EXHIBIT (h)(1)
FORUM FUNDS
ACCOUNTING, ADMINISTRATION AND TRANSFER AGENCY
SERVICES AGREEMENT
TABLE OF CONTENTS
SECTION 1 DEFINED TERMS; APPOINTMENT; DELIVERY OF DOCUMENTS 1
SECTION 2 DUTIES OF CITIBANK AND THE TRUST 6
SECTION 2A CONTRACT MANAGEMENT 9
SECTION 3 STANDARD OF CARE; INDEMNIFICATION; RELIANCE; AND LIABILITY
LIMITATIONS 10
SECTION 4 COMPENSATION AND EXPENSES 12
SECTION 5 EFFECTIVENESS, DURATION, TERMINATION AND ASSIGNMENT 13
SECTION 6 ADDITIONAL FUNDS 16
SECTION 7 RECORDKEEPING; PROPRIETARY INFORMATION; CONFIDENTIALITY 16
SECTION 8 PREPRESENTATIONS AND WARRANTIES 18
SECTION 9 FORCE MAJEURE 19
SECTION 10 ACTIVITIES OF CITIBANK 20
SECTION 11 AUDIT RIGHTS; COOPERATION WITH CHIEF COMPLIANCE OFFICER OTHER
SERVICE PROVIDERS AND INDEPENDENT ACCOUNTANTS 20
SECTION 12 SERVICE DAYS 22
SECTION 13 LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY 22
SECTION 14 TAXES 22
SECTION 15 MISCELLANEOUS 23
APPENDIX A [Intentionally Deleted] X-0
XXXXXXXX X [Intentionally Deleted] B-1
APPENDIX C FUND ADMINISTRATION SERVICES C-1
APPENDIX D FUND ACCOUNTING SERVICES D-1
APPENDIX E TRANSFER AGENCY SERVICES E-1
APPENDIX F SERVICE LEVEL STANDARDS AND OPERATING REPORTS F-1
APPENDIX G DEPENDENCIES G-1
APPENDIX H FORMS OF CERTIFICATIONS H-1
FORUM FUNDS
ACCOUNTING, ADMINISTRATION AND TRANSFER AGENCY
SERVICES AGREEMENT
AGREEMENT dated as of the 20th day of April, 2007, by and between Forum
Funds, a Delaware statutory trust, with its principal office and place of
business at Two Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 (the "Trust"), and
Citibank, N.A., a national banking association, with its principal office and
place of business at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx ("Citibank").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and
may issue its shares of beneficial interest, no par value (the "Shares"), in
separate series and classes; and
WHEREAS, the Trust offers shares in various series as listed in the Fee
Schedule (as defined below) (each such series, together with all other series
subsequently established by the Trust and made subject to this Agreement in
accordance with Section 6, being herein referred to as a "Fund," and
collectively as the "Funds") and the Trust may in the future offer shares of
various classes of each Fund as listed in the Fee Schedule (each such class
together with all other classes subsequently established by the Trust in a Fund
being herein referred to as a "Class," and collectively as the "Classes");
WHEREAS, the Trust desires that Citibank perform certain services for each
Fund and Class thereof, and Citibank is willing to provide those services, on
the terms and conditions set forth in this Agreement;
WHEREAS, Citibank is the corporate parent of Forum Accounting Services, LLC,
Forum Administrative Services, LLC and Forum Shareholder Services, LLC and
their respective successors-in-interest, each of which had entered into a
separate agreement with the Trust concerning accounting, administration and
transfer agency services, respectively (the "Prior Agreements"); and
WHEREAS, subject to Section 15(c) of this Agreement, this Agreement
supersedes and replaces the Prior Agreements;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust on its behalf and on behalf of each Fund
and Citibank hereby agree as follows:
SECTION 1. DEFINED TERMS; APPOINTMENT; DELIVERY OF DOCUMENTS
(a) As used in this Agreement, the following terms have the following
meanings:
"1940 Act" has the meaning set forth in the preamble hereto.
"38a-1 Compliance Program" has the meaning set forth in Section 1(b).
"38a-1 Manuals" shall have the meaning set forth in Section 11(b).
"Adviser" has the meaning set forth in Section 2(b).
"Affiliate" means, with respect to any Person, any other Person that is
controlled by, controls, or is under common control with such Person; for
purposes hereof, "control" of a Person means (i) ownership of, or possession of
the right to vote, more than 25% of the outstanding voting equity of that
Person or (ii) the right to control the appointment of the board of directors,
management or executive officers of that Person.
"Affiliated" mean the relationship of being an Affiliate to another person.
"Agreement" means this Agreement and any appendices and schedules attached
hereto, in each case as any of them may be amended from time to time.
"AML Compliance Officer" has the meaning set forth in Section 4.1 of
Appendix E.
"Authorized Person(s)" has the meaning set forth in Section 2(d).
"Base Period" has the meaning set forth in Section 5(e).
"Board" has the meaning set forth in Section 2(a).
"CCO" has the meaning set forth in Section 2(g).
"Change Control Process" has the meaning set forth in Section 2(c).
"Citibank" has the meaning set forth in the preamble hereto and includes
successors-in-interest.
"Citibank Indemnitees" has the meaning set forth in Section 3(b).
"Citibank Processes" has the meaning set forth in Section 2(e).
"Class" and "Classes" have the meaning set forth in the preamble hereto.
"Contract Manager" has the meaning set forth in Section 2A(a).
"Dependencies" has the meaning set forth in Section 2(d).
"Dependencies Schedule" has the meaning set forth in Section 2(d).
"Disclosing Party" has the meaning set forth in Section 7(f).
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"Effective Date" has the meaning set forth in Section 5(a).
"Executive Officers" has the meaning set forth in Section 2(a).
"Existing Adviser" has the meaning set forth in Section 5(f).
"Fee Schedule" has the meaning set forth in Section 4(a).
"Fund" and "Funds" have the meaning set forth in the preamble hereto.
"Fund Intermediaries" has the meaning set forth in Section 2(d).
"Governing Body" means, for any entity, the Person or body of Persons
governing the operations of the entity (for example, if the entity is a
corporation, its board of directors).
"Governmental Authority" has the meaning set forth in Section 2(d).
"Instruction" means any oral and written notice or statement directing
action or inaction, including any such notice or statement transmitted to
Citibank (i) in electronic format by machine-readable input, electronic mail,
CRT data entry or other similar means, or (ii) in person or by telephone,
telecopy, vocal telegram or similar means.
"Intellectual Property Rights" means: (i) trademarks, service marks, brand
names, certification marks, trade dress, trade names and other indications of
origin, and the goodwill associated with the foregoing; (ii) inventions,
discoveries and improvements, whether patentable or not; (iii) patents,
applications for patents, inventors' certificates and invention disclosures;
(iv) non-public information, ideas, trade secrets and confidential information
and rights to limit the use or disclosure thereof by any person;
(v) copyrightable works, including writings, databases, computer software
programs and documentation; (vi) copyrights and mask works; (vii) any similar
intellectual property or proprietary rights; and (viii) any claims or causes of
action arising out of or related to any infringement or misappropriation of any
of the foregoing; in each case, including all registrations, applications for
registration, applications, renewals, extensions, and reissues, of or for any
of the foregoing and in any jurisdiction.
"Law" has the meaning set forth in Section 2(d).
"NAV" has the meaning set forth in Section 3(e).
"NAV Difference" has the meaning set forth in Section 3(f).
"Non-Discretionary Subcontractors" has the meaning set forth in Section 2(d).
"Organic Documents" has the meaning set forth in Section 1(b).
"Partial Termination" has the meaning set forth in Section 5(c).
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"Parties" means the Trust and Citibank.
"Person" means any natural person or incorporated or unincorporated entity.
"Plan" has the meaning set forth in Section 1(b).
"Policies and Procedures" has the meaning set forth in Section 1(c).
"Principal Executive Officer (or "PEO")" has the meaning set forth in
Section 2(a).
"Principal Financial Officer (or "PFO")" has the meaning set forth in
Section 2(a).
"Prior Agreements" has the meaning set forth in the preamble hereto.
"Proprietary Information" has the meaning set forth in Section 7(e).
"Prospectus" has the meaning set forth in Section 1(b).
"Recalculated NAV" has the meaning set forth in Section 3(f).
"Receiving Party" has the meaning set forth in Section 7(f).
"Registration Statement" has the meaning set forth in Section 1(b).
"Reviews" has the meaning set forth in Section 11(c).
"SEC" means the United States Securities and Exchange Commission and any
successor governmental authority.
"Securities Act" means the Securities Act of 1933, as amended.
"Service Change" has the meaning set forth in Section 2(c).
"Service Change Plan" has the meaning set forth in Section 2(c).
"Services" means the services set forth in Section 2(b).
"Services Operations" has the meaning set forth in Section 11(b).
"Service Standards" means the service standards set forth in Appendix F.
"Shares" has the meaning set forth in the preamble hereto.
"Standard of Care" has the meaning set forth in Section 3(a).
"Termination Payment Amount" has the meaning set forth in Section 5(f).
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"Third Party Contract" means a contract or other understanding or agreement
(other than this Agreement) between or among (i) the Trust and (ii) a third
party service provider to the Trust pursuant to which such third party is
obligated to take or refrain from taking actions that are necessary or useful
for the orderly and timely delivery of the Services, including contracts or
understandings with (A) Advisers, (B) principal underwriters, (C) Persons
acting as PEO, PFO or CCO and their respective employers, (D) Fund
Intermediaries, and (E) Non-Discretionary Subcontractors.
"Third Party Service Provider" means any Person that provides services to
the Trust under a Third Party Contract.
"Trust" has the meaning set forth in the preamble hereto.
"Trust Counsel" has the meaning set forth in Section 2(g).
"Trust Records" has the meaning set forth in Section 7(a).
Other capitalized terms used but not defined in this Section 1(a) shall have
the meanings set forth in this Agreement.
(b) The Trust hereby appoints Citibank, and Citibank hereby agrees, to act
or to cause an Affiliate to act for the Trust and for each of the Funds for the
period and on the terms set forth in this Agreement as: (i) administrator,
(ii) fund accountant and (iii) transfer agent for the authorized and issued
Shares, including dividend disbursing agent and agent in connection with any
accumulation plan, open-account plan, periodic investment plan, periodic
withdrawal program or similar plan or programs provided to the registered
owners of Shares ("Shareholders") and set out in the currently effective
prospectuses and statements of additional information of the applicable Fund
(collectively, as currently in effect and as amended or supplemented, the
"Prospectus"). As the context may require (including in relation to the
delivery of the Services and information, and compliance with recordkeeping
requirements), references herein to Citibank include Citibank and such
Affiliates to which Citibank may from time to time subcontract the performance
of the Services or any portion thereof pursuant to Section 5(h) of this
Agreement, including, without limitation, Citigroup Fund Services, LLC.
Pursuant and subject to the provisions of this Agreement, including
Section 5(h) hereof, Citibank shall be fully responsible to the Trust for the
acts and omissions of any such subcontractor as Citibank is for its own acts
and omissions under this Agreement.
(c) In connection therewith, the Trust has delivered to Citibank or Citibank
has received copies of (i) the Trust's Trust Instrument and Bylaws
(collectively, as amended from time to time, "Organic Documents"), (ii) the
Trust's Registration Statement and all amendments thereto filed with the U.S.
Securities and Exchange Commission ("SEC") pursuant to the Securities Act of
1933, as amended (the "Securities Act"), or the 1940 Act (the "Registration
Statement"), (iii) the current Prospectus for each Fund, (iv) each current plan
of distribution or similar document adopted by the Trust under Rule 12b-1 under
the 1940 Act ("Plan") and each current shareholder service plan or similar
document adopted by the Trust ("Service Plan"), (v) all policies and procedures
adopted by the Trust with respect to the Funds (e.g., repurchase
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agreement procedures) ("Policies and Procedures") and (vi) the Trust's current
compliance program adopted under Rule 38a-1 under the 1940 Act (the "38a-1
Compliance Program"), and shall promptly furnish Citibank with all amendments
of or supplements to the foregoing.
(d) By May 4, 2007, Citibank will send to each adviser to a Fund a
memorandum describing the Agreement and a schedule showing the differences
between the fees and expenses being paid by the Fund currently and the fees and
expenses projected to be paid by the Fund under the Agreement, each in form and
substance approved by the Board, and requesting additional comments on and
discussion of the Agreement and fee schedule, and, by May 18, 2007, Citibank
will provide a written report to the Board, in form approved by it, detailing
the comments received from each adviser and the discussions between the adviser
and Citibank with respect to the Agreement and the fee schedule.
SECTION 2. DUTIES OF CITIBANK AND THE TRUST
(a) Subject to the direction and control of the Board of Trustees of the
Trust (the "Board") and as detailed in this Agreement, Citibank shall manage,
coordinate and report to the Board and, subject and pursuant to Section 11 of
this Agreement, to the principal executive officer ("PEO") and the principal
financial officer ("PFO") of the Trust (the "Executive Officers") regarding the
(i) Services and (ii) such other matters related to the services provided to
the Trust by an Affiliate of Citibank as may be specifically set forth in this
Agreement.
(b) With respect to the Trust or one or more Funds, as applicable, and
subject to the terms and conditions of this Agreement, (i) Citibank shall
provide the services set forth in Appendices C, D and E (the "Services") and
(ii) Citibank agrees that the Services shall meet service standards set forth
in Appendix F (the "Service Standards") and that pursuant to Appendix F and
subject to the Dependencies credits (as set forth in Appendix F) shall be
applied against invoices rendered by Citibank in the event that Citibank
(i) has delivered a report to the Board that contains an inaccuracy that is
material to the content of the report and (ii) has not promptly corrected such
report after it knew or reasonably should have known about such inaccuracy.
Citibank shall provide such other services and assistance relating to the
affairs of the Trust or an investment adviser or investment subadviser to a
Fund or the Funds (collectively, the "Adviser") as the Trust may, from time to
time, reasonably request pursuant to mutually acceptable compensation
agreements.
(c) Citibank shall reasonably cooperate with the Trust to accommodate
non-material changes and adjustments to any Service; the Trust recognizes that
isolated requests for changes or adjustments, when combined with other such
requests, may in the aggregate have a material effect. If (i) the Trust
requests (A) the addition of a new service, or (B) any material change or
adjustment to any Service, or (ii) in the event that the Trust materially
amends its Policies and Procedures or 38a-1 Compliance Program or there is a
material change in Law related to or affecting any Service (collectively, a
"Service Change"), the parties shall cooperate with one another to implement
such addition, change or adjustment in a manner that minimizes any material
adverse effect on the Trust. The parties shall mutually determine the date on
which such Service Change shall take place, and develop a written plan to
implement such Service
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Change (a "Service Change Plan"), as well as any implementation or additional
fees and expenses that may be required to effect such Service Change. Each
Service Change Plan will include applicable obligations for each party and will
specify (A) actions to be taken by parties to Third Party Contracts, and (B) an
effective date for the completion of the Service Change Plan. Notwithstanding
the foregoing, Citibank shall have no obligation to effect any Service Change
unless and until it has agreed to do so in writing. Any Service Change made by
the parties shall become part of the Services for all purposes under this
Agreement thereafter. For purposes of this Agreement, the foregoing shall be
the "Change Control Process."
(d) In addition to the limitation of liability set forth in Section 3 of
this Agreement, Citibank shall not be liable to the Trust or any other person
for any failure to provide any Service, or any failure to meet a Service
Standard, in the following circumstances, but only for so long as such
circumstances continue (and for a reasonable period thereafter taking into
account the impact that such an occurrence has on Citibank's ability to comply
with its obligations under this Agreement):
(i) if any relevant Dependencies (as defined in Appendix G, hereinafter
the "Dependencies Schedule") upon which performance of the relevant
Service or compliance with the applicable Service Standards depends
are not met and the failure to meet any such Dependencies was not a
result of delay, or failure to provide information or take action, by
Citibank required to be provided or taken under this Agreement;
provided that Citibank shall not be exculpated pursuant to this
Section 1(d) for any such failure to perform a Service or meet a
Service Standard caused solelyand directly by a breach by Citibank of
its standard of care as set forth in the custody agreement between
Citibank and the Trust;
(ii) if the failure to perform the Services or the failure to perform the
Services to any Service Standard is at the request or with the
consent of the Trust or an Authorized Person;
(iii) if the failure to perform the Services or the failure to perform the
Services to any Service Standard results from incorrect or corrupted
information provided by (A) any Third Party Service Provider,
including, without limitation, any Adviser, the principal underwriter
for a Fund, brokers or other intermediaries through which a Fund's
shares may be sold or distributed ("Fund Intermediaries") and any
other current or predecessor service providers to the Trust
(excluding the predecessors-in-interest of Citigroup Fund Services,
LLC under the Prior Agreements) or (B) valuation or market
information providers, pricing services, couriers, software houses,
custodians (excluding Citibank), clearing systems or depositories,
provided, that (1) if any such person described in clause (B) above
is chosen by Citibank, then the selection of such person must have
been reasonable under the circumstances (and the selection of such a
person shall be deemed reasonable if, after notice explicitly
identifying such selection and providing an opportunity to object to
such selection, the Board or an Executive Officer does not object to
such selection); and (2) in any event, persons shall be deemed
reasonable if they are selected or retained at the direction of the
Trust or an Authorized Person ("Non-
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Discretionary Subcontractors") or with the consent of the Trust or an
Authorized Person; and/or
(iv) if any Law (as defined below) to which Citibank or any third party is
subject prevents or limits the performance of the duties and
obligations of Citibank, and, if such Law affects Citibank, Citibank
has notified the Trust or an Authorized Person.
Notwithstanding the foregoing, Citibank shall nevertheless use reasonable
efforts to provide the Services while any of the circumstances specified in
this Section 2(d) above subsist, provided that Citibank shall not be required
to incur any additional costs in doing so (other than costs that it would have
had to incur in the ordinary course of providing the Services, assuming such
circumstances had not so occurred). If, despite the foregoing, Citibank incurs
any such additional costs in endeavoring to supply the Services, Citibank shall
promptly notify an Authorized Person, and the Trust shall reimburse those costs
to Citibank to the extent that they have been reasonably incurred (and Citibank
used reasonable efforts to mitigate such costs) or they have been agreed in
advance between the parties. For purposes of this Agreement, (i) the
capitalized term "Law" means any statutes, rules and regulations of any
Governmental Authority and applicable judicial or regulatory interpretations
thereof, (ii) "Governmental Authority" means any court, government department,
central bank, commission, board, bureau, agency, securities or futures industry
associations or other regulatory, self-regulatory, administrative, judicial,
executive, legislative or governmental entity in any country or jurisdiction
and (iii) "Authorized Person" means any Executive Officer or the Board or any
committee thereof.
(e) Nothing contained herein shall be construed to require Citibank to
perform any service that could cause Citibank to be deemed an investment
adviser for purposes of the 1940 Act or the Investment Advisers Act of 1940, as
amended, or that could cause a Fund to act in contravention of the Prospectus
or any provision of the 1940 Act. The Trust acknowledges and agrees that
(i) the summaries of the Services and Service Standards set out in Appendices
C, D, E and F are intended to define the scope of the Services to be provided,
and to establish Service Standards for their provision; and (ii) subject to the
Board's right to audit the efficacy of the Citibank Processes in connection
with discharging the Board's obligations under Rule 38a-1 and pursuant to
Section 11 of this Agreement, the procedures, features, functionalities,
systems and/or facilities ("Citibank Processes") that support the provision of
the Services by Citibank or any Affiliated subcontractor shall be a matter for
the sole discretion of Citibank. Except as otherwise specifically provided in
Appendices C, D and E with respect to the Services, the Trust assumes all
responsibility for ensuring that the Trust complies in all material respects
with all applicable requirements of the Securities Act, the 1940 Act and any
other Laws applicable to the Trust.
(f) Citibank shall perform the Services (i) in material compliance with Laws
applicable to Citibank and (ii) subject to the terms of this Agreement, in
observance of the Policies and Procedures and the 38a-1 Compliance Program.
(g) Citibank shall (i) promptly notify the Trust's chief compliance officer
("CCO") and its legal counsel ("Trust Counsel") of any material violation of
Law known to Citibank by the Trust or any Funds and (ii) at each meeting of the
Board and at such other times as
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determined appropriate by Citibank, notify the Board of any other violation of
Law by Citibank or a Third Party Service Provider affecting the Trust of which
Citibank becomes aware in providing the Services, including as a result of
information generated by Citibank, detected through Citibank's internal or
external audit procedures or provided to Citibank by other service providers to
the Trust or any Citibank subcontractor. In addition, the CCO will receive
reports pursuant to Section 11 of this Agreement.
(h) Prior to the commencement of Citibank's responsibilities under this
Agreement with respect and to the extent applicable to a new Fund, the Trust
shall deliver or cause to be delivered over to Citibank (i) an accurate list of
Shareholders, showing each Shareholder's address of record, number of Shares
owned and whether such Shares are represented by outstanding share certificates
and (ii) all Shareholder and Fund records, files, and other materials necessary
or appropriate for proper performance of the functions assumed by Citibank
under this Agreement.
SECTION 2A. CONTRACT MANAGEMENT
(a) Citibank will appoint one individual with sufficient seniority,
experience and authority to oversee the Citibank's performance under this
Agreement (the Citibank "Contract Manager") and, for periods when any Contract
Manager is absent due to illness or vacation, a deputy for him or her, who will
be the primary point of contact for the Executive Officers. One of the Trust's
PEO, PFO, or such other Person designated by the Board from time to time, shall
be the Trust's "Contract Manager". The Contract Managers for each Party shall
be responsible for the overall management of this Agreement. Subject to and as
contemplated by this Agreement (including specifically Section 11), the
Contract Managers or their deputies will have the authority and be given the
primary responsibility to:
(i) oversee matters relating to their respective appointing Party that are
set out in this Agreement;
(ii) represent the appointing Party in relation to this Agreement and make
or communicate management decisions by or on behalf of the appointing Party
on day-to-day issues;
(iii) on behalf of the appointing Party and in relation to this Agreement,
receive and respond to, and deliver, (A) requests for information and
reports and (B) notices and communications, excepting for Instructions and
as otherwise specifically provided in this Agreement.
(iv) monitor the appointing Party's compliance with its obligations under
this Agreement;
(v) review the performance of the Services and the achievement of Service
Standards;
(vi) conduct preliminary discussions concerning new, or changes to existing
Services or Service Standards, including a determination of whether any such
change or addition requires or does not require a Service Change before
implementation;
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(b) Each Party shall notify the other Party promptly of any planned change
of its Contract Manager or any deputy to the Contract Manager.
(c) Each Party shall cause its Contract Managers to attend:
(i) a quarterly meeting (or as otherwise agreed by the Contract Managers) at
which Citibank's performance of the Services in compliance with the Service
Standards shall be reviewed; and
(ii) a periodic meeting (as agreed by such persons) at which strategic
review and planning issues in relation to the Services are discussed.
Each Party shall provide its Contract Manager with such information and
documentation as may be reasonably necessary for the Contract Manager to carry
out its functions. The Contract Managers shall agree on the form and content of
the minutes of each such meeting or any other report relating to the foregoing
and the Services (i) that may be requested by the Board or (ii) to be delivered
to the Board.
SECTION 3. STANDARD OF CARE; INDEMNIFICATION; RELIANCE; AND LIABILITY
LIMITATIONS
(a) Citibank shall be under no duty to take any action except as
specifically set forth herein or as may be specifically agreed to by Citibank
in writing. Citibank shall use commercially reasonable judgment and efforts in
rendering the Services, provided, however, that notwithstanding the foregoing
or any other provision of this Agreement to the contrary, Citibank shall not be
liable to the Trust, any Shareholders or any other person for any action or
inaction of Citibank relating to any event whatsoever in the absence of bad
faith, willful misfeasance or negligence in the performance of Citibank's
duties or obligations under this Agreement or Citibank's reckless disregard of
its duties and obligations under this Agreement (the "Standard of Care").
(b) The Trust agrees to indemnify and hold harmless Citibank, its employees,
agents, subcontractors, directors, officers and managers and any person who
controls Citibank within the meaning of section 15 of the Securities Act or
section 20 of the Securities Exchange Act of 1934, as amended, ("Citibank
Indemnitees") against and from any and all claims, demands, actions, suits,
judgments, liabilities, losses, damages, costs, charges, reasonable counsel
fees and other expenses of every nature and character arising out of or in any
way related to a claim from a third party and arising directly out of
(A) Citibank's actions taken or failures to act with respect to a Fund or
(B) incident to the delivery of the Services, except those actions or failures
to act for which Citibank would be liable under Section 3(a).
(c) Citibank agrees to indemnify and hold harmless the Trust, its employees,
agents, trustees and officers against and from any and all claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character
arising out or in any way related to a claim from a third party and arising
directly out of (A) Citibank's actions taken or failures to act with respect to
a Fund or (B) incident to the delivery of the Services for which Citibank would
be liable under Section 3(a).
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(d) A Citibank Indemnitee shall not be liable for any action taken or
failure to act in good faith reliance upon:
(i) the advice of the Trust or of counsel, who may be counsel to the Trust
or counsel to Citibank, and upon statements of accountants, brokers and
other persons reasonably believed in good faith by Citibank to be expert in
the matters upon which they are consulted;
(ii) any oral instruction which it receives and which it reasonably believes
in good faith was transmitted by the person or persons authorized by the
Board to give such oral instruction. Citibank shall have no duty or
obligation to make any inquiry or effort of certification of such oral
instruction;
(iii) any written instruction or certified copy of any resolution of the
Board, and Citibank may rely upon the genuineness of any such document or
copy thereof reasonably believed in good faith by Citibank to have been
validly executed; or
(iv) any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument, report, notice,
consent, order, or other document reasonably believed in good faith by
Citibank to be genuine and to have been signed or presented by the Trust or
other proper party or parties;
(v) any share certificates which are reasonably believed to bear the proper
manual or facsimile signatures of the officers of the Trust, and the proper
countersignature of any former transfer agent or former registrar or of a
co-transfer agent or co-registrar of the Trust;
(vi) any electronic instructions from the Trust in conformity with security
procedures established by Citibank from time to time in order to (x) effect
the transfer or movement of cash or Shares or (y) transmit Shareholder
information or other information.
(e) With respect to Funds that do not value their assets in accordance with
Rule 2a-7 under the 1940 Act, notwithstanding anything to the contrary in this
Agreement, Citibank shall not be liable to the Trust or any shareholder of the
Trust for (i) any loss to the Trust if a net asset value ("NAV") difference (as
defined below, an "NAV Difference") for which Citibank would otherwise be
liable under this Agreement is less than or equal to 0.001 (1/10 of 1%) of the
Recalculated NAV, as defined below, or (ii) any loss to a shareholder of the
Trust if (x) the NAV Difference for which Citibank would otherwise be liable
under this Agreement is less than or equal to 0.005 (1/2 of 1%) of the
Recalculated NAV or (y) the loss in the shareholder's account with the Trust is
less than or equal to $25 or such other amount as may be set forth in the
then-current Prospectus or statement of additional information for the affected
Fund. Any loss for which Citibank is determined to be liable hereunder pursuant
to Section 3(e)(i) shall be reduced by the amount of gain that inures to the
affected Fund. In addition, with respect to any loss for which Citibank is
determined to be liable hereunder pursuant to Section 3(e)(ii), Citibank shall
have the right to debit Shareholder accounts to recover any gains resulting
from an NAV
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Difference unless an affected Shareholder is no longer a Shareholder (in which
event Citibank shall be subrogated to any rights to collect such gain that the
Trust has under applicable Law).
(f) For purposes of this Agreement, (i) an NAV Difference shall mean the
difference between the NAV at which a shareholder purchase or redemption should
have been effected ("Recalculated NAV") and the NAV at which the purchase or
redemption was effected, divided by the Recalculated NAV, (ii) any NAV
Difference and any Citibank liability therefrom are to be calculated each time
a Fund's (or class's) NAV is calculated, (iii) in calculating any NAV
Difference for which Citibank would otherwise be liable under this Agreement
for a particular NAV error, losses and gains of the affected Fund or class
shall be netted and (iv) in calculating any NAV Difference for which Citibank
would otherwise be liable under this Agreement for a particular NAV error that
continues for a period covering more than one NAV determination, losses and
gains of the affected Fund or class for the period shall be netted.
(g) In order that the indemnification provisions contained in this Section
shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim or to defend against
said claim in its own name or in the name of the other party. The party seeking
indemnification shall in no case confess any claim or make any compromise in
any case in which the other party may be required to indemnify it except with
the other party's prior written consent.
(h) Notwithstanding any other provision of this Agreement to the contrary,
neither party to this Agreement shall be liable to the other party or any
indemnitee for any indirect, special or consequential damages in relation to
the subject matter of this Agreement or under any provision of this Agreement,
even if advised of the possibility of the same.
SECTION 4. COMPENSATION AND EXPENSES
(a) In consideration of the Services provided by Citibank pursuant to this
Agreement, the Trust shall pay Citibank, with respect to each Fund, the fees
set forth in a separate document agreed to from time to time by the Parties
(the "Fee Schedule"). These fees shall be accrued by the Trust daily and shall
be payable monthly in arrears on the second business day of each calendar month
for services performed under this Agreement during the prior calendar month.
Reimbursement shall be payable monthly in arrears on the second business day of
each calendar month for services performed under this Agreement during the
prior calendar month.
If fees begin to accrue in the middle of a month or if this Agreement
terminates before the end of any month, all fees for the period from that date
to the end of that month or from the beginning of that month to the date of
termination, as the case may be, shall be prorated according to the proportion
that the period bears to the full month in which the effectiveness or
termination occurs. Upon the termination of this Agreement with respect to a
Fund, the Trust shall pay to Citibank such compensation as shall be payable
prior to the effective date of termination.
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(b) Notwithstanding anything in this Agreement to the contrary, Citibank and
its affiliated persons may receive compensation or reimbursement from the Trust
with respect to (i) the provision of services not covered by this Agreement on
behalf of the Funds in accordance with any Plan or Service Plan, (ii) the
provision of shareholder support or other services not covered by this
Agreement, and (iii) service as a trustee of the Trust.
(c) In connection with the services provided by Citibank pursuant to this
Agreement, the Trust, on behalf of each Fund, agrees to reimburse Citibank for
the expenses set forth in the Fee Schedule. In addition, the Trust, on behalf
of the applicable Fund, shall reimburse Citibank for all expenses and employee
time (at 150% of salary) attributable to any review, outside of routine and
normal periodic reviews or other reviews provided for under this Agreement, of
the Trust's accounts and records by the Trust's independent accountants or any
regulatory body of which the Trust is first notified and that are not
attributable to any negligent action or inaction of Citibank or any custodian
that was (as of the relevant time period) an Affiliate of Citibank.
(d) Citibank may, with respect to questions of law relating to its services
hereunder, apply to and obtain the advice and opinion of counsel to the Trust
or counsel to Citibank. The costs of any such advice or opinion of counsel to
the Trust shall be borne by the Trust, and Citibank shall notify the Trust of
any such advice and shall cooperate with the Trust to ensure that such costs
are reasonable.
SECTION 5. EFFECTIVENESS, DURATION, TERMINATION AND ASSIGNMENT
(a) This Agreement shall become effective as between Citibank and the Trust
on the date first above written ("Effective Date"). This Agreement shall have a
term of three years from the Effective Date and shall thereafter continue in
effect from year to year until terminated. This Agreement shall become
effective with respect to a new Fund on the later of the date that the Trust's
Registration Statement with respect to such Fund becomes effective or the date
of the commencement of operations of the Fund. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties
hereto covering the subject matter hereof insofar as such Agreement may have
been deemed to relate to the Trust or the Funds; provided that the fees and
liability and indemnification agreement provisions applicable to services
provided and acts or failure to act before the Effective Date shall be the
agreement provisions in effect at the time under the Prior Agreements.
(b) This Agreement shall continue in effect (i) until terminated in its
entirety or (ii), with respect to any Fund or with respect to any one or more
of the Services covered by Appendices C, D or E, as applicable, provided to any
one or more of the Funds, until terminated as to a Fund or a Service provided
to a Fund.
(c) Except as provided in Section 5(e), this Agreement may be terminated
(A) in its entirety or (B) with respect to any Fund or with respect to any one
or more of the Services covered by Appendices C, D or E, as applicable,
provided to any one or more of the Funds (a "Partial Termination"), without the
payment of any penalty:
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(i) subject to Section 5(e) below, with or without cause, at any time, by
either party on the date specified in a written notice to the other
party provided not less than 120 days prior to the termination date
specified in the notice, provided that in the event the Trust gives
notice of a Partial Termination, Citibank shall have thirty days to
deliver notice that it intends to terminate any remaining portion, or
the entirety, of this Agreement (and any such notice from Citibank
shall be deemed to have been given as of the date of the original
notice from the Trust and with the same effective date as that set
forth in such notice from the Trust); provided further, that in the
event Citibank gives notice of termination or of a Partial
Termination, the Board may delay the termination or Partial
Termination for up to 60 days upon written notice to Citibank and a
finding that dong so is in the best interest of shareholders of the
affected Fund or Funds; and
(ii) for cause at any time by the non-breaching party on at least sixty
(60) days' written notice thereof to the other party, if the other
party has materially breached any of its obligations hereunder
including, with respect to Citibank, the failure by Citibank to act
consistently with the standard of care set forth in Section 3(a);
provided, however, that (i) the termination notice shall describe the
breach, and (ii) no such termination shall be effective if, with
respect to any breach that is capable of being cured prior to the
date set forth in the termination notice, the breaching party has
cured such breach to the reasonable satisfaction of the non-breaching
party.
(d) Upon notice of termination by either party of this Agreement, in its
entirety or with respect to any Fund or any Service provided to any Fund,
Citibank shall promptly transfer to any successor service providers the
original or copies of all books and records maintained by Citibank under this
Agreement including, in the case of records maintained on computer systems,
copies of such records in commercially reasonable, machine-readable form, and
shall cooperate with, and provide reasonable assistance to, the successor
service provider(s) in the establishment of the books and records necessary to
carry out the successor service providers' responsibilities. Should the Trust
exercise its right to terminate this Agreement, the Trust shall reimburse
Citibank for Citibank's reasonable costs associated with the copying and
movement of records and material to any successor person and providing
assistance to any successor person in the establishment of the accounts and
records necessary to carry out the successor's responsibilities ("termination
costs"); provided, however, that, notwithstanding anything herein to the
contrary, the Trust shall have no obligation to reimburse Citibank for its
costs if the Trust terminates this Agreement pursuant to clause (ii) of
subsection (c) above or if Citibank terminates this Agreement pursuant to
clause (i) of subsection (c) above.
(e) Except as provided in Section 5(c)(i) concerning Citibank's termination
should the Trust give notice of Partial Termination and except as provided in
Section 5(c)(ii), this Agreement may not be terminated with respect to any Fund
as to which the Agreement becomes effective after the Effective Date (a "new
Fund") before the end of three years following the date on which the Agreement
becomes effective with respect to the new Fund, unless the operations of the
new Fund are wound up and discontinued and the assets of the new Fund are
distributed to
- 14 -
the Shareholders. The period from the date on which this Agreement becomes
effective as to a new Fund until the date on which the Agreement could be
terminated as to the new Fund under this Section 5(e) is the "Base Period" as
to the new Fund.
(f) Inasmuch as a termination pursuant to Section 5(c)(ii) by Citibank or if
the Agreement is otherwise terminated or deemed to be terminated by actions of
the Trust (except pursuant to Section 5(c)(ii) due to breach by Citibank) will,
in the circumstances described below in this Section 5(f), cause substantial
damages to Citibank and because of the difficulty of estimating those damages,
the Trust shall pay, as liquidated damages, the amounts set forth below as of
the effective date of such termination or Partial Termination (the "Termination
Payment Amount"):
(A) If the new Fund is advised by an Adviser or an Affiliate of the Adviser
that has provided advisory services to the Trust (even if such services were
provided with respect to another Fund) for at least three (3) years prior to
the effective date of such termination or Partial Termination for the new
Fund (an "Existing Advisor"), then the Termination Payment Amount shall be
equal to:
(1) If the new Fund began operations as a Fund under the Trust --
(a) $50,000, if such termination or Partial Termination occurs
within one year of the effective date of the Registration
Statement for such new Fund;
(b) $30,000, if such termination or Partial Termination occurs
after one year but before the second year of the effective date
of the Registration Statement for such new Fund; and
(c) $15,000, if such termination or Partial Termination occurs
after the second year but before the third year of the
effective date of the Registration Statement for such new Fund;
(2) If the new Fund began operations as a fund under another company or
trust --
(a) $150,000, if such termination or Partial Termination occurs
within one year of the effective date of the Registration
Statement for such new Fund;
(b) $100,000, if such termination or Partial Termination occurs
after one year but before the second year of the effective date
of the Registration Statement for such new Fund; and
(c) $50,000, if such termination or Partial Termination occurs
after the second year but before the third year of the
effective date of the Registration Statement for such new Fund;
- 15 -
(3) The amounts listed in (1) and (2) above are for terminations; the
Termination Payment Amount for Partial Terminations shall be 50% of the
amount listed.
(B) If the new Fund is advised by an Advisor that is not an Existing
Advisor, then the Termination Payment Amount shall be equal to one-third of
(i) the average monthly fees payable to Citibank pursuant to Section 4(a) of
this Agreement for the last six (6) months preceding such termination or
Partial termination, multiplied by (ii) the number of full and partial
months remaining until the expiration of the Base Period.
The Parties agree that the foregoing sums are a reasonable forecast of probable
actual loss to Citibank and that they are agreed to as liquidated damages and
not as a penalty.
(g) The provisions of Sections 3, 4, 5, 7, 13 and 15 shall survive any
termination of this Agreement.
(h) Except as otherwise provided in this Agreement, neither this Agreement
nor any rights or obligations under this Agreement may be assigned by any party
without the written consent of the other party. This Agreement shall inure to
the benefit of and be binding upon the parties and their respective permitted
successors and assigns. Subject to prior notice to the Trust, Citibank may,
without further consent on the part of the Trust, (i) assign this agreement to
any Affiliate of Citibank or (ii) subcontract for the performance hereof with
any entity, including an Affiliate of Citibank; provided however, that Citibank
shall be as fully responsible to the Trust for the acts and omissions of any
assignee or subcontractor as Citibank is for its own acts and omissions under
this Agreement and that no such assignment or subcontract will increase the
compensation payable by the Trust to Citibank under this Agreement for the
Services. Notwithstanding the foregoing, (A) Citibank shall not be liable for
the acts or omissions of (i) any Non-Discretionary Subcontractors or (ii) any
assignee provided that the Trust has consented to such assignment and
(B) Citibank may subcontract for the performance hereof with Citigroup Fund
Services, LLC without prior notice; provided however, that Citibank shall be as
fully responsible to the Trust for the acts and omissions of Citigroup Fund
Services, LLC as Citibank is for its own acts and omissions and that no such
subcontract will increase the compensation payable by the Trust to Citibank
under this Agreement for the Services.
SECTION 6. ADDITIONAL FUNDS OR CLASSES OF SHARES
In the event that the Trust establishes one or more series or classes of
Shares after the effectiveness of this Agreement, each such series or class of
Shares shall become a Fund, or class of Shares of a Fund (if applicable), under
this Agreement and shall be added to the Fee Schedule.
SECTION 7. RECORDKEEPING; PROPRIETARY INFORMATION; CONFIDENTIALITY
(a) Citibank shall prepare and maintain on behalf of the Trust the books and
records detailed in the Appendices and such other records as are agreed from
time to time in writing by
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Citibank and the Trust (the "Trust Records"). The books and records maintained
by Citibank shall be prepared, maintained and, subject to Section 7(d) below,
preserved by Citibank in such form, for such periods and in such locations as
may be required by the Laws applicable to the Trust, including, without
limitation, Section 31 of the 1940 Act, as amended. The Trust Records in
Citibank's possession shall be the property of the Trust.
(b) Subject to Citibank's then-current, reasonable confidentiality, security
and data protection procedures, the Trust and its authorized representatives
and any Governmental Authority with jurisdiction over the Trust shall have
reasonable access to the Trust Records at all times during Citibank's normal
business hours. Upon the reasonable advance request of the Trust, an Authorized
Person or the CCO, copies of Trust Records shall be provided by Citibank to the
Trust or its authorized representatives, provided that the Trust or the
appropriate Fund shall pay Citibank's reasonable costs of copying the Trust
Records.
(c) If Citibank receives a request or demand from a third party, including a
Governmental Authority with jurisdiction over the Trust, to inspect any Trust
Records, Citibank will endeavor to notify the Trust and to secure instructions
from the Trust or an authorized representative about such inspection. Citibank
shall abide by such instructions for granting or denying the inspection;
provided, that Citibank may grant the inspection without instructions or in
contravention of instructions if Citibank is advised by counsel to Citibank or
the Trust that failure to do so is substantially likely to result in liability
to Citibank; and provided, further, that in such event, Citibank shall endeavor
promptly to advise the Trust of such contrary advice, to the extent practicable
in advance of any inspection.
(d) Upon termination of this Agreement, Citibank shall, subject to payment
of all undisputed amounts due to Citibank hereunder and at the expense and
direction of the Trust, transfer to the Trust or any successor service provider
all Trust Records in the electronic or other medium in which such material is
then maintained by Citibank.
(e) The Trust acknowledges that the information provided by Citibank
pursuant to Section 11 of this Agreement, databases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals maintained by Citibank on databases under the control and ownership of
Citibank or a third party retained by Citibank constitute copyrighted, trade
secret, or other proprietary information (collectively, "Proprietary
Information") of substantial importance to Citibank or the third party. The
Trust agrees to treat all Proprietary Information as proprietary to Citibank
and further agrees that it shall (i) maintain as confidential any Proprietary
Information and (ii) cause its Authorized Persons and other officers, directors
and representatives to treat as confidential any Proprietary Information, and
Citibank may request and shall receive from any such persons an executed
acknowledgement by them of such obligations.
(f) The Trust and Citibank (for purposes of Sections 7(f) and 7(g), each a
"Receiving Party") agree to keep confidential all information disclosed by the
other party (for purposes of this Sections 7(f) and 7(g), each a "Disclosing
Party"), including, without limitation all forms and types of financial,
business, marketing, operations, technical, economic, engineering and personnel
information of the Disclosing Party, whether tangible or intangible.
- 17 -
(g) Notwithstanding any provision of this Agreement to the contrary, the
Trust and Citibank agree that the following information shall not be deemed
confidential information: (i) information that was known to the Receiving Party
before receipt thereof from or on behalf of the Disclosing Party;
(ii) information that is disclosed to the Receiving Party by a third person who
has a right to make such disclosure without any obligation of confidentiality
to the Party seeking to enforce its rights under this Section;
(iii) information that is or becomes generally known in the trade without
violation of this Agreement by the Receiving Party; or (iv) information that is
independently developed by the Receiving Party or its employees or affiliates
without reference to the Disclosing Party's information.
(h) Notwithstanding any provision of this Agreement to the contrary,
Citibank may: (i) provide information to Citibank's counsel and to persons
engaged by Citibank or the Trust to provide Services; (ii) provide information
consistent with operating procedures that are customary with respect to the
services in the industry; (iii) identify the Trust as a client of Citibank for
Citibank's sales and marketing purposes; and (iv) provide information as
approved by the Trust or its authorized representative.
(i) Citibank acknowledges that certain Shareholder information made
available by the Trust to Citibank or otherwise maintained by Citibank under
this Agreement may be deemed nonpublic personal information under the
Xxxxx-Xxxxx-Xxxxxx Act and other applicable privacy laws (collectively,
"Privacy Laws"). Citibank agrees (i) not to disclose or use such information
except as required to carry out its duties under the Agreement or as otherwise
permitted by law in the ordinary course of business; (ii) to limit access to
such information to authorized representatives of Citibank and the Trust;
(iii) to establish and maintain reasonable physical, electronic and procedural
safeguards to protect against access to such information by unauthorized
persons; and (iv) to cooperate with the Trust and provide reasonable assistance
in ensuring compliance with such Privacy Laws to the extent applicable to
either or both of the parties, including to the extent Citibank maintains or
otherwise possesses consumer report information for a business purpose, the
proper disposal of such information.
(j) Citibank shall establish and maintain commercially reasonable facilities
and procedures for safekeeping of all records maintained by Citibank pursuant
to this Agreement.
SECTION 8. REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties of Citibank. Citibank represents and
warrants to the Trust that:
(i) It is a national banking association duly organized and existing and is
in good standing in every state where it is required so to be.
(ii) It is empowered under Law applicable to Citibank and by the documents
pursuant to which it was formed as a legal entity in its jurisdiction to
enter into this Agreement and perform its duties under this Agreement.
- 18 -
(iii) All requisite corporate proceedings have been taken to authorize it to
enter into this Agreement and perform its duties under this Agreement.
(iv) It has access to the necessary facilities, equipment, and personnel to
perform its duties and obligations under this Agreement.
(v) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of Citibank, enforceable against Citibank in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured parties.
(b) Representations and Warranties of the Trust. The Trust represents and
warrants to Citibank that:
(i) It is a statutory trust duly organized and existing and in good standing
under the laws of Delaware.
(ii) It is empowered under Law applicable to the Trust and by its Organic
Documents to enter into this Agreement and perform its duties under this
Agreement.
(iii) All requisite corporate proceedings have been taken to authorize it to
enter into this Agreement and perform its duties under this Agreement.
(iv) It is registered as an open-end management investment company under the
1940 Act.
(v) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of the Trust, enforceable against the Trust in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured parties.
(vi) A registration statement under the Securities Act is currently
effective and will remain effective, and appropriate State securities law
filings have been made and will continue to be made, with respect to all
Shares of the Funds and Classes of the Trust being offered for sale, except
to the extent that Citibank is responsible for any of the foregoing under
this Agreement or a Prior Agreement and has failed to cause such filings to
be made not as the result of the failure of a Dependency.
SECTION 9. FORCE MAJEURE
Citibank shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdowns, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply. In addition, to the extent
Citibank's obligations hereunder are
- 19 -
to oversee or monitor the activities of third parties, Citibank shall not be
liable for any failure or delay in the performance of Citibank's duties caused,
directly or indirectly, by the failure or delay of such third parties in
performing their respective duties or cooperating reasonably and in a timely
manner with Citibank.
SECTION 10. ACTIVITIES OF CITIBANK
Except to the extent necessary to perform Citibank's obligations under this
Agreement, nothing herein shall be deemed to limit or restrict Citibank's
right, or the right of any of Citibank's managers, officers or employees who
also may be a trustee, officer or employee of the Trust, or persons who are
otherwise affiliated persons of the Trust to engage in any other business or to
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, trust, firm, individual or association.
SECTION 11. AUDIT RIGHTS; COOPERATION WITH CHIEF COMPLIANCE OFFICER OTHER
SERVICE PROVIDERS AND INDEPENDENT ACCOUNTANTS
(a) Citibank shall (i) measure, monitor and track the performance of the
Services and compare such performance to the Service Standards and (ii) report
such performance to the Trust or a designated Authorized Person on a periodic
basis in arrears in a form and with such frequency as (A) may mutually agreed
by the parties or, (B) with respect to specified components of the Services, as
may be specifically set forth in Appendices C, D, E and F.
(b) Subject to the terms of this Agreement, Citibank shall also provide to
the CCO a copy of (i) any SAS 70 report obtained by Citibank (or any Affiliated
subcontractor of a material portion of the Services) with respect to its
operations (and the operations of any such Affiliated subcontractor) related to
the Services from time to time, (ii) the reports in the form set forth in
Appendix H-4 (which may be delivered by Citibank or, as applicable, any
Affiliated subcontractor of a material portion of the Services) with the
frequency set forth therein, and (iii) Citibank's (or such Affiliated
subcontractors') compliance policies ("38a-1 Manuals") applicable to Citibank's
(or such Affiliated subcontractors') operations related to the Services
("Services Operations"), as amended from time to time.
(c) Upon the Trust's reasonable request and subject to Citibank's
then-current, reasonable confidentiality, security and data protection
procedures, Citibank will permit the CCO and other authorized representatives
of the Trust to visit with the appropriate personnel at Citibank (or such
Affiliated subcontractors) in order to conduct due diligence on, audit, inspect
or otherwise examine the Services Operations and the Citibank Processes
(collectively, "Reviews"). The Trust agrees that a Review may cover the entire
scope of the Services Operations and will occur at Citibank's (or such
Affiliated subcontractors') facilities upon reasonable advance notice and will
be scheduled to occur during regular business hours. The expenses incurred by a
person conducting a Review shall not be borne by Citibank. The parties will
cooperate to minimize the disruption associated with Reviews, including the
scope and timing of such Reviews. On-site Reviews of Citibank (or such
Affiliated subcontractors) will be limited to two (2) Reviews per calendar
year, except if and to the extent that material service,
- 20 -
information security or compliance issues with respect to the Services
Operations merit additional Reviews in the reasonable opinion of the CCO or a
Review is requested in writing by an Adviser to a Fund; for the avoidance of
doubt, a Review shall not include routine discussions about scheduling Reviews
or other discussions between the Contract Managers or their deputies pursuant
to Section 2A.
(d) Citibank shall provide certifications about Citibank's Services
Operations in the form attached hereto as Appendices H-1 through H-3 with the
frequency and to the person(s) detailed in such Appendices, as they may be
amended as agreed by the Parties taking into account industry standards for
such certifications. At such other times as the Trust and Citibank may agree,
Citibank shall provide reasonable, mutually acceptable, written certifications
about such other matters as may be reasonably requested by the Trust and agreed
by Citibank.
(e) If (i) Citibank or any Citibank Affiliate to which this Agreement has
been assigned or to which a material portion of the Services has been
subcontracted fails to meet a Service Standard (including as a result of the
action or inaction of any assignee or subcontractor) in the performance of any
Service under this Agreement and such failure does not result from the failure
of a Dependency or (ii) Citibank is notified in writing by a Governmental
Authority that Citibank (or any Affiliated assignee or subcontractor of a
material portion of the Services) is in violation of any Law applicable to
Citibank (or such assignee or subcontractor) and related to the Services,
Citibank shall:
(i) with respect to any such failure to meet a Service Standard,
(A) perform an analysis to identify the cause of any such failure or
violation;
(B) provide the CCO (and each Executive Officer that requests such
report) with a report identifying the cause of, and the intended
procedure/steps for correcting or resolving, such failure and the
timeline for completing such procedure/steps;
(C) with respect to any such failure that is material, and if requested
by the CCO or an Executive Officer, meet with the CCO or an
Executive Officer to discuss such failure and such intended
procedure/steps and timeline; and
(D) implement the intended procedure/steps for correcting such failure;
and
(ii) with respect to any such putative violation of applicable Law,
(A) determine whether such Law applies to Citibank (or such assignee or
subcontractor) and whether Citibank (or such assignee or
subcontractor) is in violation of such applicable Law;
(B) provide the CCO (and each Executive Officer that requests such
report) with a report identifying the cause of, and the intended
procedure/steps for
- 21 -
correcting or resolving, such violation and the timeline for
completing such procedure/steps;
(C) with respect to any such violation that is material, and if
requested by the CCO or an Executive Officer, meet with the CCO or
an Executive Officer to discuss such violation and such intended
procedure/steps and timeline; and
(D) implement the intended procedure/steps for correcting such failure.
Citibank shall notify the CCO or an Executive Officer upon completing the
intended procedure/steps for correcting any such failure or violation.
(f) Subject to the provisions of this Agreement (including the Fee Schedule,
the Change Control Process and Section 7 related to confidentiality), Citibank
shall provide such additional cooperation or information (to the extent not
covered by the foregoing provisions of this Section 11) with respect to
Citibank, the Citibank Processes and the Services Operations as the Executive
Officers, the CCO and each Fund's independent public accountants may reasonably
request.
(g) Notwithstanding any other provision of this Agreement to the contrary,
to the extent Citibank is under this Agreement (including the Appendices)
required to deliver or provide data, information or reports to any Executive
Officer or the CCO, Citibank shall be deemed to have satisfied any such
obligation if it has provided commercially reasonable access to a single
database per Service containing the required data, information or report, which
access may be granted subject to reasonable confidentiality and security
requirements.
SECTION 12. SERVICE DAYS
Nothing contained in this Agreement is intended to or shall require
Citibank, in any capacity under this Agreement, to perform any functions or
duties on any day other than a business day of the Trust or of a Fund.
Functions or duties normally scheduled to be performed on any day, which is not
a business day of the Trust or of a Fund, shall be performed on, and as of, the
next business day, unless otherwise required by law.
SECTION 13. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The trustees of the Trust and the Shareholders shall not be liable for any
obligations of the Trust or of the Funds under this Agreement, and Citibank
agrees that, in asserting any rights or claims under this Agreement, it shall
look only to the assets and property of the Trust or the Fund to which
Citibank's rights or claims relate in settlement of such rights or claims, and
not to the trustees of the Trust or the Shareholders.
SECTION 14. TAXES
Citibank shall not be liable for any taxes, assessments or governmental
charges that may be levied or assessed on any basis whatsoever in connection
with the Trust or any Shareholder or
- 22 -
any purchase of Shares, excluding taxes assessed against Citibank for
compensation received by it under this Agreement, unless the taxes, assessments
or governmental charges are the result of acts or failures to act for which
Citibank would be liable under Section 3(a).
SECTION 15. MISCELLANEOUS
(a) Except for the Fee Schedule to add new Funds and Classes in accordance
with Section 6, no provisions of this Agreement may be amended or modified in
any manner except by a written agreement properly authorized and executed by
both parties hereto.
(b) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware.
(c) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any Prior Agreement or other agreement executed prior to
the date hereof with respect to the subject matter hereof, whether oral or
written. Upon the execution and delivery of this Agreement, the Prior
Agreements shall be deemed to have been terminated by mutual consent of the
parties, provided that to the extent set forth therein the provisions of any
Prior Agreement shall survive such termination.
(d) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(f) Section headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
(g) Notices, requests, instructions and communications received by the
parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(h) Notwithstanding any other provision of this Agreement, the parties agree
that the assets and liabilities of each Fund of the Trust are separate and
distinct from the assets and liabilities of each other Fund and that no Fund
shall be liable or shall be charged for any debt, obligation or liability of
any other Fund, whether arising under this Agreement or otherwise.
(i) No affiliated person, employee, agent, director, officer or manager of
Citibank shall be liable at law or in equity for Citibank's obligations under
this Agreement.
- 23 -
(j) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof.
(k) Notwithstanding any provision of this Agreement to the contrary,
Citibank shall not be obligated to provide legal representation to the Trust or
any Fund, including through the use of attorneys that are employees of Citibank.
(l) Each Appendix to this Agreement is part of the Agreement. In the event
of any conflict between this Agreement and any Appendices, this Agreement shall
control. To the extent Citibank is required to deliver a report to the Trust
under this Agreement, such obligation cannot be discharged by Citibank
delivering such report to itself or to an Affiliated subcontractor (including
itself or such Affiliated subcontractor acting in any capacity under this
Agreement other than in its capacity in delivering such report).
(m) Except as specifically set forth in Sections 3(b) and (c), there are no
third party beneficiaries of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
FORUM FUNDS
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Xxxxx X. Xxxxxxx
President and Principal
Executive Officer
CITIBANK, N.A.
By: /s/ Xxxxxxxxx Xxxx
-----------------------------
Xxxxxxxxx Xxxx
Vice President
- 24 -
APPENDIX A -
[INTENTIONALLY DELETED]
A-1 (Funds and Classes)
APPENDIX B -
[INTENTIONALLY DELETED]
B-1 (Fees)
APPENDIX C -
FUND ADMINISTRATION SERVICES
Pursuant to Section 2(b) of the Accounting, Administration and Transfer
Agency Services Agreement (the "Agreement") by and between Forum Funds (the
"Trust") and Citibank, N.A. ("Citibank"), Citibank shall provide the following
services, subject to the terms and conditions of the Agreement and this
Appendix C:
1. BOARD MEETINGS AND BOARD REPORTS
Citibank shall:
(a) Maintain a calendar of scheduled meetings of the Trust's Board;
(b) In connection with meetings of the Board or any committee thereof
meeting at the same time as the full Board,
(i) prepare materials for meetings of the Board or such committee
including (A) agendas reflecting the input and priorities of the Trust's
Board or such committee, as applicable, and (B) consistent with current
practice, resolutions and reports to the Trust's Board or such
committee, as applicable, covering (1) regulatory and industry
developments of general applicability (2) the Trust's operations, and
(3) reports reasonably requested by the Board or such committee about
the Services Operations and data in Citibank's possession, and
(ii) in connection with the Board's obligations under section 15(c) of
the 1940 Act and consistent with current practice, coordinate the
delivery of Lipper (or similar, industry-recognized) analyses of fund
expenses and performance relative to relevant benchmarks and to
comparable funds; and
(c) Distribute materials for meetings of the Trust's Board, including
materials that have been approved or supplied by the Trust's Advisers,
counsel, auditors, custodians, CCO, Executive Officers, and other service
providers;
(d) Consistent with current practice, assist in, gather materials and
information and provide scatter plot and similar analyses for, and
coordinate matters related to, the Trust's Advisers'and other service
providers' contract renewals;
(e) Consistent with current practice, assist with the design and operation
of the Funds, including new portfolios or classes, investment objectives,
policies, and provide consultation related to the regulatory aspects of the
establishment, maintenance, and liquidation or dissolution of Funds; and
(f) At the request of the Trust, provide one or more employees reasonably
satisfactory to the Trust's Board to attend meetings of the Trust's Board or
any committee thereof or of the Trust and to record minutes with respect to
such meetings.
C-1 (Fund Administration)
APPENDIX C -
FUND ADMINISTRATION SERVICES
2. SEC FILINGS
With respect to the Trust or each Fund, as applicable, Citibank shall:
(a) Based on information from the Trust's service providers, including
Citibank and its affiliates when applicable, prepare for filing the
following documents required of the Trust by the SEC ("SEC Filings") in
either written or, if required or permitted, electronic format (e.g.,
pursuant to XXXXX), including: (i) periodic and other requested updates to
the Registration Statement on Forms N-1A, including Fund prospectuses,
statements of additional information and supplements thereto, (ii) Forms
N-CSR, N-Q and N-SAR and any required financial data schedules, (iii) Form
N-PX, (iv) Form 24f-2, (v) fidelity bond filings and (vi) if requested, and
pursuant to mutually acceptable terms, proxy and information statements and
related communications to shareholders;
(b) Subject to prior execution by the Executive Officers when necessary in
connection with such filing, file or cause to be filed with the SEC
financial statements and other SEC Filings as required; provided that items
2(a)(i) and (vi) and the non-financial portions of Forms N-CSR and N-SAR
shall have been reviewed by Trust counsel (and such counsel shall not have
objected to such filings);
(c) Oversee the printing of SEC Filings that are intended to be distributed
to Shareholders;
(d) Oversee the distribution of those items in 2(a) that are to be provided
to Shareholders; and oversee the solicitation and tabulation of proxies; and
(e) Assist Trust Counsel in preparing and submitting SEC exemptive order
requests and no-action letter requests.
3. COMPLIANCE
With respect to the Trust or each Fund, as applicable, Citibank shall:
(a) Reasonably assist the Trust's Executive Officers, Advisers, CCO and
other appropriate persons with respect to regulatory compliance matters
related to the Trust;
(b) Reasonably assist the Trust's Advisers with daily post-trade compliance
testing in accordance with the Funds' prospectuses and statements of
additional information;
(c) Reasonably assist the Trust and the CCO in developing or modifying
compliance procedures for each Fund that are part of the Trust's 38a-1
Compliance Program;
(d) Prepare policies, procedures, committee charters and similar documents
for review by Trust Counsel and approval by the Trust;
C-2 (Fund Administration)
APPENDIX C -
FUND ADMINISTRATION SERVICES
(e) Prepare and distribute Trustee/Officer Questionnaires annually or at
such other more frequent intervals as may be necessary;
(f) Produce standard quarterly compliance reports for delivery to the Trust,
the Adviser and the CCO;
(g) Coordinate examinations of the Trust or a Fund by the staff of the SEC
or other Governmental Authorities, including: (i) compiling data and other
information in response to requests for information, (ii) assisting with the
preparation of the Trust's responses to those examinations and the responses
to general communications from those authorities and (iii) communicating
with the Trust to provide status updates; and
(h) Assist the Trust and the Trust's Board in soliciting proposals for,
analyzing, securing, documenting and taking reasonable actions to maintain
fidelity bond and director and officers/errors and omissions insurance.
4. ORGANIC DOCUMENTS; RECORDKEEPING AND MINISTERIAL MATTERS
With respect to the Trust or each Fund, as applicable, and subject to review by
Trust Counsel as to items (a), (b) and (g) (as appropriate) and execution by
Executive Officers (when required), Citibank shall:
(a) Prepare, file, amend as necessary and maintain the Trust's Organic
Documents and minutes of the meetings of the Trust's Board, any committees
thereof, and Shareholders;
(b) Prepare such filings as are necessary to maintain the Trust's existence
and good standing under applicable state law;
(c) Administer direct contracts between the Trust and any Third Party
Service Provider to the Trust, and provide centralized oversight and
coordination of all services provided to the Trust by Citibank;
(d) Maintain XXXXX, CUSIP, ticker, news media and tax identification number
listings;
(e) Provide the Trust adequate general meeting space for scheduled Board
meetings and concurrent meetings of its committees.
(f) Provide persons reasonably suitable to the Trust to serve as ministerial
officers, including secretary, of the Trust;
(g) Assist and consult with the Trust's officers in the negotiation of
agreements to which the Trust or a Fund is a party that are related to the
operations of the Trust or a Fund; and
C-3 (Fund Administration)
APPENDIX C -
FUND ADMINISTRATION SERVICES
(h) Facilitate execution of Rule 22c-2 amendments to intermediary agreements
to which a Fund is the primary party.
5. BLUE SKY
With respect to the Trust or each Fund, as applicable, Citibank shall:
(a) Monitor sales of Shares for compliance with state blue sky laws; and
(b) Register or prepare applicable filings with respect to the Shares with
the various state and other securities commissions of the United States and
its territories, and advise the distributor of a Fund as soon as possible of
changes in the Fund's blue sky status.
6. EXPENSE ACCOUNTING
With respect to the Trust or each Fund, as applicable, Citibank shall:
(a) Calculate, review and account for Fund expenses and report on Fund
expenses on a periodic basis;
(b) Subject to review and approval of an Executive Officer of the Trust or
another Authorized Person as designated on a list of Authorized Persons
approved by the Board, authorize the payment of Trust expenses and pay, from
Trust assets, all bills of the Trust;
(c) Prepare Fund budgets, pro-forma financial statements, expense and
profit/loss projections, and fee waiver/expense reimbursement projections on
a periodic basis;
(d) Accrue expenses of each Fund according to this Agreement and submit
changes to accruals and expense items to the Executive Officers for review
and approval and make necessary and appropriate adjustments over such
periods to reflect over-accruals and under-accruals of estimated expenses,
or income;
(e) Monitor, if applicable, each Fund's expense limitation and provide the
Trust's Executive Officers and the Adviser to each Fund with a periodic
report regarding compliance with expense limitation in effect;
(f) Calculate and accrue fee waivers and expense reimbursements and invoice
and collect expense reimbursements on behalf of the Trust; and
(g) Prepare financial statement expense information.
C-4 (Fund Administration)
APPENDIX C -
FUND ADMINISTRATION SERVICES
7. FINANCIAL STATEMENTS; OTHER FINANCIAL MATTERS
With respect to the Trust or each Fund, as applicable, Citibank shall:
(a) Prepare semi-annual and annual financial statements and oversee the
production and distribution of those statements and any related report to
the Trust's Shareholders prepared by the Trust or its Advisers, as
applicable;
(b) Calculate data with respect to yields, dividend yields, distribution
rates, total returns and, consistent with the Change Control Process and
industry standards, other information for dissemination to information
services covering the investment company industry, for advertising and sales
literature of the Trust and other appropriate purposes;
(c) Consistent with current practice, report Fund data to investment company
industry survey companies;
(d) Report applicable data to rating agencies (such as STANDARD & POOR'S)
that rate a Fund; and
8. TAX MATTERS
With respect to the Trust or each Fund, as applicable, Citibank shall:
(a) Prepare Federal and state income and excise tax workpapers and
provisions;
(b) Subject to execution thereof by the Executive Officers or other
non-ministerial officers of the Trust, file all Federal income and excise
tax returns and state income and other tax returns, including any extensions
or amendments, as agreed;
(c) Calculate required distributions to maintain the qualification of each
Fund as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code");
(d) Monitor, calculate and report to the Trust compliance with respect to
Code Section 851(b) "good income" and "diversification" testing, report the
tax status of distributions and prepare year-end Federal tax notice data);
(e) Prepare data for the Trust's financial statement, sixty (60) day
shareholder tax notice disclosure, tax related footnotes and Statement of
Position 95-3 ("ROCSOP") adjustments);
(f) Calculate income distributions for Funds that declare income
distributions more often than annually but not daily and calculate capital
gain distributions (in addition to typical calendar year end capital gain
distributions);
C-5 (Fund Administration)
APPENDIX C -
FUND ADMINISTRATION SERVICES
(g) Prepare and, with approval of the Trust, distribute to appropriate
parties notices announcing the declaration of distributions to Shareholders;
(h) Oversee and coordinate the payment of distributions to Shareholders;
(i) Perform monthly capital gain analyses based on book numbers adjusted for
prior year unpaid spillback distribution requirements and capital loss
carryforwards; and
(j) Prepare, as needed, short- and long-term gain reports for the Adviser
for Fund year-end capital gain tax planning.
C-6 (Fund Administration)
APPENDIX D -
FUND ACCOUNTING SERVICES
Pursuant to Section 2(b) of the Accounting, Administration and Transfer Agency
Services Agreement (the "Agreement") by and between Forum Funds (the "Trust")
and Citibank, N.A. ("Citibank"), Citibank shall provide the following services,
subject to the terms and conditions of the Agreement and this Appendix D:
1. SERVICES RELATED TO CALCULATION OF ACCOUNTING ITEMS, DETERMINATION OF NAV
AND MAINTENANCE OF A GENERAL LEDGER ("ACCOUNTING SERVICES")
Citibank shall:
(a) Calculate the net asset value per Share ("NAV") on each Fund business
day or with such frequency as is required to facilitate trading of the
Shares, but no more frequently than once each Fund business day.
(b) Calculate each item of income, expense, deduction, credit, gain and
loss, if any, and process each Fund's stated expense ratio as required by
the Trust and the Adviser and in conformance with generally accepted
accounting principles ("GAAP"), the SEC's Regulation S-X (or any successor
regulation) and the Internal Revenue Code of 1986, as amended (or any
successor laws) (the "Code").
(c) Allocate income and expense and calculate the net asset value per share
("NAV") of each class of shares offered by each Fund in accordance with the
relevant provisions of the applicable Prospectus of each Fund and applicable
regulations under the 1940 Act.
(d) Calculate the "SEC yield" and money market fund seven and thirty day
yields for the Fund and each Class thereof, as applicable and, subject to
the Change Control Process, such other measures of performance as may be
requested by the Trust or an Adviser.
(e) Prepare and record once daily, as of the time when the NAV of a Fund is
calculated or at such other time as otherwise directed by the Trust, either
(A) a valuation of the assets and liabilities of the Fund (unless otherwise
specified in or in accordance with the Trust's Portfolio Securities
Valuation Procedures, based upon the use of third party securities pricing
services normally used and contracted for this purpose by Citibank in the
case of securities for which information and market price or yield
quotations are readily available, and based upon evaluations conducted in
accordance with the Trust's instructions in the case of all other assets and
liabilities) or (B) periodic calculation confirming that the market value of
the Fund's assets does not deviate from the amortized cost value of those
assets by more than a specified percentage.
(f) Maintain each Fund's general ledger and record all income, gross
expenses, capital share activity and cash and security transactions of each
Fund.
D-1 (Fund Accounting)
APPENDIX D -
FUND ACCOUNTING SERVICES
2. SERVICES RELATED TO REPORTING OF DATA AND PROVISION OF OTHER INFORMATION
Citibank shall:
(a) Provide the Trust and such other persons as the Trust may direct with
standard fund reporting available through Citibank's Internet reporting
application or other delivery arrangements used from time to time by
Citibank.
(b) Provide appropriate records to assist each Fund's independent
accountants and such other persons as the Trust may direct
(c) Provide information typically supplied in the investment company
industry to each Fund's transfer agent.
(d) Transmit the NAVs and dividend factors of the Fund to such persons as
directed by the Trust or the Adviser.
(e) Provide the Trust and such other persons as the Trust may direct with
the data requested by the Trust that is required to update the Registration
Statement.
(f) Provide the Trust, the Adviser, the independent accountants for the
Fund, and such other persons as the Trust may direct data maintained by
Citibank requested with respect to the preparation of the Fund's income,
excise and other tax returns.
(g) Provide the Trust, the Adviser, the Public Accountants, and such other
persons as the Trust may direct, and explain as required, unadjusted Fund
data directly from the portfolio accounting system for any Fund business day
and other data reasonably requested for the preparation of the Fund's
semi-annual and annual financial statements.
(h) Transmit to and receive from each Fund's transfer agent appropriate data
to reconcile Shares outstanding and other data.
(i) Transmit to and receive from each Fund's custodian appropriate data to
reconcile daily cash.
(j) Provide such other industry standard reports regarding the Trust
maintained by Citibank as set forth in Appendix H.
3. SERVICES RELATED TO DISTRIBUTIONS AND RECONCILIATION OF DATA
Citibank shall:
(a) Process all distributions as directed by the Trust or its agents.
(b) Reconcile cash and portfolio positions daily with each Fund's custodian.
D-2 (Fund Accounting)
APPENDIX D -
FUND ACCOUNTING SERVICES
(c) Verify receipt of and review for reasonableness investment trade
instructions when received from an Adviser.
(d) Maintain individual ledgers and historical tax lots for each security.
(e) Distribute net asset values and yields to NASDAQ; and, as agreed, other
reporting agencies.
4. SERVICES RELATED TO RECORDKEEPING AND REPORTING
Citibank shall:
(a) Prepare and maintain on behalf of the Trust the following books and
records of each Fund, and each Class thereof, pursuant to Rule 31a-1 under
the 1940 Act (the "Rule"):
(i) 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;
(ii) General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, as required by subsection
(b)(2) of the Rule (but not including the ledgers required by subsection
(b)(2)(iv) of the Rule);
(iii) Separate ledger accounts required by subsection (b)(2)(ii) and
(iii) of the Rule;
(iv) A record of each brokerage order given by or on behalf of any Fund
for, or in connection with, the purchase or sale of securities, and all
other portfolio purchases or sales, as required by subsections (b)(5)
and (b)(6) of the Rule;
(v) A record of all options, futures, swaps or other derivatives, if
any, in which the Funds have any direct or indirect interest or which
the Fund has granted or guaranteed and a record of any contractual
commitments to purchase, sell, receive or deliver any property, as
required by subsection (b)(7) of the Rule;
(vi) A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b)(8) of the Rule; and
(vii) All other records required by the Rule or any successor rule or
pursuant to interpretations thereof to be kept by open-end management
investment companies, but limited to those provisions of the Rule
applicable to portfolio transactions and as agreed upon between the
parties hereto.
D-3 (Fund Accounting)
APPENDIX E -
TRANSFER AGENCY SERVICES
Pursuant to Section 2(b) of the Accounting, Administration and Transfer Agency
Services Agreement (the "Agreement") by and between Forum Funds (the "Trust")
and Citibank, N.A. ("Citibank"), Citibank shall provide the following services,
subject to the terms and conditions of the Agreement and this Appendix E:
1. GENERAL.
Transfer agent services, dividend disbursing agent services, shareholder
support services and, as relevant, services in connection with accumulation,
open-account or similar plans (including without limitation any periodic
investment plan or periodic withdrawal program) that in each case are customary
for open-end, management investment companies, including:
(a) Setting up Shareholder account information, including, as applicable,
name, address, dividend option, taxpayer identification numbers,
privileges and wire instructions;
(b) Maintaining all Shareholder account information changes;
(c) Preparing Shareholder meeting lists;
(d) Delivering proxies and related materials to direct Shareholders and
making the same available for intermediaries (subject to instructions from
intermediaries or their agents, or information from reputable third
parties that maintain such information (e.g., ADP));
(e) Delivering Shareholder reports and prospectuses to direct Shareholders
and making the same available for intermediaries (subject to instructions
from intermediaries or their agents, or information from reputable third
parties that maintain such information (e.g., ADP));
(f) Withholding taxes on U.S. resident and non-resident alien accounts;
(g) Preparing and filing U.S. Treasury Department Forms 945, 1042, 1099
and 5498 with respect to distributions for Shareholders;
(h) Preparing and mailing confirmation statements in compliance with Rule
10b-10 of the 1934 Act and statements of account to Shareholders for all
purchases and redemptions of Shares and other confirmable transactions in
Shareholder accounts;
(i) Preparing and mailing activity statements and other routine
communications to Shareholders;
(j) Providing Shareholder account information;
(k) Providing data regarding broker commissions and providing related
reports to the Trust's distributor;
(l) Calculating the applicable Funds' fees under 12b-1 plans and providing
related reports to the Trust's distributor;
E-1 (Transfer Agency)
APPENDIX E -
TRANSFER AGENCY SERVICES
(m) Transmitting to each Fund's fund accounting service provider
appropriate data to allow the service provider's daily reconciliations of
cash, Shares outstanding and other data;
(n) Maintaining and following an open account, closed account and purged
account procedure approved by the Trust; and
(o) Providing standard information reporting based on data maintained by
Citibank as set forth in Appendix H-4.
2.1 PURCHASE, REDEMPTION AND TRANSFER OF SHARES
(a) Receive for acceptance orders for the purchase of Shares and promptly
deliver payment and appropriate documentation to the custodian for the
applicable Fund;
(b) Pursuant to purchase orders, issue the appropriate number of Shares
and hold such Shares in the appropriate Shareholder account;
(c) Receive for acceptance redemption requests and deliver the appropriate
documentation to the custodian for the applicable Fund;
(d) As and when it receives monies paid to it by the Custodian with
respect to any redemption, pay the redemption proceeds as required by the
Prospectus pursuant to which the redeemed Shares were offered and as
instructed by the redeeming Shareholders; and
(e) Effect transfers of Shares upon receipt of appropriate instructions
from Shareholders.
(f) Process "as of" transactions relating to transaction in Fund shares
consistent with 38a-1 Manuals as in effect from time to time and any
further Instructions received from the Trust.
2.2 NOTES AND CONDITIONS TO PURCHASE, REDEMPTION AND TRANSFER OF SHARES:
(a) Processing requests to purchase, redeem and transfer shares of a Fund
shall be subject to Citibank's and the Trust's anti-money-laundering
("AML") program.
(b) Citibank may require any or all of the following in connection with
the original issue of Shares: (i) Instructions requesting the issuance,
(ii) evidence that the Trust's Board has authorized the issuance,
(iii) any required funds for the payment of any original issue tax
applicable to such Shares, and (iv) an opinion of the counsel to the Trust
regarding the legality and validity of the issuance.
(c) Shares shall be issued in accordance with the terms of a Fund's or
Class' Prospectus after Citibank or its agent receives either of the
following, in each case in good order and with such additional items or
materials as may be required by the Trust's Policies and Procedures,
Citibank's operational procedures and/or Citibank's AML Program:
E-2 (Transfer Agency)
APPENDIX E -
TRANSFER AGENCY SERVICES
(i)(A) an instruction directing investment in a Fund or Class, (B) a
check (other than a third party check) or a wire or other electronic
payment in the amount designated in the instruction and (C), in the
case of an initial purchase, a completed account application; or
(ii) the information required for purchases pursuant to a selected
dealer agreement, processing organization agreement, or a similar
contract with a financial intermediary.
(d) Shareholder payments shall be considered Federal Funds no later than
on the day indicated below unless other times are noted in the Prospectus
of the applicable Fund or Class:
(i) for a wire received, at the time of the receipt of the wire;
(ii) for a check drawn on a member bank of the Federal Reserve System,
on the next Fund business day following receipt of the check; and
(iii) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as Citibank is credited with
Federal Funds with respect to that check.
(e) In registering transfers of Shares, Citibank may rely upon the Uniform
Commercial Code as in effect in the State of Delaware or any other
statutes that, in the opinion of Citibank's counsel, protect Citibank and
the Trust from liability arising from (i) not requiring complete
documentation, (ii) registering a transfer without an adverse claim
inquiry, (iii) delaying registration for purposes of such inquiry or
(iv) refusing registration whenever an adverse claim requires such
refusal. As Transfer Agent, Citibank will be responsible for delivery to
the transferor and transferee of such documentation as is required by the
Uniform Commercial Code.
3. PROCESSING DISTRIBUTIONS
Prepare and, subject to receipt of good funds therefor from the custodian for
the applicable Fund, transmit to Shareholders (or credit the appropriate
Shareholder accounts) payments for all distributions declared by the Trust with
respect to Shares of a Fund.
4.1 AML SERVICES
The Trust delegates to Citibank the performance of the anti-money laundering
services set forth below (the "AML Services") with respect to shareholder
accounts maintained by Citibank pursuant to the Agreement; and subject to the
terms and conditions of the Agreement, Citibank accepts this delegation and
agrees to perform the AML Services in accordance with the Trust's and
Citibank's AML program and reasonably to cooperate with the Trust's AML
compliance officer (the "AML Compliance Officer") in the performance of that
person's responsibilities. Notwithstanding this delegation, the Trust shall
maintain full responsibility for ensuring that its
E-3 (Transfer Agency)
APPENDIX E -
TRANSFER AGENCY SERVICES
AML program is and continues to be reasonably designed to ensure compliance
with the applicable AML laws.
(a) Verify shareholder identity upon opening new customer accounts in
accordance with Section 326 of the USA PATRIOT Act (the "PATRIOT ACT") and
any regulations thereunder, as required under Applicable Law;
(b) Monitor shareholder transactions and identify and report suspicious
activities that are required to be so identified and reported, in each
case consistent with the AML programs of the Trust and Citibank;
(c) Review all new accounts and registration maintenance transactions
against the Office of Foreign Asset Control ("OFAC") database and other
such lists or databases of trade restricted individuals or entities as may
be required from time to time by applicable regulatory authorities,
including review of such shareholder information upon changes to such
databases;
(d) Follow the Trust's policies with respect to the acceptance of cash
equivalents and third party checks; provided, however, that unless the
parties agree otherwise under no circumstance will Citibank accept a
corporate third party check;
(e) Place holds on transactions in shareholder accounts or freeze
shareholder accounts, as provided in the AML programs of the Trust and
Citibank and in accordance with the Patriot Act and OFAC;
(f)(i) subject to the Change Control Process, maintain reasonably adequate
policies, procedures and internal controls that are consistent with the
Trust's AML program as in effect from time-to-time, (ii) conduct (or have
a third party conduct) an independent review of its AML Program at least
annually and provide the report of such independent review to the Trust
and the Trust's AML Compliance Officer; and (iii) maintain a reasonable,
ongoing training program with respect to its own personnel relating to AML
matters.
4.2 NOTES AND CONDITIONS TO AML SERVICES
(a) The Trust authorizes Citibank to take such actions in the performance
of the AML Services as Citibank deems appropriate and consistent with the
Trust's AML program and applicable AML Laws;
(b) Citibank agrees to furnish the Trust its written program concerning
anti-money laundering services rendered by Citibank to its various
clients. Citibank agrees to notify the Trust of any changes to its
anti-money laundering program that individually or in the aggregate would
materially impact the Trust's AML program;
E-4 (Transfer Agency)
APPENDIX E -
TRANSFER AGENCY SERVICES
(c) Citibank shall make its relevant personnel available to meet or speak
with the Board concerning the AML Services at such intervals as may be
reasonably necessary or appropriate.
(d) Citibank represents and warrants to the Trust that (i) Citibank has
adopted and will maintain a written program concerning the anti-money
laundering services it provides to its various clients, and
(ii) Citibank's policies and procedures are reasonably adequate for it to
provide the AML Services and comply with its obligation xxxxxx this
Agreement.
5.1 PAYMENTS TO FINANCIAL INTERMEDIARIES, REDEMPTION FEES
(a) Citibank agrees to track Shareholder Accounts by financial
intermediary source and otherwise as reasonably requested by the Trust as
well as rights of accumulation and purchases made under letters of intent
and to provide periodic reporting thereof to the Trust;
(b) Citibank agrees to calculate, report to the Trust and receive from
Shareholders or debit Shareholder accounts for sales commissions,
including sales loads, contingent deferred, deferred and other sales
charges, and service fees (e.g., wire redemption charges);
(c) Citibank agrees to calculate, report to the Trust and to the Adviser
and, subject to receipt of good funds, transmit payments to underwriters,
selected dealers and others for commissions, service fees and other
payments due from the Trust or any distributor; and
(d) Citibank agrees to calculate, report to the Trust and withhold
redemption fees and pay the amount of any redemption fees to the Fund.
5.2 NOTES AND CONDITIONS TO FINANCIAL INTERMEDIARIES SERVICES
The Trust has authorized Citibank to conduct transactions through Fund/SERV
and Networking for the Trust or various Funds, and Citibank agrees to do so
subject to the terms of this Agreement. Fund/SERV and Networking are services
sponsored by the National Securities Clearing Corporation ("NSCC") and as used
herein have the meanings as set forth in the then current edition of NSCC Rules
and Procedures published by NSCC or such other similar publication as may exist
from time to time.
(a) If any Fund fails to settle any trade of Shares (a "SETTLEMENT
FAILURE") transacted over the FundServ network, the Trust or the Adviser
shall, prior to one hour before the next settlement of Shares, (i) notify
Citibank about the settlement failure and (ii) provide Citibank with a
description of the specific remedial and prospective actions proposed to
be taken by the Trust or the Adviser in order to remedy such settlement
failure and avoid any settlement failures in the future (a "remediation
plan"). If (i) the Trust or the Adviser fails to notify Citibank about a
settlement failure on a timely basis and (ii) the Trust or the Adviser
fails to deliver the remediation plan on a timely basis, or (iii) the
remediation plan is inadequate (in Citibank's reasonable opinion), then,
upon written notice to the
E-5 (Transfer Agency)
APPENDIX E -
TRANSFER AGENCY SERVICES
Trust, Citibank may terminate the performance of any services rendered to
the Fund under Section 5.1 of this Appendix E immediately and without
penalty.
(b) If Citibank is or, in Citibank's reasonable opinion Citibank may be,
subject to any disciplinary action by NSCC, including, but not limited to
fine or censure, expulsion, suspension, limitation of or restriction on
activities, functions, and operations (collectively, an "NSCC SANCTION")
that is proximately caused by conduct of a Fund or its agents (other than
Citibank) that contravenes this agreement or that contravenes any
agreement between the Fund or the Trust and NSCC, then Citibank may, in
its sole discretion, demand in writing that the Fund provide Citibank with
adequate assurances specifying any remedial and prospective actions to be
taken in order to remedy or avoid the NSCC sanction. If the Fund does not
within seven (7) days of such demand provide adequate assurances
satisfactory to Citibank in response to any NSCC sanction, then, upon
written notice to the Trust, Citibank may terminate the performance of any
services rendered to that Fund under Section 5.1 of this Appendix E
immediately and without penalty.
(c) Notwithstanding the foregoing, Citibank may terminate the performance
of any services rendered the Trust under Section 5.1 of this Appendix E
immediately and without penalty upon written notice to the Trust if
Citibank is subject to more than one NSCC sanction by NSCC during the term
of this Agreement, that are proximately caused by conduct of the Trust or
its agents (other than Citibank).
(d) The Trust shall indemnify and hold Citibank harmless from and against
any and all losses, damages, costs, charges, reasonable counsel fees,
payments, expenses and liability arising directly or indirectly out of or
attributable to any action or failure or omission to act by NSCC. Citibank
will subrogate to the Trust any legal claims Citibank has against NSCC and
will, if reasonably requested by the Trust, sign all documents necessary
for the Trust to pursue such claims.
6.1 BLUE SKY; ESCHEATMENT
(a) Citibank shall calculate the total number of Shares of each Fund and
Class thereof sold in each reporting jurisdiction authorized by the Trust;
(b) Citibank shall monitor and prepare and make appropriate filings with
respect to the escheatment laws of the various states and territories of
the United States;
(c) Citibank shall perform such services as are required in order to
comply with Rules 17Ad-17 of the 1934 Act (the "Lost Shareholder Rules"),
including, but not limited to, those set forth below. Citibank may, in its
sole discretion, use the services of a third party to perform some or all
such services.
(i) documentation of search policies and procedures;
E-6 (Transfer Agency)
APPENDIX E -
TRANSFER AGENCY SERVICES
(ii) execution of required searches;
(iii) tracking results and maintaining data sufficient to comply with
the Lost Shareholder Rules; and
(iv) preparation and submission of data required under the Lost
Shareholder Rules.
6.2 NOTES AND CONDITIONS TO BLUE SKY SERVICES
The Trust or the distributor for a Fund shall be responsible for
identifying to Citibank in writing those transactions and assets to be
treated as exempt from reporting for a specific state or political
subdivision of the United States.
7. SHAREHOLDER VOTES AND PROXY STATEMENTS
(a) Oversee the activities of proxy solicitation firms;
(b) Receive and tabulate proxy votes, coordinate the tabulation of proxy
and shareholder meeting votes and provide standard reports thereon to the
Trust, its Executive Officers and the Adviser; and
(c) Perform such other additional proxy-related services as may be
specified from time to time by the Trust, pursuant to mutually acceptable
compensation and implementation agreements.
8. RECORDKEEPING AND REPORTING; FACILITIES
(a) Citibank shall record the issuance of Shares of the Trust and maintain
pursuant to Rule 17Ad-10(e) under the 1934 Act a record of the total
number of Shares of the Trust, each Fund and each Class thereof, that are
authorized, based upon data provided to it by the Trust, and are issued
and outstanding and provide the Trust on a regular basis a report of the
total number of Shares that are authorized and the total number of Shares
that are issued and outstanding;
(b) Citibank shall maintain records of account for and provide reports and
statements to the Trust and Shareholders about the matters covered by this
Appendix E; and
(c) Citibank shall establish and maintain facilities and procedures
reasonably acceptable to the Trust for the safekeeping, control,
preparation and use of share certificates, check forms, and facsimile
signature imprinting devices. Citibank shall establish and maintain
facilities and procedures reasonably acceptable to the Trust for
safekeeping of all records maintained by Citibank pursuant to this
Agreement.
E-7 (Transfer Agency)
APPENDIX E -
TRANSFER AGENCY SERVICES
(d) In addition to other references herein regarding records to be
maintained regarding shareholders, transactions, accounts, and Trust
operations, Citibank shall maintain such records as (i) may be required by
the Laws applicable to Citibank and (ii) are prudently and customarily
maintained by third-party transfer agents for registered open-end
management investment companies.
9.1 SHARE CERTIFICATES (IF APPLICABLE)
Citibank shall issue (i) share certificates and (ii) replacement share
certificates for those share certificates alleged to have been lost,
stolen, or destroyed. Citibank may require the Shareholder to indemnify
the Trust and/or Citibank with respect to the issuance of replacement
share certificates.
9.2 NOTES AND CONDITIONS TO SHARE CERTIFICATES SERVICES
(a) The Trust agrees to furnish to Citibank a supply of blank share
certificates of each Fund and Class thereof that issues shares and, from
time to time, will renew such supply upon Citibank's request. Blank share
certificates shall be signed manually or by facsimile signatures of
officers of the Trust authorized to sign by the Organic Documents of the
Trust and, if required by the Organic Documents or the Trust's Board,
shall bear the Trust's seal or a facsimile thereof. Unless otherwise
directed by the Trust, Citibank may issue or register Share certificates
reflecting the manual or facsimile signature of an officer who has died,
resigned or been removed by the Trust.
(b) New Share certificates shall be issued by Citibank upon surrender of
outstanding Share certificates in the form deemed by Citibank to be
properly endorsed for transfer and satisfactory evidence of compliance
with all Applicable Law relating to the payment or collection of taxes.
Citibank shall forward Share certificates in "non-negotiable" form by
first-class or registered mail, or by whatever means Citibank deems
equally reliable and expeditious. Citibank shall not mail Share
certificates in "negotiable" form unless requested in writing by the Trust
and fully indemnified by the Trust to Citibank's satisfaction.
(c) Citibank shall place a stop notice against any certificate reported to
be lost or stolen and comply with all applicable federal regulatory
requirements for reporting such loss or alleged misappropriation. A new
certificate shall be registered and issued only upon the Shareholder's
pledge of a lost instrument bond or such other appropriate indemnity bond
issued by a surety company approved by Citibank.
10. OMNIBUS ACCOUNT TRANSACTION MONITORING
Citibank will perform the following services with respect to each Fund:
. Omnibus account identification
. Analysis of omnibus account trading activity to determine if arbitrage
opportunities exist triggering underlying account transaction data
request of an intermediary
E-8 (Transfer Agency)
APPENDIX E -
TRANSFER AGENCY SERVICES
. Managing the request and flow of underlying data
. Customized file feed/format translations
. Storage of underlying account transaction data
. Applying each Fund's market timing rules upon receipt of the underlying
account transaction data to flag violations
. Reporting of "red flag" violations to the applicable Fund and CCO
. Providing standard report package for on-going review and monitoring of
data
E-9 (Transfer Agency)
APPENDIX F -
SERVICE LEVEL STANDARDS AND OPERATING REPORTS
Each month, beginning on the first day of the first full calendar month after
the effectiveness of this Agreement, Citibank shall measure its service
delivery to the Trust with respect to each service level set forth below.
Within 10 business days after month end, Citibank shall report to the Trust the
service levels achieved for the Trust or for each Fund, as appropriate, as
measured below, and indicate whether Citibank has failed to achieve any service
level. Also, Citibank shall provide the Trust such operating reports at such
times as may be requested by the Trust pursuant to Section 11(a) of the
Agreement.
In the event the conditions set forth in Section 2(b) with respect to
uncorrected and material inaccuracies in reports to the Board have been met,
the Trust shall receive a service credit equal to 5% of the total fees earned
by Citibank for that month pursuant to this Agreement, excluding expenses, for
each such uncorrected material inaccuracy up to a maximum credit of 25% of
those total fees.
A. FUND ACCOUNTING
1. NAV ACCURACY - REPORTING TO TRANSFER AGENT
Number of accurate NAVs reported to the Transfer Agent by the Transfer
Agent's Designated Time divided by total number of NAVs required to report
to the Transfer Agent = 99.7%
. "NAV" for this purpose is class net assets divided by total class shares
outstanding and includes Dividend Factors. An NAV is accurate if, upon
recalculation, the change in reported extended class NAV (difference in
original NAV and new NAV) is less than a full xxxxx of the Recalculated
NAV and, with respect to Dividend Factors, any revision to previously
reported data does not require the Transfer Agent to reprocess
shareholder account data.
. Numerator and denominator include NAVs affected by "non-controllable
information"
. Each NAV error is treated as an NAV error only once (i.e., if an error
lasts more than one business day before it is discovered, it is treated
as one error and excluded from both the numerator and denominator in the
calculation after the first day).
. "Designated Time" is the time specified by the Transfer Agent and agreed
to by Citibank.
. "Dividend Factor" is the dividend rate per share for a dividend period.
2. NAV ACCURACY - REPORTING TO NASDAQ
Number of accurate NAVs reported to NASDAQ by the designated time divided by
number of total NAVs required to be reported to NASDAQ = 99.7%
Appendix F-1
. "NAV" for this purpose is class net assets divided by total class shares
outstanding and includes dividend factors. An NAV is accurate if, upon
recalculation, the change in NAV is less than a full xxxxx and, with
respect to dividend factors, any revision to previously reported data
does not require the Transfer Agent to reprocess shareholder account
data.
. Numerator and denominator include NAVs affected by non-controllable
information
. Each NAV error is treated as an NAV error only once (i.e., if an error
lasts more than one business day before it is discovered, it is treated
as one error and excluded from both the numerator and denominator in the
calculation after the first day).
. Designated time is the time specified by NASDAQ for reporting mutual
fund prices currently 6:00 p.m. ET.
B. ADMINISTRATION
1. TIMELINESS OF REGULATORY FILINGS
Number of regulatory filings transmitted to Federal government by deadline
divided by total number of regulatory filings transmitted..............100.0%
. "Regulatory filings" for this purpose include: Form N-1A (annual
updates), Rule 497(c), Form N-CSR, Form N-Q, Form 24f-2, Form N-PX, Form
N-SAR, Form 1120 RIC (based on extended date), Form 8913 (based on
extended date)
. "Deadline" determined by applicable Federal securities law
2. FINANCIAL STATEMENT ACCURACY
Number of annual, semi-annual and quarterly reports submitted for final
external review for which reviewer does not identify (either prior to or
following the filing) any material (determined by whether or not refilling
would be required if missed) changes required to be made prior to filing
that are the result of Citibank computational errors ................. 95.0%
3. FINANCIAL STATEMENT TIMELINESS
Number of annual, semiannual and quarterly reports submitted for external
review on a timely basis divided by total number of semiannual reports filed
with the SEC..........................................................100.0%
. "Timely basis" is within 15 business days of release to shareholders
4. TAX WORK TIMELINESS
Number of tax filings (Form 1120 RIC and Form 8913 based on extended date
for both) transmitted to Federal government by deadline (determined by
applicable Federal securities law) divided by total number of tax filings
transmitted...........................................................100.0%
Appendix F-2
Percentage of asset diversification and gross income test results
transmitted to tax auditors within 15 calendar days after the quarter
end....................................................................99.8%
5. EXPENSE MANAGEMENT AND PAYMENT TIMELINESS
Percentage of investment advisers contractual fees paid within 15 business
days...................................................................99.8%
Percentage of funds' fiscal year end expenses reported within 20 business
days...................................................................99.8%
6. BOARD MATERIALS AND MINUTES TIMELINESS
Percentage of regular Board materials packages delivered not less than seven
(7) days prior to scheduled meetings..................................100.00%
. Delays approved by the Chairman of the Board or due to requests for the
inclusion of materials from Trust Counsel, an Executive Officer or the
CCO shall permit Citibank not to meet the deadline set forth above.
Percentage of regular Board minutes packages delivered not more than
thirty (30) days after each regularly scheduled Board meeting ........100.00%
C. TRANSFER AGENCY
1. SAME-DAY PROCESSING OF ALL SHAREHOLDER FINANCIAL TRANSACTIONS
Number of shareholder financial transactions processed divided by the number
of shareholder financial transactions received........................ 99.5%
Number of shareholder dividends processed upon timely receipt of dividend
factor information divided by the number of shareholder accounts.......99.8%
Appendix F-3
. A transaction is defined as received on a business day if received prior
to the fund's closing. Late day trades are included in the next business
day's calculation.
. Financial transaction for this purpose is a purchase, redemption,
exchange, or transfer.
. Each transaction will only be counted once (i.e., if the transaction is
not processed until the 3rd business day before it is discovered, it is
treated as one missed transaction and excluded from both the numerator
and denominator in the calculation after the 1st day beyond standard).
2. PROCESSING OF ALL NON-FINANCIAL SHAREHOLDER TRANSACTIONS WITHIN 3 AND 5
BUSINESS DAYS (BEGINNING WITH THE DAY OF RECEIPT)
Number of non-financial shareholder transactions processed within 3 business
days divided by the number of non-financial shareholder transactions
received on a business day.............................................93.0%
Number of non-financial shareholder transactions processed within 5 business
days divided by the number of non-financial shareholder transactions
received on a business day............................................100.0%
. A transaction is defined as received on a business day if received prior
to 6:00 p.m. ET.
. Non-financial shareholder transaction for this purpose is an account
maintenance, new account establishment, transfer of assets request, or
returned mail.
. Each transaction will only be counted once (i.e. if the transaction is
not processed until the 3rd business day before it is discovered, it is
treated as one missed transaction and excluded from both the numerator
and denominator in the calculation after the 1st day beyond standard).
3. SHAREHOLDER STATEMENTS MAILED WITHIN 5 BUSINESS DAYS (BEGINNING WITH THE DAY
FOLLOWING THE LAST DAY COVERED BY THE STATEMENT)
Number of statements mailed within 5 business days divided by total Number
of statements..........................................................99.8%
. A statement is defined as mailed the day it is postmarked.
4. SHAREHOLDER DISTRIBUTION CHECKS MAILED WITHIN TWO BUSINESS DAYS (BEGINNING
WITH THE DISTRIBUTION PAYMENT DATE)
Number of distribution checks mailed within 2 business days divided by
total number of distribution checks....................................99.8%
. A distribution check is defined as mailed the day it is postmarked.
Appendix F-4
5. CALL ABANDONMENT RATE
Number of calls abandoned divided by total number of calls offered...... 2.0%
. A call is considered abandoned if a caller hangs up after more than 5
seconds
6. CONFIRMATION DELIVERIES
Number of financial confirmations mailed by the end of the next business day
after the transaction is processed..................................... 99.5%
7. CALLS ANSWERED WITHIN 15 SECONDS
Number of calls answered within 15 seconds divided by total number of
calls received..........................................................90.0%
. A call is answered when a representative picks up the line
Appendix F-5
APPENDIX G -
DEPENDENCIES
Citibank's delivery of the Services is dependent upon:
(a) The Trust and its Authorized Officers (i) responding to requests for
instructions promptly and (ii) with respect to Authorized Officers, executing
such documents as are required to be executed by such persons promptly,
provided they are given reasonable advance notice of the requirement to do the
same.
(b) All instructions from the Trust or its Authorized Officers are complete,
validated and authenticated in accordance with procedures in place from time to
time between the Trust and Citibank, and instructions that are amended or
cancelled by the Trust are done so in accordance with procedures agreed from
time to time between the Trust and Citibank.
(c) The communications systems operated by the Trust or its other service
providers in respect of activities that interface with the Services remaining
fully operational, to the extent that the operations of said system have an
impact on the ability of Citibank to provide the Services.
(d) The authority, accuracy, truth and completeness of any information or data
provided by or on behalf of the Trust by Authorized Officers or Third Party
Service Providers that is reasonably requested by Citibank or is otherwise
provided to Citibank in connection with the provision of the Services. Without
limitation of the foregoing, (i) market data, portfolio trade information and
custodian information and counterparty information required to validate
instructions from the Trust or perform any reconciliation service must be
available, authorized, complete and correct; (ii) when the Trust has to provide
information to allow pricing functions to be performed (e.g. fair market value
prices), this is done by the applicable cut-off time and (iii) when a Third
Party Service Provider (including an Adviser or any subadvisor) is required to
deliver any information or report, this is done by the applicable cut-off time.
(e) The validity and enforceability of all Third Party Contracts, and the Trust
and such third parties remaining in compliance with their respective
obligations thereunder, and the Trust taking all reasonable steps to enforce
the terms of such contracts, to the extent that such validity, enforceability
and compliance have an impact on the ability of Citibank to provide the
Services.
(f) The Trust informing Citibank on a timely basis of any modification to, or
replacement of, any Policy or Procedures of the Trust or any contract to which
it is a party that is relevant to the provision of the Services (in each case
to the extent not known to Citibank acting as administrator).
Appendix G-1
APPENDIX H-1 -
FORM OF QUARTERLY CERTIFICATION TO TRUST CCO
[TO BE DELIVERED QUARTERLY]
RE: RULE 38A-1 CERTIFICATION FOR THE FUND(S) (EACH A "FUND" AND COLLECTIVELY,
THE "FUNDS") LISTED ON THE FEE SCHEDULE
TO THE CHIEF COMPLIANCE OFFICER OF XXX FUNDS*
In connection with its Services Agreement (the "Services"), Citibank, N.A.
("Citibank") is providing this certification for the Fund(s) with respect to
the period Month DD, YYYY--Month DD, YYYY (the "Period") for the purpose of
assisting you in meeting the requirements of Rule 38a-1 under the Investment
Company Act of 1940, as amended ("Rule 38a-1").
In relation to the Services provided, Citibank represents that to the best of
its knowledge:
1) Citibank has adopted and implemented written policies and procedures (the
"Procedures") that are reasonably designed to prevent the violation of the
Federal Securities laws (as defined under Rule 38a-1) by the Funds.
2) With respect to the Funds in relation to the Services, to the best of my
knowledge after due inquiry, the following items listed on Exhibit B
represent compliance matters that have come to my attention during the
period referenced above and that may reasonably be deemed material (as
defined under Rule 38a-1) individually, or in the aggregate. I note that you
may have already been notified by Citibank of other compliance matters in
the due course of business. In addition, except as otherwise noted, there is
nothing that has come to my attention to indicate that the Procedures are
not effective in all material respects in relation to violations of the
Federal Securities Laws that such Procedures have been designed to prevent.
--------
* This communication is solely intended for use by the Chief Compliance Officer
to whom it is addressed and is not intended for use or reliance by any other
party. Please note that Citibank reserves the right to amend and supplement
its policies and procedures at its discretion, and that neither Citibank nor
I shall have any obligation to update or supplement this letter.
Sincerely,
--------------------------
Name, title
cc:
APPENDIX H-2 -
FORM OF QUARTERLY CERTIFICATION TO TRUST AML COMPLIANCE OFFICER
[TO BE DELIVERED QUARTERLY]
RE: ANTI-MONEY LAUNDERING PROGRAM CERTIFICATION FOR THE FUND(S) (EACH A "FUND"
AND COLLECTIVELY, THE "FUNDS") LISTED ON THE FEE SCHEDULE
TO THE ANTI-MONEY LAUNDERING COMPLIANCE OFFICER OF XXX FUNDS*
In an effort to assist the xx Funds (the "Fund") in compliance with its
Anti-Money Laundering requirements, Citibank, N.A. ("Citibank") is providing
this certification with respect to the period Month DD, YYYY--Month DD, YYYY
(the "Period").
Citibank represents that to the best of its knowledge:
1) Citibank currently provides services to [Fund Name] Fund (the "Funds")
listed on the Fee Schedule, pursuant to an Agreement between Citibank and
the Funds (the "Services"). We are providing this letter to you in your
capacity as the Anti-Money Laundering Compliance Officer for the Funds with
respect to the period [Month dd, yyyy] to [Month dd, yyyy] in order to
assist you in meeting the requirements of Rule 38a-1 under the Investment
Company Act of 1940, as amended ("Rule 38a-1").
2) Citibank's transfer agency has an anti-money laundering program ("the
Program") that includes, to the extent reasonable and practical: (A) written
policies, procedures, and controls to detect and prevent money laundering;
(B) a designated compliance officer with authority to oversee the Program;
(C) an ongoing training Program for Citibank employees; and (D) scheduled
regular audits to test the Program.
3) The Program meets all current requirements required of Citibank with respect
to the Funds.
4) For the Period with respect to the Fund, Citibank has not encountered any
material violations of the Program.
5) Citibank has a policy of communicating, upon request, to the Funds'
designated Anti-Money Laundering Compliance Officer, those items required to
be communicated by Citibank.
6) Citibank provides a copy of the Program to the Funds' designated Anti-Money
Laundering Compliance Officer, and will provide copies of any future
material amendments.
--------
* This communication is solely intended for use by the Fund's designated
Anti-Money Laundering Compliance Officer to whom it is addressed and is not
intended for use or reliance by any other party. Please note that Citibank
reserves the right to amend and supplement its policies and procedures at its
discretion, and that neither Citibank nor I shall have any obligation to
update or supplement this letter.
Sincerely,
-------------------------
Name, title
cc:
APPENDIX H-3 -
FORM OF PERIODIC CERTIFICATION TO TRUST EXECUTIVE OFFICERS
[TO BE DELIVERED IN CONNECTION WITH EXECUTIVE OFFICERS' EXECUTION OF SOX
CERTIFICATIONS INCIDENT TO TRUST SEC FILINGS REQUIRED CERTIFICATION UNDER THE
SOX ACT]
RE: XXXXXXXX-XXXXX [N-Q OR N-CSR] CERTIFICATION FOR THE FUND(S) (EACH A "FUND"
AND COLLECTIVELY, THE "FUNDS") LISTED ON THE FEE SCHEDULE
TO THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF XXX FUNDS*
In connection with its Services Agreement (the "Agreement"), Citibank, N.A.
("Citibank") is providing this sub-certification for the Fund(s) with respect
to the period Month DD, YYYY--Month DD, YYYY (the "Period") for the purpose of
assisting you with the certification requirements of the Xxxxxxxx-Xxxxx Act of
2002 in connection with Form [N-Q or N-CSR] (the "Report") to be filed by the
Fund(s) with the Securities and Exchange Commission for the Period.
In relation to the services provided by Citibank under the Agreement, Citibank
represents that to the best of its knowledge:
1. Citibank is responsible for the design and operation of Citibank's internal
controls relating to the services that it provides for the Fund(s).
2. For the Period, Citibank is not aware of any significant deficiencies and
material weaknesses in the design or operation of internal controls over
financial reporting for which Citibank is responsible under the Agreement
that are likely to adversely affect the Fund's ability to record, process,
summarize or report financial information.
3. For the Period, there have been no material changes with respect to the
design or operation of the internal controls of Citibank related to the
services provided by Citibank under the Agreement.
4. For the Period, Citibank is not aware of any instances of fraud involving
employees of Citibank who have significant roles with respect to the Fund's
internal controls over financial reporting.
SINCERELY,
-------------------------
NAME, TITLE
CITIBANK, N.A.
APPENDIX H-4 -
LIST OF REPORTS TO TRUST CCO*
REPORTS FREQUENCY
-------------------------------------- -------------------------------------
CCO Summary Letter Quarterly
38a-1 Program Certifications Quarterly
Notifications regarding compliance When Applicable
and control matters
Notifications regarding items When Applicable
escalated to the Fund's portfolio
manager by the portfolio compliance
monitoring process
Notifications regarding items When Applicable
escalated to the Fund's AML
Compliance Officer by AML
monitoring processes
Notifications regarding items When Applicable
escalated to the Fund's designated
contact by the excessive trade
monitoring process
FUND ADMINISTRATION
Board meeting materials At least one week before the meeting
Compliance calendars Following any update
Fund documents Post-board meeting
Shareholder documents (print and
electronic) When distributed to shareholders
Xxxxxxxx-Xxxxx certification
support binder After N-CSR and N-Q filing dates
Blue Sky permit summary Annually
Weekly portfolio compliance summary Weekly
Asset diversification test
worksheet Quarterly
Gross income test worksheet Annually
Performance summary Monthly
FUND ACCOUNTING
Fair Market Value Pricing Report Weekly
Revised NAV Memorandum Following any NAV error > $.01
Aged Cash and Unit Breaks Report Monthly
InvestOne or Mulitfonds reports,
real-time and historical Accessible 24/7
SAS #70 Report Annually
TRANSFER AGENCY
Excessive Trading Log Monthly
Dealer Gain/Loss Worksheet Quarterly
AML Red Flag Report Monthly
SAS #70 Report Annually
--------
* The listed reports assume the delivery of fund administration, fund
accounting and transfer agency services as set forth in Appendices C, D and
E. To the extent such Services are terminated for any Fund, Citibank will
discontinue delivery of any related reports.
