EX-99.h.2.
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made as of _________ __, 2007,
(the "Effective Date") between Citi Fund Services Ohio, Inc., formerly known as
BISYS Fund Services Ohio, Inc. ("Citi"), an Ohio corporation having a place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 and Aberdeen Funds (the
"Company") a Delaware statutory trust, having a place of business at 5 Tower
Bridge, 000 Xxxx Xxxxxx Xxxxx Xxxxx 000, Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
WHEREAS, the Company desires that Citi perform fund accounting and transfer
agency services for the investment portfolios of the Company listed on Schedule
A to this Agreement, as well as such additional investment portfolios as
hereafter may be established by the Company from time to time (collectively, the
"Funds");
WHEREAS, Citi is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in exchange for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Company and Citi hereby
agree as follows:
1. Retention of Citi.
The Company hereby retains Citi to act as fund accountant and transfer
agent of the Company and the Funds, and to furnish the Company and the Funds
with fund accounting and transfer agency services as set forth in Sections 2(a)
through (b) below. Citi will perform the services upon the terms set forth in
this Agreement and the Schedules to this Agreement.
Citi shall, for all purposes herein, be deemed to be an independent
contractor and, except as otherwise expressly provided or authorized, shall have
no authority to act for or represent the Company or Funds in any way, and shall
not be deemed an agent of the Company or any Funds.
2. Services.
(a) Fund Accounting Services. Citi shall perform for the Company the fund
accounting services set forth in Schedule B to this Agreement. Citi
shall also perform such special accounting services, and furnish such
reports, for the Company and the Funds to the extent agreed upon by
the parties from time to time, for which the Company will pay Citi the
amounts agreed upon between them.
(b) Transfer Agency Services. Citi shall perform for the Company the
transfer agency services set forth in Schedule C to this Agreement.
Citi also agrees to perform for the Company such special transfer
agency services, and furnish such reports, for the Company and the
Funds to the extent agreed upon by the parties from time to time, for
which the Company will pay Citi the amounts agreed upon between them.
Citi shall perform such other services for the Company or the Funds that
are mutually agreed upon by the parties from time to time, for which the Company
will pay Citi the amounts agreed upon between them, from time to time. Except as
explicitly set forth herein, Citi shall only perform additional services as are
set forth in an amendment to this Agreement, in consideration of such fees as
the parties agree.
Citi may use one or more third parties to perform some or all of its
obligations under this Agreement. Citi shall be fully responsible for the acts
of such third parties and shall not be relieved of any of its responsibilities
under this Agreement by virtue of the use of such third parties.
3. Allocation of Charges and Expenses.
Citi shall furnish at its own expense the executive, supervisory and
clerical personnel necessary to perform its obligations under this Agreement.
Citi shall pay all compensation, if any, of officers and trustees of the Company
who are affiliated persons of Citi or any affiliated entity of Citi; provided,
however, that unless otherwise specifically provided, Citi shall not be
obligated to pay the compensation of any employee or agent of the Company (who
is not a Citi employee) retained by the Board of Trustees of the Company (the
"Board") to perform services on behalf of the Company.
The Company assumes and shall pay or cause to be paid all other expenses of
the Company not otherwise allocated herein, including, without limitation,
organization costs, taxes, expenses for Company legal and auditing services, the
expenses of preparing (including typesetting), printing and mailing reports,
prospectuses, statements of additional information, proxy solicitation material
and notices to existing shareholders of record of the Funds ("Shareholders"),
all expenses incurred in connection with issuing and redeeming shares of
beneficial interest in the Funds ("Shares"), the cost of custodial services, the
cost of initial and ongoing registration of the Shares under Federal and state
securities laws, fees and out-of-pocket expenses of trustees who are not
affiliated persons of Citi or any affiliate of Citi (fees for other "interested
trustees" may be paid by parties other than the Company), insurance, interest,
brokerage costs, litigation and other extraordinary or nonrecurring expenses,
and all fees and charges of investment advisers.
4. Fees and Eixpenses.
(a) The Company shall pay Citi for the services to be provided by Citi
under this Agreement in accordance with, and in the manner set forth
in, Schedule D to this Agreement. Fees for any additional services to
be provided by Citi pursuant to an amendment to any of Schedules B or
C shall be subject to mutual agreement at the time such amendment is
proposed.
(b) In addition to paying Citi the fees set forth in Schedule D, the
Company agrees to reimburse Citi for all of its actual out-of-pocket
expenses reasonably incurred in providing services hereunder,
including without limitation:
(i) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred in communication
with the Company or the Company's investment adviser or
custodian, broker-dealers, shareholders or others as required for
Citi to perform the services to be provided hereunder;
(ii) The cost of electronic storage of Company records and other
materials;
(iii) All freight and other delivery and bonding charges incurred in
delivering materials to and from the Company, its investment
advisers and custodian;
(iv) All printing, production (including graphics support, copying,
and binding) and distribution expenses incurred in relation to
Board meeting materials, tax forms, statements of average cost,
daily confirmations, periodic statements, new account letters and
maintenance letters;
(v) Check and payment processing fees;
(vi) XXX custody and other related fees;
(vii) NSCC and related costs;
(viii) Sales taxes;
(ix) Costs of shareholder correspondence;
(x) Costs of tax data services;
(xi) Costs of rating agency services; and
(xii) Any expenses incurred at the written direction of an officer of
the Company; provided however, that such officer is not an
officer or employee of Citi or its affiliates.
(c) In addition, Citi shall be entitled to receive the following
miscellaneous fees and charges:
(i) Ad hoc reporting fees billed, when mutually agreed upon,
according to applicable rate schedules;
(ii) Fees for pricing information used in connection with pricing the
securities and other investments of each Fund, provided that the
Fund shall not be charged an amount greater than the amount the
Fund would be charged if it obtained the information directly
from the relevant vendor or vendors, including costs incurred by
Citi to Fair Value Information Vendors (as defined in Schedule B)
with respect to the provision of fair value pricing information
to Citi for use in valuing the portfolio holdings of a specific
Fund or Funds that the Company designates as being subject to
fair value determinations and for which services are to be
provided by Citi hereunder (such costs shall be incurred at the
discounted group rate made available to Citi clients, if
applicable);
(iii) A fee for managing and overseeing the report, print and mail
functions performed by Citi using third-party vendors, not to
exceed $.04 per page for Board meeting materials, tax forms and
statements of average cost, and $.03 per page for daily
confirmations, periodic statements, new account letters and
maintenance letters; fees for programming in connection with
creating or changing the forms of statements, billed at a
mutually agreed upon rate; and costs for postage, couriers, stock
computer paper, computer disks, statements, labels, envelopes,
checks, reports, letters, tax forms, proxies, notices or other
forms of printed material (including the costs of preparing and
printing all printed materials) which shall be required for the
performance of the services to be provided hereunder;
(iv) Fees and expenses associated with providing the "AML Services,"
as defined in Section 23 of this Agreement, and as set forth in
further detail on Schedule D;
(v) System development fees, billed at a mutually agreed upon rate as
approved by the Company, and all systems-related expenses, as
agreed upon in advance, associated with the provision of special
reports and services;
(vi) Fees for development of any custom interfaces, billed at a
mutually agreed upon rate;
(vii) Interactive Voice Response System fees, charged according to
Citi's standard rate schedule, and applicable to the level of
service (e.g., basic, transaction, premium) selected; and
(viii) In the event that Citi is requested or authorized by the
Company or is required by governmental regulation, summons,
subpoena, investigation, examination or other legal or regulatory
process to produce documents or personnel with respect to
services provided by Citi to the Company or any Fund, the Company
will, so long as Citi is not the subject of the investigation or
proceeding in which the information is sought, pay Citi for its
professional time (at its standard billing rates) and reimburse
Citi for its out-of-pocket expenses (including reasonable
attorneys fees) incurred in responding to such requests or
requirements.
(ix) Blue sky check processing and payment fees.
All rights of compensation under this Agreement for services
performed and for expense reimbursement and for payment of
miscellaneous fees and charges shall survive the termination of
this Agreement.
(d) Citi shall use reasonable efforts to notify the Company of changes in
material, substantial vendors and subcontractors that directly impact
the Funds' Rule 38a-1 compliance procedures; provided, however, that
Citi shall have no obligation to notify the Company of any changes
that would not result in a change to the Funds' control procedures.
5. Effective Date.
This Agreement shall become effective as of the Effective Date.
6. Term; Liquidated Damages.
(a) This Agreement shall continue in effect for an initial term of three
years from the Effective Date (the "Initial Term"). Thereafter, unless
otherwise terminated pursuant to this Agreement, this Agreement shall
be renewed automatically for successive one year periods ("Rollover
Periods"). This Agreement may be terminated only (i) by provision of a
written notice of non-renewal provided at least 90 days prior to the
end of the Initial Term or any Rollover Period (which notice of
non-renewal will cause this Agreement to terminate as of the end of
the Initial Term or such Rollover Period, as applicable), (ii) by
mutual agreement of the parties, or (iii) for "cause," as defined
below, upon the provision of 30 days advance written notice by the
party alleging cause. After the Initial Term, this Agreement may be
terminated by either party at any time without penalty upon the
provision of a minimum of six (6) months' prior written notice to the
other party.
(b) For purposes of this Section 6, "cause" shall mean (a) a material
breach of this Agreement that has not been remedied within 30 days
following written notice of such breach from the non-breaching party;
(b) a final, unappealable judicial, regulatory or administrative
ruling or order in which the party to be terminated has been found
guilty of criminal or unethical behavior in the conduct of its
business; or (c) financial difficulties on the part of the party to be
terminated which are evidenced by the authorization or commencement
of, or involvement by way of pleading, answer, consent or acquiescence
in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law,
other than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors.
(c) Notwithstanding the foregoing termination provisions, following any
such termination, in the event that Citi in fact continues to perform
any one or more of the services contemplated by this Agreement (or any
Schedule or exhibit to this Agreement) with the consent of the
Company, the provisions of this Agreement, including without
limitation the provisions dealing with compensation and
indemnification, shall continue in full force and effect. Fees and
out-of-pocket expenses incurred by Citi but unpaid by the Company upon
such termination shall be immediately due and payable upon and
notwithstanding such termination. The Company shall pay to Citi, in
addition to the fees and expenses provided in Sections 3 and 4 of this
Agreement, the amount of all of Citi's reasonable cash disbursements
in connection with Citi's activities in effecting such termination,
including without limitation, the delivery to the Company, its
investment adviser and/or other parties of the Company's property,
records, instruments and documents, such amount to be paid on or
before the date of such termination.
(d) If, for any reason other than (i) non-renewal, (ii) termination by the
Administrator upon the provision of six (6) month's prior written
notice, after the Initial Term, (iii) mutual agreement of the parties
or (iv) "cause", the Company terminates this Agreement, or the Company
terminates Citi's services, or Citi is replaced as service provider to
the Company or some or all of the Funds, then the Company shall make a
one-time cash payment to Citi, in consideration of the fee structure
and services to be provided under this Agreement, equal to the balance
that would be due Citi for its services under this Agreement during
the lesser of (x) the balance of the Initial Term or any applicable
Rollover Period, as the case may be, or (y) 6 months, if the Company
is terminating based on establishing, in good-faith, dissatisfaction
with the quality of the provision of Services, or 12 months, if the
Company is terminating for any other reason, and assuming, in all
instances, for purposes of the calculation of the one-time payment
that the fees that would be earned by Citi for each month would be
based upon the average fees payable to Citi monthly during the 12
months before the date of the event that triggers such payment.
(e) In the event that the Company or any Fund is, in part or in whole,
liquidated, dissolved, merged into a third party, acquired by a third
party, or involved in any other transaction that materially reduces
the assets and/or accounts serviced by Citi pursuant to this Agreement
during the Initial Term, or after the Initial Term, if the Company
fails to provide a minimum of six (6) months' advance written notice,
the liquidated damages provision set forth above shall be applicable.
(f) If one of the events described above is partial (e.g., a termination
of Citi as provider of some but not all of the services set forth in
this Agreement, or a liquidation of some but not all of the Funds),
the liquidated damages amount payable by the Company shall be
appropriately adjusted on a pro rata basis.
(g) Any liquidated damages amount payable to Citi shall be paid by the
Company on or before the date of the event that triggers the payment
obligation.
(h) The parties further acknowledge and agree that, upon the occurrence of
any of the events described above: (i) a determination of actual
damages incurred by Citi would be extremely difficult, and (ii) the
liquidated damages payment described above is intended to adequately
compensate Citi for damages incurred and is not intended to constitute
any form of penalty.
7. Standard of Care; Force Majeure; Limitation of Liability.
(a) Citi shall use reasonable professional diligence in the performance of
services under this Agreement, but shall not be liable to the Company
for any action taken or omitted by Citi in the absence of bad faith,
willful misfeasance, negligence or reckless disregard by it of its
obligations and duties. The duties of Citi shall be confined to those
expressly set forth in this Agreement, and no implied duties are
assumed by or may be asserted against Citi under this Agreement.
(b) Notwithstanding any other provision of this Agreement, Citi assumes no
responsibility hereunder, and shall not be liable for, any damage,
loss of data, delay or any other loss whatsoever caused by events
beyond Citi's control. Events beyond Citi's control include, without
limitation, force majeure events, such as natural disasters, actions
or decrees of governmental bodies, and communication lines failures
that are not the fault of either party. In the event of force majeure,
computer or other equipment failures or other events beyond its
control, Citi shall follow applicable procedures in its disaster
recovery and business continuity plan and use all commercially
reasonable efforts to minimize any service interruption.
(c) Citi shall provide the Company, at such times as the Company may
reasonably request, copies of reports rendered by independent auditors
on the internal controls and procedures of Citi relating to the
services provided by Citi under this Agreement.
(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL CITI, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR EXEMPLARY,
PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES,
INCLUDING LOST REVENUE, LOST PROFITS, AND LOST OR DAMAGED DATA, EACH
OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES, REGARDLESS OF
WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER A PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8. Legal Advice.
Citi may notify the Company if Citi reasonably determines that it is in
need of the advice of counsel to the Company with regard to Citi's
responsibilities and duties pursuant to this Agreement. If the advice Citi seeks
relates to its responsibilities and duties to more than one of its clients, Citi
shall be responsible for seeking advice of its counsel or other counsel and
shall be liable for payment of such counsel. Citi may rely upon the advice of
counsel to the Company; however, this Agreement shall not obligate counsel to
the Company to render such advice. After so notifying the Company, if Citi does
not obtain the advice of counsel to the Company within a reasonable period of
time, Citi shall be entitled to seek, receive and act upon advice of legal
counsel of its reasonable choosing at the reasonable expense of the Company
unless relating to a matter involving Citi's willful misfeasance, bad faith,
negligence or reckless disregard of Citi's responsibilities and duties
hereunder. Citi shall in no event be liable to the Company or any Fund or any
shareholder or beneficial owner of the Company for any action reasonably taken
pursuant to legal advice rendered in accordance with this paragraph.
9. Instructions / Certain Procedures, etc.
(a) Citi shall be protected in acting upon any document that it reasonably
believes to be genuine and to have been signed or presented by the
proper person or persons. Citi will not be held to have notice of any
change of authority of any officers, employees or agents of the
Company until receipt of actual notice thereof from the Company.
(b) Subject to Section 23(b) of this Agreement, whenever Citi is requested
or authorized to take action hereunder pursuant to instructions from a
shareholder, or a properly authorized agent of a shareholder
("shareholder's agent"), concerning an account in a Fund, Citi shall
be entitled to rely upon any certificate, letter or other instrument
or communication (including electronic mail), reasonably believed by
Citi to be genuine and to have been properly made, signed or
authorized by an officer or other authorized agent of the Company or
by the shareholder or shareholder's agent, as the case may be, and
shall be entitled to receive as conclusive proof of any fact or matter
required to be ascertained by it hereunder a certificate signed by an
officer of the Company or any other person authorized by the Board or
by the shareholder or shareholder's agent, as the case may be.
(c) As to the services to be provided hereunder, Citi may rely
conclusively upon the terms of the relevant then-current Prospectus
and Statement of Additional Information of the Company, to the extent
that such services are described therein unless Citi receives written
instructions to the contrary in a timely manner from the Company.
(d) The parties may amend any procedures adopted, approved or set forth
herein by written agreement as may be appropriate or practical under
the circumstances, and Citi may reasonably assume that any special
procedure which has been approved by an executive officer of the
Company (other than an officer or employee of Citi or its affiliates)
does not conflict with or violate any requirements of the Company's
Declaration of Trust, By-Laws or then-current Prospectus.
(e) The Company acknowledges receipt of a copy of Citi's policy related to
the acceptance of trades for prior day processing (the "Citi As-of
Trading Policy"). Citi may amend the Citi As-of Trading Policy from
time to time in its sole discretion, but will provide prompt notice to
the Company of such amendment. Citi may apply the Citi As-of Trading
Policy whenever applicable, unless Citi agrees in writing to process
trades according to such other as-of trading policy as may be adopted
by the Company and furnished to Citi by the Company.
(f) The Company acknowledges and agrees that deviations from Citi's
written transfer agent compliance procedures may involve a substantial
risk of loss. In the event an authorized representative of the Company
(other than an officer or employee of Citi or its affiliates) requests
that an exception be made from any written compliance or transfer
agency procedures adopted by Citi, or any requirements of the AML
Program (as defined in Section 16 of this Agreement), Citi may in its
sole discretion determine whether to permit such exception. In the
event Citi determines to permit such exception, the same shall become
effective when set forth in a written instrument executed by an
authorized representative of the Company (other than an officer or
employee of Citi or its affiliates) and delivered to Citi (an
"Exception"); provided that an Exception concerning the requirements
of the Company's AML Program shall also be authorized by the Company's
AML Compliance Officer (as defined in Section 16 of this Agreement).
An Exception shall be deemed to remain effective until the relevant
instrument expires according to its terms (or if no expiration date is
stated, until Citi receives written notice from the Company that such
instrument has been terminated and the Exception is no longer in
effect). Notwithstanding any provision in this Agreement that
expressly or by implication provides to the contrary, as long as Citi
acts in good faith, Citi shall have no liability for any loss,
liability, expenses or damages to the Company resulting from the
Exception, and the Company shall indemnify Citi and hold Citi harmless
from any loss, liability, expenses (including reasonable attorneys
fees) and damages resulting to Citi therefrom.
(g) The Company instructs and authorizes Citi to provide information
pertaining to the Funds' investments to Fair Value Information Vendors
(as defined in Schedule B) in connection with the fair value
determinations made under the Company's Valuation Procedures (as
defined in Schedule B) and other legitimate purposes related to the
services to be provided hereunder. The Company acknowledges that while
Citi's services related to fair value pricing are intended to assist
the Company and its Board in its obligations to price and monitor
pricing of Fund investments, Citi does not assume responsibility for
the accuracy or appropriateness of pricing information or
methodologies, including any fair value pricing information or
adjustment factors.
10. Indemnification.
(a) The Company shall indemnify and hold harmless Citi, and its
affiliates, subsidiaries and parents, and their employees, agents,
directors, officers and nominees from and against any claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses (collectively,
"Losses") resulting directly and proximately from Citi's performance
of services under this Agreement or based, if applicable, upon Citi's
reasonable reliance on information, records, instructions or requests
pertaining to services hereunder, that are given or made to Citi by
the Company, the investment adviser, or other authorized agents of the
Company; provided that this indemnification shall not apply to actions
or omissions of Citi involving bad faith, willful misfeasance,
negligence or reckless disregard by Citi of its obligations and duties
under this Agreement.
(b) Citi shall indemnify, defend, and hold the Company and its affiliates,
subsidiaries and parents, and its trustees, officers, agents and
nominees harmless from and against Losses resulting directly and
proximately from Citi's willful misfeasance, bad faith or negligence
in the performance of, or the reckless disregard of, its duties or
obligations hereunder; provided that this indemnification shall not
apply to actions or omissions of the Company involving bad faith,
willful misfeasance, negligence or reckless disregard by the Company
of its obligations and duties.
(c) In order that the indemnification provisions contained herein shall
apply, if in any case a party may be asked to indemnify or hold the
other party harmless, the other party shall fully and promptly advise
the indemnifying party in writing of all pertinent facts concerning
the situation in question. The party seeking indemnification will use
all reasonable care to identify and notify the indemnifying party in
writing promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification
against the indemnifying party, but failure to do so in good faith
shall not affect the rights hereunder except to the extent the
indemnifying party is materially prejudiced thereby. As to any matter
eligible for indemnification, an indemnified party shall act
reasonably and in accordance with good faith business judgment and
shall not effect any settlement or confess judgment without the
consent of the indemnifying party, which consent shall not be withheld
or delayed unreasonably.
(d) The indemnifying party shall be entitled to participate in at its own
expense or, if it so elects, to assume the defense of any claim or
suit subject to this indemnity provision. If the indemnifying party
elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by it and reasonably satisfactory to the
indemnified party. In the event that the indemnifying party elects to
assume the defense of any suit and retain counsel, the indemnified
party shall bear the fees and expenses of any additional counsel
retained by it. An indemnifying party shall not effect any settlement
without the consent of the indemnified party (which shall not be
withheld or delayed unreasonably by the indemnified party) unless such
settlement imposes no liability, responsibility or other obligation
upon the indemnified party and relieves it of all fault. If the
indemnifying party does not elect to assume the defense of suit, it
will reimburse the indemnified party for the reasonable fees and
expenses of counsel retained by the indemnified party and reasonably
satisfactory to the indemnifying party. The indemnity and defense
provisions set forth herein shall survive the termination of this
Agreement.
(e) The provisions of this Section 10 are subject to the provisions of
Section 9 of this Agreement.
11. Record Retention and Confidentiality.
Citi shall keep and maintain on behalf of the Company all books and records
which are customary or which are required to be kept in connection with Citi's
services pursuant to applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act"). Citi further agrees that all such books and
records shall be the property of the Company and to make such books and records
available for inspection by the Company at reasonable times or by the Securities
and Exchange Commission (the "Commission") promptly.
Citi shall otherwise keep confidential all books and records relating to
the Fund and its shareholders, except when (i) disclosure is required by law,
(ii) Citi is advised by counsel that it may incur liability for failure to make
a disclosure, (iii) Citi is requested to divulge such information by
duly-constituted authorities or court process, (iv) Citi is requested to make a
disclosure by a shareholder or shareholder's agent with respect to information
concerning an account as to which such shareholder has either a legal or
beneficial interest and a legal right to such information at such time
consistent with the Company's Declaration of Trust, Prospectus and applicable
law, or (v) as requested or authorized by the Company (including pursuant to its
policies and procedures). Citi shall provide the Company with reasonable advance
notice of disclosure pursuant to items (i) - (iii) of the previous sentence, to
the extent reasonably practicable. The provisions of this Section 11 are subject
to the provisions of Section 23(b) of this Agreement (Anti-Money Laundering
Provisions).
12. Reports.
Citi shall furnish to the Company and to its properly-authorized auditors,
investment advisers, examiners, distributors, broker-dealers, underwriters,
salesmen, insurance companies and others designated by the Company in writing,
such reports at such times as are prescribed pursuant to this Agreement (or
schedules to this Agreement), or as subsequently agreed upon by the parties
pursuant to an amendment to this Agreement (or schedules to this Agreement). The
Company agrees to examine each such report or copy provided to it promptly and
will report or cause to be reported to Citi any errors or discrepancies therein.
13. Rights of Ownership.
All computer programs, systems and procedures employed or developed by
Citi, or on behalf of Citi by system providers or vendors used by Citi, to
perform services required to be provided by Citi under this Agreement are the
property of Citi. All records and other data maintained hereunder, excepting
such computer programs, systems and procedures, are the exclusive property of
the Company. All such records and other data which is the property of the
Company shall be furnished to the Company in appropriate form as soon as
practicable after termination of this Agreement for any reason.
14. Return of Records.
Citi shall promptly upon the Company's demand, turn over to the Company and
cease to retain Citi's files, records and documents created and maintained by
Citi pursuant to this Agreement which are no longer needed by Citi in the
performance of its services or for its legal protection. If the Company has not
requested that its files, records and documents created and maintained by Citi
pursuant to this Agreement be turned over to the Company, such documents and
records shall be retained by Citi, at the expense of the Company, for six (6)
years from the date of creation. At the end of such six-year period, such
records and documents shall be turned over to the Company at the Company's
expense unless the Company authorizes in writing the destruction of such records
and documents.
15. Bank Accounts.
Citi is hereby granted such power and authority as may be necessary to
establish one or more bank accounts for the Company with such bank or banks as
are acceptable to the Company, as may be necessary or appropriate from time to
time in connection with the transfer agency services to be performed hereunder.
The Company shall be deemed to be the customer of such bank or banks for
purposes of such accounts. To the extent that the performance of such services
hereunder shall require Citi to disburse amounts from such accounts in payment
of dividends, redemption proceeds or for other purposes hereunder, the Company
shall provide such bank or banks with all instructions and authorizations
necessary for Citi to effect such disbursements.
16. Representations and Warranties of the Company.
The Company represents and warrants to Citi that:
(a) It is a trust duly formed and validly existing under the laws of the
jurisdiction of its formation, and has full capacity and authority to
enter into this Agreement and to carry out its obligations hereunder;
(b) It has all necessary authorizations, licenses and permits to carry out
its business as currently conducted;
(c) It is in compliance in all material respects with all laws and
regulations applicable to its business and operations;
(d) This Agreement has been duly authorized by the Company and, when
executed and delivered by the Company, will constitute a legal, valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the right and remedies of creditors and secured parties;
(e) By virtue of the Company's Declaration of Trust, shares of each Fund
which are redeemed by the Company may be resold by the Company;
(f) (i) The Company has adopted a written anti-money laundering program,
which has been provided to Citi pursuant to Section 19 of this
Agreement (the "AML Program"), and has appointed an officer of the
Company as the Company's anti-money laundering compliance officer
("AML Compliance Officer"), (ii) the AML Program and the designation
of the AML Officer have been approved by the Board, (iii) the
delegation of certain services thereunder to Citi, as provided in
Section 23 of this Agreement, has been approved by the Board, and (iv)
the Company will submit any material amendments to the AML Program to
Citi for Citi's review and consent prior to adoption, in accordance
with Section 21 of this Agreement; and
(g) The Company has entered into a confidentiality agreement, in
accordance with U.S. Department of the Treasury, Financial Crimes
Enforcement Network ("FinCEN") release FIN-2006-G013, dated October 4,
2006, with Funds' investment adviser, and the Company hereby
authorizes Citi, acting in its capacity as transfer agent, to provide
the investment adviser with information related to shareholder
Suspicious Activity Reports, upon request.
17. Representations and Warranties of Citi.
Citi represents and warrants to the Company that:
(a) It is a corporation duly incorporated and validly existing under the
laws of the state of Ohio, and has full capacity and authority to
enter into this Agreement and to carry out its obligations hereunder;
(b) It has all necessary authorizations, licenses and permits to carry out
its business as currently conducted;
(c) It is, and shall continue to be, in compliance in all material
respects with all provisions of law applicable to it in connection
with its services hereunder, including Section 17A(c) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(d) The various procedures and systems which it has implemented with
regard to safekeeping from loss or damage attributable to fire, theft
or any other cause of the blank checks, records, and other data of the
Company and Citi's equipment, facilities, and other property used in
the performance of its obligations hereunder are reasonable and
adequate and that it will make such changes therein from time to time
as are reasonably required for the secure performance of its
obligations hereunder; and
(e) This Agreement has been duly authorized by Citi and, when executed and
delivered by Citi, will constitute a legal, valid and binding
obligation of Citi, enforceable against Citi in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the right and remedies
of creditors and secured parties.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL REPRESENTATIONS AND
WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY,
SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
(IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) CONCERNING THE
SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO THE SERVICES PROVIDED UNDER THIS
AGREEMENT BY CITI ARE COMPLETELY DISCLAIMED.
18. Insurance.
Citi shall maintain a fidelity bond covering larceny and embezzlement and
an insurance policy with respect to directors and officers errors and omissions
coverage, in amounts that are appropriate in light of its duties and
responsibilities hereunder. Upon the request of the Company, Citi shall provide
evidence that coverage is in place. Citi shall notify the Company should its
insurance coverage with respect to professional liability or errors and
omissions coverage be reduced or canceled. Such notification shall include the
date of cancellation or reduction and the reasons therefore. Citi shall notify
the Company promptly of any material claims against it with respect to services
performed under this Agreement, whether or not they may be covered by insurance,
and shall notify the Company promptly should the total outstanding claims made
by Citi under its insurance coverage materially impair, or threaten to
materially impair, the adequacy of its coverage.
19. Information to be Furnished by the Company and Funds.
The Company agrees to furnish to Citi the following, upon Citi's request,
each as amended and current as of the Effective Date:
(a) A copy of its organizational document and any amendments thereto;
(b) A copy of the Company's By-laws and any amendments thereto;
(c) A copy of the resolutions of the Board regarding (i) approval of this
Agreement and authorization of a specified officer of the Company to
execute and deliver this Agreement and authorization for specified
officers of the Company to instruct Citi hereunder; and (ii)
authorization of Citi to act as fund accountant and transfer agent for
the Company;
(d) A certified list of all officers of the Company, with the Company's
AML Compliance Officer included among the officers therein, and any
other persons (who may be associated with the Company or its
investment advisor), together with specimen signatures of those
officers and other persons who (except as otherwise provided herein to
the contrary) shall be authorized to instruct Citi in all matters;
(e) Copies of each of the following documents employed by the Company:
(i) Prospectuses and Statement of Additional Information;
(ii) Distribution Agreement; and
(iii) All other forms commonly used by the Company or its distributor
with regard to their relationships and transactions with
shareholders of the Funds.
(f) A certificate as to shares of the Company authorized, issued, and
outstanding as of the Effective Date and as to receipt of full
consideration by the Company for all shares outstanding;
(g) Contact information for the Company's financing agent, if share-class
financing is applicable;
(h) A copy of the Company's written AML Program, including any related
policies and procedures; and
(i) The Company's Valuation Procedures as defined in Schedule B.
20. Information Furnished by Citi.
Citi agrees to furnish to the Company, upon its request, evidence of the
following:
(a) Approval of this Agreement by Citi, and authorization of a specified
officer of Citi to execute and deliver this Agreement;
(b) Authorization of Citi to act as Transfer Agent and Fund Accountant for
the Company;
(c) The current Citi As-of Trading Policy; and
(d) The current version of Citi written polices and procedures with
respect to its provision on AML Services (as defined in Section 23
below).
Upon request, Citi shall furnish a copy of the relevant provisions of its
internal policies on service of employees as executive officers of funds ("Citi
Policies"), and any material amendments thereto, to the Company.
21. Amendments to Documents.
The Company will provide Citi with advance notice of any material
amendments to the items set forth in Section 19 of this Agreement. Citi will not
be responsible for changing or conforming its services to any such amendments
until Citi has reviewed and accepted responsibility for the relevant changes in
services. Citi will consider such changes in good faith. In the event that any
such amendment, or change in laws applicable to the Company would require Citi
to make specific changes to its service model, Citi will use reasonable good
faith efforts to inform the Company of the changes that would be necessary, and
set out the estimated costs and estimated implementation timetable for any
additional services. The parties shall then in good faith agree to mutually
agreeable terms applicable to such additional service.
22. Reliance on Amendments.
Citi may rely on any amendments to or changes in any of the documents and
other items to be provided by the Company pursuant to Sections 19 and 21 of this
Agreement and the indemnification provisions of Section 10 hereof are applicable
to Citi's reasonable reliance upon such amendments and/or changes. Although Citi
is authorized to rely on the above-mentioned amendments to and changes in the
documents and other items to be provided pursuant to Sections 19 and 21 of this
Agreement, in the event the same relate to services provided by Citi hereunder,
Citi shall have no liability for failure to comply with or take any action in
conformity with such amendments or changes except as provided in Section 21 of
this Agreement or as otherwise agreed upon in writing.
23. Compliance with Laws.
(a) Prospectus and Public Offering. Except for information which is the
obligation of Citi as set forth in Section 11 of this Agreement, and
except as provided in the services listed in the schedules to this
Agreement which call for information to be provided by Citi for
inclusion in the Prospectus, the Company assumes full responsibility
for the preparation, contents, and distribution of each Prospectus of
the Company in compliance with all applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act, and
any other laws, rules and regulations of governmental authorities
having jurisdiction. Subject to its obligations herein with respect to
"blue sky" filings, Citi shall have no obligation to take cognizance
hereunder of laws relating to the sale of the Funds' shares. The
Company represents and warrants that all shares of the Funds that are
offered to the public are covered by an effective registration
statement under the 1933 Act and the 1940 Act.
(b) Anti-Money Laundering Provisions. The Company acknowledges that it is
a financial institution subject to the law entitled Uniting and
Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism ("USA PATRIOT") Act of 2001 and the
Bank Secrecy Act (collectively, the "AML Acts") and shall comply with
the AML Acts and applicable regulations adopted thereunder
(collectively, the "Applicable AML Laws") in all relevant respects,
subject to the delegation of certain responsibilities to Citi, as
provided in the next paragraph below.
The Company hereby delegates to Citi the performance, on behalf of the
Company, of the anti-money laundering services set forth under Item 6
of Schedule C (the "AML Services") with respect to the shareholder
accounts maintained by Citi pursuant to this Agreement, and Citi
agrees to the foregoing delegation and agrees to perform such services
in accordance with the Company's AML Program for the fee set forth on
Schedule D to this Agreement. In connection therewith, Citi agrees to
maintain policies and procedures, and related internal controls, that
are consistent with the Company's AML Program and the requirement that
the Company employ procedures reasonably designed to achieve
compliance with the Applicable AML Laws. Citi's obligations under this
delegation shall be subject to Sections 19 and 21 of this Agreement,
which require that the AML Program and any material amendments thereto
be submitted to Citi for its review and consent prior to adoption.
The Company agrees and acknowledges that, notwithstanding the
delegation provided for in the foregoing paragraph, the Company
maintains full responsibility for ensuring that its AML Program is,
and shall continue to be, reasonably designed to ensure compliance
with the Applicable AML Laws, in light of the particular business of
the Company, taking into account factors such as its size, location,
activities and risks or vulnerabilities to money laundering.
In connection with the foregoing delegation, the Company also
acknowledges that the performance of the AML Services involves the
exercise of discretion which in certain circumstances may result in
consequences to the Company and its shareholders (such as in the case
of the reporting of suspicious activities and the freezing of
shareholder accounts). In this regard, (i) under circumstances in
which the AML Program authorizes the taking of certain actions, Citi
is granted the discretion to take any such action as may be authorized
under the AML Program, and consultation with Company shall not be
required in connection therewith unless specifically required under
the AML Program, and (ii) the Company instructs Citi that it may avail
the Company of any safe harbor from civil liability that may be
available under Applicable AML Laws for making a disclosure or filing
a report thereunder.
As concerns Networked Level III accounts and omnibus accounts, the AML
Services performed by Citi are subject to a more limited scope, as
discussed in the Release concerning the final rule of the Department
of the Treasury, 31 CFR 103 and of the Commission, 17 CFR 270,
entitled Customer Identification Programs for Mutual Funds issued on
May 9, 2003 and subsequent guidance issued jointly by such agencies
entitled Question and Answer Regarding the Mutual Fund Customer
Identification Program Rule (31 CFR 103.131) issued on August 11, 2003
24. Notices.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address, or at such other address as such party may from time
to time specify in writing to the other party pursuant to this Section 24:
If to the Company:
Xxxxxxxx Xxxxx
0 Xxxxx Xxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
Attn: Fund Administration
with a copy to:
Aberdeen Asset Management Inc.
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Legal
If to Citi:
Citi Fund Services Ohio, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: President
with a copy to:
c/o Citigroup Fund Services, LLC
0 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attn: Legal Department
25. Assignment.
This Agreement and the rights and duties hereunder shall not be assignable
by either of the parties without the prior written consent of the other party;
provided, however, that either party may assign this Agreement to an affiliate
of such party without the need for such consent. This Section 25 shall not limit
or in any way affect Citi's right to use a third party to perform obligations
pursuant to Section 2 of this Agreement. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties and their respective successors
and permitted assigns.
26. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to New York's conflicts of laws
principles, and the applicable provisions of the Investment Company Act of 1940
(the "1940 Act"). To the extent that the laws of the State of New York conflict
with the applicable provisions of the 1940 Act, the applicable provisions of
1940 Act shall control.
27. Activities of Citi.
The services of Citi rendered to the Company hereunder are not to be deemed
to be exclusive. Citi is free to render such services to others and to have
other businesses and interests. It is understood that trustees, officers,
employees and Shareholders of the Company and/or Fund are or may be or become
interested in Citi, as officers, employees or otherwise and that partners,
officers and employees of Citi and its counsel are or may be or become similarly
interested in the Company and/or Fund, and that Citi may be or become interested
in the Company and/or Fund as a shareholder or otherwise.
28. Privacy.
Nonpublic personal financial information relating to consumers or customers
of the Company provided by, or at the direction of the Company to Citi, or
collected or retained by Citi in the course of performing its duties as transfer
agent, shall be considered confidential information. Citi shall not give, sell
or in any way transfer such confidential information to any person or entity,
other than affiliates of Citi involved in servicing the Company except at the
direction of the Company or as required or permitted by law (including
Applicable AML Laws). Citi represents, warrants and agrees that it has in place
and will maintain physical, electronic and procedural safeguards reasonably
designed to protect the security, confidentiality and integrity of, and to
prevent unauthorized access to or use of records and information relating to
consumers or customers of the Company. The Company represents to Citi that it
has adopted a Statement of its privacy policies and practices as required by the
Commission's Regulation S-P and agrees to provide Citi with a copy of that
statement annually.
29. Miscellaneous.
(a) Paragraph headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the parties as to
the subject matter covered by this Agreement, and supersedes all prior
negotiations, understandings and agreements bearing upon the subject
matter covered herein.
(c) This Agreement may be executed in counterparts, each of which shall be
an original but all of which, taken together, shall constitute one and
the same agreement.
(d) No amendment to this Agreement shall be valid unless made in writing
and executed by both parties.
(e) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and
enforced as if this Agreement did not contain such part, term or
provision.
[Signature page follows.]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed all as of the date first above written.
ABERDEEN FUNDS
By: _________________________________
Name:
Title:
CITI FUND SERVICES OHIO, INC.
By: _________________________________
Name:
Title:
SCHEDULE A
TO THE SERVICES AGREEMENT BETWEEN
CITI FUND SERVICES OHIO, INC. AND ABERDEEN FUNDS
FUNDS
Aberdeen Global Financial Services Fund
Aberdeen Health Sciences Fund
Aberdeen Natural Resources Fund
Aberdeen Technology and Communications Fund
Aberdeen Hedged Core Equity Fund
Aberdeen Market Neutral Fund
Aberdeen Select Mid Cap Growth Fund
Aberdeen Select Equity Fund
Aberdeen Small Cap Opportunities Fund
Aberdeen Small Cap Fund
Aberdeen Small Cap Growth Fund
Aberdeen Select Small Cap Fund
Aberdeen Small Cap Value Fund
Aberdeen Tax-Free Income Fund
Aberdeen Select Growth Fund
Aberdeen Select Equity Long-Short Fund
Aberdeen China Opportunities Fund
Aberdeen Developing Markets Fund
Aberdeen Global Utilities Fund
Aberdeen International Equity Fund
Aberdeen Select Worldwide Fund
Aberdeen Optimal Allocations Fund:Growth
Aberdeen Optimal Allocations Fund:Moderate Growth
Aberdeen Optimal Allocations Fund:Moderate
Aberdeen Optimal Allocations Fund:Specialty
Aberdeen Optimal Allocations Fund:Defensive
SCHEDULE B
TO THE SERVICES AGREEMENT BETWEEN
CITI FUND SERVICES OHIO, INC. AND ABERDEEN FUNDS
FUND ACCOUNTING SERVICES
(a) Citi will keep and maintain the following books and records of each Fund
pursuant to Rule 31a-1 (the "Rule") under the 1940 Act:
1. Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of
cash and all other debits and credits, as required by subsection
(b)(1) of the Rule;
2. General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including interest
accrued and interest received, as required by subsection (b)(2)(i) of
the Rule;
3. Separate ledger accounts required by subsection (b)(2)(ii) and (iii)
of the Rule; and
4. A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b)(8) of the Rule.
(b) In addition to the maintenance of the books and records specified above,
Citi shall perform the following accounting services for each Fund:
1. 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;
2. Apply securities pricing information as required or authorized under
the terms of the valuation policies and procedures of the Company
("Valuation Procedures"), including (A) pricing information from
independent pricing services, with respect to securities for which
market quotations are readily available, (B) if applicable to a
particular Fund or Funds, fair value pricing information or adjustment
factors from independent fair value pricing services or other vendors
approved by the Company (collectively, "Fair Value Information
Vendors") with respect to securities for which market quotations are
not readily available, for which a significant event has occurred
following the close of the relevant market but prior to the Fund's
pricing time, or which are otherwise required to be made subject to a
fair value determination under the Valuation Procedures, and (C)
prices obtained from each Fund's investment adviser or other designee,
as approved by the Board;
3. Coordinate the preparation of reports that are prepared or provided by
Fair Value Information Vendors which help the Company to monitor and
evaluate its use of fair value pricing information under its Valuation
Procedures;
4. Verify and reconcile with the Funds' custodian all daily trade
activity;
5. Compute, as appropriate, each Fund's net income and capital gains,
dividend payables, dividend factors, 7-day yields, 7-day effective
yields, 30-day yields, and weighted average portfolio maturity; (and
other yields or standard or non-standard performance information as
mutually agreed);
6. Review daily the net asset value calculation and dividend factor (if
any) for each Fund prior to release to shareholders, check and confirm
the net asset values and dividend factors for reasonableness and
deviations, and distribute net asset values and yields to NASDAQ; and
as agreed, in certain cases, to newspapers;
7. If applicable, report to the Company the periodic market pricing of
securities in any money market funds, with the comparison to the
amortized cost basis;
8. Determine and report unrealized appreciation and depreciation on
securities held in variable net asset value funds;
9. Amortize premiums and accrete discounts on fixed income securities
purchased at a price other than face value, if requested by the
Company;
10. Update fund accounting system to reflect rate changes, as received
from a Fund's investment adviser, on variable interest rate
instruments;
11. Post Fund transactions to appropriate categories;
12. Accrue expenses of each Fund according to instructions received from
the Company's Administrator, and submit changes to accruals and
expense items to authorized officers of the Company (who are not Citi
employees) for review and approval;
13. Determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income and
expense accounts;
14. Provide accounting reports in connection with and coordinate with
independent auditors concerning the Company's regular annual audit,
and other audits and examinations by regulatory agencies;
15. Provide such periodic reports as the parties shall agree upon, as set
forth in a separate schedule;
16. Provide a representative (in a non-voting capacity) for the Company's
Pricing Committee, if any; and
17. Assist the Company in identifying instances where market prices are
not readily available, or are unreliable, within parameters set forth
in the Company's Valuation Procedures.
(c) Citi shall also perform the following additional accounting services for
each Fund:
1. Provide monthly a hard copy and electronic copy of the unaudited
financial statements described below, upon request of the Company. The
unaudited financial statements will include the following items:
A. Unaudited Statement of Assets and Liabilities,
B. Unaudited Statement of Operations,
C. Unaudited Statement of Changes in Net Assets, and
D. Unaudited Condensed Financial Information
2. Provide accounting information for the following: (in compliance with
Reg. S-X as applicable):
A. federal and state income tax returns and federal excise tax
returns;
B. the Company's semi-annual reports with the SEC on Form N-SAR and
Form N-CSR;
C. the Company's schedules of investments for filing with the SEC on
Form N-Q;
D. the Company's annual and semi-annual shareholder reports and
quarterly Board meetings;
E. registration statements on Form N-1A and other filings relating
to the registration of shares;
F. Citi's monitoring of each Fund's status as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986,
as amended;
G. annual audit by the Company's auditors; and
H. examinations performed by the SEC.
3. Calculate turnover and expense ratio.
4. Prepare schedule of Capital Gains and Losses.
5. Provide daily cash report.
6. Maintain and report security positions and transactions in accounting
system.
7. Prepare Broker Commission Report.
8. Monitor expense limitations.
9. Maintain list of failed trades.
10. Provide unrealized gain/loss report.
SCHEDULE C
TO THE SERVICES AGREEMENT BETWEEN
CITI FUND SERVICES OHIO, INC. AND ABERDEEN FUNDS
Transfer Agency Services
1. Shareholder Transactions
(a) Process shareholder purchase and redemption orders.
(b) Set up account information, including address, dividend option,
taxpayer identification numbers and wire instructions.
(c) Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.
(d) Issue periodic statements for shareholders.
(e) Process transfers and exchanges.
(f) Process dividend payments, including the purchase of new shares,
through dividend reimbursement.
(g) Where applicable, process redemption fee as stated in the Fund
Prospectus.
2. Shareholder Information Services
(a) Produce detailed history of transactions through duplicate or special
order statements upon request.
(b) Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to current
shareholders, upon request.
3. Compliance Reporting
(a) Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc. and the states in
which the Fund is registered.
(b) Prepare and distribute appropriate Internal Revenue Service forms for
corresponding Fund and shareholder income and capital gains.
(c) Issue tax withholding reports to the Internal Revenue Service.
4. Dealer/Load Processing (if applicable)
(a) Where appropriate information is provided, process purchases made
under the rights of accumulation or a Letter of Intent privileges at
the appropriate breakpoint.
(b) Calculate fees due under 12b-1 plans for distribution and marketing
expenses.
(c) Provide for payment of commission on direct shareholder purchases in a
load fund.
5. Shareholder Account Maintenance
(a) Maintain all shareholder records for each account in the Company.
(b) Issue customer statements on scheduled cycle, providing duplicate
second and third party copies if required.
(c) Record shareholder account information changes.
(d) Maintain account documentation files for each shareholder.
6. Anti-Money Laundering Services
(a) Where appropriate and information is available, verify shareholder
identity upon opening new accounts.
(b) Monitor, identify and report shareholder transactions and identify and
report suspicious activities that are required to be so identified and
reported, and provide other required reports to the Securities and
Exchange Commission, the U.S. Treasury Department, the Internal
Revenue Service or each agency's designated agent, in each case
consistent with the Company's AML Program.
(c) Place holds on transactions in shareholder accounts or freeze assets
in shareholder accounts, as provided in the Company's AML Program.
(d) Create documentation to provide a basis for law enforcement
authorities to trace illicit funds.
(e) Maintain all records or other documentation related to shareholder
accounts and transactions therein that are required to be prepared and
maintained pursuant to the Company's AML Program, and make the same
available for inspection by (i) the Company's AML Compliance Officer,
(ii) any auditor of the Company's AML Program or related procedures,
policies or controls that has been designated by the Company in
writing, or (iii) regulatory or law enforcement authorities, and
otherwise make said records or other documents available at the
direction of the Company's AML Compliance Officer.
7. Blue Sky Services
Prepare such reports, applications and documents (including reports
regarding the sale and redemption of shares in the Company as may be
required in order to comply with Federal and state securities laws) as may
be necessary or desirable to register the shares in the Company ("Shares")
with state securities authorities, monitor the sale of Shares for
compliance with state securities laws, and file with the appropriate state
securities authorities the registration statements and reports for the
Company and the Shares and all amendments thereto, as may be necessary or
convenient to register and keep effective the registration of the Company
and the Shares with state securities authorities to enable the Company to
make a continuous offering of its Shares. State securities ("Blue Sky")
exemption services are made available at an additional standard fee which
is earned by Citi based on exemptions obtained by the Company, including an
annual minimum.
8. Profile II Services
Citi will populate the Mutual Fund Profile II database ("Profile II") of
the National Securities Clearing Corporation ("NSCC") as required by the
NSCC as of the date of this Amendment.
In the event that, during the term of this Agreement, the NSCC modifies its
requirements with respect to the type of data that is required to populate
Profile II, then Citi agrees to be responsible to populate Profile II with
such modified types of data, provided that doing so will not increase the
burden (including, without limitation, cost or risk) to Citi, as reasonably
determined by Citi, subject to Citi's receipt of advance written notice of
such modified requirements, and further subject to Citi's timetable for the
implementation of such changes, and the Company's agreement to reimburse
Citi for any costs of implementation. Citi will consider such changes in
good faith and will use reasonable good faith efforts to inform the Company
of the changes that would be necessary, as well as the estimated costs and
estimated implementation timetable.
Citi will obtain the information from Citi's internal records, Fund
prospectuses and other Fund documents, and third parties that provide
services to the Funds or to Citi. Citi will use all commercially reasonable
efforts to ensure that such information is accurate and updated on a timely
basis. Notwithstanding any provision of this Agreement to the contrary,
Citi's aggregate liability for any and all claims with respect to the
Profile II services described above will be limited to the amount of actual
monetary damages sustained by the Company not to exceed the amount of fees
paid to Citi by the Company for the Profile II services during the 12
months immediately preceding the date on which Citi receives written notice
of the first damages claim related to the Profile II services.
Transfer Agency Representation
Following each quarterly period, Citi will provide a representation to the
following effect pertaining to the AML Services rendered by Citi hereunder
during such quarterly period:
1. Performance of good order review for all new and reregistered
accounts;
2. Performance of acceptance review for all monetary instruments
received;
3. Administration of signature guarantee policy in accordance with
prospectus requirements;
4. If applicable, administration of escrow hold policy in accordance with
prospectus requirements;
5. Verification of customer address changes;
6. Verification of customer identification for all new accounts and all
name changes on existing accounts;
7. Monitoring of all purchase transactions made with cash equivalents
totaling in excess of $10,000. The number of Form 8300 reports filed
during the period will be reported;
8. Monitoring of all accounts for suspicious activity. The number of Form
SAR reports filed during the period will be reported;
9. Review of shareholder names against lists of suspected terrorist and
terrorist organizations supplied by various governmental
organizations, such as the Office of Foreign Asset Control. The number
of accounts frozen and otherwise reported to authorities during the
period will be reported;
10. Creation of the documentation necessary to provide a basis for law
enforcement authorities to trace illicit funds;
11. Maintenance all records and other documentation related to shareholder
accounts and transactions required to be prepared and maintained
pursuant to the Company's AML program for all Citi transfer agent
services; and
12. Performance of the required due diligence on any new correspondent
accounts opened during the period.
The following will be provided in such representation if the Company falls
under the related USA PATRIOT Act of 2001 provisions:
13. Performance of the required due diligence to help prevent the opening
of any accounts for foreign shell banks during the period either
directly or through correspondent accounts.
SCHEDULE D
TO THE SERVICES AGREEMENT BETWEEN
CITI FUND SERVICES OHIO, INC. AND ABERDEEN FUNDS
FEES
The Company shall pay Citi on the first business day of each month, or as
otherwise set forth below, fees for fund accounting and transfer agency
services, determined at the annual rates set forth below.
Asset-Based Annual Fee
0.045% of the first $500 million in aggregate net assets of all Funds, plus
0.03% of aggregate net assets of all Funds in excess of $500 million up to
$2 billion; plus
0.015% of the aggregate net assets of all Funds in excess of $2 billion.
The asset-based fees are subject to an annual minimum fee equal to the
number of Funds multiplied by $25,000.
Additional Class Annual Fee
An additional class fee of $2,500 per class per year, applicable to each
additional class of shares over the first four classes of shares per Fund.
Transfer Agency Services
The following per-account fees, applied per year to each shareholder
account (open or closed) on Citi's transfer agency system:
Per Non-Networked Account up to 50,000 accounts $20.00
Per Non-Networked Account in excess of 50,000 accounts $18.00
Per Open Networked Level III Accounts $12.00
Per Closed Accounts $2.00
For these purposes, the following categories constitute an open account on
the Citi system in any one month: open account with balance, open account with
zero balance, or open account with negative balance and closed account with
activity. Closed accounts with no activity in the month are considered a closed
account for billing purposes.
AML Fees
Annual Fees
Program servicing: $4,500 for the first 50,000 accounts, plus
$2,500 for accounts in excess of 50,000
(to be billed in equal monthly installments)
Early Warning annual fee: $575.00
Early Warning per record cost: $0.22
Early Warning searches for all accounts except Networked Level III accounts
are conducted and fees applied every three weeks.
Equifax - per request cost: $5.00
Fair Value Support Services
As compensation for Fair Value Support Services (the services set forth in
subsections (b)2 and (b)3 (as they relate to fair value determinations) of
Schedule B to this Agreement). Citi shall receive the following annual servicing
fee for each Fund that the Company designates as being subject to fair value
determinations and for which Fair Value Support Services are to be provided by
Citi hereunder, as follows:
One-time Development Fee, due upon the execution of this Agreement: $10,000
Annual Fee for Fair Value Support Services to be provided by Citi:
For each Fund with less than 200 securities: $5,000
For each Funds with at least 200 securities: $7,500
(The Annual Fee is to be billed in equal monthly installments)
The foregoing Citi fee(s) do not include out of pocket costs. Citi will
also be reimbursed by the Company for the actual costs charged by Fair Value
Information Vendors with respect to the provision of fair value pricing
information to Citi for use in valuing the portfolio holdings of a specific Fund
or Funds.
Profile II Fees
$56 per CUSIP per month plus
Reimbursement of NSCC charges Depository Trust & Clearing Corporation
charges and other out-of-pocket expenses incurred by Citi in performing the
Profile II services set forth in this Agreement.
Annual Fee Adjustment
Commencing on the two-year anniversary of the Effective Date, Citi may
annually increase the fixed fees and other fees expressed as stated dollar
amounts in this Agreement by up to an amount equal to the greater of: (a) the
most recent annual percentage increase in consumer prices for services as
measured by the United States Consumer Price Index entitled "All Services Less
Rent of Shelter" or a similar index should such index no longer be published,
and (b) 5%.
Out of Pocket Expenses and Miscellaneous Charges
The out of pocket expenses and miscellaneous services fees and charges
provided for under this Agreement are not included in the above fees and shall
also be payable to Citi in accordance with the provisions of this Agreement.
