EXHIBIT (k)(2)
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of January,
2005, by and between TORTOISE NORTH AMERICAN ENERGY CORPORATION, a Maryland
corporation (the "Company") and U.S. BANCORP FUND SERVICES, LLC. a Wisconsin
limited liability company ("USBFS").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a closed-end management investment
company, and is authorized to issue shares of common stock;
WHEREAS, USBFS is, among other things, in the business of providing fund
administration services for the benefit of its customers; and
WHEREAS, the Company desires to retain USBFS to provide fund
administration services to the Company.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. APPOINTMENT OF USBFS AS ADMINISTRATOR
The Company hereby appoints USBFS as administrator of the Company on the
terms and conditions set forth in this Agreement, and USBFS hereby accepts
such appointment and agrees to perform the services and duties set forth
in this Agreement. The services and duties of USBFS shall be confined to
those matters expressly set forth herein, and no implied duties are
assumed by or may be asserted against USBFS hereunder.
2. SERVICES AND DUTIES OF USBFS
USBFS shall provide the following administration services to the Company:
A. General Management:
(1) Act as liaison among Company service providers.
(2) Supply:
a. Corporate secretarial services.
b. Office facilities (which may be in USBFS's, or an
affiliate's, own offices).
c. Non-investment-related statistical and research data as
needed.
(3) Coordinate the Company's board of directors' (the "Board of
Directors" or the "Directors") communications, such as:
a. Prepare meeting agendas and resolutions, with the
assistance of Company counsel.
b. Prepare reports for the Board of Directors based on
financial and administrative data.
c. Evaluate independent auditor.
d. Secure and monitor fidelity bond and director and
officer liability coverage, and make the necessary
Securities and Exchange Commission (the "SEC") filings
relating thereto.
e. Prepare minutes of meetings of the Board of Directors
and Company shareholders.
f. Recommend dividend declarations to the Board of
Directors and prepare and distribute to appropriate
parties notices announcing declaration of dividends and
other distributions to shareholders.
g. Provide personnel to serve as officers of the Company if
so elected by the Board of Directors, attend Board of
Directors meetings and present materials for Directors'
review at such meetings.
(4) Audits:
a. Prepare appropriate schedules and assist independent
auditors.
b. Provide information to the SEC and facilitate audit
process.
c. Provide office facilities.
(5) Assist in overall operations of the Company.
(6) Pay Company expenses upon written authorization from the
Company.
(7) Maintain the Company's governing documents, including its
articles, bylaws and minute books.
B. Compliance:
(1) Regulatory Compliance:
a. Monitor compliance with the 1940 Act requirements,
including:
(i) Asset diversification tests.
(ii) Total return calculations.
(iii) Maintenance of books and records under Rule 31a-3.
b. Monitor Company's compliance with the policies and
investment limitations as set forth in its prospectus
(the "Prospectus") and statement of additional
information (the "SAI").
c. Perform its duties hereunder in compliance with all
applicable laws and regulations and provide any
sub-certifications reasonably requested by the Company
in connection with any certification required of the
Company pursuant to the Xxxxxxxx-Xxxxx Act of 2002 (the
"SOX Act") or any rules or regulations promulgated by
the SEC thereunder, provided the same shall not be
deemed to change USBFS's standard of care as set forth
herein.
d. Monitor applicable regulatory and operational service
issues, and update Board of Directors periodically.
e. Draft and disseminate to the New York Stock Exchange
quarterly earnings statements, annual written
affirmation statements, record date notification for
annual meetings of Company shareholders, proxy voting
updates, and final results and miscellaneous press
releases as periodically required with respect to
material changes within the Company.
(2) SEC Registration and Reporting:
a. Assist Company counsel in annual update of the
Prospectus and SAI and in preparation of proxy
statements as needed.
b. Prepare and file annual and semiannual shareholder
reports, Form N-SAR, Form N-CSR, Form N-Q and Form N-PX
filings.
c. Coordinate the printing, filing and mailing of
Prospectuses and shareholder reports, and amendments and
supplements thereto.
d. File fidelity bond under Rule 17g-1.
e. Monitor sales of Company shares and ensure that such
shares are properly registered or qualified, as
applicable, with the SEC and the appropriate state
authorities.
(3) IRS Compliance:
a. Monitor the Company's status as a regulated investment
company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), including without
limitation, review of the following:
(i) Asset diversification requirements.
(ii) Qualifying income requirements.
(iii) Distribution requirements.
b. Calculate required distributions (including excise tax
distributions).
C. Financial Reporting:
(1) Provide financial data required by the Prospectus and SAI.
(2) Prepare financial reports for officers, shareholders, tax
authorities, performance reporting companies, the Board of
Directors, the SEC, and independent accountants.
(3) Supervise the Company's custodian and fund accountants in the
maintenance of the Company's general ledger and in the
preparation of the Company's financial statements, including
oversight of expense accruals and payments, the determination
of net asset value and the declaration and payment of
dividends and other distributions to shareholders.
(4) Compute the total return, expense ratio and portfolio turnover
rate of the Company.
(5) Monitor the expense accruals and notify the Company's
management of any proposed adjustments.
(6) Prepare quarterly financial statements, which include, without
limitation, the following items:
a. Schedule of Investments.
b. Statement of Assets and Liabilities.
c. Statement of Operations.
d. Statement of Changes in Net Assets.
e. Cash Statement.
f. Schedule of Capital Gains and Losses.
(7) Prepare quarterly broker security transaction summaries.
D. Tax Reporting:
(1) Prepare and file on a timely basis appropriate federal and
state tax returns including, without limitation, Forms
1120/8610, with any necessary schedules.
(2) Prepare state income breakdowns where relevant.
(3) File Form 1099 for payments to disinterested Directors and
other service providers.
(4) Monitor wash sale losses.
(5) Calculate eligible dividend income for corporate shareholders.
(6) Calculate return of capital for shareholders.
3. COMPENSATION
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit A
hereto (as amended from time to time). USBFS shall also be compensated for
such out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by
USBFS in performing its duties hereunder. The Company shall pay all such
fees and reimbursable expenses within 30 calendar days following receipt
of the billing notice, except for any fee or expense subject to a good
faith dispute. The Company shall notify USBFS in writing within 30
calendar days following receipt of each invoice if the Company is
disputing any amounts in good faith. The Company shall pay such disputed
amounts within 10 calendar days of the day on which the parties agree to
the amount to be paid. With the exception of any fee or expense the
Company is disputing in good faith as set forth above, unpaid invoices
shall accrue a finance charge of 1 1/2% per month after the due date.
4. REPRESENTATIONS AND WARRANTIES
A. The Company hereby represents and warrants to USBFS, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) 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;
(2) This Agreement has been duly authorized, executed and
delivered by the Company in accordance with all requisite
action and constitutes a valid and legally binding obligation
of the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and
remedies of creditors and secured parties; and
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it
and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its
execution or performance of this Agreement.
B. USBFS hereby represents and warrants to the Company, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) 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;
(2) This Agreement has been duly authorized, executed and
delivered by the Company in accordance with all requisite
action and constitutes a valid and legally binding obligation
of the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and
remedies of creditors and secured parties; and
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state
and federal, and has obtained all regulatory approvals
necessary to carry on its business as now conducted; there is
no statute, rule, regulation, order or judgment binding on it
and no provision of its charter, bylaws or any contract
binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
5. STANDARD OF CARE; INDEMNIFICATION; LIMITATION OF LIABILITY
A. USBFS shall exercise reasonable care in the performance of its
duties under this Agreement. USBFS shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the
Company in connection with its duties under this Agreement,
including losses resulting from mechanical breakdowns or the failure
of communication or power supplies beyond USBFS's control, except a
loss arising out of or relating to USBFS's refusal or failure to
comply with the terms of this Agreement or from its bad faith,
negligence, or willful misconduct in the performance of its duties
under this Agreement. Notwithstanding any other provision of this
Agreement, if USBFS has exercised reasonable care in the performance
of its duties under this Agreement, the Company shall indemnify and
hold harmless USBFS from and against any and all claims, demands,
losses, expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) that USBFS may sustain or incur or that
may be asserted against USBFS by any person arising out of any
action taken or omitted to be taken by it in performing the services
hereunder (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to USBFS by
any duly authorized officer of the Company, such duly authorized
officer to be included in a list of authorized officers approved by
the Board of Directors of the Company and set forth on Exhibit B
hereto (as amended from time to time), except for any and all
claims, demands, losses, expenses, and liabilities arising out of or
relating to USBFS's refusal or failure to comply with the terms of
this Agreement or from its bad faith, negligence or willful
misconduct in the performance of its duties under this Agreement.
This indemnity shall be a continuing obligation of the Company, its
successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term "USBFS" shall include
USBFS's directors, officers and employees.
USBFS shall indemnify and hold the Company harmless from and against
any and all claims, demands, losses, expenses, and liabilities of
any and every nature (including reasonable attorneys' fees) that the
Company may sustain or incur or that may be asserted against the
Company by any person arising out of any action taken or omitted to
be taken by USBFS as a result of USBFS's refusal or failure to
comply with the terms of this Agreement, or from its bad faith,
negligence, or willful misconduct in the performance of its duties
under this Agreement. This indemnity shall be a continuing
obligation of USBFS, its successors and assigns, notwithstanding the
termination of this Agreement. As used in this paragraph, the term
"Company" shall include the Company's directors, officers and
employees.
Neither party to this Agreement shall be liable to the other party
for consequential, special or punitive damages under any provision
of this Agreement.
In the event of a mechanical breakdown or failure of communication
or power supplies beyond its control, USBFS shall take all
reasonable steps to minimize service interruptions for any period
that such interruption continues. USBFS will make every reasonable
effort to restore any lost or damaged data and correct any errors
resulting from such a breakdown at the expense of USBFS. USBFS
agrees that it shall, at all times, have reasonable contingency
plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent
appropriate equipment is available. Representatives of the Company
shall be entitled to inspect USBFS's premises and operating
capabilities at any time during regular business hours of USBFS,
upon reasonable notice to USBFS. Moreover, USBFS shall provide the
Company, at such times as the Company may reasonably require, copies
of reports rendered by independent accountants on the internal
controls and procedures of USBFS relating to the services provided
by USBFS under this Agreement.
Notwithstanding the above, USBFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is
further understood that the indemnitee will use all reasonable care
to notify the indemnitor promptly concerning any situation that
presents or appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim that may be the subject of this
indemnification. In the event that the indemnitor so elects, it will
so notify the indemnitee and thereupon the indemnitor shall take
over complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall
in no case confess any claim or make any compromise in any case in
which the indemnitor will be asked to indemnify the indemnitee
except with the indemnitor's prior written consent.
C. The indemnity and defense provisions set forth in this Section 5
shall indefinitely survive the termination and/or assignment of this
Agreement.
D. If USBFS is acting in another capacity for the Company pursuant to a
separate agreement, nothing herein shall be deemed to relieve USBFS
of any of its obligations in such other capacity.
6. DATA NECESSARY TO PERFORM SERVICES
The Company or its agent shall furnish to USBFS the data necessary to
perform the services described herein at such times and in such form as
mutually agreed upon.
7. PROPRIETARY AND CONFIDENTIAL INFORMATION
USBFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Company, all records and other information relative to the Company and
prior, present, or potential shareholders of the Company (and clients of
said shareholders), and not to use such records and information for any
purpose other than the performance of its responsibilities and duties
hereunder, except (i) after prior notification to and approval in writing
by the Company, which approval shall not be unreasonably withheld and may
not be withheld where USBFS may be exposed to civil or criminal contempt
proceedings for failure to comply, (ii) when requested to divulge such
information by duly constituted authorities, or (iii) when so requested by
the Company. Records and other information which have become known to the
public through no wrongful act of USBFS or any of its employees, agents or
representatives, and information that was already in the possession of
USBFS prior to receipt thereof from the Company or its agent, shall not be
subject to this paragraph.
Further, USBFS will adhere to the privacy policies adopted by the Company
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time (the "GLB Act"). In this regard, USBFS shall have in place
and maintain physical, electronic and procedural safeguards reasonably
designed to protect the security, confidentiality and integrity of, and to
prevent unauthorized access to or use of, records and information relating
to the Company and its shareholders.
8. RECORDS
USBFS shall keep records relating to the services to be performed
hereunder in the form and manner, and for such period, as it may deem
advisable and is agreeable to the Company, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. USBFS
agrees that all such records prepared or maintained by USBFS relating to
the services to be performed by USBFS hereunder are the property of the
Company and will be preserved, maintained, and made available in
accordance with such applicable sections and rules of the 1940 Act and
will be promptly surrendered to the Company or its designee on and in
accordance with its request.
9. COMPLIANCE WITH LAWS
The Company has and retains primary responsibility for all compliance
matters relating to the Company, including but not limited to compliance
with the 1940 Act, the Code, the SOX Act, the USA Patriot Act of 2002 and
the policies and limitations of the Company relating to its portfolio
investments as set forth in its Prospectus and SAI. USBFS's services
hereunder shall not relieve the Company of its responsibilities for
assuring such compliance or the Board of Directors' oversight
responsibility with respect thereto.
10. TERM OF AGREEMENT; AMENDMENT
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of one year. Subsequent to the
initial one-year term, this Agreement may be terminated by either party
upon giving 90 days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. Notwithstanding
the foregoing, this Agreement may be terminated by any party upon the
breach of the other party of any material term of this Agreement if such
breach is not cured within 15 days of notice of such breach to the
breaching party. This Agreement may not be amended or modified in any
manner except by written agreement executed by USBFS and the Company, and
authorized or approved by the Board of Directors.
11. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the Company
by written notice to USBFS, USBFS will promptly, upon such termination and
at the expense of the Company, transfer to such successor all relevant
books, records, correspondence, and other data established or maintained
by USBFS under this Agreement in a form reasonably acceptable to the
Company (if such form differs from the form in which USBFS has maintained
the same, the Company shall pay any expenses associated with transferring
the data to such form), and will cooperate in the transfer of such duties
and responsibilities, including provision for assistance from USBFS's
personnel in the establishment of books, records, and other data by such
successor. If no such successor is designated, then such books, records
and other data shall be returned to the Company.
12. ASSIGNMENT
This Agreement shall extend to and be binding upon the parties hereto and
their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Company without the written
consent of USBFS, or by USBFS without the written consent of the Company
accompanied by the authorization or approval of the Company's Board of
Directors.
13. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Wisconsin, or any of the
provisions herein, conflict with the applicable provisions of the 1940
Act, the latter shall control, and nothing herein shall be construed in a
manner inconsistent with the 1940 Act or any rule or order of the SEC
thereunder.
14. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower either
party to act as agent for the other party to this Agreement, or to conduct
business in the name, or for the account, of the other party to this
Agreement.
15. SERVICES NOT EXCLUSIVE
Nothing in this Agreement shall limit or restrict USBFS from providing
services to other parties that are similar or identical to some or all of
the services provided hereunder.
16. INVALIDITY
Any provision of this Agreement which may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the
parties.
17. NOTICES
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given on the date
delivered personally or by courier service, or three days after sent by
registered or certified mail, postage prepaid, return receipt requested,
or on the date sent and confirmed received by facsimile transmission to
the other party's address set forth below:
Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Fund Services
Facsimile: (000) 000-0000
and notice to the Company shall be sent to:
Tortoise North American Energy Corporation
00000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, CEO and President
Facsimile: (000) 000-0000
18. MULTIPLE ORIGINALS
This Agreement may be executed on two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
TORTOISE NORTH AMERICAN U.S. BANCORP FUND SERVICES, LLC
ENERGY CORPORATION
By:_________________________ By:_________________________
Title:______________________ Title:______________________
EXHIBIT A
TO THE
FUND ADMINISTRATION SERVICING AGREEMENT
FUND ADMINISTRATION & COMPLIANCE SERVICES
ANNUAL FEE SCHEDULE
TORTOISE NORTH AMERICAN ENERGY CORPORATION
(CLOSED-END FUND)
Annual fee based upon managed assets per fund*
9 basis points on the first $200 million
8 basis points on the next $300 million
6 basis points on the next $500 million
4 basis points on the balance
Minimum annual fee: $50,000 per fund**
** Includes quarterly financial statements produced within 30 days of
quarter-end. If additional financial statements are required, or financial
statements are required sooner than the 30th day of a period end, there is an
additional fee of $5,000 per occurrence.
Includes the drafting and dissemination of the following closed-end fund press
releases to the NYSE:
- Quarterly Earnings Statement
- Annual Written Affirmation Statement to the NYSE (no press release
required)
- Record Date Notification for Annual Meeting of Company Shareholders
- Proxy Voting Updates and Final Results
- Miscellaneous Press Releases as Periodically Required with Respect
to Material Changes within the Company
Extraordinary services - quoted separately
- Multiple classes
- Legal administration
- Master feeder funds
- International funds
- File transfer (subject to requirements)
- Etc.
Plus out-of-pocket expenses, including but not limited to:
Postage, Stationery
Programming, Special Reports
Proxies, Insurance
XXXXX filing
Retention of records
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of directors meetings
Auditing and legal expenses
Blue Sky conversion expenses (if necessary)
All other out-of-pocket expenses
Fees are billed monthly.
* Subject to CPI increase, Milwaukee MSA.
EXHIBIT B
TO THE
FUND ADMINISTRATION SERVICING AGREEMENT
LIST OF AUTHORIZED OFFICERS
Name Title
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B-1
