EXHIBIT (d)(3)
AMENDMENT NUMBER TWO
TO THE
INVESTMENT ADVISORY AGREEMENT
This Amendment Number Two, dated November 1, 2004, to the Investment Advisory
Agreement dated May 31, 1997 (the "Agreement"), as previously amended on April
17, 2000, by and between Xxx Xxxxxx Real Estate Securities Fund, a Delaware
statutory trust (the "Fund"), and Xxx Xxxxxx Asset Management (the "Adviser,"
successor in interest of Xxx Xxxxxx Asset Management, Inc.) a Delaware statutory
trust, hereby amends the terms and conditions of the Agreement in the manner
specified herein.
W I T N E S S E T H
WHEREAS, the Board of Trustees of the Fund at a meeting held on September 23,
2004 has approved a reduction in the investment advisory fee payable by the Fund
to the Adviser; and
WHEREAS, the parties desire to amend and restate Section 3 of the Agreement
relating to the investment advisory fee.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter contained, the parties hereby agree to amend the
Agreement, as follows:
Section 3 of the Agreement is hereby deleted in its entirety and replaced with
the following:
3. Compensation Payable to the Adviser.
The Fund shall pay to the Adviser, as compensation for the services rendered,
facilities furnished and expenses paid by the Adviser, a monthly fee computed at
the following annual rate:
AVERAGE DAILY FEE AS A PERCENT PER ANNUM
NET ASSETS OF AVERAGE DAILY NET ASSETS
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First $500 million 0.80%
Next $500 million 0.75%
Over $1 billion 0.70%
Average daily net assets shall be determined by taking the average of the net
assets for each business day during a given calendar month calculated in the
manner provided in the Fund's Declaration of Trust. Such fee shall be payable
for each calendar month as soon as practicable after the end of that month.
The fees payable to the Adviser by the Fund pursuant to this Section 3 shall
be reduced
by any commissions, tender solicitation and other fees, brokerage or similar
payments received by the Adviser, or any other direct or indirect majority owned
subsidiary of Xxx Xxxxxx Investments Inc., in connection with the purchase and
sale of portfolio investments of the Fund, less any direct expenses incurred by
such person, in connection with obtaining such commissions, fees, brokerage or
similar payments. The Adviser shall use its best efforts to recapture all
available tender offer solicitation fees and exchange offer fees in connection
with the Fund's portfolio transactions and shall advise the Trustees of any
other commissions, fees, brokerage or similar payments which may be possible for
the Adviser or any other direct or indirect majority owned subsidiary of Xxx
Xxxxxx Investments Inc. to receive in connection with the Fund's portfolio
transactions or other arrangements which may benefit the Fund.
In the event that the ordinary business expenses of the Fund for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the Fund's shares are qualified for sale, the compensation due the
Adviser for such fiscal year shall be reduced by the amount of such excess. The
Adviser's compensation shall be so reduced by a reduction or a refund thereof,
at the time such compensation is payable after the end of each calendar months
during such fiscal year of the Fund, and if such amount should exceed such
monthly compensation, the Adviser shall pay the Fund an amount sufficient to
make up the deficiency, subject to readjustment during the Fund's fiscal year.
For purposes of this paragraph, all ordinary business expenses of the Fund shall
include the investment advisory fee and other operating expenses paid by the
Fund except (i) for interest and taxes; (ii) brokerage commissions; (iii) as a
result of litigation in connection with a suit involving a claim for recovery by
the Fund; (iv) as a result of litigation involving a defense against a liability
asserted against the Fund, provided that, if the Adviser made the decision or
took the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; (v) any indemnification paid by the Fund to its
officers and trustees and the Adviser in accordance with applicable state and
federal laws as a result of such litigation; and (vi) amounts paid to Xxx Xxxxxx
Funds Inc., the distributor of the Fund's shares, in connection with a
distribution plan adopted by the Fund's Trustees pursuant to Rule 12b-1 under
the Investment Company Act of 1940 as amended from time to time.
If the Adviser shall serve for less than the whole of any month, the
foregoing compensation shall be prorated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.
XXX XXXXXX REAL ESTATE SECURITIES FUND XXX XXXXXX ASSET MANAGEMENT
By: By:
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Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxx, III
Executive Vice President Managing Director
and Principal Executive Officer
