MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of December,
2005, by and between Real Estate Income Fund Inc., a Maryland
Corporation (the "Corporation") and Citi Fund Management Inc., a Delaware
corporation (the "Manager")
WHEREAS, the Corporation is registered as a management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering investment advisory,
management and administrative services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Corporation wishes to retain the Manager to provide investment
advisory, management, and administrative services to the Corporation
(the "Fund"); and
WHEREAS, the Manager is willing to furnish such services on the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed as follows:
1.The Corporation hereby appoints the Manager to act as investment adviser
and administrator of the Fund for the period and on the terms set forth in
this Agreement. The Manager accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2.The Fund shall at all times keep the Manager fully informed with regard
to the securities owned by it, its funds available, or to become available,
for investment, and generally as to the condition of its affairs. It shall
furnish the Manager with such other documents and information with regard
to its affairs as the Manager may from time to time reasonably request.
3.(a)Subject to the supervision of the Corporation's Board of Directors
(the "Board"), the Manager shall regularly provide the Fund with investment
research, advice, management and supervision and shall furnish a continuous
investment program for the Fund's portfolio of securities and other
investments consistent with the Fund's investment objectives, policies and
restrictions, as stated in the Fund's current Prospectus and Statement of
Additional Information. The Manager shall determine from time to time what
securities and other investments will be purchased, retained, sold or
exchanged by the Fund and what portion of the assets of the Fund's portfolio
will be held in the various securities and other investments in which the
Fund invests, and shall implement those decisions, all subject to the
provisions of the Corporation's Articles of Incorporation and By-Laws
(collectively, the "Governing Documents"), the 1940 Act, and the applicable
rules and regulations promulgated thereunder by the Securities and Exchange
Commission (the "SEC") and interpretive guidance issued thereunder by the
SEC staff and any other applicable federal and state law, as well as the
investment objectives, policies and restrictions of the Fund referred to
above, and any other specific policies adopted by the Board and disclosed
to the Manager. The Manager is authorized as the agent of the Corporation
to give instructions to the custodian of the Fund as to deliveries of
securities and other investments and payments of cash for the account of
the Fund. Subject to applicable provisions of the 1940 Act and direction
from the Board, the investment program to be provided hereunder may entail
the investment of all or substantially all of the assets of a Fund in one
or more investment companies. The Manager will place orders pursuant to
its investment determinations for the Fund either directly with the issuer
or with any broker or dealer, foreign currency dealer, futures commission
merchant or others selected by it. In connection with the selection of
such brokers or dealers and the placing of such orders, subject to
applicable law, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Funds and/or the
other accounts over which the Manager or its affiliates exercise
investment discretion. The Manager is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for a Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Manager determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction
or the overall responsibilities which the Manager and its affiliates have
with respect to accounts over which they exercise investment discretion.
The Board may adopt policies and procedures that modify and restrict the
Manager's authority regarding the execution of the Fund's portfolio
transactions provided herein. The Manager shall also provide advice and
recommendations with respect to other aspects of the business and affairs
of the Fund, shall exercise voting rights, rights to consent to corporate
action and any other rights pertaining to a Fund's portfolio securities
subject to such direction as the Board may provide, and shall perform such
other functions of investment management and supervision as may be directed
by the Board.
(b)Subject to the direction and control of the Board, the Manager shall
perform such administrative and management services as may from time to time
be reasonably requested by the Fund as necessary for the operation of the
Fund, such as (i) supervising the overall administration of the Fund,
including negotiation of contracts and fees with and the monitoring of
performance and xxxxxxxx of the Fund's transfer agent, shareholder servicing
agents, custodian and other independent contractors or agents, (ii) providing
certain compliance, fund accounting, regulatory reporting, and tax reporting
services, (iii) preparing or participating in the preparation of Board
materials, registration statements, proxy statements and reports and other
communications to shareholders, (iv) maintaining the Fund's existence, and
(v) during such times as shares are publicly offered, maintaining the
registration and qualification of the Fund's shares under federal and state
laws. Notwithstanding the foregoing, the Manager shall not be deemed to
have assumed any duties with respect to, and shall not be responsible for,
the distribution of the shares of any Fund, nor shall the Manager be
deemed to have assumed or have any responsibility with respect to functions
specifically assumed by any transfer agent, fund accounting agent, custodian,
shareholder servicing agent or other agent, in each case employed by the
Fund to perform such functions.
(c)The Fund hereby authorizes any entity or person associated with the Manager
which is a member of a national securities exchange to effect any transaction
on the exchange for the account of the Fund which is permitted by Section
11(a) of the Securities Exchange Act of 1934, as amended, and Rule 11a2-2(T)
thereunder, and the Fund hereby consents to the retention of compensation for
such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
Notwithstanding the foregoing, the Manager agrees that it will not deal with
itself, or with members of the Board or any principal underwriter of the Fund,
as principals or agents in making purchases or sales of securities or other
property for the account of the Fund, nor will it purchase any securities
from an underwriting or selling group in which the Manager or its affiliates
is participating, or arrange for purchases and sales of securities between a
Fund and another account advised by the Manager or its affiliates, except in
each case as permitted by the 1940 Act and in accordance with such policies
and procedures as may be adopted by a Fund from time to time, and will comply
with all other provisions of the Governing Documents and the Fund's then
current Prospectus and Statement of Additional Information relative to the
Manager and its directors and officers.
4.Subject to the Board's approval, the Manager or the Fund may enter into
contracts with one or more investment subadvisers or subadministrators,
including without limitation, affiliates of the Manager, in which the Manager
delegates to such investment subadvisers or subadministrators any or all its
duties specified hereunder, on such terms as the Manager will determine to
be necessary, desirable or appropriate, provided that in each case the
Manager shall supervise the activities of each such subadviser or
subadministrator and further provided that such contracts impose on any
investment subadviser or subadministrator bound thereby all the conditions
to which the Manager is subject hereunder and that such contracts are
entered into in accordance with and meet all applicable requirements of
the 1940 Act.
5.(a)The Manager, at its expense, shall supply the Board and officers of the
Corporation with all information and reports reasonably required by them and
reasonably available to the Manager and shall furnish the Fund with office
facilities, including space, furniture and equipment and all personnel
reasonably necessary for the operation of the Fund. The Manager shall
oversee the maintenance of all books and records with respect to the Fund's
securities transactions and the keeping of the Fund's books of account in
accordance with all applicable federal and state laws and regulations. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Manager hereby agrees that any records that it maintains for the Fund are
the property of the Fund, and further agrees to surrender promptly to the
Fund any of such records upon the Fund's request. The Manager further
agrees to arrange for the preservation of the records required to be
maintained by Rule 31a-1 under the 1940 Act for the periods prescribed by
Rule 31a-2 under the 1940 Act. The Manager shall authorize and permit any
of its directors, officers and employees, who may be elected as Board
members or officers of the Fund, to serve in the capacities in which they
are elected.
(b)The Manager shall bear all expenses, and shall furnish all necessary
services, facilities and personnel, in connection with its responsibilities
under this Agreement. Other than as herein specifically indicated, the
Manager shall not be responsible for the Fund's expenses, including,
without limitation, advisory fees; distribution fees; interest; taxes;
governmental fees; voluntary assessments and other expenses incurred in
connection with membership in investment company organizations;
organization costs of the Fund; the cost (including brokerage commissions,
transaction fees or charges, if any) in connection with the purchase or
sale of the Fund's securities and other investments and any losses in
connection therewith; fees and expenses of custodians, transfer agents,
registrars, independent pricing vendors or other agents; legal expenses;
loan commitment fees; expenses relating to share certificates; expenses
relating to the issuing and redemption or repurchase of the Fund's shares
and servicing shareholder accounts; expenses of registering and qualifying
the Fund's shares for sale under applicable federal and state law; expenses
of preparing, setting in print, printing and distributing prospectuses and
statements of additional information and any supplements thereto, reports,
proxy statements, notices and dividends to the Fund's shareholders; costs
of stationery; website costs; costs of meetings of the Board or any
committee thereof, meetings of shareholders and other meetings of the Fund;
Board fees; audit fees; travel expenses of officers, members of the Board
and employees of the Fund, if any; and the Fund's pro rata portion of
premiums on any fidelity bond and other insurance covering the Fund and its
officers, Board members and employees; litigation expenses and any
non-recurring or extraordinary expenses as may arise, including, without
limitation, those relating to actions, suits or proceedings to which the
Fund is a party and the legal obligation which the Fund may have to
indemnify the Fund's Board members and officers with respect thereto.
0.Xx member of the Board, officer or employee of the Corporation or Fund
shall receive from the Corporation or Fund any salary or other compensation
as such member of the Board, officer or employee while he is at the same
time a director, officer, or employee of the Manager or any affiliated
company of the Manager, except as the Board may decide. This paragraph
shall not apply to Board members, executive committee members, consultants
and other persons who are not regular members of the Manager's or any
affiliated company's staff.
0.Xx compensation for the services performed and the facilities furnished
and expenses assumed by the Manager, including the services of any
consultants retained by the Manager, the Fund shall pay the Manager, as
promptly as possible after the last day of each month, a fee, computed
daily at an annual rate set forth opposite the Fund's name on Schedule A
annexed hereto, provided however, that if the Fund invests all or
substantially all of its assets in another registered investment company
for which the Manager or an affiliate of the Manager serves as investment
adviser or investment manager, the annual fee computed as set forth on
such Schedule A shall be reduced by the aggregate management fees
allocated to that Fund for the Fund's then-current fiscal year from such
other registered investment company. The first payment of the fee shall
be made as promptly as possible at the end of the month succeeding the
effective date of this Agreement, and shall constitute a full payment of
the fee due the Manager for all services prior to that date. If this
Agreement is terminated as of any date not the last day of a month, such
fee shall be paid as promptly as possible after such date of termination,
shall be based on the average daily net assets of the Fund in that period
from the beginning of such month to such date of termination, and shall
be that proportion of such average daily net assets as the number of
business days in such period bears to the number of business days in such
month. The average daily net assets of the Fund shall in all cases be
based only on business days and be computed as of the time of the regular
close of business of the New York Stock Exchange, or such other time as
may be determined by the Board.
8.The Manager assumes no responsibility under this Agreement other than
to render the services called for hereunder, in good faith, and shall not
be liable for any error of judgment or mistake of law, or for any loss
arising out of any investment or for any act or omission in the execution
of securities transactions for a Fund, provided that nothing in this
Agreement shall protect the Manager against any liability to the Fund to
which the Manager would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties hereunder. As used in this Section 8, the term "Manager" shall
include any affiliates of the Manager performing services for the
Corporation or the Fund contemplated hereby and the partners,
shareholders, directors, officers and employees of the Manager and such
affiliates.
9.Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Manager who may also be a Board
member, officer, or employee of the Corporation or the Fund, to engage
in any other business or to devote his time and attention in part to the
management or other aspects of any other business, whether of a similar
nature or a dissimilar nature, nor to limit or restrict the right of
the Manager to engage in any other business or to render services of any
kind, including investment advisory and management services, to any
other fund, firm, individual or association. If the purchase or sale of
securities consistent with the investment policies of a Fund or one or
more other accounts of the Manager is considered at or about the same
time, transactions in such securities will be allocated among the
accounts in a manner deemed equitable by the Manager. Such transactions
may be combined, in accordance with applicable laws and regulations,
and consistent with the Manager's policies and procedures as presented
to the Board from time to time.
10.For the purposes of this Agreement, the Fund's "net assets" shall be
determined as provided in the Fund's then-current Prospectus and Statement
of Additional Information and the terms "assignment," "interested person,"
and "majority of the outstanding voting securities" shall have the meanings
given to them by Section 2(a) of the 1940 Act, subject to such exemptions
as may be granted by the SEC by any rule, regulation or order.
11.This Agreement will become effective with respect to the Fund on the
date set forth opposite the Fund's name on Schedule A annexed hereto,
provided that it shall have been approved by the Corporation's Board and
by the shareholders of the Fund in accordance with the requirements of the
1940 Act and, unless sooner terminated as provided herein, will continue in
effect for two years from the above written date. Thereafter, if not
terminated, this Agreement shall continue in effect with respect to the
Fund, so long as such continuance is specifically approved at least annually
(i) by the Board or (ii) by a vote of a majority of the outstanding voting
securities of the Fund, provided that in either event the continuance is also
approved by a majority of the Board members who are not interested persons of
any party to this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval.
12.This Agreement is terminable with respect to the Fund without penalty by
the Board or by vote of a majority of the outstanding voting securities of the
Fund, in each case on not more than 60 days' nor less than 30 days' written
notice to the Manager, or by the Manager upon not less than 90 days' written
notice to the Fund, and will be terminated upon the mutual written consent of
the Manager and the Corporation. This Agreement shall terminate automatically
in the event of its assignment by the Manager and shall not be assignable by
the Corporation without the consent of the Manager.
13. The Manager agrees that for services rendered to the Fund, or for any
claim by it in connection with services rendered to the Fund, it shall look
only to assets of the Fund for satisfaction and that it shall have no claim
against the assets of any other portfolios of the Corporation.
00.Xx provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no material amendment of the Agreement shall be effective until
approved, if so required by the 1940 Act, by vote of the holders of a
majority of the Fund's outstanding voting securities.
15.This Agreement embodies the entire agreement and understanding between
the parties hereto, and supersedes all prior agreements and understandings
relating to the subject matter hereof. Should any part of this Agreement
be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding on and shall inure to the benefit of the parties
hereto and their respective successors.
16.This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
REAL ESTATE INCOME FUND INC.
By:_______________________________
Name: R. Xxx Xxxxxx
Title: Chairman
CITI FUND MANAGEMENT INC.
By:_______________________________
Name: Xxxxxx Xxxxxxx
Title: Director
Schedule A
Fee: The following percentage of the Fund's average daily net assets: 0.90
