EXHIBIT K.10
[Chatham Financial CORPORATION logo]
000 Xxxxxxxxxx Xxxx X Xxxxxxx Xxxxxx, XX 00000
PHONE 000.000.0000 O FAX 000.000.0000
xxx.xxxxxxxxxxxxxxxx.xxx
February __, 2003
Xxxxxx X. Xxxxxxx
AEW Management and Advisors, L.P.
World Trade Center East
Two Seaport Xxxx
Xxxxx 00
Xxxxxx, Xxxxxxxxxxxxx 00000
AEW Real Estate Income Fund
c/o CDC IXIS Asset Management Services, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Gentlemen:
This letter agreement sets forth the terms and conditions pursuant to which
Chatham Financial Corporation ("Chatham") will provide certain consulting
services to AEW Management and Advisors, L.P. ("AEW" or "you") in connection
with the evaluation, procurement, assignment and/or termination of interest
rate, currency and equity hedging transactions (collectively, "hedging
transactions") entered into by AEW Real Estate Income Fund (the "Fund"), a
registered investment company for which AEW serves as investment adviser.
1. AEW hereby retains Chatham as a consultant to assist AEW in
implementing hedging transactions on behalf of the Fund. In connection
with its services as consultant, Xxxxxxx agrees that, at the request of
AEW, it will assist AEW in locating appropriate counterparties for such
hedging transactions and in structuring, documenting, negotiating and
executing such hedging transactions.
2. Xxxxxxx shall follow the requests and directions of a duly authorized
officer of AEW with respect to the services to be performed by Xxxxxxx
and Xxxxxxx shall report to such officer and to whomever he or she may
designate. Chatham shall perform its consulting services hereunder in
good faith and to the best of its ability.
3. At the request of AEW, Xxxxxxx will negotiate directly with financial
institutions that may enter into hedging transactions with the Fund,
although AEW will make all decisions with respect to whether to
implement any particular hedging transaction, the terms of such
transaction and the other parties to such transaction. Xxxxxxx shall
keep you apprised of market conditions and negotiations with potential
counter-parties and other vendors of hedging transactions.
4. As compensation to Chatham for its services hereunder, the Fund will
pay to Chatham the fees set forth below with respect to all hedging
transactions entered into by the Fund during the term of this
agreement:
Xxxxxxx's wiring instructions are:
Citibank NA
New York, NY 10043
ABA 000000000
FBO Xxxxxxx Xxxxxx & Co., Inc.
Account 4055-3953
For: Chatham Financial Corporation
Account 2240-6021
Our transactional fees also include the portfolio-level web services
outlined below:
xxx.xxxxxxxxxxxxxxxx.xxx
Web-based, customized hedging portfolio and select current and
indicative market rates:
Existing hedge transaction information
Deal/transaction analysis - pre-deal memos
Valuations and portfolio sensitivity analysis, available on a daily
business
Counterparty information including S&P and Xxxxx'x ratings
Credit/Collateral monitoring
Accounting requirements per transaction (see below)
PDF Viewable executed documentation including:
ISDA Master Agreements and Schedules
Credit Support Annex and other collateral agreements
Confirmations
The above, web-based services are dependent upon information gathered
from AEW for completeness and accuracy.
5. AEW agrees to protect, indemnify, defend and hold Xxxxxxx, its
directors, officers, employees, trustees and agents harmless against
all losses, claims, damages, liabilities, costs and expenses (including
reasonable legal counsel fees) arising out of Xxxxxxx's engagement
hereunder, including costs arising out of any dispute, whether or not
Xxxxxxx is a party to such dispute; provided, however, that this
indemnity shall not apply with respect to bad faith, reckless or
willful misconduct or negligence on the part of Chatham in the
performance of its services hereunder. Xxxxxxx shall also be paid a
reasonable fee to reimburse it for its costs in preparing for, or
testifying in, any legal proceeding where such preparation or testimony
is requested by you. Also, it is understood and agreed that the
indemnification contained herein survives termination of this
agreement.
6. In no event, unless it has been finally determined that Xxxxxxx acted
recklessly or fraudulently or in bad faith, shall Chatham be liable to
AEW or the Fund or any of their authorized employees or to any other
third party, whether a claim be in tort, contract or otherwise, for any
special, consequential, indirect, exemplary, punitive, or similar
damages, even if Chatham has been apprised of the possibility thereof.
7. Xxxxxxx agrees to keep all information provided by AEW or the Fund
strictly confidential. and agrees not to share or disclose such
information to persons outside of Chatham (except as required in
connection with the transactions contemplated hereby) without the
consent of AEW. AEW gives Xxxxxxx permission to disclose to clients and
prospective clients the fact that AEW is a client of Xxxxxxx. However,
both parties agree not to disclose the terms of this agreement except
(i) to their attorneys, accountants or other agents who have agreed to
keep such terms confidential or (ii) as provided by law.
8. AEW agrees to keep analysis, techniques, tools and models provided to
AEW by Xxxxxxx strictly confidential and agrees not to share or
disclose them to persons outside of AEW without the consent of Chatham
except (i) to its attorneys, accountants or other agents who have
agreed to keep such terms confidential or (ii) as provided by law. AEW
understands and agrees that the website provided to AEW as part of this
agreement is for the exclusive use by AEW and it will not provide any
passwords or information to anyone not employed by AEW without the
consent of Chatham. Xxxxxxx gives permission to AEW to disclose to
investors that Xxxxxxx has been retained as a hedging advisor.
9. AEW understands that although Xxxxxxx may assist in the preparation and
negotiation of the legal, tax and regulatory aspects of the purchase of
hedging instruments, it is not qualified to provide legal, tax or
regulatory advice. AEW agrees that it will rely on its own advisors for
advice in these areas.
10. Both parties agree that any and all telephone conversations between
Xxxxxxx and AEW, their associates, advisors or consultants may be
recorded.
-2-
11. Either party may terminate this agreement at any time by providing 60
days written notice to the other party.
12. This Agreement will be governed by and construed in accordance with the
domestic substantive laws of the Commonwealth of Massachusetts, without
giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any other jurisdiction. AEW
and Xxxxxxx hereby agree that the Fund is an intended third-party
beneficiary of this Agreement.
-3-
If these terms and conditions meet with your approval, kindly execute and return
a copy of this letter.
Best Regards,
Date: ___________________________________
By: __________________________________
Name:
Title___________________________
Accepted and Agreed:
AEW Management and Advisors, L.P.
Date: ___________________________________
By: __________________________________
Name:
Title___________________________
The Fund is a Massachusetts business trust. A copy of the Amended and Restated
Agreement and Declaration of Trust of the Fund is on file with the Secretary of
the Commonwealth of Massachusetts, and notice is hereby given that this
Agreement is executed on behalf of the Fund by an officer or trustee of the Fund
in his or her capacity as an officer or trustee of the Fund and not individually
and that the obligations of or arising out of this instrument are not binding
upon any of the trustees, officers or shareholders individually but are binding
only upon the assets and property of the Fund.
Agreed and accepted solely as to the payment obligations contained in Section 4:
AEW REAL ESTATE INCOME FUND
Date: _____________________________________
By: ____________________________________
Name:
Title_____________________________
