EXHIBIT (g)(ii)
XXXXXXX RREEF REAL ESTATE FUND, INC.
FORM OF INVESTMENT ADVISORY AGREEMENT
Agreement made as of August ___, 2003 between DEUTSCHE ASSET
MANAGEMENT, INC., a Delaware corporation (the "Manager") and RREEF AMERICA,
L.L.C., a Delaware limited liability company (the "Investment Advisor").
W I T N E S S E T H:
WHEREAS, the Manager has entered into an Investment Management
Agreement dated as of August ___, 2003 (the "Investment Management Agreement")
with Xxxxxxx RREEF Real Estate Fund II, Inc., a closed-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act") and organized as a corporation under the laws of the State of
Maryland (the "Fund"), pursuant to which the Manager will act as manager to the
Fund;
WHEREAS, the Investment Management Agreement contemplates that
the Manager may appoint a sub-adviser to perform certain services relating to
the management of the investment operations of the Fund, and the Investment
Advisor is willing to render such investment advisory services to the Fund; and
WHEREAS, the Investment Advisor is registered as an investment
adviser under the Investment Advisers Act of 1940.
NOW, THEREFORE, in consideration of the premises and mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. The Manager hereby appoints the Investment Advisor to
act as investment advisor to the Fund for the period and on the terms set forth
in this Agreement. The Investment Advisor accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. Subject to the general supervision of the Board of
Directors and the Manager, the Investment Advisor shall manage the investment
operations of the Fund and the composition of the Fund's holdings of securities
and other investments, including cash, the purchase, retention and disposition
thereof and agreements relating thereto, in accordance with the Fund's
investment objective and policies as stated in the Registration Statement (as
defined in paragraph 3(d) of this Agreement) and subject to the following
understandings:
(a) The Investment Advisor, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the Articles of
Incorporation and By-Laws of the Fund and the Registration Statement and with
the instructions and directions of the Board of Directors, and will conform to
and comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations;
(b) the Investment Advisor shall use the same skill and care in the
management of the Fund's investments as it uses in the administration of other
accounts for which it has investment responsibility as agent;
(c) the Investment Advisor shall determine the securities or other
investments to be purchased, sold or lent by the Fund and as agent for the Fund
will effect portfolio transactions pursuant to its determinations either
directly with the issuer or with any broker and/or dealer in such securities,
including a broker affiliated with the Investment Advisor; in placing orders
with brokers and/or dealers the Investment Advisor intends to seek best price
and execution for purchases and sales; the Investment Advisor shall also
determine whether or not the Fund shall enter into repurchase or reverse
repurchase agreements;
(d) On occasions when the Investment Advisor deems the purchase or sale of
a security or other investment to be in the best interest of the Fund as well as
other customers of the Investment Advisor, the Investment Advisor may, to the
extent permitted by applicable laws and regulations, but shall not be obligated
to, aggregate the securities to be so sold or purchased on behalf of the Fund
and such other customer of the Investment Advisor in order to obtain best
execution, including lower brokerage commissions, if applicable. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Investment Advisor in the
manner it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund;
(e) the Investment Advisor shall maintain a set of books and records with
respect to the Fund's securities transactions as required by the Advisers Act
and other applicable laws and regulations and shall render to the Board of
Directors such periodic and special reports as the Board of Directors may
reasonably request; and
(f) the services of the Investment Advisor to the Fund under this Agreement
are not to be deemed exclusive, and the Investment Advisor shall be free to
render similar services to others.
Notwithstanding the foregoing, the Investment Advisor is not
authorized, and shall not be deemed to have assumed any duties under this
Agreement, to make any business, operational or management decisions on behalf
of the Fund other than with respect to the investment operations and composition
of the Fund's holdings of securities and other investments as set forth herein.
3. The Manager has delivered copies of each of the
following documents to the Investment Advisor and will promptly notify and
deliver to it all future amendments and supplements, if any:
(a) Articles of Incorporation of the Fund (such Articles of Incorporation,
as presently in effect and as amended from time to time, are herein called the
"Articles of Incorporation");
(b) By-Laws of the Fund (such By-Laws, as presently in effect and as
amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of Directors authorizing the
appointment of the Manager and approving the form of this Agreement;
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(d) The Fund's Notification of Registration on Form N-8A under the 1940
Act, its Registration Statement on Form N-2 under the Securities Act of 1933, as
amended and the 1940 Act (File No. 333-97717), as filed with the Securities and
Exchange Commission (the `Commission') on May 6, 2003 including all amendments
thereto (together with the Registration Statement of the Fund, the 'Registration
Statement').
4. The Investment Advisor shall keep the books and
records required to be maintained by it pursuant to paragraph 2(e) of this
Agreement. The Investment Advisor agrees that all records that it maintains for
the Fund are the property of the Fund and it will promptly surrender any of such
records to the Fund or to the Manager upon request. The Investment Advisor
further agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act any such records as are required to be maintained
by the Manager with respect to the Fund by Rule 31a-2 of the Commission under
the 1940 Act.
5. During the term of this Agreement, the Investment
Advisor will pay all expenses, including personnel costs and overhead, incurred
by it in connection with its activities under this Agreement, other than the
cost of securities and investments purchased or sold for the Fund (including
taxes and brokerage commissions, if any) and extraordinary expenses.
6. The Manager shall continue to have responsibility for
all services to be provided to the Fund pursuant to the Investment Management
Agreement and shall oversee and review the Investment Advisor's performance of
its duties under this Agreement.
7. For the services provided and the expenses borne
pursuant to this Agreement, the Manager will pay to the Investment Advisor, as
full compensation therefor, a fee, calculated daily and payable monthly in
arrears, at an annual rate of ___% of the Fund's average daily total managed
assets (i.e., the net asset value of the Fund's common stock plus the
liquidation preference of any Fund preferred shares and the principal amount of
any borrowings used for leverage). The Investment Advisor agrees to waive the
Investment Advisory fees in the amount of 0.25% of the Fund's average daily
total managed assets until August 29, 2008, such waiver declining by 0.05% for
each subsequent twelve-month period until August 29, 2012.
Subject to the provisions of this Agreement, the duties of the
Investment Advisor, and the fees to be paid to the Investment Advisor by the
Manager under and pursuant to this Agreement or other arrangement entered into
in accordance with this Agreement may be adjusted from time to time by the
Manager, subject to the prior approval of the members of the Board of Directors
who are not "interested persons" (as defined in the 1940 Act).
8. The Investment Advisor shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Manager or
the Fund in connection with the matters to which this Agreement relates, except
a loss resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
9. This Agreement shall continue in effect until the
date two years after the date of its execution and shall continue in effect from
year to year thereafter if such continuance is specifically approved at least
annually in conformity with the requirements of the 1940 Act;
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provided, however, that this Agreement may be terminated in its entirety, at any
time, without the payment of any penalty, (a) by the Manager, or (b) by the
Fund, by vote of a majority of the Board of Directors or by vote of a majority
of the outstanding voting securities (as defined in the 0000 Xxx) of the Fund,
in each case on 60 days' written notice to the Investment Advisor, or by the
Investment Advisor, at any time, without the payment of any penalty, on 60 days'
written notice to the Manager and to the Fund. This Agreement will automatically
and immediately terminate in the event of its "assignment" (as defined in the
0000 Xxx) or upon termination of the Investment Advisory Agreement.
10. The Investment Advisor shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Directors and the Manager from
time to time, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
11. This Agreement may be amended by the mutual consent
of the parties. Any such amendment shall also require the consent of the Fund,
which must be approved (a) by vote of a majority of those Directors of the Fund
who are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any such party (other than as Directors of the Fund), cast in
person at a meeting called for the purpose of voting on such amendment, and (b)
by vote of a majority of the outstanding voting securities of the Fund.
12. Notices of any kind to be given hereunder shall be in
writing and shall be duly given if mailed or delivered as follows: (a) to the
Investment Advisor at 000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: President, with a copy to the Manager; (b) to the Manager at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President; (c) to the Fund
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or (d) at such other address or to
such other individual as any of the foregoing shall designate by notice to the
others.
13. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the date set
forth above.
DEUTSCHE ASSET MANAGEMENT, INC.
By: _________________________
Name:
Title:
RREEF AMERICA, L.L.C.
By: _________________________
Name:
Title:
Acknowledged and Confirmed.
XXXXXXX RREEF REAL ESTATE FUND II, INC.
By: ________________________________
Name:
Title:
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