ECONOMIC CONSULTING AGREEMENT
October 18, 1996
Primark Decision Economics, Inc.
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▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Preferred Income Fund Incorporated, Preferred Income
Opportunity Fund Incorporated and Preferred Income Management Fund Incorporated
(each a "Company" and together the "Companies"), each a corporation organized
under the laws of the State of Maryland, each herewith confirms its agreement
with Primark Decision Economics, Inc. (the "Economic Consultant"), a corporation
organized under the laws of the Commonwealth of Massachusetts, and for good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Investment Description; Appointment
Each Company desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its Articles of Incorporation, as the same may from time to time be
amended, and in such manner and to such extent as may from time to time be
approved by the Board of Directors of the Company. Each Company desires to
employ and hereby appoint the Economic Consultant to act as economic consultant
to the Company. The Economic Consultant accepts the appointment and agrees to
furnish the services described herein for the compensation set forth below.
2. Services as Economic Consultant
The Economic Consultant will provide the services set forth in
Exhibit A and such other services reasonably incidental thereto.
3. Standard of Care
The Economic Consultant shall exercise its best judgment in
rendering the services described in paragraph 2 above. The Economic Consultant
shall not be liable for any error of judgment or mistake of law or for any act
or omission or any loss suffered by the Companies or by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Incorporated (the "Adviser") in connection with the matters to which this
Agreement relates, provided that nothing herein shall be deemed to protect or
purport to protect the Economic Consultant against any liability to the Adviser,
the Companies or their shareholders to which the Economic Consultant would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
4. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Companies will pay the Economic Consultant an annual fee, such
amount to be paid in equal quarterly installments, in the aggregate amount of
$136,000, each Company to be solely responsible for payment of one-third of such
amount. The Economic Consultant agrees that no Company will be responsible to
pay amounts owed to the Economic Consultant by any other Company. The fee
payable to the Economic Consultant for the period from the date of this
Agreement to the end of the first calendar quarter thereafter shall be prorated
according to the proportion that such payment bears to the full quarterly
payment.
5. Expenses
The Economic Consultant will bear all expenses in connection
with the performance of its services under this Agreement. Each Company will
bear certain other expenses to be incurred in its operation, including:
organizational expenses, taxes, interest, brokerage costs and commissions and
stock exchange fees; fees of directors of the Company who are not officers,
directors or employees of the Adviser; Securities and Exchange Commission fees;
state Blue Sky qualification fees; charges of the custodian, any sub-custodians
and transfer and dividend-paying agent; expenses in connection with the
Company's Dividend Reinvestment and Cash Purchase Plan; insurance premiums;
outside auditing and legal expenses; costs of maintenance of the Company's
existence; costs attributable to investor services, including, without
limitation, telephone and personnel expenses; costs of printing stock
certificates; costs of shareholders' reports and meetings of the shareholders of
the Company and of the officers or Board of Directors of the Company; membership
fees in trade associations; stock exchange listing fees and expenses; expenses
in connection with auctions of shares of auction rate preferred stock proposed
to be issued by the Company; litigation and other extraordinary or non-recurring
expenses.
6. Services to Other Companies or Accounts
Each Company understands that the Economic Consultant now
acts, will continue to act or may act in the future as economic adviser or
investment adviser to fiduciary and other managed accounts or as economic
adviser or investment adviser to one or more other investment companies, and the
Company has no objection to the Economic Consultant so acting. Each Company
understands that the persons employed by the Economic Consultant to assist in
the performance of the Economic Consultant's duties hereunder will not devote
their full time to such service and nothing contained herein shall be deemed to
limit or restrict the right of the Economic Consultant or any affiliate of the
Economic Consultant to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
7. Term of Agreement
This Agreement shall become effective as of the date hereof
and shall remain in effect with respect to a Company from year to year so long
as such continuance is specifically approved at least annually by the Board of
Directors of the Company. This Agreement is terminable with respect to each
Company separately by that Company or by the Economic Adviser on 60 days'
written notice to the other party. Any termination with respect to one Company
shall not affect the continued operation of the Agreement with respect to any
other Company. Any termination shall be without penalty and any notice of
termination shall be deemed given when received by the addressee.
8. No Assignment
This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by any party hereto. It may be amended by
mutual agreement in writing by the parties hereto.
9. Entire Agreement
This Agreement constitutes the entire agreement among the
parties hereto.
10. Governing Law
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York without giving effect to
the conflicts of laws principles thereof.
If the foregoing accurately sets forth our agreement, kindly
indicate your acceptance hereof by signing and returning the enclosed copy
hereof.
Very truly yours,
PREFERRED INCOME FUND INCORPORATED
PREFERRED INCOME OPPORTUNITY
FUND INCORPORATED
PREFERRED INCOME MANAGEMENT
FUND INCORPORATED
By:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Executive Officer
Accepted:
PRIMARK DECISION ECONOMICS, INC.
By: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
CLIENT AGREEMENT
Prepared for: Preferred Income Fund
Preferred Income Opportunity Fund
Preferred Income Management Fund
Services of Primark Decision Economics, Inc. ("PDE") provided to the
above-listed investment companies ("Clients") as outlined in the attached
Economic Consulting Agreement.
PRIMARK DECISION ECONOMICS, INC.
By:
▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
Accepted and agreed this 18th day of October, 1996.
PREFERRED INCOME FUND INCORPORATED
PREFERRED INCOME OPPORTUNITY FUND INCORPORATED
PREFERRED INCOME MANAGEMENT FUND INCORPORATED
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Executive Officer
EXHIBIT A
Information Services
o Economic Consultant - The Economic Consultant may be designated as
such, where desired, in any literature relating to the Companies.
o Economic Adviser - Dr. ▇▇▇▇▇ ▇▇▇▇▇ may be designated as the
Economic Adviser to the Companies, where
desired, in any literature relating to the Companies.
o Publications - Selected publications will be provided to the
Adviser on behalf of the Companies as indicated in Attachment A.
o Strategic Planning - Periodic (4 to 5 and, as needed) in person
or telephone strategy sessions with Dr. ▇▇▇▇▇ ▇▇▇▇▇.
o Priority Telephone Access - Telephone access to Dr. ▇▇▇▇▇ ▇▇▇▇▇ and
other senior staff of the Economic Consultant, including Managing
Directors ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, initiated by the Adviser on
behalf of the Companies.
o Consultations with the Economic Consultant's Economists and Staff -
may be initiated by individuals from any of the Companies at any
time on data, other information, Washington policy, etc.
High-Frequency Personal Information Support
o High frequency telephone support from ▇▇▇▇▇▇ ▇▇▇▇▇ to the Adviser
on U.S. and international economic
indicators and from Dr. ▇▇▇▇▇ ▇▇▇▇▇ on the most key indicators.
o Telephone support to the Adviser from ▇▇▇▇▇ ▇▇▇▇▇ on macroeconomic
trends as they pertain to the banking and utility industries.
Telecommunication
o Tele-conference calls by the Economic Consultant, on notice, with
other clients.
Customized Economic Research and Projects
o At the request of the Companies, the Economic Consultant will
provide customized economic research and/or conduct economic
projects, subject to such additional fees as are agreed upon in
advance.
Attachment A
Publications:
1. Weekly Executive Summary (Sinai) -- Fax, Internet (not mailed)
2. Daily Staff Summary (worldwide, staff) -- Fax (not mailed)
3. Comments on Current Economic Indicators and Events (worldwide, staff) --
Fax (not mailed)
4. Forecast Calendars -- U.S., Germany, Japan -- Fax (not mailed)
5. Bulletins (periodic) -- Fax, mail
6. Economic Outlook and Issues (monthly, 10 times per year) -- mail
7. World Economic View (quarterly, 3 times a year) -- mail
8. Global Economic Developments in review (weekly) -- mail
9. Prospects (biweekly) -- mail