaudited Statement of Operations,
o Unaudited Statement of Changes in Net Assets, and
o Unaudited Condensed Financial Information.
25
Exhibit (h)(3)
(b) Provide accounting information for the following:
o federal and state income tax returns and federal excise tax
returns;
o the Company's semi-annual reports filed with the Securities
and Exchange Commission ("SEC") on Form N-SAR and the N-CSR;
o the Company's quarterly schedules of portfolio holdings filed
with the SEC on Form N-Q;
o the Company's annual and semi-annual shareholder reports and
quarterly Board meetings;
o registration statements on Form N-1A and other filings
relating to the registration of shares, including required
performance information;
o the Company's administrator's monitoring of the Company's
status as a regulated investment company under Subchapter M of
the Internal Revenue Code, as amended;
o annual audit by the Company's auditors; and
o examinations performed by the SEC.
26
Exhibit (h)(3)
SCHEDULE D
TO THE FIRST AMENDED AND RESTATED
MASTER SERVICES AGREEMENT
Dated as of July 1, 2005
Legal Services
BISYS will provide the following legal services to the Company:
1. Provide information and assistance to counsel to the Funds in preparing and
assist with filing (a) the annual update to each Company's registration
statement on Form N-1A, (b) other amendments to each Company's registration
statement and supplements to its prospectus and statements of additional
information, and (c) notices of annual or special meetings of shareholders
of the Companies and proxy materials relating thereto, and file any of the
foregoing with the Commission upon the request of the Company or counsel to
the Company;
2. Maintain corporate records on behalf of the Company, including, but not
limited to, minute books, Declaration of Trust and by-laws, and prepare, at
the direction of Company, amendments to the Company's Declaration of Trust
and by-laws and file as necessary;
3. Obtain, maintain and file fidelity bonds and directors and officers/errors
and omissions insurance policies for the Company at the expense of the 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;
and
4. Assist the Company in preparing for and conducting Board meetings by (a)
coordinating Board book production and distribution, (b) subject to review
and approval by the Company and its counsel, preparing Board agendas and
minutes, (c) preparing the relevant sections of the Board materials
pertaining to the responsibilities of BISYS, (d) assisting and coordinating
special materials related to annual contract approvals and approval of rule
12b-1 plans and related matters, (e) attending Board meetings and recording
the minutes, and (f) performing such other Board meeting functions as agreed
by the parties.
27