FORM OF SUB-ADMINISTRATION AGREEMENT
Agreement dated as of April ___, 2004 by and between State Street Bank
and Trust Company, a Massachusetts trust company (the "Sub-Administrator") and
RMR Advisors, Inc., a Massachusetts corporation (the "Administrator").
WHEREAS, RMR Hospitality and Real Estate Fund (the "Fund") is
registered as a closed-end, management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Fund has retained the Administrator to furnish
administrative services to it; and
WHEREAS, the Administrator desires to retain the Sub-Administrator to
furnish certain administrative services to the Fund, and the Sub-Administrator
is willing to furnish such services, on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF SUB-ADMINISTRATOR
The Administrator hereby appoints the Sub-Administrator to act as
sub-administrator with respect to the Fund's investment portfolio for purposes
of providing certain sub-administrative services for the period and on the terms
set forth in this Agreement. The Sub-Administrator accepts such appointment and
agrees to render the services stated herein.
2. DELIVERY OF DOCUMENTS
The Administrator will promptly deliver to the Sub-Administrator upon
request copies of each of the following documents and all future amendments and
supplements, if any:
a. The Fund's Amended and Restated Agreement and Declaration of Trust;
b. The Fund's Bylaws;
c. The Fund's currently effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and the 1940
Act, the Prospectus(es) and Statement(s) of Additional Information
and all amendments and supplements thereto as in effect from time to
time;
d. Certified copies of the resolutions of the Board of Trustees of the
Fund (the "Board") authorizing (1) the Administrator to enter into
this Agreement and (2) certain individuals to give instructions to
the Sub-Administrator pursuant to this Agreement;
e. A copy of the investment advisory agreement between the Fund and its
investment advisor; and
f. Such other certificates, documents or opinions which the
Sub-Administrator may, in its reasonable discretion, deem necessary
or appropriate in the proper performance of its duties.
3. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADMINISTRATOR
The Sub-Administrator represents and warrants to the Administrator
that:
a. It is a Massachusetts trust company, duly organized and existing
under the laws of The Commonwealth of Massachusetts;
b. It has the corporate power and authority to carry on its business in
The Commonwealth of Massachusetts;
c. All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would materially impair the Sub-Administrator's
ability to perform its duties and obligations under this Agreement;
and
e. Its entrance into this Agreement shall not cause a material breach
or be in material conflict with any other agreement or obligation of
the Sub-Administrator or any law or regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE ADMINISTRATOR
The Administrator represents and warrants to the Sub-Administrator
that:
a. It is a corporation, duly organized, existing and in good standing
under the laws of The Commonwealth of Massachusetts;
b. It has the corporate power and authority under applicable laws and
by its charter and bylaws to enter into and perform this Agreement;
c. All requisite proceedings have been taken to authorize it to enter
into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Administrator's ability to perform
its duties and obligations under this Agreement;
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e. Its entrance into this Agreement will not cause a material breach or
be in material conflict with any other agreement or obligation of
the Administrator or any law or regulation applicable to it;
f. With respect to the Fund:
(1) The Fund is an investment company properly registered under the
1940 Act;
(2) A registration statement under the 1940 Act has been filed and
will be effective and remain effective during the term of this
Agreement;
(3) As of the close of business on the date of this Agreement, the
Fund is authorized to issue shares of common shares of
beneficial interest, initially in the amount as set forth in
Schedule A to this Agreement; and
(4) The Fund is duly organized, existing and in good standing as a
business trust under the laws of The Commonwealth of
Massachusetts.
5. SUB-ADMINISTRATION SERVICES
The Sub-Administrator shall provide the services set forth on Schedule
B annexed hereto, subject to the control, supervision and direction of the
Administrator in accordance with procedures which may be established from time
to time between the Administrator and the Sub-Administrator.
The Sub-Administrator shall provide the office facilities and personnel
required by it to perform the services contemplated herein.
6. FEES; EXPENSES; EXPENSE REIMBURSEMENT
The Sub-Administrator shall receive from the Administrator such
compensation for the Sub-Administrator's services provided pursuant to this
Agreement as may be agreed to from time to time in a written fee schedule
approved by the parties and initially set forth in the Fee Schedule to this
Agreement. The fees are calculated based on the average daily net assets of the
Fund and billed monthly and shall be due and payable upon receipt of the
invoice. Upon the termination of this Agreement before the end of any month, the
fee for the part of the month before such termination shall be prorated
according to the proportion which such part bears to the full monthly period and
shall be payable upon the date of termination of this Agreement. In addition,
the Administrator shall reimburse the Sub-Administrator for its out-of-pocket
costs incurred in connection with this Agreement.
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The Administrator agrees to reimburse the Sub-Administrator for any
other expenses not contemplated by this Agreement as mutually agreed upon in
writing by the Administrator and the Sub-Administrator from time to time.
The Sub-Administrator is authorized to and may employ or associate with
such person or persons as the Sub-Administrator may deem desirable to assist it
in performing its duties under this Agreement; provided, however, that the
compensation of such person or persons shall be paid by the Sub-Administrator
and that the Sub-Administrator shall be as fully responsible to the
Administrator for the acts and omissions of any such person or persons as it is
for its own acts and omissions.
7. INSTRUCTIONS AND ADVICE
At any time, the Sub-Administrator may apply to any officer of the
Administrator for instructions and may consult with outside counsel for the Fund
or the independent auditors for the Fund at the expense of the Administrator, or
other individuals designated in writing by the Administrator, for instructions
with respect to any matter arising in connection with the services to be
performed by the Sub-Administrator under this Agreement. The Sub-Administrator
shall not be liable, and shall be indemnified by the Administrator, for any
action taken or omitted by it in good faith in reliance upon any such
instructions or advice or upon any paper or document reasonably believed by it
to be genuine and to have been signed by such officers or individuals. The
Sub-Administrator shall not be held to have notice of any change of authority of
any officer or individual until receipt of written notice thereof from the
Administrator. Nothing in this Section shall be construed as imposing upon the
Sub-Administrator any obligation to seek such instructions.
8. LIMITATION OF LIABILITY AND INDEMNIFICATION
The Sub-Administrator shall be responsible for the performance of only
such duties as are set forth in this Agreement, including those set forth on
Schedule B annexed hereto which forms a part hereof, as such Schedule B may be
amended from time to time, and, except as otherwise provided under Section 6,
shall have no responsibility for the actions or activities of any other party,
including other service providers. The Sub-Administrator shall have no liability
for any error of judgment or mistake of law or for any loss or damage resulting
from the performance or nonperformance of its duties hereunder unless solely
caused by or resulting from the bad faith, negligence, willful misconduct or
reckless disregard of the duties and obligations of the Sub-Administrator, its
officers or employees. The Sub-Administrator shall not be liable for any
special, indirect, incidental, or consequential damages of any kind whatsoever
(including, without limitation, attorneys' fees) under any provision of this
Agreement or for any such damages arising out of any act or failure to act
hereunder. In any event, the Sub-Administrator's cumulative liability for each
calendar year (a "Liability Period") with respect to the Administrator under
this Agreement, regardless of the form of action or legal theory, shall be
limited to the total annual compensation earned by the Sub-Administrator with
respect to the Fund and fees payable hereunder during the preceding Compensation
Period, as defined herein, for any liability or loss suffered by the
Administrator or the Fund including, but not limited to, any liability relating
to qualification of the Fund as a regulated investment company or any liability
relating to the Fund's compliance with
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any federal or state tax or securities statute, regulation or ruling during such
Liability Period. "Compensation Period" shall mean the calendar year ending
immediately prior to each Liability Period in which the event(s) giving rise to
the Administrator's liability for that period have occurred. Notwithstanding the
foregoing, the Compensation Period for purposes of calculating the annual
cumulative liability of the Sub-Administrator for the Liability Period
commencing on the date of this Agreement and terminating on December 31, 2004
shall be the date of this Agreement through December 31, 2004 on an annualized
basis, and the Compensation Period for the Liability Period commencing January
1, 2004 and terminating on December 31, 2004 shall be January 1, 2004 through
December 31, 2004.
Except as may arise from the Sub-Administrator's bad faith, negligence,
willful misconduct or reckless disregard of its duties and obligations under the
Agreement, the Sub-Administrator shall not be responsible or liable for any
failure or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its control,
including without limitation, work stoppage, power or other mechanical failure,
computer virus, natural disaster, governmental action or communication
disruption.
The Administrator shall indemnify and hold the Sub-Administrator
harmless from all loss, cost, damage and expense, including reasonable fees and
expenses for counsel, incurred by the Sub-Administrator resulting from any
claim, demand, action or suit in connection with the Sub-Administrator's
acceptance of this Agreement, any action or omission by the Sub-Administrator in
the performance of its duties hereunder, or as a result of the
Sub-Administrator's acting upon any instructions reasonably believed by it to
have been duly authorized by the Administrator, provided that this
indemnification shall not apply to actions or omissions of the
Sub-Administrator, its officers or employees in cases of its or their own bad
faith, negligence, willful misconduct or reckless disregard of their duties and
obligations.
The indemnification contained herein shall survive the termination of
this Agreement.
9. CONFIDENTIALITY
The Sub-Administrator agrees that, except as otherwise required by law
or in connection with any required disclosure to a banking or other regulatory
authority, it will keep confidential all records and information in its
possession relating to the Administrator, the Fund or the Fund's shareholders or
shareholder accounts and will not disclose the same to any person except at the
request or with the written consent of the Administrator.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Fund assumes full responsibility for complying with all securities,
tax, commodities and other laws, rules and regulations applicable to it.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Administrator agrees that all records which it maintains pursuant to its
duties under this Agreement
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shall at all times remain the property of the Fund, shall be readily accessible
during normal business hours, and shall be promptly surrendered upon the
termination of the Agreement or otherwise on written request. The
Sub-Administrator further agrees that all records which it maintains pursuant to
its duties under this Agreement pursuant to Rule 31a-1 under the 1940 Act will
be preserved for the periods prescribed by Rule 31a-2 under the 1940 Act unless
any such records are earlier surrendered as provided above.
11. SERVICES NOT EXCLUSIVE
The services of the Sub-Administrator under this Agreement are not to
be deemed exclusive, and the Sub-Administrator shall be free to render similar
services to others. The Sub-Administrator shall be deemed to be an independent
contractor and, unless otherwise expressly provided herein or authorized by the
Administrator from time to time, shall have no authority to act or represent the
Administrator or the Fund in any way or otherwise be deemed an agent of the
Administrator or the Fund.
12. TERM, TERMINATION AND AMENDMENT
(a) This Agreement shall become effective on the date of its execution
and shall remain in full force and effect unless either party
terminates this Agreement upon at least sixty (60) days' prior
written notice to the other party, or unless the Fund terminates
the services of Administrator prior to that date. Termination of
this Agreement may be effected with or without cause and without
the payment of any penalty; provided, however, that the
Administrator and Sub-Administrator specifically agree that any
compensation or expense described in Section 12 (b) below shall not
be deemed a penalty.
(b) Upon termination of this Agreement, the Administrator shall pay to
the Sub-Administrator such compensation and any reimbursable
expenses as may be due under the terms hereof as of the date of
such termination, including reasonable out-of-pocket expenses
associated with such termination.
(c) This Agreement may be modified or amended from time to time by
mutual written agreement of the parties hereto.
13. NOTICES
Any instruction, notice, communication or other instrument required to
be given hereunder may be (a) delivered in person to the offices of the parties
as set forth herein during normal business hours; or (b) effected directly
between electro-mechanical or electronic devices; or (c) delivered prepaid
registered mail (in which case it shall be deemed to have been served at the
expiration of five business days after posting); or (d) delivered by telecopy
(in which case it shall be deemed to have been served on the business day after
the receipt thereof). Each party hereto shall designate from time to time the
person(s) and address(es) for Proper Instructions and other communications
related to the daily operations. Instructions and other communications
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related to this Agreement (including, but not limited to termination, breach, or
default) shall be delivered at the following addresses or such other addresses
as may be notified by any party from time to time.
If to the Administrator:
RMR Advisors, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
ATTN: Xxxxxx X. X'Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Sub-Administrator:
State Street Bank and Trust Company
One Xxxxxxx Xxxxxx, 0xx Xxxxx (B02/9)
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
ATTN: Xxxx Xxxxx Zeven, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14. NON-ASSIGNABILITY
This Agreement shall not be assigned by either party hereto without the
prior consent in writing of the other party, except that the Administrator or
Sub-Administrator may assign this Agreement to a successor of all or a
substantial portion of its business, or to a party controlling, controlled by or
under common control with the Administrator or Sub-Administrator.
15. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
the Administrator and the Sub-Administrator and their respective successors and
permitted assigns.
16. ENTIRE AGREEMENT
This Agreement and the Fee Schedule contain the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersede all previous representations, warranties or commitments regarding the
services to be performed hereunder whether oral or in writing.
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17. WAIVER
The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver nor shall it
deprive such party of the right thereafter to insist upon strict adherence to
that term or any term of this Agreement. Any waiver must be in writing signed by
the waiving party.
18. SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, the
balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance it shall nevertheless remain
applicable to all other persons and circumstances.
19. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
20. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
RMR ADVISORS, INC.
By:
-----------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------
Title: Vice President
--------------------------------
STATE STREET BANK AND TRUST COMPANY
By:
------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------
Title: Senior Vice President
--------------------------------
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SCHEDULE A
LIST OF PORTFOLIOS AUTHORIZED SHARES
RMR HOSPITALITY AND REAL ESTATE FUND Unlimited Common Shares of
Beneficial Interest
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SCHEDULE B
SUB-ADMINISTRATION RESPONSIBILITIES
Subject to oversight by the Fund's Administrator:
a. Oversee the maintenance by the Fund's custodian of certain books and
records of the Fund as required under Rule 31a-1(b) of the 1940 Act
and as required by the Custodian Agreement dated April 2, 2004
between the Fund and State Street Bank and Trust Company;
b. Prepare the Fund's federal, state and local income tax returns for
review by the Fund's independent accountants (if and as directed by
the Fund), execution by the Fund's treasurer; file the Fund's
federal, state and local income tax returns;
c. Review calculation of, and if appropriate, recommend changes to,
Fund expense accruals. Submit for approval by officers of the Fund
and arrange for payment of the Fund's expenses;
d. Prepare for review and approval by officers of the Fund financial
information for the Fund's semi-annual and annual reports, proxy
statements and other communications required or otherwise to be sent
to Fund shareholders;
e. Prepare for review by an officer of the Fund the Fund's periodic
financial reports required to be filed with the Securities and
Exchange Commission ("SEC") on Forms N-SAR and N-CSR, and financial
information required by Form N-2 and such other reports, forms or
filings as may be mutually agreed upon;
f. Prepare reports relating to the business and affairs of the Fund as
may be mutually agreed upon and not otherwise prepared by the Fund's
investment adviser, Administrator, custodian, legal counsel or
independent accountants;
g. Coordinate the audit of the Fund's financial statements by the
Fund's independent accountants, and make such reports and
recommendations to the Board concerning the performance of the
independent accountants as the Board may reasonably request;
h. Oversee and review calculations of fees paid to the Fund's
investment adviser, Administrator, custodian and transfer agent;
i. Consult with the Fund's officers, Administrator, independent
accountants, legal counsel, custodian and transfer agent in
establishing the accounting policies of the Fund;
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j. Refer to the Fund's officers or transfer agent, shareholder
inquiries relating to the Fund;
k. Provide periodic testing of portfolios to assist the Fund's
investment adviser in complying with Internal Revenue Code mandatory
qualification requirements, the requirements of the 1940 Act and
Company prospectus limitations as may be mutually agreed upon;
l. Maintain general corporate calendar;
m. Maintain copies of the Fund's charter and by-laws;
n. File annual and semi-annual shareholder reports with the appropriate
regulatory agencies; review text of "President's letters" to
shareholders and "Management's Discussion of Company Performance"
(which shall also be subject to review by the Fund's legal counsel);
o. Provide consultation on regulatory matters relating to portfolio
management, Fund operations and any potential changes in the Fund's
investment policies, operations or structure; act as liaison to
legal counsel to the Fund and, where applicable, to legal counsel to
the Fund's independent Board members;
p. Maintain continuing awareness of significant emerging regulatory and
legislative developments which may affect the Fund, update the
Administrator, the Board and the investment adviser on those
developments and provide related planning assistance where requested
or appropriate;
q. Counsel and assist the Fund in the handling of routine regulatory
examinations and work closely with the Fund's legal counsel in
response to any non-routine regulatory matters;
r. Prepare and disseminate vendor survey information;
s. Prepare and furnish performance information (including total return
information and yield information), including such information on an
after-tax basis, calculated in accordance with applicable U.S.
securities laws and regulations as may be reasonably requested by
the Administrator;
Subject to review and comment by the Fund's legal counsel and the Fund's
Administrator:
t. Prepare for filing with the SEC amendments to the Fund's
registration statement, including updating the Prospectus and
Statement of Additional Information, where applicable;
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u. Prepare for filing with the SEC routine proxy statements; provide
consultation on proxy solicitation matters;
v. Prepare agenda and background materials for Board meetings, make
presentations where appropriate; attend Board meetings, prepare
minutes and follow-up on matters raised at Board meetings; attend
shareholder meetings and prepare minutes; and
w. Supply the Fund with officers, as necessary.
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XXXXX XXXXXX BANK AND TRUST COMPANY
FUND ADMINISTRATION COMPLEX FEE SCHEDULE
FOR
RMR HOSPITALITY AND REAL ESTATE FUND
DATED APRIL ___, 2004
I. FEES FOR FUND ADMINISTRATION SERVICES:
The following fee schedule is for administration services for the RMR
Hospitality and Real Estate Fund. Services include: Semi annual and
annual financial reporting, NSAR preparation and filing, surveys, audit
coordination, expense budgeting /monitoring, performance calculations,
IRS / SEC / Prospectus compliance, tax services and legal services. For
these services, the fund will be charged the following fees:
ANNUAL FEE
AVERAGE ASSETS EXPRESSED IN BASIS POINTS: 1/100 OF 1%
First $___ million / fund
Next $___ million / fund
Next $___ million / fund
Next $___ million / fund
Minimum Per Fund
FUND FEES:
Fees will be calculated by multiplying each average asset break point
in the above schedule by the total number of funds only to determine
the break points used in the schedule (i.e., 1 fund at $___ million at
____ basis points, etc.). The basis point rate will then be applied to
determine the asset-based fee for the complex. The minimum fee will be
calculated by multiplying the minimum fee by the number of Funds. State
Street will charge the greater of the complex basis point fee or the
complex minimum fee. The Base Fee is subject to an increase each year
in an amount equal to the increase in the Consumer Price Index for that
year.
II. MULTIPLE CLASSES OF SHARES & FEEDER FEES
An additional $___________ annual fee will be applied for each class of
common shares, excluding the first class of common shares, if more than
one class of common shares is operational in a Fund.
III. PREFERRED SHARES COMPLIANCE TESTING
The following fee covers 1940 Act and Preferred Shares Basic
Maintenance asset coverage testing for the preferred rate auction
shares issued by the Funds. Preferred rate auction testing will be
performed twice per month.
ANNUAL FEE PER FUND
$ --------
IV. OUT OF POCKET EXPENSES - INCLUDE, BUT MAY NOT BE LIMITED TO:
o Legal fees, audit fees and other professional fees
o Postage
o Supplies related to Fund records
o Travel and lodging for Board and Operations meetings
o Preparation of financial statements other than Annual and Semi-Annual
Reporting, $3,000 per financial report.
V. SPECIAL ARRANGEMENTS
Fees for activities of a non-recurring nature such as reorganizations,
and/or preparation of special reports will be subject to negotiation. Fees
for a change in fund structure (i.e., Core and Feeder) are subject to
negotiation.
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VI. TERM OF THE CONTRACT
The parties agree that this fee schedule shall remain in effect until April
__, 2006 and from year to year thereafter until it is revised as a result
of negotiations initiated by either party.
Note: As discussed, the services do not include: blue sky and daily
oversight of the funds books and records. The fees are also subject to a
review of the fund's N-2 and statement of additional information.
RMR ADVISORS, INC.
By:
---------------------------------------------
Name: Xxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
STATE STREET BANK AND TRUST COMPANY
By:
---------------------------------------------
Name: Xxxx X. Xxxxxx
------------------------------------------
Title: Senior Vice President
------------------------------------------
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