Exhibit h(1)
SERVICES AGREEMENT
SERVICES AGREEMENT, dated as of January 4, 1999, by and between CFBDS,
INC., a Massachusetts corporation ("CFBDS") and CITIBANK, N.A., a national
banking association ("Citibank").
W I T N E S S E T H :
WHEREAS, Citibank has been retained by certain registered open-end
management investment companies under the Investment Company Act of 1940, as
amended (the "1940 Act"), as listed on Schedule A hereto (each individually a
"Trust" and collectively the "Trusts"), to provide administrative services to
its investment portfolios, as listed on Schedule A hereto (each individually a
"Fund" and collectively the "Funds"), pursuant to separate Management Agreements
(each a "Management Agreement"), and
WHEREAS, as permitted by Section 1 of each Management Agreement,
Citibank desires to subcontract some or all of the performance of its
obligations thereunder to CFBDS, and CFBDS desires to accept such obligations;
and
WHEREAS, Citibank wishes to engage CFBDS to provide certain
administrative services on the terms and conditions hereinafter set forth, so
long as Citibank shall have found CFBDS to be qualified to perform the
obligations sought to be subcontracted; and
WHEREAS, CFBDS desires to retain Citibank to perform certain services
on the terms and conditions hereinafter set forth, and Citibank is willing to
render such services.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties as CFBDS. Subject to the supervision and direction of
Citibank, CFBDS will assist in supervising various aspects of each Trust's
administrative operations and undertakes to perform the following specific
services, from and after the effective date of this Agreement:
(a) To the extent requested by Citibank, furnish Trust secretarial
services;
(b) To the extent requested by Citibank, furnish Trust treasury
services, including the review of financial data, tax and
other regulatory filings and audit requests;
(c) To the extent requested by Citibank, provide the services of
certain persons who may be appointed as officers or Trustees
of the Trust by the Trust's Board;
(d) To the extent requested by Citibank, participate in the
preparation of documents required for compliance by the Trust
with applicable laws and regulations, including registration
statements, prospectuses, semi-annual and annual reports to
shareholders and proxy statements;
(e) To the extent requested by Citibank, prepare agendas and
supporting documents for and minutes of meetings of the
Trustees, Committees of Trustees and shareholders;
(f) Maintain books and records of the Trust;
(g) To the extent requested by Citibank, provide advice and
counsel to the Trust with respect to regulatory matters,
including monitoring regulatory and legislative developments
which may affect the Trust and assisting the Trust in routine
regulatory examinations or investigations of the Trust, and
working closely with outside counsel to the Trust in
connection with litigation in which the Trust is involved;
(h) To the extent requested by Citibank, generally assist in all
aspects of Trust's operations and provide general consulting
services on a day to day, as needed basis;
(i) In connection with the foregoing activities, maintain office
facilities (which may be in the offices of CFBDS or its
corporate affiliate); and
(j) In connection with the foregoing activities, furnishing
clerical services, and internal executive and administrative
services, stationery and office supplies.
Notwithstanding the foregoing, CFBDS under this Agreement shall not be
deemed to have assumed any duties with respect to, and shall not be responsible
for, the management of a Trust, or the distribution of beneficial interests in a
Trust, nor shall CFBDS be deemed to have assumed or have any responsibility with
respect to functions specifically assumed by any transfer agent or custodian of
a Trust.
In performing all services under this Agreement, CFBDS shall (a) act in
conformity with the Trust's charter documents and bylaws, the 1940 Act and other
applicable laws, as the same may be amended from time to time, (b) consult and
coordinate with legal counsel for the Trust, as necessary or appropriate, and
(c) advise and report to the Trust and its legal counsel, as necessary or
appropriate, with respect to any material compliance or other matters that come
to its attention.
In performing its services under this Agreement, CFBDS shall cooperate
and coordinate with Citibank as necessary and appropriate and shall provide such
information as is reasonably necessary or appropriate for Citibank to perform
its obligations to the Trust. CFBDS shall perform its obligations under this
Agreement in a conscientious and diligent manner consistent with prevailing
industry standards.
2. Compensation of CFBDS. For the services to be rendered and the
facilities to be provided by CFBDS hereunder, CFBDS shall be paid an
administrative fee as may from time to time be agreed to between Citibank and
CFBDS.
3. Duties of Citibank. CFBDS hereby retains Citibank to perform the
following services, and Citibank hereby agrees to render such services for the
compensation and on the terms herein provided, from and after the effective date
of this Agreement:
(a) From time to time, Citibank will prepare marketing materials
and advertising materials for the Funds, will review such
material for compliance with applicable legal standards,
submit such materials to CFBDS for final review (unless such
material is submitted to another NASD member for review),
assist CFBDS in connection with discussions with NASD
Regulation and others who review such materials submitted by
CFBDS, make responsive changes and obtain final approval for
use in a timely fashion, and arrange and pay for the
production and dissemination of such material. Citibank shall
coordinate its activities in this regard with brokers selling
shares of the Funds and may delegate its duties under this
provision to others as appropriate.
(b) Citibank will provide liaison between CFBDS and the Funds,
other brokers selling shares of the Funds, and other parties
related to the operations of the Funds, and Citibank shall
provide information and assistance in this regard, as
requested by CFBDS.
In performing its services under this Agreement, Citibank shall (a) act
in conformity with the Trust's charter documents, bylaws, prospectus, state of
additional information, the 1940 Act and other applicable laws, as the same may
be amended from time to time, and (b) cooperate and coordinate with CFBDS as
necessary and appropriate.
4. Compensation of Citibank. In consideration for the services to be
rendered by Citibank under this Agreement, CFBDS hereby assigns to Citibank for
the term of this Agreement all revenues payable to CFBDS pursuant to its
Distribution Agreements with the Trusts (as relate to the Funds) and/or any
related Distribution Plans or Service Plans of the Trusts (as relate to the
Funds) (the "Distribution Revenues"). Citibank will be solely responsible for
computing and collecting any and all Distribution Revenues to CFBDS and assigned
to Citibank hereby and it shall do so at its own expense. CFBDS shall have no
obligation to provide any accounting or other computation of the Distribution
Revenues to Citibank or to otherwise assist in the collection of the
Distribution Revenues, provided that CFBDS agrees to execute any instruments or
take any other actions reasonably necessary to effect or perfect the assignment
of the Distribution Revenues to Citibank, and the further assignment by
Citibank, at its discretion, of any part of the Distribution Revenues to any
other entity.
5. Limitation of Liability.
(a) CFBDS shall not be liable to Citibank for any error or
judgment or mistake of law or for any loss, liability,
expense, or damage (collectively a "Loss") suffered by
Citibank in connection with the performance of CFBDS'
obligations and duties under this Agreement, except a Loss
resulting from CFBDS' willful misfeasance, bad faith, or
negligence in the performance of such obligations and duties.
(b) Citibank will indemnify CFBDS, its affiliated companies and
its officers, employees, and agents, and hold each of them
harmless from any and all losses, claims, damages,
liabilities, or expenses (including reasonable counsel fees
and expenses) resulting from any claim, demand, action, or
suit relating to this Agreement, and not resulting from the
willful misfeasance, bad faith or negligence of CFBDS in the
performance of its obligations under such agreements, but only
to the extent such losses, claims, damages, liabilities, or
expenses are not covered by an applicable insurance policy
maintained by CFBDS and/or its affiliates (other than by
virtue of being part of a deductible under any such policy).
Citibank's indemnification obligations under this Section (b)
are expressly conditioned on satisfaction of all the following
requirements:
(i) CFBDS shall notify Citibank in writing of any claim,
demand, or other occurrence in respect of which CFBDS
may seek indemnification, promptly after CFBDS becomes
aware of it;
(ii) Subject to the terms of any applicable insurance
policies maintained by CFBDS and/or its affiliates,
Citibank shall have the right to assume sole control
of the defense of any resulting action or suit; and
(iii) CFBDS shall not confess any claim or settle or make
any compromise relating thereto, except with
Citibank's prior written consent.
(c) CFBDS will indemnify Citibank, its affiliated companies, and
their officers, employees, and agents, and hold each of them
harmless from any and all losses, claims, damages,
liabilities, or expenses (including reasonable counsel fees
and expenses) resulting from any claim, demand, action, or
suit relating to CFBDS' performance of its obligations under
this Agreement, not resulting from the willful misfeasance,
bad faith or negligence of Citibank or any of its affiliated
companies, but only to the extent such losses, claims,
damages, liabilities, or expenses are not covered by an
applicable insurance policy maintained by Citibank or any of
its affiliates (other than by virtue of being part of a
deductible under any such policy). CFBDS' indemnification
obligations under this Section 5(c) are expressly conditioned
on satisfaction of all the following requirements:
(i) Citibank shall notify CFBDS in writing of any claim,
demand, or other occurrence which relates to or in
respect of which Citibank or any of its affiliates may
seek indemnification, promptly after Citibank becomes
aware of it;
(ii) Subject to the terms of any applicable insurance
policies maintained by Citibank and/or its affiliates,
CFBDS shall have the right to assume sole control of
the defense of any resulting action or suit; and
(iii) Citibank and/or its affiliates shall not confess any
claim or settle or make any compromise relating
thereto, except with CFBDS' prior written consent.
6. Confidentiality.
(a) All books, records, information and data pertaining to the
business of Citibank, any of its affiliates, each Fund, each
Fund's prior, present, or potential shareholders, and the
customers of Citibank or any of its affiliates that are
exchanged or received by CFBDS pursuant to the performance of
CFBDS' duties under this Agreement shall remain confidential
and shall not be disclosed to any other person, except as
specifically authorized in writing by the applicable
affiliate, Citibank, or Fund or as may be required by law, and
shall not be used for any purposes other than the performance
of CFBDS' responsibilities and duties hereunder. The
provisions of this Section 6(a) shall survive this Agreement's
termination.
(b) All books, records, information and data that are the property
of CFBDS, which are not included in Section 6(a) above, and
which were received by Citibank or any of its affiliates
pursuant to CFBDS' performance of this Agreement, shall be
treated as confidential and shall not be disclosed to any
other person, except as specifically authorized in writing by
CFBDS, as may be required by law or as may be reasonably
necessary in connection with the conversion to a different
party upon termination of this Agreement. The provisions of
this Section 6(b) shall survive termination of this Agreement.
7. Service to Other Companies or Accounts: Limitation on Other
Activities. During the term of this Agreement, CFBDS shall not conduct any
business activities other than as contemplated by (i) this Agreement; (ii) any
Distribution Agreement between CFBDS and a Trust; (iii) any distribution
contract between CFBDS and any other investment company advised or administered
by a subsidiary of Citigroup Inc.; or (iv) any agreement between CFBDS and a
subsidiary of Citigroup Inc. Citibank acknowledges that the persons employed by
CFBDS to assist in the performance of CFBDS' duties under this Agreement may not
devote their full time to such service and nothing contained in this Agreement
shall be deemed to limit or restrict the right of any employee or affiliate of
CFBDS to engage in and devote time and attention to other business or to render
services of whatever kind or nature, provided such other activities do not
adversely affect CFBDS' performance hereunder, and that in conducting such
business or rending such services CFBDS' employees and affiliates would take
reasonable steps to assure that the other parties involved are put on notice as
to the legal entity with which they are dealing.
8. Books and Records; Audits; Reports. Citibank shall have the right at
any time to have representatives of its auditors and/or legal counsel, and/or
auditors and legal counsel of any of the Funds, and/or employees of any
affiliate to: (a) obtain full and complete access to any of CFBDS' books and
records relating to its services and duties required under this Agreement,
including, but not limited to, correspondence, contracts, agreements, bank
transaction documents and records of any type, receipts, ledgers, and any other
books of account ("Books and Records") and obtain a reasonable number of copies
of any such Books and Records; and (b) perform on-site audits at any of CFBDS'
system of internal controls with respect to its services and duties required
under this Agreement.
9. Change in Control. To the extent possible, CFBDS shall promptly
provide Citibank prior written notice of any change in "control" (as such term
is defined in the 0000 Xxx) of CFBDS.
10. Use of Name. Except as required by law, CFBDS shall not use the
name Citibank or Citicorp or Citigroup in any manner without Citibank's prior
written consent in any marketing or promotional materials for CFBDS. This
section 10 shall survive termination of this Agreement.
11. Insurance. CFBDS shall, during the term of this Agreement, maintain
directors/officers errors and omissions insurance coverage in the amount of $5
million.
12. Miscellaneous.
(a) Any notice or other written instrument authorized or required
by this Agreement to be given in writing to Citibank or CFBDS
shall be sufficiently given if addressed to the party and
received by it at its office set forth below or at such other
place as it may from time to time designate in writing.
To Citibank:
Citibank, N.A.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
To CFBDS:
CFBDS, Inc.
00 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
without the written consent of the other party.
(c) This Agreement shall be construed in accordance with the laws
of the State of New York, without giving effect to its
conflict of laws principles.
(d) This Agreement may be executed in counterparts, each of which
shall be an original and which collectively shall be deemed to
constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
(f) The parties hereto acknowledge that in performing its services
and duties under this Agreement, each of Citibank and CFBDS
shall do so in the capacity of an independent contractor.
13. Termination. This Agreement may be terminated by Citibank at any
time, in its entirety or as to one or more Funds, with or without cause. This
Agreement may be terminated by CFBDS, in its entirety or as to one or more
Funds, with or without cause, provided that CFBDS has notified Citibank of such
termination in writing at least 90 days prior to the effective date thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
CFBDS, INC. CITIBANK, N.A.
By: Xxxxxx Xxxxxxxx By: Xxxxxx X. Xxxxx
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Title: C.E.O. Title: Vice President
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SCHEDULE A
CitiFundsTrust I
CitiSelect(R) Folio 200
CitiSelect(R) Folio 300
CitiSelect(R) Folio 400
CitiSelect(R) Folio 500
CitiFunds Trust II
CitiFunds Large Cap Growth Portfolio
CitiFunds Small Cap Growth Portfolio
CitiFunds Small Cap Value Portfolio
CitiFunds Growth & Income Portfolio
CitiFunds Fixed Income Trust
CitiFunds Intermediate Income Portfolio
CitiFunds International Trust
CitiFunds International Growth & Income Portfolio
CitiFunds Tax Free Income Trust
CitiFunds New York Tax Free Income Portfolio
CitiFunds National Tax Free Income Portfolio
CitiFunds California Tax Free Income Portfolio
CitiFunds Institutional Trust
CitiFunds Institutional Cash Reserves
The Premium Portfolios
Large Cap Growth Portfolio
Small Cap Growth Portfolio
Growth & Income Portfolio
U.S. Fixed Income Portfolio
High Yield Portfolio
Asset Allocation Portfolios
International Portfolio
Large Cap Value Portfolio
Intermediate Income Portfolio
Foreign Bond Portfolio
Short-Term Portfolio
Small Cap Value Portfolio
Variable Annuity Portfolios
CitiSelect(R) VIP Folio 200
CitiSelect(R) VIP Folio 300
CitiSelect(R) VIP Folio 400
CitiSelect(R) VIP Folio 500
CitiFunds Small Cap Growth VIP Portfolio
Citibank, N.A.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
August 1, 1999
CFBDS, Inc.
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: CitiFundsSM Balanced Portfolio - Services Agreement
Ladies and Gentlemen:
This letter serves as notice that CitiFunds Balanced Portfolio is
hereby added to the list of series of CitiFunds Trust I to which CFBDS, Inc.
("CFBDS") renders services as sub-administrator pursuant to the terms of the
Services Agreement dated as of January 4, 1999 (the "Agreement") between
Citibank, N.A. and CFBDS.
Please sign below to acknowledge your receipt of this notice adding
CitiFunds Balanced Portfolio as a beneficiary under the Agreement.
CITIBANK, N.A.
By: Xxxxxxx X. Xxxxx
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Title: Vice President
----------------
Acknowledgment:
CFBDS, INC.
By: Xxxxxx Xxxxxxxx
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Title: CEO
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