TRANSFER AGENT SERVICING 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.
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 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, 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 Trust desires 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" 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:
1. Appointment of USBFS as Transfer Agent
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. The services and duties of USBFS shall be
confined to those matters expressly set forth herein, and no implied
duties are assumed by or may be asserted against USBFS hereunder.
2. Services and Duties of USBFS
USBFS shall provide the following transfer agent and dividend
disbursing agent services to the Fund:
A. Receive and process all orders for the purchase, exchange,
optional tender or repurchase of shares.
B. Process purchase orders with prompt delivery, where appropriate,
of payment and supporting documentation to the Trust's custodian,
and issue the appropriate number of uncertificated shares, with
such uncertificated shares being held in the appropriate
shareholder account
C. Maintain shareholder account records, including name, address,
taxpayer identification number and shares held.
D. Furnish a list of shareholders as of each dividend record date if
requested by the Fund.
E. 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.
F. File with the proper federal, state and local authorities such
appropriate information returns as are required by law to be filed
by the Fund concerning the payment of dividends and distributions.
1
G. Providing Dividend Reinvestment Services per the terms and
conditions in the specific plan document [WHAT IS THIS? DEFAULT IS
DIVIDEND REINVESTMENT, UNLESS OPT OUT], including:
(a) Crediting full and fractional shares to the participant
accounts.
(b) Updating and balancing participant records as transactions
occur.
(c) Generating shareholder statements to participants.
(d) Issuing, as applicable, all Internal Revenue Services forms.
H. Make changes to shareholder records, including, but not limited
to, address changes in plans (e.g. dividend reinvestment).
I. Prepare shareholder meeting lists and, as necessary, mail, receive
and tabulate proxies.
J. Provide shareholder account information upon request and prepare
and mail confirmation and statements of account to shareholders
for all purchases, redemptions and other confirmable transactions
as agreed upon with the Fund.
K. 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 Fund, all as required by applicable
federal tax laws and regulations.
L. Reasonably cooperate with the Chief Compliance Officer (the "CCO")
of the Trust in respect of the CCO's initial and periodic reviews
of those aspects of UBSFS' 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.
M. 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 B hereto.
3. Lost Shareholder Due Diligence Searches and Servicing
The Trust hereby acknowledges that USBFS has an arrangement with an
outside vendor to conduct lost shareholder searches required by Rule
17Ad-17 under the Securities Exchange Act of 1934, as amended. Costs
associated with such searches will be passed through to the Trust as an
out-of-pocket expense in accordance with the fee schedule set forth in
Exhibit C hereto. If a shareholder remains lost and the shareholder's
account remains unresolved after completion of the mandatory Rule
17Ad-17 search, the Trust hereby authorizes the vendor to enter, at its
discretion, into fee sharing arrangements with the lost shareholder (or
such lost shareholder's representative or executor) to conduct a more
in-depth search in order to locate the lost shareholder before the
shareholder's assets escheat to the applicable state. The Trust hereby
acknowledges that USBFS is not a party to these arrangements and does
not receive any revenue sharing or other fees relating to these
arrangements.
4. Anti-Money Laundering Program
The Trust acknowledges that it has had an opportunity to review,
consider and comment upon the written procedures provided by USBFS
describing various tools used by USBFS which are designed to promote
the detection and reporting of potential money laundering activity by
monitoring certain aspects of
2
shareholder activity as well as written
procedures for verifying a customer's identity (collectively, the
"Procedures"). Further, the Trust has determined that the Procedures,
as part of the Trust's overall anti-money laundering program, are
reasonably designed to prevent the Fund from being used for money
laundering or the financing of terrorist activities and to achieve
compliance with the applicable provisions of the USA Patriot Act of
2002 and the implementing regulations thereunder.
Based on this determination, the Trust hereby instructs and directs
USBFS to implement the Procedures on the Trust's behalf, as such may be
amended or revised from time to time. It is contemplated that these
Procedures will be amended from time to time by the parties as
additional regulations are adopted and/or regulatory guidance is
provided relating to the Trust's anti-money laundering
responsibilities.
USBFS agrees to provide to the Trust:
(a) Prompt written notification of any transaction or combination
of transactions that USBFS believes, based on the Procedures,
evidence money laundering activity in connection with the
Trust or any shareholder of the Fund;
(b) Prompt written notification of any customer(s) that USBFS
reasonably believes, based upon the Procedures, to be engaged
in money laundering activity, provided that the Trust agrees
not to communicate this information to the customer;
(c) Any reports received by USBFS from any government agency or
applicable industry self-regulatory organization pertaining
to USBFS's anti-money laundering monitoring on behalf of the
Trust;
(d) Prompt written notification of any action taken in response
to anti-money laundering violations as described in (a), (b)
or (c); and
(e) Certified annual and quarterly reports of its monitoring and
customer identification activities on behalf of the Trust.
The Trust hereby directs, and USBFS acknowledges, that USBFS shall (i)
permit federal regulators to access such information and records
maintained by USBFS and relating to USBFS's implementation of the
Procedures, on behalf of the Trust, as they may request, and (ii)
permit such federal regulators to inspect USBFS's implementation of the
Procedures on behalf of the Trust.
5. Compensation
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit C
hereto (as amended from time to time). USBFS 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 USBFS 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
USBFS 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 USBFS shall only be paid out of assets and
property of the particular Fund involved.
6. Representations and Warranties
3
A. The Trust hereby represents and warrants to USBFS, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) 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;
(2) 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;
(3) 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; and
(4) A registration statement under the 1940 Act and the
Securities Act of 1933, as amended, will be made
effective prior to the effective date of this
Agreement and will remain effective during the term
of this Agreement, and appropriate state securities
law filings will be made prior to the offering of
shares in such jurisdiction and will continue to be
made during the term of this Agreement as necessary
to enable the Trust to make any continuing public
offering of its shares. For the avoidance of doubt,
the effective date of this agreement shall be the
later of the date first written above or the date in
which the Trust's initial registration Statement is
declared effective.
B. USBFS hereby represents and warrants to the Trust, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) 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;
(2) This Agreement has been duly authorized, executed and
delivered by USBFS in accordance with all requisite
action and constitutes a valid and legally binding
obligation of USBFS, 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;
(3) 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; and
(4) It is a registered transfer agent under the Exchange
Act.
7. Standard of Care; 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
4
the Trust in connection with its duties under this Agreement,
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 its bad
faith, negligence, or willful misconduct 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 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) that USBFS may
sustain or incur or that 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 (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 Trust, as approved by the Board of Trustees of the Trust (the
"Board of Trustees"), 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 its bad faith, negligence or willful misconduct
in the performance of its duties under this Agreement. 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 term "USBFS" shall
include USBFS's directors, officers and employees.
USBFS shall indemnify and hold 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 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 USBFS as a result of USBFS's refusal or failure to
comply with the terms of this Agreement, or from its bad faith,
negligence, or willful misconduct in the performance of its duties
under this Agreement. This indemnity shall be a continuing
obligation of USBFS, 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.
Neither party to this Agreement shall be liable to the other party
for consequential, special or punitive damages under any provision
of this Agreement.
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. 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
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. Moreover, USBFS shall provide the
Trust, at such times as the Trust may reasonably require, copies
of reports rendered by independent accountants on the internal
controls and procedures of USBFS relating to the services provided
by USBFS under this Agreement.
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
5
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.
C. The indemnity and defense provisions set forth in this Section 7
shall indefinitely survive the termination and/or assignment of
this Agreement.
D. If USBFS is acting in another capacity for the Trust pursuant to a
separate agreement, nothing herein shall be deemed to relieve
USBFS of any of its obligations in such other capacity.
E. Any amounts owed by the Trust to UBSFS under this Section 7 shall
only be paid out of the assets and property of the particular Fund
involved.
8. Data Necessary to Perform Services
The Trust or its agent shall furnish to USBFS the data necessary to
perform the services described herein at such times and in such form as
mutually agreed upon.
9. 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
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 USBFS 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 USBFS or any of
its employees, agents or representatives, and information that was
already in the possession of USBFS prior to receipt thereof from the
Trust or its agent, shall not be subject to this paragraph.
Further, USBFS 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, USBFS 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.
10. 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 or its designee on and in
accordance with its request.
11. Compliance with Laws
6
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 and statement of additional
information. USBFS'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.
12. Term of Agreement; Amendment
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.
Subsequent to the initial two-year term, this Agreement may be
terminated by either party 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
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. This Agreement
may not be amended or modified in any manner except by written
agreement executed by USBFS and the Trust, and authorized or approved
by the Board of Trustees.
13. 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
Trust by written notice to USBFS, USBFS will promptly, upon such
termination and at the expense of the Trust, 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 Trust (if such form differs from the form in which
USBFS 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 USBFS's personnel in the establishment of
books, records, and other data by such successor. If no such successor
is designated, then such books, records and other data shall be
returned to the Trust.
14. 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 by the Trust without the written
consent of USBFS, or by USBFS without the written consent of the Trust
accompanied by the authorization or approval of the Trust's Board of
Trustees.
15. Governing Law
This Agreement shall be 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 Securities and Exchange Commission thereunder.
16. 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.
7
17. Services Not Exclusive
Nothing in this Agreement shall limit or restrict USBFS from providing
services to other parties that are similar or identical to some or all
of the services provided hereunder.
18. 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.
19. 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 USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
000-000-0000 (fax)
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)
20. Multiple Originals
This Agreement may be executed on two or more counterparts, each of
which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
8
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. BANCORP FUND SERVICES, LLC
INVESTMENTS TRUST
By:____________________________ By:_____________________________
Name:__________________________ Name:___________________________
Title:___________________________ Title:____________________________
9
Exhibit A
to the
Transfer Agent Servicing Agreement
Fund Names
Separate Series of Citigroup Alternative Investments Trust
Name of Fund
Citigroup Alternative Investments Tax Advantaged Short Term Fund
C-1
Exhibit B
to the
Transfer Agent Servicing Agreement
As Of Processing Policy
USBFS will reimburse each Fund for any Net Material Loss that may exist
on the Fund's books and for which USBFS is responsible, at the end of each
calendar month. "Net Material Loss" shall be defined as any remaining loss,
after netting losses against any gains, which impacts a Fund's net asset value
per share by more than 1/2 cent. Gains and losses will be reflected on the
Fund's daily share sheet, and the Fund will be reimbursed for any net material
loss on a monthly basis. USBFS will reset the as of ledger each calendar month
so that any losses which do not exceed the materiality threshold of 1/2 cent
will not be carried forward to the next succeeding month. USBFS will notify the
advisor to the Fund on the daily share sheet of any losses for which the advisor
may be held accountable.
B-1
Exhibit C
to the
Transfer Agent Servicing Agreement
Fund to be priced Monthly.
Transfer Agency:
Shareholder Services Fee per Fund:
$17.00 per open account
$2.50 per closed (zero balance) account for a maximum of 18
months per closed account
Additional Services:
$3.00 per fulfillment kit
$83.33 per month for 800# services plus $0.05 per call
Minimum annual Transfer Agency fee N/A
Plus out-of-pocket expenses, including but not limited to:
Statements (if necessary) 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
C-1
