Exhibit 10.1
ADMINISTRATION AGREEMENT
     THIS AGREEMENT is made as of this 28th day of February, 2009, by and
between KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY, a Maryland corporation (the
“Company”), and ULTIMUS FUND SOLUTIONS, LLC (“Ultimus”), a limited liability
company organized under the laws of the State of Ohio.
     WHEREAS, the Company is a closed-end, non-diversified, management
investment company, and has filed an election to be treated as a business
development company under the Investment Company Act of 1940, as amended (the
“1940 Act”); and
     WHEREAS, the Company desires that Ultimus provide certain administrative
services for the Company; and
     WHEREAS, Ultimus is willing to perform such services on the terms and
conditions set forth in this Agreement;
     NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. RETENTION OF ULTIMUS.
     The Company hereby retains Ultimus to act as the administrator of the
Company and to furnish the Company with the services as set forth below. Ultimus
hereby accepts such employment to perform such duties.
     Ultimus shall provide the Company with regulatory reporting services; shall
provide all necessary office space, equipment, personnel, compensation and
facilities for handling the affairs of the Company; and shall provide such other
services as the Company may request that Ultimus perform consistent with its
obligations under this Agreement. Without limiting the generality of the
foregoing, Ultimus shall:

  (a)   Consult with the Company’s officers, registered independent public
accounting firm, legal counsel, custodian, accounting agent and transfer agent
in establishing and maintaining the accounting policies of the Company;     (b)
  Oversee the maintenance by the Company’s custodian of certain books and
records of the Company as required under the 1940 Act and maintain (or oversee
maintenance by such other persons as approved by the Board) such other books and
records (other than those maintained by the investment adviser and other Company
service providers) required by law or for the proper operation of the Company;  
  (c)   Review the appropriateness of and arrange for the payment of the
Company’s expenses;     (d)   Oversee and review calculations of fees paid to
the Administrator, the Company’s investment adviser, its custodian, and any
other service providers of the Company as determined and recorded by the
Company’s accounting agent;

 

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  (e)   Prepare, maintain and disseminate total return performance calculations
on at least a quarterly basis;     (f)   Prepare for review and approval by
officers of the Company, financial information for the Company’s quarterly,
semi-annual, annual and other periodic reports, proxy statements and other
communications with shareholders required or otherwise to be sent to the
Company’s shareholders, and arrange for the printing and dissemination of such
reports and communications to shareholders;     (g)   Prepare for review by an
officer of the Company, the Company’s periodic financial reports required to be
incorporated into and filed with the Securities and Exchange Commission (“SEC”)
on Form 10-K, Form 10-Q and Form N-2 and such other reports, forms or filings
(e.g., Form 8-K), as may be mutually agreed upon;     (h)   Prepare the
financial information for certain SEC filings (e.g., proxy statements), review
such filings as prepared by the Company’s counsel in their entirety and provide
comments to the Company’s management and other appropriate parties (e.g., legal
counsel);     (i)   Assist in the preparation and the filing of the Company’s
federal, state and local income tax returns and any other required tax return;  
  (j)   Prepare, distribute and file with the Internal Revenue Service, Form
1099-MISC for payments made to the Company’s directors, legal counsel and
independent registered public accounting firm, as applicable;     (k)   Compute
the amount of dividends and distributions to be paid by the Company; ensure
proper notification accompanying payment(s), if applicable, and year-end
reporting of such dividends and distributions;     (l)   Develop and implement
procedures to assist the investment adviser in monitoring, on a periodic basis,
compliance with regulatory requirements and the Company’s investment objectives,
policies and restrictions as set forth in the Company’s prospectus and as
amended by the Board and by the Company’s shareholders;     (m)   Review
implementation of any stock purchase or dividend reinvestment programs
authorized by the Board;     (n)   Review of dividend and distribution
notifications sent to Company shareholders;     (o)   Assist the Company in
obtaining any required insurance;     (p)   File with the SEC the fidelity bond
and arrange for the preparation of a memorandum or other appropriate
correspondence that outlines the terms and conditions of such policy;     (q)  
Prepare such financial information reports as may be required by any stock
exchange or exchanges on which the Company’s shares are listed;

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  (r)   Monitor any share repurchase program the Company may engage in,
including the timely reporting of such information to any stock exchange or
exchanges on which the Company’s shares are listed;     (s)   Review the notice
and agenda for any regularly scheduled board meetings, audit committee meeting
or other meetings of committees of the board, as drafted by Company counsel or
other competent parties. Such notices and agendas will be subject to the
approval of Company counsel prior to the distribution to the Board or any
committee members thereof;     (t)   Assist Company management and Company
counsel in the coordination of the production and distribution of the board
materials to the directors, officers and other directly-interested parties
(e.g., legal counsel, independent registered public accounting firm) and provide
meeting facilities, if necessary;     (u)   Review drafts of the minutes of
meetings of the Board (including committees thereof) and shareholder meetings as
prepared by Company counsel or other competent parties, incorporating comments
and revisions received from Company management, Company counsel and other
interested parities;     (v)   Manage the process with respect to the
shareholder meetings. Specifically, arrange for the solicitation of proxies
(including engaging a proxy solicitor), oversee the tabulation of votes, and
provide the meeting facilities, if necessary;     (w)   Gather news and market
updates on the Company;     (x)   Respond to or refer to the Company’s officers
or its transfer agent, shareholder inquiries relating to the Company;     (y)  
Prepare reports relating to the business and affairs of the Company as may be
mutually agreed upon and not otherwise appropriately prepared by the Company’s
investment adviser, its custodian, transfer agent, legal counsel or independent
registered public accounting firm;     (z)   Make such reports and
recommendations to the Board concerning the performance and fees’ of the
Company’s other service providers as the Board may reasonably request or deem
appropriate;     (aa)   Provide communication and coordination services with
regard to the Company’s investment adviser, its transfer agent, custodian and
other service providers that render recordkeeping or shareholder communication
services to the Company;     (bb)   Provide such assistance to the Company’s
investment adviser, its custodian, transfer agent, legal counsel and independent
registered public accounting firm as generally may be required to properly carry
on the business and operations of the Company; and     (cc)   Assist the Company
with its compliance efforts related to Section 404 of the Sarbanes Oxley Act of
2002.

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2. ALLOCATION OF CHARGES AND EXPENSES.
     Ultimus shall furnish at its own expense the executive, supervisory and
clerical personnel and office space and equipment necessary to perform its
obligations under this Agreement.
     The Company assumes and shall pay or cause to be paid all other expenses of
the Company other than as stated in the preceding paragraph, including, without
limitation, taxes, expenses for legal and auditing services, accounting
expenses, transfer agency expenses, the expenses of preparing (including
typesetting), printing and mailing reports, prospectuses, statements of
additional information, proxy solicitation material and notices to existing
shareholders, the costs of custodial services, stock exchange listing fees, fees
and out-of-pocket expenses of Directors who are not affiliated persons of
Ultimus or the investment adviser to the Company, insurance premiums, interest,
brokerage costs, litigation and other extraordinary or nonrecurring expenses,
and all fees and charges of investment advisers to the Company.
3. COMPENSATION OF ULTIMUS.
     For the services to be rendered, the facilities furnished and the expenses
assumed by Ultimus pursuant to this Agreement, the Company shall pay to Ultimus
compensation at an annual rate specified in Schedule A attached hereto. Such
compensation shall be calculated and accrued daily, and paid to Ultimus monthly.
The Company shall also reimburse Ultimus for its reasonable out-of-pocket
expenses, including but not limited to the travel and lodging expenses incurred
by officers and employees of Ultimus in connection with attendance at Board
meetings.
     If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, Ultimus’ compensation for that
part of the month in which this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above. Payment
of Ultimus’ compensation for the preceding month shall be made promptly.
4. EFFECTIVE DATE.
     This Agreement shall become effective with respect to the Company as of the
date first written above (the “Effective Date”).
5. TERM OF THIS AGREEMENT.
     The term of this Agreement shall continue in effect, unless earlier
terminated by either party hereto as provided hereunder, for a period of one
year. Thereafter, unless otherwise terminated as provided herein, this Agreement
shall be renewed automatically for successive one-year periods.
     Should the Company desire to move any of its services provided by Ultimus
hereunder to a successor service provider prior to the expiration of one year
from the Effective Date, Ultimus shall make a good faith effort to facilitate
the conversion on such prior date. In connection with the foregoing, should
services be converted to a successor service provider, prior to the expiration
of one year from the Effective Date, the fees payable to Ultimus shall be the
monthly average of the fees paid for the three months prior to receipt of notice
of termination multiplied by the number of months remaining under the initial
one year term of this Agreement. The payment of all fees to Ultimus as set forth
herein shall be accelerated to the business day immediately prior to the
conversion of services.

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     During the initial one year period under this Agreement, the Company may
terminate this Agreement, without penalty, by notice to Ultimus, effective at
any time specified therein, in the event that (a) Company ceases to carry on its
business and is being liquidated, (b) Company is merged into another management
investment company registered under the 1940 Act, or (c) Company alleges “cause”
(as defined herein) upon the provision of thirty (30) days’ advance written
notice.
     After the initial one year period under this Agreement, this Agreement may
be terminated without penalty: (i) by provision of sixty (60) days’ written
notice; (ii) by mutual agreement of the parties; or (iii) for “cause” (as
defined herein) upon the provision of thirty (30) days’ advance written notice
by the party alleging cause.
     For purposes of this Agreement, “cause” shall mean: (i) a material breach
of this Agreement that has not been remedied within thirty (30) days following
written notice of such breach from the non-breaching party, (ii) a series of
negligent acts or omissions or breaches of this Agreement which, in the
aggregate, constitute in the reasonable judgment of the Company, a serious
failure to perform satisfactorily Ultimus’ obligations hereunder; (iii) a final,
unappealable judicial, regulatory or administrative ruling or order in which the
party to be terminated has been found guilty of criminal or unethical behavior
in the conduct of its business; or (iv) financial difficulties on the part of
the party to be terminated which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or the modification or alteration of the rights of
creditors.
     Notwithstanding the foregoing, after such termination for so long as
Ultimus, with the written consent of the Company, in fact continues to perform
any one or more of the services contemplated by this Agreement or any schedule
or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Compensation due Ultimus and unpaid by the Company upon such
termination shall be immediately due and payable upon and notwithstanding such
termination. Ultimus shall be entitled to collect from the Company, in addition
to the compensation described in Schedule A, the amount of all of Ultimus’ cash
disbursements for services in connection with Ultimus’ activities in effecting
such termination, including without limitation, the delivery to the Company
and/or its designees of the Company’s property, records, instruments and
documents.
6. STANDARD OF CARE.
     The duties of Ultimus shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against Ultimus
hereunder. Ultimus shall use its best efforts in the performance of its duties
hereunder and act in good faith in performing the services provided for under
this Agreement. Ultimus shall be liable for any damages arising directly or
indirectly out of Ultimus’ failure to perform its duties under this Agreement to
the extent such damages arise directly or indirectly out of Ultimus’ willful
misfeasance, bad faith, negligence in the performance of its duties, or reckless
disregard of it obligations and duties hereunder. (As used in this Article 6,
the term “Ultimus” shall include directors, officers, employees and other agents
of Ultimus as well as Ultimus itself.)

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     Without limiting the generality of the foregoing or any other provision of
this Agreement, (i) Ultimus shall not be liable for losses beyond its reasonable
control, provided that Ultimus has acted in accordance with the standard of care
set forth above; and (ii) Ultimus shall not be liable for the validity or
invalidity or authority or lack thereof of any instruction, notice or other
instrument that Ultimus reasonably believes to be genuine and to have been
signed or presented by a duly authorized representative of the Company (other
than an employee or other affiliated persons of Ultimus who may otherwise be
named as an authorized representative of the Company for certain purposes).
     Ultimus may apply to the Company at any time for instructions and may
consult with counsel for the Company or its own counsel and with accountants and
other experts with respect to any matter arising in connection with Ultimus’
duties hereunder, and Ultimus 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 reasonable opinion of such counsel, accountants or other experts qualified
to render such opinion.
7. INDEMNIFICATION.
     The Company agrees to indemnify and hold harmless Ultimus from and against
any and all actions, suits, claims, losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) (collectively, “Losses”) arising directly or
indirectly out of any action or omission to act which Ultimus takes (i) at any
request or on the direction of or in reliance on the reasonable advice of the
Company, (ii) upon any instruction, notice or other instrument that Ultimus
reasonably believes to be genuine and to have been signed or presented by a duly
authorized representative of the Company (other than an employee or other
affiliated person of Ultimus who may otherwise be named as an authorized
representative of the Company for certain purposes) or (iii) on its own
initiative, in good faith and in accordance with the standard of care set forth
herein, in connection with the performance of its duties or obligations
hereunder; provided, however that the Company shall have no obligation to
indemnify or reimburse Ultimus under this Article 8 to the extent that Ultimus
is entitled to reimbursement or indemnification for such Losses under any
liability insurance policy described in this Agreement or otherwise.
     Ultimus shall not be indemnified against or held harmless from any Losses
arising directly or indirectly out of Ultimus’ own willful misfeasance, bad
faith, negligence in the performance of its duties, or reckless disregard of its
obligations and duties hereunder. (As used in this Article 7, the term “Ultimus”
shall include directors, officers, employees and other agents of Ultimus as well
as Ultimus itself.)
     The Company and its officers, employees, shareholders and agents shall not
be liable for, and Ultimus shall indemnify and hold harmless from and against,
any and all claims made by third parties, including costs, expenses (including
reasonable attorney’s fees), losses, damages, charges, payments and liabilities
of any sort or kind, which result from a negligent act, or omission to act, or
bad faith by Ultimus in the performance of its duties hereunder or the breach by
Ultimus of any representation or covenant in this Agreement.
8. RECORD RETENTION AND CONFIDENTIALITY.
     Ultimus shall keep and maintain on behalf of the Company all books and
records which the Company and Ultimus is, or may be, required to keep and
maintain pursuant to any applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the 1940

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Act, relating to the maintenance of books and records in connection with the
services to be provided hereunder. Ultimus further agrees that all such books
and records shall be the property of the Company and to make such books and
records available for inspection by the Company or by the SEC at reasonable
times and otherwise to keep confidential all books and records and other
information relative to the Company and its shareholders; except when requested
to divulge such information by duly-constituted authorities or court process. If
Ultimus is requested or required to disclose any confidential information
supplied to it by the Company, Ultimus shall, unless prohibited by law, promptly
notify the Company of such request(s) so that the Company may seek an
appropriate protective order.
9. FORCE MAJEURE.
     Ultimus assumes no responsibility hereunder, and shall not be liable, for
any damage, loss of data, delay or any other loss whatsoever caused by events
beyond its reasonable control, including acts of civil or military authority,
national emergencies, fire, flood, catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or power supply.
10. RIGHTS OF OWNERSHIP; RETURN OF RECORDS.
     All records and other data except computer programs and procedures
developed to perform services required to be provided by Ultimus are the
exclusive property of the Company and all such records and data will be
furnished to the Company in appropriate form as soon as practicable after
termination of this Agreement for any reason. Ultimus may at its option at any
time, and shall promptly upon the Company’s demand, turn over to the Company and
cease to retain Ultimus’ files, records and documents created and maintained by
Ultimus pursuant to this Agreement which are no longer needed by Ultimus in the
performance of its services or for its legal protection. If not so turned over
to the Company, such documents and records will be retained by Ultimus for six
years from the year of creation. At the end of such six-year period, such
records and documents will be turned over to the Company unless the Company
authorizes in writing the destruction of such records and documents.
11. REPRESENTATIONS OF THE COMPANY.
     The Company certifies to Ultimus that this Agreement has been duly
authorized by the Company and, when executed and delivered by the Company, will
constitute a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
12. REPRESENTATIONS OF ULTIMUS.
     Ultimus represents and warrants that: (1) it will maintain a disaster
recovery plan and procedures including provisions for emergency use of
electronic data processing equipment, which is reasonable in light of the
services to be provided, and it will, at no additional expense to the Company,
take reasonable steps to minimize service interruptions ; (2) this Agreement has
been duly authorized by Ultimus and, when executed and delivered by Ultimus,
will constitute a legal, valid and binding obligation of Ultimus, enforceable
against Ultimus in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties; (3) this Agreement does
not conflict with or violate any agreement to which Ultimus or its
representatives is a party;

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and (4) it has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
13. INSURANCE.
     Ultimus shall furnish the Company with pertinent information concerning the
professional liability insurance coverage that it maintains. Such information
shall include the identity of the insurance carrier(s), coverage levels and
deductible amounts. Ultimus shall notify the Company should any of its insurance
coverage be canceled or reduced. Such notification shall include the date of
change and the reasons therefor. Ultimus shall notify the Company of any
material claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance, and shall notify the
Company from time to time as may be appropriate of the total outstanding claims
made by Ultimus under its insurance coverage.
14. INFORMATION TO BE FURNISHED BY THE COMPANY.
     The Company has furnished to Ultimus the following:

  (a)   Copies of the Articles of Incorporation and of any amendments thereto,
certified by the proper official of the state in which such document has been
filed.     (b)   Copies of the following documents:

  (1)   The Company’s By-Laws and any amendments thereto; and     (2)  
Certified copies of resolutions of the Directors covering the approval of this
Agreement, authorization of a specified officer of the Company to execute and
deliver this Agreement and authorization for specified officers of the Company
to instruct Ultimus thereunder.

  (c)   A list of all the officers of the Company, together with specimen
signatures of those officers who are authorized to instruct Ultimus in all
matters.     (d)   Copies of the Prospectus and Statement of Additional
Information for the Company

15. AMENDMENTS TO AGREEMENT.
     This Agreement, or any term thereof, may be changed or waived only by
written amendment signed by the party against whom enforcement of such change or
waiver is sought.
     For special cases, the parties hereto may amend such procedures set forth
herein as may be appropriate or practical under the circumstances, and Ultimus
may conclusively assume that any special procedure which has been approved by
the Company does not conflict with or violate any requirements of its Articles
of Incorporation or then current prospectuses, or any rule, regulation or
requirement of any regulatory body.
16. COMPLIANCE WITH LAW.
     Except for the obligations of Ultimus otherwise set forth herein, the
Company assumes full responsibility for compliance with all applicable
requirements of the Securities Act of 1933,

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the 1940 Act and any other laws, rules and regulations of governmental
authorities having jurisdiction.
17. NOTICES.
     Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such
notice, at the following address: if to the Company, at 717 Texas Avenue,
Suite 3100, Houston, Texas 77002, Attn: Terry A. Hart; and if to Ultimus, at 225
Pictoria Drive, Suite 450, Cincinnati, Ohio 45246, Attn: Robert G. Dorsey; or at
such other address as such party may from time to time specify in writing to the
other party pursuant to this Section.
18. ASSIGNMENT.
     This Agreement and the rights and duties hereunder shall not be assignable
by either of the parties hereto except by the specific written consent of the
other party. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and permitted
assigns.
19. GOVERNING LAW.
     This Agreement shall be construed in accordance with the laws of the State
of Ohio and the applicable provisions of the 1940 Act. To the extent that the
applicable laws of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
20. MULTIPLE ORIGINALS.
     This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.

            KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
      By:   /s/ Terry A. Hart         Title: Chief Financial Officer           
 

            ULTIMUS FUND SOLUTIONS, LLC
      By:   /s/ Robert A. Dorsey         Title: President           

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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT BETWEEN
KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
AND
ULTIMUS FUND SOLUTIONS, LLC
FEES
     Pursuant to Article 3, in consideration of services rendered and expenses
assumed pursuant to this Agreement, the Company will pay Ultimus on the first
business day after the end of each month, or at such time(s) as Ultimus shall
request and the parties hereto agree, a fee computed with respect to the Company
as follows:

      Average Daily Net Assets   Administration Fee
Up to $1 billion
  .075%
In excess of $1 billion
  .050%

The fee is subject to a monthly minimum of $6,250 ($75,000 annually).

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