Exhibit g
USA REIT FUND LLC
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the 25th day of November, 2003, by and
between USA REIT Fund LLC, a Delaware limited liability company (the "Fund") and
INVESCO Institutional (N.A.), Inc., acting through its real estate management
division, INVESCO Real Estate (the "Advisor").
RECITALS
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a closed-end, non-diversified management
investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor;
WHEREAS, the Fund and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Fund upon the terms and
conditions hereinafter set forth; and
WHEREAS, all capitalized terms used but not defined herein shall have
their respective meanings as set forth in the Prospectus of the Fund (the
"Prospectus");
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. ADVISORY SERVICES. Subject at all times to the policies and control
of the Board of Directors of the Fund (the "Board"), the Advisor shall act as
investment advisor for the Fund and shall give the Fund the benefit of its best
judgment, efforts and facilities in rendering its services as investment
advisor.
2. INVESTMENT ANALYSIS AND IMPLEMENTATION. In carrying out its
obligations under Section 1 hereof, the Advisor shall act at all times (i) on a
basis that is fair and reasonable to the Fund, (ii) honestly and in good faith
with a view to the best interests of the Fund and, (iii) in connection
therewith, exercise the degree of care, diligence and skill that a reasonably
prudent portfolio manager would exercise in the circumstances.
Without limiting its general powers but subject to the terms and
conditions hereof, the Advisor is hereby authorized and empowered in its sole
discretion as follows:
(a) to invest, reinvest and manage the investments of the Fund
in accordance with the investment objectives and subject to the
investment restrictions as described in the Prospectus and the Advisor
agrees to so act;
(b) to make decisions as to the purchase and sale of portfolio
investments and decisions as to the execution of portfolio
transactions, including selection of exchanges,
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dealers or brokers and the negotiation, where applicable, of
commissions or service charges, to execute transactions and to perform
the services described in this Agreement with respect to the Fund;
(c) to perform any and all other acts as may be in its
judgment necessary or appropriate to the management of the investments
of the Fund;
(d) unless otherwise notified by the Administrator, provided
that the Administrator has properly provided or has caused to be
provided to the Advisor the proxy materials, and further provided that
timely notice has been given to the Advisor by the custodian of the
Fund's assets, to determine whether and in what manner to vote, and
execute or cause to be executed proxies respecting the voting of,
securities held by the Fund at meetings of holders of such securities;
(e) provide or cause to be provided to the Company and the
Administrator, in electronic form, a quarterly statement of the
investments held by the Fund within ten business days following each
quarter-end, and such other reports as the Administrator may reasonably
request;
(f) provide quarterly presentations to the Board and the
Administrator;
(g) make available to the Administrator, on a basis agreed
upon between the Administrator and the Advisor, the Advisor's expertise
relating to the matters affecting the Fund, including attending
marketing presentations when requested by the Fund;
(h) 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 assets of the Fund or the activities in
which such issuers engage, or with respect to securities which the
Advisor considers desirable for inclusion in the Fund's assets; and
(i) take, on behalf of the Fund, all actions which are
necessary or appropriate to carry out the aforesaid.
3. DELEGATION OF RESPONSIBILITIES. Subject to approval by the Board,
the Advisor is authorized to delegate any or all of its rights, duties and
obligations under this Agreement to one or more sub-advisors, and may enter into
agreements with sub-advisors, and may replace any such sub-advisors from time to
time in its discretion, in accordance with the 1940 Act, the Advisers Act, and
rules and regulations thereunder, as such statutes, rules and regulations are
amended from time to time or are interpreted from time to time by the staff of
the Securities and Exchange Commission ("SEC"), and if applicable, exemptive
orders or similar relief granted by the SEC and upon receipt of approval of such
sub-advisors by the Board and by shareholders (unless any such approval is not
required by such statutes, rules, regulations, interpretations, orders or
similar relief).
4. INDEPENDENT CONTRACTORS. The Advisor and any sub-advisors shall for
all purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly
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provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed to be an agent of the Fund.
5. CONTROL BY THE BOARD. Any investment program undertaken by the
Advisor pursuant to this Agreement, as well as any other activities undertaken
by the Advisor on behalf of the Fund, shall at all times be subject to any
directives of the Board.
6. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers
Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Fund,
as the same may be amended from time to time under the 1940 Act;
(c) the provisions of the Prospectus, including without
limitation, the investment objectives and the investment restrictions;
(d) the provisions of the Fund's Limited Liability Company
Agreement, as the same may be amended from time to time;
(e) the provisions of the by-laws of the Fund, as the same may
be amended from time to time; and
(f) any other applicable provisions of state, federal or
foreign law.
The Advisor shall provide annual certification to the Fund that it is
in compliance with the provisions of this Section 6 and quarterly certification
to the Fund that it is in compliance with this Section 6(c).
7. BROKER-DEALER RELATIONSHIPS. The Advisor is responsible for
decisions to buy and sell securities for the Fund, broker-dealer selection, and
negotiation of brokerage commission rates.
(a) The Advisor's primary consideration in effecting a
security transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor 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 the 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 execution
services offered.
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(c) Subject to such policies as the Board may from time to
time determine, the Advisor 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
Advisor an amount of commission for effecting a fund investment
transaction in excess of the amount of commission another broker or
dealer 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 brokerage and research
services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Advisor's overall responsibilities
with respect to the Fund and to other clients of the Advisor as to
which the Advisor exercises investment discretion. The Advisor 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, the Advisor or to
any sub-advisor. Such allocation shall be in such amounts and
proportions as the Advisor shall determine and the Advisor will report
on said allocations regularly to the Board indicating the brokers to
whom such allocations have been made and the basis therefor.
(d) With respect to the Fund, to the extent the Advisor does
not delegate trading responsibility to one or more sub-advisors, in
making decisions regarding broker-dealer relationships, the Advisor may
take into consideration the recommendations of any sub-advisor
appointed to provide investment research or advisory services in
connection with the Fund, and may take into consideration any research
services provided to such sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 7 and the
directions of the Fund's Board of Directors, the 1940 Act, the
Securities Exchange Act of 1934, and rules and regulations thereunder,
as such statutes, rules and regulations are amended from time to time
or are interpreted from time to time by the staff of the SEC, any
exemptive orders issued by the SEC, and any other applicable provisions
of law, the Advisor may select brokers or dealers with which it or the
Fund is affiliated.
8. BOOKS AND RECORDS. The Advisor will maintain complete and accurate
records in respect of all transactions relating to the Fund's portfolio. The
Advisor will keep or will cause to be kept records in respect of all such
portfolio transactions executed on behalf of the Fund. To the extent permitted
by applicable law, the Advisor shall provide access to its books and records
relating to the Fund as the Fund or the Administrator may reasonably request.
The Advisor shall have access at all reasonable times to books and records
maintained for the Fund, only to the extent necessary for the Advisor to comply
with all applicable securities, or other laws to which it is subject, and
further provided that the Fund shall produce copies of such records and books
whenever reasonably required to do so by the Advisor for the purpose of legal
proceedings or dealings with any governmental or regulatory authorities or for
its internal compliance procedures.
9. COMPENSATION. The Fund shall pay the Advisor, out of the assets of
the Fund, as full compensation for all services rendered, an advisory fee rate
as described in this paragraph 9. If the Fund's Net Asset Value exceeds $55
million (CDN), the Investment Advisor will receive an
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annual fee equal to 0.80% of the Fund's Net Asset Value for the first $10
million (CDN), 0.70% of the Fund's Net Asset Value on the next $10 million (CDN)
and 0.60% of the Fund's Net Asset Value over $20 million (CDN), in each case
calculated and payable monthly in arrears. If the Fund's Net Asset Value is less
than $55 million (CDN) the Investment Advisor will receive an annual fee equal
to 55% of 1.10% of the Fund's Net Asset Value which will be reduced by 0.014% of
the Fund's Net Asset Value for each $1 million (CDN) below $55 million (CDN) and
further reduced by 0.055% of the Fund's Net Asset Value for each $1 million
(CDN) below $30 million (CDN).
10. EXPENSES OF THE ADVISOR. The Advisor shall be entitled to
reimbursement from the Fund for trading costs reasonably incurred by it in
connection with the provisions of its services under this Agreement.
11. SERVICES TO OTHER COMPANIES OR ACCOUNTS. The Fund understands that
the Advisor now acts, will continue to act and may act in the future as
investment advisor to fiduciary and other managed accounts, and as investment
advisor to other investment companies, including any offshore entities, or
accounts, and the Fund has no objection to the Advisor so acting, provided that
whenever the Fund and one or more other investment companies or accounts managed
or 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 company and account. The Fund recognizes that
in some cases this procedure may adversely affect the size of the positions
obtainable and the prices realized for the Fund.
12. NON-EXCLUSIVITY. The Fund understands that the persons employed by
the Advisor to assist in the performance of the Advisor's 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. The Fund
further understands and agrees that officers or directors of the Advisor may
serve as officers or directors of the Fund, and that officers or directors of
the Fund may serve as officers or directors of the Advisor to the extent
permitted by law; and that the officers and directors of the Advisor are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies.
13. CONSENT TO THE USE OF NAME. During the term of this Agreement, when
referring to the Advisor in connection with the Fund and in any promotional and
marketing materials relating thereto, the Fund shall use such name or trade
names of the Advisor, or its affiliates or its associates, and describe the
Advisor and its affiliates and associates only as directed and permitted by the
Advisor.
14. EFFECTIVE DATE, TERM AND APPROVAL. This Agreement shall become
effective with respect to the Fund, if approved by the shareholders of the Fund,
on November 26, 2003. If so approved, this Agreement shall continue in force and
effect until November 26, 2005, and may be continued from year to year
thereafter, provided that the continuation of the Agreement is specifically
approved at least annually:
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(a) (i) by the Board or (ii) by the vote of "a majority of the
outstanding voting securities" of the Fund (as defined in Section
2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the directors who
are not parties to this Agreement or "interested persons" (as defined
in the 0000 Xxx) of a party to this Agreement (other than as directors
of the Fund), by votes cast in person at a meeting specifically called
for such purpose.
15. TERMINATION. This Agreement may be terminated as to the Fund at any
time, without the payment of any penalty, by vote of the Board or by vote of a
majority of the outstanding voting securities of the Fund, or by the Advisor, on
no more than sixty (60) days' written notice to the other party. The notice
provided for herein may be waived by the party entitled to receipt thereof. This
Agreement shall automatically terminate in the event of its assignment, the term
"assignment" for purposes of this paragraph having the meaning defined in
Section 2(a)(4) of the 1940 Act. Upon termination pursuant to this Section 15,
the Advisor, at the Company's request, must deliver all copies of books and
records maintained in accordance with this Agreement and applicable law.
16. 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.
17. LIABILITY OF ADVISOR. The Advisor will not be liable in any way for
any default, failure or defect in any of the securities comprising the Fund's
portfolio if it has satisfied the duties and the standard of care, diligence and
skill set forth in this Agreement. However, the Advisor shall be liable to the
Fund for any loss, damage, claim, cost, charge, expense or liability resulting
from the Advisor's willful misconduct, bad faith or negligence or disregard by
the Advisor of the Advisor's duties or standard of care, diligence and skill set
forth in this Agreement or a material breach or default of the Advisor's
obligations under this Agreement.
18. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Notice to the Company shall be sent to: Xxxxx Xxxxxx,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 with a copy to the
Administrator, Brompton Capital Advisors, Inc., Xxxxx 0000, X.X. Xxx 000, Xxx
Xxxxxxxxxx Tower, BCE Place, 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0, and that
of the Advisor shall be Three Gallery Tower, Suite 500, 00000 Xxxx Xxxx, Xxxxxx,
Xxxxx, 00000.
19. 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 1940 Act or the Advisers Act shall be resolved
by reference to such term or provision of the 1940 Act or the Advisers 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 SEC issued pursuant to said Acts. In addition, where the effect of
a requirement of the 1940 Act or the Advisers Act reflected in any provision of
the Agreement is revised by rule, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
Subject to the foregoing, this Agreement shall be
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governed by and construed in accordance with the laws (without reference to
conflicts of law provisions) of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective duly authorized officers on the day
and year first written above.
USA REIT FUND LLC
(a Delaware limited liability company)
By:/s/ Xxxxx X. Xxxxxxx
_____________________________________
Chief Executive Officer and President
INVESCO INSTITUTIONAL (N.A.), INC.,
acting through its real estate
management division, INVESCO REAL ESTATE
By:/s/ Xxx Xxxxxxxxx, Jr.
_____________________________________
Vice President
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