EXHIBIT 2(k)(3)
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, made as of the 14th day of December, 1993,
amended March 1, 1996, between Royce Micro-Cap Trust, Inc. (formerly Royce
OTC Micro-Cap Fund, Inc.) a Maryland corporation (the "Fund"), and Xxxxxxxx
Xxxxxxxx Asset Management Inc., a Delaware corporation (the "Administrator").
W I T N E S S E T H :
-------------------
WHEREAS, the Fund is a diversified, closed-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, the Fund has retained Quest Advisory Corp. to serve as
investment adviser for the purpose of investing its assets in securities and
desires to retain the Administrator for certain administrative services, and
the Administrator is willing to furnish such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Fund hereby appoints the Administrator to provide the services
set forth below, subject to the overall supervision of the Board of Directors
of the Fund, for the period and on the terms set forth in this Agreement.
The Administrator hereby accepts such appointment and agrees during such
period to render the services herein described and to assume the obligations
herein set forth, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors and officers
of the Fund, the Administrator shall provide the following services to the
Fund:
(a) Prepare all reports required to be filed by the Fund with the
S.E.C. on Form N-SAR, or such other form as the S.E.C. may substitute for
Form N-SAR;
(b) Provide to the Fund's independent accountants such information
as is necessary for such accountants to prepare and file the Fund's Federal,
state, and local tax returns, and review such returns after they are
prepared;
(c) Assist in preparing financial information relating to the Fund
for the Fund's periodic reports to stockholders.
(d) Assist in monitoring compliance of the Fund's operations in
accordance with its investment policies and limitations as stated in the
Fund's prospectus, as amended from time to time.
(e) Review the calculation of the Fund's net asset value in
accordance with the Fund's registration statement under the 1940 Act and the
1933 Act, by the Fund's accounting agent (which may or may not be the same
party as the Fund's custodian or on affiliate of the Fund's custodian), and
in monitoring the performance or such agent in making the Fund's net asset
value available for public dissemination;
(f) Assist in establishing the accounting policies of the Fund;
(g) Assist the Fund in determining the amount of dividends or other
distributions available to be paid by the Fund to its stockholders;
All services are to be furnished through the medium of any directors,
officers or employees of the Administrator as the Administrator deems
appropriate in order to fulfill its obligations hereunder.
Each party shall bear all its own expenses incurred in connection with
this Agreement.
3. The Fund will pay the Administrator an annual fee, payable monthly,
of $50,000 plus 0.05% on the first $125 million of the Fund's average daily
net assets and 0.03% of the Fund's average daily net assets exceeding $125
million based on the net asset value of the Fund's shares on the last day of
each week and on which the New York Stock Exchange is open for business.
Average net assets shall be calculated for this purpose without regard to the
liquidation value of any outstanding shares of preferred stock of the Fund.
4. The Administrator assumes no responsibility under this Agreement
other than to render the services called for hereunder, and specifically
assumes no responsibilities for investment advice or the investment or
reinvestment of the Fund's assets.
5. The Administrator shall not be liable to the Fund for any action
taken or omitted to be taken by the Administrator in connection with the
performance of any of its duties or obligations under this Agreement, and the
Fund shall indemnify the Administrator and hold it harmless from and against
all damages, liabilities, cost and expenses (including reasonable attorneys'
fees and amounts reasonably paid in settlement) incurred by the Administrator
in or by reason of any pending, threatened or completed action, suit,
investigation or other proceeding (including an action or suit by or in the
right of the Fund or its security holders) arising out of or otherwise based
upon any action actually or allegedly taken or omitted to be taken by the
Administrator in connection with the performance of any of its duties or
obligations under this Agreement; provided, however, that nothing contained
herein shall protect or be deemed to protect the Administrator against or
entitle or be deemed to entitle the Administrator to indemnification in
respect to any liability to the Fund or its security holders to which the
Administrator would otherwise be subject by reason of the Administrator's
willful misfeasance, bad faith or gross negligence in the performance of its
duties under this Agreement, or by reason of its reckless disregard of its
duties and obligations under this Agreement.
6. This Agreement shall become effective as of the date on which the
Fund's Registration Statement on Form N-2 shall be declared effective by the
SEC and shall thereafter continue in effect unless terminated as herein
provided. This Agreement may be terminated by either party hereto (without
penalty) at any time upon not less than 60 days' prior written notice to the
other party hereto.
7. The services of the Administrator to the Fund hereunder are not
exclusive and nothing in this Agreement shall limit or restrict the right of
the Administrator to engage in any other business or to render services of
any kind to any other corporation, firm, individual or association. The
Administrator shall be deemed to be an independent contractor, unless
otherwise expressly provided or authorized by this Agreement.
8. During the term of this Agreement, the Fund agrees to furnish the
Administrator at the principal office of the Administrator prior to use
thereof all prospectuses, proxy statements, reports to stockholders, sales
literature, or other material prepared for distribution to stockholders of
the Fund or the public that refer in any way to the Administrator. If the
Administrator reasonably objects in writing to such references within two
business days (or such other time as may be mutually agreed upon) after
receipt thereof, the Fund will modify such references in a manner reasonably
satisfactory to the Administrator. In the event of termination of this
Agreement, the Fund will continue to furnish to the Administrator copies of
any of the above-mentioned materials that refer in any way to the
Administrator. The Fund shall furnish or otherwise make available to the
Administrator such other information relating to the business affairs of the
Fund as the Administrator at any time, or from time to time, reasonably
requests in order to discharge its obligations hereunder.
9. This Agreement may be amended by mutual written consent.
10. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Administrator at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Director of Mutual
Funds, or (2) to the Fund at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: Xxxxxxx X. Xxxxx, President.
11. This Agreement sets forth the entire agreement and understanding of
the parties hereto solely with respect to the matters covered hereby and the
relationship between the Fund and Xxxxxxxx Xxxxxxxx Asset Management Inc. as
Administrator. Nothing in this Agreement shall govern, restrict or limit in
any respect any other business dealings between the parties hereto unless
otherwise expressly provided herein.
12. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without reference to choice of law
principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first
above written.
Royce Micro-Cap Trust, Inc.
ATTEST:
BY:
------------------------------ -----------------------------
Name:
Title:
ATTEST: XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
BY:
------------------------------ -----------------------------
Name:
Title:
