Exhibit k(3)
SUB-ADMINISTRATION AGREEMENT
Agreement dated as of May 23, 2000 among Hyperion Capital Management,
Inc. (the "Company"), a Delaware corporation on behalf of the Hyperion 2005
Investment Grade Opportunity Term Trust, Inc., Hyperion 2002 Term Trust,
Inc., Hyperion Total Return Fund, Inc., Lend Lease Hyperion High Yield CMBS
Fund, Inc. and Lend Lease Hyperion Mortgage Opportunity Fund, Inc. (the
"Funds") and State Street Bank and Trust Company, a Massachusetts trust
company (the "Bank").
WHEREAS, each Fund, except Lend Lease Hyperion Mortgage Opportunity
Fund, Inc., is registered as closed-end, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, Lend Lease Hyperion Mortgage Opportunity Fund, Inc. is
registered as an open-end, management investment company under the 1940
Act;
WHEREAS, the Company has been appointed as administrator to the Funds;
WHEREAS, the Company and the Funds desire to retain the Bank to
furnish certain administrative services to the Funds, and the Bank is
willing to furnish such services, on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF BANK
The Company and the Funds hereby appoint the Bank to act as
sub-administrator with respect to the Funds for purposes of providing
certain administrative services for the period and on the terms set forth
in this Agreement. The Bank accepts such appointment and agrees to render
the services stated herein.
The Funds will initially consist of the portfolio(s) and/or class(es)
of shares (each an "Investment Fund") listed in Schedule A to this
Agreement. In the event that the Funds establishes one or more additional
Investment Funds with respect to which the Company and the Funds wish to
retain the Bank to act as administrator hereunder, the Company and the
Funds shall notify the Bank in writing. Upon written acceptance by the
Bank, such Investment Fund shall become subject to the provisions of this
Agreement to the same extent as the existing Investment Funds, except to
the extent that such provisions (including those relating to the
compensation and expenses payable by the Funds and its Investment Funds)
may be modified with respect to each additional Investment Fund in writing
by the Company, the Funds and the Bank at the time of the addition of the
Investment Fund.
2. DELIVERY OF DOCUMENTS
Each Fund will promptly deliver to the Bank copies of each of the
following documents and all future amendments and supplements, if any:
a. It's Articles of Incorporation and by-laws;
b. The Fund's currently effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), if
applicable, and the 1940 Act and the Fund's Prospectus(es) and
Statement(s) of Additional Information relating to all Investment
Funds and all amendments and supplements thereto as in effect
from time to time;
c. A copy of the investment advisory agreement between the Fund and
its investment adviser, including any sub-advisory agreement
between the Fund and its investment sub-adviser, if any; and
d. Such other certificates, documents or opinions which the Bank
may, in its reasonable discretion, deem necessary or appropriate
in the proper performance of its duties.
3. REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to the Fund that:
a. It is a Massachusetts trust company, duly organized and existing
under the laws of The Commonwealth of Massachusetts;
b. It has the corporate power and authority to carry on its business
in The Commonwealth of Massachusetts;
c. All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Bank's ability to perform its
duties and obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligation of the Bank or any law or regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE FUND
Each Fund represents and warrants to the Bank that:
a. It is a corporation, duly organized, existing and in good
standing under the laws of the State of Maryland;
b. It has the corporate power and authority under applicable laws
and by its Articles of Incorporation and by-laws to enter into
and perform this Agreement;
c. All requisite proceedings have been taken to authorize it to
enter into and perform this Agreement;
d. It is an investment company properly registered under the 1940
Act;
e. A registration statement under the 1933 Act, where applicable,
and the 1940 Act has been filed and will be effective and remain
effective during the term of this Agreement. The Fund also
warrants to the Bank that as of the effective date of this
Agreement, all necessary filings under the securities laws of the
states in which the Fund offers or sells its shares have been
made;
f. No legal or administrative proceedings have been instituted or
threatened which would impair the Fund's ability to perform its
duties and obligations under this Agreement;
g. Its entrance into this Agreement will not cause a material breach
or be in material conflict with any other agreement or obligation
of the Fund or any law or regulation applicable to it; and
h. As of the close of business on the date of this Agreement, the
Fund is authorized to issue shares of beneficial interest, and it
will initially offer shares, in the authorized amounts as set
forth in Schedule A to this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Bank that:
a. It is a corporation, duly organized, existing and in good
standing under the laws of Delaware;
b. It has the power and authority under Delaware law and by its
charter and by-laws to enter into and perform this Agreement;
c. All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Company's ability to perform
its duties and obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligation of the Company or any law or regulation applicable to
it.
6. ADMINISTRATION SERVICES
The Bank shall provide the following services, in each case, subject
to the control, supervision and direction of the Fund and the Company and
the review and comment by the Fund's and the Company's auditors and legal
counsel and in accordance with procedures which may be established from
time to time between the Fund, the Company and the Bank:
a. Oversee the determination and publication of each Fund's net
asset value in accordance with the Fund's policy as adopted from
time to time by the Board;
b. Oversee the maintenance by the Fund's custodian of certain books
and records of each Fund as required under Rule 31a-1(b) of the
1940 Act;
c. Review calculation, submit for approval by officers of each Fund
and arrange for payment of the Fund's expenses;
d. Prepare for review and approval by officers of each Fund
financial information for the Fund's semi-annual and annual
reports, proxy statements and other communications required or
otherwise to be sent to Fund shareholders, and arrange for the
printing and dissemination of such reports and communications to
shareholders;
e. Prepare for review by an officer of and legal counsel for the
Fund the Fund's periodic financial reports required to be filed
with the Securities and Exchange Commission ("SEC") on Form N-SAR
and financial information required by Form N-2 and such other
reports, forms or filings as may be mutually agreed upon;
f. Prepare reports relating to the business and affairs of each Fund
as may be mutually agreed upon (including but not limited to
performance and aged receivables) and not otherwise prepared by
the Fund's investment adviser, custodian, legal counsel or
independent accountants;
g. Make such reports and recommendations to the Board concerning the
performance of the independent accountants as the Board may
reasonably request;
h. Make such reports and recommendations to the Board concerning the
performance and fees of the Fund's custodian and transfer and
dividend disbursing agent ("Transfer Agent") as the Board may
reasonably request or deems appropriate;
i. Oversee and review calculations of fees paid to the Fund's
investment adviser, custodian and Transfer Agent;
j. Consult with each Fund's officers, independent accountants, legal
counsel, custodian and Transfer Agent in establishing the
accounting policies of the Fund;
k. Respond to, or refer to each Fund's officers or Transfer Agent,
shareholder inquiries relating to the Fund;
l. Provide periodic testing of portfolios to assist the Fund's
investment adviser in complying with Internal Revenue Code
mandatory qualification requirements, the requirements of the
1940 Act and Fund prospectus limitations as may be mutually
agreed upon;
m. Review and provide assistance on shareholder communications;
n. Maintain general calendar for each Fund;
o. Maintain copies of the Fund's charter and by-laws and copies of
minutes of meetings of the Board of Directors of the Fund and
meeting of shareholders of each Fund;
p. File annual and semi-annual shareholder reports with the
appropriate regulatory agencies; review text of "President's
letters" to shareholders and "Management's Discussion of Fund
Performance" (which shall also be subject to review by the Fund's
legal counsel);
q. Provide limited legal services as described in the Fee Schedule
to this Agreement;
r. Develop or assist in developing guidelines and procedures to
improve overall compliance by the Fund and its various agents;
and
s. Prepare and file with the SEC Rule 24f-2 notices.
The Bank shall provide the office facilities and the personnel required by it to
perform the services contemplated herein.
7. FEES; EXPENSES; EXPENSE REIMBURSEMENT
The Bank shall receive from the Company such compensation for the
Bank's services provided pursuant to this Agreement as may be agreed to
from time to time in a written fee schedule approved by the parties and
initially set forth in the Fee Schedule to this Agreement. The fees are
accrued daily and billed monthly and shall be due and payable upon receipt
of the invoice. Each Fund shall pay to the Bank any and all compensation
and reimbursement of expense that are not paid to the Bank by the Company.
Upon the termination of this Agreement before the end of any month, the fee
for the part of the month before such termination shall be prorated
according to the proportion which such part bears to the full monthly
period and shall be payable upon the date of termination of this Agreement.
In addition, the Company shall reimburse the Bank for its out-of-pocket
costs incurred in connection with this Agreement.
The Company agrees promptly to reimburse the Bank for any equipment
and supplies specially ordered by or for a Fund, or the Company, through
the Bank and for any other expenses not contemplated by this Agreement that
the Bank may incur on a Fund's or the Company's behalf, at the Fund's or
the Company's request or with the Fund's or the Company's consent.
Each Fund will bear all expenses that are incurred in its operation
and not specifically assumed by the Bank. Expenses to be borne by each
Fund, include, but are not limited to: organizational expenses; cost of
services of independent accountants and outside legal and tax counsel
(including such counsel's preparation and review of the Fund's registration
statement, proxy materials as well as federal and state tax qualification
as a regulated investment company and other reports and materials that may
be prepared by the Bank under this Agreement); cost of any services
contracted for by the Fund directly from parties other than the Bank; cost
of trading operations and brokerage fees, commissions and transfer taxes in
connection with the purchase and sale of securities for the Fund;
investment advisory fees; taxes, insurance premiums and other fees and
expenses applicable to its operation; costs incidental to any meetings of
shareholders including, but not limited to, legal and accounting fees,
proxy filing fees and the costs of preparation, filing (edgarization),
printing and mailing of any proxy materials; costs incidental to Board
meetings, including fees and expenses of Board members; the salary and
expenses of any officer, director/trustee or employee of the Fund; costs
incidental to the preparation, filing (edgarization), printing and
distribution of the Fund's registration statements and any amendments
thereto and shareholder reports; cost of typesetting and printing of
prospectuses; cost of preparation and filing of the Fund's tax returns and
Form N-SAR (other than pursuant to Section 6f. of this Agreement), and all
notices, registrations and amendments associated with applicable federal
and state tax and securities laws; all applicable registration fees and
filing fees required under federal and state securities laws; fidelity bond
and directors' and officers' liability insurance; and cost of independent
pricing services used in computing each Fund's net asset value.
The Bank is authorized to and may employ or associate with such person
or persons as the Bank may deem desirable to assist it in performing its
duties under this Agreement; provided, however, that the compensation of
such person or persons shall be paid by the Bank and that the Bank shall be
as fully responsible to the Fund for the acts and omissions of any such
person or persons as it is for its own acts and omissions.
8. INSTRUCTIONS AND ADVICE
At any time, the Bank may apply to the Treasurer or Compliance Officer
for instructions and may consult with its own legal counsel or outside
counsel for the Fund or the independent accountants for the Fund at the
expense of the Fund, with respect to any matter arising in connection with
the services to be performed by the Bank under this Agreement; provided,
however, that legal fees and expenses of the Bank for consultation with its
own legal counsel shall not be an expense of the Fund unless such payment
is approved by the Fund. The Bank shall not be liable, and shall be
indemnified by the Fund, for any action taken or omitted by it in good
faith in reliance upon any such instructions or advice or upon any paper or
document believed by it to be genuine and to have been signed by the proper
person or persons. The Bank shall not be held to have notice of any change
of authority of any person until receipt of written notice thereof from the
Fund. Nothing in this paragraph shall be construed as imposing upon the
Bank any obligation to seek such instructions or advice, or to act in
accordance with such advice when received.
9. LIMITATION OF LIABILITY AND INDEMNIFICATION
The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement and, except as otherwise provided under
Section 6, shall have no responsibility for the actions or activities of
any other party, including other service providers. The Bank shall have no
liability for any error of judgment or mistake of law or for any loss or
damage resulting from the performance or nonperformance of its duties
hereunder unless solely caused by or resulting from the gross negligence or
willful misconduct of the Bank, its officers or employees. The Bank shall
not be liable for any special, indirect, incidental, or consequential
damages of any kind whatsoever (including, without limitation, attorneys'
fees) under any provision of this Agreement or for any such damages arising
out of any act or failure to act hereunder. In any event, the Bank's
liability under this Agreement shall be limited to its total annual
compensation earned and fees paid hereunder during the preceding twelve
months for any liability or loss suffered by the Fund including, but not
limited to, any liability relating to qualification of the Fund as a
regulated investment company or any liability relating to the Fund's
compliance with any federal or state tax or securities statute, regulation
or ruling.
The Bank shall not be responsible or liable for any failure or delay
in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its control,
including without limitation, work stoppage, power or other mechanical
failure, computer virus, natural disaster, governmental action or
communication disruption.
The Company and the Fund shall indemnify and hold the Bank harmless
from all loss, cost, damage and expense, including reasonable fees and
expenses for counsel, incurred by the Bank resulting from any claim,
demand, action or suit in connection with the Bank's acceptance of this
Agreement, any action or omission by it in the performance of its duties
hereunder, or as a result of acting upon any instructions reasonably
believed by it to have been duly authorized by the Company and the Fund,
provided that this indemnification shall not apply to actions or omissions
of the Bank, its officers or employees in cases of its or their own gross
negligence or willful misconduct.
The indemnification contained herein shall survive the termination of
this Agreement.
10. CONFIDENTIALITY
The Bank agrees that, except as otherwise required by law or in
connection with any required disclosure to a banking or other regulatory
authority, it will keep confidential all records and information in its
possession relating to the Fund or its shareholders or shareholder accounts
and will not disclose the same to any person except at the request or with
the written consent of the Fund.
11. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
Each Fund assumes full responsibility for complying with all
securities, tax, commodities and other laws, rules and regulations
applicable to it.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Bank agrees that all records which it maintains for the Fund shall at
all times remain the property of the Fund, shall be readily accessible
during normal business hours, and shall be promptly surrendered upon the
termination of the Agreement or otherwise on written request. The Bank
further agrees that all records which it maintains for the Fund pursuant to
Rule 31a-1 under the 1940 Act will be preserved for the periods prescribed
by Rule 31a-2 under the 1940 Act unless any such records are earlier
surrendered as provided above. Records shall be surrendered in usable
machine-readable form.
12. SERVICES NOT EXCLUSIVE
The services of the Bank to the Fund are not to be deemed exclusive,
and the Bank shall be free to render similar services to others. The Bank
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Fund from time to time, have
no authority to act or represent the Fund in any way or otherwise be deemed
an agent of the Fund.
13. TERM, TERMINATION AND AMENDMENT
This Agreement shall become effective on the date of its execution and
shall remain in full force and effect from the effective date for an
initial term of one year from the effective date and shall automatically
continue in full force and effect after such initial term unless either
party terminates this Agreement by written notice to the other party at
least sixty (60) days prior to the expiration of the initial term. Either
party may terminate this Agreement at any time after the initial term upon
at least sixty (60) days' prior written notice to the other party.
Termination of this Agreement with respect to any given Investment Fund
shall in no way affect the continued validity of this Agreement with
respect to any other Investment Fund. Upon termination of this Agreement,
the Company shall pay to the Bank such compensation and any reimbursable
expenses as may be due under the terms hereof as of the date of such
termination, including reasonable out-of-pocket expenses associated with
such termination. Each Fund shall pay to the Bank any and all compensation
and reimbursement of expense that are not paid to the Bank by the Company.
This Agreement may be modified or amended from time to time by mutual
written agreement of the parties hereto.
14. NOTICES
Any notice or other communication authorized or required by this
Agreement to be given to either party shall be in writing and deemed to
have been given when delivered in person or by confirmed facsimile, or
posted by certified mail, return receipt requested, to the following
address (or such other address as a party may specify by written notice to
the other): If to the Company: Hyperion Capital Management, Inc., One
Liberty Plaza, 000 Xxxxxxxx 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, if to the
Funds: c/o Hyperion Capital Management, Inc., One Liberty Plaza, 000
Xxxxxxxx 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,; if to the Bank: State -
Street Bank and Trust Company, 0 Xxxxxx xx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000-0000, Attn: Fund Administration Legal Department, fax: (000)000-0000.
15. NON-ASSIGNABILITY
This Agreement shall not be assigned by any party hereto without the
prior consent in writing of the other two parties, except that the Bank may
assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by or under common control
with the Bank.
16. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
each Fund, the Company and the Bank and their respective successors and
permitted assigns.
17. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties
hereto with respect to the subject matter hereof and supersedes all
previous representations, warranties or commitments regarding the services
to be performed hereunder whether oral or in writing.
18. WAIVER
The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver nor shall
it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
19. SEVERABILITY If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance it shall
nevertheless remain applicable to all other persons and circumstances.
20. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
21. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties
hereto all/each agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not
such reproduction was made by a party in the regular course of business,
and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
Hyperion Capital Management, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Chief Operating Officer
Hyperion 2005 Investment Grade Opportunity Term Trust, Inc.
Hyperion 2002 Term Trust, Inc.
Hyperion Total Return Fund, Inc.
Lend Lease Hyperion High Yield CMBS Fund, Inc.
Lend lease Hyperion Mortgage Opportunity Fund, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Executive Vice President
SUB-ADMINISTRATION AGREEMENT
Hyperion Funds
SCHEDULE A
Listing of Investment Funds and Authorized Shares
Investment Fund Authorized Shares
Hyperion 2005 Investment Grade Opportunity Term Trust, Inc.
Hyperion 2002 Term Trust, Inc.
Hyperion Total Return Fund, Inc.
Lend Lease Hyperion High Yield CMBS Fund, Inc.
Lend Lease Hyperion Mortgage Opportunity Fund, Inc.
AMENDMENT No. 1 TO
SUB-ADMINISTRATION AGREEMENT
AMENDMENT No. 1, made as of this 26th day of July 2002, to the
Sub-Administration Agreement dated as of May 23, 2000 among Hyperion
Capital Management, Inc. (the "Company"), a Delaware corporation on behalf
of the Hyperion 2005 Investment Grade Opportunity Term Trust, Inc.,
Hyperion 2002 Term Trust, Inc., Hyperion Total Return Fund, Inc., Lend
Lease Hyperion High Yield CMBS Fund, Inc. and Lend Lease Hyperion Mortgage
Opportunity Fund, Inc. (the "Funds") and State Street Bank and Trust
Company, a Massachusetts trust company (the "Bank").
WHEREAS, the Company, the Funds and the Bank have entered into a
Sub-Administration Agreement for the provision by the Bank of certain
administrative services to the Funds and the Trust and;
WHEREAS, the Company wishes to add The Hyperion Strategic Mortgage
Income Fund, Inc. (the "New Fund") as a party to the Sub-Administration
Agreement, and each of the New Fund, the Company, the Funds and the Bank
wish to amend the Sub-Administration Agreement to (i) add the New Fund as a
party thereto and (ii) amend the Fee Schedule to include the New Fund;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. The New Fund shall be added to the Sub-Administration Agreement
as an additional party. The New Fund shall become subject to the
provisions of the Sub-Administration Agreement to the same extent
as the existing Funds, except to the extent that such provisions
(including those relating to the compensation and expenses
payable by the Funds) are hereby modified with respect to the New
Fund in writing by the New Fund and the Bank.
2. The New Fund hereby makes all of the representations and
warranties to the Bank contained in Section 4 of the
Sub-Administration Agreement.
3. The Fee Schedule annexed hereto shall replace any prior fee
schedule.
4. Schedule A annexed hereto shall replace any prior Schedule A.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the date first written
above.
Hyperion Capital Management, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Chief Operating Officer
Hyperion 2005 Investment Grade Opportunity Term Trust, Inc.
Hyperion 2002 Term Trust, Inc.
Hyperion Total Return Fund, Inc.
Lend Lease Hyperion High Yield CMBS Fund, Inc.
Lend lease Hyperion Mortgage Opportunity Fund, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
THe Hyperion Strategic Mortgage Income Fund, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
SUB-ADMINISTRATION AGREEMENT
Hyperion Funds
SCHEDULE A
Listing of Investment Funds and Authorized Shares
Investment Fund Authorized Shares
Hyperion 2005 Investment Grade Opportunity Term Trust, Inc.
Hyperion 2002 Term Trust, Inc.
Hyperion Total Return Fund, Inc.
Lend Lease Hyperion High Yield CMBS Fund, Inc.
Lend Lease Hyperion Mortgage Opportunity Fund, Inc.
The Hyperion Strategic Mortgage Income Fund, Inc.
Amended as of July 26, 2002
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STATE STREET BANK AND TRUST COMPANY
FUND ADMINISTRATION COMPLEX FEE SCHEDULE
FOR
HYPERION FUNDS
I. FEES FOR FUND ADMINISTRATION SERVICES:
The following fee schedule is for sub-administration services for the following
Hyperion Funds: Hyperion 2002 Term Trust Inc., Hyperion 2005 Investment Grade
Opportunity Term Trust Inc., Hyperion Total Return Fund Inc., Lend Lease
Hyperion High Yield Commercial Mortgage Fund, Inc., Hyperion Strategic Mortgage
Income Fund, Inc. For these funds, the services include: Daily accounting
oversight; IRS, SEC & Prospectus Compliance; financial reporting; expense
budgeting & xxxx processing; SEC performance, board reporting and limited legal
services 1. For these services, the funds will be charged according to the
following fee schedule:
Annual Fee
Average Assets Break Point Expressed in Basis Points: 1/100 of 1%
-------------------------- --------------------------------------
First $100 Million 9.00
Next $100 Million 7.00
Thereafter 5.00
Minimum Per Fund $100,000
Fund Fees:
The total net assets of all funds will be used to calculate the fee by
multiplying the net assets of all funds by the basis point fees in the
above schedule. The minimum fee will be calculated by multiplying the
minimum fee by the number of funds to arrive at the total minimum fee.
The greater of the basis point fee or the minimum fee will be accrued
to each fund based on the pro-rata total net asset value of each fund.
II. Services Not Performed
This proposal specifically does not include the following services:
proxy tabulation, assembling and distributing board books, telephone support for
shareholders' inquiries, tax preparation and filing, blue sky services and other
services as outlined in the Administration Contract and Fund Profile.
III. Multiple Classes of Shares
An additional $10,000 annual fee will be applied for each class of
shares, excluding the first class of shares, if more than one class of shares is
operational in a Fund.
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1 Legal services are limited to the preparation, for review and approval by
Hyperion and it's outside legal counsel, of the following: initial fund
registration statements on Form N-2, annual proxy statements and Forms N-8F.
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STATE STREET BANK AND TRUST COMPANY
FUND ADMINISTRATION COMPLEX FEE SCHEDULE
FOR
HYPERION FUNDS
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IV. OUT OF POCKET EXPENSES - Include, But May Not Be Limited To:
o Legal fees, audit fees and other professional fees
o Postage
o Supplies related to Fund records
o Travel and lodging for Board and Operations meetings
o Preparation of financial statements other than Annual and
Semi-Annual Reporting, $3,000 per financial report.
V. SPECIAL ARRANGEMENTS
Fees for activities of a non-recurring nature such as reorganizations,
and/or preparation of special reports will be subject to negotiation.
Fees for a change in fund structure (i.e., Core and Feeder) are subject
to negotiation.
VI. TERM OF THE CONTRACT
The parties agree that this fee schedule shall remain in effect until
December 31, 2003 and from year to year thereafter until it is revised
as a result of negotiations initiated by either party.
HYPERION CAPITAL MANAGEMENT, INC. STATE STREET BANK AND TRUST COMPANY
BY: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxx
--------------------- --------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxx Xxxxxx
Title: Chief Operating Officer Title: Executive Vice President
Date: July 26, 2002 Date: July 26, 2002
Hyperion 2005 Investment Grade Opportunity Term Trust, Inc.
Hyperion 2002 Term Trust, Inc.
Hyperion Total Return Fund, Inc.
Lend Lease Hyperion High Yield CMBS Fund, Inc.
Lend lease Hyperion Mortgage Opportunity Fund, Inc.
THe Hyperion Strategic Mortgage Income Fund, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
Date: July 26, 2002
