EXHIBIT H(3)
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
Title: C.E.O. Title: Vice President
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