INVESTMENT MANAGEMENT AGREEMENT
XXXXX & STEERS REIT AND UTILITY INCOME FUND, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
January __, 2004
XXXXX & STEERS CAPITAL MANAGEMENT, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxx & Steers REIT and Utility Income Fund, Inc. ("We" or the
"Company") herewith confirms its agreement (the "Agreement") with Xxxxx & Steers
Capital Management, Inc. ("You") as follows:
1. We are a closed-end, non-diversified management investment company
registered under the Investment Company Act of 1940 (the "Act"). We propose to
engage in the business of investing and reinvesting our assets in securities of
the type and in accordance with the limitations specified in our Articles of
Incorporation, By-Laws, and Registration Statement filed with the Securities and
Exchange Commission, as these documents may be amended from time to time. You
agree, during the term of this Agreement, to continuously furnish the Company
with an investment program for the assets of the Company, to manage and
supervise the investment and reinvestment of the assets of the Company, and to
arrange for the purchase and sale of securities and other assets held in the
investment portfolio of the Company consistent with our Articles of
Incorporation, By-Laws, and Registration Statement filed with the Securities and
Exchange Commission, as these documents may be amended or modified from time to
time. On your own initiative, You will furnish us from time to time with such
information as You may believe appropriate for this purpose, whether concerning
the individual issuers whose securities
are included in our portfolio, the industries in which they engage, or the
conditions prevailing in the economy generally. You will also furnish us with
such statistical and analytical information with respect to our portfolio
securities as You may believe appropriate or as we reasonably may request. In
making such purchases and sales of our portfolio securities, You will bear in
mind the policies set from time to time by our Board of Directors as well as the
limitations imposed by our Articles of Incorporation and in our Registration
Statement under the Act and the Securities Act of 1933, the limitations in the
Act and of the Internal Revenue Code of 1986, as amended, in respect of
regulated investment companies.
2. It is understood that You will from time to time employ or associate
with yourselves such persons as You believe to be particularly fitted to assist
You in the execution of your duties hereunder, the cost of performance of such
duties to be borne and paid by You. No obligation may be incurred on our behalf
in any such respect. You will provide us persons satisfactory to our Board of
Directors to serve as our officers.
3. We hereby confirm that We shall be responsible and hereby assume the
obligation for payment of all of our expenses, including (a) the fee payable to
You under paragraph 5 of this Agreement; (b) charges and expenses of our
administrator, sub-administrator, custodian, transfer and dividend disbursing
agent; (c) fees of directors who are not affiliated persons of You; (d) legal
and auditing expenses; (e) compensation of our officers, Directors and employees
who do not devote any part of their time to your affairs or the affairs of your
affiliates other than Us; (f) costs of printing our prospectuses and stockholder
reports; (g) costs of any proxy solicitation; (h) cost of maintenance of
corporate existence; (i) interest charges, taxes, brokerage fees and
commissions; costs of stationery and supplies; (k) expense and fees related to
registration and
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filing with the Securities and Exchange Commission and with any state regulatory
authority; and (l) upon the approval of the Board of Directors, costs of your
personnel or your affiliates rendering clerical, accounting and other services.
4. We shall expect of You, and You will give us the benefit of, your
best judgment and efforts in rendering these services to us, and We agree as an
inducement to your undertaking these services that You shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, You against any liability to us or to our security holders
to which You would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.
5. In consideration of the foregoing, We will pay You a monthly fee at
an annualized rate of .85 of 1% of our average daily managed assets (i.e., the
net asset value of our common shares plus the liquidation preference of our
preferred shares and the principal amount of any borrowings used for leverage).
Such fee shall be payable in arrears on the last day of each calendar month for
services performed hereunder during such month. If our initial Registration
Statement is declared effective by the Securities and Exchange Commission after
the beginning of a month or this Agreement terminates prior to the end of a
month, such fee shall be prorated according to the proportion which such portion
of the month bears to the full month.
6. This Agreement shall become effective on the date on which our
pending Registration Statement on Form N-2 relating to our shares becomes
effective and shall remain in effect until December 31, 2005, and may be
continued for successive twelve-month periods
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(computed from each January 1), provided that such continuance is specifically
approved at least annually by the Board of Directors or by majority vote of the
holders of the outstanding voting securities of the Company (as defined in the
Act), and, in either case, by a majority of the Board of Directors who are not
interested persons, as defined in the Act, of any party to this Agreement (other
than as Directors of the Company), provided further, however, that if the
continuation of this Agreement is not approved, You may continue to render the
services described herein in the manner to the extent permitted by the Act and
the rules and regulations thereunder. Upon the effectiveness of this Agreement,
it shall supersede all previous agreements between us covering the subject
matter hereof. This Agreement may be terminated at any time, without the payment
of any penalty, by vote of a majority of the outstanding voting securities (as
so defined) or by a vote of a majority of the Board of Directors on 60 days'
written notice to You, or by You on 60 days' written notice to the Company.
7. This Agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by You and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by You. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and any
interpretation thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
8. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees, who may also be a
Director, officer or employee of the Company, or persons otherwise affiliated
with the Company (within the meaning of the Act) to engage in any other
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business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other trust, corporation, firm, individual or
association.
9. If You cease to act as our Investment Manager, or, in any event, if
You so request in writing, We agree to take all necessary action to change our
name to a name not including the term "Xxxxx & Steers." You may from time to
time make available without charge to Us for our use such marks or symbols owned
by You, including marks or symbols containing the term "Xxxxx & Steers" or any
variation thereof, as You may consider appropriate. Any such marks or symbols so
made available will remain the property of You and You shall have the right,
upon notice in writing, to require Us to cease the use of such xxxx or symbol at
any time.
10. This Agreement shall be construed in accordance with the laws of
the State of New York, provided, however, that nothing herein shall be construed
as being inconsistent with the Act.
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If the foregoing is in accordance with your understanding, will You
kindly so indicate by signing and returning to Us the enclosed copy hereof.
Very truly yours,
XXXXX & STEERS REIT AND UTILITY
INCOME FUND, INC.
By: ______________________________
Name: Xxxxxx X. Xxxxxx
Title: Chairman
Agreed to and accepted
as of the date first set
forth above
XXXXX & STEERS CAPITAL MANAGEMENT, INC.
By: ___________________________
Name: Xxxxxx Xxxxx
Title: President
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