FORM OF
INVESTMENT ADVISORY AGREEMENT
FORM OF
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this __th day of ____, 1998 by and between the
E.I.I. REALTY SECURITIES TRUST, a Delaware business trust (the "Trust"), on
behalf of the E.I.I. REALTY SECURITIES FUND (the "Fund"), and E.I.I. REALTY
SECURITIES, INC., a Delaware corporation (the "Investment Adviser");
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, non-diversified
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations
promulgated thereunder; and
WHEREAS, the Investment Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Investment Advisers
Act"), and engages in the business of acting as an investment adviser; and
WHEREAS, the Trust and the Investment Adviser desire to enter into an
agreement to provide for the management of the assets of the Fund on the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Management. The Investment Adviser shall act as investment adviser
for the Fund and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising the Fund's
assets, subject at all times to the policies and control of the Trust's Board of
Trustees. The Investment Adviser shall give the Fund the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser.
2. Duties of Investment Advisor. In carrying out its obligation under
paragraph 1 hereof, the Investment Adviser shall:
(a) provide the Board of Trustees of the Trust on a regular basis
with financial reports and analyses on the Fund's operations and the operations
of comparable investment companies;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or the Fund, and whether
concerning the individual issuers whose securities are included in the Fund or
the activities in which they engage, or with respect to securities which the
Investment Adviser considers desirable for inclusion in the Fund;
(c) determine what issuers and securities shall be represented in
the Fund's portfolio and regularly report them to the Board of Trustees of the
Trust;
(d) formulate and implement continuing programs for the purchases
and sales of the securities of such issuers and regularly report thereon to the
Board of Trustees of the Trust; and
(e) take, on behalf of the Fund, all actions which appear to the
Fund necessary to carry into effect such purchase and sale programs as
aforesaid, including the placing of orders for the purchase and sale of
portfolio securities.
3. Broker-Dealer Relationships. The Investment Adviser is responsible
for decisions to buy and sell securities for the Fund, broker-dealer selection,
and negotiation of brokerage commission rates. The Investment Adviser's primary
consideration in effecting a security transaction will be execution at a price
that is reasonable and fair compared to the commission, fee or other
remuneration received or to be received by other brokers in connection with
comparable transactions, including similar securities being purchased or sold on
a securities exchange during a comparable period of time.
In selecting abroker-dealer to execute each particular transaction, the
Investment Adviser will take the following into consideration: the best net
price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to the Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies and procedures as the Board
of Trustees may determine, the Investment Adviser shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker or
dealer that provides brokerage and research services to the Investment Adviser
for the Fund's use an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Investment Adviser
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Investment Adviser's overall responsibilities with respect to the Fund. The
Investment Adviser is further authorized to allocate the orders placed by it on
behalf of the Fund to such brokers and dealers who also provide research or
statistical material, or other services to the Fund or the Investment Adviser
for the Fund's use. Such allocation shall be in such amounts and proportions as
the Investment Adviser shall determine and the Investment Adviser will report on
said allocations regularly to the Board of Trustees of the Trust indicating the
brokers to whom such allocations have been made and the basis therefor.
4. Control by Board of Trustees. Any investment program undertaken by
the Investment Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Investment Adviser on behalf of the Fund pursuant
thereto, shall at all times be subject to any directives of the Board of
Trustees of the Trust.
-2-
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Investment Adviser shall at all times
conform to:
(a) all applicable provisions of the Investment Company Act and
the Investment Advisers Act and any rules and regulations adopted thereunder as
amended; and
(b) the provisions of the Registration Statements of the Fund
under the Securities Act of 1933, as amended, and the Investment Company Act;
and
(c)the provisions of the Agreement and Declaration of Trust of the
Trust, as amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e)any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Fund shall be allocable
between the Fund and the Investment Adviser as follows:
(a)The Investment Adviser shall bear the expenses connected with
carrying out its obligations under this Agreement.
(b) The Investment Adviser shall further maintain, at its expense
and without cost to the Fund, a trading function in order to carry out its
obligations under subparagraph (e) of paragraph 2 hereof to place orders for the
purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be construed to
require the Investment Adviser to bear:
(i) any of the costs (including applicable office space,
facilities and equipment) of the services of a principal financial
officer of the Fund whose normal duties consist of maintaining the
financial accounts and books and records of the Fund; including the
reviewing of calculations of net asset value and preparing tax
returns; or
(ii) any of the costs (including applicable office space,
facilities and equipment) of the services of any of the personnel
operating under the direction of such principal financial officer.
Notwithstanding the obligation of the Fund to bear the expense of the
functions referred to in clauses (i) and (ii) of this subparagraph
(c), the Investment Adviser may pay the salaries, including any
applicable employment or payroll taxes and other salary costs, of the
principal financial officer and other personnel carrying out such
functions and the Fund shall reimburse the Investment Adviser therefor
upon proper accounting.
(d) All of the ordinary business expenses incurred in the
operations of the Fund and the offering of its shares shall be borne by the Fund
unless specifically provided otherwise in this paragraph 6. These expenses
include but are not limited to brokerage commissions, legal, auditing, taxes or
governmental fees, the cost of preparing share certificates, custodian,
depository, transfer and shareholder service agent costs, expenses of issue,
sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, insurance premiums on property or personnel
(including officers and trustees if available) of the Fund which inure to its
benefit, expenses relating to trustee and shareholder meetings, the cost of
preparing and distributing reports and notices to
-3-
shareholders, the fees and other expenses incurred by the Fund in connection
with membership in investment company organizations and the cost of printing
copies of prospectuses and statements of additional information distributed to
shareholders.
7. Delegation of Responsibilities. The Investment Adviser, with the
consent of the Board of Trustees, may delegate the performance of certain
investment advisory services to a subadviser as permitted under the Investment
Company Act.
8. Compensation. The Fund shall pay the Investment Adviser in full
compensation for services rendered hereunder an annual investment advisory fee,
payable monthly, of 0.75% of the Fund's average daily net assets. The average
daily net asset value of the Fund shall be determined in the manner set forth in
the Registration Statement of the Fund.
9. Name. The Fund hereby acknowledges that any and all rights in or to
the name "E.I.I." which exist on the date of this Agreement or which may arise
hereafter are, and under any and all circumstances shall continue to be, the
sole property of the Investment Adviser; that the Investment Adviser may assign
any or all of such rights to another party or to parties without the consent of
the Fund; and that the Investment Adviser may permit other parties, including
other investment companies, to use the term "E.I.I." in their names. If the
Investment Adviser, or its assignee as the case may be, ceases to serve as an
adviser to the Fund, the Fund hereby agrees to take promptly any and all actions
which are necessary or desirable to change its name and the name of the Fund so
as to delete the term "E.I.I.".
10. Non-Exclusivity. The services of the Investment Adviser to the Fund
are not to be deemed to be exclusive, and the Investment Adviser shall be free
to render investment advisory or other services to others (including other
investment companies) and to engage in other activities. It is understood and
agreed that officers of the Investment Adviser may serve as officers or trustees
of the Trust, and that officers or trustees of the Trust may serve as officers
of the Investment Adviser to the extent permitted by law; and that the officers
of the Investment Adviser are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners or officers of any other firm or corporation, including other
investment companies.
11. Term and Approval. This Agreement shall become effective at the
close of business on the date hereof and shall remain in force and effect for
two years and thereafter from year to year, provided that such continuance is
specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the vote
of a majority of the Fund's outstanding voting securities (as defined in Section
2(a)(42) of the Investment Company Act); and
(b) (i) by the affirmative vote of a majority of the Trustees
who are not parties to this Agreement or interested persons of a party to this
Agreement (other than as Trust trustees), by votes cast in person at a meeting
specifically called for such purpose.
12. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Trust's Board of Trustees or by vote
of a majority of
-4-
the Fund's outstanding voting securities, or by the Investment Adviser, on sixty
(60) days' written notice to the other party. The notice provided for herein may
be waived by either party. This Agreement shall automatically terminate in the
event of its assignment, the term "assignment" for the purpose having the
meaning defined in Section 2(a)(4) of the Investment Company Act.
13. Liability of Investment Adviser and Indemnification. In the absence
of willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Investment Adviser or any of
its officers, directors or employees, it shall not be subject to liability to
the Fund or to any shareholder of the Fund for any omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
14. Liability of Trustees and Shareholders. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary of The State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the trustees of the Trust as trustees and not individually and that the
obligations of this instrument are not binding upon any of the trustees or
shareholders individually but are binding only upon the assets and property of
the Trust.
15. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
and that of the Investment Adviser shall be ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
16. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the Investment Company Act shall be resolved by
reference to such term or provision of the Act and to interpretations thereof,
if any, by the United States Courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the Securities
and Exchange Commission issued pursuant to said Act. In addition, where the
effect of a requirement of the Investment Company Act reflected in any provision
of this Agreement is released by rules, regulation or order of the Securities
and Exchange Commission, such provision shall be deemed to incorporate the
effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
-5-
E.I.I. REALTY SECURITIES TRUST, on
behalf of the E.I.I. Realty Securities Fund
Attest: By:________________________________________
_____________________
E.I.I. REALTY SECURITIES, INC.
Attest:
By:________________________________________
_____________________
-6-
