EXHIBIT (c)(4)
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT
AGREEMENT made as of the 17th day of April, 1995, and amended as of April
30, 1998, by and between Prime Income Trust, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (hereinafter
called the "Fund"), and Xxxx Xxxxxx Services Company Inc., a Delaware
corporation (hereinafter called the "Administrator")
WHEREAS, The Fund is engaged in business as a closed-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, The Fund desires to retain the Administrator to render
administrative services in the manner and on the terms and conditions hereafter
set forth; and
WHEREAS, The Administrator desires to be retained to perform services on
said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Administrator agree as follows:
1. The Fund hereby retains the Administrator to act as administrator of the
Fund and, subject to the supervision of the Trustees, to supervise the
investment activities of the Fund as hereinafter set forth. Without limiting the
generality of the foregoing, the Administrator shall: (i) provide the Fund with
the maintenance of certain books and records, such as journals, ledger accounts
and other records required under the Act, the notification to the Fund's
investment adviser of available funds for investment, the reconciliation of
account information and balances among the Fund's custodian, transfer agent and
dividend disbursing agent and the Fund's investment adviser, and the calculation
of the net asset value of the Fund's shares; (ii) provide the Fund with the
services of persons competent to perform such supervisory, administrative and
clerical functions as are necessary to provide effective operation of the Fund;
(iii) oversee the performance of administrative and professional services
rendered to the Fund by others, including its custodian, transfer agent and
dividend disbursing agent, as well as accounting, auditing and other services;
(iv) provide the Fund with adequate general office space and facilities; and (v)
oversee the preparation and the printing of the periodic updating of the Fund's
registration statement and prospectus, tax returns, and reports to its
shareholders and the Securities and Exchange Commission.
2. The Administrator shall, at its own expense, maintain such staff and employ
or retain such personnel and consult with such other persons as it shall from
time to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Administrator shall be deemed to
include persons employed or otherwise retained by the Administrator to furnish
services, statistical and other factual data, information with respect to
technical and scientific developments, and such other information, advice and
assistance as the Administrator may desire. The Administrator shall, as agent
for the Fund, maintain the Fund's records and books of account (other than those
maintained by the Fund's investment adviser, transfer agent, registrar,
custodian and other agencies). All such books and records so maintained shall be
the property of the Fund and, upon request therefor, the Administrator shall
surrender to the Fund such of the books and records so requested.
3. The Fund will, from time to time, furnish or otherwise make available to the
Administrator such financial reports, proxy statements and other information
relating to the business and affairs of the Fund as the Administrator may
reasonably require in order to discharge its duties and obligations hereunder.
1
4. The Administrator shall bear the cost of rendering the administrative
services to be performed by it under this Agreement, and shall, at its own
expense, pay the compensation of the officers and employees, if any, of the Fund
who are also directors, officers or employees of the Administrator, and provide
such office space, facilities and equipment and such clerical help and
bookkeeping services as the Fund shall reasonably require in the conduct of its
business. The Administrator shall also bear the cost of telephone service, heat,
light, power and other utilities provided to the Fund.
5. The Fund assumes and shall pay or cause to be paid all other expenses of the
Fund, including without limitation: the charges and expenses of any registrar,
any custodian or depository appointed by the Fund for the safekeeping of its
cash, portfolio securities or commodities and other property, and any stock
transfer or dividend agent or agents appointed by the Fund; brokers' commissions
chargeable to the Fund in connection with portfolio transactions to which the
Fund is a party; all taxes, including securities or commodities issuance and
transfer taxes, and fees payable by the Fund to federal, state or other
governmental agencies; the cost and expense of engraving or printing
certificates representing shares of the Fund; all costs and expenses in
connection with the registration and maintenance of registration of the Fund and
its shares with the Securities and Exchange Commission and various states and
other jurisdictions (including filing fees and legal fees and disbursements of
counsel and the costs and expenses of preparing, printing, including
typesetting, and distributing prospectuses for such purposes); all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees of
the Administrator or the Fund's investment adviser or any corporate affiliate of
either of them; all expenses incident to the payment of any dividend or
distribution program; charges and expenses of any outside service used for
pricing of the Fund's shares; charges and expenses of legal counsel, including
counsel to the Trustees of the Fund who are not interested persons (as defined
in the Act) of the Fund or the Administrator or the Fund's investment adviser,
and of independent accountants, in connection with any matter relating to the
Fund; membership dues of industry associations; interest payable on Fund
borrowings; fees and expenses incident to the listing of the Fund's shares on
any stock exchange; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Fund which inure to its benefit;
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification related thereto); and
all other charges and costs of the Fund's operation unless otherwise explicitly
provided herein.
6. For the services to be rendered, the facilities furnished, and the expenses
assumed by the Administrator, the Fund shall pay to the Administrator monthly
compensation determined by applying the annual rate of 0.25% to the Fund's
average daily net assets. Such calculation shall be made by applying 1/365th of
the annual rate to the Fund's net assets each day determined as of the close of
business on that day or the last previous business day. 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 fees as set forth above.
7. The Administrator will use its best efforts in the supervision and
administration of the Fund, but in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations hereunder, the
Administrator shall not be liable to the Fund or any of its investors for any
error of judgment or mistake of law or for any act or omission by the
Administrator or for any losses sustained by the Fund or its investors.
8. Nothing contained in this Agreement shall prevent the Administrator or any
affiliated person of the Administrator from acting as administrator for any
other person, firm or corporation. Nothing in this Agreement shall limit or
restrict the right of any Trustee, officer or employee of the Administrator to
engage in any other business or to devote his or her time and attention in part
to the administration or other aspects of any other business whether of a
similar or dissimilar nature.
2
9. This Agreement shall remain in effect until April 30, 1999 and from year to
year thereafter provided such continuance is approved at least annually by the
Board of Trustees of the Fund; provided that such continuance is also approved
annually by a vote of a majority of the Trustees of the Fund who are not parties
to this Agreement or "interested persons" (as defined in the Act) of any such
party; provided, however, that the Fund, acting by majority vote of the
Trustees, or the Administrator may, at any time and without the payment of any
penalty, terminate this Agreement upon thirty days' written notice to the other
party. Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed post-paid, to the other party at the principal office of
such party.
10. This Agreement may be amended or modified by the parties by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Trustees of the Fund.
11. This Agreement may be assigned by either party with the written consent of
the other party.
12. This Agreement shall be construed in accordance with the laws of the State
of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.
13. The Declaration of Trust establishing Prime Income Trust, dated August 17,
1989, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name Prime Income Trust refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of Prime Income Trust shall
be held to any personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim or otherwise, in
connection with the affairs of said Prime Income Trust, but the Trust Estate
only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, as amended, on April 30, 1998 in New York, New York.
PRIME INCOME TRUST
By: /s/ Xxxxx Xxxx
-----------------------------------------
Attest:
/s/ Xxxxx Xxxxxxxxxxx
---------------------------------------------
XXXX XXXXXX SERVICES COMPANY INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------------
Attest:
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
3
