Exhibit G(2)
CITI FUND MANAGEMENT INC.
WAIVER RELIANCE LETTER
July 25, 2002
Real Estate Income Fund Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentleman:
Citi Fund Management Inc. (the "Adviser") and Real Estate Income Fund Inc.
(the "Fund") have entered into an Investment Management Agreement, dated as of
the date hereof (the "Investment Management Agreement"), pursuant to which the
Adviser has agreed to furnish investment advisory and administrative services to
the Fund on the terms and subject to the conditions of the Investment Management
Agreement.
The Investment Management Agreement provides, among other things, that the
Fund will pay to the Adviser as full compensation for all services rendered by
the Adviser to the Fund under the Investment Management Agreement a monthly fee
in arrears at an annual rate equal to 0.90% of the average daily value of the
Fund's Managed Assets (as defined in the Investment Management Agreement) (such
fee being referred to herein as the "Management Fee"). The Adviser has
covenanted to the underwriters of the Fund's common shares that the Adviser will
waive receipt of certain payments that would be expenses of the Fund, as set
forth below. The Adviser understands that you intend to disclose this
undertaking in your Registration Statement on Form N-2 and the prospectus
included therein. This letter confirms that you may rely on such undertaking for
purposes of making disclosure in your Registration Statement and prospectus and
authorizes you to offset the appropriate amount of the waived payments described
herein against the Management Fee.
2
For the period from the commencement of the Fund's investment operations
through July 31, 2003, and for the 12 month periods ending July 31 in each
indicated year during the term of the Investment Management Agreement (including
any continuation thereof in accordance with Section 15 of the Investment Company
Act of 1940, as amended), the Adviser will waive receipt of certain payments
that would be expenses of the Fund in the amount determined by applying the
following annual rates to the average daily value of the Fund's Managed Assets:
Period Ending July 31 Waiver
--------------------- ------
2003 0.32%
2004 0.32%
2005 0.32%
2006 0.32%
2007 0.32%
2008 0.20%
2009 0.10%
The Adviser intends to cease to so waive receipt of payments upon the
earlier of (i) July 31, 2009 or (ii) termination of the Investment Management
Agreement.
3
Please acknowledge the foregoing by signing this letter in the space
provided below and returning the executed copy to the Adviser.
Sincerely,
CITI FUND MANAGEMENT INC.
By:
------------------------
Name:
Title:
CONFIRMED AND ACCEPTED
REAL ESTATE INCOME FUND INC.
By:
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Name:
Title:
