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Exhibit g(3)
ADMINISTRATION AGREEMENT
AGREEMENT, made as of the day of , 1999, by and
between XXXXXXX XXXXX SENIOR FLOATING RATE FUND II, INC., a Maryland corporation
(the "Fund"), and XXXXXXX XXXXX ASSET MANAGEMENT, L.P., a Delaware limited
partnership ("MLAM" or the "Administrator").
WITNESSETH:
WHEREAS, the Fund intends to engage in business as a closed-end,
non-diversified, management investment company and is registered as such under
the Investment Company Act of 1940, as amended (the "Investment Company Act");
and
WHEREAS, the Fund and MLAM are entering into an investment advisory
agreement (the "Investment Advisory Agreement") pursuant to which MLAM will
provide management and investment advisory services to the Fund; and
WHEREAS, the Fund desires to retain MLAM to render administrative
services in the manner and on the terms hereinafter set forth; and
WHEREAS, MLAM is willing to provide administrative services to the Fund
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and MLAM agree as follows:
1. Duties of the Administrator. The Fund hereby retains MLAM to act as
administrator of the Fund, subject to the supervision and direction of the Board
of Directors of the Fund, as hereinafter set forth. MLAM shall perform, or
arrange for its affiliates to perform, the
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administrative services (i.e., services other than investment advise and related
portfolio activities) necessary for the operation of the Fund and, without
limiting the generality of the foregoing, shall (i) prepare and file reports and
other documents required by U.S. Federal, state and other applicable laws and
regulations; (ii) prepare proxy materials and periodic reports to Fund
shareholders; (iii) respond to inquiries from Fund shareholders; (iv) calculate,
or arrange for the calculation of, the net asset value of the Fund's shares (it
being understood that the Fund will reimburse the Administrator for its costs in
providing such accounting services to the Fund); (v) oversee the performance of
administrative and professional services rendered to the Fund by others,
including its custodian, transfer agent, dividend disbursing agent and
shareholder servicing agent, as well as accounting, auditing and other services;
(vi) provide the Fund with the services of persons competent to perform such
administrative and clerical functions as are necessary to provide effective
operation of the Fund, (vii) coordinate tender offers for the Fund's shares, and
(viii) provide the Fund with administrative office and data processing
facilities.
2. Expenses of the Administrator. MLAM shall provide the staff and
personnel necessary to perform its obligations under this Agreement, shall
assume and pay or cause to be paid all expenses incurred in connection with the
maintenance of such staff and personnel, and, at its own expense, shall provide
the office space, facilities, equipment and necessary personnel which it is
obligated to provide under paragraph 1 hereof, except that the Fund shall pay
the expenses of legal counsel retained by MLAM as may be necessary or
appropriate for MLAM's performance of its duties and responsibilities under this
Agreement. All other expenses of the Fund shall be paid as set forth in the
Investment Advisory Agreement.
3. Compensation of the Administrator. For the services rendered to the
Fund by MLAM pursuant to this Agreement, the Fund shall pay to the Administrator
a monthly a fee at
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an annual rate of 0.40 of 1.0% (0.40%) of the Fund's average daily net assets
(i.e., the average daily value of the total assets of the Fund, minus the sum of
accrued liabilities of the Fund and accumulated dividends on shares of
outstanding preferred stock, if any). It is understood that the liquidation
preference of any outstanding preferred stock (other than accumulated dividends)
is not considered a liability in determining the Fund's average daily net
assets. 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 Fund for
each day during the month. 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 the 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. Payment of the Administrator's compensation shall be payable in arrears
on the last day of each calendar month for services performed hereunder during
such month. During any period when the determination of net asset value is
suspended by the Board of Directors, the average net asset value of a share for
the last day prior to such suspension for this purpose shall be deemed to be the
net asset value at the close of each succeeding day until it is again
determined.
4. Limitation of Liability of the Administrator; Indemnification.
(a) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder. Nothing herein
contained shall be construed to protect the administrator against any liability
to the Fund, its shareholders or any sub-investment adviser to which the
Administrator shall otherwise be subject by reasons of willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reckless
disregard of its obligations and duties hereunder.
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(b) The Administrator may, with respect to questions of law, apply for
and obtain the advice and opinion of counsel to the Fund or of its own counsel,
at the expense of the Fund, and shall be fully protected with respect to any
action taken or omitted by it in good faith in conformity with such advice or
opinion.
(c) The Fund agrees to indemnify and hold harmless the Administrator
from and against all charges, claims, expenses (including legal fees) and
liabilities reasonably incurred by the Administrator in connection with the
performance of its duties hereunder, except such as may arise from the
Administrator's willful misfeasance, bad faith, gross negligence in the
performance of its duties or by reckless disregard of its obligations and duties
hereunder. Such expenses shall be paid by the Fund in advance of the final
disposition of such matter upon invoice by the Administrator and receipt by the
Fund of an undertaking from the Administrator to repay such amounts if it shall
ultimately be established that the Administrator is not entitled to
indemnification hereunder by virtue of the Administrator's willful misfeasance,
bad faith, gross negligence in the performance of its duties or by reckless
disregard of its obligations and duties hereunder.
(d) As used in this paragraph 4, the term "Administrator" shall include
any affiliates of the Administrator performing services for the Fund
contemplated hereby and directors, officers, agents and employees of the
Administrator and such affiliates.
5. Activities of the Administrator. The services of the Administrator
under this Agreement are not to be deemed exclusive, and the Administrator and
any person controlled by or under common control with the Administrator shall be
free to render similar services to others.
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6. Duration and Termination of this Agreement. This Agreement shall
become effective as of the date first above written and shall remain in force
until , 2001 and thereafter, but only so long as such continuance specifically
is approved at least annually by (i) the Board of Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Fund, and
(ii) by the vote of a majority of those Directors who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Directors or by vote of a majority of the
outstanding voting securities of the Fund, or by the Investment Adviser, on
sixty days' written notice to the other party. In the event of its assignment,
this Agreement shall automatically terminate.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.
7. Amendments to this Agreement. This Agreement may be amended by the
parties hereto only if such amendment is specifically approved by the Board of
Directors of the Fund and such amendment is set forth in a written instrument
executed by each of the parties hereto.
8. Governing Law. The provisions of this Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State of New
York as at the time in effect and the applicable provisions of the Investment
Company Act. To the extent that the applicable law of the State of New York, or
any of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
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9. 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.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND II, INC.
By: __________________________
Title:
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
By: __________________________
Title:
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