INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT dated May 16, 2005, between
RMR F.I.R.E. Fund (the Fund), a Massachusetts business trust, and
RMR Advisors,Inc. (the Advisor), a Massachusetts corporation.
RECITALS
WHEREAS, the Fund is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as a closedend, nondiversified
management investment company;
WHEREAS, the Advisor is registered under the Investment Advisors
Act of 1940, as amended (the Advisors Act), as an investment advisor and
engages in the business of acting as an investment advisor;
WHEREAS, the Fund and the Advisor were previously parties to an
investment advisory agreement dated September 22, 2004 (the Initial
Agreement Date);
WHEREAS, the Fund desires to employ the Advisor for, and the
Advisor desires to provide, investment advisory services to the Fund
upon 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 and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Investment Description, Appointment. The Fund desires to
employ its capital by investing and reinvesting in investments of the
kind and in accordance with the investment objectives, policies and
limitations specified in its Agreement and Declaration of Trust, as
amended from time to time (Charter), its prospectus (Prospectus) and
statement of additional information (Statement) filed with the Securities
and Exchange Commission (SEC) as part of the Funds Registration Statement
on FormN2, as amended from time to time (Registration Statement), and in
the manner and to the extent as may from time to time be approved by the
Board of Trustees of the Fund (the Board). Copies of the Prospectus, the
Statement and the Charter have been or will be submitted to the Advisor.
The Fund agrees to provide copies of all amendments to the Registration
Statement and the Charter to the Advisor on an ongoing basis. The Fund
hereby appoints the Advisor to act as the investment manager to the Fund.
The Advisor accepts the appointment and agrees to furnish the services
for the compensation set forth below.
2. Services as Investment Advisor. Subject to the supervision,
direction and approval of the Board, the Advisor will (a)manage the Funds
holdings in accordance with the Funds investment objectives and policies
as stated in the Charter and the Registration Statement; (b)make
investment decisions for the Fund; (c)place purchase and sale orders
for portfolio transactions for the Fund; and (d)provide research services
to the Fund. In providing those services, the Advisor will conduct a
continual program of investment, evaluation and, if appropriate, sale
and reinvestment of the Funds assets. In compliance with applicable law,
the Advisor is hereby authorized to retain third parties and to delegate
some or all of its duties and obligations under this paragraph2 to such
persons provided that such persons shall remain under the general
supervision of the Advisor.
3. Standard of Care. The Advisor shall give the Fund the benefit
of its best judgment and effort in rendering services. The Advisor shall
not 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 those involving the Advisors willful misfeasance, bad faith or
gross negligence in the performance of its duties, or the reckless
disregard of its obligations and duties under this Agreement.
4. Services to Other Companies and Accounts. The Fund
understands that the Advisor and its affiliates now act, will continue
to act and may in the future act as investment advisor or fiduciary to
other managed accounts and as investment advisor or property manager to
other investment companies or trusts. Nothing in this Agreement shall
prevent the Advisor or any director, officer, employee or other affiliate
of the Advisor from acting as investment advisor, property manager,
fiduciary or administrator for any other person, firm or corporation, or
from engaging in any lawful activity, and shall not in any way limit or
restrict the Advisor or any of its directors, officers, 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; provided, however, that the Advisor will undertake no activities
which, in its judgment, will adversely affect the performance of its
obligations under this Agreement and further provided that that whenever
the Fund and one or more other clients advised by the Advisor have
available funds for investment, investments suitable and appropriate for
each will be allocated in accordance with a formula believed to be
equitable to each client. The Fund recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for
the Fund. In addition, the Fund understands that the persons employed
by the Advisor to assist in the performance of the Advisors duties under
this Agreement will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or restrict
the right of the Advisor or any affiliate of the Advisor to engage in
and devote time and attention to other businesses or to render services
of whatever kind or nature.
5. Portfolio Transactions and Brokerage. Subject to the
supervision of the Board, the Advisor is authorized, for the purchase
and sale of the Funds portfolio securities, to employ such securities
dealers and brokers and to negotiate brokerage commissions on behalf of
the Fund as may, in the judgment of the Advisor, implement the policy of
the Fund to obtain the best net results taking into account such factors
as: the net price available; the reliability, integrity and financial
condition of the broker; the size of and difficulty in executing the
order; and the value of the expected contribution of the broker to the
Funds investment performance on a continuing basis. The Fund understands
that the cost of the brokerage commissions in any transaction may be
greater than that available from other brokers if the difference is
reasonably justified by other aspects of the services offered. Subject
to such policies and procedures as the Board may determine, the Advisor
may cause the Fund to pay a broker that provides research services to
the Advisor an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker would
have charged for effecting that transaction, if the Advisor determines
in good faith that such amount of commission was reasonable in relation
to the value of the research service provided by such broker viewed in
terms of either that particular transaction or the Advisors ongoing
responsibilities under this Agreement. The Fund understands that research
and investment information provided at no cost to the Advisor by brokers
that are paid by the Fund will be available to benefit other accounts
advised by the Advisor and its affiliates. In the allocation of the Funds
brokerage business the Advisor is authorized to consider (i)its use of
statistical, research and other services furnished by brokers and
(ii)payments made by brokers effecting transactions for the Fund to
other persons on the Funds behalf for services (such as custodial or
professional fees).
6. Compensation of the Advisor. In consideration of the
advisory services pursuant to this Agreement, the Fund agrees to pay
to the Advisor, on the first business day of each month a fee (Advisory
Fee) for the previous month, and the Advisor agrees to accept as full
compensation for all services rendered by the Advisor, computed at the
annual rate of .85% of the sum of the Funds net asset value attributable
to the Funds outstanding common shares, plus the liquidation preference
of the Funds outstanding preferred shares plus the principal amount of
any borrowings evidenced by notes, commercial paper or other similar
instruments issued by the Fund (Average Daily Managed Assets). The value
of the Funds Average Daily Managed Assets shall be computed at the times
and in the manner specified by the Registration Statement. 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 31days, as the case may be.
7. Fee Waiver. Notwithstanding the provisions of the above
Section6, during the five year period following the closing of the Funds
first public offering of common shares, the Advisor agrees to waive a
portion of its Advisory Fee equal to an annual rate of .25% of Average
Daily Total Assets.
8. Duration and Termination. This Agreement shall become
effective on the date first set forth and above and continue until the
second anniversary of the Initial Agreement Date. Thereafter, this
Agreement will continue from year to year, or for such longer terms as
may be approved by Board (including a majority of the Trustees who are
not interested persons of the Advisor, as defined by the 0000 Xxx) and
as may be permitted by the 1940 Act, but only so long as such continuation
is specifically approved at least as often as required by the 1940 Act,
as it may be amended from time to time.
So long as the 1940 Act requires these provisions respectively: (i)this
Agreement may be terminated by the Fund at any time without penalty upon
giving the Advisor sixty days notice and payment of any unpaid
compensation to the Advisor described in Section6, above, earned prior
to such termination, provided that such termination by the Fund shall be
directed or approved by the vote of a majority of the Trustees of the
Fund in office at the time or by the vote of the holders of a majority
(as defined in the 0000 Xxx) of the voting securities of the Fund at the
time outstanding and entitled to vote; (ii)this Agreement shall terminate
automatically in the event of its assignment (as assignment is defined in
the 1940 Act).
9. Amendment. No amendment of this Agreement shall be effective
unless it is in writing and signed by the party against which enforcement
of the amendment is sought.
10. NonLiability of Shareholders, Trustees, etc. The Charter is
on file with the Secretary of State of The Commonwealth of Massachusetts.
This Agreement is executed on behalf of the Fund, by the Trustees or by
an officer or officers of the Fund in their capacity as such and not
individually, and neither the shareholders nor the Funds Trustees nor
any officers, employees or agents shall be liable thereunder and the
Advisor shall look solely to the Funds estate for the payment of any
claim hereunder or for the performance of the Funds duties created by
this Agreement.
11. Expenses. The Advisor will bear all the expenses in
connection with the performance of its advisory services under this
Agreement. The Fund will bear all other expenses incurred in the
operations of the Fund including, but not limited to the fees payable
under this Agreement, brokerage commissions, taxes, interest,
distributions, legal, auditing, SEC, blue sky qualification or other
governmental fees, rating agency fees, the cost of preparing share
certificates, custodian, transfer and shareholder service agent costs,
accounting costs, administration services costs (including those fees
charged by any party under any administration or subadministration
agreements approved by the Board) expenses of issue, sale, redemption
and repurchase of shares, dividend disbursing expenses, expenses of
registering and qualifying shares for sale, the Funds and its Board
members proportionate share of insurance premiums, fees of the Board
members of the Fund who are not affiliated persons (as defined in the
0000 Xxx) of the Advisor or any affiliate of the Advisor, expenses
relating to Board and shareholder meetings, the cost of preparing and
distributing reports, notices and proxy statements to shareholders, the
fees and other expenses incurred related to the Funds membership in
investment company organizations and the cost of printing copies of
prospectuses and statements of additional information for regulatory
purposes and for distribution to the Funds shareholders and any
extraordinary expenses.
12. Governing Law. This Agreement shall be construed in
accordance with the laws of The Commonwealth of Massachusetts for
contracts to be performed entirely therein without reference to choice
of law principles and in accordance with the applicable provisions of
the 1940 Act.
13. 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 notices 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.
14. License Agreement. The Fund shall have the nonexclusive
right to use the name RMR F.I.R.E. Fund to designate any current or
future series of shares and may use the term RMR, including marks and
symbols containing such term or variations thereof as considered
appropriate, only so long as RMR Advisors,Inc. serves as investment
manager or advisor to the Fund.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers and their
respective seals to be hereunto affixed, all as of the day and the year
first above written.
RMR F.I.R.E. FUND
By:
Xxxxxx X. XXxxxx, President
RMR ADVISORS, INC.
By:
Xxxx X. Xxxxxxxx, Treasurer
