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EXHIBIT 99(d-1)
LEND LEASE FUNDS
ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of February, 2000 between Lend Lease
Real Estate Investments, Inc, a Delaware corporation (the "Adviser"), and Lend
Lease Funds, a Delaware business trust (the "Trust").
WHEREAS, the Adviser is engaged principally in the business of
rendering investment management services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust proposes to engage in business as an open-end
management investment company and is so registered under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
in separate series with each such series representing interests in a separate
portfolio of securities and other assets, and in multiple classes of such
series; and
WHEREAS, the Trust has retained Sunstone Financial Group, Inc.
(together with any new administrator engaged by the Trust, the "Administrator")
to provide administration and fund accounting services with respect to the
Trust's operations, subject to the control of the Board of Trustees; and
WHEREAS, the Trust intends to initially offer shares in multiple
classes of shares of one series, the Lend Lease U.S. Real Estate Securities
Fund, such series (the "Initial Fund"), together with all other series
subsequently established by the Trust with respect to which the Adviser renders
management and investment advisory services pursuant to the terms of this
Agreement, being herein collectively referred to as the "Funds" and individually
as a "Fund."
NOW THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF ADVISER.
(a) Initial Fund. The Trust hereby appoints the Adviser to act
as manager and investment adviser to the Initial Fund for the period and on the
terms herein set forth. The Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
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(b) Additional Funds. In the event that the Trust establishes one
or more series of shares other than the Initial Fund with respect to which it
desires to retain the Adviser to render management and investment advisory
services hereunder, it shall so notify the Adviser in writing, indicating the
advisory fee to be payable with respect to the additional series of shares. If
the Adviser is willing to render such services on the terms provided for herein,
it shall so notify the Trust in writing, whereupon such series of shares shall
become a Fund hereunder.
2. DUTIES OF ADVISER. The Adviser, at its own expense, shall, subject
to the provisions of paragraph 11 hereof, (a) develop and furnish continuously
an investment program and strategy for each Fund in compliance with that Fund's
investment objective and policies as set forth in the Trust's current
Registration Statement, (b) provide research and analysis relative to the
investment program and investments of each Fund, (c) determine (subject to the
overall supervision and review of the Board of Trustees of the Trust) what
investments shall be purchased, held, sold or exchanged by each Fund and what
portion, if any, of the assets of each Fund shall be held in cash or cash
equivalents, and (d) make changes on behalf of the Trust in the investments of
each Fund. The Adviser shall also oversee the activities of the Administrator,
subject always to the control of the Board of Trustees of the Trust and to the
provisions of the Trust's Master Trust Agreement and By-laws, as amended, and
the 1940 Act. The Adviser is authorized to engage one or more sub-advisers in
connection with the Adviser's duties under this Agreement, which sub-advisers
may be affiliates of the Adviser.
In connection therewith, the Adviser shall:
(i) furnish to the Trust necessary assistance in the
preparation all reports, prospectuses, registration statements and
amendments thereto now or hereafter required by federal or other laws
or by the rules or regulations of any duly authorized commission or
administrative body;
(ii) furnish to the Trust office space in the offices of the
Adviser, or in such other place or places as may be agreed upon from
time to time, and all necessary office facilities, simple business
equipment, supplies, utilities and telephone service.
(iii) furnish to the Trust executive and administrative
personnel to provide management of the affairs of the Trust, including
personnel to perform clerical, bookkeeping, accounting and other office
functions, which services are exclusive of the necessary records or
services, including shareholder services and fund accounting services,
of the Administrator and any dividend disbursing agent, transfer agent,
registrar or custodian, provided that the Adviser shall compensate all
personnel, officers, and directors of the Trust if such persons are
also employees of the Adviser or its affiliates; and
(iv) arrange for providing and maintaining a bond issued by a
reputable insurance company authorized to do business in the place
where the bond is issued against larceny and embezzlement covering each
officer and employee of the Trust, the
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Adviser and/or any sub-adviser who may singly or jointly with others
have access to funds or securities of the Trust, with direct or
indirect authority to draw upon such funds or to direct generally the
disposition of such funds, which bond shall be in such reasonable
amount as a majority of the Trustees who are not "interested persons"
of the Trust, as defined in the 1940 Act, shall determine, with due
consideration to the aggregate assets of the Trust to which any such
officer or employee may have access, provided that the premium, or
portion thereof pursuant to an agreement among the insured parties in
the case of a joint insured bond, for the bond shall be payable by the
Trust in accordance with paragraph 3(q).
3. ALLOCATION OF EXPENSES.
The Trust assumes and shall pay all expenses for all other Trust
operations and activities and shall reimburse the Adviser for any such expense
incurred by the Adviser (it being understood that the Trust shall allocate such
expenses between or among the Funds to the extent contemplated by its Master
Trust Agreement). The expenses to be borne by the Trust shall include, without
limitation:
(a) all expenses of organizing the Trust or forming any series
thereof, to the extent now or hereafter permitted under generally accepted
accounting principles applicable to registered investment companies;
(b) all expenses (including information, materials and services
other than services of the Adviser) of preparing, printing and mailing all
annual, semiannual and periodic reports, proxy materials and other
communications (including registration statements, prospectuses and amendments
and revisions thereto) furnished to existing shareholders of the Trust and/or
regulatory authorities;
(c) fees involved in registering and maintaining registration of
the Trust and its shares with the Securities and Exchange Commission and state
regulatory authorities;
(d) any other registration, filing or other fees in connection with
requirements of regulatory authorities;
(e) expenses, including the cost of printing of certificates
relating to the issuance of shares of the Trust;
(f) to the extent not paid by the Trust's distributor, the expenses
of maintaining a shareholder account and furnishing, or causing to be furnished,
to each shareholder a statement of his account, including the expense of
mailing;
(g) taxes and fees payable by the Trust to federal, state or other
governmental agencies;
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(h) expenses related to the redemption of its shares, including
expenses attributable to any program of periodic redemption;
(i) all issue and transfer taxes, brokers' commissions, margin
costs, interest on borrowings and other costs chargeable to the Trust in
connection with securities transactions to which the Trust is a party, including
any portion of such commissions attributable to research and brokerage services
as defined by Section 28(e) of the Securities Exchange Act of 1934, as amended;
(j) the charges and expenses of the custodian appointed by the
Trust, or any depository utilized by such custodian, for the safekeeping of its
property;
(k) charges and expenses of the Administrator and any shareholder
servicing agents, transfer agents and registrars appointed by the Trust,
including costs of servicing shareholder investment accounts;
(l) charges and expenses of independent accountants retained by the
Trust (including but not limited to charges and expenses relating to tax
compliance and the preparation and review of tax returns and related tax
matters);
(m) fees and expenses for legal services in connection with the
affairs of the Trust, including reasonable fees charged (including internal
charges and allocations) and expenses incurred by the Adviser, if any, for
performing such legal services for the Trust;
(n) compensation and expenses of Trustees of the Trust who are not
"interested persons" of the Trust (as defined in the 0000 Xxx);
(o) expenses of shareholders' and Trustees' meetings;
(p) membership dues in, and assessments of, the Investment Company
Institute or similar organizations;
(q) insurance premiums on fidelity, errors and omissions and other
coverages;
(r) expenses incurred in connection with any distribution plan
adopted by the Trust in compliance with Rule 12b-1 of the 1940 Act;
(s) such other non-recurring expenses of the Trust as may arise,
including expenses of actions, suits, or proceedings to which the Trust is a
party and the legal obligation which the Trust may have to indemnify its
Trustees, officers or shareholders with respect thereto;
(t) fees and expenses incurred in connection with registering and
qualifying the Trust's shares with federal and state regulatory authorities,
including reasonable fees
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charged (including internal charges and allocations) and expenses incurred by
the Administrator or the Adviser, if any, for performing such services for the
Trust; and
(u) fees and expenses for fund accounting services, including
reasonable fees charged (including internal charges and allocations) and
expenses incurred by the Administrator or the Adviser, if any, for performing
such fund accounting services for the Trust.
4. ADVISORY FEE.
For the services and facilities to be provided by the Adviser as
provided in Sections 1 and 2 of this Agreement, the Trust shall pay to the
Adviser on a monthly basis compensation based on an annual percentage rate
applied to the Fund's average daily net assets as specified in the Schedule(s)
which are attached hereto and made a part of this Agreement. Such compensation
shall be paid to the Adviser as soon as practicable after the last calendar day
of each month.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this Agreement.
In the case of commencement or termination of this Agreement with
respect to any Fund during any calendar month, the fee with respect to such Fund
for that month shall be reduced proportionately based upon the number of
calendar days during which it is in effect, and the fee shall be computed upon
the average daily net assets of such Fund for the days during which it is in
effect.
The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation hereunder to the extent the Adviser may, by
notice to the Trust, voluntarily declare.
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5. EXPENSE LIMITATION.
The Adviser agrees that if the total expenses of any Fund (exclusive of
interest, taxes, brokerage expenses, distribution expenses, extraordinary items
and any other items allowed to be excluded by applicable state law) for any
fiscal year of the Trust exceed the lowest expense limitation imposed in any
jurisdiction in which that Fund is then making sales of its shares or in which
its shares are then qualified for sale, the Adviser will pay or reimburse such
Fund for that excess up to the amount of its advisory fee payable with respect
to that Fund during that fiscal year. The amount of the monthly advisory fee
payable under Paragraph 4 hereof shall be reduced to the extent that the monthly
expenses of that Fund, on an annualized basis, would exceed the foregoing
limitation. At the end of each fiscal year of the Trust, if the aggregate annual
expenses chargeable to any Fund for that year exceed the foregoing limitation
based upon the average of the monthly average net asset value of that Fund for
the year, the Adviser will promptly reimburse that Fund for the amount of such
excess to the extent not already reimbursed by reduction of the monthly advisory
fee. In the event that such expenses are within the foregoing limitation, the
Trust shall be obligated to pay the Adviser excess amounts previously withheld
from the advisory fee during that fiscal year, provided that the amount of such
payment would not exceed the foregoing limitation.
In the event that this Agreement (i) is terminated with respect to any
one or more Funds as of a date other than the last day of the fiscal year of the
Trust or (ii) commences with respect to one or more Funds as of a date other
than the first day of the fiscal year of the Trust, then the expenses of such
Fund or Funds shall be annualized and the Adviser shall pay to, or receive from,
the applicable Fund or Funds a pro rata portion of the amount that the Adviser
would have been required to pay or would have received, if any, had this
Agreement remained in effect with respect to such Fund or Funds for the full
fiscal year.
6. RELATIONS WITH TRUST.
Subject to and in accordance with the Master Trust Agreement and
By-Laws of the Trust and the organizational or governing documents of the
Adviser, it is understood that Trustees, officers, agents and shareholders of
the Trust are or may be interested in the Adviser and its affiliates (or any
successor thereof) as directors, officers, or otherwise, that directors,
officers, agents and shareholders of the Adviser and its affiliates (or any
successor) are or may be interested in the Trust as Trustees, officers,
shareholders or otherwise, that the Adviser (or any such successor thereof) is
or may be interested in the Trust as a shareholder or otherwise and that the
effect of any such adverse interests shall be governed by said Master Trust
Agreement, By-Laws and organization or governing documents. In addition,
brokerage transactions for the Trust may be effected through affiliates of the
Adviser if approved by the Board of Trustees, subject to the rules and
regulations of the Securities and Exchange Commission.
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7. LIABILITY OF ADVISER.
Neither the Adviser, its officers, directors, members, managers,
employees, agents or controlling persons or their respective affiliates or
assigns shall be liable for any error of judgment or mistake of law or for any
loss suffered by the Trust or its shareholders in connection with the matters to
which this Agreement relates; provided that no provision of this Agreement shall
be deemed to protect the Adviser against any liability to the Trust or its
shareholders to which it might otherwise be subject by reason of any willful
misfeasance, bad faith or negligence in the performance of its duties or the
reckless disregard of its obligations and duties under this Agreement. Nor shall
any provision hereof be deemed to protect any Trustee or officer of the Trust
against any such liability to which he might otherwise be subject by reason of
any willful misfeasance, bad faith or negligence in the performance of his
duties or the reckless disregard of his obligations and duties.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to
the Initial Fund on the date hereof and, with respect to any additional Fund, on
the date of receipt by the Trust of notice from the Adviser in accordance with
paragraph 1(b) hereof that the Adviser is willing to serve as Adviser with
respect to such Fund. Unless terminated as herein provided, this Agreement shall
remain in full force and effect for two years from the date hereof with respect
to the Initial Fund and, with respect to each additional Fund, for two years
from the date on which such Fund becomes a Fund hereunder. Subsequent to such
initial periods of effectiveness, this Agreement shall continue in full force
and effect for periods of one year thereafter with respect to each Fund so long
as such continuance with respect to such Fund is approved at least annually (a)
by either the Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of such Fund, and (b), in either
event, by the vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or "interested persons" (as defined in the 0000 Xxx)
of any such party, cast in person at a meeting called for the purpose of voting
on such approval. Notwithstanding the foregoing provisions of this Section 8(a),
the continuance of this Agreement with respect to the Initial Fund or any
additional Fund is subject to the approval of this Agreement by a majority of
the outstanding voting securities of that Fund at the first meeting of
shareholders after this Agreement becomes effective with respect to that Fund.
(b) Amendment. Any amendment to this Agreement shall become
effective with respect to a Fund upon approval of the Adviser, the Fund and if
required by applicable law, a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of that Fund.
(c) Termination. This Agreement may be terminated with respect to
any Fund at any time, without payment of any penalty, by vote of the Trustees or
by vote of a majority of the outstanding voting securities (as defined in the
0000 Xxx) of that Fund, or by the Adviser, in each case on sixty (60) days'
prior written notice to the other party.
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(d) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment (as defined in the 1940
Act).
(e) Approval, Amendment or Termination by Individual Fund. Any
approval, amendment or termination of this Agreement by the holders of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
any Fund shall be effective to continue, amend or terminate this Agreement with
respect to any such Fund notwithstanding (i) that such action has not been
approved by the holders of a majority of the outstanding voting securities of
any other Fund affected thereby, and (ii) that such action has not been approved
by the vote of a majority of the outstanding voting securities of the Trust,
unless such action shall be required by any applicable law or otherwise.
9. SERVICES NOT EXCLUSIVE.
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser and its affiliates shall be free to render similar
services to others so long as the Adviser's services hereunder are not impaired
thereby. It is understood that the persons employed by the Adviser to assist in
the performance of its duties hereunder will not devote their full time to such
services and nothing hereunder contained shall be deemed to limit or restrict
the right of the Adviser to engage in or devote time and attention to other
businesses or to render services of whatever kind or nature.
10. SUBCONTRACTORS.
The Trust hereby agrees that the Adviser may subcontract for the
performance of any of the services contemplated to be rendered by the Adviser to
any Fund hereunder, which subcontractors may be affiliates of the Adviser.
11. LIMITATION OF LIABILITY.
The term "Lend Lease Funds" means and refers to the Trustees from time
to time serving under the Master Trust Agreement of the Trust dated October 28,
1999 as the same may subsequently thereto have been, or subsequently hereto may
be, amended. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of the Trust, as provided in the Master Trust Agreement. The execution
and delivery of this Agreement have been authorized by the Trustees and the
initial shareholder of the Trust and signed by the President of the Trust,
acting as such, and neither such authorization by such Trustees and shareholder
nor such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
its Master Trust Agreement.
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12. RESERVATION OF NAME.
The parties hereby acknowledge that the Adviser has reserved the right
to grant the non-exclusive use of the name "Lend Lease" or any derivative
thereof to any other investment company, investment adviser, distributor or
other business enterprise, and to withdraw from the Trust the use of the name
"Lend Lease." The name "Lend Lease" will continue to be used by the Trust so
long as such use is mutually agreeable to the Adviser and the Trust.
13. MISCELLANEOUS.
(a) Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for the receipt of such
notices.
(b) Severability. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
(c) Applicable Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware without regard to
principles of conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
ATTEST: LEND LEASE FUNDS
By: /s/ Xxxxx X. Xxxxx-Xxxxxxx
------------------------- ------------------------------------
Name: Xxxxx X. Xxxxx-Xxxxxxx, President
Title:
ATTEST: LEND LEASE REAL ESTATE
INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxxx
------------------------- ------------------------------------
Name: Xxxxxxx Xxxxx,
Title: Chief Investment Officer
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Schedule A
to the
Advisory Agreement
between Lend Lease Funds
and
Lend Lease Real Estate Investments, Inc.
The Trust shall pay the Adviser compensation at an annual rate
multiplied by the average daily net asset value of each Fund as follows:
Fund Fee (in basis points)
---- ---------------------
Lend Lease U.S. Real Estate Securities Fund 80
Such fee shall be accrued daily and paid as soon as practical after the last day
of each calendar month.
From time to time, the Adviser may voluntarily waive all or a portion
of the advisory fee payable with respect to the Lend Lease U.S. Real Estate
Securities Fund and/or, on a class-by-class basis, pay or reimburse the Trust
for expenses of the Fund. In addition to any amounts otherwise payable to the
Adviser as an advisory fee for current services under the Investment Management
Agreement, the Trust shall be obligated to pay the Adviser all amounts
previously waived, paid or reimbursed by the Adviser with respect to the Lend
Lease U.S. Real Estate Securities Fund, provided that the amount of such
additional payment in any year, together with all other expenses of the Lend
Lease U.S. Real Estate Securities Fund (excluding portfolio transaction costs
such as brokerage charges, interest on borrowings, margin expenses and similar
expenses), in the aggregate, would not cause the Lend Lease U.S. Real Estate
Securities Fund's expense ratio for each class of shares in such year to exceed
the following annual rate multiplied by the average daily net asset value of the
respective class of such Fund, and provided further that no additional payments
shall be made with respect to amounts waived, paid or reimbursed more than three
(3) years prior to the date the Fund accrues a liability with respect to such
additional payment:
Class Maximum Expense Ratio (in basis points)
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Class A Shares 150
Class K Shares 125
Class Y Shares 97
