TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this _______ of _________,
2002, by and between Alternative Investment Partners, LLC, a Delaware limited
liability company (the "Adviser"), AIP Alternative Strategies Funds, a Delaware
business trust (the "Trust") and U.S. Bancorp Fund Services, LLC, a Wisconsin
limited liability company ("USBFS").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-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, USBFS is, among other things, in the business of administering
transfer and dividend disbursing agent functions for the benefit of its
customers; and
WHEREAS, the Adviser and the Trust desire to retain USBFS to provide
transfer and dividend disbursing agent services to each series of the Trust
listed on Exhibit A hereto (as amended from time to time) (each a "Fund",
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:
1. Appointment of USBFS as Transfer Agent
The Adviser and the Trust hereby appoints USBFS as transfer agent of the
Trust on the terms and conditions set forth in this Agreement, and USBFS
hereby accepts such appointment and agrees to perform the services and
duties set forth in this Agreement.
2. Services and Duties of USBFS
USBFS shall perform all of the customary services of a transfer agent and
dividend disbursing agent for the Funds, and as relevant, agent in
connection with accumulation, open account or similar plans (including
without limitation any periodic investment plan or periodic withdrawal
program), including but not limited to:
A. Receive orders for the purchase of shares.
B. Process purchase orders with prompt delivery, where appropriate, of
payment and supporting documentation to the Fund's custodian, and
issue the appropriate number of uncertificated shares with such
uncertificated shares being held in the appropriate shareholder
account.
C. Arrange for issuance of shares obtained through transfers of funds
from Fund shareholders' accounts at financial institutions and arrange
for the exchange of shares for shares of other eligible investment
companies, when permitted by the Fund's current prospectus
("Prospectus").
D. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Trust's custodian.
E. Pay monies upon receipt from the Fund's custodian, where relevant, in
accordance with the instructions of redeeming shareholders.
F. Process transfers of shares in accordance with the shareholder's
instructions.
G. Process exchanges between Funds and/or classes of shares of Funds both
within the same family of funds and with a First American Money Market
Fund, if applicable.
H. Prepare and transmit payments for dividends and distributions declared
by the Trust with respect to the Fund, after deducting any amount
required to be withheld by any applicable laws, rules and regulations
and in accordance with shareholder instructions.
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (e.g., systematic withdrawal, automatic
investment, dividend reinvestment).
J. Record the issuance of shares of the Fund and maintain, pursuant to
Rule 17Ad-10(e) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), a record of the total number of
shares of the Fund which are authorized, issued and outstanding.
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies.
L. Mail shareholder reports and Prospectuses to current shareholders.
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders.
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Trust.
O. Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate federal
authorities any taxes to be withheld on dividends and distributions
paid by the Trust, all as required by applicable federal tax laws and
regulations.
P. Provide a Blue Sky system that will enable the Trust to monitor the
total number of shares of the Fund sold in each state. In addition,
the Trust or its agent, including USBFS, shall identify to USBFS in
writing those transactions and assets to be treated as exempt from the
Blue Sky reporting for each state. The responsibility of USBFS for the
Trust's Blue Sky state registration status is solely limited to the
initial compliance by the Trust and the reporting of such transactions
to the Trust or its agent.
Q. Answer correspondence from shareholders, securities brokers and others
relating to USBFS's duties hereunder and such other correspondence as
may from time to time be mutually agreed upon between USBFS and the
Trust.
R. Reimburse the Fund each month for all material losses resulting from
"as of" processing errors for which USBFS is responsible in accordance
with the "as of" processing guidelines set forth on Exhibit C hereto.
3. Compensation
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit B hereto
(as amended from time to time). The Adviser shall pay all fees and
reimbursable expenses within thirty (30) calendar days following receipt of
the billing notice, except for any fee or expense subject to a good faith
dispute. The Adviser shall notify USBFS in writing within thirty (30)
calendar days following receipt of each invoice if the Adviser is disputing
any amounts in good faith. The Adviser shall settle such disputed amounts
within ten (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 Adviser is
disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of one and one-half percent (1 1/2%) per month, after the
due date.
4. Indemnification; Limitation of Liability
A. USBFS shall exercise reasonable care in the performance of its duties
under this Agreement. USBFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond USBFS's control, except a loss
arising out of or relating to USBFS's refusal or failure to comply
with the terms of this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance of its duties under
this Agreement. Notwithstanding any other provision of this Agreement,
if USBFS has exercised reasonable care in the performance of its
duties under this Agreement, the Adviser and the Trust shall indemnify
and hold harmless USBFS from and against any and all claims, demands,
losses, expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) which USBFS may sustain or incur or which
may be asserted against USBFS by any person arising out of any action
taken or omitted to be taken by it in performing the services
hereunder, except for any and all claims, demands, losses, expenses,
and liabilities arising out of or relating to USBFS's refusal or
failure to comply with the terms of this Agreement or from bad faith,
negligence or from willful misconduct on its part in performance of
its duties under this Agreement, (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral instruction
provided to USBFS by any duly authorized officer of the Adviser or the
Trust, such duly authorized officer to be included in a list of
authorized officers furnished to USBFS and as amended from time to
time in writing by resolution of the Board of Trustees of the Trust
(the "Board of Trustees" or "Trustees").
USBFS shall indemnify and hold the Adviser and the Trust harmless from
and against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable attorneys'
fees) that the Adviser or the Trust may sustain or incur or that may
be asserted against the Adviser or the Trust by any person arising out
of any action taken or omitted to be taken by USBFS as a result of
USBFS's refusal or failure to comply with the terms of this Agreement,
its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, USBFS shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond USBFS's control. USBFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of USBFS. USBFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency
use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Adviser and the Trust
shall be entitled to inspect USBFS's premises and operating
capabilities at any time during regular business hours of USBFS, upon
reasonable notice to USBFS.
Notwithstanding the above, USBFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this section
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 will use all reasonable care to 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.
5. Proprietary and Confidential Information
USBFS agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Adviser and
the Trust all records and other information relative to the Adviser and the
Trust and prior, present, or potential shareholders (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 after prior notification to and approval in writing by the Adviser
or the Trust, which approval shall not be unreasonably withheld and may not
be withheld where USBFS may be exposed to civil or criminal contempt
proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities, or when so requested by the
Adviser or the Trust.
Further, USBFS will adhere to the privacy policies adopted by the Adviser
and the Trust pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be
modified from time to time (the "Act"). Notwithstanding the foregoing,
USBFS will not share any nonpublic personal information concerning any of
the Trust's shareholders with any third party unless specifically directed
by the Adviser or the Trust or allowed under one of the exceptions noted
under the Act.
6. Term of Agreement; Amendment
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of three years. Subsequent to the
initial three-year term, this Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or
such shorter period as is mutually agreed upon by the parties. However,
this Agreement may be amended by mutual written consent of the parties. See
Exhibit D for additional termination conditions.
7. Records
USBFS shall keep records relating to the services to be performed hereunder
in the form and manner, and for such period, as it may deem advisable and
is agreeable to the Trust, but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section
31 of the 1940 Act and the rules thereunder. USBFS agrees that all such
records prepared or maintained by USBFS relating to the services to be
performed by USBFS hereunder are the property of the Trust and will be
preserved, maintained, and made available in accordance with such
applicable sections and rules of the 1940 Act and will be promptly
surrendered to the Trust on and in accordance with its request.
8. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Wisconsin, 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 Securities and
Exchange Commission thereunder.
9. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the Adviser
and the Trust by written notice to USBFS, USBFS will promptly, upon such
termination and at the expense of the Adviser, transfer to such successor
all relevant books, records, correspondence, and other data established or
maintained by USBFS under this Agreement in a form reasonably acceptable to
the Adviser or the Trust (if such form differs from the form in which USBFS
has maintained, the Adviser 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
USBFS's personnel in the establishment of books, records, and other data by
such successor.
10. Data Necessary to Perform Services
The Adviser, the Trust or its agent, which may be USBFS, shall furnish to
USBFS the data necessary to perform the services described herein at such
times and in such form as mutually agreed upon. If USBFS is also acting in
another capacity for AIP, nothing herein shall be deemed to relieve USBFS
of any of its obligations in such capacity.
11. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party.
12. 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 (3) 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 USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Adviser and the Trust shall be sent to:
Alternative Investment Partners, LLC/AIP Alternative Strategies Funds
000 Xxxxxxxxxxx Xxxx Xx.
Xxxxxxxxx, XX 00000
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.
Alternative investment Partners, LLC U.S. BANCORP FUND SERVICES, LLC
By: ______________________________ By: ________________________________
Title: __________________________ Title: _____________________________
AIP Alternative Strategies FUNDS
By: ______________________________
Title: __________________________
