Exhibit 99.(k)(3)
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT, made as of the 25th day of August, 2004,
among THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST, a Massachusetts
business trust (the "Trust"), and PRINCETON ADMINISTRATORS, L.P., a Delaware
limited partnership (the "Administrator").
WITNESSETH:
WHEREAS, the Trust is a non-diversified closed-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, the Trust wishes to retain the Administrator to perform the
administrative services contemplated by this Agreement to the Trust.
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties of the Administrator. The Trust hereby retains the Administrator to
act as administrator of the Trust, subject to the supervision and
directions of the Board of Trustees of the Trust as herein set forth. The
Administrator shall perform or arrange for the performance of the
following administrative and clerical services:
(a) Calculate or arrange for the calculation and publication of the
Trust's net asset value in accordance with the Declaration of Trust
and any applicable votes and determinations adopted from time to
time by the Board of Trustees;
(b) Maintain, or arrange for the maintenance of certain books and
records of the Trust, as mutually agreed upon between the parties
hereto, that are required under the Investment Company Act;
(c) Provide the Trust with administrative offices and data processing
facilities as well as the services of persons competent to perform
such administrative and clerical functions as are necessary to
provide effective operation of the Trust;
(d) Maintain the Trust's expense budget and monitor expense accruals;
(e) Arrange for payment of the Trust's expenses which may include
calculation of various contractual expenses of the Trust's service
providers, and the review and approval of invoices for the Trust's
account and submission to a Trust officer for authorization of
payment in a manner to be agreed upon;
(f) Compute the Trust's yield, total return, expense ratios and
portfolio turnover rate as well as various Trust statistical data as
reasonably requested;
(g) Prepare, for review and approval by officers of the Trust, financial
information for the Trust's quarterly, semi-annual and annual
reports, proxy statements and other communications with shareholders
required or otherwise to be sent to Trust shareholders, and arrange
for the printing and dissemination of such reports and
communications to shareholders;
(h) Prepare reports relating to the business and affairs of the Trust as
may be mutually agreed upon and not otherwise appropriately prepared
by the investment adviser, or the Trust's custodian, counsel or
independent public accountants;
(i) Prepare, or arrange for preparation for review, approval and
execution by officers of the Trust, the Trust's federal, state and
local income tax returns, and any other required tax returns, as may
be mutually agreed upon;
(j) Calculate the Trust's annual net investment income (including net
realized short-term capital gain) and net realized long-term capital
gain to determine the Trust's minimum annual distributions to
shareholders and the tax and accounting treatment of such
distributions on a per share basis, to be reviewed by the Trust's
independent public accountants;
(k) Prepare for review by an officer of the Trust the Trust's periodic
financial reports required to be filed with the Securities and
Exchange Commission (the "SEC") on
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Form N-CSR and Form N-SAR and such other reports, forms or filings,
as may be required by applicable law;
(l) Prepare such financial information and reports as may be required by
any stock exchange or exchanges on which the Trust's shares are
listed, and such other information and reports required by such
stock exchanges as may be mutually agreed upon;
(m) Prepare such financial information and reports as may be required by
any banks from which the Trust borrows funds;
(n) Prepare reports related to the Trust's preferred stock, if any, as
required by rating agencies;
(o) Assist in the preparation and filing of Forms 3, 4 and 5 pursuant to
Section 16 of the Securities Exchange Act of 1934 and Section 30(f)
of the Investment Company Act for the officers and Trustees of the
Trust, such filings to be based on information provided by those
persons and the Trust's investment adviser;
(p) Coordinate the performance of administrative and professional
services rendered to the Trust by others, including its custodian,
registrar, transfer agent, dividend disbursing agent and dividend
reinvestment plan agent, as well as auditing and such other services
as may from time to time be mutually agreed;
(q) Consult as necessary with the Trust's officers, independent public
accountants, legal counsel, custodian and transfer and dividend
disbursing agent in establishing the accounting policies of the
Trust;
(r) Review implementation of any stock purchase or dividend reinvestment
programs authorized by the Board of Trustees;
(s) Provide such assistance to the investment adviser, the custodian and
the Trust's counsel and independent public accountants as generally
may reasonably be required to properly carry on the business and
operations of the Trust;
(t) Respond to, or refer to the investment adviser, the Trust's officers
or transfer agent, shareholder inquiries relating to the Trust; and
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(u) Provide such certifications as the Trust shall reasonably require in
connection with Section 302 and 906 of the Xxxxxxxx-Xxxxx Act and
the implemented regulations of the SEC.
All services are to be furnished through the medium of any officer or employee
of the Administrator as the Administrator deems appropriate in order to fulfill
its obligations hereunder.
Each party shall bear all its own expenses incurred in connection with this
Agreement. Printing and dissemination expenses, such as those for reports to
shareholders and proxy statements, shall be expenses of the Trust.
2. Compensation of the Administrator. The Trust will pay the Administrator a
fee on the first business day of each calendar month for the previous
month at an annual rate of 0.15% of the average daily net assets of the
Trust ("average daily net assets" means the average daily value of the
total assets of the Trust, including the amount obtained from leverage and
any proceeds from the issuance of preferred stock, minus the sum of (i)
accrued liabilities of the Trust, (ii) any accrued and unpaid interest on
outstanding borrowing and (iii) accumulated dividends on shares of
outstanding preferred stock), commencing on the day following
effectiveness hereof. For purposes of this calculation, average daily net
assets is determined at the end of each month on the basis of the average
net assets of the Trust for each day during the month. It is understood
that the liquidation preference of any outstanding preferred stock (other
than accumulated dividends) is not considered a liability in determining
the Trust's average daily net assets. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last
day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of
the fee as set forth above. During any period when the determination of
net asset value is suspended by the Board of Trustees, the average net
asset value of a share for the day prior to such suspension shall for this
purpose be deemed to be the net asset value of each
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succeeding day until it is again determined. For the purposes of
determining fees payable to the Administrator, the value of the Trust's
assets shall be computed at the times and in the manner specified in the
Trust's Registration Statement on Form N-2, as amended from time to time
(the "Registration Statement").
3. Limitation of Liability, Indemnification.
(a) The Administrator, with respect to questions of law, may apply for
and obtain the advice and opinion of legal counsel, and with respect
to the application of generally accepted accounting principles or
federal tax accounting principles, may apply for and obtain the
advice and opinion of accounting experts, at the reasonable expense
of the Trust. The Administrator shall obtain prior permission of the
Trust before obtaining the advice and opinion of legal or accounting
experts at the expense of the Trust, and shall not use any counsel
or accounting experts to which the Trust shall reasonably object.
The Administrator shall be fully protected with respect to any
action taken or omitted by it in good faith in conformity with this
paragraph.
(b) The Administrator shall not be liable to the Trust for any action
taken or omitted to be taken by the Administrator, as the case may
be, in connection with the performance of any of its respective
duties or obligations under this Agreement, and the Trust shall
indemnify the Administrator and hold the Administrator harmless from
and against all damages, liabilities, costs and expenses (including
reasonable attorneys' fees and amounts reasonably paid in
settlement) incurred by the Administrator, as the case may be, in or
by reason of any pending, threatened or contemplated action, suit,
investigation or other proceeding (including an action or suit by or
in the right of the Trust or its security holders) arising out of or
otherwise based upon any action actually or allegedly taken or
omitted to be taken by the Administrator, as the case may be, in
connection with the performance of any of their respective duties or
obligations under this Agreement; provided, however, that nothing
contained herein shall protect or be deemed to protect the
Administrator against or entitle or be deemed to entitle the
Administrator to indemnification in respect of any liability to the
Administrator, the Trust or its
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security holders to which the Administrator, as the case may be,
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 duties and obligations under
this Agreement. Such expenses shall be paid by the Trust in advance
of the final disposition of such matter upon invoice by the
Administrator, as the case may be, and receipt by the Trust of an
undertaking from the Administrator, as the case may be, to repay
such amounts if it shall ultimately be established that the
Administrator is not entitled to payment of such expenses hereunder.
(c) As used in this Paragraph 3, the term "Administrator" shall include
any affiliates of the Administrator performing services for the
Trust contemplated hereby, and trustees, officers, agents and
employees of the Administrator or such affiliates.
4. Activities of the Administrator. The services of the Administrator
hereunder are not exclusive and nothing in this Agreement shall 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. The Administrator shall be deemed to be an independent
contractor, unless otherwise expressly provided or authorized by this
Agreement.
5. Duration and termination of this Agreement. This Agreement may be
terminated by each party hereto (without penalty) at any time upon not
less than 60 days prior written notice to the each party hereto.
6. Amendments of this Agreement. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved by the Board of
Trustees of the Trust and such amendment is set forth in a written
instrument executed by each of the parties hereto.
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7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to
choice of law principles thereof and in accordance with the Investment
Company Act. In the case of any conflict, the Investment Company Act shall
control.
8. Counterparts. This Agreement may be executed by the parties hereto in
counterparts, and if executed in more than one counterpart, the separate
instruments shall constitute one agreement.
9. Notices. Any notice or other communication required to be given in writing
pursuant to this Agreement shall be deemed duly given if delivered or
mailed by registered mail, postage prepaid, (1) to the Administrator at
X.X. Xxx 0000, Xxxxxxxxx, Xxx Xxxxxx 00000-0000, Attention: Xxxxxx X.
Xxxxx, (2) to the Trust c/o the Chairman of the Board of Trustees.
10. Entire Agreement. This Agreement sets forth the agreement and
understanding of the parties hereto solely with respect to the matters
covered hereby and the relationship among the Trust and Princeton
Administrators, L.P. as Administrator. Nothing in this Agreement shall
govern, restrict or limit in any respect any other business dealings among
the parties hereto unless otherwise expressly provided herein.
11. No Assignment. This Agreement shall not be assigned by each party without
the prior written consent of the other, except that each party may assign
the agreement to another party if such assignment is to a party
controlling, controlled by or under common control with the assigning
party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE MASSACHUSETTS HEALTH &
EDUCATION TAX-EXEMPT TRUST
By /s/ Xxxxxx X. Xxxxxx
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Title: Chairman
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PRINCETON ADMINISTRATORS, L.P.
By /s/ Xxxxxx X. Xxxxx
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Title: Senior Vice President
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