FORM OF FUND ADMINISTRATION AND ACCOUNTING AGREEMENT
AGREEMENT made as of June ___, 2002, by and between each entity listed
on Exhibit A hereto (each, a "Fund"; collectively, the "Funds"), and The Bank of
New York, a New York banking organization ("BNY").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, each Fund is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, each Fund desires to retain BNY to provide for the portfolios
identified on Exhibit A hereto (each, a "Series") the services described herein,
and BNY is willing to provide such services, all as more fully set forth below;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the parties hereby agree as follows:
1. Appointment.
Each Fund hereby appoints BNY as its agent for the term of this
Agreement to perform the services described herein. BNY hereby accepts such
appointment and agrees to perform the duties hereinafter set forth.
2. Representations and Warranties.
Each Fund hereby represents and warrants to BNY, which representations
and warranties shall be deemed to be continuing, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Fund in accordance with all requisite action and constitutes a
valid and legally binding obligation of the Fund, enforceable in accordance with
its terms;
1
(c) It is conducting its business in compliance with all
applicable laws and regulations, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted; there is no statute, regulation, rule, order or judgment
binding on it and no provision of its charter or by-laws (or other
organizational discounts, as the case may be), nor of any mortgage, indenture,
credit agreement or other contract binding on it or affecting its property which
would prohibit its execution or performance of this Agreement; and
(d) To the extent the performance of any services described in
Schedule II attached hereto by BNY in accordance with the then effective
Prospectus (as hereinafter defined) for the Fund would violate any laws or
regulations applicable to the Fund, the Fund shall immediately so notify BNY in
writing and thereafter shall either furnish BNY with the appropriate values of
securities, net asset value or other computation, as the case may be, or,
subject to the prior approval of BNY, instruct BNY in writing to value
securities and/or compute net asset value or other computations in a manner the
Fund specifies in writing, and either the furnishing of such values or the
giving of such instructions shall constitute a representation by the Fund that
the same is consistent with all applicable laws and regulations and with its
Prospectus.
3. Delivery of Documents.
(a) Each Fund will promptly deliver to BNY true and correct copies
of each of the following documents as currently in effect and will promptly
deliver to it all future amendments and supplements thereto, if any:
(i) The Fund's articles of incorporation or other organizational
document and all amendments thereto (the "Charter");
(ii) The Fund's bylaws or similar document (the "Bylaws"), if any;
(iii) Resolutions of the Fund's board of directors or other
governing body (the "Board") authorizing the execution, delivery and performance
of this Agreement by the Fund;
(iv) The Fund's registration statement most recently filed with
the Securities and Exchange Commission (the "SEC") relating to the shares of the
Fund (the "Registration
2
Statement");
(v) The Fund's Notification of Registration under the 1940 Act on
Form N-8A filed with the SEC; and
(vi) The Fund's Private Placement Memorandum and Statement of
Additional Information pertaining to the Series (the "Prospectus").
(b) Each copy of the Charter shall be certified by the Secretary
of State (or other appropriate official) of the state of organization, and if
the Charter is required by law also to be filed with a county or other officer
or official body, a date-stamped copy of such filing shall be submitted to BNY.
Each copy of the Bylaws, Registration Statement and Prospectus, and all
amendments thereto, and copies of Board resolutions, shall be certified by the
Secretary or an Assistant Secretary of the appropriate Fund.
(c) It shall be the sole responsibility of each Fund to deliver to
BNY its currently effective Prospectus and BNY shall not be deemed to have
notice of any information contained in such Prospectus until it is actually
received by BNY.
4. Duties and Obligations of BNY.
(a) Subject to the direction and control of each Fund's Board and
the provisions of this Agreement, BNY shall provide to each Fund (i) the
administrative services set forth on Schedule I attached hereto and (ii) the
valuation and computation services listed on Schedule II attached hereto.
(b) In performing hereunder, BNY shall provide, at its expense,
office space, facilities, equipment and personnel.
(c) BNY shall not provide any services relating to the management,
investment advisory or sub-advisory functions of any Fund, distribution of
shares of any Fund, maintenance of any Fund's financial records or other
services normally performed by the Funds' respective counsel or independent
auditors.
(d) Upon receipt of a Fund's prior written consent (which shall
not be unreasonably withheld), BNY may delegate any of its duties and
obligations hereunder to any
3
delegee or agent whenever and on such terms and conditions as it deems necessary
or appropriate. Notwithstanding the foregoing, no Fund consent shall be required
for any such delegation to any other subsidiary of The Bank of New York Company,
Inc. BNY shall not be liable to any Fund for any loss or damage arising out of,
or in connection with, the actions or omissions to act of any delegee or agent
utilized hereunder so long as BNY acts in good faith and without negligence or
wilful misconduct in the selection of such delegee or agent.
(e) Each Fund shall cause its officers, advisors, sponsor,
distributor, legal counsel, independent accountants, and transfer agent to
cooperate with BNY and to provide BNY, upon written request, with such
information, documents and advice relating to such Fund as is within the
possession or knowledge of such persons, in order to enable BNY to perform its
duties hereunder. In connection with its duties hereunder, BNY shall be entitled
to rely, and shall be held harmless by each Fund when acting in reliance, upon
the instructions, advice or any documents relating to such Fund provided to BNY
by any of the aforementioned persons, provided that BNY's actions in reliance on
the foregoing are performed without violating BNY's standard of care. BNY shall
not be liable for any loss, damage or expense resulting from or arising out of
the failure of the Fund to cause any information, documents or advice to be
provided to BNY as provided herein. All fees or costs charged by such persons
shall be borne by the appropriate Fund.
(f) Nothing in this Agreement shall limit or restrict BNY, any
affiliate of BNY or any officer or employee thereof from acting for or with any
third parties, and providing services similar or identical to same or all of the
services provided hereunder.
(g) Each Fund shall furnish BNY with any and all instructions,
explanations, information, specifications and documentation reasonably deemed
necessary by BNY in the performance of its duties hereunder, including, without
limitation, the amounts or written formula for calculating the amounts and times
of accrual of Fund liabilities and expenses. BNY shall not be required to
include as Fund liabilities and expenses, nor as a reduction of net asset value,
any accrual for any federal, state, or foreign income taxes unless the Fund
shall have specified to BNY the precise amount of the same to be included in
liabilities and expenses or used to reduce net asset value. Each Fund shall also
furnish BNY with market values (or fair
4
values calculated pursuant to procedures adopted by the Fund) of Securities if
BNY notifies such Fund that same are not available to BNY from a security
pricing or similar service utilized, or subscribed to, by BNY which BNY in its
judgment deems reliable at the time such information is required for
calculations hereunder. At any time and from time to time, the Fund also may
furnish BNY with bid, offer, or market values (or fair values calculated
pursuant to procedures adopted by the Fund) of Securities and instruct BNY to
use such information in its calculations hereunder. BNY shall at no time be
required or obligated to commence or maintain any utilization of, or
subscriptions to, any securities pricing or similar service.
(h) BNY may apply to an officer of any Fund for written
instructions with respect to any matter arising in connection with BNY's
performance hereunder for such Fund, and BNY shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance with such
instructions. Such application for instructions may, at the option of BNY, set
forth in writing any action proposed to be taken or omitted to be taken by BNY
with respect to its duties or obligations under this Agreement and the date on
and/or after which such action shall be taken, but BNY shall not take or omit to
take any such action until it receives instructions, unless BNY reasonably
believes the failure to act prior to such date could expose BNY to liability,
and BNY shall not be liable for any action taken or omitted to be taken in
accordance with a proposal included in any such application on or after the date
on which it reasonably believes it could be exposed to liability unless, prior
to taking or omitting to take any such action, BNY has received written
instructions in response to such application specifying the action to be taken
or omitted.
(i) BNY may consult with counsel to the appropriate Fund, at the
Fund's expense, or its own counsel, at its own expense, and shall be fully
protected with respect to anything done or omitted by it in good faith in
accordance with the advice or opinion of such counsel, provided that if BNY
seeks advice of counsel and intends to rely thereon, it will where circumstances
permit notify the Fund of such reliance. BNY may, with respect to questions of
law specifically regarding an Account, obtain the advice of counsel and shall be
fully protected with respect to anything done or omitted by it in good faith in
conformity with such advice, provided that BNY shall not be so protected unless
the Fund shall have received prior notice
5
from BNY of the substance of the advice of counsel and BNY's intent to rely
thereon, such notice to be provided to the Fund as far in advance of such
reliance as is reasonably possible. In the event BNY does not provide such prior
notice, BNY shall not be liable unless acting in accordance with such advice
constitutes the BNY's own gross negligence or willful misconduct.
(j) Notwithstanding any other provision contained in this
Agreement or Schedule I or II attached hereto, BNY shall have no duty or
obligation to determine, or advise or notify any Fund of: (i) the taxable nature
of any distribution or amount received or deemed received by, or payable to, a
Fund, (ii) the taxable nature or effect on a Fund or its shareholders of any
corporate actions, class actions, tax reclaims, tax refunds or similar events,
(iii) the taxable nature or taxable amount of any distribution or dividend paid,
payable or deemed paid, by a Fund to it shareholders; or (iv) the effect under
any federal, state, or foreign income tax laws of a Fund making or not making
any distribution or dividend payment, or any election with respect thereto.
(k) BNY shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this Agreement
and Schedules I and II attached hereto, and no covenant or obligation shall be
implied against BNY in connection with this Agreement.
(l) The Bank, in performing the services required of it under the
terms of this Agreement, shall be entitled to rely fully on the accuracy and
validity of any and all instructions, explanations, information, specifications
and documentation furnished to it in writing by a Fund and shall have no duty or
obligation to review the accuracy, validity or propriety of such instructions,
explanations, information, specifications or documentation, including, without
limitation, evaluations of securities; the amounts or formula for calculating
the amounts and times of accrual of Series' liabilities and expenses; the
amounts receivable and the amounts payable on the sale or purchase of
Securities; and amounts receivable or amounts payable for the sale or redemption
of Fund shares effected by or on behalf of a Fund. In the event BNY's
computations hereunder rely, in whole or in part, upon information, including,
without limitation, bid, offer or market values of securities or other assets,
or accruals of interest or earnings thereon, from a pricing or similar service
utilized, or subscribed to, by BNY which BNY in its reasonable judgment deems
reliable, BNY shall not be responsible for, under any
6
duty to inquire into, or deemed to make any assurances with respect to, the
accuracy or completeness of such information. Without limiting the generality of
the foregoing, BNY shall not be required to inquire into any valuation of
securities or other assets by a Fund or any third party described in this (l)
even though BNY in performing services similar to the services provided pursuant
to this Agreement for others may receive different valuations of the same or
different securities of the same issuers.
(m) BNY, in performing the services required of it under the terms
of this Agreement, shall not be responsible for determining whether any interest
accruable to a Fund is or will be actually paid, but will accrue such interest
until otherwise instructed by such Fund.
(n) BNY shall not be responsible for delays or errors which occur
by reason of circumstances beyond its control in the performance of its duties
under this Agreement, including, without limitation, labor difficulties outside
the Bank, mechanical breakdowns, flood or catastrophe, acts of God, failures of
transportation, interruptions, loss, or malfunctions of utilities,
communications or computer (hardware or software) services beyond BNY's
reasonable control. Nor shall BNY be responsible for delays or failures to
supply the information or services specified in this Agreement where such delays
or failures are caused by the failure of any person(s) other than BNY to supply
any instructions, explanations, information, specifications or documentation
deemed necessary by BNY in the performance of its duties under this Agreement.
5. Allocation of Expenses.
Except as otherwise provided herein, all costs and expenses arising or
incurred in connection with the performance of this Agreement shall be paid by
the appropriate Fund, including but not limited to, organizational costs and
costs of maintaining corporate existence, taxes, interest, brokerage fees and
commissions, insurance premiums, compensation and expenses of such Fund's
trustees, directors, officers or employees, legal, accounting and audit
expenses, management, advisory, sub-advisory, administration and shareholder
servicing fees, charges of custodians, transfer and dividend disbursing agents,
expenses (including clerical expenses) incident to the issuance, redemption or
repurchase of Fund shares, fees and expenses incident to the registration or
qualification under federal or state securities laws of the Fund or its
7
shares, costs (including printing and mailing costs) of preparing and
distributing Prospectuses, reports, notices and proxy material to such Fund's
shareholders, all expenses incidental to holding meetings of such Fund's
trustees, directors and shareholders, and extraordinary expenses as may arise,
including litigation affecting such Fund and legal obligations relating thereto
for which the Fund may have to indemnify its trustees, directors and officers.
6. Standard of Care; Indemnification.
(a) Except as otherwise provided herein, BNY shall not be liable
for any costs, expenses, damages, liabilities or claims (including attorneys'
and accountants' fees) incurred by a Fund, except those costs, expenses,
damages, liabilities or claims arising out of BNY's own gross negligence or
wilful misconduct. In no event shall BNY be liable to any Fund or any third
party for special, indirect or consequential damages, or lost profits or loss of
business, arising under or in connection with this Agreement, even if previously
informed of the possibility of such damages and regardless of the form of
action. BNY shall not be liable for any loss, damage or expense, including
counsel fees and other costs and expenses of a defense against any claim or
liability, resulting from, arising out of, or in connection with its performance
hereunder, including its actions or omissions, the incompleteness or inaccuracy
of any specifications or other information furnished by the Fund, or for delays
caused by circumstances beyond the Bank's control, unless such loss, damage or
expense arises out of the gross negligence or willful misconduct of the Bank.
(b) Each Fund shall indemnify and hold harmless BNY from and
against any and all costs, expenses, damages, liabilities and claims (including
claims asserted by a Fund), and reasonable attorneys' and accountants' fees
relating thereto, which are sustained or incurred or which may be asserted
against BNY, by reason of or as a result of any action taken or omitted to be
taken by BNY in good faith hereunder or in reliance upon (i) any law, act,
regulation or proper interpretation of the same even though the same may
thereafter have been altered, changed, amended or repealed, (ii) such Fund's
Registration Statement or Prospectus, (iii) any instructions of an officer of
such Fund, or (iv) any opinion of legal counsel for such Fund or BNY, or arising
out of transactions or other activities of such Fund which occurred prior to the
commencement of this Agreement; provided, that no Fund shall indemnify BNY for
costs,
8
expenses, damages, liabilities or claims for which BNY is liable under preceding
6(a). This indemnity shall be a continuing obligation of each Fund, its
successors and assigns, notwithstanding the termination of this Agreement.
Without limiting the generality of the foregoing (and subject to the proviso at
the end of the first sentence of in this Section 6(b)), each Fund shall
indemnify BNY against and save BNY harmless from any loss, damage or expense,
including counsel fees and other costs and expenses of a defense against any
claim or liability, arising from any one or more of the following:
(i) Errors in records or instructions, explanations, information,
specifications or documentation of any kind, as the case may be, supplied to the
Bank by any third party described above or by or on behalf of a Fund;
(ii) Action or inaction taken or omitted to be taken by BNY
pursuant to written or oral instructions of the Fund or otherwise without gross
negligence or willful misconduct;
(iii) Any action taken or omitted to be taken by BNY in good faith
in accordance with the advice or opinion of counsel for a Fund or its own
counsel;
(iv) Any use in violation of applicable laws by a Fund or its
agents, distributor or investment advisor of any valuations or computations
supplied by BNY pursuant to this Agreement;
(v) The method of valuation of the securities and the method of
computing each Series' net asset value; or
(vi) Any valuations of securities or net asset value provided by a
Fund.
(c) Actions taken or omitted in reliance on oral or written
instructions, or upon any information, order, indenture, stock certificate,
power of attorney, assignment, affidavit or other instrument reasonably believed
by BNY to be genuine or bearing the signature of a person or persons reasonably
believed to be authorized to sign, countersign or execute the same, or upon the
opinion of legal counsel for a Fund or its own counsel, shall be conclusively
presumed to have been taken or omitted in good faith.
(d) Notwithstanding any other provision contained in this
Agreement, BNY
9
shall have no duty or obligation with respect to, including, without limitation,
any duty or obligation to determine, or advise or notify the Fund of: (a) the
taxable nature of any distribution or amount received or deemed received by, or
payable to, a Fund; (b) the taxable nature or effect on a Fund or its
shareholders of any corporate actions, class actions, tax reclaims, tax refunds,
or similar events; (c) the taxable nature or taxable amount of any distribution
or dividend paid, payable or deemed paid, by a Fund to its shareholders; or (d)
the effect under any federal, state, or foreign income tax laws of the Fund
making or not making any distribution or dividend payment, or any election with
respect thereto.
7. Compensation.
For the services provided hereunder, each Fund agrees to pay BNY such
compensation as is mutually agreed from time to time and such reasonable
out-of-pocket expenses (e.g., telecommunication charges, postage and delivery
charges, record retention costs, reproduction charges and transportation and
lodging costs) as are incurred by BNY in performing its duties hereunder. Except
as hereinafter set forth, compensation shall be calculated and accrued daily and
paid monthly in arrears. Each Fund authorizes BNY to debit such Fund's custody
account for all amounts due and payable hereunder. BNY shall deliver to each
Fund invoices for services rendered promptly after debiting such Fund's custody
account with an indication that payment has been made. Upon termination of this
Agreement before the end of any month, the compensation for such part of a month
shall be prorated according to the proportion which such period bears to the
full monthly period and shall be payable upon the effective date of termination
of this Agreement. For the purpose of determining compensation payable to BNY,
each Fund's net asset value shall be computed at the times and in the manner
specified in the Fund's Prospectus.
8. Term of Agreement.
(a) This Agreement shall continue until terminated by either BNY
giving to a Fund, or a Fund giving to BNY, a notice in writing specifying the
date of such termination, which date shall be not less than 90 days after the
date of the giving of such notice. Upon termination hereof, the affected Fund(s)
shall pay to BNY such compensation as may be due as of the date of such
termination, and shall reimburse BNY for any disbursements and expenses
10
made or incurred by BNY and payable or reimbursable hereunder.
(b) Notwithstanding the foregoing, BNY may terminate this
Agreement upon 30 days prior written notice to a Fund if such Fund shall
terminate either its custody agreement or fund accounting agreement with The
Bank of New York, or fail to perform its obligations hereunder in a material
respect.
9. Authorized Persons.
Attached hereto as Exhibit B is a list of persons duly authorized by
the board of each Fund to execute this Agreement and give any written or oral
instructions, or written or oral specifications, by or on behalf of such Fund.
From time to time each Fund may deliver a new Exhibit B to add or delete any
person and BNY shall be entitled to rely on the last Exhibit B actually received
by BNY.
10. Amendment.
This Agreement may not be amended or modified in any manner except by a
written agreement executed by BNY and the Fund to be bound thereby, and
authorized or approved by such Fund's Board.
11. Assignment.
This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by any Fund without the written consent
of BNY, or by BNY without the written consent of the affected Fund accompanied
by the authorization or approval of such Fund's Board.
12. Governing Law; Consent to Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, without regard to conflict of laws principles thereof. Each
Fund hereby consents to the jurisdiction of a state or federal court situated in
New York City, New York in connection with any dispute arising hereunder, and
waives to the fullest extent permitted by law its right to a trial by jury. To
the extent that in any jurisdiction any Fund may now or hereafter be entitled to
11
claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, such Fund irrevocably agrees
not to claim, and it hereby waives, such immunity.
13. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
14. No Waiver.
Each and every right granted to BNY or the Fund hereunder or under any
other document delivered hereunder or in connection herewith, or after giving
effect to the provisions of this Agreement allowed it by law or equity, shall be
cumulative and may be exercised from time to time. No failure on the part of BNY
or the Fund to exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by BNY or the Fund of
any right preclude any other or future exercise thereof or the exercise of any
other right.
15. Notices.
All notices, requests, consents and other communications pursuant to
this Agreement in writing shall be sent as follows:
if to a Fund, at
Clarion Value Fund Master, LLC
c/o Clarion Capital, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
if to BNY, at
The Bank of New York
000 Xxxxxx Xxxxxx
00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Title: Vice President
or at such other place as may from time to time be designated in writing.
Notices hereunder shall be effective upon receipt.
16. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts together shall
constitute only one instrument.
17. Several Obligations.
The parties acknowledge that the obligations of the Funds hereunder are
several and not joint, that no Fund shall be liable for any amount owing by
another Fund and that the Funds have executed one instrument for convenience
only.
18. Trustees, Officers and Shareholders.
A copy of the Agreement and Articles of Incorporation establishing the
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trust by officers of the Trust as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the Trustees, officers or shareholders of any Fund individually but
are binding only upon the assets and property belonging to the Funds.
13
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to
be executed by their duly authorized officers and their seals to be hereunto
affixed, all as of the day and year first above written.
By:
-----------------------------------
on behalf of each Fund
identified on Exhibit A
attached hereto
THE BANK OF NEW YORK
By:
-----------------------------------
Title:
EXHIBIT A
CLARION Value Fund Master, LLC
Clarion Total Return Fund,
a series of the Clarion Investment Trust
EXHIBIT B-1
I, Xxxxxxxx Xxxxxxxxx, of Clarion Value Fund Master, LLC, a Delaware
limited liability company (the "Fund"), do hereby certify that:
The following individuals serve in the following positions with the
Fund, and each has been duly elected or appointed by the Board of Directors of
the Fund to each such position and qualified therefor in conformity with the
Fund's Charter and By-Laws (or similar organizational documents, as the case may
be), and the signatures set forth opposite their respective names are their true
and correct signatures. Each such person is authorized to give written or oral
instructions or written or oral specifications by or on behalf of the Fund to
the Bank.
Name Position Signature
--------------------------- ------------------------- -----------------------
EXHIBIT B-2
I, Xxxxxxxx Xxxxxxxxx, of Clarion Investment Trust, a Delaware business
trust (the "Trust"), do hereby certify that:
The following individuals serve in the following positions with the
Trust, and each has been duly elected or appointed by the Board of Trustees of
the Trust to each such position and qualified therefor in conformity with the
Trust's Charter and By-Laws (or similar organizational documents, as the case
may be), and the signatures set forth opposite their respective names are their
true and correct signatures. Each such person is authorized to give written or
oral instructions or written or oral specifications by or on behalf of the Trust
to the Bank.
Name Position Signature
--------------------------- ------------------------- -----------------------
