Exhibit (d)(2)
SUBADVISORY AGREEMENT
SUBADVISORY AGREEMENT, dated July 2, 2003 between J. & X. XXXXXXXX &
CO. INCORPORATED, a Delaware corporation (the "Manager") and LASALLE INVESTMENT
MANAGEMENT (SECURITIES), L.P., a Maryland limited partnership (the
"Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated as
of the date hereof (the "Management Agreement"), with Xxxxxxxx LaSalle Real
Estate Fund Series, Inc. (the "Corporation"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), to render or contract to obtain assistance in rendering investment
management services to Xxxxxxxx LaSalle Monthly Dividend Real Estate Fund (the
"Fund"), a separate series of the Corporation, and to administer the business
and other affairs of the Fund; and
WHEREAS, the Manager desires to retain the Subadviser to assist in
providing investment advisory and other services to the Fund, and the Subadviser
is willing to render such services, effective as of the commencement of the
Fund's operations (the "Effective Date").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Duties of the Subadviser. (a) Subject in each case to the control
of the Board of Directors of the Corporation (the "Board") and in accordance
with the objectives, policies and principles set forth in the Registration
Statement and Prospectus(es) of the Fund (the "Registration Statement") and the
requirements of the 1940 Act, and in conjunction with and under the supervision
of the Manager, the Subadviser agrees to furnish the Manager and the Fund with
such investment advice, research and assistance as the Manager or the Fund shall
from time to time reasonably request. Without limiting the generality of the
foregoing, Subadviser shall manage the investments of the Fund in accordance
with the Registration Statement and in compliance with the requirements
applicable to registered investment companies under applicable laws and those
requirements applicable to regulated investment companies under Subchapter M of
the Internal Revenue Code of 1986, as amended ("Code"), and such other
limitations as the Manager or the Board may institute and inform the Subadviser
in writing are applicable.
(b) Subject to the foregoing, the Subadviser shall (i) participate in
the development of the Fund's overall investment strategy and in the
determination of investment allocations, (ii) provide investment advice and
research to the Fund with respect to existing and potential investments in
securities, including company visits and meetings with management, (iii)
determine securities and other assets for investment, (iv) select brokers and
dealers, and (v) cause the execution of trades; provided that, until Subadviser
is notified otherwise by the Manager, the Manager shall determine (in
consultation with the Subadviser) the amount of assets that shall be Uninvested
Assets (as defined below) of the Fund and retain the authority and
responsibility for investment and reinvestment of Uninvested Assets. In
providing these services, the Subadviser will conduct a continual program of
investment, evaluation and, if
appropriate, sale and reinvestment of the Fund's assets. The Subadviser will
make available representatives to report in person to the Board at least
semi-annually on investment results, regulatory compliance with respect to the
Fund's investments and other matters that the Manager or the Board may
reasonably request. The Subadviser shall also provide such reports and other
information to the Manager or the Board as such persons may reasonably request.
For purposes of this Section 1(b), "Uninvested Assets" means any assets of the
Fund that are in cash, cash equivalents or money market instruments.
(c) The Subadviser agrees to provide, subject to any obligations or
undertakings by the Manager reasonably necessary to maintain the confidentiality
of the Subadviser's non-public information, any and all information, records and
supporting documentation about the composite of accounts and the funds the
Subadviser manages that have investment objectives, policies, and strategies
substantially similar to those employed by the Subadviser in managing the Fund
which may be reasonably necessary, under applicable laws, to allow the
Corporation or its agent to present historical performance information
concerning the Subadviser's substantially similarly managed accounts and funds,
for inclusion in the Fund's Prospectus(es) and any other reports and materials
prepared by the Corporation or its agent, in accordance with regulatory
requirements or as requested by applicable federal or state regulatory
authorities.
(d) Portfolio accounting and pricing for the Fund will be the ultimate
responsibility of a third party accounting agent or administrator; however, in
the event that an asset under the supervision of the Subadviser cannot be priced
by a pricing source authorized by the Manager or market quotations are not
readily available (as contemplated in the Fund's valuation procedures), the
Subadviser will provide the third party accounting agent or administrator with
the "fair value" for such asset in accordance with the Fund's valuation
procedures. With respect to Fund investments under the supervision of the
Subadviser, the Subadviser shall provide reasonable assistance to the Manager
and the Fund's custodians ("Custodians"), third party accounting agents and
administrators to assist in trade settlement, dividend processing and corporate
actions affecting the Fund's investments and will provide to the Manager and
such Custodians, third party accounting agents or administrators executed trade
information which may be transmitted by computer or other acceptable electronic
medium. Subadviser will not be responsible for any loss to the extent incurred
by reason of any act or omission of any of the third party accounting agents or
administrators or Custodians and will not take custody of any Fund investments.
(e) The Subadviser agrees to keep, and to preserve for the prescribed
periods, all records relating to its activities hereunder that are required by
the 1940 Act and the Investment Advisers Act of 1940, as amended (the "Advisers
Act"). The Subadviser hereby agrees that any and all records which it maintains
for the Fund are the property of the Corporation and further agrees to surrender
promptly to the Corporation copies of any of such records upon the Fund's or the
Manager's request, provided, however, that Subadviser may retain copies of any
records. Nothing herein shall prohibit the Subadviser from using the performance
track record of the Fund, including following any termination of this Agreement,
to the extent such use is otherwise consistent with applicable law, rules and
regulations.
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(f) With respect to any investment company in the Xxxxxxxx Group of
Funds, (i) the Subadviser will not consult with any other subadviser to that
investment company (including, in the case of an offering of securities subject
to Section 10(f) of the 1940 Act, any subadviser that is a principal underwriter
or an affiliated person of a principal underwriter of such offering) concerning
transactions for that investment company in securities or other assets, except,
in the case of transactions involving securities of persons engaged in
securities-related businesses, for purposes of complying with the conditions of
paragraphs (a) and (b) of Rule 12d3-1 under the 1940 Act; and (ii) if the
Subadviser and any other subadviser are providing investment advice to that
investment company, the investment advice provided by Subadviser to that
investment company will be limited to the assets for which Subadviser is
responsible. The Manager shall provide a current list of all subadvisers to the
Xxxxxxxx Group of Funds to the Subadviser and shall update such list promptly
upon any additions or departures of subadvisers to the Xxxxxxxx Group of Funds.
(g) The Subadviser shall exercise its best judgment in rendering its
services described in this Agreement. However, subject to Section 36 of the 1940
Act, the Subadviser shall not be liable to the Fund for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the performance of its duties under this Agreement except for
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement; provided, however, that the Subadviser shall be liable for any
loss incurred by the Fund, the Manager or their respective affiliates to the
extent such losses arise out of any act or omission directly attributable to the
Subadviser which results, directly or indirectly, in an error in the net asset
value of the Fund.
2. Expenses. The Subadviser shall furnish at its own expense, (i) all
necessary investment and management facilities, including salaries of clerical
and other personnel required for it to execute its duties hereunder, (ii)
administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the investment advisory affairs
of the Fund, and (iii) all travel expenses in connection with its services to
the Fund. Except for expenses specifically assumed or agreed to be paid by the
Subadviser under this Agreement, the Subadviser shall not be liable for any
expenses of the Manager or the Fund including, without limitation, (i) interest
and taxes, (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities or other investment instruments with respect to
the Fund, and (iii) custodian, third party accounting agent or administrator
fees and expenses.
3. Compensation. (a) As compensation for the services performed by
the Subadviser pursuant to Section 1, the Manager will pay to the Subadviser
each month a fee equal to 50% of the amount of the investment management fee
payable to the Manager with respect to that month pursuant to the terms of the
Management Agreement then in effect. Such compensation shall be paid by the
Manager to the Subadviser as soon as practicable following receipt by the
Manager of its investment management fees from the Fund (but no later than 10
business days following such receipt).
(b) If the Subadviser shall serve hereunder for less than the whole of
any month, the fee hereunder shall be prorated.
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(c) Any fee payable to the Subadviser under this Agreement shall be
paid to the Subadviser or to an affiliate of the Subadviser at an address or to
an account designated by the Subadviser.
4. Purchase and Sale of Assets. (a) The Subadviser shall purchase
securities and other assets from or through and sell securities or other assets
to or through such persons, brokers or dealers as the Subadviser shall deem
appropriate in order to carry out the policy with respect to allocation of
portfolio transactions as set forth in the Registration Statement and as the
Board may direct from time to time. In providing the Fund with investment
management and supervision, it is recognized that the Subadviser will seek best
execution and, consistent with such policy, may give consideration to the
research, statistical and other services furnished by brokers or dealers to the
Subadviser for its use, to the general attitude of brokers or dealers toward
investment companies and their support of them, and to such other considerations
as the Board may direct or authorize from time to time.
Notwithstanding the above, it is understood that it may be desirable
for the Fund that the Subadviser have access to supplemental investment and
market research and security and economic analysis provided by brokers who
execute brokerage transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers. Therefore, the Subadviser is authorized
to place orders for the purchase and sale of securities of the Fund with such
brokers, subject to review by the Board from time to time with respect to the
extent and continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Subadviser in connection with its
services to other clients as well as the Fund.
(b) Subadviser will not be responsible for any act or omission by
brokers and dealers selected by the Subadviser in accordance with Section 1(g)
of this Agreement, provided that such brokers or dealers were selected with
reasonable care.
(c) Subadviser may, to the extent permitted by applicable laws and
regulations, but shall be under no obligation to, aggregate securities to be
sold or purchased on behalf of the Fund with those of other clients.
5. Subadviser's Representations. Subadviser represents, warrants and
covenants to Corporation and the Manager that:
(a) It is duly formed, validly existing and in good standing under the
laws of the State of Maryland and has full power and authority to enter into and
perform its obligations under this Agreement;
(b) It has duly authorized, executed and delivered this Agreement and
intends that it shall constitute a valid and binding agreement enforceable in
accordance with its terms, except to the extent limited by the principles of
equity and public policy;
(c) It is registered as an investment adviser under the Advisers Act;
(d) Its entry into, and performance of any duties or actions under,
this Agreement shall at all times be in accordance with all applicable laws and
regulations;
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(e) It shall deliver to the Corporation and the Manager (i) a copy of
Subadviser's Form ADV, Part II (or similar disclosure document) and each update
thereof, (ii) Subadviser's proxy voting policies and each update thereof, (iii)
Subadviser's Code of Ethics, including any code adopted under Rule 17j-1 of the
1940 Act, and each update thereof and (iv) such other information (e.g.,
disclosures, policies, violations of Code of Ethics or other materials) as
reasonably requested by the Manager or the Board to the extent such information
is required to be delivered or made available under the 1940 Act or Advisers Act
or rules and regulations promulgated thereunder or in connection therewith;
(f) Its Form ADV and each investment performance composite and
accompanying disclosures provided by the Subadviser to the Manager or the Board
include all material information that is required to be stated therein or
necessary to make the statements therein not misleading;
(g) It shall not execute trades with broker-dealers who are
"affiliated persons" (within the meaning of the 0000 Xxx) of the Subadviser,
without the prior approval of the Manager and, to the extent necessary to comply
with the 1940 Act, the Board;
(h) It shall notify the Manager and the Board of any change in the
membership of its partnership within a reasonable time after such change;
(i) It has adopted procedures reasonable necessary to prevent "access
persons" (within the meaning of Rule 17j-1) from violating its Code of Ethics;
and
(j) It will promptly notify the Manager in writing in the event that
any of the foregoing ceases to be true.
6. Manager's Representations. Manager represents, warrants and
covenants to Subadviser that:
(a) It is duly formed, validly existing and in good standing under the
laws of the State of Delaware and has full power and authority to enter into and
perform its obligations under this Agreement;
(b) It has duly authorized, executed and delivered this Agreement and
intends that it shall constitute a valid and binding agreement enforceable in
accordance with its terms, except to the extent limited by the principles of
equity and public policy;
(c) It is registered as an investment adviser under the Advisers Act;
(d) Its entry into, and performance of any duties or actions under,
this Agreement shall at all times be in accordance with all applicable laws and
regulations;
(e) Assuming the accuracy of the representations, warranties and
covenants of the Subadviser contained herein and the due performance of the
Subadviser of its obligations
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hereunder, the Fund's Registration Statement, to Manager's best knowledge, is in
compliance in all material respects with applicable federal and state laws and
regulations.
(f) It will promptly notify the Subadviser in writing in the event
that any of the foregoing ceases to be true.
7. Service to Other Clients. The services of the Subadviser are not
to be deemed exclusive to the Fund, it being understood that the Subadviser may
perform investment advisory services for various other clients, and it is
acknowledged that the Subadviser may give advice and take action with respect to
any of its other clients which may differ or be contrary to, advice given, or
from timing or nature of actions taken, with respect to the assets of the Fund.
To the extent permitted by applicable law, Subadviser may purchase, or recommend
purchase, for the Fund securities owned by the Subadviser, its partners or
affiliates, securities of companies for which an affiliate or Subadviser acts as
financial adviser or performs other investment banking services, or securities
of companies where partners or employees of Subadviser, or its affiliates, serve
on the board of directors.
8. Delivery of Documents and Notice of Events. The Manager agrees to
promptly furnish the Subadviser with the Management Agreement, the Fund's
Articles of Incorporation and Bylaws, the Fund's Registration Statement, the
Fund's prospectus(es) and Statement of Additional Information, proxy statements,
reports to shareholders, any policies properly Board authorized affecting
management and any other items reasonably requested by the Subadviser. The
Manager further agrees to promptly provide the Subadviser with copies of all
amendments of or supplements to all of the foregoing.
9. Indemnification. (a) Subadviser agrees to hold harmless and
indemnify the Manager from and against any loss or damages arising out of
Subadviser's breach of this Agreement or arising out of the willful misfeasance,
bad faith or gross negligence on Subadviser's part in the performance of its
duties, or from reckless disregard of its obligations and duties, under this
Agreement.
(b) The Manager agrees to hold harmless and indemnify Subadviser from
and against any loss or damages arising out of the Manager's breach of this
Agreement or arising out of the willful misfeasance, bad faith or gross
negligence on the Manager's part in the performance of its duties, or from
reckless disregard of its obligations and duties, under this Agreement.
(c) The Manager acknowledges and agrees that the Subadviser makes no
representation, warranty, express or implied, that any level of performance or
investment results will be achieved by the Fund or that the Fund will perform
comparably with any standard index, including other clients of the Subadviser,
whether public or private.
10. Cooperation and Provision of Certain Information. The Subadviser
shall promptly notify the Manager (1) in the event the SEC or other governmental
authority has censured the Subadviser; placed limitations upon its activities,
functions or operations; suspended or revoked its registration, if any, as an
investment adviser; or has commenced proceedings or an investigation that may
result in any of these actions or (2) upon having a
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reasonable basis for believing that the Fund has ceased to qualify or might not
qualify as a regulated investment company under Subchapter M of the Code. The
Manager shall promptly notify the Subadviser (1) in the event the SEC or other
governmental authority has censured the Manager; placed limitations upon its
activities, functions or operations; suspended or revoked its registration, if
any, as an investment adviser; or has commenced proceedings or an investigation
that may result in any of these actions or (2) upon having a reasonable basis
for believing that the Fund has ceased to qualify or might not qualify as a
regulated investment company under Subchapter M of the Code. The Subadviser
further agrees to notify the Manager promptly of any material fact known to the
Subadviser respecting or relating to the Subadviser that is not contained in the
Prospectus, and is required to be stated therein or necessary to make the
statements therein not misleading, or of any statement relating to Subadviser
contained therein that becomes untrue in any material respect. As reasonably
requested by the Manager or the Board and in accordance with the scope of
Subadviser's obligations and responsibilities contained in this Agreement,
Subadviser will cooperate with, and provide assistance to, the Manager or the
Corporation as needed in order for the Manager and the Corporation to comply
with applicable laws, rules and regulations, including, but not limited to,
compliance with the Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated
by the SEC thereunder.
11. Use of Names. The Subadviser shall not use the name, logo,
insignia, or other identifying xxxx of the Corporation, the Fund or the Manager
or any of their affiliates or any derivative or logo or trade or service xxxx
thereof, or disclose information related to the business of the Manager or any
of its affiliates in material relating to the Subadviser in any manner not
approved prior thereto by the Manager; provided, however, that the Manager shall
approve all uses of its or the Corporation's name and that of their affiliates
which merely refer in accurate terms to the appointment of the Subadviser
hereunder or which are required by the SEC or a state securities commission; and
provided, further, that in no event shall such approval be unreasonably
withheld. The Manager shall not use the name, logo, insignia, or other
identifying xxxx of the Subadviser or any of its affiliates in any prospectus,
sales literature or other material relating to the Corporation in any manner not
approved prior thereto by the Subadviser; provided, however, that the Subadviser
shall approve all uses of its name which merely refer in accurate terms to the
appointment of the Subadviser hereunder or which are required by the SEC or a
state securities commission, and Subadviser hereby expressly consents to the use
of its name in the name of the Fund and the Corporation; and provided, further
that in no event shall such approval be unreasonably withheld. The Manager and
the Fund acknowledge and agree that the Subadviser may withdraw the use of its
name in the Fund and the Corporation should it cease to act as subadviser to the
Fund.
12. Notices. Any notice required or permitted hereunder shall, unless
expressly permitted otherwise hereunder, be in writing and shall be given by
personal service, mail, telex, or facsimile to the other party as set forth
below. Notice shall be effective upon receipt if by mail, on the date of
personal delivery (by private messenger, courier service or otherwise), or upon
receipt of telex or facsimile, whichever occurs first.
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Notice to the Manager shall be to:
J. & X. Xxxxxxxx & Co. Incorporated
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: President
Notice to the Subadviser shall be to:
LaSalle Investment Management (Securities), L.P.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: ___________________
Notice to the Fund shall be to:
Seligman LaSalle Monthly Dividend Real Estate Fund
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Secretary
A party may change its notice address at any time by written
communication to the other parties.
13. Term of Agreement. This Agreement shall become effective on the
Effective Date and shall continue in full force and effect until December 31,
2004, and from year to year thereafter if such continuance is approved in the
manner required by the 1940 Act. This Agreement may be terminated at any time,
without payment of penalty, by the Fund on 60 days' written notice to the
Subadviser by vote of the Board or by vote of a majority of the outstanding
voting securities (as defined by the 0000 Xxx) of the Fund. After December 31,
2006 (the "Commitment Date"), this Agreement also may be terminated by the
Subadviser or the Manager as of the end of any calendar year upon not less than
60 days' written notice to the other and to the Fund. This Agreement will
automatically terminate in the event of its assignment (within the meaning of
the 0000 Xxx) or upon the termination of the Management Agreement. In the event
that this Agreement terminates before the Commitment Date as a result of an
assignment of this Agreement or termination of the Management Agreement,
Subadviser agrees that, if requested by the Board and the Manager, Subadviser
shall make its advisory services available to the Fund and the Manager on terms
no less favorable to the Fund and the Manager than provided herein.
14. Amendments. This Agreement may be amended by consent of the
parties hereto provided that the consent of the Fund is obtained in accordance
with the requirements of the 1940 Act.
15. Miscellaneous. (a) Entire Agreement. This Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and shall supersede any and all prior agreements and
understandings, whether written or verbal.
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(b) Governing Law. This Agreement shall be construed and interpreted
under the laws of the State of New York applicable to contracts executed and
performed entirely in the State of New York. Anything herein to the contrary
notwithstanding, this Agreement shall not be construed to require, or to impose
any duty upon, either of the parties to do anything in violation of any
applicable laws or regulations.
(c) Waiver. Failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered to be a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(d) Enforceability. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which taken together shall constitute one and the same
instrument.
(f) Headings. The section and paragraph headings contained in this
Agreement are for reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the Manager and the Subadviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
J. & X. XXXXXXXX & CO. INCORPORATED
By:
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Name:
Title:
LASALLE INVESTMENT MANAGEMENT
(SECURITIES), L.P.
By:
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Name:
Title:
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