EXHIBIT (K)(2)
ADMINISTRATION AGREEMENT
AGREEMENT made as of ____________, 2003 by and between xxxxxx
brothers/first trust income opportunity fund, a statutory trust organized under
the laws of Delaware (the "Fund"), and INVESTORS BANK & TRUST COMPANY, a
Massachusetts trust company (the "Bank").
WHEREAS, the Fund, a registered investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain the Bank to render certain
administrative services to the Fund and the Bank is willing to render such
services.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Bank to act as
Administrator of the Fund on the terms set forth in this Agreement. The Bank
accepts such appointment and agrees to render the services herein set forth for
fees that may be agreed to from time to time in writing between the parties.
2. Delivery of Documents. The Fund has furnished the Bank with
copies properly certified or authenticated of each of the following:
(a) Resolutions of the Fund's Board of Trustees authorizing
the appointment of the Bank to provide certain administrative services to the
Fund and approving this Agreement;
(b) The Fund's certificate of trust as filed with the state of
Delaware on April 8, 2003 and all amendments thereto;
(c) The Fund's Declaration of Trust ("Declaration of Trust");
(d) The Fund's by-laws and all amendments thereto (the
"By-Laws");
(e) The Fund's agreements with all service providers which
include any investment advisory agreements, sub-investment advisory agreements,
custody agreements, distribution agreements and transfer agency agreements
(collectively, the "Agreements");
(f) The Fund's most recent Registration Statement on Form N-2
(the "Registration Statement") under the Securities Act of 1933 and under the
1940 Act and all amendments thereto; and
(g) The Fund's most recent prospectus and statement of
additional information (the "Prospectus"); and
(h) Such other certificates, documents or opinions as may
mutually be deemed necessary or appropriate for the Bank in the proper
performance of its duties hereunder.
The Fund will immediately furnish the Bank with copies of all
amendments of or supplements to the foregoing. Furthermore, the Fund will notify
the Bank as soon as possible of any matter which may materially affect the
performance by the Bank of its services under this Agreement.
3. Duties of Administrator. Subject to the supervision and
direction of the Board of Directors of the Fund, the Bank, as Administrator,
will assist in conducting various aspects of the Fund's administrative
operations and undertakes to perform the services described in Appendix A
hereto. The
Bank may, from time to time, perform additional duties and functions which shall
be set forth in an amendment to such Appendix A executed by both parties.
In performing all services under this Agreement, the Bank
shall act in conformity with the Fund's Declaration of Trust and By-Laws and the
1940 Act, as the same may be amended from time to time, and the investment
objectives, investment policies and other practices and policies set forth in
the Fund's Registration Statement, as the same may be amended from time to time.
Notwithstanding any item discussed herein, the Bank has no discretion over the
Fund's assets or choice of investments and cannot be held liable for any problem
relating to such investments.
4. Duties of the Fund.
(a) The Fund is solely responsible (through its transfer agent
or otherwise) for (i) providing timely and accurate reports ("Daily Sales
Reports") which will enable the Bank as Administrator to monitor the total
number of shares sold in each state on a daily basis and (ii) identifying any
exempt transactions ("Exempt Transactions") which are to be excluded from the
Daily Sales Reports.
(b) The Fund agrees to make its legal counsel available to the
Bank for instruction with respect to any matter of law arising in connection
with the Bank's duties hereunder, and the Fund further agrees that the Bank
shall be entitled to rely on such instruction without further investigation on
the part of the Bank.
5. Fees and Expenses.
(a) For the services rendered by the Bank hereunder, the Fund
will pay to the Bank such fees at such rate as shall be agreed upon in writing
by the parties from time to time. The Fund will also pay or reimburse the Bank
from time to time for any transfer taxes payable upon any transfers made
hereunder, and for all necessary proper disbursements, expenses and charges made
or incurred by the Bank in the performance of this Agreement (including any
duties listed on any Schedule hereto, if any) including any indemnities for any
loss, liabilities or expense to the Bank as provided herein. The Bank will also
be entitled to reimbursement by the Fund for all reasonable expenses incurred in
conjunction with termination of this Agreement and any conversion or transfer
work done in connection therewith.
(b) Fees and expenses will be calculated monthly. Fees and
expenses owed to the Bank for any month may be charged against any cash balance
held by the Fund beginning on the first (1st) business day after the end of such
month based on information then available. Fees charged to an account may result
in an overdraft that will be subject to normal interest charges. The Fund will
have thirty (30) days after the receipt of an invoice to dispute any charge that
appears on such invoice. After such thirty (30) day period, the invoice will be
deemed to be complete and accurate and may no longer be disputed.
(c) The Bank shall not be required to pay any expenses
incurred by the Fund.
(d) In the case of the following transactions, not in the
ordinary course of business, namely, the merger of the Fund into or the
consolidation of the Fund with another investment company or series thereof, the
sale by a series of the Fund of all, or substantially all, of its assets to
another investment company or series thereof, or the liquidation or dissolution
of the Fund and distribution of its assets, upon the payment of the fees,
disbursements and expenses of the Bank through the then remaining term of this
Agreement, the Bank will complete all actions reasonably necessary to implement
such merger, consolidation, or sale upon the order of the Fund set forth in an
Officers' Certificate, accompanied by a certified copy of a resolution of the
Board authorizing any of the foregoing transactions. Upon completion of such
actions and the payment of all such fees, disbursements and expenses of the
Bank, this Agreement will terminate and the Bank shall be released from any and
all obligations hereunder.
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6. Limitation of Liability.
(a) The Bank, its directors, officers, employees and agents
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the performance of its obligations and
duties under this Agreement, except a loss resulting from willful misfeasance,
bad faith or gross negligence in the performance of such obligations and duties,
or by reason of its reckless disregard thereof. The Fund will indemnify the
Bank, its directors, officers, employees and agents against and hold it and them
harmless from any and all losses, claims, damages, liabilities or expenses
(including legal fees and expenses) resulting from any claim, demand, action or
suit (i) arising out of the actions or omissions of the Fund, including, but not
limited to, inaccurate Daily Sales Reports and misidentification of Exempt
Transactions; (ii) arising out of the offer or sale of any securities of the
Fund in violation of (x) any requirement under the federal securities laws or
regulations, (y) any requirement under the securities laws or regulations of any
state, or (z) any stop order or other determination or ruling by any federal or
state agency with respect to the offer or sale of such securities; or (iii) not
resulting from the willful misfeasance, bad faith or gross negligence of the
Bank in the performance of such obligations and duties or by reason of its
reckless disregard thereof.
(b) The Bank will indemnify the Fund, its directors, officers
and employees against and hold it and them harmless from any and all losses,
claims, damages, liabilities or expenses (including legal fees and expenses)
resulting from any claim, demand, action or suit to the extent arising out of
the willful misfeasance, bad faith or gross negligence of the Bank in the
performance of its obligations and duties hereunder or by reason of its reckless
disregard thereof.
(c) The Bank may apply to the Fund at any time for
instructions and may consult counsel for the Fund, or its own counsel, and with
accountants and other experts with respect to any matter arising in connection
with its duties hereunder, and the Bank shall not be liable or accountable for
any action taken or omitted by it in good faith in accordance with such
instruction, or with the opinion of such counsel, accountants, or other experts.
The Bank shall not be liable for any act or omission taken or not taken in
reliance upon any document, certificate or instrument which it reasonably
believes to be genuine and to be signed or presented by the proper person or
persons. The Bank shall not be held to have notice of any change of authority of
any officers, employees, or agents of the Fund until receipt of written notice
thereof has been received by the Bank from the Fund.
(d) In the event the Bank is unable to perform, or is delayed
in performing, its obligations under the terms of this Agreement because of acts
of God, strikes, legal constraint, government actions, war, emergency
conditions, interruption of electrical power or other utilities, equipment or
transmission failure or damage reasonably beyond its control or other causes
reasonably beyond its control, the Bank shall not be liable to the Fund for any
damages resulting from such failure to perform, delay in performance, or
otherwise from such causes.
(e) Notwithstanding anything to the contrary in this
Agreement, in no event shall the Bank be liable for special, incidental or
consequential damages, even if advised of the possibility of such damages.
7. Termination of Agreement.
(a) The term of this Agreement shall be three years commencing
upon the date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this Agreement
shall automatically renew for successive three-year terms (each a "Renewal
Term") unless written notice of non-renewal is delivered by the non-renewing
party to the other party no later than ninety days prior to the expiration of
the Initial Term or any Renewal Term, as the case may be.
Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term or any Renewal Term in the event the other party
violates any material provision of this Agreement,
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provided that the violating party does not cure such violation within ninety
days of receipt of written notice from the non-violating party of such
violation.
(b) At any time after the termination of this Agreement, the
Fund may, upon written request, have reasonable access to the records of the
Bank relating to its performance of its duties as Administrator.
8. Miscellaneous.
(a) Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Fund or the Bank shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Fund:
Xxxxxx Brother/First Trust Income Opportunity Fund
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
To the Bank:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: _____________, Director, Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
(b) This Agreement shall extend to and shall be binding upon
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable without the written consent
of the other party.
(c) This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts, without regard to its conflict of
laws provisions.
(d) This Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original and which
collectively shall be deemed to constitute only one instrument.
(e) The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
9. Confidentiality. Both parties hereto agree than any non-public
information obtained hereunder concerning the other party is confidential and
may not be disclosed without the consent of the other party, except as may be
required by applicable law or at the request of a governmental agency or
self-regulatory organization. The parties further agree that a breach of this
provision would irreparably damage the other party and accordingly agree that
each of them is entitled, in addition to all other remedies at law or in equity
to an injunction or injunctions without bond or other security to prevent
breaches of this provision. In addition, the parties further agree that any
Nonpublic Personal Information, as defined under Section 248.3(t) of Regulation
S-P ("Regulation S-P"), promulgated under the Xxxxx-Xxxxx-Xxxxxx Act (the
"Act"), disclosed by a party hereunder is for the specific purpose of permitting
the other party to perform the services set forth in this Agreement. Each party
agrees that, with respect to such information, it will comply with Regulation
S-P and the Act and that it will not disclose any Nonpublic Personal Information
received in connection with this Agreement, to any other party, except as
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necessary to carry out the services set forth in this Agreement or as otherwise
permitted by Regulation S-P or the Act.
10. Use of Name. The Fund shall not use the name of the Bank or
any of its affiliates in any prospectus, sales literature or other material
relating to the Fund in a manner not approved by the Bank prior thereto in
writing; provided however, that the approval of the Bank shall not be required
for any use of its name which merely refers in accurate and factual terms to its
appointment hereunder or which is required by the Securities and Exchange
Commission or any state securities authority or any other appropriate
regulatory, governmental or judicial authority; provided further, that in no
event shall such approval be unreasonably withheld or delayed.
11. Recordkeeping. The Bank shall create and maintain all
necessary records in accordance with all applicable laws, rules and regulations,
including but not limited to records required by Section 31(a) of the Investment
Company Act of 1940, as amended (the "1940 Act"), and those records pertaining
to the various functions performed by it hereunder. All records shall be
available for inspection and use by the Fund. Where applicable, such records
shall be maintained by the Bank for the periods and in the places required by
Rule 31a-2 under the 1940 Act.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
XXXXXX BROTHERS/FIRST TRUST
INCOME OPPORTUNITY FUND
By: __________________________
Name:
Title:
INVESTORS BANK & TRUST COMPANY
By: _________________________
Name:
Title:
[Signature Page to Administration Agreement]
Appendices
Appendix A................................................... Services
