CORPORATE FINANCE SERVICES AND CONSULTING AGREEMENT
This CORPORATE FINANCE SERVICES AND CONSULTING AGREEMENT (the
"Agreement"), dated as of October 31, 2003, between X.X. Xxxxxxx & Sons, Inc.
("X.X. Xxxxxxx") and Xxxxxxxxx Xxxxxx Management Inc. ("Xxxxxxxxx Xxxxxx").
WHEREAS, Xxxxxxxxx Xxxxxx Real Estate Securities Income Fund Inc. (the
"Fund") is a non-diversified, closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and its shares of common stock, par value $0.0001 per share (the "Common
Stock"), are registered under the Securities Act of 1933, as amended;
WHEREAS, Xxxxxxxxx Xxxxxx is the investment manager and the
administrator of the Fund;
WHEREAS, Xxxxxxxxx Xxxxxx desires to retain X.X. Xxxxxxx to provide
certain corporate finance and consulting services to Xxxxxxxxx Xxxxxx and to the
Fund on an ongoing basis, and X.X. Xxxxxxx is willing to render such services;
and
WHEREAS, Xxxxxxxxx Xxxxxx desires to provide compensation to X.X. Xxxxxxx
for providing such services;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:
1. Xxxxxxxxx Xxxxxx hereby employs X.X. Xxxxxxx, for the period and on the
terms and conditions set forth herein, to provide the following
services: (i) provide relevant information, studies or reports
regarding general trends in the closed-end investment company and asset
management industries, if reasonably obtainable, and consult with
representatives of Xxxxxxxxx Xxxxxx in connection therewith; (ii) at
the request of Xxxxxxxxx Xxxxxx, provide certain economic research and
statistical information and reports, if reasonably obtainable, on
behalf of Xxxxxxxxx Xxxxxx or the Fund and consult with representatives
of Xxxxxxxxx Xxxxxx or the Fund, and/or Directors of the Fund in
connection therewith, which information and reports shall include: (a)
statistical and financial market information with respect to the Fund's
market performance; and (b) comparative information regarding the Fund
and other closed-end management investment companies with respect to
(x) the net asset value of their respective shares (as made publicly
available by the Fund and such investment companies), (y) the
respective market performance of the Fund and such other companies, and
(z) other relevant performance indicators; and (iii) provide Xxxxxxxxx
Xxxxxx with such other services in connection with the Common Stock
relating to the trading price and market price thereof upon which
Xxxxxxxxx Xxxxxx and X.X. Xxxxxxx shall, from time to time, agree,
including after-market services designed to maintain the visibility of
the Fund in the market. At the request of Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx shall limit or cease any action or service provided hereunder to
the extent and for the time period requested by Xxxxxxxxx Xxxxxx;
provided, however, that pending termination of this Agreement as
provided for in Section 7 hereof, any such limitation or cessation
shall not relieve Xxxxxxxxx Xxxxxx of its payment obligations pursuant
to Section 3 hereof.
2. X.X. Xxxxxxx will promptly notify Xxxxxxxxx Xxxxxx in writing if it learns
of any material inaccuracy or misstatement in, or material omission from,
any written information provided by X.X. Xxxxxxx to Xxxxxxxxx Xxxxxx in
connection with the performance of services by X.X. Xxxxxxx under this
Agreement. X.X. Xxxxxxx agrees that in performing its services under this
Agreement, it shall comply in all material respects with all applicable
laws, rules and regulations.
3. Xxxxxxxxx Xxxxxx shall pay to X.X. Xxxxxxx a fee payable quarterly in
arrears, commencing December 31, 2003, prorated in respect to the period
from the closing date of the firm shares offered pursuant to the
Underwriting Agreement to December 31 , 2003, at an annualized rate of
0.07% of the Fund's average daily Managed Assets (as such term is defined
in the Prospectus relating to the Offering) for a term as described in
Section 7 hereof; provided that the total amount of the fee hereunder
shall not exceed 2.07% of the aggregate offering price of the shares of
Common Stock in the Offering (the "Maximum Fee Amount"). Xxxxxxxxx Xxxxxx
shall be permitted to discharge all or a portion of its payment
obligations hereunder upon prepayment in full or in part of the remaining
balance of that portion of the Maximum Fee Amount due to X.X. Xxxxxxx
under this Agreement as described in Section 3 above.
4. Xxxxxxxxx Xxxxxx acknowledges that the services of X.X. Xxxxxxx
provided for hereunder do not include any advice as to the value of
securities or regarding the advisability of purchasing or selling any
securities, in each case for the Fund's portfolio. No provision of this
Agreement shall be considered as creating, nor shall any provision
create, any obligation on the part of X.X. Xxxxxxx, and X.X. Xxxxxxx is
not agreeing, to: (i) furnish any advice or make any recommendations
regarding the purchase or sale of portfolio securities or (ii) render
any opinions, valuations of portfolio securities or recommendations of
any kind in connection with providing the services described in Section
1 hereof, to the extent that any such services would constitute
investment advisory or investment banking services, it being understood
between the parties hereto that any such investment advisory or
investment banking services if, and to the extent, agreed to be
performed by X.X. Xxxxxxx, shall be the subject of a separate agreement
with Xxxxxxxxx Xxxxxx.
5. Nothing herein shall be construed as prohibiting X.X. Xxxxxxx or any of
its respective affiliates from providing similar or other services to
any other clients (including other registered investment companies or
other investment managers), so long as X.X. Xxxxxxx'x services to
Xxxxxxxxx Xxxxxx are not impaired thereby. Neither this Agreement nor
the performance of the services contemplated hereunder shall be
considered to constitute a partnership, association or joint venture
between X.X. Xxxxxxx and Xxxxxxxxx Xxxxxx. In addition, nothing in
this Agreement shall be construed to constitute X.X. Xxxxxxx as the
agent or employee of Xxxxxxxxx Xxxxxx or Xxxxxxxxx Xxxxxx as the agent
or employee of X.X. Xxxxxxx, and neither party shall make any
representation to the contrary. It is understood that X.X. Xxxxxxx is
being engaged hereunder solely to provide the services described above
to Xxxxxxxxx Xxxxxx and that X.X. Xxxxxxx is not acting as an agent or
fiduciary of Xxxxxxxxx Xxxxxx. It is further understood that X.X.
Xxxxxxx shall not have any duties or liabilities to the current or
2
future shareholders of the Fund or any other third party in connection
with its engagement hereunder, all of which are hereby expressly waived
to the extent Xxxxxxxxx Xxxxxx has the authority to waive such duties
and liabilities.
6. Xxxxxxxxx Xxxxxx will furnish X.X. Xxxxxxx with such information as
X.X. Xxxxxxx reasonably believes appropriate to the performance of its
obligations hereunder (all such information so furnished being the
"Information"). Xxxxxxxxx Xxxxxx recognizes and confirms that X.X.
Xxxxxxx (a) will use and rely primarily on the Information and on
information available from generally recognized public sources in
performing the services contemplated by this Agreement without having
independently verified the same and (b) does not assume responsibility
for the accuracy or completeness of the Information and such other
information. To the best of Xxxxxxxxx Berman's knowledge, the
Information to be furnished by Xxxxxxxxx Xxxxxx when delivered, will be
true and correct in all material respects and will not contain any
material misstatement of fact or omit to state any material fact.
Xxxxxxxxx Xxxxxx will promptly notify X.X. Xxxxxxx if it learns of any
material inaccuracy or misstatement in, or material omission from, any
Information delivered to such party.
7. This Agreement shall terminate on the earliest to occur of (a) notice by
X.X. Xxxxxxx to Xxxxxxxxx Xxxxxx that further payments hereunder would
exceed the Maximum Fee Amount, (b) the dissolution and winding up of the
Fund, (c) the date on which the Management Agreement or other investment
management agreement between the Fund and Xxxxxxxxx Xxxxxx or any
successor in interest to Xxxxxxxxx Xxxxxx, including but not limited to
an affiliate of Xxxxxxxxx Xxxxxx, shall terminate and (d) the prepayment
by Xxxxxxxxx Xxxxxx of an agreed upon amount in accordance Section 3
hereof.
8. Xxxxxxxxx Xxxxxx agrees that X.X. Xxxxxxx shall not have any liability to
Xxxxxxxxx Xxxxxx or the Fund for any act or omission to act by X.X.
Xxxxxxx in the course of its performance under this Agreement, in the
absence of gross negligence or willful misconduct on the part of X.X.
Xxxxxxx. Xxxxxxxxx Xxxxxx agrees that it shall provide indemnification to
X.X. Xxxxxxx as set forth in the Indemnification Agreement appended
hereto.
9. This Agreement and any claim, counterclaim or dispute of any kind or
nature whatsoever arising out of or in any way relating to this Agreement
("Claim") shall be governed by and construed in accordance with the laws
of the State of New York.
10. No Claim may be commenced, prosecuted or continued in any court other
than the courts of the State of New York located in the City and County
of New York or in the United States District Court for the Southern
District of New York, which courts shall have exclusive jurisdiction
over the adjudication of such matters, and Xxxxxxxxx Xxxxxx and X.X.
Xxxxxxx consent to the jurisdiction of such courts and personal service
with respect thereto. Each of Xxxxxxxxx Xxxxxx and X.X. Xxxxxxx waives
all right to trial by jury in any proceeding (whether based upon
contract, tort or otherwise) in any way arising out of or relating to
this Agreement. Each of Xxxxxxxxx Xxxxxx and X.X. Xxxxxxx agrees that
a final judgment in any proceeding or counterclaim brought in any such
court shall be conclusive and binding upon such party and may be
3
enforced in any other courts to the jurisdiction of which such party is
or may be subject, by suit upon such judgment.
11. This Agreement may not be assigned by either party without the prior
written consent of the other party.
12. 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. If any provision
of this Agreement is determined to be invalid or unenforceable in any
respect, such determination will not affect such provision in any other
respect or any other provision of this Agreement, which will remain in
full force and effect. This Agreement may not be amended or otherwise
modified or waived except by an instrument in writing signed by
Xxxxxxxxx Xxxxxx and X.X. Xxxxxxx.
13. All notices required or permitted to be sent under this Agreement shall be
sent, if to Xxxxxxxxx Xxxxxx:
Xxxxxxxxx Xxxxxx Management Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx (cc: General Counsel)
or if to X.X. Xxxxxxx:
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Attention: Investment Banking--Corporate Finance
Any notice shall be deemed to be given or received on the third day after
deposit in the U.S. mail with certified postage prepaid or when actually
received, whether by hand, express delivery service or facsimile
transmission, whichever is earlier.
14. This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and all of which taken together constitute one
and the same agreement.
4
IN WITNESS WHEREOF, the parties hereto have duly executed this Corporate
Finance Services and Consulting Agreement as of the date first above written.
XXXXXXXXX XXXXXX MANAGEMENT INC. X.X. XXXXXXX & SONS, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxx
----------------------------- -------------------------------
Name: Xxxxxx Xxxxx Name: Xxxxx X. Xxxxxx
Title: Senior Vice President Title: Vice President
5
INDEMNIFICATION AGREEMENT
-------------------------
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Ladies and Gentlemen:
In connection with the engagement of X.X. Xxxxxxx & Sons, Inc. ("X.X.
Xxxxxxx") to provide services to the undersigned (together with its affiliates
and subsidiaries, referred to as the "Company") in connection with the matters
set forth in the Corporate Finance Services and Consulting Agreement dated
October 31, 2003 (the "Agreement"), between the Company and X.X. Xxxxxxx, in the
event that X.X. Xxxxxxx becomes involved in any capacity in any claim, suit,
action, proceeding, investigation or inquiry (including, without limitation, any
shareholder or derivative action or arbitration proceeding) (collectively, a
"Proceeding") in connection with any matter in any way relating to or referred
to in the Agreement or arising out of the matters contemplated by the Agreement,
including, without limitation, related services and activities prior to the date
of the Agreement, the Company agrees to indemnify, defend and hold X.X. Xxxxxxx
harmless to the fullest extent permitted by law, from and against any losses,
claims, damages, liabilities and expenses in connection with any matter in any
way relating to or referred to in the Agreement or arising out of the matters
contemplated by the Agreement, including, without limitation, related services
and activities prior to the date of the Agreement, except to the extent that it
shall be determined by a court of competent jurisdiction in a judgment that has
become final in that it is no longer subject to appeal or other review, that
such losses, claims, damages, liabilities and expenses resulted from the gross
negligence or willful misconduct of X.X. Xxxxxxx. In addition, in the event that
X.X. Xxxxxxx becomes involved in any capacity in any Proceeding in connection
with any matter in any way relating to or referred to in the Agreement or
arising out of the matters contemplated by the Agreement, including, without
limitation, related services and activities prior to the date of the Agreement,
the Company will reimburse X.X. Xxxxxxx for its legal and other expenses
(including the cost of any investigation and preparation) as such expenses are
reasonably incurred by X.X. Xxxxxxx in connection therewith. If such
indemnification were not to be available for any reason, the Company agrees to
contribute to the losses, claims, damages, liabilities and expenses involved (i)
in the proportion appropriate to reflect the relative benefits received or
sought to be received by the Company and its stockholders and affiliates and
other constituencies, on the one hand, and X.X. Xxxxxxx, on the other hand, in
the matters contemplated by the Agreement or (ii) if (but only if and to the
extent that) the allocation provided for in clause (i) is for any reason held
unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of the
Company and its stockholders and affiliates and other constituencies, on the one
hand, and the party entitled to contribution, on the other hand, as well as any
other relevant equitable considerations. The Company agrees that for the
purposes of this paragraph the relative benefits received, or sought to be
received, by the Company and its stockholders and affiliates, on the one hand,
and the party entitled to contribution, on the other hand, of a transaction as
contemplated shall be deemed to be in the same proportion that the total value
received or paid or contemplated to be received or paid by the Company or its
stockholders or affiliates and other constituencies, as the case may be, as a
result of or in connection with the transaction (whether or not consummated) for
which X.X. Xxxxxxx has been retained to perform services bears to the fees paid
to X.X. Xxxxxxx under the Agreement; provided, that in no event shall the
Company contribute less than the amount necessary to assure that X.X. Xxxxxxx is
not liable for losses, claims, damages, liabilities and expenses in excess of
the amount of fees actually received by X.X. Xxxxxxx pursuant to the Agreement.
Relative fault shall be determined by reference to, among other things, whether
any alleged untrue statement or omission or any other alleged conduct relates to
information provided by the Company or other conduct by the Company (or its
employees or other agents), on the one hand, or by X.X. Xxxxxxx, on the other
hand. The Company shall not be liable under this Indemnification Agreement to
X.X. Xxxxxxx regarding any settlement or compromise or consent to the entry of
any judgment with respect to any Proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the Company is an actual
or potential party to such Proceeding) unless such settlement, compromise or
judgment is consented to by the Company. The Company shall not, without the
prior written consent of X.X. Xxxxxxx, settle or compromise or consent to the
entry of any judgment with respect to any Proceeding in respect of which
indemnification or contribution could be sought under this Indemnification
Agreement (whether or not X.X. Xxxxxxx is an actual or potential party thereto),
unless such settlement, compromise or consent (i) includes an unconditional
release of X.X. Xxxxxxx from all liability arising out of such Proceeding and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of X.X. Xxxxxxx. For purposes of this
Indemnification Agreement, X.X. Xxxxxxx shall include any of its affiliates,
their respective officers, current and former directors, employees and agents,
and the successors and assigns of all of the foregoing persons. The foregoing
indemnity and contribution agreement shall be in addition to any rights that any
indemnified party may have at common law or otherwise.
The Company agrees that neither X.X. Xxxxxxx nor any of its affiliates,
directors, agents, employees or controlling persons shall have any liability to
the Company or any person asserting claims on behalf of or in right of the
Company in connection with or as a result of either X.X. Xxxxxxx'x engagement
under the Agreement or any matter referred to in the Agreement, including,
without limitation, related services and activities prior to the date of the
Agreement, except to the extent that it shall be determined by a court of
competent jurisdiction in a judgment that has become final in that it is no
longer subject to appeal or other review that any losses, claims, damages,
liabilities or expenses incurred by the Company resulted from the gross
negligence or willful misconduct of X.X. Xxxxxxx in performing the services that
are the subject of the Agreement.
Notwithstanding any provision contained herein, in no event shall X.X.
Xxxxxxx be entitled to indemnification by the Company hereunder from and against
any losses, claims, damages, liabilities or expenses in respect of which
indemnity may be sought under Section 9 of the Underwriting Agreement.
For clarification, the parties to this Indemnification Agreement agree
that the term "affiliate" as used in the definition of "Company" herein does not
include any registered investment company for which Xxxxxxxxx Xxxxxx Management
Inc. serves as investment manager.
2
THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF
ANY KIND OR NATURE WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS SET FORTH BELOW,
NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN ANY COURT OTHER THAN THE
COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICH
COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF SUCH MATTERS,
AND THE COMPANY AND X.X. XXXXXXX CONSENT TO THE JURISDICTION OF SUCH COURTS AND
PERSONAL SERVICE WITH RESPECT THERETO. THE COMPANY HEREBY CONSENTS TO PERSONAL
JURISDICTION, SERVICE AND VENUE IN ANY COURT IN WHICH ANY CLAIM ARISING OUT OF
OR IN ANY WAY RELATING TO THIS AGREEMENT IS BROUGHT BY ANY THIRD PARTY AGAINST
X.X. XXXXXXX OR ANY INDEMNIFIED PARTY. X.X. XXXXXXX AND THE COMPANY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR CLAIM (WHETHER BASED UPON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT. THE
COMPANY AGREES THAT A FINAL JUDGMENT IN ANY PROCEEDING OR CLAIM ARISING OUT OF
OR IN ANY WAY RELATING TO THIS AGREEMENT BROUGHT IN ANY SUCH COURT SHALL BE
CONCLUSIVE AND BINDING UPON THE COMPANY AND MAY BE ENFORCED IN ANY OTHER COURTS
TO THE JURISDICTION OF WHICH THE COMPANY IS OR MAY BE SUBJECT, BY SUIT UPON SUCH
JUDGMENT.
3
The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of X.X. Xxxxxxx'x engagement. This
Indemnification 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.
Very truly yours,
XXXXXXXXX XXXXXX MANAGEMENT INC.
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
Accepted and agreed to as of
the date first above written:
X.X. XXXXXXX & SONS, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
4
