Exhibit 13(b)
ADMINISTRATIVE AND INVESTOR SERVICES AGREEMENT
This ADMINISTRATIVE AND INVESTOR SERVICES AGREEMENT (the "Agreement")
is made as of October 1, 2005, by and between Citigroup Alternative Investments
LLC, a Delaware limited liability company (the "Administrator" or "CAI"), and
Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC, a
Delaware limited liability company (the "Company"). Capitalized terms not
defined herein have the meanings attributed to them in the Limited Liability
Company Agreement of the Company, as amended (the "LLC Agreement").
W I T N E S S E T H:
WHEREAS, the Company wishes to retain the Administrator to provide
certain administrative and investor services with respect to the Company, and
the Administrator is willing to furnish those services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the Administrator to
provide each Series of the Company certain administrative and investor services
required by the Company for the period and on the terms set forth in this
Agreement; provided that this Agreement shall not be effective until approved by
the Board of Directors of the Company. The Administrator accepts such
appointment and agrees to furnish the services herein set forth in return for
the compensation as provided in Article 3 of this Agreement. If the Company
decides to modify the Administrator's duties hereunder, the Company shall notify
the Administrator in writing.
2. Services and Duties. (a) Subject to the control of the Company and
the oversight of the Company's Board of Directors, the Administrator undertakes
to perform the types of services for each Series of the Company as set forth on
Schedule A hereto.
(b) In performing its duties under this Agreement, the Administrator
will (i) act in accordance with the LLC Agreement, the effective Registration
Statement of the Company and with the instructions and directions of the
Company, (ii) conform to and comply with the requirements of the 1940 Act, and
all other applicable federal or state laws and regulations, and (iii) consult
with legal counsel to and the independent public accountant for the Company, as
necessary and appropriate, on whose advice the Administrator shall be entitled
to rely. The Company will provide the Administrator from time to time with
copies of any documents that the Administrator may reasonably request and that
are necessary for it to perform its obligations and duties under this Agreement
and will notify the Administrator as soon as possible of any matter materially
affecting the performance by the Administrator of its services under this
Agreement.
(c) The Administrator is also authorized to make various determinations
on behalf of each Series, and in particular the Administrator shall, under the
supervision of the Board of Directors:
- determine whether the Company should offer Shares at other
times than scheduled dates; reduce minimums; authorize
acceptance of subscriptions prior to receipt of cleared funds;
waive the requirement that subscriptions be made in cash
through a Xxxxx Xxxxxx brokerage account; waive any other
requirement concerning the time and manner of subscription;
suspend subscriptions for Shares; consult with any placement
agents retained by the Company with respect to adjustment or
waiver of placement fees.
- With respect to repurchase of a Shareholder's Shares by the
Company without the consent of the particular Shareholder,
make any applicable determination as to the timing, manner and
grounds for such repurchase; determine whether repurchases of
Shares by the Company shall be paid in cash, or by the
distribution of securities in kind or partly in cash and
partly in kind; reduce the amount to be repurchased from a
Shareholder so that any required minimum share amount is
maintained (or alternatively repurchase all of the particular
Shareholder's Shares of a Series).
For the avoidance of doubt, any transfer agent, record keeping and registrar
functions associated with the determinations referred to in this Section 2 (c)
shall be solely the responsibility of the Company's transfer agent.
3. Compensation and Allocation of Expenses. (a) The Company shall
compensate the Administrator for its services rendered to each Series pursuant
to this Agreement in accordance with the fees set forth in Schedule B hereto.
Such fees do not include out-of-pocket disbursements of the Administrator, for
which the Administrator shall be entitled to xxxx and be reimbursed separately.
Out-of-pocket disbursements shall include, but shall not be limited to, the
items specified in Schedule B hereto. Fees shall be payable monthly in arrears
on the first business day of each month.
(b) The Administrator shall not be required to pay any Company or
Series expenses except those that it has agreed to pay in connection with
performing the duties described herein or which it has agreed to pay in another
written agreement between the parties hereto.
(c) Upon any termination of this Agreement before the end of any month,
the fee for the period ending on the termination date shall be prorated
according to the proportion that such period bears to the full monthly period.
For purposes of determining fees payable to the Administrator, the value of the
net assets of a Series shall be computed at the time and in the manner specified
in the then-current Registration Statement and LLC Agreement of the Company.
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(d) The Administrator shall not be required to pay for any services
provided by other parties directly retained by the Company or any Series.
4. Indemnification. (a) The Company shall indemnify, defend, and
hold harmless the Administrator, its controlling persons, their affiliates and
their respective directors, officers, shareholders, employees, and controlling
persons, from and against any and all losses, claims, damages, liabilities
(joint and several), costs, and expenses (including any reasonable legal
expenses and including any expenses incurred in connection with, and any amounts
paid in, any settlement; provided that the Company shall have approved such
settlement) resulting from a claim, lawsuit, or other proceeding (other than
those incurred as a result of claims brought by or in the right of an
indemnified party) relating to the business or activities undertaken by the
Administrator pursuant to this Agreement or to a breach of this Agreement by the
Company; provided that a court of competent jurisdiction upon entry of a final
judgment finds (or, if no final judgment is entered, an opinion is rendered to
the Company by independent counsel who is approved by the Company and the
Administrator, such approval not to be unreasonably withheld) to the effect that
the action or inaction of such indemnified party that was the subject of the
claim, lawsuit, or other proceeding did not constitute gross negligence, fraud,
willful default or misconduct, or a breach of this Agreement and was done in
good faith and in a manner such indemnified party reasonably believed to be in,
or not opposed to, the best interests of the Company.
(b) Neither the Administrator nor its controlling persons or their
affiliates or their respective directors, officers, shareholders, employees or
controlling persons shall be liable to the Company or its affiliates and their
respective directors, officers, shareholders, employees, and controlling persons
except for actions or omissions of such person that constitute a breach of this
Agreement, fraud, willful default or misconduct or gross negligence or are the
result of such person not having acted in good faith and in the reasonable
belief that such actions or omissions were in, or not opposed to, the best
interests of the Company.
(c) The Administrator shall indemnify, defend and hold harmless the
Company, its controlling persons, their affiliates and their respective
directors, officers, shareholders, employees, and controlling persons from and
against any and all losses, claims, damages, liabilities (joint and several),
costs, and expenses (including any reasonable legal expenses and other expenses
incurred in connection with, and any amounts paid in, any settlement; provided
that the Administrator shall have approved such settlement) incurred as a result
of any action or inaction involving the Administrator or any of its controlling
persons or affiliates or their respective directors, officers, partners,
shareholders, or employees; provided that such liability arises from an action
or inaction of any such person which is found by a court of competent
jurisdiction upon entry of a final judgment (or, if no final judgment is
entered, by an opinion rendered by counsel who is approved by the Administrator
and the Company, such approval not to be unreasonably withheld) to be a breach
of this Agreement, or to constitute fraud, willful default or misconduct, gross
negligence or conduct not done in good faith and in the reasonable belief that
it was in, or not opposed to, the best interests of the Company.
(d) The foregoing agreements of indemnity shall be in addition to, and
shall in no respect limit or restrict, any other remedies which may be available
to an indemnified party.
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(e) Notwithstanding any other provision of this Agreement, this
Agreement shall not be construed to protect any Director or officer of the
Company, or partner or officer of the Administrator, from liability in violation
of Sections 17(h) and (i) of the 1940 Act.
6. Termination of Agreement. (a) This Agreement shall become effective
on the date first set forth above and shall remain in force unless terminated
pursuant to the provisions of subparagraph (b) of this Paragraph.
(b) This Agreement may be terminated at any time without payment of any
penalty, upon sixty (60) days' written notice by the Company or by the
Administrator.
7. Amendment to this Agreement. No provision of this Agreement may be
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought.
8. Assignment. This Agreement shall extend to, and shall be binding
upon, the parties hereto and their respective successors and assigns. This
Agreement may be assigned by the Administrator; provided, however, that the
Company has consented in writing to such assignment. The Administrator may
delegate any duty hereunder, and no consent by the Company shall be needed
therefore; provided, however, that any such delegation does not effect a release
of the Administrator from guaranty of the fulfillment of any duty delegated by
the Administrator.
9. Notice. Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Company or the Administrator shall
be sufficiently given if addressed to that party and received by it at its
office set forth below or at such other place as it may from time to time
designate in writing.
To the Company:
Citigroup Alternative Investments
Multi-Adviser Hedge Fund Portfolios LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (212)
Attention: Xxxxx Xxxxx, President
To the Administrator:
Citigroup Alternative Investments LLC
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxx, General Counsel
10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be
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inconsistent with, any federal law, regulation or rule, including the 1940 Act
and the Advisers Act, and any rules and regulations promulgated thereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and which
collectively shall be deemed to constitute only one instrument.
12. Captions. The captions of this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
13. Non-Exclusivity. The Company's employment of the Administrator is
not an exclusive arrangement, and the Company may, from time to time, employ
other individuals or entities to furnish it with the services provided for
herein.
14. Independent Contractor. The Administrator shall, for all purposes
herein, be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized to do so, have no authority to act for or
represent the Company in any way, or in any way be deemed an agent for the
Company. It is expressly understood and agreed that the services to be rendered
by the Administrator to the Company under the provisions of this Agreement are
not to be deemed exclusive, and the Administrator shall be free to render
similar or different services to others so long as its ability to render the
services provided for in this Agreement shall not be impaired thereby.
15. Administrator's Office Facilities and Personnel. The Administrator
shall, at its own expense, maintain adequate office facilities and staff and
employ or retain such personnel and consult with such other persons as it shall
from time to time determine to be necessary to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Administrator shall be deemed to
include persons employed or retained by the Administrator to furnish statistical
information, research, and other factual information, advice regarding economic
factors and trends, information with respect to technical and scientific
developments, and such other information, advice and assistance as the
Administrator or the Company's Directors may desire and reasonably request.
16. Notice of Limited Liability. The Administrator acknowledges that it
has received notice of and accepts the limitations of the Company's liability as
set forth in its LLC Agreement. The Administrator agrees that the Company's
obligations under this Agreement shall be limited, with respect to each Series,
to such Series and its assets, and that the Administrator shall not seek
satisfaction of any such obligation from the Shareholders of the Company nor
from any Director, officer, employee or agent of the Company or a Series.
17. Conflicts with Company's Governing Documents and Applicable Laws.
Nothing herein shall be deemed to require the Company to take any action
contrary to the Company's LLC Agreement or any applicable statute or regulation,
or to relieve or deprive the Directors of the Company of their responsibility
for and control of the conduct of the affairs of the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
CITIGROUP ALTERNATIVE
INVESTMENTS LLC
By:
---------------------------
Name: Xxxxxx XxXxxxxxx
Title: Managing Director
CITIGROUP ALTERNATIVE
INVESTMENTS MULTI-ADVISER
HEDGE FUND PORTFOLIOS LLC
By:
---------------------------
Name: Xxxxxxx Xxxxx
Title: President
SCHEDULE A
CITIGROUP ALTERNATIVE INVESTMENTSMULTI-ADVISER HEDGE FUND
PORTFOLIOS LLC
ADMINISTRATIVE AND INVESTOR SERVICES AGREEMENT
Compliance
o Provide Chief Compliance Officer to the Company; including facilities
and support for Chief Compliance Officer.
o Ongoing development and monitoring of the Company's compliance program.
o Monitor portfolios to maintain compliance with current Company
investment policies and registration statement.
o Coordinate with legal staff to provide advice to the portfolio managers
regarding specific compliance issues.
o Coordinate appropriate legal and risk management review of proposed
procedures and policies to ensure consistency with risk management
polices and compliance with regulatory, IRS and SEC requirements.
o Serve as primary coordinator in responding to regulatory examinations
or requests for information of the Company.
Board Administration
o Supervise all scheduling, documentation preparation and distribution of
Board meeting materials including, at the request of the Company's
Board, assisting in the preparation of all agendas, notices and minutes
for meetings of the Company's Board.
o Research and provide statistical industry information in conjunction
with contract renewals and in response to requests by the Board.
o Prepare or coordinate the preparation, communication and implementation
of Company policy and procedural changes upon the recommendation or
request by the Board.
o Control disbursement of Director retainers, fees and expense
reimbursements.
o Prepare Board reports regarding service providers
o Maintain Company Code of Ethics
Regulatory
o Coordinate efforts of the Company's legal resources as necessary
(Company outside counsel, Company Internal counsel and counsel for
Independent Directors).
o Manage overall process of preparation, review and filing of Company's
registration statements, updates, and supplements, including proposed
changes by the Investment Advisor or in response to regulatory
requirements or operational considerations.
o Manage production, printing and inventory of prospectuses, supplements
and marketing material.
o Coordinate drafting of commentary from portfolio managers for monthly
updates to investors.
o Maintain and file Fidelity Bond
o Maintain E&O / D&O Insurance
o Coordinate comments to proposed changes to SEC rules or regulations
o Maintain official records of the Company (contracts, agreements,
corporate documents)
o Administration of agreements and contracts in response to changing
regulatory requirements
o Coordinate with legal counsel in preparing and filing appropriate
states for blue-sky filings, conduct blue-sky analyses as necessary,
monitoring state exemption filings and notices with various states made
by agents of the Company.
o Maintain all state registrations and annual filings
General Business
o Coordinate, negotiate and review all service contract proposals.
o Draft and maintain materials sent in investor kits
o Coordinate combined efforts of other service providers, including:
o Transfer Agent
o Co-Administrator
o Custodian
o Accountants
o Distributors
o Auditors
o Monitor compliance of service providers to service standards
o Analyze impact to the Company and coordinate changes as a result of
changing regulatory requirements.
o Serve as liaison for distributors reporting on activities and
communication between service agents.
o Performance measurement and analysis, including furnishing performance
data, statistical data and research data to the Company.
o Financial reporting and assisting the Company's auditors in the
preparation of financial statements.
o Performing such other administrative and investor services on behalf of
the Company as the parties may agree from time to time.
Operations
o Subscription Onboarding
o Review original subscription documents for completeness.
o Record investor information into a database.
o Scan the subscription document and file originals.
o Debit investor accounts on a daily basis.
o Wire funds to the Fund's escrow account.
o Post the Fund position to the Xxxxx Xxxxxx client statement.
o Provide daily report to PFPC listing all investors and investment
information.
o Placement Fees
Record and process placement fees associated with subscription to the
Funds by Xxxxx Xxxxxx investors.
o Valuation
The CAI operations team closely interacts with PFPC on a daily basis.
CAI's role in the Fund's valuation process includes:
o Daily reconciliation between PFPC's pricing files and CAI's
pricing files
o Involvement in the rebalancing process to reflect all new Fund
subscriptions and redemptions
o Review of material differences between final NAVs and 5-day
estimates for each Fund investment, and
o Monthly reconciliation between PFPC's month-end values and CAI's
month-end values, with investigations of discrepancies where
necessary.
o Transfer process
Facilitate the information flow between FCs and the Transfer Agent regarding
requests for transfers from FCs including obtaining and reviewing any related
documentation such as a copy of an LOA, death certificate, trust cert,
partnership documents, corporation documents, or divorce decree depending on the
nature of the transfer request.
SCHEDULE B
CITIGROUP ALTERNATIVE INVESTMENTSMULTI-ADVISER HEDGE FUND
PORTFOLIOS LLC
ADMINISTRATIVE AND INVESTOR SERVICES AGREEMENT
--------------------------------------------------------------------------------
Category Average Daily Net Assets Annual Rate
--------------------------------------------------------------------------------
Administration and Investor As to each Series, all 0%
Servicing Fee amounts of such Series
--------------------------------------------------------------------------------
Out-of-Pocket Disbursements
o overnight delivery and courier services; postage
o telephone and telecommunication charges
o pricing services
o terminals, transmitting lines and expenses in connection therewith
o travel outside of New York City area on Company business
o costs of preparing Board books, presentations and other materials
for the Board of Directors
o printing and related costs
o extraordinary expenses
CITIGROUP ALTERNATIVE CITIGROUP ALTERNATIVE
INVESTMENTS MULTI-ADVISER HEDGE INVESTMENTS, LLC
FUND PORTFOLIOS LLC
By: By:
------------------------ -------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxx XxXxxxxxx
Title: President Title: Managing Director
