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EXHIBIT (k)(1)
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THE XXXXX TOTAL RETURN FUND, INC.
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, dated as of the 1st day of August, 1995
between THE XXXXX TOTAL RETURN FUND, INC., a Maryland corporation (the "Fund"),
and XXXXX/XXXXXX ADVISERS, a New York general partnership (the "Administrator").
W I T N E S S E T H
WHEREAS, the Fund is a closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund has been organized for the purpose of investing its
assets, and has retained an investment adviser for this purpose, and also
desires to avail itself of the facilities available to the Administrator with
respect to the administration of the Fund's day to day corporate affairs, and
the Administrator is willing to furnish such administrative services to or for
the benefit of the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Fund appoints the Administrator to administer its corporate
affairs, subject to the overall supervision of the Board of Directors of the
Fund, for the period and on the terms set forth in this Agreement. The
Administrator accepts such appointment and agrees during such period to render
the services herein described and to assume the obligations set forth herein,
for the compensation herein provided.
2. (a) Subject to the supervision of the Board of Directors of the
Fund, the Administrator shall provide office facilities and personnel adequate
to perform the following services at such office facilities for the Fund:
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(i) determine the net asset value per share of the Fund's
Common Stock ($.001 par value) (the "Shares") as of the close of
trading on the New York Stock Exchange on each day the exchange is open
for trading, and make such net asset value available for purposes of
publication in accordance with the Fund's policy, as adopted from time
to time by the Fund's Board of Directors;
(ii) maintain the books and records of the Fund required under
Rule 31a-1(b)(2) under the 1940 Act;
(iii) assist in preparing and providing to the Fund's
accountants information necessary for such accountants to prepare and
file the Fund's U.S. federal, state and local income tax returns;
(iv) assist in preparing the financial information for the
Fund's proxy statements and quarterly and annual reports to
shareholders;
(v) assist in preparing and providing to the Fund and its
counsel information necessary for the preparation of the Fund's reports
to the Securities and Exchange Commission;
(vi) respond to or refer to the Fund's officers or transfer
agent shareholder inquiries relating to the Fund; and
(vii) authorize and permit any of the Administrator's
directors, officers and employees who may be elected as directors or
officers of the Fund to serve in the capacities in which they are
elected.
The performance of services described in clauses (i), (ii), (iii), (iv) and (v)
is subject to the Fund's investment adviser furnishing, on behalf of the Fund,
the Administrator with information on a daily basis with respect to the Fund's
portfolio transactions and such other information as the Administrator may
reasonably request. All services to be furnished by the Administrator under this
Agreement may be furnished through any medium selected by the Administrator.
(b) In connection with services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following expenses:
(i) the salaries and expenses of all personnel of the
Administrator, and
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(ii) all of the Administrator's own office expenses incurred
by the Administrator in connection with the services to be provided to
the Fund and set forth in paragraph 2(a) hereof.
The Fund assumes and will pay all expenses other than those
assumed by the Administrator pursuant to this Agreement, including but
not limited to the expenses described below:
(a) the fees and expenses of the Fund's investment adviser or
expenses otherwise incurred by the Fund in connection with the
management of the Fund's assets;
(b) the fees and expenses of Fund directors who are not
affiliated persons of the Administrator or the Fund's investment
adviser (including out-of-pocket expenses received for attendance of
board of directors' meetings);
(c) the fees and expenses of the Fund's custodian arising
under the custody agreement or any other agreement between the Fund and
its custodian;
(d) the fees and expenses of the Fund's transfer and dividend
disbursing agent and registrar (which may be the custodian) arising
under the transfer agency agreement or any other agreement with the
Fund;
(e) the charges and expenses of legal counsel and independent
accountants for the Fund;
(f) brokers' commissions and any issue or transfer taxes
chargeable to the Fund in connection with its securities transactions;
(g) all taxes and corporate fees payable by the Fund to
federal, state or other governmental agencies;
(h) the fees of any trade association of which the Fund may be
a member;
(i) the cost of stock certificates representing, and
non-negotiable share deposit receipts evidencing, the Fund's Shares;
(j) all of the fees and expenses involved in registering and
maintaining registrations of the Fund and of its Shares with the
Securities and Exchange Commission, and to the extent applicable under
state securities laws, including the preparation and printing of the
Fund's registration statements and prospectuses for filing under
federal and state securities laws for such purposes;
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(k) the fees and expenses involved in obtaining and
maintaining any stock exchange listings of the Fund's Shares;
(l) allocable communications expenses with respect to investor
services (including, without limitation, telephone, stationery and
postage) and all expenses of stockholders' and directors' meetings and
of preparing, printing and mailing reports to stockholders in the
amount necessary for distribution to the Fund's stockholders; and
(m) insurance premiums and litigation, indemnification and
other expenses not expressly provided for herein or in the Fund's
investment advisory agreement.
3. As full compensation for the services performed and the facilities
furnished by the Administrator, the Fund shall pay the Administrator a fee at
the annual rate of .13 of 1% of the average daily net assets of the Fund during
the previous month. This fee will be computed daily and paid monthly.
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to this Agreement and the Fund's investment advisory agreement,
but excluding interest, taxes, brokerage and, with the prior written consent of
the necessary state securities commissions, extraordinary expenses) exceed the
expense limitations of any state having jurisdiction over the Fund, the Fund may
deduct from the fees to be paid hereunder, or the Administrator will bear, to
the extent required by state law, that portion of such excess which bears the
same relation to the total of such excess as the Administrator's fee hereunder
bears to the total fees otherwise payable for the fiscal year by the Fund,
pursuant to this Agreement and the investment advisory agreement between the
Fund and its investment adviser. The Administrator's reimbursement obligation
under this paragraph 3 is limited by the amount of fees received by it under
this Agreement. Such deduction or payment, if any, will be estimated weekly, and
reconciled and effected or paid, as the case may be, on a monthly basis.
4. The Administrator assumes no responsibility under this Agreement
other than to render the services called for hereunder, and specifically assumes
no responsibilities for investment advice or the investment or reinvestment of
the Fund's assets, or any other responsibilities not specifically assumed
herein.
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5. The Administrator shall not be liable for any error of judgment or
for any loss suffered by the Fund in connection with any matter to which this
Agreement relates, except a loss resulting from its own willful misfeasance, bad
faith or gross negligence in the performance of its duties or from its reckless
disregard of its obligations and duties under this Agreement.
6. The Administrator and the Fund each hereby represent and warrant,
but only as to themselves, that each has all requisite authority to enter into,
execute, deliver and perform its obligations under, this Agreement, and that
this Agreement is legal, valid and binding, and enforceable in accordance with
its terms.
7. The Fund hereby covenants and agrees that it will:
(a) promptly advise the Administrator of all portfolio
transactions made for the Fund on a daily basis;
(b) provide the Administrator with any information it requires
to furnish services pursuant to this Agreement, in a timely fashion,
and will provide any other information, in a timely fashion, as the
Administrator may reasonably request; and
(c) immediately notify the Administrator in the event of any
material change in the condition, operation or activities of the Fund.
8. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Administrator who may also be a director,
officer or employee of 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 business,
whether of a similar or a dissimilar nature, nor limit or restrict the right of
the Administrator to engage in any other business or to render services of any
kind to any other corporation, firm, individual or association.
9. This Agreement shall continue in effect for a period of two years
from the date hereof and thereafter shall continue in effect only so long as
such continuance is specifically approved at least annually by the Board of
Directors (including a majority of the directors who are not
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"interested persons" (as defined in the 1940 Act)) of the Fund or the
Administrator; provided, however, that this Agreement may be terminated by the
Fund at any time, without the payment of any penalty, by the Board of Directors
of the Fund or by vote of a majority of the outstanding voting securities (as
such term is defined in the 0000 Xxx) of the Fund and may be terminated by the
Administrator at any time, without the payment of any penalty, in either case on
not more than 90 days' nor less than 60 days' written notice to the other party.
This Agreement shall terminate automatically in the event of its assignment (as
such term is defined in the 1940 Act).
10. During the term of this Agreement, the Fund shall furnish the
Administrator, at its office at 0 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, or
such other place as the Administrator may designate in writing, with all
prospectuses, proxy statements, reports to stockholders, sales literature, or
other material prepared for distribution to stockholders of the Fund or the
public, that refer in any way to the Administrator, prior to the public
dissemination or use thereof, and shall not use such material if the
Administrator reasonably objects in writing within five business days after the
receipt thereof or at such other time as may be mutually agreed upon. In the
event of termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer in any
way to the Administrator. The Fund shall furnish or otherwise make available to
the Administrator such other information relating to the business affairs of the
Fund as the Administrator at any time, and from time to time, reasonably
requests in order to discharge its obligations hereunder.
11. This Agreement may be amended or modified, but only by mutual
written consent.
12. It is understood that the Administrator is an independent
contractor and not an employee or agent of the Fund and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
13. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by certified or
registered mail, postage
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prepaid, (a) to the Administrator at 0 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Fund Services; or (b) to the Fund at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: President with a copy to Xxxxxx X. Xxxxx, Esq. of
Rosenman & Colin, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
14. This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and arrangement with
respect to the subject matter hereof.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE XXXXX TOTAL RETURN FUND, INC.
By: /s/ Xxxxxx X. Xxxxx
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President
XXXXX/XXXXXX ADVISERS
By: Xxxxx Management Corp., a partner
By: /s/ Xxxxxx X. Xxxxx
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President
By: Xxxxxx Corp., a partner
By: /s/ Xxxxxxxx Xxxxxx
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President
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