Exhibit (h)(1)
ISI FUNDS
AMENDED AND RESTATED SERVICES AGREEMENT
AGREEMENT made as of the 23rd day of September, 2005, as amended and
restated September 27, 2006, by and between Citigroup Fund Services, LLC
("Citigroup"), a Delaware limited liability company with its principal office
and place of business at Two Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 and the
successor-in-interest by statutory merger to the assets and liabilities of
Forum Administrative Services, LLC, Forum Accounting Services, LLC and Forum
Shareholder Services, LLC (each, a "Forum Service Provider") and each of ISI
Strategy Fund, Inc., Managed Municipal Fund, Inc., North American Government
Bond Fund, Inc. and Total Return US Treasury Fund, Inc. (each a "Company"),
corporations organized under the laws of the State of Maryland, with their
principal office and place of business at 000 Xxxxxxx Xxxxxx, 00/xx/ Xxxxx, Xxx
Xxxx, XX 00000.
WHEREAS, each Company and Forum Service Provider entered into certain
service agreements on May 24, 2002, as amended and restated on May 1, 2004 (the
"Original Services Agreements");
WHEREAS, each Forum Service Provider was acquired by Citibank N.A. on
December 18, 2003 and, effective July 1, 2005 each Forum Service Provider was
merged into Citigroup, which succeeded to the assets and liabilities of each
Forum Service Provider on that date;
WHEREAS, each Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company and
may issue its shares ("Shares") in separate series and classes;
WHEREAS, each Company offers Shares in a single series and may in the future
offer Shares in various other series as listed in Appendix A hereto from time
to time (each such series, together with all other series subsequently
established by a Company and made subject to this Agreement being herein
referred to as a "Fund," and collectively as the "Funds"), and the Companies
may in the future offer Shares of various classes of each Fund as listed in
Appendix A hereto from time to time (each such class together with all other
classes subsequently established by a Company in each Fund being herein
referred to as a "Class," and collectively as the "Classes");
WHEREAS, each Company desires that Citigroup provide various administration,
fund accounting and transfer agency services to the Company, and Citigroup is
willing to provide those services on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, each Company and Citigroup hereby agree to amend
and restate the Agreement as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) Each Company hereby appoints Citigroup, and Citigroup hereby agrees, to
act as administrator, fund accountant and transfer agent of the Company for the
period and on the terms set forth in this Agreement.
(b) In connection therewith, each Company has delivered to Citigroup copies
of: (i) its Articles of Incorporation and Bylaws (collectively, as amended from
time to time, "Organic Documents"); (ii) its Registration Statement and all
amendments thereto filed with the U.S. Securities and Exchange Commission
("SEC") pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), or the 1940 Act (the "Registration Statement"); (iii) the current
Prospectus and Statement of Additional Information of each of its Funds
(collectively, as currently in effect and as amended or supplemented, the
"Prospectus"); (iv) each plan of distribution or similar document adopted by it
under Rule 12b-1 under the 1940 Act ("Plan") and each current shareholder
service plan or similar document adopted by it ("Service Plan"); and (v) all
procedures adopted by it with respect to the Funds, and shall promptly furnish
Citigroup with all amendments of or supplements to the foregoing. Each Company
shall deliver to Citigroup a certified copy of the resolution of its Board of
Directors (the "Board") appointing Citigroup and authorizing the execution and
delivery of this Agreement.
SECTION 2. DUTIES OF CITIGROUP
(a) Subject to the direction and control of each Board and the provisions of
this Agreement, Citigroup shall provide the services set forth in Appendix B
(the "Services Schedule").
(b) Citigroup shall provide such other services and assistance relating to
the affairs of each Company as the Company may, from time to time, reasonably
request pursuant to mutually acceptable compensation and implementation
agreements.
(c) Citigroup shall maintain records relating to its services, such as
journals, ledger accounts and other records, as are required to be maintained
under the 1940 Act and Rule 31a-1 thereunder, as further specified in the
Services Schedule. The books and records pertaining to a Company that are in
possession of Citigroup shall be the property of the Company. Each Company, or
the Company's authorized representatives, shall have access to such books and
records at all times during Citigroup's normal business hours. Upon the
reasonable request of a Company, copies of any such books and records shall be
provided promptly by Citigroup to the Company or the Company's authorized
representatives at the Company's expense. Subject to section 5(b) of this
Agreement, in the event a Company designates a successor that shall assume any
of Citigroup's obligations hereunder, Citigroup shall, at the direction of the
Company, transfer to such successor all relevant books, records and other data
established or maintained by Citigroup under this Agreement.
(d) Citigroup and each Company agree that all books, records, information,
and data pertaining to the business of the other party which are exchanged or
received pursuant to the
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negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as MAY BE
PERMITTED UNDER THIS AGREEMENT OR AS MAY BE required by law.
(e) In case of any requests or demands for the inspection of the Shareholder
records of a Company, Citigroup will endeavor to notify the Company and to
secure instructions from an authorized officer of the Company as to such
inspection. Citigroup shall abide by a Company's instructions for granting or
denying the inspection; provided, however, that Citigroup may grant the
inspection without instructions if Citigroup is advised by counsel to Citigroup
that failure to do so will result in liability to Citigroup.
(f) Nothing contained herein shall be construed to require Citigroup to
perform any service that could cause Citigroup to be deemed an investment
adviser for purposes of the 1940 Act or the Investment Advisers Act of 1940, as
amended, or that could cause a Fund to act in contravention of the Fund's
Prospectus or any provision of the 1940 Act. Except with respect to Citigroup's
duties as set forth in this Section 2 and except as otherwise specifically
provided herein, each Company assumes all responsibility for ensuring that the
Company complies with all applicable requirements of the Securities Act, the
1940 Act and any laws, rules and regulations of governmental authorities with
jurisdiction over the Company. All references to any law in this Agreement
shall be deemed to include reference to the applicable rules and regulations
promulgated under authority of the law and all official interpretations of such
law or rules or regulations.
(g) In order for Citigroup to perform the services required by this
Section 2, each Company (i) shall cause all service providers to that Company
to furnish any and all information to Citigroup, and assist Citigroup as may be
required and (ii) shall ensure that Citigroup has access to all records and
documents maintained by the Company or any service provider to the Company.
SECTION 3. STANDARD OF CARE; LIMITATION OF LIABILITY; INDEMNIFICATION
(a) Citigroup shall be under no duty to take any action except as
specifically set forth herein or as may be specifically agreed to by Citigroup
in writing. Citigroup shall use its best judgment and efforts in rendering the
services described in this Agreement. Citigroup shall not be liable to a
Company or any of the Company's shareholders for any action or inaction of
Citigroup relating to any event whatsoever in the absence of bad faith, willful
misfeasance or negligence in the performance of Citigroup's duties or
obligations under this Agreement or by reason of Citigroup's reckless disregard
of its duties and obligations under this Agreement.
(b) Each Company agrees to indemnify and hold harmless Citigroup, its
employees, agents, directors, officers and managers and any person who controls
Citigroup within the meaning of section 15 of the Securities Act or section 20
of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
("Citigroup Indemnitees"), against and from any and all claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs, charges,
reasonable
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counsel fees and other expenses of every nature and character arising out of or
in any way related to Citigroup's actions taken or failures to act with respect
to that Company and its Funds that are consistent with the standard of care set
forth in Section 3(a) or based, if applicable, on good faith reliance upon an
item described in Section 3(d) (a "Citigroup Claim"). A Company shall not be
required to indemnify any Citigroup Indemnitee if, prior to confessing any
Citigroup Claim against the Citigroup Indemnitee, Citigroup or the Citigroup
Indemnitee does not give the Company written notice of and reasonable
opportunity to defend against the Citigroup Claim in its own name or in the
name of the Citigroup Indemnitee.
(c) Citigroup agrees to indemnify and hold harmless each Company, its
employees, agents, directors, officers and managers ("Company Indemnitees"),
against and from any and all claims, demands, actions, suits, judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and other
expenses of every nature and character arising out of or in any way related to
(i) Citigroup's actions taken or failures to act with respect to that Company
and its Funds that are not consistent with the standard of care set forth in
Section 3(a) or based, if applicable, on good faith reliance upon an item
described in Section 3(d), or (ii) any breach of Citigroup's representation set
forth in Section 13 (a "Company Claim"). Citigroup shall not be required to
indemnify any Company Indemnitee if, prior to confessing any Company Claim
against the Company Indemnitee, the applicable Company or the Company
Indemnitee does not give Citigroup written notice of and reasonable opportunity
to defend against the Company Claim in its own name or in the name of the
Company Indemnitee.
(d) A Citigroup Indemnitee shall not be liable for any action taken or
failure to act in good faith reliance upon:
(i) the advice of a Company or of counsel, who may be counsel to that
Company or counsel to Citigroup, and upon statements of accountants, brokers
and other persons reasonably believed in good faith by Citigroup to be
experts in the matter upon which they are consulted;
(ii) any oral instruction which it receives and which it reasonably believes
in good faith was transmitted by a person or persons authorized by the Board
or by the Administrator to give such oral instruction. Provided that
Citigroup has such reasonable belief, Citigroup shall have no duty or
obligation to make any inquiry or effort of certification of such oral
instruction;
(iii) any written instruction or certified copy of any resolution of the
Board, and Citigroup may rely upon the genuineness of any such document or
copy thereof reasonably believed in good faith by Citigroup to have been
validly executed; or
(iv) as to genuineness, any signature, instruction, request, letter of
transmittal, certificate, opinion of counsel, statement, instrument, report,
notice, consent, order, or other document reasonably believed in good faith
by Citigroup to be genuine and to have been signed or presented by a Company
or other proper party or parties;
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(v) the reliance on or use by Citigroup or its agents or subcontractors of
information, records, documents or services which have been prepared,
maintained or performed by a Company or any other person or firm on behalf
of the Company, including share certificates that are reasonably believed by
Citigroup to bear the proper manual or facsimile signatures of the officers
of the applicable Company, and the proper countersignature of any former
transfer agent or former registrar or of a co-transfer agent or co-registrar
of the Company; or
(vi) the offer or sale of Shares in violation of any requirement under the
Federal securities laws or regulations or the securities laws or regulations
of any State that such Shares be registered in such State or in violation of
any stop order or other determination or ruling by any Federal agency or any
State with respect to the offer or sale of such Shares in such State.
and no Citigroup Indemnitee shall be under any duty or obligation to inquire
into the validity or invalidity or authority or lack thereof of any statement,
oral or written instruction, resolution, signature, request, letter of
transmittal, certificate, opinion of counsel, instrument, report, notice,
consent, order, or any other document or instrument which Citigroup reasonably
believes in good faith to be genuine.
(e) Citigroup shall not be liable for the errors of other service providers
to a Company or their systems, including the errors of pricing services (other
than to pursue all reasonable claims against the pricing service based on the
pricing services' standard contracts entered into by Citigroup) and errors in
information provided by an investment adviser (including prices and pricing
formulas and the untimely transmission of trade information), custodian or
transfer agent to the Company.
(f) Subject to Section 3(a) of this Agreement, Citigroup shall reimburse
each applicable Fund for any net losses to the Fund during each NAV Error
Period resulting from an NAV Difference that is at least 1/10 of 1% but that is
less than 1/2 of 1%. Citigroup shall reimburse the Fund on its own behalf and
on behalf of each Fund shareholder for any losses experienced by the Fund or
any Fund shareholder, as applicable, during each NAV Error Period resulting
from an NAV Difference that is at least 1/2 of 1%; provided, however, that
Citigroup shall not be responsible for reimbursing any Fund with respect to any
shareholder that experiences an aggregate loss during any NAV Error Period of
less than $10.
(g) For purposes of this Agreement: (i) the NAV Difference shall mean the
difference between the NAV at which a shareholder purchase or redemption should
have been effected ("Recalculated NAV") and the NAV at which the purchase or
redemption is effected divided by Recalculated NAV; (ii) NAV Error Period shall
mean any Fund business day or series of two or more consecutive Fund business
days during which an NAV Difference of 1/10 of 1% or more exists; (iii) NAV
Differences and any Citigroup liability therefrom are to be calculated each
time a Fund's (or Class's) NAV is calculated; (iv) in calculating any amount
for which Forum would otherwise be liable under this Agreement for a particular
NAV error, Fund (or Class) losses and gains shall be netted; and (v) in
calculating any amount for which Citigroup would otherwise be
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liable under this Agreement for a particular NAV error that continues for a
period covering more than one NAV determination, Fund (or Class) losses and
gains for the period shall be netted.
(h) Each Company has authorized or in the future may authorize Citigroup to
act as a "Mutual Fund Services Member" for each Company or various Funds.
Fund/SERV and Networking are services sponsored by the National Securities
Clearing Corporation ("NSCC") and as used herein have the meanings as set forth
in the then current edition of NSCC Rules and Procedures published by NSCC or
such other similar publication as may exist from time to time. Each Company
shall indemnify and hold Citigroup harmless from and against any and all
losses, damages, costs, charges, reasonable counsel fees, payments, expenses
and liability arising directly or indirectly out of or attributed to any action
or failure or omission to act by NSCC.
SECTION 4. REPRESENTATIONS AND WARRANTIES
(a) Citigroup represents and warrants to each Company that:
(i) It is a limited liability company duly organized and existing and in
good standing under the laws of the State of Delaware;
(ii) It is duly qualified to carry on its business in the State of Maine;
(iii) It is empowered under applicable laws and by its Operating Agreement
to enter into this Agreement and perform its duties under this Agreement;
(iv) All requisite corporate proceedings have been taken to authorize it to
enter into this Agreement and perform its duties under this Agreement;
(v) It has access to the necessary facilities, equipment, and personnel to
perform its duties and obligations under this Agreement; and
(vi) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of Citigroup, enforceable against Citigroup in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured parties.
(b) Each Company represents and warrants to Citigroup that:
(i) It is a corporation duly organized and existing and in good standing
under the laws of the State of Maryland;
(ii) It is empowered under applicable laws and by its Organic Documents to
enter into this Agreement and perform its duties under this Agreement;
(iii) All requisite corporate proceedings have been taken to authorize it to
enter into this Agreement and perform its duties under this Agreement;
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(iv) It is an open-end management investment company registered under the
1940 Act;
(v) This Agreement, when executed and delivered, 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 rights and remedies of creditors and secured parties; and
(vi) A registration statement under the Securities Act is currently
effective and will remain effective, and appropriate State securities law
filings have been made and will continue to be made, with respect to all
Shares of the Funds and Classes of the Company being offered for sale.
SECTION 5. COMPENSATION AND EXPENSES
(a) In consideration of the services provided by Citigroup pursuant to this
Agreement, each Company shall pay Citigroup, with respect to each Fund thereof,
the fees as from time to time set forth in a separate written agreement between
Citigroup and the Companies (the "Fee Schedule").
All fees payable hereunder shall be accrued daily by each Company. The fees
payable for the services listed in the Fee Schedule shall be payable monthly in
arrears on the first day of each calendar month for services performed during
the preceding calendar month. If fees payable for the services listed in
clauses (i) and (ii) begin to accrue in the middle of a month or if this
Agreement terminates before the end of any month, all fees for the period from
that date to the end of that month or from the beginning of that month to the
date of termination, as the case may be, shall be prorated according to the
proportion that the period bears to the full month in which the effectiveness
or termination occurs. Upon the termination of this Agreement with respect to a
Company, the applicable Company shall pay to Citigroup such compensation as
shall be payable prior to the effective date of termination.
Nothing in this Agreement shall require Citigroup to perform any of the
services listed in Section I(a)(xxviii) of the Services Schedule, as such
services may be performed by the Fund's independent accountant if appropriate.
(b) In connection with the services provided by Citigroup pursuant to this
Agreement, each Company, on behalf of each Fund, agrees to reimburse Citigroup
for the expenses payable by the Company but incurred by Citigroup set forth in
the Fee Schedule. Reimbursements shall be payable as incurred. Should a Company
exercise its right to terminate this Agreement, the Company, on behalf of the
applicable Fund, shall reimburse Citigroup for all reasonably incurred
out-of-pocket expenses and employee time (at 150% of salary) associated with
the copying and movement of records and material to any successor person and
providing assistance to any successor person in the establishment of the
accounts and records necessary to carry out the successor's responsibilities;
provided however, that the Company shall not be required to reimburse Citigroup
for its employees' time as set forth above in the event this Agreement is
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terminated (i) because Citigroup has breached its standard of care in
connection with one of its material obligations under this Agreement or
(ii) after May 25, 2005.
(c) Citigroup may, with respect to questions of law relating to its services
hereunder, apply to and obtain the advice and opinion of counsel to a Company
or counsel to Citigroup; provided, however, that Citigroup shall in all cases
first reasonably attempt to apply to and obtain the advice and opinion of
counsel to the Company. The costs of any such advice or opinion shall be borne
by the applicable Company.
(d) Notwithstanding anything in this Agreement to the contrary, Citigroup
and its affiliated persons may receive compensation or reimbursement from each
Company with respect to: (i) the provision of services on behalf of the Funds
in accordance with any Plan or Service Plan; (ii) the provision of shareholder
support or other services; (iii) service as a director or officer of the
Company; and (iv) services to the Company, which may include the types of
services described in this Agreement, with respect to the creation of any Fund
and the start-up of the Fund's operations.
SECTION 6. EFFECTIVENESS, DURATION, TERMINATION AND ASSIGNMENT
(a) This Agreement, as amended and restated, shall become effective on
September 27, 2006. Upon effectiveness of this amended and restated Agreement,
it shall supersede all previous agreements between the parties hereto covering
the subject matter hereof insofar as such Agreement may have been deemed to
relate to the Companies or the Funds.
(b) This Agreement shall continue in effect with respect to a Fund until
terminated.
(c) This Agreement may be terminated with respect to a Fund at any time,
without the payment of any penalty (i) by the applicable Board on 60 days'
written notice to Citigroup or (ii) by Citigroup on 60 days' written notice to
the applicable Company.
(d) This Agreement may be terminated with respect to a Fund at any time
where the other party has materially breached any of its obligations hereunder
including, with respect to Citigroup, the failure by Citigroup to act
consistently with the standard of care set forth in Section 3(a). Termination
pursuant to this subsection shall not be effective in less than thirty
(30) days after written notice thereof from the non-breaching party, which
termination notice shall describe the breach; provided, however, that no such
termination shall be effective if, with respect to any breach that is capable
of being cured, within such thirty (30) day period the breaching party has
cured such breach to the reasonable satisfaction of the non-breaching party.
(e) The provisions of Sections 2(d), 3, 5, 6(e), 6(f), 8, 9, 10, 12, and 13
shall survive any termination of this Agreement.
(f) Except as otherwise provided in this Agreement, neither this Agreement
nor any rights or obligations under this Agreement may be assigned by any party
without the written consent of the other party. This Agreement shall inure to
the benefit of and be binding upon the
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parties and their respective permitted successors and assigns. Citigroup may,
without further consent on the part of any Company, (i) assign this agreement
to any affiliate of Citigroup or (ii) subcontract for the performance hereof
with any entity, including an affiliate of Citigroup; provided however, that
Citigroup shall be as fully responsible to the Company for the acts and
omissions of any subcontractor as Citigroup is for its own acts and omissions
and that Citigroup shall not be relieved of any of its responsibilities
hereunder.
SECTION 7. ADDITIONAL FUNDS AND CLASSES
In the event that a Company establishes one or more series of Shares or one
or more classes of Shares after the effectiveness of this Agreement, such
series of Shares or classes of Shares, as the case may be, shall become Funds
and Classes under this Agreement.
SECTION 8. CONFIDENTIALITY; PROPRIETARY INFORMATION
(a) Citigroup agrees to treat all records and other information related to
the Companies as proprietary information of the applicable Company and, on
behalf of itself and its employees, to keep confidential all such information,
except that Citigroup may:
(i) prepare or assist in the preparation of periodic reports to shareholders
and regulatory bodies such as the SEC;
(ii) provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
information regarding investment companies; and
(iii) release such other information as approved by the Company, which
approval shall not be unreasonably withheld and may not be withheld where
Citigroup is advised by counsel that it may be exposed to civil or criminal
contempt proceedings for failure to release the information (provided,
however, that Citigroup shall seek the approval of the Company as promptly
as possible so as to enable the Company to pursue such legal or other action
as it may desire to prevent the release of such information) or when so
requested by the Company.
(b) Each Company acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals maintained by Citigroup on databases under the control and ownership of
Citigroup or a third party constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of
substantial value to Citigroup or the third party. Each Company agrees to treat
all Proprietary Information as proprietary to Citigroup and further agrees that
it shall not divulge any Proprietary Information to any person or organization
except as may be provided under this Agreement.
(c) Citigroup acknowledges that the Shareholder list and all information
related to Shareholders furnished to Forum by the applicable Company or by a
Shareholder in connection
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with this Agreement (collectively, "Customer Data") constitute proprietary
information of substantial value to the Company. In no event shall Proprietary
Information be deemed Customer Data. Citigroup agrees to treat all Customer
Data as proprietary to a Company and further agrees that it shall not divulge
any Customer Data to any person or organization except as may be provided under
this Agreement, as may be permitted by law in the ordinary course of business,
as may be directed by the Company or as otherwise required under Citigroup's
Anti-Money Laundering Program ("Citigroup AML Program").
SECTION 9. FORCE MAJEURE
Citigroup shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdowns, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply. In addition, to the extent
Citigroup's obligations hereunder are to oversee or monitor the activities of
third parties, Citigroup shall not be liable for any failure or delay in the
performance of Citigroup's duties caused, directly or indirectly, by the
failure or delay of such third parties in performing their respective duties or
cooperating reasonably and in a timely manner with Citigroup.
SECTION 10. ACTIVITIES OF CITIGROUP
(a) Except to the extent necessary to perform Citigroup's obligations under
this Agreement, nothing herein shall be deemed to limit or restrict Citigroup's
right, or the right of any of Citigroup's managers, officers or employees who
also may be a Director, officer or employee of a Company, or persons who are
otherwise affiliated persons of the Company to engage in any other business or
to devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, trust, firm, individual or association.
(b) Citigroup may subcontract any or all of its functions or
responsibilities pursuant to this Agreement to one or more persons, including
an affiliate of Citigroup, who agree to comply with the terms of this
Agreement; provided, that any such subcontracting shall not relieve Citigroup
of its responsibilities hereunder. Citigroup may pay those persons for their
services, but no such payment will increase Citigroup's compensation or
reimbursement of expenses from a Company.
(c) Each Company acknowledges and agrees that that services rendered by
Citigroup under this Agreement with the assistance of Citigroup employees who
have legal training are nevertheless not legal services.
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SECTION 11. COOPERATION WITH INDEPENDENT ACCOUNTANTS
Citigroup shall cooperate, if applicable, with each Fund's independent
public accountants and shall take reasonable action to make all necessary
information available to the accountants for the performance of the
accountants' duties.
SECTION 12. LIMITATION OF SHAREHOLDER AND DIRECTOR LIABILITY
No Company shall be liable for the obligations of any other Company under
this Agreement. The Directors of each Company and the shareholders of each Fund
shall not be liable for any obligations of the Company or of the Funds under
this Agreement, and Citigroup agrees that, in asserting any rights or claims
under this Agreement, it shall look only to the assets and property of the
Company or the Fund to which Citigroup's rights or claims relate in settlement
of such rights or claims, and not to the Directors of each Company or the
shareholders of the Funds.
SECTION 13. MISCELLANEOUS
(a) No party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
(b) Except for Appendix A to add new Funds and Classes in accordance with
Section 7, no provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid. This Agreement shall be construed as if drafted jointly by both
Citigroup and each Company and no presumptions shall arise favoring any party
by virtue of authorship of any provision of this Agreement.
(g) Section headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
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(h) Notices, requests, instructions and communications received by the
parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(i) Notwithstanding any other provision of this Agreement, the parties agree
that the assets and liabilities of each Fund of a Company are separate and
distinct from the assets and liabilities of each other Fund and that no Fund
shall be liable or shall be charged for any debt, obligation or liability of
any other Fund, whether arising under this Agreement or otherwise.
(j) Nothing contained in this Agreement is intended to or shall require
Citigroup, in any capacity hereunder, to perform any functions or duties on any
day other than a Fund business day. Functions or duties normally scheduled to
be performed on any day which is not a Fund business day shall be performed on,
and as of, the next Fund business day, unless otherwise required by law.
(k) No affiliated person, employee, agent, director, officer or manager of
Citigroup shall be liable at law or in equity for Citigroup's obligations under
this Agreement.
(l) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof and each
party hereto warrants and represents that this Agreement, when executed and
delivered, will constitute a legal, valid and binding obligation of the party,
enforceable against the party in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
(m) The term "affiliated person" shall have the meaning ascribed thereto in
the 1940 Act.
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IN WITNESS WHEREOF, each Company and Citigroup hereto have caused this
Agreement to be executed in their names and on their behalf by and through
their duly authorized officers, as of the day and year first above written.
ISI STRATEGY FUND, INC.
By: /s/ R. Xxxx Xxxxxxx
-----------------------------
R. Xxxx Xxxxxxx
President
MANAGED MUNICIPAL FUND, INC.
By: /s/ R. Xxxx Xxxxxxx
-----------------------------
R. Xxxx Xxxxxxx
President
NORTH AMERICAN GOVERNMENT BOND FUND, INC.
By: /s/ R. Xxxx Xxxxxxx
-----------------------------
R. Xxxx Xxxxxxx
President
TOTAL RETURN US TREASURY FUND,
INC.
By: /s/ R. Xxxx Xxxxxxx
-----------------------------
R. Xxxx Xxxxxxx
President
CITIGROUP FUND SERVICES, LLC
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxx
Director
- 13 -
ISI FUNDS
SERVICES AGREEMENT
APPENDIX A
FUNDS AND CLASSES OF THE COMPANIES
COMPANY FUNDS CLASSES
------- ----------------------------- --------------
ISI Strategy Fund, Inc. ISI Strategy Fund Single class
Managed Municipal Fund, Inc. Managed Municipal Fund Single class
North American Government North American Government Class A Shares
Bond Fund, Inc. Bond Fund Class C Shares
Total Return US Treasury Fund, Inc. Total Return US Treasury Fund Single class
- A-1 -
ISI FUNDS
SERVICES AGREEMENT
APPENDIX B
SERVICES SCHEDULE
I. ADMINISTRATION SERVICES:
(a) Citigroup shall administer the Company's operations with respect to the
Funds except those that are the responsibility of any other service provider
hired by the Companies, all in such manner and to such extent as may be
authorized by the Board.
(b) With respect to each Company or Fund, as applicable, Citigroup shall:
(i) coordinate (A) the preparation and maintenance by the Company's
custodian, in such form, for such periods and in such locations as
may be required by applicable United States law, of all documents
and records relating to the operation of the Company required to be
prepared or maintained by the Company or its agents pursuant to
applicable law; (B) the reconciliation of account information and
balances among the Company's custodian and Citigroup; and (C) the
transmission of purchase and redemption orders for Shares;
(ii) coordinate the performance of administrative and professional
services rendered to the Company by others, including its custodian,
as well as legal, auditing, shareholder servicing and other services
performed for the Funds;
(iii) provide the Company with adequate general office space and
facilities and provide persons suitable to the Board to serve as
ministerial officers of the Company, if requested;
(iv) coordinate the service relationship between Citigroup, the other
service providers to the Company, the Company and each investment
adviser to a Fund to ensure an efficient and effective working
relationship;
(v) act as a liaison between and among Citigroup, the other service
providers to the Company, the Company and each investment adviser to
a Fund ensuring open communication between the various entities; and
(vi) as a representative of Citigroup, attend meetings of the Board of
the Company;
(vii) with the cooperation of the Company's investment advisers, the
officers of the Company and other relevant parties and the
cooperation of the Company's counsel, prepare and disseminate
materials for meetings of the Board, as
APPENDIX B -- SERVICES SCHEDU
applicable, including a general report to the Board covering the
Company's operations;
(viii) subject to commentary following review by the Fund's counsel:
(A) Based on information from the Fund's investment adviser,
custodian, and distributor, and also information maintained by
Citigroup under this Agreement, prepare for filing the following
documents required to be filed by the Fund with the SEC ("SEC
Filings") in either written or, if required or permitted,
electronic format (e.g., pursuant to XXXXX): (1) periodic and
other requested updates to the Registration Statement on Form
N-1A or N-2, (2) prospectuses for the Fund, (3) Forms N-CSR and
N-SAR and any required financial data schedules, (4) Forms N-PX,
(5) Forms 24F, (6) joint insurance policy filings and (7) if
requested and pursuant to mutually acceptable terms, proxy and
information statements and related communications to
shareholders;
(B) Cause to be filed with the SEC all SEC Filings; provided that
items (iii)(A)(1), (2) and (7) shall have been approved by the
Fund and/or Fund counsel;
(C) Oversee the printing of SEC Filings that are intended to be
distributed to shareholders;
(D) Assist Fund counsel in preparing SEC exemptive order requests
and No-Action Letter requests.
(ix) subject to commentary following review by the Fund's counsel, assist
the Company's investment advisers and other appropriate persons with
respect to regulatory compliance matters;
(x) subject to commentary following review by the Fund's counsel
prepare, file and maintain the Company's Organic Documents and
minutes of meetings of the Board, Board committees and shareholders;
(xi) subject to commentary following review by the Fund's counsel,
maintain the Company's existence and good standing under applicable
state law;
(xii) monitor sales of Shares, ensure that the Shares are properly and
duly registered with the SEC and register, or prepare applicable
filings with respect to, the Shares with the various state and other
securities commissions;
(xiii) advise the Company and the Board on matters concerning the Company
and its affairs;
- B-2 -
APPENDIX B -- SERVICES SCHEDULE
(xiv) assist the Company in the selection of other service providers, such
as independent accountants, law firms and proxy solicitors;
(xv) calculate, review and account for Fund expenses and report on Fund
expenses on a periodic basis;
(xvi) authorize the payment of Company expenses and pay, from Company
assets, all bills of the Company;
(xvii) prepare Fund budgets, pro-forma financial statements, expense and
profit/loss projections and fee waiver/expense reimbursement
projections on a periodic basis;
(xviii) prepare financial statement expense information;
(xix) prepare semi-annual financial statements and oversee the production
of the semi-annual financial statements and any related report to
the Company's shareholders prepared by the Company or its investment
advisers, as applicable;
(xx) file the Funds' semi-annual financial statements with the SEC or
ensure that the Funds' semi-annual financial statements are filed
with the SEC and oversee the distribution of the financial
statements to shareholders;
(xxi) produce quarterly compliance reports for the Board;
(xxii) calculate data with respect to yields, dividend yields, distribution
rates and total returns for dissemination to information services
covering the investment company industry, for advertising and sales
literature of the Company and other appropriate purposes;
(xxiii) report Fund data to investment company industry survey companies
(i.e., Lipper, Inc.);
(xxiv) maintain CUSIP, ticker, news media and tax identification number
listings;
(xxv) report applicable data to rating agencies (such as Standard & Poors)
that rate a Fund;
(xxvi) supervise the declaration of dividends and other distributions to
shareholders and prepare and distribute to appropriate parties'
notices announcing the declaration of dividends and other
distributions to shareholders;
(xxvii) prepare Federal income and excise tax workpapers and provisions;
- B-3 -
APPENDIX B -- SERVICES SCHEDULE
(xxviii)prepare, execute and file all Federal income and excise tax returns
and state income and other tax returns, including any extensions or
amendments, each as agreed between the Company and Citigroup;
(xxix) calculate required Fund distributions to maintain the qualification
of each Fund as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code") and avoid, if
applicable, Federal excise tax;
(xxx) perform other tax compliance and related reporting (limited to
calculation of Code Section 851(b) "good income" and
"diversification" testing, reporting the tax status of distributions
and preparing year-end Federal tax notice data);
(xxxi) prepare financial statement tax provisions (limited to sixty
(60) day shareholder tax notices disclosure, tax related footnotes
and Statement of Position 95-3 ("ROCSOP") adjustments);
(xxxii) calculate income distributions for Funds that declare income
distributions more often than annually but not daily and calculate
capital gain distributions (in addition to typical calendar year end
capital gain distributions); and
(xxxiii)perform monthly capital gain analyses based on book numbers adjusted
for prior year unpaid spillback distribution requirements and
capital loss carryforwards.
- B-4 -
APPENDIX B -- SERVICES SCHEDULE
XX.XXXX ACCOUNTING SERVICES:
(a)With respect to a Company or Fund, Citigroup shall:
(i) calculate the net asset value per share ("NAV") with the frequency
prescribed in the Fund's then-current Prospectus;
(ii) calculate each item of income, deduction, credit, gain and loss, if
any, and process each Fund's stated expense ratio as required by the Company
and in conformance with generally accepted accounting practice ("GAAP"), the
SEC's Regulation S-X (or any successor regulation) and the Internal Revenue
Code of 1986, as amended (or any successor laws)(the "Code");
(iii) maintain the Fund's general ledger and record all income, gross
expenses, capital share activity and security transactions of each Fund;
(iv) calculate the "SEC yield" and money market fund seven day yields for
the Fund, and each Class thereof, as applicable;
(v) provide the Company and such other persons as the Administrator may
direct with the following reports (A) Key Numbers Summary, (B) trial
balance, (C) current security position report by tax lot, (D) security
position report by security identifier, (E) stale pricing and (F) cash
position and projection report;
(vi) prepare and record once daily, as of the time when the NAV of the Fund
is calculated or at such other time as otherwise directed by the Company,
either (A) a valuation of the assets of the Fund (unless otherwise specified
in or in accordance with this Agreement, based upon the use of outside
services normally used and contracted for this purpose by Citigroup in the
case of securities for which information and market price or yield
quotations are readily available and based upon evaluations conducted in
accordance with the instructions of the Company in the case of all other
assets) or (B) a calculation confirming that the market value of the Fund's
assets does not deviate from the amortized cost value of those assets by
more than a specified percentage;
(vii) make such adjustments over such periods, as the Company deems
necessary to reflect over-accruals or under-accruals of estimated expenses
or income;
(viii) provide appropriate records to assist the Company's independent
accountants and, upon approval of the Company, any regulatory body in any
requested review of the Company's books and records maintained by Citigroup;
(ix) transmit the NAVs and dividend factors of the Fund to those persons
designated by the Company in writing either by Internet e-mail or facsimile
transmission;
- B-5 -
APPENDIX B -- SERVICES SCHEDULE
(x) provide the Company with the data requested by the Company that is
required to update the Registration Statement;
(xi) provide the Company or its independent accountants the data requested
with respect to the preparation of the Company's income, excise and other
tax returns;
(xii) provide the Company or its independent accountants with unadjusted
Fund data directly from Citigroup's portfolio accounting system for any Fund
business day and other data reasonably requested for the preparation of the
Company's semi-annual financial statements;
(xiii) process all distributions as directed in writing by the Company;
(xiv) transmit to and receive from the Fund's transfer agent appropriate
data to reconcile daily Shares outstanding and other data with the transfer
agent;
(xv) reconcile cash daily and reconcile security identifier, units,
maturities and rates at least monthly with the Fund's custodian;
(xvi) verify investment trade tickets when received from an investment
adviser and maintain individual ledgers and historical tax lots for each
security; and
(xvii) perform such other recordkeeping, reporting and other tasks as may be
specified from time to time by the Company or the Administrator in the
procedures adopted by the Board pursuant to mutually acceptable compensation
and implementation agreements.
(b) Citigroup shall prepare and maintain on behalf of each Company the
following books and records of each Fund, and each Class thereof, pursuant to
Rule 31a-1 under the 1940 Act (the "Rule"):
(i) Journals containing an itemized daily record in detail of all purchases
and sales of securities, all receipts and disbursements of cash and all
other debits and credits, as required by subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all asset, liability, reserve,
capital, income and expense accounts, as required by subsection (b)(2) of
the Rule (but not including the ledgers required by subsection (b)(2)(iv) of
the Rule);
(iii) A record of each brokerage order given by or on behalf of each Company
for, or in connection with, the purchase or sale of securities, whether
executed or not, and all other portfolio purchases or sales, as required by
subsections (b)(5) and (b)(6) of the Rule;
(iv) A record of all options, if any, in which each Fund has any direct or
indirect interest or which each Fund has granted or guaranteed and a record
of any contractual
- B-6 -
APPENDIX B -- SERVICES SCHEDULE
commitments to purchase, sell, receive or deliver any property, as required
by subsection (b)(7) of the Rule;
(v) A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b)(8) of the Rule; and
(vi) Other records required by the Rule or any successor rule or pursuant to
interpretations thereof to be kept by open-end management investment
companies, but limited to those provisions of the Rule applicable to
portfolio transactions and as agreed upon between the parties hereto.
- B-7 -
APPENDIX B -- SERVICES SCHEDULE
III.TRANSFER AGENCY SERVICES
1. GENERAL SERVICES
(a) In accordance with procedures established from time to time by agreement
between each Company and Citigroup, Citigroup will perform the following
services with respect to each Company:
(i) provide the services of a transfer agent, dividend disbursing agent and,
as relevant, agent in connection with accumulation, open-account or similar
plans (including without limitation any periodic investment plan or periodic
withdrawal program) that are customary for open-end management investment
companies including: (A) maintaining all Shareholder accounts, (B) preparing
Shareholder meeting lists, (C) mailing proxies and related materials to
Shareholders, (D) mailing Shareholder reports and prospectuses to current
Shareholders, (E) withholding taxes on U.S. resident and non-resident alien
accounts, (F) preparing and filing U.S. Treasury Department Forms 1099 and
other appropriate forms required by federal authorities with respect to
distributions for Shareholders, (G) preparing and mailing confirmation forms
and statements of account to Shareholders for all purchases and redemptions
of Shares and other confirmable transactions in Shareholder accounts,
(H) preparing and mailing activity statements for Shareholders, and
(I) providing Shareholder account information;
(ii) receive for acceptance orders for the purchase of Shares and promptly
deliver payment and appropriate documentation therefor to the custodian of
the applicable Fund (the "Custodian") or, in the case of Fund's operating in
a master-feeder or fund of funds structure, to the transfer agent or
interestholder recordkeeper for the master portfolios in which the Fund
invests;
(iii) pursuant to purchase orders, issue the appropriate number of Shares
and hold such Shares in the appropriate Shareholder account;
(iv) receive for acceptance redemption requests and deliver the appropriate
documentation therefor to the Custodian or, in the case of Fund's operating
in a master-feeder structure, to the transfer agent or interestholder
recordkeeper for the master fund in which the Fund invests;
(v) as and when it receives monies paid to it by the Custodian with respect
to any redemption, pay the redemption proceeds as required by the prospectus
pursuant to which the redeemed Shares were offered and as instructed by the
redeeming Shareholders;
(vi) effect transfers of Shares upon receipt of appropriate instructions
from Shareholders;
(vii) prepare and transmit to Shareholders (or credit the appropriate
Shareholder accounts) payments for all distributions declared by the Company
with respect to Shares;
- B-8 -
APPENDIX B -- SERVICES SCHEDULE
(viii) issue share certificates and replacement share certificates for those
share certificates alleged to have been lost, stolen, or destroyed upon
receipt by Citigroup of indemnification satisfactory to Citigroup and
protecting Citigroup and the Company and, at the option of Citigroup, issue
replacement certificates in place of mutilated share certificates upon
presentation thereof without requiring indemnification;
(ix) receive from Shareholders or debit Shareholder accounts for sales
commissions, including contingent deferred, deferred and other sales
charges, and service fees (i.e., wire redemption charges) and prepare and
transmit payments to underwriters, selected dealers and others for
commissions and service fees received;
(x) track shareholder accounts by financial intermediary source and
otherwise as reasonably requested by the Company and provide periodic
reporting to the Company or its administrator or other agent;
(xi) maintain records of account for and provide reports and statements to
the Company and Shareholders as to the foregoing;
(xii) record the issuance of Shares of the Company and maintain pursuant to
Rule 17Ad-10(e) under the Securities Exchange Act of 1934, as amended ("1934
Act") a record of the total number of Shares of the Company, each Fund and
each Class thereof, that are authorized, based upon data provided to it by
the Company, and are issued and outstanding and provide the Company on a
regular basis a report of the total number of Shares that are authorized and
the total number of Shares that are issued and outstanding;
(xiii) provide a system that will enable the Company to calculate the total
number of Shares of each Fund and Class thereof sold in each State;
(xiv) monitor and make appropriate filings with respect to the escheatment
laws of the various states and territories of the United States; and
(xv) oversee the activities of proxy solicitation firms.
(b) Citigroup shall receive and tabulate proxy votes, coordinate the
tabulation of proxy and shareholder meeting votes and perform such other
additional services as may be specified from time to time by each Company, all
pursuant to mutually acceptable compensation and implementation agreements.
(c) Each Company (i) shall identify to Citigroup in writing those
transactions and assets to be treated as exempt from reporting for each state
and territory of the United States and for each foreign jurisdiction
(collectively "States") and (ii) shall monitor the sales activity with respect
to Shareholders domiciled or resident in each State. The responsibility of
Citigroup for each Company's State registration status is solely limited to the
reporting of transactions to each Company, and Citigroup shall have no
obligation, when recording the issuance of Shares, to monitor the issuance of
such Shares or to take cognizance of any laws relating to the issue or sale
- B-9 -
APPENDIX B -- SERVICES SCHEDULE
of such Shares, which functions shall be the sole responsibility of each
Company or its administrator or other agent.
(d) Citigroup shall establish and maintain facilities and procedures
reasonably acceptable to each Company for the safekeeping, control, preparation
and use of share certificates, check forms, and facsimile signature imprinting
devices. Citigroup shall establish and maintain facilities and procedures
reasonably acceptable to each Company for safekeeping of all records maintained
by Citigroup pursuant to this Agreement.
(e) Citigroup shall cooperate with each Fund's independent public
accountants and shall take reasonable action to make all necessary information
available to the accountants for the performance of the accountants' duties.
(f) Fund transactions shall be subject to the Citigroup AML Program.
2. RECORDKEEPING
(a) Prior to the commencement of Citigroup's responsibilities under this
Agreement, if applicable, each Company shall deliver or cause to be delivered
over to Citigroup (i) an accurate list of its Shareholders, showing each
Shareholder's address of record, number of Shares owned and whether such Shares
are represented by outstanding share certificates and (ii) all Shareholder
records, files, and other materials necessary or appropriate for proper
performance of the functions assumed by Citigroup under this Agreement
(collectively referred to as the "Materials"). Each Company shall on behalf of
each applicable Fund or Class indemnify and hold Citigroup harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to any error, omission,
inaccuracy or other deficiency of the Materials, or out of the failure of the
Company to provide any portion of the Materials or to provide any information
in the Company's possession or control reasonably needed by Citigroup to
perform the services described in this Agreement.
3. ISSUANCE AND TRANSFER OF SHARES
(a) Citigroup shall make original issues of Shares of each Fund and Class
thereof in accordance with the applicable Company's then-current prospectus
only upon receipt of (i) instructions requesting the issuance, (ii) a certified
copy of a resolution of the Board authorizing the issuance, (iii) necessary
funds for the payment of any original issue tax applicable to such Shares, and
(iv) an opinion of the Company's counsel as to the legality and validity of the
issuance, which opinion may provide that it is contingent upon the filing by
the Company of an appropriate notice with the SEC, as required by Section 24 of
the 1940 Act or the rules thereunder. If the opinion described in (iv) above is
contingent upon a filing under Section 24 of the 1940 Act, the Company shall
indemnify Citigroup for any liability arising from its failure to comply with
that section or the rules thereunder.
(b) Transfers of Shares of each Fund and Class thereof shall be registered
on the Shareholder records maintained by Citigroup. In registering transfers of
Shares, Citigroup may
- B-10 -
APPENDIX B -- SERVICES SCHEDULE
rely upon the Uniform Commercial Code as in effect in the State of Delaware or
any other statutes that, in the opinion of Citigroup's counsel, protect
Citigroup and the Company from liability arising from (i) not requiring
complete documentation, (ii) registering a transfer without an adverse claim
inquiry, (iii) delaying registration for purposes of such inquiry or
(iv) refusing registration whenever an adverse claim requires such refusal. As
transfer agent, Citigroup will be responsible for delivery to the transferor
and transferee of such documentation as is required by the Uniform Commercial
Code.
4. SHARE CERTIFICATES
(a) Each Company shall furnish to Citigroup a supply of blank share
certificates of each Fund and Class thereof and, from time to time, will renew
such supply upon Citigroup's request. Blank share certificates shall be signed
manually or by facsimile signatures of officers of the applicable Company
authorized to sign by the Organic Documents of the Company and, if required by
the Organic Documents, shall bear the Company's seal or a facsimile thereof.
Unless otherwise directed by a Company, Citigroup may issue or register Share
certificates reflecting the manual or facsimile signature of an officer who has
died, resigned or been removed by the Company.
(b) New Share certificates shall be issued by Citigroup upon surrender of
outstanding Share certificates in the form deemed by Citigroup to be properly
endorsed for transfer and satisfactory evidence of compliance with all
applicable laws relating to the payment or collection of taxes. Citigroup shall
forward Share certificates in "non-negotiable" form by first-class or
registered mail, or by whatever means Citigroup deems equally reliable and
expeditious. Citigroup shall not mail Share certificates in "negotiable" form
unless requested in writing by the applicable Company and fully indemnified by
the Company to Citigroup's satisfaction.
(c) In the event that a Company informs Citigroup that any Fund or Class
thereof does not issue share certificates, Citigroup shall not issue any such
share certificates and the provisions of this Agreement relating to share
certificates shall not be applicable with respect to those Funds or Classes
thereof.
5. SHARE PURCHASE; ELIGIBILITY TO RECEIVE DISTRIBUTIONS
(a) Shares shall be issued in accordance with the terms of a Fund's or
Class' prospectus after Citigroup or its agent receives either of the
following, in each case in good order and with such additional items or
materials as may be required by a Fund's or Class' procedures, Citigroup's
operational procedures and/or the Citigroup AML Program:
(i)(A) an instruction directing investment in a Fund or Class, (B) a check
(other than a third party check) or a wire or other electronic payment in
the amount designated in the instruction and (C), in the case of an initial
purchase, a completed account application; or
(ii) the information required for purchases pursuant to a selected dealer
agreement, processing organization agreement, or a similar contract with a
financial intermediary.
- B-11 -
APPENDIX B -- SERVICES SCHEDULE
(b) Shares issued in a Fund after receipt of a completed purchase order
shall be eligible to receive distributions of the Fund at the time specified in
the Prospectus pursuant to which the Shares are offered.
(c) Shareholder payments shall be considered Federal Funds no later than on
the day indicated below unless other times are noted in the prospectus of the
applicable Class or Fund:
(i) for a wire received, at the time of the receipt of the wire;
(ii) for a check drawn on a member bank of the Federal Reserve System, on
the next Fund business day following receipt of the check; and
(iii) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as Citigroup is credited with Federal
Funds with respect to that check.
6. ANTI-MONEY LAUNDERING ("AML") MATTERS
(a) Each Company delegates to Citigroup the performance of the services set
forth below (the "AML Services") with respect to shareholder accounts
maintained by Citigroup pursuant to the Agreement; and subject to the terms and
conditions of the Agreement, Citigroup accepts this delegation and agrees to
perform the AML Services in accordance with the Citigroup AML Program.
Notwithstanding this delegation, each Companyshall maintain full responsibility
for ensuring that its AML program is and continues to be reasonably designed to
ensure compliance with the applicable AML laws.
(i) Verify shareholder identity upon opening new accounts in accordance with
Section 326 of the USA PATRIOT Act (the "PATRIOT ACT") and any regulations
thereunder, as required under applicable law;
(ii) Monitor shareholder transactions and identify and report suspicious
activities that are required to be so identified and reported, in each case
consistent with the Citigroup AML Program;
(iii) Submit all accounts through the Office of Foreign Asset Control
("OFAC") database and FinCEN's Control List;
(iv) Follow each Company's third party check policies; provided, however,
that under no circumstance will Citigroup accept a corporate third party
check;
(v) Place holds on transactions in shareholder accounts or freeze assets in
shareholder accounts, as provided in the Citigroup AML Program and in
accordance with the Patriot Act and OFAC; and
- B-12 -
APPENDIX B -- SERVICES SCHEDULE
(b) Each Company authorizes Citigroup to take such actions in the
performance of the AML Services as Citigroup deems appropriate and consistent
with the Citigroup AML Program and applicable AML Laws.
(c) Citigroup agrees to furnish each Company its written program concerning
AML Services rendered by Citigroup to its various clients. Citigroup agrees to
notify each Company of any change to the Citigroup AML Program that would
materially impact a Company's AML program.
(d) Citigroup agrees to allow appropriate federal examiners to (a) obtain
and inspect information and records maintained by Citigroup under this
Agreement relating to each Company's AML program and (b) inspect Citigroup for
purposes of each Company's AML program.
- B-13 -
