sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )(1)
Real Estate Income Fund Inc.
----------------------------
(Name of Issuer)
Common Stock, par value $0.001 per share
----------------------------------------
(Title of Class of Securities)
755881109
---------
(CUSIP Number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 14, 2005
------------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See Rule 13d-7
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 18 Pages)
----------------------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
--------------------- ---------------------
CUSIP No. 755881109 13D Page 2 of 18 Pages
--------------------- ---------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WESTERN INVESTMENT LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 479,500
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
- 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
479,500
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
479,500
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.3%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
--------------------- ---------------------
CUSIP No. 755881109 13D Page 3 of 18 Pages
--------------------- ---------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ARTHUR D. LIPSON
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 479,500
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
- 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
479,500
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
479,500
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.3%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
--------------------- ---------------------
CUSIP No. 755881109 13D Page 4 of 18 Pages
--------------------- ---------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WESTERN INVESTMENT HEDGED PARTNERS L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 289,900
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
- 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
289,900
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
289,900
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
--------------------- ---------------------
CUSIP No. 755881109 13D Page 5 of 18 Pages
--------------------- ---------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WESTERN INVESTMENT INSTITUTIONAL PARTNERS LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 165,000
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
- 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
165,000
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
165,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.5%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
--------------------- ---------------------
CUSIP No. 755881109 13D Page 6 of 18 Pages
--------------------- ---------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 24,600
OWNED BY
EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
- 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
24,600
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
24,600
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
--------------------- ---------------------
CUSIP No. 755881109 13D Page 7 of 18 Pages
--------------------- ---------------------
The following constitutes the Schedule 13D filed by the undersigned
(the "Schedule 13D").
Item 1. Security and Issuer.
-------------------
This statement relates to shares of the Common Stock, par value
$0.001 (the "Shares"), of Real Estate Income Fund Inc. (the "Issuer"). The
address of the principal executive offices of the Issuer is 125 Broad Street,
New York, NY 10004.
Item 2. Identity and Background.
-----------------------
(a) This statement is filed by Western Investment LLC, a Delaware
limited liability company ("WILLC"), Arthur D. Lipson, Western Investment Hedged
Partners L.P., a Delaware limited partnership ("WIHP"), Western Investment
Institutional Partners LLC, a Delaware limited liability company ("WIIP"), and
Western Investment Activism Partners LLC, a Delaware limited liability company
("WIAP"). Each of the foregoing is referred to as a "Reporting Person" and
collectively as the "Reporting Persons."
WILLC has sole voting and investment power over WIHP's, WIIP's and
WIAP's security holdings and Mr. Lipson, in his role as the managing member of
WILLC, controls WILLC's voting and investment decisions.
By virtue of that certain Joint Filing and Solicitation Agreement by
and among the Reporting Persons and Karpus Management, Inc. ("Karpus"), as
described in further detail in Item 6, the Reporting Persons affirm that they
are members of a "group" with Karpus for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Act"). The Reporting Persons
expressly disclaim beneficial ownership of the Shares held by Karpus.
(b) The principal business address of each Reporting Person is 2855
East Cottonwood Parkway, Suite 110, Salt Lake City, Utah 84121.
(c) The principal business of WILLC is acting as the general partner
and managing member, as the case may be, of WIHP, WIIP and WIAP. The principal
occupation of Mr. Lipson is acting as managing member of WILLC. The principal
business of WIHP, WIIP and WIAP is the business of acquiring, holding and
disposing of investments in various companies.
(d) No Reporting Person has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) No Reporting Person has, during the last five years, been party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
--------------------- ---------------------
CUSIP No. 755881109 13D Page 8 of 18 Pages
--------------------- ---------------------
(f) Mr. Lipson is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The aggregate purchase price of the 479,500 Shares beneficially
owned by WILLC is $8,852,975.10, including brokerage commissions. The Shares
beneficially owned by WILLC were acquired with the working capital of each of
WIHP, WIIP and WIAP.
Item 4. Purpose of Transaction.
----------------------
The Reporting Persons purchased the Shares based on the Reporting
Persons' belief that the Shares, when purchased, were undervalued and
represented an attractive investment opportunity. Depending upon overall market
conditions, other investment opportunities available to the Reporting Persons,
and the availability of Shares at prices that would make the purchase of
additional Shares desirable, the Reporting Persons may endeavor to increase
their position in the Issuer through, among other things, the purchase of Shares
on the open market or in private transactions or otherwise, on such terms and at
such times as the Reporting Persons may deem advisable.
The Reporting Persons believe the current management and the Board
of Directors of the Issuer have not taken adequate measures to close the
discount to net asset value that the Issuer has historically maintained. On
September 14, 2005, the Reporting Persons and Karpus formed a "group" for the
purpose of soliciting proxies in opposition to the Issuer's proposals to approve
the new Management Agreement and Subadvisory Agreement for the Issuer and for
the purpose of voting against such proposals at a special meeting of
shareholders scheduled to be held on October 21, 2005 (the "Special Meeting").
No Reporting Person has any present plan or proposal which would
relate to or result in any of the matters set forth in subparagraphs (a) - (j)
of Item 4 of Schedule 13D except as set forth herein or such as would occur upon
completion of any of the actions discussed above. The Reporting Persons intend
to review their investment in the Issuer on a continuing basis and engage in
discussions with management and the Board of Directors of the Issuer concerning
the business, operations and future plans of the Issuer. Depending on various
factors including, without limitation, the Issuer's financial position and
investment strategy, the price levels of the Shares, conditions in the
securities markets and general economic and industry conditions, the Reporting
Persons may in the future take such actions with respect to its investment in
the Issuer as it deems appropriate including, without limitation, seeking Board
representation, making proposals to the Issuer concerning changes to the
capitalization, ownership structure or operations of the Issuer, purchasing
additional Shares, selling some or all of its Shares, engaging in short selling
of or any hedging or similar transaction with respect to the Shares or changing
its intention with respect to any and all matters referred to in Item 4.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) The aggregate percentage of Shares reported owned by each person
named herein is based upon 11,069,242 Shares outstanding, which is the total
number of Shares outstanding as of August 22, 2005, as reported in the Issuer's
--------------------- ---------------------
CUSIP No. 755881109 13D Page 9 of 18 Pages
--------------------- ---------------------
Definitive Proxy Statement filed with the Securities and Exchange Commission on
September 2, 2005.
As of the close of business on September 14, 2005, WIHP, WIIP and
WIAP beneficially owned 289,900, 165,000 and 24,600 Shares, respectively,
constituting 2.6%, 1.5% and less than 1%, respectively, of the Shares
outstanding. As the general partner or managing member, as the case may be, of
WIHP, WIIP and WIAP, WILLC may be deemed to beneficially own the 479,500 Shares
owned in the aggregate by WIHP, WIIP and WIAP, constituting approximately 4.3%
of the Shares outstanding. As the managing member of WILLC, Mr. Lipson may be
deemed to beneficially own the 479,500 Shares beneficially owned by WILLC,
constituting approximately 4.3% of the Shares outstanding.
(b) Each of WILLC and Mr. Lipson is deemed to have sole voting and
dispositive power over the Shares reported as beneficially owned by WIHP, WIIP
and WIAP by virtue of their respective positions as described in paragraph (a).
(c) Schedule A annexed hereto lists all transactions in the Shares
during the past sixty days by the Reporting Persons. Except where otherwise
noted, all of such transactions were effected in the open market.
(d) No person other than the Reporting Persons is known to have the
right to receive, or the power to direct the receipt of dividends from, or
proceeds from the sale of, the Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
------------------------------------
On September 14, 2005, the Reporting Persons and Karpus entered into
a Joint Filing and Solicitation Agreement in which, among other things, (a) the
parties agreed to file individually a statement on Schedule 13D, and any
necessary amendments thereto, with respect to the Shares of the Issuer to the
extent required under applicable securities laws reflecting the formation of a
group, (b) the parties agreed not to, directly or indirectly, sell, dispose of,
transfer or hypothecate any securities of the Issuer without the prior written
consent of each of the parties, (c) the parties agreed to form a group for the
purpose of soliciting proxies in opposition to the Issuer's proposals to approve
a new Management Agreement and Subadvisory Agreement for the Issuer at the
Special Meeting, and voting against and soliciting proxies against such
proposals, and (d) the Reporting Persons and Karpus agreed to share the expenses
incurred by the members of the group in soliciting proxies for the Special
Meeting pro rata based upon their respective percentage ownership of shares of
the Issuer as of the date of the Special Meeting.
Other than as described herein, there are no contracts,
arrangements, understandings or relationships among the Reporting Persons, or
between the Reporting Persons and any other person, with respect to the
securities of the Issuer.
--------------------- ---------------------
CUSIP No. 755881109 13D Page 10 of 18 Pages
--------------------- ---------------------
Item 7. Material to be Filed as Exhibits.
--------------------------------
1. Joint Filing and Solicitation Agreement by and among Western
Investment LLC, Arthur D. Lipson, Western Investment Hedged
Partners L.P., Western Investment Institutional Partners LLC
and Western Investment Activism Partners LLC and Karpus
Management, Inc., dated September 14, 2005.
--------------------- ---------------------
CUSIP No. 755881109 13D Page 11 of 18 Pages
--------------------- ---------------------
SIGNATURES
----------
After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: September 15, 2005 WESTERN INVESTMENT LLC
By: /s/ Arthur D. Lipson
-------------------------------------
Name: Arthur D. Lipson
Title: Sole Member
WESTERN INVESTMENT HEDGED PARTNERS L.P.
By: Western Investment LLC,
Its General Partner
By: /s/ Arthur D. Lipson
-------------------------------------
Name: Arthur D. Lipson
Title: Managing Member
WESTERN INVESTMENT INSTITUTIONAL PARTNERS
LLC
By: Western Investment LLC,
Its Managing Member
By: /s/ Arthur D. Lipson
-------------------------------------
Name: Arthur D. Lipson
Title: Managing Member
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
By: Western Investment LLC,
Its Managing Member
By: /s/ Arthur D. Lipson
-------------------------------------
Name: Arthur D. Lipson
Title: Managing Member
/s/ Arthur D. Lipson
--------------------------------------------
ARTHUR D. LIPSON
--------------------- ---------------------
CUSIP No. 755881109 13D Page 12 of 18 Pages
--------------------- ---------------------
SCHEDULE A
----------
Transactions in the Shares During the Past 60 Days
--------------------------------------------------
Shares of Common Stock Price Per Date of
Purchased Share($) Purchase
--------- -------- --------
WESTERN INVESTMENT HEDGED PARTNERS L.P.
---------------------------------------
800 18.6291 7/18/05
1,300 18.7437 7/25/05
5,900 18.8477 7/26/05
200 19.0485 7/28/05
2,100 19.2766 8/02/05
4,300 19.2536 8/03/05
6,300 18.3251 8/05/05
1,000 18.0145 8/08/05
4,000 17.7193 8/08/05
5,600 18.3143 8/17/05
3,500 18.1871 8/18/05
900 17.9200 8/19/05
7,100 18.0804 8/23/05
1,000 18.2900 8/24/05
14,300 18.4205 8/25/05
1,100 18.4736 8/26/05
4,500 18.5984 8/29/05
29,900 18.6036 8/30/05
2,000 18.6085 8/30/05
27,900 18.9285 8/31/05
13,800 19.1324 9/01/05
14,900 19.2691 9/02/05
17,300 19.4468 9/06/05
16,100 19.4530 9/07/05
7,200 19.4868 9/08/05
18,200 19.4973 9/09/05
24,700* 19.4300 9/13/05
--------------------- ---------------------
CUSIP No. 755881109 13D Page 13 of 18 Pages
--------------------- ---------------------
Shares of Common Stock Price Per Date of
Purchased Share($) Purchase
--------- -------- --------
14,700 19.4061 9/14/05
WESTERN INVESTMENT INSTITUTIONAL PARTNERS LLC
---------------------------------------------
800 18.6291 7/18/05
1,200 18.6985 7/19/05
1,000 18.6800 7/19/05
1,200 18.7437 7/25/05
5,900 18.8477 7/26/05
2,400 18.2310 7/29/05
1,000 19.2185 8/01/05
2,100 19.2766 8/02/05
4,200 19.2536 8/03/05
6,200 18.3251 8/05/05
5,000 18.0145 8/08/05
29,200 17.7182 8/08/05
3,900 17.7595 8/09/05
9,300 17.8998 8/10/05
14,100 17.9595 8/11/05
22,700 17.9710 8/11/05
7,400 18.0261 8/12/05
5,300 18.1387 8/15/05
4,600 18.2892 8/16/05
5,600 18.3143 8/17/05
3,400 18.1871 8/18/05
7,100 18.0804 8/23/05
14,200 18.4205 8/25/05
(24,700)* 19.4300 (9/13/05)
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
----------------------------------------
10,400 19.5285 9/12/05
14,200 19.4499 9/13/05
--------------------- ---------------------
CUSIP No. 755881109 13D Page 14 of 18 Pages
--------------------- ---------------------
WESTERN INVESTMENT LLC
----------------------
None
ARTHUR D. LIPSON
----------------
None
----------------------
* Transaction was a cross-trade between affiliates.
--------------------- ---------------------
CUSIP No. 755881109 13D Page 15 of 18 Pages
--------------------- ---------------------
EXHIBIT INDEX
-------------
Exhibit Page
------- ----
1. Joint Filing and Solicitation Agreement by and among 16 to 18
Western Investment LLC, Arthur D. Lipson, Western
Investment Hedged Partners L.P., Western Investment
Institutional Partners LLC and Western Investment Activism
Partners LLC and Karpus Management, Inc., dated September
14, 2005.
--------------------- ---------------------
CUSIP No. 755881109 13D Page 16 of 18 Pages
--------------------- ---------------------
JOINT FILING AND SOLICITATION AGREEMENT
WHEREAS, certain of the undersigned are stockholders, direct or
beneficial, of Real Estate Income Fund, Inc., a Maryland corporation (the
"Company");
WHEREAS, Karpus Management, Inc. ("Karpus") on the one hand, and
Western Investment LLC, Western Investment Hedged Partners L.P., Western
Investment Activism Partners LLC, Western Investment Institutional Partners LLC
and Arthur D. Lipson (collectively, "Western") wish to form a group for the
purpose of voting against and soliciting proxies against proposals to approve a
new management agreement and subadvisory agreement for the Company (the "Company
Proposals") to be submitted to a vote of the shareholders at a special meeting
of shareholders scheduled to be held on October 21, 2005 and any adjournments,
postponements, reschedulings or continuations thereof (the "Special Meeting")
and taking all other action necessary to achieve the foregoing.
NOW, IT IS AGREED, this 14th day of September 2005 by the parties
hereto:
1. In accordance with Rule 13d-1(k)(2) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), each of the undersigned
(collectively, the "Group") agrees to file individually a statement on Schedule
13D with respect to the securities of the Company to the extent required under
applicable securities laws reflecting the formation of a group, such individual
filings to be undertaken cooperatively so as to be consistent in form and
substance. Each of the undersigned further agrees to file any necessary
amendments to their respective filings on Schedule 13D and to cooperate with
each other in preparing such filings. Each member of the Group shall be
responsible for the accuracy and completeness of his/its own disclosure in
his/its respective filings and is not responsible for the accuracy and
completeness of the information concerning the other members, unless such member
knows or has reason to know that such information is inaccurate.
2. While this Agreement is in effect and up until the Special
Meeting, none of the undersigned shall be permitted to, directly or indirectly,
sell, dispose of, transfer or hypothecate any securities of the Company without
the prior written consent of each of the undersigned, however, nothing herein
contained shall limit the undersigned from purchasing additional securities of
the Company. Neither party shall withhold consent to the sale of securities if
such sale is precipitated by directions of a client of the selling party in
connection with the the termination of liquidation of all or part of an account.
3. So long as this Agreement is in effect, each of the undersigned
shall provide written notice to Kavinoky Cook LLP ("Kavinoky") and Olshan
Grundman Frome Rosenzweig & Wolosky LLP ("Olshan") of (a) any of their purchases
or sales of securities of the Company or (b) any securities of the Company over
which they acquire or dispose of beneficial ownership. Notice shall be given no
later than 24 hours after each such transaction.
4. Each of the undersigned agrees to form a group for the purpose of
voting against and soliciting proxies against the Company Proposals at the
Special Meeting and taking all other action necessary to achieve the foregoing.
--------------------- ---------------------
CUSIP No. 755881109 13D Page 17 of 18 Pages
--------------------- ---------------------
5. Karpus and Western agree to share the expenses incurred by the
members of the Group in soliciting proxies for the Special Meeting pro rata
based upon their respective percentage ownership of shares of the Fund as of the
date of the Special Meeting (or any Special Meeting held following an
adjournment). Notwithstanding the foregoing, Karpus and Western shall not be
required to reimburse any party for (i) out-of-pocket expenses (which shall
include items such as incidental mailing, telephone, travel and courier service)
incurred by a party in the aggregate in excess of $3,000 without Karpus' and
Western's prior written approval; (ii) the value of the time of any party; (iii)
legal fees incurred without Karpus' and Western's prior written approval; or
(iv) the costs of any counsel employed in connection with any pending or
threatened litigation without Karpus' and Western's prior written approval.
6. Each of the undersigned agrees that any SEC filing, press release
or shareholder communication proposed to be made or issued by the Group in
connection with the Group's activities set forth in Section 4 shall be first
approved by Kavinoky and Olshan, which approval shall not be unreasonably
withheld.
7. The relationship of the parties hereto shall be limited to
carrying on the business of the Group in accordance with the terms of this
Agreement. Such relationship shall be construed and deemed to be for the sole
and limited purpose of carrying on such business as described herein. Nothing
herein shall be construed to authorize any party to act as an agent for any
other party, or to create a joint venture or partnership, or to constitute an
indemnification. Nothing herein shall restrict any party's right to purchase
securities of the Company, as he/it deems appropriate, in his/its sole
discretion.
8. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute
but one and the same instrument, which may be sufficiently evidenced by one
counterpart.
9. In the event of any dispute arising out of the provisions of this
Agreement, the parties hereto consent and submit to the exclusive jurisdiction
of the Federal and State Courts in the State of New York.
10. Each of the undersigned parties hereby agrees that this
Agreement shall be filed as an exhibit to the Schedule 13D pursuant to Rule
13d-1(k)(1)(iii) under the Exchange Act.
11. Any party hereto may terminate his/its obligations under this
Agreement only after the earlier of the first business day following the
conclusion of the Special Meeting or any adjournments of the Special Meeting, on
24 hours' written notice to all other parties, with a copy by fax to Steven
Wolosky at Olshan, Fax No. (212) 451-2222 and Jonathan Gardner at Kavinoky, Fax
No. (716) 845-6474.
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CUSIP No. 755881109 13D Page 18 of 18 Pages
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
KARPUS MANAGEMENT, INC.
By: /s/ Sharon L. Thornton
-----------------------
Name: Sharon L. Thornton
Title: Director Investment Personnel,
Senior Analyst
WESTERN INVESTMENT LLC
By: /s/ Arthur D. Lipson
------------------------
Name: Arthur D. Lipson
Title: Sole Member
WESTERN INVESTMENT HEDGED PARTNERS L.P.
By: Western Investment LLC
its General Partner
By: /s/ Arthur D. Lipson
------------------------
Name: Arthur D. Lipson
Title: Managing Member
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
By: Western Investment LLC
its Managing Member
By: /s/ Arthur D. Lipson
------------------------
Name: Arthur D. Lipson
Title: Managing Member
WESTERN INVESTMENT INSTITUTIONAL PARTNERS
LLC
By: Western Investment LLC
its Managing Member
By: /s/ Arthur D. Lipson
------------------------
Name: Arthur D. Lipson
Title: Managing Member
/s/ Arthur D. Lipson
-----------------------------
ARTHUR D. LIPSON