ADMINISTRATIVE AND MANAGEMENT AGREEMENT
AGREEMENT, made as of the ___ day of October, 2000, by and between
GOVERNMENT SECURITIES DELAWARE, LLC, a Limited Liability Company organized under
the laws of the State of Delaware (hereinafter referred to as the "Company"),
and FUND ASSET MANAGEMENT, L.P., a Delaware limited partnership (the
"Administrator").
W I T N E S S E T H:
-------------------
WHEREAS, the Company intends to engage in business as a closed-end
investment company and to register as such under the Investment Company Act of
1940, as amended (the "Investment Company Act"); and
WHEREAS, the Company desires to retain the Administrator to render
administrative and management services to the Company in the manner and on the
terms hereinafter set forth; and
WHEREAS, the Administrator is willing to provide administrative and
management services to the Company on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the promises and the covenants
hereinafter contained, the Company and the Administrator hereby agree as
follows:
ARTICLE I
Duties of the Administrator
The Company hereby employs the Administrator to act as an administrator
and manager of the Company and to furnish, or arrange for affiliates to furnish,
the administrative and management services described below, subject to the
policies of, review by and overall control of
1
the Board of Managers of the Company, for the period and on the terms and
conditions set forth in this Agreement. The Administrator hereby accepts such
employment and agrees during such period, at its own expense, to render, or
arrange for the rendering of, such services and to assume the obligations herein
set forth for the compensation provided for herein. The Administrator and its
affiliates shall for all purposes herein be deemed to be independent contractors
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Company in any way or otherwise be deemed agents of
the Company.
(a) Administrative and Management Services. The Administrator shall perform
(or arrange for the performance by affiliates of) the administrative and
management services necessary for the operation of the Company. It is understood
that the Administrator or its affiliates may enter into separate agreements with
the Company for the provision of administrative and management services
necessary for the operation of the Company. The Administrator shall provide the
Company with office space, facilities, equipment and necessary personnel and
such other services as the Administrator, subject to review by the Board of
Managers, shall from time to time determine to be necessary or useful to perform
its obligations under this Agreement. The Administrator shall also, on behalf of
the Company, conduct relations with custodians, depositories, transfer agents,
dividend disbursing agents, other shareholder servicing agents, pricing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed to be necessary or desirable. The Administrator shall make reports to the
Board of Managers of its performance of its obligations hereunder and furnish
advice and recommendations with respect to such other aspects of the business
and affairs of the Company as it shall determine to be desirable.
2
(b) Sub-Administrators. In carrying out its responsibilities hereunder,
the Administrator may employ, retain or otherwise avail itself of the services
of other persons or entities including without limitation, affiliates of the
Administrator, on such terms as the Administrator shall determine to be
necessary, desirable or appropriate. However, if the Administrator chooses to
retain or avail itself of the services of another person or entity to provide
administrative and management services to the Company, such other person or
entity must be retained at the Administrator's own cost and expense. Retention
of one or more sub-administrators, or the employment or retention of other
persons or entities to perform services, shall in no way reduce the
responsibilities or obligations of the Administrator under this Agreement and
the Administrator shall be responsible for all acts and omissions of such
sub-administrators, or other persons or entities, in connection with the
performance of the Administrator's duties hereunder.
(c) Notice Upon Change in Partners of the Administrator. The Administrator
is a limited partnership and its limited partner is Xxxxxxx Xxxxx & Co., Inc.
and its general partner is Princeton Services, Inc. The Administrator will
notify the Company of any change in the membership of the partnership within a
reasonable time after such change.
ARTICLE II
Allocation of Charges and Expenses
The Administrator. The Administrator assumes and shall pay, or cause its
affiliates to pay, for maintaining the staff and personnel necessary to perform
its obligations under this Agreement, and shall at its own expense, provide the
office space, facilities, equipment and necessary personnel which it is
obligated to provide under Article I as well as all other expenses of the
Company including, but not limited to, legal and audit expenses and custodial,
transfer agency,
3
accounting, audit and printing fees. The Company shall pay the compensation of
all officers of the Company and all Managers of the Company.
ARTICLE III
Compensation of the Administrator
Administrative Fee. For the services rendered, the facilities furnished
and expenses assumed by the Administrator, the Company shall pay to the
Administrator a semi-annual management fee on February 15th and August 15th of
twenty-five thousand dollars ($25,000). If the Agreement becomes effective
subsequent to the first day of a semi-annual period or terminates before the
last day of a semi-annual period, compensation for that part of the semi-annual
period this Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fee as set forth above.
ARTICLE IV
Limitation of Liability of the Administrator
The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in the
administration or management of the Company, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Administrator" shall include any sub-administrators
performing services for the Company contemplated hereby and the partners,
directors, officers and employees of the Administrator and such
sub-administrators.
ARTICLE V
Activities of the Administrator
4
The services of the Administrator to the Company are not to be deemed
to be exclusive: the Administrator and any person controlled by or under common
control with the Administrator (for purposes of this Article V referred to as
"affiliates") are free to render services to others. It is understood that the
Board of Managers, officers, employees and shareholders of the Company are or
may become interested in the Administrator and its affiliates, as directors,
officers, employees, partners, shareholders or otherwise and that directors,
officers, employees, partners and shareholders of the Administrator and its
affiliates are or may become similarly interested in the Company, and that the
Administrator and directors, officers, employees, partners and shareholders of
its affiliates may become interested in the Company as shareholders or
otherwise.
ARTICLE VI
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above
written and shall remain in force for a period of two years thereafter and
thereafter continue from year to year. This Agreement may be terminated at any
time, without the payment of any penalty, by the Board of Managers or by vote of
a majority of the outstanding voting securities of the Company, or by the
Administrator, on sixty days' written notice to the other party. This Agreement
shall automatically terminate in the event of its assignment.
ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of the Managers of the Company, including a
majority of those Managers who are not parties to this Agreement or interested
persons of any such party, cast in person at a
5
meeting called for the purpose of voting on such approval and, when required by
the Investment Company Act, by the vote of a majority of the outstanding voting
securities of the Company.
ARTICLE VIII
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE IX
Governing Law
This Agreement shall be governed by and construed in accordance with
laws of the State of New York and the applicable provisions of the Investment
Company Act. To the extent that the applicable laws of the State of New York, or
any of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
6
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
GOVERNMENT SECURITIES DELAWARE, LLC
By:
---------------------------------
Name:
Title:
FUND ASSET MANAGEMENT, L.P.
By: PRINCETON SERVICES, INC.,
as General Partner
By:
---------------------------------
Name:
Title:
