XXXXXXXXX XXXXXX REAL ESTATE SECURITIES INCOME FUND INC.
ADMINISTRATION AGREEMENT
This Agreement is made as of October __, 2003, between Xxxxxxxxx Xxxxxx
Real Estate Securities Income Fund Inc., a Maryland corporation ("Fund"), and
Xxxxxxxxx Xxxxxx Management Inc., a New York corporation ("Administrator").
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as a closed-end, non-diversified management
investment company;
WHEREAS, the Fund desires to retain the Administrator to furnish
administrative services, including stockholder accounting, recordkeeping, and
other services to stockholders and the Administrator is willing to furnish such
services,
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. SERVICES OF THE ADMINISTRATOR.
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1.1 ADMINISTRATIVE SERVICES. The Administrator shall supervise the
business and affairs of the Fund and shall provide such services required for
effective administration of the Fund as are not provided by employees or other
agents engaged by the Fund; PROVIDED, that the Administrator shall not have any
obligation to provide under this Agreement any services related to the
distribution of the Fund's shares, or any other services that are the subject of
a separate agreement or arrangement between the Fund and the Administrator. The
Administrator can use any of the officers and employees of Xxxxxxxxx Xxxxxx, LLC
to provide any of the services or reports required under this agreement. Subject
to the foregoing, in providing administrative services hereunder, the
Administrator shall:
1.1.1 OFFICE SPACE, EQUIPMENT AND FACILITIES. Furnish without
cost to the Fund, or pay the cost of, such office space, office equipment and
office facilities as are adequate for the needs of the Fund;
1.1.2 PERSONNEL. Provide, without remuneration from or other
cost to the Fund, the services of individuals competent to perform all of the
executive, administrative and clerical functions of the Fund that are not
performed by employees or other agents engaged by the Fund or by the
Administrator acting in some other capacity pursuant to a separate agreement or
arrangement with the Fund;
1.1.3 AGENTS. Assist the Fund in selecting and coordinating
the activities of the other agents engaged by the Fund, including the Fund's
stockholder servicing agent, dividend disbursing agent, custodian, independent
auditors and legal counsel;
1.1.4 DIRECTORS AND OFFICERS. Authorize and permit the
Administrator's directors, officers or employees who may be elected or appointed
as officers of the Fund or directors of the Fund ("Directors") to serve in such
capacities, without remuneration from or other cost to the Fund;
1.1.5 BOOKS AND RECORDS. Assure that all financial,
accounting and other records required to be maintained and preserved by the Fund
are maintained and preserved by it or on its behalf in accordance with
applicable laws and regulations; and
1.1.6 REPORTS AND FILINGS. Assist in the preparation of (but
not pay for) all periodic reports by the Fund to stockholders of the Fund and
all reports and filings required to maintain the registration, qualification and
listing on a national securities exchange of the Fund and the shares of the
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Fund, or to meet other regulatory or tax requirements applicable to the Fund or
the shares of the Fund, under federal and state securities and tax laws.
1.2 STOCKHOLDER AND RELATED SERVICES. The Administrator shall
provide such of the following services as are required by the Fund or its
stockholders:
1.2.1 Direct stockholder services, consisting of:
(a) Responding to telephonic and in-person inquiries from
existing stockholders or their representatives requesting information regarding
matters such as stockholder account or transaction status, net asset value
("NAV") of Fund shares, and Fund performance, Fund services, plans and options,
Fund investment policies, Fund portfolio holdings, and Fund distributions and
classification thereof for tax purposes;
(b) Dealing with stockholder complaints and correspondence
directed to or brought to the attention of the Administrator; and
(c) Generating or developing and distributing special data,
notices, reports, programs and literature required by large stockholders, by
stockholders with specialized informational needs, or by stockholders generally
in light of developments, such as changes in tax laws.
1.2.2 Soliciting and gathering stockholder proxies.
1.2.3 Such other stockholder and stockholder-related services,
whether similar to or different from those described in Subparagraphs 1.2.1 and
1.2.2 of this Paragraph 1.2, as the parties may from time to time agree in
writing.
1.3 BLUE SKY SERVICES. The Administrator shall maintain under this
Agreement the registration or qualification of the Fund and its shares under
state Blue Sky or securities laws and regulations, as necessary; PROVIDED that
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such Fund shall pay all related filing fees and registration or qualification
fees.
1.4 OTHER SERVICES. The Administrator shall provide such other services
required by the Fund as the parties may from time to time agree in writing are
appropriate to be provided under this Agreement.
2. EXPENSES OF THE FUND.
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2.1 EXPENSES TO BE PAID BY THE ADMINISTRATOR. The Administrator
shall pay all salaries, expenses and fees of the officers, Directors, or
employees of the Fund who are officers, directors or employees of the
Administrator. If the Administrator pays or assumes any expenses of the Fund not
required to be paid or assumed by the Administrator under this Agreement, the
Administrator shall not be obligated hereby to pay or assume the same or any
similar expense in the future; PROVIDED, that nothing herein contained shall be
deemed to relieve the Administrator of any obligation to the Fund under any
separate agreement or arrangement between the parties.
2.2 EXPENSES TO BE PAID BY THE FUND. The Fund shall bear all
expenses of its operation, except those specifically allocated to the
Administrator under this Agreement or under any separate agreement between the
Fund and the Administrator. Subject to any separate agreement or arrangement
between the Fund and the Administrator, the expenses hereby allocated to the
Fund, and not to the Administrator, include, but are not limited to:
2.2.1 CUSTODY. All charges of depositories, custodians, and
other agents for the transfer, receipt, safekeeping, and servicing of its cash,
securities, and other property;
2.2.2 STOCKHOLDER SERVICING. All expenses of maintaining and
servicing stockholder accounts, including but not limited to the charges of any
stockholder servicing agent, dividend disbursing agent, dividend reinvestment
plan agent or other agent (other than the Administrator hereunder) engaged by
the Fund to service stockholder accounts;
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2.2.3 STOCKHOLDER REPORTS. All expenses of preparing, setting
in type, printing and distributing reports and other communications to
stockholders of the Fund;
2.2.4 PROSPECTUSES. All expenses of preparing, setting in
type, printing and mailing annual or more frequent revisions of the Fund's
Prospectus and SAI and any supplements thereto and of supplying them to
stockholders of the Fund and Account holders;
2.2.5 PRICING AND PORTFOLIO VALUATION. All expenses of
computing the Fund's NAV per share, including any equipment or services obtained
for the purpose of pricing shares or valuing the Fund's investment portfolio;
2.2.6 COMMUNICATIONS. All charges for equipment or services
used for communications between the Administrator or the Fund and any custodian,
stockholder servicing agent, portfolio accounting services agent, or other agent
engaged by the Fund;
2.2.7 LEGAL AND ACCOUNTING FEES. All charges for services and
expenses of the Fund's legal counsel and independent auditors;
2.2.8 DIRECTORS' FEES AND EXPENSES. All compensation of
Directors other than those affiliated with the Administrator, all expenses
incurred in connection with such unaffiliated Directors' services as Directors,
and all other expenses of meetings of the Directors or committees thereof;
2.2.9 STOCKHOLDER MEETINGS. All expenses incidental to
holding meetings of stockholders, including the printing of notices and proxy
materials, and proxy solicitation therefor;
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2.2.10 FEDERAL REGISTRATION FEES. All fees and expenses of
registering and maintaining the registration of the Fund under the 1940 Act and
the registration of the Fund's shares under the Securities Act of 1933 (the
"1933 Act"), including all fees and expenses incurred in connection with the
preparation, setting in type, printing, and filing of any Registration
Statement, Prospectus and SAI under the 1933 Act or the 1940 Act, and any
amendments or supplements that may be made from time to time;
2.2.11 STATE REGISTRATION FEES. All fees and expenses of
qualifying and maintaining the qualification of the Fund and of the Fund's
shares for sale under securities laws of various states or jurisdictions, and of
registration and qualification of the Fund under all other laws applicable to
the Fund or its business activities (including registering the Fund as a
broker-dealer, or any officer of the Fund or any person as agent or salesman of
the Fund in any state);
2.2.12 SHARE CERTIFICATES. All expenses of preparing and
transmitting the Fund's share certificates, if any;
2.2.13 CONFIRMATIONS. All expenses incurred in connection
with the issue and transfer of the Fund's shares, including the expenses of
confirming all share transactions;
2.2.14 BONDING AND INSURANCE. All expenses of bond,
liability, and other insurance coverage required by law or regulation or deemed
advisable by the Directors, including, without limitation, such bond, liability
and other insurance expense that may from time to time be allocated to the Fund
in a manner approved by the Directors;
2.2.15 BROKERAGE COMMISSIONS. All brokers' commissions and
other charges incident to the purchase, sale or lending of the Fund's portfolio
securities;
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2.2.16 TAXES. All taxes or governmental fees payable by or
with respect to the Fund to federal, state or other governmental agencies,
domestic or foreign, including stamp or other transfer taxes;
2.2.17 TRADE ASSOCIATION FEES. All fees, dues and other
expenses incurred in connection with the Fund's membership in any trade
association or other investment organization;
2.2.18 NONRECURRING AND EXTRAORDINARY EXPENSES. Such
nonrecurring and extraordinary expenses as may arise, including the costs of
actions, suits, or proceedings to which the Fund is a party and the expenses the
Fund may incur as a result of its legal obligation to provide indemnification to
the Fund's officers, Directors and agents;
2.2.19 ORGANIZATIONAL EXPENSES AND OFFERING EXPENSES FOR
COMMON STOCK. Any and all organizational expenses and any and all offering
expenses for shares of the Fund's common stock paid or assessed by the
Administrator, which the Fund shall reimburse to the Administrator if and at
such time or times agreed by the Fund and the Administrator; and
2.2.20 INVESTMENT ADVISORY SERVICES. Any fees and expenses
for investment advisory services that may be incurred or contracted for by the
Fund.
2.2.21 EXPENSES OF LISTING ON A NATIONAL SECURITIES EXCHANGE.
Any and all expenses of listing and maintaining the listing of shares of the
Fund's common stock on any national securities exchange.
2.2.22 OFFERING EXPENSES FOR ANY PREFERRED STOCK. Any and all
offering expenses (including rating agency fees) for any preferred stock of the
Fund paid or assessed by the Administrator shall be reimbursed by the Fund if
and at such time or times agreed by the Fund and the Administrator.
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2.2.23 DIVIDEND REINVESTMENT PLAN. Any and all expenses
incident to any dividend reinvestment plan.
2.2.24 INTEREST. Such interest as may accrue on borrowings of
the Fund.
3. ADMINISTRATION FEE.
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3.1 FEE. As compensation for all services rendered, facilities
provided and expenses paid or assumed by the Administrator to or for the Fund
under this Agreement, the Fund shall pay the Administrator an annual fee as set
out in Schedule A to this Agreement.
3.2 COMPUTATION AND PAYMENT OF FEE. The administration fee shall
accrue on each calendar day, and shall be payable monthly on the first business
day of the next succeeding calendar month. The daily fee accruals for the Fund
shall be computed by multiplying the fraction of one divided by the number of
days in the calendar year by the applicable annual administration fee rate (as
set forth in Schedule A hereto), and multiplying this product by the total
assets minus liabilities other than the aggregate indebtedness entered into for
purposes of leverage ("Managed Assets") of the Fund, determined in the manner
set forth in the Fund's Prospectus, as of the close of business on the last
preceding business day on which the Fund's NAV was determined.
4. OWNERSHIP OF RECORDS. All records required to be maintained and
preserved by the Fund pursuant to the provisions or rules or regulations of the
Securities and Exchange Commission ("SEC") under Section 31(a) of the 1940 Act
and maintained and preserved by the Administrator on behalf of the Fund are the
property of the Fund and shall be surrendered by the Administrator promptly on
request by the Fund; PROVIDED, that the Administrator may at its own expense
make and retain copies of any such records.
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5. REPORTS TO ADMINISTRATOR. The Fund shall furnish or otherwise make
available to the Administrator such copies of the Fund's Prospectus, SAI,
financial statements, proxy statements, reports, and other information relating
to its business and affairs as the Administrator may, at any time or from time
to time, reasonably require in order to discharge its obligations under this
Agreement.
6. REPORTS TO THE FUND. The Administrator shall prepare and furnish to
the Fund such reports, statistical data and other information in such form and
at such intervals as the Fund may reasonably request.
7. OWNERSHIP OF SOFTWARE AND RELATED MATERIALS. All computer programs,
written procedures and similar items developed or acquired and used by the
Administrator in performing its obligations under this Agreement shall be the
property of the Administrator, and the Fund will not acquire any ownership
interest therein or property rights with respect thereto.
8. CONFIDENTIALITY. The Administrator agrees, on its own behalf and on
behalf of its employees, agents and contractors, to keep confidential any and
all records maintained and other information obtained hereunder which relates to
the Fund or to any of the Fund's former, current or prospective stockholders,
EXCEPT that the Administrator may deliver records or divulge information (a)
when requested to do so by duly constituted authorities after prior notification
to and approval in writing by the Fund (which approval will not be unreasonably
withheld and may not be withheld by the Fund where the Administrator advises the
Fund that it may be exposed to civil or criminal contempt proceedings or other
penalties for failure to comply with such request) or (b) whenever requested in
writing to do so by the Fund.
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9. THE ADMINISTRATOR'S ACTIONS IN RELIANCE ON FUND'S INSTRUCTIONS,
LEGAL OPINIONS, ETC.; FUND'S COMPLIANCE WITH LAWS.
9.1 The Administrator may at any time apply to an officer of the
Fund for instructions, and may consult with legal counsel for the Fund or with
the Administrator's own legal counsel, in respect of any matter arising in
connection with this Agreement; and the Administrator shall not be liable for
any action taken or omitted to be taken in good faith and with due care in
accordance with such instructions or with the advice or opinion of such legal
counsel. The Administrator shall be protected in acting upon any such
instructions, advice or opinion and upon any other paper or document delivered
by the Fund or such legal counsel which the Administrator believes to be genuine
and to have been signed by the proper person or persons, and the Administrator
shall not be held to have notice of any change of status or authority of any
officer or representative of the Fund, until receipt of written notice thereof
from the Fund.
9.2 Except as otherwise provided in this Agreement or in any
separate agreement between the parties and except for the accuracy of
information furnished to the Fund by the Administrator, the Fund assumes full
responsibility for the preparation, contents, filing and distribution of its
Prospectus and SAI, and full responsibility for other documents or actions
required for compliance with all applicable requirements of the 1940 Act, the
Securities Exchange Act of 1934, the 1933 Act, and any other applicable laws,
rules and regulations of governmental authorities having jurisdiction over the
Fund.
10. SERVICES TO OTHER CLIENTS. Nothing herein contained shall limit the
freedom of the Administrator or any affiliated person of the Administrator to
render administrative or stockholder services to other investment companies, to
act as administrator to other persons, firms, or corporations, or to engage in
other business activities.
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11.1 LIABILITY OF THE ADMINISTRATOR. Neither the Administrator nor any
director, officer or employee of the Administrator performing services for the
Fund at the direction or request of the Administrator in connection with the
Administrator's discharge of its obligations hereunder shall be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with any matter to which this Agreement relates; provided, that
nothing herein contained shall be construed (i) to protect the Administrator
against any liability to the Fund or its Stockholders to which the Administrator
would otherwise be subject by reason of the Administrator's misfeasance, bad
faith, or gross negligence in the performance of the Administrator's duties, or
by reason of the Administrator's reckless disregard of its obligations and
duties under this Agreement ("disabling conduct"), or (ii) to protect any
director, officer or employee of the Administrator who is or was a Director or
officer of the Fund against any liability to the Fund or its Stockholders to
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person's office with the Fund.
11.2 INDEMNIFICATION BY THE FUND. The Fund will indemnify the
Administrator against, and hold it harmless from, any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) incurred investigating or defending against claims for losses or
liabilities described in Section 11.1 not resulting from negligence, disregard
of its obligations and duties under this Agreement or disabling conduct by the
Administrator. Indemnification shall be made only following: (i) a final
decision on the merits by a court or other body before whom the proceeding was
brought that the Administrator was not liable by reason of negligence, disregard
of its obligations and duties under this Agreement or disabling conduct or (ii)
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in the absence of such a decision, a reasonable determination, based upon a
review of the facts, that the Administrator was not liable by reason of
negligence, disregard of its obligations and duties under this Agreement or
disabling conduct by (a) the vote of a majority of a quorum of directors of the
Fund who are neither "interested persons" of the Fund nor parties to the
proceeding ("disinterested non-party directors") or (b) an independent legal
counsel in a written opinion. The Administrator shall be entitled to advances
from the Fund for payment of the reasonable expenses incurred by it in
connection with the matter as to which it is seeking indemnification hereunder
in the manner and to the fullest extent permissible under the Maryland General
Corporation Law. The Administrator shall provide to the Fund a written
affirmation of its good faith belief that the standard of conduct necessary for
indemnification by the Fund has been met and a written undertaking to repay any
such advance if it should ultimately be determined that the standard of conduct
has not been met. In addition, at least one of the following additional
conditions shall be met: (a) the Administrator shall provide security in form
and amount acceptable to the Fund for its undertaking; (b) the Fund is insured
against losses arising by reason of the advance; or (c) a majority of a quorum
of the full Board of Directors of the Fund, the members of which majority are
disinterested non-party directors, or independent legal counsel, in a written
opinion, shall have determined, based on a review of facts readily available to
the Fund at the time the advance is proposed to be made, that there is reason to
believe that the Administrator will ultimately be found to be entitled to
indemnification hereunder.
12. INDEMNIFICATION BY THE ADMINISTRATOR. The Administrator shall
indemnify the Fund and hold it harmless from and against any and all losses,
damages and expenses, including reasonable attorneys' fees and expenses,
incurred by the Fund which result from: (i) the Administrator's failure to
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comply with the terms of this Agreement; or (ii) the Administrator's lack of
good faith in performing its obligations hereunder; or (iii) the Administrator's
negligence or misconduct or that of its employees, agents or contractors in
connection herewith. The Fund shall not be entitled to such indemnification in
respect of actions or omissions constituting negligence or misconduct on the
part of the Fund or its employees, agents or contractors other than the
Administrator unless such negligence or misconduct results from or is
accompanied by negligence or misconduct on the part of the Administrator, any
affiliated person of the Administrator, or any affiliated person of an
affiliated person of the Administrator. Before confessing any claim against it
which may be subject to indemnification hereunder, the Fund shall give the
Administrator reasonable opportunity to defend against such claim in its own
name or in the name of the Fund.
13. EFFECT OF AGREEMENT. Nothing herein contained shall be deemed to
require the Fund to take any action contrary to the Articles of Incorporation or
By-laws of the Fund or any applicable law, regulation or order to which it is
subject or by which it is bound, or to relieve or deprive the Directors of their
responsibility for and control of the conduct of the business and affairs of the
Fund.
14. TERM OF AGREEMENT. The term of this Agreement shall begin on
October __, 2003 and, unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect through June 30, 2005. Thereafter, this
Agreement shall continue in effect from year to year, subject to the termination
provisions and all other terms and conditions hereof; PROVIDED, such continuance
is approved at least annually by vote or written consent of the Directors,
including a majority of the Directors who are not interested persons of either
party hereto ("Disinterested Directors"); and PROVIDED FURTHER, that the
Administrator shall not have notified the Fund in writing at least sixty days
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prior to the first expiration date hereof or at least sixty days prior to any
expiration date in any year thereafter that it does not desire such
continuation. The Administrator shall furnish the Fund, promptly upon its
request, such information as may reasonably be necessary to evaluate the terms
of this Agreement or any extension, renewal or amendment thereof.
15. AMENDMENT OR ASSIGNMENT OF AGREEMENT. Any amendment to this
Agreement shall be in writing signed by the parties hereto; PROVIDED, that no
such amendment shall be effective unless authorized on behalf of any Fund (i) by
resolution of the Directors, including the vote or written consent of a majority
of the Disinterested Directors, or (ii) by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall terminate automatically and
immediately in the event of its assignment; provided, that with the consent of
the Fund, the Administrator may subcontract to another person any of its
responsibilities with respect to the Fund.
16. TERMINATION OF AGREEMENT. This Agreement may be terminated at any
time by either party hereto, without the payment of any penalty, upon at least
sixty days' prior written notice to the other party; PROVIDED, that in the case
of termination by the Fund, such action shall have been authorized (i) by
resolution of the Directors, including the vote or written consent of the
Disinterested Directors, or (ii) by vote of a majority of the outstanding voting
securities of the Fund.
17. NAME OF THE FUND. The Fund hereby agrees that if the Administrator
shall at any time for any reason cease to serve as administrator to the Fund,
the Fund shall, if and when requested by the Administrator, eliminate from the
Fund's name the name "Xxxxxxxxx Xxxxxx" and thereafter refrain from using the
name "Xxxxxxxxx Xxxxxx" or the initials "NB" in connection with its business or
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activities, and the foregoing agreement of the Fund shall survive any
termination of this Agreement and any extension or renewal thereof.
18. INTERPRETATION AND DEFINITION OF TERMS. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the Act shall be resolved by
reference to such term or provision of the 1940 Act and to interpretation
thereof, if any, by the United States courts or, in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
SEC validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities," "interested persons,"
"assignment" and "affiliated person," as used in this Agreement shall have the
meanings assigned to them by Section 2(a) of the 1940 Act. In addition, when the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is modified, interpreted or relaxed by a rule, regulation or order of
the SEC, whether of special or of general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
19. CHOICE OF LAW. This Agreement is made and to be principally
performed in the State of New York, and except insofar as the Act or other
federal laws and regulations may be controlling, this Agreement shall be
governed by, and construed and enforced in accordance with, the internal laws of
the State of New York.
20. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
21. EXECUTION IN COUNTERPARTS. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
XXXXXXXXX XXXXXX REAL ESTATE SECURITIES
INCOME FUND INC.
By:
--------------------------------------
Title:
XXXXXXXXX XXXXXX MANAGEMENT INC.
By:
--------------------------------------
Title:
-00-
XXXXXXXXX XXXXXX XXXX XXXXXX SECURITIES INCOME FUND INC.
ADMINISTRATION AGREEMENT
SCHEDULE A
Compensation pursuant to Paragraph 3 of the Xxxxxxxxx Xxxxxx
Real Estate Securities Income Fund Inc. Administration Agreement shall be:
(1) For the services provided to the Fund and its stockholders
(including amounts paid to third parties), 0.25% per annum of
the average daily total assets minus liabilities other than
the aggregate indebtedness entered into for purposes of
leverage ("Managed Assets") of the Fund; plus
(2) Certain out-of-pocket expenses for technology used for
stockholder servicing and stockholder communication, subject
to the prior approval of an annual budget by the Fund's Board
of Directors, including a majority of those Directors who are
not interested persons of the Fund or of Xxxxxxxxx Xxxxxx
Management Inc., and periodic reports to the Board of
Directors on actual expenses.
DATED: October __, 2003
