Exhibit 23(d)(1)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT dated as of May 24, 2000, between Third
Avenue Trust (the "Trust"), a Delaware business trust, on behalf the Third
Avenue Real Estate Value Fund Series (the "Fund"), and EQSF Advisers, Inc. (the
"Adviser"), a New York corporation.
In consideration of the mutual promises and agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. IN GENERAL
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Fund with respect to the investment of the assets of
the Fund and to supervise and arrange the purchase and sale of assets held in
the investment portfolio of the Trust. The Adviser may delegate any or all of
its responsibilities to one or more sub-advisers or administrators, subject to
the approval of the Board of Trustees of the Trust. Such delegation shall not
relieve the Adviser of its duties and responsibilities hereunder.
2. DUTIES AND OBLIGATIONS OF THE ADVISER WITH RESPECT TO INVESTMENTS
OF ASSETS OF THE FUND
(a) Subject to the succeeding provisions of this paragraph and subject to
the direction and control of the Trust's Board of Trustees, the Adviser shall
(i) act as investment adviser for and supervise and manage the investment and
reinvestment of the Fund's assets and in connection therewith have complete
discretion in purchasing and selling securities and other assets for the Fund
and in voting, exercising consents and exercising all other rights appertaining
to such securities and other assets on behalf of the Fund; and (ii) arrange for
the purchase and sale of securities and other assets held in the investment
portfolio of the Fund. Nothing contained herein shall be construed to restrict
the Fund's right to hire its own employees or to contract separately with EQSF
Advisers, Inc. or others to provide administrative services to the Fund,
including but not limited to, the calculation of net asset value of the Fund's
shares.
(b) In the performance of its duties under this Agreement, the Adviser
shall at all times use all reasonable efforts to conform to, and act in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940, as amended (the "Act"), and of any rules or
regulations in force thereunder; (ii) any other applicable provisions of law;
(iii) the provisions of the Trust Instrument and By-Laws of the Trust, as such
documents are amended from time to time; (iv) the investment objective, policies
and restrictions applicable to the Fund as set forth in the Fund's Prospectus
(including its Statement of Additional Information) and (v) any policies and
determinations of the Board of Trustees of the Trust.
(c) The Adviser will seek to provide qualified personnel to fulfill its
duties hereunder and will bear all costs and expenses (including any overhead
and personnel costs) incurred in connection with its duties hereunder and shall
bear the costs of any salaries or trustees fees of any officers or trustees of
the Trust who are affiliated persons (as defined in the Act) of the Adviser.
Subject to the foregoing, the Fund shall be responsible for the payment of all
the Fund's other expenses, including (i) payment of the fees payable to the
Adviser under paragraph 4 hereof; (ii) organizational expenses; (iii) brokerage
fees and commissions; (iv) taxes; (v) interest charges on borrowing; (vi) the
cost of liability insurance or fidelity bond coverage for the Fund's officers
and employees, and trustees' and officers' errors and omissions insurance
coverage; (vii) legal, auditing, and accounting fees and expenses; (viii)
charges of the Fund's administrator, custodian, transfer agent and other service
providers; (ix) the Fund's pro rata portion of dues, fees and charges of any
trade association of which the Fund is a member; (x) the
expenses of printing, preparing and mailing proxies, stock certificates and
reports, including the Fund's prospectus and statements of additional
information, and notices to shareholders; (xi) filing fees for the registration
or qualification of the Fund and its shares under federal or state securities
laws; (xii) the fees and expenses involved in registering and maintaining
registration of the Fund's shares with the Securities and Exchange Commission;
(xiii) the expenses of holding shareholder meetings; (xiv) the compensation,
including fees, of any of the Trust's trustees, officers or employees who are
not affiliated persons of the Adviser; (xv) all expenses of computing the Fund's
net asset value per share, including any equipment or services obtained solely
for the purpose of pricing shares or valuing the Fund's investment portfolio;
(xvi) expenses of personnel performing shareholder servicing functions and all
other distribution expenses payable by the Fund; (xvii) expenses of redemption
of shares and (xviii) litigation and other extraordinary or non-recurring
expenses and other expenses properly payable by the Fund.
(d) The Adviser shall give the Fund the benefit of its best judgment and
effort in rendering services hereunder, but neither the Adviser nor any of its
officers, directors, employees, agents or controlling persons shall be liable
for any act or omission or for any loss sustained by the Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties
under this agreement, provided, however, that the foregoing shall not constitute
a waiver of any rights which the Fund may have which may not be waived under
applicable law.
(e) Nothing in this Agreement shall prevent the Adviser or any director,
officer, employee or other affiliate thereof from acting as investment adviser
for any other person, firm or corporation, or from engaging in any other lawful
activity, and shall not in any way limit or restrict the Adviser or any of its
directors, employees or agents from buying, selling or trading any securities
for its or their own accounts or for the accounts of others for whom it or they
may be acting.
3. PORTFOLIO TRANSACTIONS
In the course of the Adviser's execution of portfolio transactions for the
Fund, it is agreed that the Adviser shall employ securities brokers and dealers
which, in its judgment, will be able to satisfy the policy of the Fund to seek
the best execution of its portfolio transactions at reasonable expenses. For
purposes of this Agreement, "best execution" shall mean prompt, efficient and
reliable execution at the most favorable price obtainable. Under such conditions
as may be specified by the Trust's Board of Trustees in the interest of its
shareholders and to ensure compliance with applicable law and regulations, the
Adviser may (a) place orders for the purchase or sale of the Fund's portfolio
securities with its affiliates, X.X. Xxxxxxx, Inc. and X.X. Xxxxxxx Senior Debt
Corp.; (b) pay commissions to brokers other than its affiliates which are higher
than might be charged by another qualified broker or obtain brokerage and/or
research services considered by the Adviser to be useful or desirable in the
performance of its duties hereunder and for the investment management of other
advisory accounts over which it or its affiliates exercise investment
discretion; and (c) consider sales by brokers (other than its affiliated
distributor) of shares of the Fund and any other mutual fund for which it or its
affiliates act as investment adviser, as a factor in its selection of brokers
and dealers for the Fund's portfolio transactions.
4. COMPENSATION OF THE ADVISER
(a) The Fund agrees to pay to the Adviser out of the Fund's assets and the
Adviser agrees to accept as full compensation for all services rendered by or
through the Adviser a fee computed daily and payable monthly in arrears an
amount equal to 1/12 of .90% of the Fund's daily average net assets for such
month. For any period less than a month during which this Agreement is in
effect, the fee shall be prorated according to the proportion which such period
bears to a full month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the net assets of the Fund shall be
calculated pursuant to the procedures adopted by resolutions of the Trustees of
the Trust for calculating the net asset value of the Fund's shares.
5. INDEMNITY
(a) The Fund hereby agrees to indemnify the Adviser and each of the
Adviser's directors, officers, employees, and agents (including any individual
who serves at the Adviser's request as director, officer, partner, trustee or
the like of another corporation) and controlling persons (each such person being
an "indemnitee") against any liabilities and expenses, including amounts paid in
satisfaction of judgements, in compromise or as fines and penalties, and counsel
fees (all as provided in accordance with applicable corporate law) reasonably
incurred by such indemnitee in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body which he may be or may have been involved
as a party or otherwise or with which he may have been threatened, while acting
in any capacity set forth above in this paragraph or thereafter by reason of his
having acted in any such capacity, except with respect to any matter as to which
he shall have been adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Fund and furthermore, in
the case of any criminal proceeding, so long as he had no reasonable cause to
believe that the conduct was unlawful, provided, however, that (1) no indemnitee
shall be indemnified hereunder against any liability to the Fund or its
shareholders or any expense of such indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence (iv) reckless disregard of
the duties involved in the conduct of his position (the conduct referred to in
such clauses (i) through (iv) being sometimes referred to herein as "disabling
conduct"), (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, pursuant to a consent decree or otherwise, no
indemnification either for said payment or for any other expenses shall be
provided unless there has been a determination that such settlement or
compromise is in the best interests of the Fund and that such indemnitee appears
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Fund and did not involve disabling conduct by such
indemnitee and (3) with respect to any action, suit or other proceeding
voluntarily prosecuted by any indemnitee as plaintiff, indemnification shall be
mandatory only if the prosecution of such action, suit or other proceeding by
such indemnitee was authorized by a majority of the full Board of the Trust.
Notwithstanding the foregoing, the Fund shall not be obligated to provide such
indemnification (i) to the extent such provision would waive any right which the
Fund cannot lawfully waive or (ii) with respect to any obligation, liability or
expense of any other series of shares of the Trust.
(b) The Fund shall make advance payments in connection with the expenses of
defending any action with respect to which indemnification might be sought
hereunder if the Fund receives a written affirmation of the indemnitee's good
faith belief that the standard of conduct necessary for indemnification has been
met and a written undertaking to reimburse the Fund unless it is subsequently
determined that he is entitled to such indemnification and if the trustees of
the Trust determine that the facts then known to them would not preclude
indemnification. In addition, at least one of the following conditions must be
met: (A) the indemnitee shall provide a security for his undertaking, (B) the
Fund shall be insured against losses arising by reason of any lawful advances,
or (C) a majority of a quorum of trustees of the Trust who are neither
"interested persons" of the Trust (as defined in Section 2(a)(19) of the Act)
nor parties to the proceeding ("Disinterested Non-Party Trustees") or an
independent legal
counsel in a written opinion, shall determine based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is reason
to believe that the indemnitee ultimately will be found entitled to
indemnification.
(c) All determinations with respect to indemnification hereunder shall be
made (1) by a final decision on the merits by a court or other body before whom
the proceeding was brought that such indemnitee is not liable by reason of
disabling conduct or, (2) in the absence of such a decision, by (i) a majority
vote of a quorum of the Disinterested Non-Party Trustees of the Trust, or (ii)
if such a quorum is not obtainable or even, if obtainable, if a majority vote of
such quorum so directs, independent legal counsel in a written opinion.
The rights accruing to any indemnitee under these provisions shall not
exclude any other right to which he may be lawfully entitled.
6. DURATION AND TERMINATION
This Agreement shall become effective upon the date hereof and shall
continue in effect for a period of two years and thereafter from year to year,
but only so long as such continuation is specifically approved at least annually
in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time without penalty
upon giving the Fund sixty days written notice (which may be waived by the Fund)
and may be terminated by the Fund at any time without penalty upon giving the
Adviser sixty days notice (which notice may be waived by the Adviser), provided
that such termination by the Fund shall be directed or approved by the vote of a
majority of the Trustees of the Trust in office at the time or by the vote of
the holders of a "majority of the voting securities" (as defined in the Act) of
the Fund at the time outstanding and entitled to vote. This Agreement shall
terminate automatically in the event of its assignment (as "assignment" is
defined in the Act and the rules thereunder).
It is understood and hereby agreed that the name "Third Avenue" and any
associated logo and mask are the property of the Adviser for copyright and other
purposes. The Fund further agrees that the words "Third Avenue" may freely be
used by the Adviser for other investment companies, entities or products. The
Fund further agrees that, in the event that the Adviser shall cease to act as
investment adviser to the Fund, the Fund shall promptly take all necessary and
appropriate action to change its name to names which do not include the words
"Third Avenue"; provided, however, that the Fund may continue to use the words
"Third Avenue" if the Adviser consents in writing to such use.
7. NOTICES
Any notice under this Agreement shall be in writing to the other party at
such address as the other party may designate from time to time for the receipt
of such notice and shall be deemed to be received on the earlier of the date
actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of New York for contracts to be performed entirely therein and in accordance
with the applicable provisions of the Act.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by their duly authorized officers, all as of the day and the year
first above written.
Third Avenue Trust, for the
Third Avenue Value Fund Series
By_____________________________
Name:
Title:
EQSF ADVISERS, INC.
By:___________________________
Name:
Title:
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT dated as of May 24, 2000, between Third
Avenue Trust (the "Trust"), a Delaware business trust, on behalf the Third
Avenue Small Cap Value Fund Series (the "Fund"), and EQSF Advisers, Inc. (the
"Adviser"), a New York corporation.
In consideration of the mutual promises and agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. IN GENERAL
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Fund with respect to the investment of the assets of
the Fund and to supervise and arrange the purchase and sale of assets held in
the investment portfolio of the Trust. The Adviser may delegate any or all of
its responsibilities to one or more sub-advisers or administrators, subject to
the approval of the Board of Trustees of the Trust. Such delegation shall not
relieve the Adviser of its duties and responsibilities hereunder.
2. DUTIES AND OBLIGATIONS OF THE ADVISER WITH RESPECT TO INVESTMENTS
OF ASSETS OF THE FUND
(a) Subject to the succeeding provisions of this paragraph and subject to
the direction and control of the Trust's Board of Trustees, the Adviser shall
(i) act as investment adviser for and supervise and manage the investment and
reinvestment of the Fund's assets and in connection therewith have complete
discretion in purchasing and selling securities and other assets for the Fund
and in voting, exercising consents and exercising all other rights appertaining
to such securities and other assets on behalf of the Fund; and (ii) arrange for
the purchase and sale of securities and other assets held in the investment
portfolio of the Fund. Nothing contained herein shall be construed to restrict
the Fund's right to hire its own employees or to contract separately with EQSF
Advisers, Inc. or others to provide administrative services to the Fund,
including but not limited to, the calculation of net asset value of the Fund's
shares.
(b) In the performance of its duties under this Agreement, the Adviser
shall at all times use all reasonable efforts to conform to, and act in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940, as amended (the "Act"), and of any rules or
regulations in force thereunder; (ii) any other applicable provisions of law;
(iii) the provisions of the Trust Instrument and By-Laws of the Trust, as such
documents are amended from time to time; (iv) the investment objective, policies
and restrictions applicable to the Fund as set forth in the Fund's Prospectus
(including its Statement of Additional Information) and (v) any policies and
determinations of the Board of Trustees of the Trust.
(c) The Adviser will seek to provide qualified personnel to fulfill its
duties hereunder and will bear all costs and expenses (including any overhead
and personnel costs) incurred in connection with its duties hereunder and shall
bear the costs of any salaries or trustees fees of any officers or trustees of
the Trust who are affiliated persons (as defined in the Act) of the Adviser.
Subject to the foregoing, the Fund shall be responsible for the payment of all
the Fund's other expenses, including (i) payment of the fees payable to the
Adviser under paragraph 4 hereof; (ii) organizational expenses; (iii) brokerage
fees and commissions; (iv) taxes; (v) interest charges on borrowing; (vi) the
cost of liability insurance or fidelity bond coverage for the Fund's officers
and employees, and trustees' and officers' errors and omissions insurance
coverage; (vii) legal, auditing, and accounting fees and expenses; (viii)
charges of the Fund's administrator, custodian, transfer agent and other service
providers; (ix) the Fund's pro rata portion of dues, fees and charges of any
trade association of which the Fund is a member; (x) the
expenses of printing, preparing and mailing proxies, stock certificates and
reports, including the Fund's prospectus and statements of additional
information, and notices to shareholders; (xi) filing fees for the registration
or qualification of the Fund and its shares under federal or state securities
laws; (xii) the fees and expenses involved in registering and maintaining
registration of the Fund's shares with the Securities and Exchange Commission;
(xiii) the expenses of holding shareholder meetings; (xiv) the compensation,
including fees, of any of the Trust's trustees, officers or employees who are
not affiliated persons of the Adviser; (xv) all expenses of computing the Fund's
net asset value per share, including any equipment or services obtained solely
for the purpose of pricing shares or valuing the Fund's investment portfolio;
(xvi) expenses of personnel performing shareholder servicing functions and all
other distribution expenses payable by the Fund; (xvii) expenses of redemption
of shares and (xviii) litigation and other extraordinary or non-recurring
expenses and other expenses properly payable by the Fund.
(d) The Adviser shall give the Fund the benefit of its best judgment and
effort in rendering services hereunder, but neither the Adviser nor any of its
officers, directors, employees, agents or controlling persons shall be liable
for any act or omission or for any loss sustained by the Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties
under this agreement, provided, however, that the foregoing shall not constitute
a waiver of any rights which the Fund may have which may not be waived under
applicable law.
(e) Nothing in this Agreement shall prevent the Adviser or any director,
officer, employee or other affiliate thereof from acting as investment adviser
for any other person, firm or corporation, or from engaging in any other lawful
activity, and shall not in any way limit or restrict the Adviser or any of its
directors, employees or agents from buying, selling or trading any securities
for its or their own accounts or for the accounts of others for whom it or they
may be acting.
3. PORTFOLIO TRANSACTIONS
In the course of the Adviser's execution of portfolio transactions for the
Fund, it is agreed that the Adviser shall employ securities brokers and dealers
which, in its judgment, will be able to satisfy the policy of the Fund to seek
the best execution of its portfolio transactions at reasonable expenses. For
purposes of this Agreement, "best execution" shall mean prompt, efficient and
reliable execution at the most favorable price obtainable. Under such conditions
as may be specified by the Trust's Board of Trustees in the interest of its
shareholders and to ensure compliance with applicable law and regulations, the
Adviser may (a) place orders for the purchase or sale of the Fund's portfolio
securities with its affiliates, X.X. Xxxxxxx, Inc. and X.X. Xxxxxxx Senior Debt
Corp.; (b) pay commissions to brokers other than its affiliates which are higher
than might be charged by another qualified broker or obtain brokerage and/or
research services considered by the Adviser to be useful or desirable in the
performance of its duties hereunder and for the investment management of other
advisory accounts over which it or its affiliates exercise investment
discretion; and (c) consider sales by brokers (other than its affiliated
distributor) of shares of the Fund and any other mutual fund for which it or its
affiliates act as investment adviser, as a factor in its selection of brokers
and dealers for the Fund's portfolio transactions.
4. COMPENSATION OF THE ADVISER
(a) The Fund agrees to pay to the Adviser out of the Fund's assets and the
Adviser agrees to accept as full compensation for all services rendered by or
through the Adviser a fee computed daily and payable monthly in arrears an
amount equal to 1/12 of .90% of the Fund's daily average net assets for such
month. For any period less than a month during which this Agreement is in
effect, the fee shall be prorated according to the proportion which such period
bears to a full month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the net assets of the Fund shall be
calculated pursuant to the procedures adopted by resolutions of the Trustees of
the Trust for calculating the net asset value of the Fund's shares.
5. INDEMNITY
(a) The Fund hereby agrees to indemnify the Adviser and each of the
Adviser's directors, officers, employees, and agents (including any individual
who serves at the Adviser's request as director, officer, partner, trustee or
the like of another corporation) and controlling persons (each such person being
an "indemnitee") against any liabilities and expenses, including amounts paid in
satisfaction of judgements, in compromise or as fines and penalties, and counsel
fees (all as provided in accordance with applicable corporate law) reasonably
incurred by such indemnitee in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body which he may be or may have been involved
as a party or otherwise or with which he may have been threatened, while acting
in any capacity set forth above in this paragraph or thereafter by reason of his
having acted in any such capacity, except with respect to any matter as to which
he shall have been adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Fund and furthermore, in
the case of any criminal proceeding, so long as he had no reasonable cause to
believe that the conduct was unlawful, provided, however, that (1) no indemnitee
shall be indemnified hereunder against any liability to the Fund or its
shareholders or any expense of such indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence (iv) reckless disregard of
the duties involved in the conduct of his position (the conduct referred to in
such clauses (i) through (iv) being sometimes referred to herein as "disabling
conduct"), (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, pursuant to a consent decree or otherwise, no
indemnification either for said payment or for any other expenses shall be
provided unless there has been a determination that such settlement or
compromise is in the best interests of the Fund and that such indemnitee appears
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Fund and did not involve disabling conduct by such
indemnitee and (3) with respect to any action, suit or other proceeding
voluntarily prosecuted by any indemnitee as plaintiff, indemnification shall be
mandatory only if the prosecution of such action, suit or other proceeding by
such indemnitee was authorized by a majority of the full Board of the Trust.
Notwithstanding the foregoing, the Fund shall not be obligated to provide such
indemnification (i) to the extent such provision would waive any right which the
Fund cannot lawfully waive or (ii) with respect to any obligation, liability or
expense of any other series of shares of the Trust.
(b) The Fund shall make advance payments in connection with the expenses of
defending any action with respect to which indemnification might be sought
hereunder if the Fund receives a written affirmation of the indemnitee's good
faith belief that the standard of conduct necessary for indemnification has been
met and a written undertaking to reimburse the Fund unless it is subsequently
determined that he is entitled to such indemnification and if the trustees of
the Trust determine that the facts then known to them would not preclude
indemnification. In addition, at least one of the following conditions must be
met: (A) the indemnitee shall provide a security for his undertaking, (B) the
Fund shall be insured against losses arising by reason of any lawful advances,
or (C) a majority of a quorum of trustees of the Trust who are neither
"interested persons" of the Trust (as defined in Section 2(a)(19) of the Act)
nor parties to the proceeding ("Disinterested Non-Party Trustees") or an
independent legal
counsel in a written opinion, shall determine based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is reason
to believe that the indemnitee ultimately will be found entitled to
indemnification.
(c) All determinations with respect to indemnification hereunder shall be
made (1) by a final decision on the merits by a court or other body before whom
the proceeding was brought that such indemnitee is not liable by reason of
disabling conduct or, (2) in the absence of such a decision, by (i) a majority
vote of a quorum of the Disinterested Non-Party Trustees of the Trust, or (ii)
if such a quorum is not obtainable or even, if obtainable, if a majority vote of
such quorum so directs, independent legal counsel in a written opinion.
The rights accruing to any indemnitee under these provisions shall not
exclude any other right to which he may be lawfully entitled.
6. DURATION AND TERMINATION
This Agreement shall become effective upon the date hereof and shall
continue in effect for a period of two years and thereafter from year to year,
but only so long as such continuation is specifically approved at least annually
in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time without penalty
upon giving the Fund sixty days written notice (which may be waived by the Fund)
and may be terminated by the Fund at any time without penalty upon giving the
Adviser sixty days notice (which notice may be waived by the Adviser), provided
that such termination by the Fund shall be directed or approved by the vote of a
majority of the Trustees of the Trust in office at the time or by the vote of
the holders of a "majority of the voting securities" (as defined in the Act) of
the Fund at the time outstanding and entitled to vote. This Agreement shall
terminate automatically in the event of its assignment (as "assignment" is
defined in the Act and the rules thereunder).
It is understood and hereby agreed that the name "Third Avenue" and any
associated logo and mask are the property of the Adviser for copyright and other
purposes. The Fund further agrees that the words "Third Avenue" may freely be
used by the Adviser for other investment companies, entities or products. The
Fund further agrees that, in the event that the Adviser shall cease to act as
investment adviser to the Fund, the Fund shall promptly take all necessary and
appropriate action to change its name to names which do not include the words
"Third Avenue"; provided, however, that the Fund may continue to use the words
"Third Avenue" if the Adviser consents in writing to such use.
7. NOTICES
Any notice under this Agreement shall be in writing to the other party at
such address as the other party may designate from time to time for the receipt
of such notice and shall be deemed to be received on the earlier of the date
actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of New York for contracts to be performed entirely therein and in accordance
with the applicable provisions of the Act.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by their duly authorized officers, all as of the day and the year
first above written.
Third Avenue Trust, for the
Third Avenue Small Cap Value Fund Series
By_____________________________
Name:
Title:
EQSF ADVISERS, INC.
By:___________________________
Name:
Title:
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT dated as of May 24, 2000, between Third
Avenue Trust (the "Trust"), a Delaware business trust, on behalf the Third
Avenue Value Fund Series (the "Fund"), and EQSF Advisers, Inc. (the "Adviser"),
a New York corporation.
In consideration of the mutual promises and agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. IN GENERAL
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Fund with respect to the investment of the assets of
the Fund and to supervise and arrange the purchase and sale of assets held in
the investment portfolio of the Trust. The Adviser may delegate any or all of
its responsibilities to one or more sub-advisers or administrators, subject to
the approval of the Board of Trustees of the Trust. Such delegation shall not
relieve the Adviser of its duties and responsibilities hereunder.
2. DUTIES AND OBLIGATIONS OF THE ADVISER WITH RESPECT TO INVESTMENTS OF
ASSETS OF THE FUND
(a) Subject to the succeeding provisions of this paragraph and subject to
the direction and control of the Trust's Board of Trustees, the Adviser shall
(i) act as investment adviser for and supervise and manage the investment and
reinvestment of the Fund's assets and in connection therewith have complete
discretion in purchasing and selling securities and other assets for the Fund
and in voting, exercising consents and exercising all other rights appertaining
to such securities and other assets on behalf of the Fund; and (ii) arrange for
the purchase and sale of securities and other assets held in the investment
portfolio of the Fund. Nothing contained herein shall be construed to restrict
the Fund's right to hire its own employees or to contract separately with EQSF
Advisers, Inc. or others to provide administrative services to the Fund,
including but not limited to, the calculation of net asset value of the Fund's
shares.
(b) In the performance of its duties under this Agreement, the Adviser
shall at all times use all reasonable efforts to conform to, and act in
accordance with, any requirements imposed by (i) the provisions of the
Investment Company Act of 1940, as amended (the "Act"), and of any rules or
regulations in force thereunder; (ii) any other applicable provisions of law;
(iii) the provisions of the Trust Instrument and By-Laws of the Trust, as such
documents are amended from time to time; (iv) the investment objective, policies
and restrictions applicable to the Fund as set forth in the Fund's Prospectus
(including its Statement of Additional Information) and (v) any policies and
determinations of the Board of Trustees of the Trust.
(c) The Adviser will seek to provide qualified personnel to fulfill its
duties hereunder and will bear all costs and expenses (including any overhead
and personnel costs) incurred in connection with its duties hereunder and shall
bear the costs of any salaries or trustees fees of any officers or trustees of
the Trust who are affiliated persons (as defined in the Act) of the Adviser.
Subject to the foregoing, the Fund shall be responsible for the payment of all
the Fund's other expenses, including (i) payment of the fees payable to the
Adviser under paragraph 4 hereof; (ii) organizational expenses; (iii) brokerage
fees and commissions; (iv) taxes; (v) interest charges on borrowing; (vi) the
cost of liability insurance or fidelity bond coverage for the Fund's officers
and employees, and trustees' and officers' errors and omissions insurance
coverage; (vii) legal, auditing, and accounting fees and expenses; (viii)
charges of the Fund's administrator, custodian, transfer agent and other service
providers; (ix) the Fund's pro rata portion of dues, fees and charges of any
trade association of which the Fund is a member; (x) the
expenses of printing, preparing and mailing proxies, stock certificates and
reports, including the Fund's prospectus and statements of additional
information, and notices to shareholders; (xi) filing fees for the registration
or qualification of the Fund and its shares under federal or state securities
laws; (xii) the fees and expenses involved in registering and maintaining
registration of the Fund's shares with the Securities and Exchange Commission;
(xiii) the expenses of holding shareholder meetings; (xiv) the compensation,
including fees, of any of the Trust's trustees, officers or employees who are
not affiliated persons of the Adviser; (xv) all expenses of computing the Fund's
net asset value per share, including any equipment or services obtained solely
for the purpose of pricing shares or valuing the Fund's investment portfolio;
(xvi) expenses of personnel performing shareholder servicing functions and all
other distribution expenses payable by the Fund; (xvii) expenses of redemption
of shares and (xviii) litigation and other extraordinary or non-recurring
expenses and other expenses properly payable by the Fund.
(d) The Adviser shall give the Fund the benefit of its best judgment and
effort in rendering services hereunder, but neither the Adviser nor any of its
officers, directors, employees, agents or controlling persons shall be liable
for any act or omission or for any loss sustained by the Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties
under this agreement, provided, however, that the foregoing shall not constitute
a waiver of any rights which the Fund may have which may not be waived under
applicable law.
(e) Nothing in this Agreement shall prevent the Adviser or any director,
officer, employee or other affiliate thereof from acting as investment adviser
for any other person, firm or corporation, or from engaging in any other lawful
activity, and shall not in any way limit or restrict the Adviser or any of its
directors, employees or agents from buying, selling or trading any securities
for its or their own accounts or for the accounts of others for whom it or they
may be acting.
3. PORTFOLIO TRANSACTIONS
In the course of the Adviser's execution of portfolio transactions for the
Fund, it is agreed that the Adviser shall employ securities brokers and dealers
which, in its judgment, will be able to satisfy the policy of the Fund to seek
the best execution of its portfolio transactions at reasonable expenses. For
purposes of this Agreement, "best execution" shall mean prompt, efficient and
reliable execution at the most favorable price obtainable. Under such conditions
as may be specified by the Trust's Board of Trustees in the interest of its
shareholders and to ensure compliance with applicable law and regulations, the
Adviser may (a) place orders for the purchase or sale of the Fund's portfolio
securities with its affiliates, X.X. Xxxxxxx, Inc. and X.X. Xxxxxxx Senior Debt
Corp.; (b) pay commissions to brokers other than its affiliates which are higher
than might be charged by another qualified broker or obtain brokerage and/or
research services considered by the Adviser to be useful or desirable in the
performance of its duties hereunder and for the investment management of other
advisory accounts over which it or its affiliates exercise investment
discretion; and (c) consider sales by brokers (other than its affiliated
distributor) of shares of the Fund and any other mutual fund for which it or its
affiliates act as investment adviser, as a factor in its selection of brokers
and dealers for the Fund's portfolio transactions.
4. COMPENSATION OF THE ADVISER
(a) The Fund agrees to pay to the Adviser out of the Fund's assets and the
Adviser agrees to accept as full compensation for all services rendered by or
through the Adviser a fee computed daily and payable monthly in arrears an
amount equal to 1/12 of .90% of the Fund's daily average net assets for such
month. For any period less than a month during which this Agreement is in
effect, the fee shall be prorated according to the proportion which such period
bears to a full month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the net assets of the Fund shall be
calculated pursuant to the procedures adopted by resolutions of the Trustees of
the Trust for calculating the net asset value of the Fund's shares.
5. INDEMNITY
(a) The Fund hereby agrees to indemnify the Adviser and each of the
Adviser's directors, officers, employees, and agents (including any individual
who serves at the Adviser's request as director, officer, partner, trustee or
the like of another corporation) and controlling persons (each such person being
an "indemnitee") against any liabilities and expenses, including amounts paid in
satisfaction of judgements, in compromise or as fines and penalties, and counsel
fees (all as provided in accordance with applicable corporate law) reasonably
incurred by such indemnitee in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body which he may be or may have been involved
as a party or otherwise or with which he may have been threatened, while acting
in any capacity set forth above in this paragraph or thereafter by reason of his
having acted in any such capacity, except with respect to any matter as to which
he shall have been adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Fund and furthermore, in
the case of any criminal proceeding, so long as he had no reasonable cause to
believe that the conduct was unlawful, provided, however, that (1) no indemnitee
shall be indemnified hereunder against any liability to the Fund or its
shareholders or any expense of such indemnitee arising by reason of (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence (iv) reckless disregard of
the duties involved in the conduct of his position (the conduct referred to in
such clauses (i) through (iv) being sometimes referred to herein as "disabling
conduct"), (2) as to any matter disposed of by settlement or a compromise
payment by such indemnitee, pursuant to a consent decree or otherwise, no
indemnification either for said payment or for any other expenses shall be
provided unless there has been a determination that such settlement or
compromise is in the best interests of the Fund and that such indemnitee appears
to have acted in good faith in the reasonable belief that his action was in the
best interest of the Fund and did not involve disabling conduct by such
indemnitee and (3) with respect to any action, suit or other proceeding
voluntarily prosecuted by any indemnitee as plaintiff, indemnification shall be
mandatory only if the prosecution of such action, suit or other proceeding by
such indemnitee was authorized by a majority of the full Board of the Trust.
Notwithstanding the foregoing, the Fund shall not be obligated to provide such
indemnification (i) to the extent such provision would waive any right which the
Fund cannot lawfully waive or (ii) with respect to any obligation, liability or
expense of any other series of shares of the Trust.
(b) The Fund shall make advance payments in connection with the expenses of
defending any action with respect to which indemnification might be sought
hereunder if the Fund receives a written affirmation of the indemnitee's good
faith belief that the standard of conduct necessary for indemnification has been
met and a written undertaking to reimburse the Fund unless it is subsequently
determined that he is entitled to such indemnification and if the trustees of
the Trust determine that the facts then known to them would not preclude
indemnification. In addition, at least one of the following conditions must be
met: (A) the indemnitee shall provide a security for his undertaking, (B) the
Fund shall be insured against losses arising by reason of any lawful advances,
or (C) a majority of a quorum of trustees of the Trust who are neither
"interested persons" of the Trust (as defined in Section 2(a)(19) of the Act)
nor parties to the proceeding ("Disinterested Non-Party Trustees") or an
independent legal
counsel in a written opinion, shall determine based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is reason
to believe that the indemnitee ultimately will be found entitled to
indemnification.
(c) All determinations with respect to indemnification hereunder shall be
made (1) by a final decision on the merits by a court or other body before whom
the proceeding was brought that such indemnitee is not liable by reason of
disabling conduct or, (2) in the absence of such a decision, by (i) a majority
vote of a quorum of the Disinterested Non-Party Trustees of the Trust, or (ii)
if such a quorum is not obtainable or even, if obtainable, if a majority vote of
such quorum so directs, independent legal counsel in a written opinion.
The rights accruing to any indemnitee under these provisions shall not
exclude any other right to which he may be lawfully entitled.
6. DURATION AND TERMINATION
This Agreement shall become effective upon the date hereof and shall
continue in effect for a period of two years and thereafter from year to year,
but only so long as such continuation is specifically approved at least annually
in accordance with the requirements of the Act.
This Agreement may be terminated by the Adviser at any time without penalty
upon giving the Fund sixty days written notice (which may be waived by the Fund)
and may be terminated by the Fund at any time without penalty upon giving the
Adviser sixty days notice (which notice may be waived by the Adviser), provided
that such termination by the Fund shall be directed or approved by the vote of a
majority of the Trustees of the Trust in office at the time or by the vote of
the holders of a "majority of the voting securities" (as defined in the Act) of
the Fund at the time outstanding and entitled to vote. This Agreement shall
terminate automatically in the event of its assignment (as "assignment" is
defined in the Act and the rules thereunder).
It is understood and hereby agreed that the name "Third Avenue" and any
associated logo and mask are the property of the Adviser for copyright and other
purposes. The Fund further agrees that the words "Third Avenue" may freely be
used by the Adviser for other investment companies, entities or products. The
Fund further agrees that, in the event that the Adviser shall cease to act as
investment adviser to the Fund, the Fund shall promptly take all necessary and
appropriate action to change its name to names which do not include the words
"Third Avenue"; provided, however, that the Fund may continue to use the words
"Third Avenue" if the Adviser consents in writing to such use.
7. NOTICES
Any notice under this Agreement shall be in writing to the other party at
such address as the other party may designate from time to time for the receipt
of such notice and shall be deemed to be received on the earlier of the date
actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of New York for contracts to be performed entirely therein and in accordance
with the applicable provisions of the Act.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.
Third Avenue Trust, for the
Third Avenue Real Estate Value Fund Series
By_____________________________
Name:
Title:
EQSF ADVISERS, INC.
By:___________________________
Name:
Title:
