PLACEMENT AGENCY AGREEMENT
CITIGROUP ALTERNATIVE INVESTMENTS TRUST
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This Placement Agency Agreement (the "Agreement") dated as of May
[___], 2006, by and among Citigroup Alternative Investments Trust (the "Trust"),
a Delaware statutory trust operating (or intending to operate) as a closed-end,
non-diversified management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), on behalf of its sole initial
series, Citigroup Alternative Investments Tax Advantaged Short Term Fund (the
"Fund"), and the Xxxxx Xxxxxx division of Citigroup Global Markets Inc. (the
"Placement Agent"), a New York corporation operating as a broker-dealer and
registered as such with the Securities and Exchange Commission ("SEC") and
National Association of Securities Dealers, Inc. ("NASD").
WHEREAS
(A) The Trust issues shares of beneficial interest ("Shares") in
the Trust relating to the Fund, pursuant to the Trust's
registration statement as amended or supplemented from time to
time, including, to the extent such separate Parts are used,
Part A (the prospectus), Part B (the statement of additional
information) and Part C as filed on Form N-2 with the SEC
(collectively, the "Registration Statement"); and
(B) The Trust desires to appoint the Placement Agent as placement agent
with respect to the Shares, and the Placement Agent desires to accept
such appointment.
NOW IT IS AGREED AS FOLLOWS:
1. Placement of Shares
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(a) Subject to the terms and conditions set forth herein, the Trust
hereby appoints the Placement Agent as its non-exclusive placement agent in
connection with the placement of Shares, and the Placement Agent hereby accepts
such appointment and agrees to use its reasonable best efforts to offer and sell
Shares to investors whom the Placement Agent reasonably believes meet the
eligibility requirements set forth in Appendix A hereto and to use all
reasonable efforts to assist the Trust in obtaining performance by each investor
who submits a Subscription Agreement (as defined below). Unless otherwise agreed
by the parties, U.S. Bancorp Fund Services, LLC, the Trust's administrator (the
"Administrator"), shall be responsible for reviewing each Subscription Agreement
to confirm that it has been completed in accordance with the instructions
thereto. The Trust and/or the Administrator, in its or their sole discretion,
may return to the Placement Agent any Subscription Agreement that is not
completed to its or their satisfaction and shall be under no obligation to
accept any Subscription Agreement. The Placement Agent is not obligated to sell
any specific number of Shares or to purchase any Shares for its own account. The
Trust shall be entitled to appoint additional placement agents.
(b) In offering subscriptions for Shares, the Placement Agent shall
act solely as the agent of the Trust and not as principal.
(c) For purposes of the offering of Shares, the Trust has furnished to
the Placement Agent copies of the Registration Statement and subscription
documentation (the "Subscription Agreement"). Additional copies of such
documents will be furnished to the Placement Agent at no cost to the Placement
Agent in such numbers as reasonably requested. The Placement Agent is authorized
to furnish to prospective subscribers for Shares only such information
concerning the Trust and the offering as may be contained in the Registration
Statement, the Trust's formation documents, or any other documents, including
sales material, if approved by the Trust (collectively with the Registration
Statement, formation documents and Subscription Agreement, the Trust's "Offering
Documents").
(d) The Placement Agent acknowledges that Shares will be offered and
sold only as set forth herein and in the Registration Statement, Subscription
Agreement and the Trust's formation documents, including, without limitation,
with respect to the commencement of the offering, pricing of Shares, handling of
investor funds, subscription dates and investor eligibility and accreditation
standards.
(e) The Trust may suspend or terminate the offering of Shares at any
time as to specific classes of investors, as to specific jurisdictions or
otherwise. Upon notice to the Placement Agent of the terms of such suspension or
termination, the Placement Agent shall suspend solicitation of subscriptions for
Shares in accordance with such terms until the Trust notifies the Placement
Agent that such solicitation may be resumed.
(f) The Trust will furnish the Placement Agent with such documents as
it may reasonably require, from time to time, for the purpose of enabling it to
pass upon the issuance and sale of Shares as contemplated in this Agreement, or
in order to evidence the accuracy of any of the representations and warranties,
or the fulfillment of any of the conditions contained in this Agreement; and all
proceedings taken by the Trust and in connection with the issuance and sale of
Shares as contemplated in this Agreement will be satisfactory in form and
substance to the Placement Agent.
(g) The Trust (or the Administrator on its behalf) will promptly
notify the Placement Agent in the event the effectiveness of the Registration
Statement then in effect or any necessary amendments thereto should be (or, to
their reasonable knowledge, is to be) suspended under any of the provisions of
the Securities Act of 1933, as amended (the "1933 Act"), or if a current
prospectus as required by Section 10(b)(2) of said Act is not on file with the
Commission. Promptly upon receipt of such notice (and until advised otherwise in
writing by the Trust or the Administrator), the Placement Agent will not offer
Shares under any of the provisions of this Agreement and no orders for the
purchase or sale of Shares hereunder will be accepted by the Trust; provided,
however, that nothing contained in this Agreement will in any way restrict or
have an application to or bearing upon the Trust's obligation to repurchase
Shares from a Shareholder in accordance with the provisions of the Trust's
prospectus or formation documents.
2. Handling of Orders
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(a) For purposes of this Agreement, purchasers of Shares whose
subscriptions were solicited by the Placement Agent and accepted by the Trust
are referred to herein as the "Placement Agent's Subscribers."
(b) All properly presented and accepted subscriptions for the purchase
of Shares shall be executed at the offering price per Share described in the
Registration Statement.
(c) The procedures relating to soliciting and the handling
subscriptions for Shares will be subject to the terms of the Registration
Statement and the Operating Procedures set forth in Appendix B hereto.
(d) Payments for Shares shall be made as specified in the Registration
Statement and Subscription Agreement.
(e) The Placement Agent will not at any time be responsible for
performing recordkeeping or accounting services with respect to the Trust. The
Trust shall promptly inform the Placement Agent of the Trust's Net Assets and
Net Asset Value per Share as soon as reasonably practicable following their
calculation. The Placement Agent is authorized to communicate such calculations
to each of the Placement Agent's Subscribers.
3. Fees and Expenses
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(a) The Placement Agent is entitled to charge a placement fee (sales
load) to each investor on the purchase price of its Shares of up to 1% as
specified in the Registration Statement upon acceptance of the investor's
subscription for Shares by the Administrator; provided that the Placement Agent
shall have the authority to waive or reduce the placement fee in particular
cases, at its sole discretion, and as generally described in the Registration
Statement.
(b) Except as may otherwise be agreed to by the Trust, the Placement
Agent shall be responsible for the payment of all costs and expenses incurred by
it in connection with the performance of its obligations under this Agreement
(other than those costs associated with preparing and updating the Registration
Statement and with reviewing the qualifications of prospective investors, which
costs will be borne by the Trust).
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4. Additional Representations, Warranties and Covenants of the Trust
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The Trust hereby represents, warrants and covenants to the Placement
Agent that:
(a) The Trust has been duly formed under the laws of the State of
Delaware and has the power and authority to effect the offering of its Shares
and conduct its business as described in the Registration Statement. All
necessary filings, consents and other actions necessary to qualify the offering
of Shares with the Commission under the 1933 Act and blue sky offices in each
applicable U.S. state and to conduct the business of the Trust as described in
the Registration Statement have been, or will timely be, made or taken.
(b) The Trust engages in business as a closed-end, non-diversified
management investment company and is registered as such under the 1940 Act.
(c) With respect to Shares, the Registration Statement and any
amendments thereto filed by the Trust with the Commission under the 1933 Act
have been prepared in conformity with the requirements of said Act and rules and
regulations of the Commission thereunder.
(d) The sale of Shares and the execution, delivery and performance of
this Agreement, and the Trust's conduct of business as described in the
Registration Statement will not result in the violation of any applicable law.
(e) The Trust will use the proceeds from the sale of Shares for the
purposes set forth in the Registration Statement.
(f) Shares to be or which may be issued by the Trust have been duly
authorized for issuance and sale, are registered with the Commission pursuant to
a Registration Statement to be effective at the time such Shares are issued and
delivered by the Trust, and will conform in all material respects to all
statements relating thereto contained in such Registration Statement.
(g) The Registration Statement and any selling materials prepared or
approved by the Trust do not contain any untrue statement of material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. If, at any time after the commencement of the
offering of Shares and prior to the termination of such offering, an event
occurs that in the opinion of counsel to the Trust materially affects the Trust
and that should be set forth in an amendment or supplement to the Registration
Statement in order to make the statements in the Registration Statement not
misleading in light of the circumstances under which they are made, the Trust
will notify the Placement Agent as promptly as practicable of the occurrence of
such event and prepare and furnish to the Placement Agent copies of an amendment
or supplement to the Registration Statement, in such reasonable quantities as it
may request, in order that the Registration Statement will not contain any
untrue statement of any material fact or omit to state a material fact that in
the opinion of such counsel is necessary to make the statements in the
Registration Statement not misleading in light of the circumstances under which
they are made.
(h) The Trust will not offer Shares under any of the provisions of
this Agreement and no orders for the purchase or sale of Shares hereunder will
be accepted by the Trust if and so long as the effectiveness of the Registration
Statement then in effect or any necessary amendments thereto should be suspended
under any of the provisions of the 1933 Act or if and so long as a current
prospectus as required by Section 10(b)(2) of said Act is not on file with the
Commission; provided, however, that nothing contained in this Agreement will in
any way restrict or have an application to or bearing upon the Trust's
obligation to repurchase Shares from a Shareholder in accordance with the
provisions of the Trust's Registration Statement or formation documents.
(i) This Agreement has been duly authorized, executed and delivered by
the Trust and, upon execution by the Placement Agent, will constitute a valid
and binding agreement of the Trust.
(j) Upon the Placement Agent's request, the Trust will make available
to the Placement Agent any information pertaining to the Trust reasonably
requested by any prospective investor.
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The foregoing covenants and representations shall be true and correct
as of the date hereof and for so long as the Agreement remains in effect and the
Placement Agent's Subscribers are invested in the Trust.
5. Additional Representations, Warranties and Covenants of the Placement
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Agent.
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The Placement Agent hereby represents and warrants to the Trust as
follows:
(a) The Placement Agent will comply with all applicable laws and
regulations in connection with its activities as placement agent.
(b) The Placement Agent has full power and authority to enter into,
and to perform its obligations under, this Agreement.
(c) The execution of this Agreement by the Placement Agent has been
validly authorized.
(d) In selling Shares, the Placement Agent will solicit offers to buy
Shares only in compliance with the procedures described in the Registration
Statement and in accordance with this Agreement. Neither the Placement Agent nor
any other persons authorized by the Placement Agent will give any information or
make any representations, other than those contained in the Registration
Statement and any other Offering Documents specifically approved by the Trust.
(e) The Placement Agent will distribute to each person to whom the
Placement Agent has furnished a copy of the Registration Statement and/or other
applicable written offering document any amendment or supplement thereto
provided to the Placement Agent by the Trust as may be applicable to such
person.
(f) The Placement Agent acknowledges that transfers of Shares (and
their repurchase by the Trust) are restricted as described in the Registration
Statement.
(g) The Placement Agent represents that it has an anti-money
laundering program ("AML program") in place reasonably designed to comply with
Section 352 of the USA PATRIOT Act, NASD Rule 3011, and NYSE Rule 445. The
Placement Agent's AML program includes: (i) Anti-Money Laundering/"Know Your
Customer" policies and procedures (ii) the designation of an Anti-Money
Laundering Compliance Officer; (iii) recording-keeping and reporting practices
in accordance with applicable law; (iv) reporting of suspicious activity to
government authorities in accordance with applicable law; (v) anti-money
laundering training; and (vi) independent testing for compliance. The Placement
Agent will provide such periodic reports or certifications to the Trust
regarding this AML program as the Trust may reasonably request. By forwarding a
Subscription Agreement to the Trust and/or the Administrator for acceptance, the
Placement Agent will represent that it has used reasonable efforts in applying
this AML program to determine the identity of the relevant subscriber and that
there is no reason to suspect the subscriber of money laundering activities.
(h) The Placement Agent maintains all licenses and registrations
necessary under applicable law and regulations (including the rules of the NASD)
to provide the services required to be provided by the Placement Agent under
this Agreement.
The representations and warranties set forth in this section are
continuing during the term of this Placement Agreement and for so long as the
Placement Agent's Subscribers are invested in the Trust. The Placement Agent
agrees to notify the Trust, in writing, if, during that time, any of the
representations or warranties made by Placement Agent in this section become
inaccurate or untrue, and of the facts relating thereto.
6. Liability; Indemnification
--------------------------
(a) The Trust agrees to indemnify, defend and hold the Placement Agent
and its affiliates and their respective officers, directors, employees, agents,
representatives and any person who controls the Placement Agent within the
meaning of Section 15 of the 1933 Act free and harmless from and against any and
all claims, demands, liabilities and reasonable expenses (including the cost of
investigation or defending such claims, demands or
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liabilities and any reasonable counsel fees incurred in connection therewith)
which the Placement Agent and its affiliates and their respective officers,
directors, employees, agents and/or any such controlling person may incur
arising out of or based upon (i) any untrue statement of a material fact or
omission to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading contained in the Registration Statement or
other Offering Documents (except to the extent such untrue statement or omission
was made in reliance on and in conformity with information provided in writing
to the Trust by the Placement Agent for inclusion in the Registration Statement
or other Offering Documents); (ii) any material breach by the Trust of any
provision of this Agreement including any representation, warranty, covenant or
agreement set forth herein; (iii) any material violation of any applicable law
by the Trust or its officers, trustees, employees, agents (other than the
Placement Agent), or representatives; (iv) any actions of the Trust and its
officers, trustees, employees and agents relating to the sale of Shares,
including but not limited to any statements or representations, written or oral,
concerning the Trust that such a party makes to the Placement Agent and its
agents and representatives; (v) the actions of the Trust and its employees and
agents relating to the Trust's processing of Subscription Agreements and the
servicing of customer accounts; or (vi) any act or omission made in respect of
its function as Placement Agent; provided, however, that, in no event shall
anything contained herein be so construed as to protect the Placement Agent
against any liability to which the Placement Agent would otherwise be subject by
reason of its gross negligence, willful misfeasance or bad faith or reckless
disregard of its obligations and duties under this Agreement, or violation of
any applicable law by the Placement Agent in connection with the distribution of
Shares. The Trust's agreement to indemnify the Placement Agent, and other
indemnitees as aforesaid is expressly conditional upon the Trust being promptly
notified of any action brought against the Placement Agent, such notification to
be given by letter or facsimile addressed to the Trust at the address set forth
in this Agreement or other address communicated to the Placement Agent in
writing (but only to the extent that the Trust is prejudiced by the failure to
give prompt notice), and further conditional upon the Placement Agent reasonably
cooperating with the Trust with respect to any claim or demand for which the
Placement Agent seeks indemnity and promptly defending such claims if the Trust
reasonably requests. In addition, any determination by the Trust under this
Section 6(a) will be made in accordance with Section 17 of the 1940 Act. The
Trust agrees to promptly notify the Placement Agent of the commencement of any
litigation proceeding against the Trust or any of its officers or trustees in
connection with the issue and sale of any Shares. Any amounts owed by the Trust
to the Placement Agent under this Section 6 shall only be paid out of assets and
property of the Fund (and not, for the avoidance of doubt, out of the assets and
property associated with any other separate series of the Trust as may be
organized from time to time).
(b) The Placement Agent agrees to indemnify, defend and hold the Trust
and each of its officers, Trustees and other controlling persons free and
harmless from and against any and all claims, demands, liabilities and
reasonable expenses (including the cost of investigating or defending against
such claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which such party may incur, but only to the extent that
such liability or expense incurred by such party resulting from such claims or
demands shall arise out of or be based upon the Placement Agent's gross
negligence, willful misfeasance, bad faith or reckless disregard of its
obligations and duties under this Agreement or violation by the Placement Agent
of any applicable law in connection with the distribution of Shares. The
Placement Agent's agreement to indemnify such party as aforesaid is expressly
conditional upon the Placement Agent being promptly notified of any action
brought against such party, such notification to be given by letter or facsimile
addressed to the Placement Agent at its address set forth herein or other
address communicated to the Trust in writing (but only to the extent that the
Placement Agent is prejudiced by the failure to give prompt notice), and further
conditional upon such party reasonably cooperating with the Placement Agent with
respect to any claim or demand for which any of such party seeks indemnity and
promptly defending such claims if the Placement Agent reasonably requests.
(c) If recovery is not available under the foregoing indemnification
provisions of this Section 6 for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be entitled to
contribution toward the amount paid or payable by such indemnified party as a
result of the liabilities, claims, costs (including attorneys fees and expenses)
damages and expenses referred to in Subsection (a) or (b) above. In determining
the amount of contribution to which the respective parties are entitled, there
shall be considered the relative benefits received by each party from the
offering of the Shares, the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any untrue statement or omission, and any
other equitable considerations appropriate under the circumstance.
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(d) Promptly after receipt by either party of notice of any claim or
the commencement of any action or proceedings with respect to which such party
may be entitled to be indemnified hereunder, the party claiming a right to
indemnification (the "Indemnified Party") will notify the other party (the
"Indemnifying Party") in writing of such claim or the commencement of such
action or proceedings, and the Indemnifying Party will assume the defense of
such action or proceeding and will employ counsel satisfactory to the
Indemnified Party and will pay the fees and expenses of such counsel as
incurred. Notwithstanding the preceding sentence, the Indemnified Party will be
entitled to employ counsel separate from the Indemnifying Party's counsel and
from any other party in such action if the Indemnified Party determines that a
conflict of interest exists which makes counsel chosen by the Indemnifying Party
not advisable or if the Indemnified Party reasonably determines that the
Indemnifying Party's assumption of the defense does not adequately represent the
Indemnified Party's interest. In such event the Indemnifying Party will pay the
fees and disbursements of such separate counsel, but in no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to local counsel) for the Indemnified Party in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(e) The Indemnifying Party agrees that it will not, without the prior
written consent of the Indemnified Party, settle any pending or threatened claim
or proceeding related to or arising out of such engagement or transactions or
conduct in connection therewith (whether or not the Indemnified Party is a party
to such claim or proceeding) unless such settlement includes a provision
unconditionally releasing the Indemnified Party from and holding the Indemnified
Party harmless against all liability in respect of claims by any releasing party
related to or arising out of such engagement or any transaction or conduct in
connection therewith. The Indemnifying Party will also promptly reimburse the
Indemnified Party for all reasonable expenses (including counsel fees) as they
are incurred by the Indemnified Party in connection with investigating,
preparing or defending, or providing evidence in, any pending or threatened
claim or proceeding in respect of which indemnification may be sought hereunder
(whether or not the Indemnified Party is a party to such claim or proceeding) or
in enforcing this Agreement.
(f) The provisions of this Section 6 shall survive termination of this
Agreement.
7. Term and Termination
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(a) This Agreement shall be effective for all purposes as of the date
hereof (or, if later, that date as of which this Agreement may be first approved
by the Trust's Board of Trustees in accordance with the requirements of the 0000
Xxx) and shall remain in effect for an initial term of two years from such date,
unless terminated in accordance with the terms of this Agreement. Thereafter,
this Agreement will continue in effect from year to year, provided that each
such continuance is approved by the Trust's Board of Trustees, including the
vote of a majority of the Trustees who are not "interested persons" of the Trust
within the meaning of the 1940 Act.
(b) Either party may terminate this Agreement without cause, upon
sixty (60) days' prior written notice to the other party, or, if there has been
a material breach of any condition, warranty, representation or other term of
this Agreement by one party, by written notice to such breaching party at any
time. This Agreement shall terminate automatically in the event of its
"assignment" within the meaning of the 1940 Act.
8. Notices
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Any notices under this Agreement shall be given in writing, sent by
hand, overnight courier, telecopier or certified or registered mail to the
address set forth below or to such other address as shall have been specified in
writing to the other party hereto, and shall be deemed to have been delivered
effective at the earlier of its receipt or within two (2) days after dispatch.
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If to the Trust:
Citigroup Alternative Investments Trust
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: CFIA COO
With a copy to:
Citigroup Alternative Investments LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxx, General Counsel
If to the Placement Agent:
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
With a copy to:
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx, 00x Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx General Counsel
9. Confidentiality.
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(a) The Trust hereby acknowledges that it has received or will receive
written and/or oral information, including the names of the Placement Agent's
Subscribers (such information being referred to in this Section 9 as "Customer
Information") from the Placement Agent regarding those customers of the
Placement Agent that subscribe for Shares and that all such Customer Information
has been or will be furnished to it subject to the provisions of this Section 9.
The Trust agrees that it will use, and that it will ensure that all of its
affiliates and agents and other entities providing services with respect to the
Trust use, the Customer Information solely in connection with the subscription
for Shares by Customers, the booking of such Shares, the administration of the
Trust and the performance of their respective roles with respect to the Trust
and its Shares, and for no other purpose whatsoever. Furthermore, the Trust
agrees that it will not disclose or make available, and will ensure that none of
its affiliates or agents or other entities providing services with respect to
the Trust discloses or makes available, any Customer Information to any person
or entity that does not have a need to know such Customer Information in
connection with the foregoing. Specifically, and without limitation of the
foregoing, the Trust agrees that it will not disclose or make available, and
will ensure that none of its affiliates or agents or other entities providing
services with respect to the Trust discloses or makes available, any Customer
Information to any persons or entities responsible for or involved in the
marketing of products or services to customers of such entities.
(b) The Placement Agent acknowledges and agrees that the Trust and its
respective affiliates may disclose Customer Information or portions thereof (1)
at the request of a regulatory agency or in connection with an examination of
the Trust or such affiliate by regulatory examiners; (2) pursuant to subpoena or
other legal process; (3) at the express direction of any other authorized
government agency; (4) to its internal or external attorneys or
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auditors; (5) to others to whom the Trust or such affiliate is required to make
such disclosure by law or regulation, and in any of the circumstances mentioned
in clause (2), (3), or (5), the Trust shall (to the extent permitted by law)
give the Placement Agent reasonable prior notice of any such disclosure and
shall, in any event, advise the Placement Agent of any such disclosure to the
extent permitted by law.
(c) The provisions of this Section 9 shall not apply to information
concerning customers that is obtained in any manner other than pursuant to this
Agreement.
(d) The provisions of this Section 9 shall survive the termination of
this Agreement.
10. Delegation
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(a) The Placement Agent shall be entitled to delegate all or any of
its duties, functions or powers under this Agreement to another person or
persons as sub-agent or sub-agents subject to the approval of the Trust (and the
Administrator shall be authorized to provide such approval on behalf of the
Trust). The Placement Agent shall be solely responsible, however, for the acts
and omissions of any such sub-agent and for the payment of any remuneration to
such sub-agent.
(b) In particular, the Placement Agent may, as agent for the Trust,
solicit other placement agents ("dealers") for offers to purchase Shares and may
enter into selling group agreements with any such dealers, the form of such
agreements to be as mutually agreed upon, from time to time, by the Placement
Agent and the Trust. Each dealer must be a member of the NASD or a foreign
dealer not eligible for membership in the NASD who has agreed in acting under
the selling group agreement to abide by the rules and regulations of the NASD
and not to use the U.S. mails or any means of interstate commerce in connection
with the sales of such Shares unless such foreign dealer is registered under the
Securities Exchange Act of 1934, as amended, or such registration is not
required. Any placement fee paid to the Placement Agent under Section 3(a) of
this Agreement in respect of customers referred to the Placement Agent by such a
dealer may be reallowed to the dealer in such amount as the Placement Agent may
deem appropriate from time to time, provided that such reallowed amount shall be
the same for all dealers and shall conform with any statements related thereto
as the Trust may include in the Registration Statement from time to time in
consultation with the Placement Agent. It is expressly acknowledged that any
such dealer will be considered a third party beneficiary of the Placement
Agent's rights of exculpation and indemnification as against the Trust under
Section 6 of this Agreement, unless the Placement Agent's selling group
agreement with such dealer expressly provides to the contrary and the Trust
consents to such contrary provision.
11. Miscellaneous
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(a) This Agreement is to be governed by, and construed in accordance
with, the laws of the State of New York without giving effect to choice of law
principles, and the provisions of the 1940 Act (which provisions shall control
in the event of any conflict between the laws of the State of New York and the
1940 Act). Neither this Agreement nor any term hereof may be amended, changed,
waived, discharged or terminated except by an instrument in writing signed by
both parties.
(b) The Placement Agent 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 the Placement Agent's 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).
(c) This Agreement sets forth the entire agreement between the parties
hereto and replaces and supersedes all other understandings, commitments, and
agreements relating to the subject matter hereof.
(d) If any provision of this Agreement is determined to be
unenforceable, the remaining provisions shall remain enforceable to the extent
permissible.
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same agreement.
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(f) The parties to this Agreement agree that the obligations of the
Trust under this Agreement will not be binding upon any Trustees or Shareholders
of the Trust, or upon any officers, employees or agents, whether past, present
or future, of the Trust, individually, but are binding only upon the assets and
property of the Fund (and not, for the avoidance of doubt, out of the assets and
property associated with any other separate series of the Trust as may be
organized from time to time).
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IN WITNESS WHEREOF, the parties to this Agreement have caused it to be
duly executed as of the date first above written.
CITIGROUP ALTERNATIVE INVESTMENTS TRUST
By: ___________________________
Name:
Title:
CITIGROUP GLOBAL MARKETS INC.
(ON BEHALF OF ITS XXXXX XXXXXX DIVISION)
By: ___________________________
Name:
Title:
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Appendix A
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Eligibility Requirements
The Placement Agent may only offer and sell Shares to investors (referred to as
"Subscribers" in this Appendix A) whom the Placement Agent reasonably believes
meet the eligibility requirements set forth below.
Accredited Investors
1. Any such Subscriber must be acquiring Shares directly or indirectly
for the account of an "accredited investor" meeting one or more of the "asset
and income tests" set forth in Rule 501(a) of Regulation D under the Securities
Act of 1933. (Alternative tests under Regulation D also may be relied upon with
respect to selected categories of investors, including employees, officers and
directors of affiliates of the Trust.) Such accredited investors are referred to
as "Eligible Investors" and include the following:
o A natural person who has an individual income in excess of
$200,000 in each of the two most recent years, or joint income with
that person's spouse in excess of $300,000 in each of those years, and
has a reasonable expectation of reaching the same income level in the
current year;
o A natural person who has an individual net worth or joint
net worth with his or her spouse, in excess of $1,000,000. "Net worth"
for these purposes means the value of total assets at fair market
value, including home, home furnishings and automobiles, less total
liabilities;
o A corporation, partnership, limited liability company, or
similar business trust or tax-exempt organization as defined in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), that (i) has total assets in excess of $5,000,000, and (ii)
was neither formed nor is operated for the specific purpose of
investing in the Trust; or
o An entity whose equity owners are each "accredited investors"
as defined in this section.
2. Any such Subscriber generally must have a brokerage account with an
approved Placement Agent. Existing Shareholders subscribing for additional
Shares must be Eligible Investors at the time of the additional subscriptions.
00
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Operating Procedures
Unless otherwise agreed by the parties, the Trust agrees that it will
not accept any subscriptions for Shares directly from the Placement Agent's
Subscribers and that any such subscriptions must be made through the Placement
Agent.
Unless otherwise agreed by the parties, the Placement Agent will
deliver all Subscription Agreements to the Trust, which may be via Citigroup
Alternative Investments Investor Services, and the Administrator will be
responsible for reviewing all Subscription Agreements to confirm that each has
been completed in accordance with the instructions thereto.
The Trust will be responsible for maintaining records of all Placement
Agent's Subscribers and for providing Placement Agent's Subscribers, on a timely
basis, with at least quarterly statements of subscriptions and repurchases, with
at least quarterly unaudited performance information for the Trust, with all
Trust reports, letters or other communications issued to the Trust's
Shareholders and with any supplements or amendments to the Registration
Statement. The Trust also will be responsible for providing the Placement
Agent's Subscribers with confirmations of subscriptions and repurchases.
The Placement Agent's Subscribers must comply with all subscription and
repurchase procedures, including deadlines, set forth in the Registration
Statement or otherwise communicated by the Trust to the Placement Agent with
respect to the transmission of subscription and repurchase requests.
The Placement Agent will provide to the Trust a list of the Placement
Agent's Financial Advisors and other appropriate parties who are to receive
copies of statements from the Trust.
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