CLOSED-END FUND
CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of
______________, 2006, by and between CITIGROUP ALTERNATIVE INVESTMENTS TRUST
(the "Trust"), a Delaware statutory trust, on behalf of its series, CITIGROUP
ALTERNATIVE INVESTMENTS TAX ADVANTAGED SHORT TERM FUND (the "Fund") and U.S.
BANK NATIONAL ASSOCIATION, a national banking association organized and existing
under the laws of the United States of America with its principal place of
business at Minneapolis, Minnesota (the "Custodian").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a closed-end management investment
company, and is authorized to issue shares of beneficial interest in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Custodian is a bank having the qualifications prescribed
in Section 26(a)(1) of the 1940 Act; and
WHEREAS, the Trust desires to retain the Custodian to act as custodian
of the cash and securities of each series of the Trust listed on Exhibit C
hereto (as amended from time to time) (each a "Fund" and collectively, the
"Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the meanings set forth below, unless the context otherwise requires:
1.1 "Authorized Person" means any Officer or other person duly
authorized by resolution of the Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and
named in Exhibit A hereto or in such resolutions of the Board of
Trustees, certified by an Officer, as may be received by the
Custodian from time to time.
1.2 "Board of Trustees" shall mean the trustees from time to time
serving under the Trust's declaration of trust, as amended from
time to time.
1.3 "Book-Entry System" shall mean a federal book-entry system as
provided in Subpart O of Treasury Circular Xx. 000, 00 XXX 306,
in Subpart B of 31 CFR Part 350, or in such book-entry
regulations of federal agencies as are substantially in the form
of such Subpart O.
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1.4 "Business Day" shall mean any day other than a Saturday, Sunday
or other day on which commercial banks located in the State of
New York are authorized or required by law or governmental
action to close,
1.5 "Fund Custody Account" shall mean any of the accounts in the
name of the Trust, which is provided for in Section 3.2 below.
1.6 "IRS" shall mean the Internal Revenue Service.
1.7 "NASD" shall mean The National Association of Securities
Dealers, Inc.
1.8 "Officer" shall mean the Chairman, President, any Vice
President, any Assistant Vice President, the Secretary, any
Assistant Secretary, the Treasurer, or any Assistant Treasurer
of the Trust.
1.9 "Oral Instructions" shall mean instructions orally transmitted
to and accepted by the Custodian because such instructions are:
(i) reasonably believed by the Custodian to have been given by
any two Authorized Persons, (ii) recorded and kept among the
records of the Custodian made in the ordinary course of
business, and (iii) orally confirmed by the Custodian. The Trust
shall cause all Oral Instructions to be confirmed by Written
Instructions prior to the end of the next Business Day. If such
Written Instructions confirming Oral Instructions are not
received by the Custodian prior to a transaction, it shall in no
way affect the validity of the transaction or the authorization
thereof by the Trust. If Oral Instructions vary from the Written
Instructions that purport to confirm them, the Custodian shall
notify the Trust of such variance but such Oral Instructions
will govern unless the Custodian has not yet acted.
1.10 "Proper Instructions" shall mean Oral Instructions or Written
Instructions.
1.11 "SEC" shall mean the Securities and Exchange Commission.
1.12 "Securities" shall include, without limitation, common and
preferred stocks, bonds, call options, put options, debentures,
notes, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities or other obligations, and any
certificates, receipts, warrants or other instruments or
documents representing rights to receive, purchase or subscribe
for the same, or evidencing or representing any other rights or
interests therein, or any similar property or assets that the
Custodian has the facilities to clear and service.
1.13 "Securities Depository" shall mean The Depository Trust Company
and any other clearing agency registered with the SEC under
Section 17A of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which acts as a system for the central
handling of Securities where all Securities of any particular
class or series of an issuer deposited within the system are
treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of the Securities.
1.14 "Shares" shall mean, with respect to a Fund, the units of
beneficial interest issued by the Trust on account of the Fund.
1.15 "Sub-Custodian" shall mean and include (i) any branch of a "U.S.
bank," as that term is defined in Rule 17f-5 under the 1940 Act,
and (ii) any "eligible foreign custodian," as that term is
defined in Rule 17f-5 under the 1940 Act, having a contract with
the Custodian which the Custodian has determined will provide
reasonable care of assets of the Fund based on the standards
specified in Section 3.3 below. Such contract shall be in
writing and shall include provisions that provide: (i) for
indemnification or insurance arrangements (or any combination of
the foregoing) such that the Fund will be adequately protected
against the risk of loss of assets held in accordance with such
contract; (ii) that the Fund's assets will not be subject to any
right, charge, security interest, lien or claim of any kind in
favor of the Sub-Custodian or its creditors except a claim of
payment for their safe custody or administration, in the case of
cash deposits, liens or rights in favor of
creditors of the Sub-Custodian arising under bankruptcy,
insolvency, or similar laws; (iii) that beneficial ownership for
the Fund's assets will be freely transferable without the
payment of money or value other than for safe custody or
administration; (iv) that adequate records will be maintained
identifying the assets as belonging to the Fund or as being held
by a third party for the benefit of the Fund; (v) that the
Fund's independent public accountants will be given access to
those records or confirmation of the contents of those records;
and (vi) that the Fund will receive periodic reports with
respect to the safekeeping of the Fund's assets, including, but
not limited to, notification of any transfer to or from a Fund's
account or a third party account containing assets held for the
benefit of the Fund. Such contract may contain, in lieu of any
or all of the provisions specified in (i) - (vi) above, such
other provisions that the Custodian determines will provide, in
their entirety, the same or a greater level of care and
protection for Fund assets as the specified provisions.
1.16 "Written Instructions" shall mean (i) written communications
actually received by the Custodian and signed by any two
Authorized Persons, (ii) communications by telex or any other
such system from one or more persons reasonably believed by the
Custodian to be Authorized Persons, or (iii) communications
between electro-mechanical or electronic devices provided that
the use of such devices and the procedures for the use thereof
shall have been approved by resolutions of the Board of
Trustees, a copy of which, certified by an Officer, shall have
been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Trust hereby appoints the Custodian as
custodian of all Securities and cash owned by or in the
possession of the Fund at any time during the period of this
Agreement, on the terms and conditions set forth in this
Agreement, and the Custodian hereby accepts such appointment and
agrees to perform the services and duties set forth in this
Agreement. The services and duties of the Custodian shall be
confined to those matters expressly set forth herein, and no
implied duties are assumed by or may be asserted against the
Custodian hereunder.
2.2 Documents to be Furnished. The following documents, including
any amendments thereto, will be provided contemporaneously with
the execution of the Agreement to the Custodian by the Trust:
(a) A copy of the Trust's declaration of trust, certified by the
Secretary or Assistant Secretary;
(b) A copy of the Trust's bylaws, certified by the Secretary or
Assistant Secretary;
(c) A copy of the resolution of the Board of Trustees of the
Trust appointing the Custodian, certified by the Secretary
or Assistant Secretary;
(d) A copy of the current prospectus of the Fund (the
"Prospectus"); and
(e) A certification of the Chairman or the President and the
Secretary or the Assistant Secretary of the Trust setting
forth the names and signatures of the current Officers of
the Trust and other Authorized Persons.
2.3 Notice of Appointment of Transfer Agent. The Trust agrees to
notify the Custodian in writing of the appointment, termination
or change in appointment of any transfer agent of the Fund.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the
Custodian for the account of the Fund (other than Securities
maintained in a Securities Depository or Book-Entry System)
shall be physically segregated from other Securities and
non-cash property in the possession of the
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Custodian (including the Securities and non-cash property of the
other series of the Trust) and shall be identified as subject to
this Agreement.
3.2 Fund Custody Accounts. As to each Fund, the Custodian shall open
and maintain in its trust department a custody account in the
name of the Trust coupled with the name of the Fund, subject
only to draft or order of the Custodian, in which the Custodian
shall enter and carry all Securities, cash and other assets of
such Fund which are delivered to it.
3.3 Appointment of Agents.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodians to act as Securities Depositories or as
sub-custodians to hold Securities and cash of the Fund and
to carry out such other provisions of this Agreement as it
may determine; provided, however, that the appointment of
any such agents and maintenance of any Securities and cash
of the Fund shall be at the Custodian's expense and shall
not relieve the Custodian of any of its obligations or
liabilities under this Agreement. The Custodian shall be
liable for the actions of any Sub-Custodians appointed by it
as if such actions had been done by the Custodian. The
Custodian shall not release any Sub-Custodian from any
responsibility or liability unless as agreed in writing by
the Custodian and the Trust on behalf of the relevant Fund.
(b) If, after the initial approval of Sub-Custodians by the
Board of Trustees in connection with this Agreement, the
Custodian wishes to appoint other Sub-Custodians to hold
property of the Fund, it will so notify the Trust and
provide it with information reasonably necessary to
determine any such new Sub-Custodian's eligibility under
Rule 17f-5 under the 1940 Act, including a copy of the
proposed agreement with such Sub-Custodian. At the meeting
of the Board of Trustees next following receipt of such
notice and information, the Trust shall give its written
approval or disapproval of the proposed action.
(c) The Agreement between the Custodian and each Sub-Custodian
acting hereunder shall contain the required provisions set
forth in Rule 17f-5(c)(2) under the 1940 Act.
(d) At the end of each calendar quarter, the Custodian shall
provide written reports notifying the Board of Trustees of
the placement of the Securities and cash of the Fund with a
particular Sub-Custodian and of any material changes in the
Fund's arrangements. The Custodian shall promptly take such
steps as may be required to withdraw assets of the Fund from
any Sub-Custodian that has ceased to meet the requirements
of Rule 17f-5 under the 1940 Act.
(e) With respect to its responsibilities under this Section 3.3,
the Custodian hereby warrants to the Trust that it agrees to
exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of property
of the Fund. The Custodian further warrants that the Fund's
assets will be subject to reasonable care if maintained with
a Sub-Custodian, after considering all factors relevant to
the safekeeping of such assets, including, without
limitation: (i) the Sub-Custodian's practices, procedures,
and internal controls for certificated securities (if
applicable), its method of keeping custodial records, and
its security and data protection practices; (ii) whether the
Sub-Custodian has the requisite financial strength to
provide reasonable care for Fund assets; (iii) the
Sub-Custodian's general reputation and standing and, in the
case of a Securities Depository, the Securities Depository's
operating history and number of participants; and (iv)
whether the Fund will have jurisdiction over and be able to
enforce judgments against the Sub-Custodian, such as by
virtue of the existence of any offices of the Sub-Custodian
in the United States or the Sub-Custodian's consent to
service of process in the United States.
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(f) The Custodian shall establish a system to monitor the
appropriateness of maintaining the Fund's assets with a
particular Sub-Custodian and the contract governing the
Fund's arrangements with such Sub-Custodian.
3.4 Delivery of Assets to Custodian. The Trust shall deliver, or
cause to be delivered, to the Custodian all of the Fund's
Securities, cash and other investment assets, including (i) all
payments of income, payments of principal and capital
distributions received by the Fund with respect to such
Securities, cash or other assets owned by the Fund at any time
during the period of this Agreement, and (ii) all cash received
by the Fund for the issuance of Shares. The Custodian shall not
be responsible for such Securities, cash or other assets until
actually received by it.
3.5 Securities Depositories and Book-Entry Systems. The Custodian
may deposit and/or maintain Securities of the Fund in a
Securities Depository or in a Book-Entry System, subject to the
following provisions:
(a) The Custodian, on an on-going basis, shall deposit in a
Securities Depository or Book-Entry System all Securities
eligible for deposit therein and shall make use of such
Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance
hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of collateral
consisting of Securities.
(b) Securities of the Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account
("Depository Account") of the Custodian in such Book-Entry
System or Securities Depository which includes only assets
held by the Custodian as a fiduciary, custodian or otherwise
for customers.
(c) The records of the Custodian with respect to Securities of
the Fund maintained in a Book-Entry System or Securities
Depository shall, by book-entry, identify such Securities as
belonging to the Fund.
(d) If Securities purchased by the Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian
shall pay for such Securities upon (i) receipt of advice
from the Book-Entry System or Securities Depository that
such Securities have been transferred to the Depository
Account, and (ii) the making of an entry on the records of
the Custodian to reflect such payment and transfer for the
account of the Fund. If Securities sold by the Fund are held
in a Book-Entry System or Securities Depository, the
Custodian shall transfer such Securities upon (i) receipt of
advice from the Book-Entry System or Securities Depository
that payment for such Securities has been transferred to the
Depository Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and
payment for the account of the Fund.
(e) The Custodian shall provide the Trust with copies of any
report (obtained by the Custodian from a Book-Entry System
or Securities Depository in which Securities of the Fund are
kept) on the internal accounting controls and procedures for
safeguarding Securities deposited in such Book-Entry System
or Securities Depository.
(f) Notwithstanding anything to the contrary in this Agreement,
the Custodian shall be liable to the Trust for any loss or
damage to the Fund resulting from (i) the use of a
Book-Entry System or Securities Depository by reason of any
negligence or willful misconduct on the part of the
Custodian or any Sub-Custodian or any of its or their
employees, or (ii) failure of the Custodian or any
Sub-Custodian to enforce effectively such rights as it may
have against a Book-Entry System or Securities Depository.
At its election, the Trust shall be subrogated to the rights
of the Custodian with respect to any claim against a
Book-Entry System or Securities Depository or any other
person from any loss or damage to the Fund
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arising from the use of such Book-Entry System or Securities
Depository, if and to the extent that the Fund has not been
made whole for any such loss or damage.
(g) With respect to its responsibilities under this Section 3.5
and pursuant to Rule 17f-4 under the 1940 Act, the Custodian
hereby warrants to the Trust that it agrees to (i) exercise
due care in accordance with reasonable commercial standards
in discharging its duty as a securities intermediary to
obtain and thereafter maintain such assets, (ii) provide,
promptly upon request by the Trust, such reports as are
available concerning the Custodian's internal accounting
controls and financial strength, and (iii) require any
Sub-Custodian to exercise due care in accordance with
reasonable commercial standards in discharging its duty as a
securities intermediary to obtain and thereafter maintain
assets corresponding to the security entitlements of its
entitlement holders.
3.6 Disbursement of Moneys from Fund Custody Account. Upon receipt
of Proper Instructions, the Custodian shall disburse moneys from
the Fund Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in
accordance with Section 4.1 of this Agreement and only (i)
in the case of Securities (other than options on Securities,
futures contracts, and options on futures contracts),
against the delivery to the Custodian (or any Sub-Custodian)
of such Securities registered as provided in Section 3.9
below or in proper form for transfer, or if the purchase of
such Securities is effected through a Book-Entry System or
Securities Depository, in accordance with the conditions set
forth in Section 3.5 above; (ii) in the case of options on
Securities, against delivery to the Custodian (or any
Sub-Custodian) of such receipts as are required by the
customs prevailing among dealers in such options; (iii) in
the case of futures contracts and options on futures
contracts, against delivery to the Custodian (or any
Sub-Custodian) of evidence of title thereto in favor of the
Fund or any nominee referred to in Section 3.9 below; and
(iv) in the case of repurchase or reverse repurchase
agreements entered into between the Trust and a bank which
is a member of the Federal Reserve System or between the
Trust and a primary dealer in U.S. Government securities,
against delivery of the purchased Securities either in
certificate form or through an entry crediting the
Custodian's account at a Book-Entry System or Securities
Depository with such Securities;
(b) In connection with the conversion, exchange or surrender, as
set forth in Section 3.7(f) below, of Securities owned by
the Fund;
(c) For the payment of any dividends or capital gain
distributions declared by the Fund;
(d) In payment of the price of Shares repurchased through tender
offers as provided in Section 5.1 below;
(e) For the payment of any expense or liability incurred by the
Fund, including, but not limited to, the following payments
for the account of the Fund: interest; taxes;
administration, investment advisory, accounting, auditing,
transfer agent, custodian, director and legal fees; and
other operating expenses of the Fund; in all cases, whether
or not such expenses are to be in whole or in part
capitalized or treated as deferred expenses;
(f) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian, and a
broker-dealer registered under the 1934 Act and a member of
the NASD, relating to compliance with rules of the Options
Clearing Corporation and of any registered national
securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in
connection with transactions by the Fund;
(g) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian, and a futures
commission merchant registered under the Commodity Exchange
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Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or
any similar organization or organizations) regarding account
deposits in connection with transactions by the Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a
term of one year or less; and
(i) For any other proper purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution
of the Board of Trustees, certified by an Officer,
specifying the amount and purpose of such payment, declaring
such purpose to be a proper corporate purpose, and naming
the person or persons to whom such payment is to be made.
3.7 Delivery of Securities from Fund Custody Account. Upon receipt
of Proper Instructions, the Custodian shall release and deliver
Securities from the Fund Custody Account but only in the
following cases:
(a) Upon the sale of Securities for the account of the Fund but
only against receipt of payment therefor in cash, by
certified or cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry System
or Securities Depository, in accordance with the provisions
of Section 3.5 above;
(c) To an offeror's depository agent in connection with tender
or other similar offers for Securities of the Fund; provided
that, in any such case, the cash or other consideration is
to be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the
name of the Fund, the Custodian or any Sub-Custodian, or any
nominee or nominees of any of the foregoing, or (ii) for
exchange for a different number of certificates or other
evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
Securities are to be delivered to the Custodian;
(e) To the broker selling the Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant
to provisions for conversion contained in such Securities,
or pursuant to any deposit agreement, including surrender or
receipt of underlying Securities in connection with the
issuance or cancellation of depository receipts; provided
that, in any such case, the new Securities and cash, if any,
are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase
or reverse repurchase agreement entered into by the Fund;
(h) In the case of warrants, rights or similar Securities, upon
the exercise thereof, provided that, in any such case, the
new Securities and cash, if any, are to be delivered to the
Custodian;
(i) For delivery in connection with any loans of Securities of
the Fund, but only if the Fund determines to engage in
securities lending activities (which shall be subject to a
separate agreement, and only against receipt of such
collateral as the Trust shall have specified to the
Custodian in Proper Instructions;
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(j) For delivery as security in connection with any borrowings
by the Fund requiring a pledge of assets by the Trust, but
only against receipt by the Custodian of the amounts
borrowed, except that where additional collateral is
required to secure a borrowing already made, subject to
Proper Instructions, further securities may be released and
delivered for that purpose;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Trust;
(l) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD,
relating to compliance with the rules of the Options
Clearing Corporation and of any registered national
securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in
connection with transactions by the Fund;
(m) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian, and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or
any similar organization or organizations) regarding account
deposits in connection with transactions by the Fund; or
(n) For any other proper corporate purpose, but only upon
receipt, in addition to Proper Instructions, of a copy of a
resolution of the Board of Trustees, certified by an
Officer, specifying the Securities to be delivered, setting
forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and
naming the person or persons to whom delivery of such
Securities shall be made.
3.8 Actions Not Requiring Proper Instructions. Unless otherwise
instructed by the Trust, the Custodian shall with respect to all
Securities held for the Fund:
(a) Subject to Section 9.4 below, collect on a timely basis all
income and other payments to which the Fund is entitled
either by law or pursuant to custom in the securities
business;
(b) Present for payment and, subject to Section 9.4 below,
collect on a timely basis the amount payable upon all
Securities which may mature or be called, redeemed, or
retired, or otherwise become payable;
(c) Endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form
for Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the federal income tax laws
or the laws or regulations of any other taxing authority now
or hereafter in effect, and prepare and submit reports to
the IRS and the Trust at such time, in such manner and
containing such information as is prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or
Securities Depository, all rights and similar Securities
issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and other assets
of the Fund.
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3.9 Registration and Transfer of Securities. All Securities held for
the Fund that are issued or issuable only in bearer form shall
be held by the Custodian in that form, provided that any such
Securities shall be held in a Book-Entry System if eligible
therefor. All other Securities held for the Fund may be
registered in the name of the Fund, the Custodian, a
Sub-Custodian, or any nominee of any of them, or in the name of
a Book-Entry System, Securities Depository or any nominee of
either thereof. The Trust shall furnish to the Custodian
appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the name
of any of the nominees referred to above or in the name of a
Book-Entry System or Securities Depository, any Securities
registered in the name of the Fund.
3.10 Records.
(a) The Custodian shall maintain complete and accurate records
with respect to Securities, cash or other property held for
the Fund, including (i) journals or other records of
original entry containing an itemized daily record in detail
of all receipts and deliveries of Securities and all
receipts and disbursements of cash; (ii) ledgers (or other
records) reflecting (A) Securities in transfer, (B)
Securities in physical possession, (C) monies and Securities
borrowed and monies and Securities loaned (together with a
record of the collateral therefor and substitutions of such
collateral), (D) dividends and interest received, and (E)
dividends receivable and interest receivable; and (iii)
canceled checks and bank records related thereto. The
Custodian shall keep such other books and records of the
Fund as the Trust shall reasonably request, or as may be
required by the 1940 Act, including, but not limited to,
Section 31 of the 1940 Act and Rule 31a-2 promulgated
thereunder.
(b) All such books and records maintained by the Custodian shall
(i) be maintained in a form acceptable to the Trust and in
compliance with the rules and regulations of the SEC, (ii)
be the property of the Trust and at all times during the
regular business hours of the Custodian be made available
upon request for inspection by duly authorized officers,
employees or agents of the Trust and employees or agents of
the SEC, and (iii) if required to be maintained by Rule
31a-1 under the 1940 Act, be preserved for the periods
prescribed in Rule 31a-2 under the 0000 Xxx.
3.11 Fund Reports by Custodian. The Custodian shall furnish the Trust
with a daily activity statement and a summary of all transfers
to or from each Fund Custody Account on the day following such
transfers. At least weekly, the Custodian shall furnish the
Trust with a detailed statement of the Securities and moneys
held by the Custodian and the Sub-Custodians for the Fund under
this Agreement.
3.12 Other Reports by Custodian. As the Trust may reasonably request
from time to time, the Custodian shall provide the Trust with
reports on the internal accounting controls and procedures for
safeguarding Securities which are employed by the Custodian or
any Sub-Custodian. In addition, the Custodian shall reasonably
cooperate with the Trust's Chief Compliance Officer (the "CCO")
in respect of the CCO's initial and periodic reviews of those
aspects of USBFS' compliance program relevant to the Trust and
provide prompt reporting to the CCO of material compliance
matters relevant thereto (as the same are defined for purposes
of Rule 38a-1 under the 1940 Act.
3.13 Proxies and Other Materials. The Custodian shall cause all
proxies relating to Securities which are not registered in the
name of the Fund to be promptly executed by the registered
holder of such Securities, without indication of the manner in
which such proxies are to be voted, and shall promptly deliver
to the Trust such proxies, all proxy soliciting materials and
all notices relating to such Securities.
3.14 Information on Corporate Actions. The Custodian shall promptly
deliver to the Trust all information received by the Custodian
(or by any Sub-Custodian appointed pursuant to Section 3.3
hereof) and pertaining to Securities being held by the Fund with
respect to optional tender or exchange offers, calls for
redemption or purchase, or expiration of rights as described in
the
9
Standards of Service Guide attached as Exhibit B. Unless
alternative procedures are mutually agreed upon in respect of
particular transactions, if the Trust desires to take action
with respect to any tender offer, exchange offer or other
similar transaction, the Trust shall notify the Custodian as
promptly as practicable prior to the date on which the Custodian
is to take such action. The Trust will provide or cause to be
provided to the Custodian all relevant information for any
Security which has unique put/option provisions as promptly as
practicable prior to the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of
Securities for the Fund, Written Instructions shall be delivered
to the Custodian, specifying (i) the name of the issuer or
writer of such Securities, and the title or other description
thereof, (ii) the number of shares, principal amount (and
accrued interest, if any) or other units purchased, (iii) the
date of purchase and settlement, (iv) the purchase price per
unit, (v) the total amount payable upon such purchase, and (vi)
the name of the person to whom such amount is payable. The
Custodian shall upon receipt of such Securities purchased by the
Fund pay out of the moneys held for the account of the Fund the
total amount specified in such Written Instructions to the
person named therein. The Custodian shall not be under any
obligation to pay out moneys to cover the cost of a purchase of
Securities for the Fund, if in the Fund Custody Account there is
insufficient cash available to the Fund for which such purchase
was made.
4.2 Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for the purchase
of Securities for the Fund is made by the Custodian in advance
of receipt of the Securities purchased and in the absence of
specified Written Instructions to so pay in advance, the
Custodian shall be liable to the Fund for such payment.
4.3 Sale of Securities. Promptly upon each sale of Securities by the
Fund, Written Instructions shall be delivered to the Custodian,
specifying (i) the name of the issuer or writer of such
Securities, and the title or other description thereof, (ii) the
number of shares, principal amount (and accrued interest, if
any), or other units sold, (iii) the date of sale and
settlement, (iv) the sale price per unit, (v) the total amount
payable upon such sale, and (vi) the person to whom such
Securities are to be delivered. Upon receipt of the total amount
payable to the Fund as specified in such Written Instructions,
the Custodian shall deliver such Securities to the person
specified in such Written Instructions. Subject to the
foregoing, the Custodian may accept payment in such form as
shall be satisfactory to it, and may deliver Securities and
arrange for payment in accordance with the customs prevailing
among dealers in Securities.
4.4 Delivery of Securities Sold. Notwithstanding Section 4.3 above
or any other provision of this Agreement, the Custodian, when
instructed to deliver Securities against payment, shall be
entitled, if in accordance with generally accepted market
practice, to deliver such Securities prior to actual receipt of
final payment therefor. In any such case, the Fund shall bear
the risk that final payment for such Securities may not be made
or that such Securities may be returned or otherwise held or
disposed of by or through the person to whom they were
delivered, and the Custodian shall have no liability for any for
the foregoing.
4.5 Payment for Securities Sold. In its sole discretion and from
time to time, the Custodian may credit the Fund Custody Account,
prior to actual receipt of final payment thereof, with (i)
proceeds from the sale of Securities which it has been
instructed to deliver against payment, (ii) proceeds from the
redemption of Securities or other assets of the Fund, and (iii)
income from cash, Securities or other assets of the Fund. Any
such credit shall be conditional upon actual receipt by
Custodian of final payment and may be reversed if final payment
is not actually received in full. The Custodian may, in its sole
discretion and from time to time, permit the Fund to use funds
so credited to the Fund Custody Account in anticipation of
actual receipt of final payment. Any such funds shall be
10
repayable immediately upon demand made by the Custodian at any
time prior to the actual receipt of all final payments in
anticipation of which funds were credited to the Fund Custody
Account.
4.6 Advances by Custodian for Settlement. The Custodian may, in its
sole discretion and from time to time, advance funds to the
Trust to facilitate the settlement of a Fund's transactions in
the Fund Custody Account. Any such advance shall be repayable
immediately upon demand made by Custodian.
ARTICLE V
REPURCHASE OF FUND SHARES
5.1 Transfer of Funds. From such funds as may be available for the
purpose in the relevant Fund Custody Account, and upon receipt
of Proper Instructions specifying that the funds are required to
repurchase Shares of the Fund pursuant to a tender offer, the
Custodian shall wire each amount specified in such Proper
Instructions to or through such bank or broker-dealer as the
Trust may designate.
5.2 No Duty Regarding Paying Banks. Once the Custodian has wired
amounts to a bank or broker-dealer pursuant to Section 5.1
above, the Custodian shall not be under any obligation to effect
any further payment or distribution by such bank or
broker-dealer.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account:
(a) in accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under
the 1934 Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of the Options
Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Fund;
(b) for purposes of segregating cash or Securities in connection
with securities options purchased or written by the Fund or
in connection with financial futures contracts (or options
thereon) purchased or sold by the Fund;
(c) which constitute collateral for loans of Securities made by
the Fund;
(d) for purposes of compliance by the Fund with requirements
under the 1940 Act for the maintenance of segregated
accounts by registered investment companies in connection
with reverse repurchase agreements and when-issued, delayed
delivery and firm commitment transactions; and
(e) for other proper corporate purposes, but only upon receipt
of, in addition to Proper Instructions, a certified copy of
a resolution of the Board of Trustees, certified by an
Officer, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper
corporate purposes.
Each segregated account established under this Article VI shall be
established and maintained for the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
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ARTICLE VII
COMPENSATION OF CUSTODIAN
The Custodian shall be compensated for providing the services set forth
in this Agreement in accordance with the fee schedule set forth on Exhibit D
hereto (as amended from time to time). The Custodian shall also be compensated
for such out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by the
Custodian in performing its duties hereunder. The Trust shall pay all such fees
and reimbursable expenses within 30 calendar days following receipt of the
billing notice, except for any fee or expense subject to a good faith dispute.
The Trust shall notify the Custodian in writing within 30 calendar days
following receipt of each invoice if the Trust is disputing any amounts in good
faith. The Trust shall pay such disputed amounts within 10 calendar days of the
day on which the parties agree to the amount to be paid. With the exception of
any fee or expense the Trust is disputing in good faith as set forth above,
unpaid invoices shall accrue a finance charge of 1 1/2% per month after the due
date. Notwithstanding anything to the contrary, amounts owed by the Trust to the
Custodian shall only be paid out of the assets and property of the particular
Fund involved.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties of the Trust. The Trust hereby
represents and warrants to the Custodian, which representations
and warranties shall be deemed to be continuing throughout the
term of this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry
on its business as now conducted, to enter into this
Agreement and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Trust in accordance with all requisite
action and constitutes a valid and legally binding
obligation of the Trust, enforceable 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
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both
state and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there
is no statute, rule, regulation, order or judgment binding
on it and no provision of its charter, bylaws or any
contract binding it or affecting its property which would
prohibit its execution or performance of this Agreement.
8.2 Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants to the Trust, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry
on its business as now conducted, to enter into this
Agreement and to perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Custodian in accordance with all requisite
action and constitutes a valid and legally binding
obligation of the Custodian, enforceable 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
12
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both
state and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there
is no statute, rule, regulation, order or judgment binding
on it and no provision of its charter, bylaws or any
contract binding it or affecting its property which would
prohibit its execution or performance of this Agreement.
ARTICLE IX
CONCERNING THE CUSTODIAN
9.1 Standard of Care. Notwithstanding anything to the contrary
herein, the Custodian shall exercise reasonable care in the
performance of its duties under this Agreement. The Custodian
shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with its
duties under this Agreement, except a loss arising out of or
relating to the Custodian's (or a Sub-Custodian's) refusal or
failure to comply with the terms of this Agreement (or any
sub-custody agreement) or from its (or a Sub-Custodian's) bad
faith, negligence or willful misconduct in the performance of
its duties under this Agreement (or any sub-custody agreement).
The Custodian shall be entitled to rely on, may act upon advice
of counsel (who may be counsel to the Trust or such other
counsel and agreed by the parties) on all matters, and shall be
without liability for any action reasonably taken or omitted
pursuant to such advice. The Custodian shall promptly notify the
Trust of any action taken or omitted by the Custodian pursuant
to advice of counsel.
9.2 Actual Collection Required. The Custodian shall not be liable
for, or considered to be the custodian of, any cash belonging to
the Fund or any money represented by a check, draft or other
instrument for the payment of money, until the Custodian or its
agents actually receive such cash or collect on such instrument.
9.3 No Responsibility for Title, etc. So long as and to the extent
that it is in the exercise of reasonable care, the Custodian
shall not be responsible for the title, validity or genuineness
of any property or evidence of title thereto received or
delivered by it pursuant to this Agreement.
9.4 Limitation on Duty to Collect. The Custodian shall not be
required to enforce collection, by legal means or otherwise, of
any money or property due and payable with respect to Securities
held for the Fund if such Securities are in default or payment
is not made after due demand or presentation.
9.5 Reliance Upon Documents and Instructions. The Custodian shall be
entitled to rely upon any certificate, notice or other
instrument in writing received by it and reasonably believed and
in good faith by it to be genuine. The Custodian shall be
entitled to rely upon any Oral Instructions and any Written
Instructions actually received by it pursuant to this Agreement.
9.6 Cooperation. The Custodian shall cooperate with and supply
necessary information to the entity or entities appointed by the
Trust to keep the books of account of the Fund and/or compute
the value of the assets of the Fund. The Custodian shall take
all such reasonable actions as the Trust may from time to time
request to enable the Trust to obtain, from year to year,
favorable opinions from the Trust's independent accountants with
respect to the Custodian's activities hereunder in connection
with (i) the preparation of the Trust's reports on Form N-2 and
Form N-SAR and any other reports required by the SEC, and (ii)
the fulfillment by the Trust of any other requirements of the
SEC.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification by Trust. The Trust shall indemnify and hold
harmless the Custodian, any Sub-Custodian and any nominee
thereof (each, an "Indemnified Party" and collectively, the
13
"Indemnified Parties") from and against any and all claims,
demands, losses, expenses and liabilities of any and every
nature (including reasonable attorneys' fees) that an
Indemnified Party may sustain or incur or that may be asserted
against an Indemnified Party by any person arising directly or
indirectly (i) from the fact that Securities are registered in
the name of any such nominee, (ii) from any action taken or
omitted to be taken by the Custodian or such Sub-Custodian (a)
at the request or direction of or in reliance on the advice of
the Trust, or (b) upon Proper Instructions, or (iii) from the
performance of its obligations under this Agreement or any
sub-custody agreement, provided that neither the Custodian nor
any such Sub-Custodian shall be indemnified and held harmless
from and against any such claim, demand, loss, expense or
liability arising out of or relating to its refusal or failure
to comply with the terms of this Agreement (or any sub-custody
agreement), or from its bad faith, negligence or willful
misconduct in the performance of its duties under this Agreement
(or any sub-custody agreement). Any amounts owed by the Trust to
UBSFS under this Article X shall only be paid out of the assets
and property of the particular Fund involved. This indemnity
shall be a continuing obligation of the Trust, its successors
and assigns, notwithstanding the termination of this Agreement.
As used in this paragraph, the terms "Custodian" and
"Sub-Custodian" shall include their respective directors,
officers and employees.
10.2 Indemnification by Custodian. The Custodian shall indemnify and
hold harmless the Trust from and against any and all claims,
demands, losses, expenses, and liabilities of any and every
nature (including reasonable attorneys' fees) that the Trust may
sustain or incur or that may be asserted against the Trust by
any person arising out of any action taken or omitted to be
taken by an Indemnified Party as a result of the Indemnified
Party's refusal or failure to comply with the terms of this
Agreement (or any sub-custody agreement), or from its bad faith,
negligence or willful misconduct in the performance of its
duties under this Agreement (or any sub-custody agreement). This
indemnity shall be a continuing obligation of the Custodian, its
successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term "Trust" shall
include the Trust's directors, officers and employees.
10.3 Security. If the Custodian advances cash or Securities to the
Fund for any purpose, either at the Trust's request or as
otherwise contemplated in this Agreement, or in the event that
the Custodian or its nominee incurs, in connection with its
performance under this Agreement, any claim, demand, loss,
expense or liability (including reasonable attorneys' fees)
(except such as may arise from its or its nominee's bad faith,
negligence or willful misconduct), then, in any such event, any
property at any time held for the account of the Fund shall be
security therefor, and should the Fund fail promptly to repay or
indemnify the Custodian, the Custodian shall be entitled to
utilize available cash of such Fund and to dispose of other
assets of such Fund to the extent necessary to obtain
reimbursement or indemnification, provided that the Custodian
give the Fund a period of five (5) business days upon receipt of
notice from the Custodian to repay such cash or securities
advanced, and provided further that such notice requirement
shall not preclude the Custodian's right to assert and execute
on such lien. Except as set forth immediately above, the
securities and other assets held by the Custodian hereunder
shall not be subject to lien or charge of any kind in favor of
the Custodian or any person claiming through the Custodian.
10.4 Miscellaneous.
(a) Neither party to this Agreement shall be liable to the other
party for consequential, special or punitive damages under
any provision of this Agreement.
(b) The indemnity provisions of this Article shall indefinitely
survive the termination and/or assignment of this Agreement.
(c) In order that the indemnification provisions contained in
this Article shall apply, it is understood that if in any
case the indemnitor may be asked to indemnify or hold the
indemnitee harmless, the indemnitor shall be fully and
promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the
indemnitee
14
will use all reasonable care to identify, and notify
the indemnitor promptly concerning, any situation
that presents or appears likely to present the probability
of a claim for indemnification. The indemnitor shall have
the option to defend the indemnitee against any claim that
may be the subject of this indemnification. In the event
that the indemnitor so elects, it will so notify the
indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in
such situation initiate no further legal or other expenses
for which it shall seek indemnification under this section.
The indemnitee shall in no case confess any claim or make
any compromise in any case in which the indemnitor will be
asked to indemnify the indemnitee except with the
indemnitor's prior written consent.
ARTICLE XI
FORCE MAJEURE
Neither the Custodian nor the Trust shall be 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 God; earthquakes; fires; floods; wars;
civil or military disturbances; acts of terrorism; sabotage; strikes; epidemics;
riots; power failures; computer failure and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that in the event of a failure or delay, the
Custodian (i) shall not discriminate against the Fund in favor of any other
customer of the Custodian in making computer time and personnel available to
input or process the transactions contemplated by this Agreement, and (ii) shall
use its best efforts to ameliorate the effects of any such failure or delay.
ARTICLE XII
PROPRIETARY AND CONFIDENTIAL INFORMATION
The Custodian agrees on behalf of itself and its directors, officers,
and employees to treat confidentially and as proprietary information of the
Trust, all records and other information relative to the Trust and prior,
present, or potential shareholders of the Trust (and clients of said
shareholders), and not to use such records and information for any purpose other
than the performance of its responsibilities and duties hereunder, except (i)
after prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the Custodian
may be exposed to civil or criminal contempt proceedings for failure to comply,
(ii) when requested to divulge such information by duly constituted authorities,
or (iii) when so requested by the Trust. Records and other information which
have become known to the public through no wrongful act of the Custodian or any
of its employees, agents or representatives, and information that was already in
the possession of the Custodian prior to receipt thereof from the Trust or its
agent, shall not be subject to this paragraph.
Further, the Custodian will adhere to the privacy policies adopted by
the Trust pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified
from time to time. In this regard, the Custodian shall have in place and
maintain physical, electronic and procedural safeguards reasonably designed to
protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information relating to the Trust
and its shareholders.
ARTICLE XIII
EFFECTIVE PERIOD; TERMINATION
13.1 Effective Period. This Agreement shall become effective as of
the date first written above (or, if later, that date as of
which this Agreement may be first approved by a vote of the
Trust's Board of Trustees) and will continue in effect for a
period of two (2) years from the date hereof.
13.2 Termination. Subsequent to the initial two-year term, this
Agreement may be terminated by either party upon by prior
written notice, such termination to take effect not sooner than
ninety (90) days after the date of delivery or mailing of notice
(180 days in the case of termination by the
15
Custodian) or such shorter period as is mutually agreed upon by
the parties. Notwithstanding the foregoing, this Agreement may
be terminated by any party upon the breach of the other party of
any material term of this Agreement if such breach is not cured
within 15 days of notice of such breach to the breaching party.
In addition, the Trust may, at any time, immediately terminate
this Agreement in the event of the appointment of a conservator
or receiver for the Custodian by regulatory authorities or upon
the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.
13.3 Appointment of Successor Custodian. If a successor custodian
shall have been appointed by the Board of Trustees, the
Custodian shall, upon receipt of a notice of acceptance by the
successor custodian, on such specified date of termination (i)
deliver directly to the successor custodian all Securities
(other than Securities held in a Book-Entry System or Securities
Depository) and cash then owned by the Fund and held by the
Custodian as custodian, and (ii) transfer any Securities held in
a Book-Entry System or Securities Depository to an account of or
for the benefit of the Fund at the successor custodian, provided
that the Trust shall have paid to the Custodian all fees,
expenses and other amounts to the payment or reimbursement of
which it shall then be entitled. In addition, the Custodian
shall, at the expense of the Trust, transfer to such successor
all relevant books, records, correspondence, and other data
established or maintained by the Custodian under this Agreement
in a form reasonably acceptable to the Trust (if such form
differs from the form in which the Custodian has maintained the
same, the Trust shall pay any expenses associated with
transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including
provision for assistance from the Custodian's personnel in the
establishment of books, records, and other data by such
successor. Upon such delivery and transfer, the Custodian shall
be relieved of all obligations under this Agreement.
13.4 Failure to Appoint Successor Custodian. If a successor custodian
is not designated by the Trust on or before the date of
termination of this Agreement, then the Custodian shall have the
right to deliver to a bank or trust company of its own
selection, which bank or trust company (i) is a "bank" as
defined in the 1940 Act, and (ii) has aggregate capital, surplus
and undivided profits as shown on its most recent published
report of not less than $100 million, all Securities, cash and
other property held by Custodian under this Agreement and to
transfer to an account of or for the Fund at such bank or trust
company all Securities of the Fund held in a Book-Entry System
or Securities Depository. Upon such delivery and transfer, such
bank or trust company shall be the successor custodian under
this Agreement and the Custodian shall be relieved of all
obligations under this Agreement. In addition, under these
circumstances, all books, records and other data of the Trust
shall be returned to the Trust.
ARTICLE XIV
MISCELLANEOUS
14.1 Compliance with Laws. The Trust has and retains primary
responsibility for all compliance matters relating to the Fund,
including but not limited to compliance with the 1940 Act, the
Internal Revenue Code of 1986, the Xxxxxxxx-Xxxxx Act of 2002,
the USA Patriot Act of 2002 and the policies and limitations of
the Fund relating to its portfolio investments as set forth in
its Prospectus. The Custodian's services hereunder shall not
relieve the Trust of its responsibilities for assuring such
compliance or the Board of Trustee's oversight responsibility
with respect thereto.
14.2 Amendment. This Agreement may not be amended or modified in any
manner except by written agreement executed by the Custodian and
the Trust, and authorized or approved by the Board of Trustees.
14.3 Assignment. This Agreement shall extend to and be binding upon
the parties hereto and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
16
by the Trust without the written consent of the Custodian, or by
the Custodian without the written consent of the Trust
accompanied by the authorization or approval of the Board of
Trustees.
14.4 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without
regard to conflicts of law principles. To the extent that the
applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of
the 1940 Act, the latter shall control, and nothing herein shall
be construed in a manner inconsistent with the 1940 Act or any
rule or order of the SEC thereunder.
14.5 No Agency Relationship. Nothing herein contained shall be deemed
to authorize or empower either party to act as agent for the
other party to this Agreement, or to conduct business in the
name, or for the account, of the other party to this Agreement.
14.6 Services Not Exclusive. Nothing in this Agreement shall limit or
restrict the Custodian from providing services to other parties
that are similar or identical to some or all of the services
provided hereunder.
14.7 Invalidity. Any provision of this Agreement which may be
determined by competent authority to be prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. In such case, the
parties shall in good faith modify or substitute such provision
consistent with the original intent of the parties.
14.8 Notices. Any notice required or permitted to be given by either
party to the other shall be in writing and shall be deemed to
have been given on the date delivered personally or by courier
service, or three days after sent by registered or certified
mail, postage prepaid, return receipt requested, or on the date
sent and confirmed received by facsimile transmission to the
other party's address set forth below:
Notice to the Custodian shall be sent to:
U.S. Bank National Association
000 Xxxxxx Xxxxxx, X.X. XX-XX-X0XX
Xxxxxxxxxx, Xxxx 00000
Attention: Mutual Fund Custody Services
Facsimile: (000) 000-0000
and notice to the Trust shall be sent to:
Citigroup Alternative Investments Tax Advantaged Short Term Fund
c/o Citigroup Alternative Investments LLC
Attention: CFIA COO
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
000-000-0000 (fax)
14.9 Multiple Originals. This Agreement may be executed on two or
more counterparts, each of which when so executed shall be
deemed an original, but such counterparts shall together
constitute but one and the same instrument.
14.10 No Waiver. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall
operate as a waiver thereof. The exercise by either party hereto
of any right hereunder shall not preclude the exercise of any
other right, and the remedies provided herein are cumulative and
not exclusive of any remedies provided at law or in equity.
17
14.11 References to Custodian. The Trust shall not circulate any
printed matter which contains any reference to the Custodian
without the prior written approval of the Custodian, excepting
printed matter contained in the prospectus or statement of
additional information for the Fund and such other printed
matter as merely identifies the Custodian as custodian for the
Fund. The Trust shall submit printed matter requiring approval
to the Custodian in draft form, allowing sufficient time for
review by the Custodian and its counsel prior to any deadline
for printing.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
CITIGROUP ALTERNATIVE U.S. BANK NATIONAL ASSOCIATION
INVESTMENTS TRUST
By:____________________________ By:_____________________________
Name:__________________________ Name:___________________________
Title:___________________________ Title:____________________________
19
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to administer the Fund Custody Accounts.
Authorized Persons Specimen Signatures
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President:
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Secretary:
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Treasurer:
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Vice President:
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Other:
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A-1
EXHIBIT B
U.S. Bank Institutional Custody Services
Standards of Service Guide
U.S. Bank, N.A. ("USBank") is committed to providing superior quality
service to all customers and their agents at all times. We have compiled this
guide as a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change transactions.
Deadlines recited in this guide represent the times required for USBank to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, USBank will make every effort to complete
all processing on a timely basis.
USBank is a direct participant of the Depository Trust Company, a
direct member of the Federal Reserve Bank of Cleveland, and utilizes the Bank of
New York as its agent for ineligible and foreign securities.
For corporate reorganizations, USBank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, Capital Changes
Daily (CCH) and the Wall Street Journal.
For bond calls and mandatory puts, USBank utilizes SEI's Bond Source,
Xxxxx Information Systems, Standard & Poor's Corporation, XCITEK, and DTC
Important Notices. USBank will not notify clients of optional put opportunities.
Any securities delivered free to USBank or its agents must be received three (3)
business days prior to any payment or settlement in order for the USBank
standards of service to apply.
Should you have any questions regarding the information contained in
this guide, please feel free to contact your account representative.
The information contained in this Standards of Service Guide
is subject to change. Should any changes be made USBank will
provide you with an updated copy of its Standards of Service
Guide.
B-1
U.S. Bank Trade Settlement Instructions
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Transaction Type Delivery Instructions
Depository Trust Company (DTC) DTC Participant #2803 U.S. Bank N.A.
DTC eligible issues Agent #: 93697
Institutional # 93696 (or customer Institutional #
if applicable)
Interested Party: (customer ID number if applicable)
Agent Internal Number: (your U.S. Bank Trust
account number)
Federal Reserve Bank , Cleveland, Ohio For: US Bank Ohio
Federal Reserve Book Entry - eligible issues ABA#: 000000000
Routing Symbol: 1050 Trust
For Account # (your U.S. Bank Trust account number)
Federal Reserve Bank, Cleveland, Ohio For: US Bank Ohio
All Fed-eligible issues delivered as ABA#: 000000000
collateral for repurchase agreements Routing Symbol: 1040 Special
For Account # (your U. S. Bank Trust account number)
Bank of New York Bank of New York
Depository ineligible and physical issues: One Xxxx Xxxxxx- 0xx Xxxxx/Xxxxxx A
Xxx Xxxx, XX 00000
For account: U.S. Bank N.A. #117612
U.S. Bank X.X. X.X. Bank Trust Services
DTC ineligible issues settling in Milwaukee, XX Xxx 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Processing
Wire Instructions ABA# 000000000 US Bank Ohio
For trade purposes only BNF US Bank Trust
AC 112950027
OBI Attention: Settlements - (functions) i.e.,
pair off, repo, tri-party
BBI or OBI For further credit to account: (trust
acct. #, contact name & phone number)
B-2
USBank Payment Standards
Security Type Income Principal
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment will be made on the
immediately following business day.
B-3
USBank Corporate Reorganization Standards
Type of Action Notification to Client Deadline for Client Instructions Transaction
to USBank Posting
Rights, Warrants, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
and Optional Mergers expiration or receipt of notice
Mandatory Puts with Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Option to Retain expiration or receipt of notice
Class Actions 10 business days prior to expiration date 5 business days prior to expiration Upon receipt
Voluntary Tenders, Later of 10 business days prior to 5 business days prior to expiration Upon receipt
Exchanges, expiration or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities None Upon receipt
Liquidations, Bankruptcies, Stock received
Splits, Mandatory Exchanges
Full and Partial Calls Later of 10 business days prior to None Upon receipt
expiration or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will be sold.
B-4
EXHIBIT C
Fund Names
Separate Series of Citigroup Alternative Investments Trust
Name of Fund
Citigroup Alternative Investments Tax Advantaged Short Term Fund
C-1
EXHIBIT D
Fee Schedule
to the
Closed-end Fund Custody Agreement
Fund to be priced Monthly.
Custody (Per Fund):
1.5 basis points per annum which includes all transactions
Minimum annual custody fee N/A
Plus out-of-pocket expenses, including but not limited to:
Printing/Postage, Stationery (if necessary) Programming
/customization (if necessary) Federal and state regulatory
filing fees Expenses from U.S. Bancorp participation in client
meetings SAS-70 or other policies and procedures certification
D-1
