INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement (the "Agreement") made this 28th day of February
1997, by and between THIRD AVENUE TRUST, a Delaware trust (the "Trust"), on
behalf of the Third Avenue Value Fund series of the Trust (the "Fund"), and EQSF
ADVISERS, INC., a New York corporation (the "Adviser").
RECITALS:
The Fund and the Adviser wish to enter into an Agreement setting forth the terms
and conditions under which the Adviser will perform certain investment advisory
and management services for the Fund, and be compensated for such services by
the Fund.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the Fund and the Adviser hereby agree as follows:
1. Investment Advisory Services.
1.1 During the Term (as such term is defined in Section 5 hereof) of this
Agreement, the Adviser shall serve as the investment adviser (within the meaning
of the Investment Advisers Act of 1940, as amended) of the Fund. In such
capacity, the Adviser shall render the following services and perform the
following functions for and on behalf of the Fund:
(a) Furnish continuous advice and recommendations to the Fund with respect to
the acquisition, holding or disposition of any or all of the securities or other
assets which the Fund may own or contemplate acquiring from time to time;
(b) Cause its officers to attend meetings and furnish oral or written reports,
as the Fund reasonably may request, in order to keep the Trustees and
appropriate officers of the Fund fully informed regarding the investment
portfolio of the Fund, the investment recommendations of the Adviser, and the
considerations which form the basis for such recommendations; and
(c) Supervise the purchase and sale of securities in accordance with the
direction of the appropriate officers of the Fund.
1.2 The services of the Adviser to the Fund are not exclusive, and nothing
contained herein shall be deemed or construed to prohibit, limit, or otherwise
restrict the Adviser from rendering investment or other advisory services to any
third person, whether similar to those to be provided to the Fund hereunder or
otherwise.
2. Compensation of Adviser.
2.1 For its services hereunder, the Fund shall pay the Adviser a fee (the
"Fee"), payable monthly in arrears, in an amount which shall be calculated as
follows, subject to the provisions of Section 2.2 hereof:
(a) 1/12 of .90% of the average daily net assets of the Fund for such
month.
2.2 Notwithstanding the provisions of Section 2.1 hereof, the amount of the Fee
to be paid with respect to the first and last months of this Agreement shall be
pro rated based on the number of calendar days in such quarter.
3. Expenses Paid by the Adviser.
3.1 Subject to the provisions of Section 3.2 hereof, the Adviser shall pay the
following expenses relating to the management and operation of the Fund:
(a) All reasonable fees, charges, costs and expenses (collectively, "Costs") and
all reasonable compensation of all officers and trustees of the Fund relating to
the performance of their duties to the Fund; provided, however, that the Adviser
shall not pay any such amounts to any Outside Trustees (for purposes of this
Agreement, an "Outside Trustee" is any trustee of the Fund who is not an
"Interested Person," within the meaning of Section 2(a)(19) of the Investment
Company Act of 1940, as amended (the "1940 Act")); and provided, further, that
in the event that any person serving as an officer of the Fund has both
executive duties attendant to such office and administrative duties to the Fund
apart from such office, the Adviser shall not pay any amounts relating to the
performance of such administrative duties;
(b) All Costs of office equipment and personnel necessary for and allocable to
the performance of the obligations of the Adviser hereunder.
3.2 Except as provided in this Section 3 hereof, nothing contained in this
Agreement shall be deemed or construed to impose upon the Adviser any obligation
to incur, pay, or reimburse the Fund for any other Costs of or relating to the
Fund.
4. Expenses Paid by the Fund.
4.1 Except as provided in Section 3 hereof, the Fund hereby assumes and shall
pay all fees, costs and expenses incurred by, or on behalf, or for the benefit
of the Fund, including without limitation:
(a) All Costs of any custodian or depository;
(b) All Costs for bookkeeping, accounting and auditors' services;
(c) All Costs of leased office space of or allocable to the Fund within the
offices of the Adviser or in such other place as may be mutually agreed upon
between the parties from time to time; and
(d) All Costs of any transfer agent and registrar of shares of the Fund
("Shares");
(e) All Costs incurred by any Outside Trustee of the Fund in connection with the
performance of his duties relating to the affairs of the Fund in such capacity
as an Outside Trustee of the Fund, and Costs relating to the performance by any
officer of the Fund, performing duties on behalf of the Fund apart from such
office, all in accordance with Section 3.1 (a) hereof;
(f) All brokers' commissions and other Costs incurred in connection with the
execution of Fund portfolio transactions;
(g) All taxes and other Costs payable by or on behalf of the Fund to federal,
state or other governmental agencies;
(h) All Costs of printing, recording and transferring certificates representing
Shares;
(i) All Costs in connection with the registration of the Fund and the Shares
with the Securities and Exchange Commission ("SEC"), and the continuous
maintenance of the effectiveness of such registrations, and the registration and
qualification of shares of the Fund under state or other securities laws,
including, without limitation, the preparation and printing of registration
statements, prospectuses and statements of additional information for filing
with the SEC and other authorities;
(j) All Costs of preparing, printing and mailing prospectuses, statements of
additional information and reports to holders of Shares;
(k) All Costs of shareholders' and Trustees' meetings and of preparing, printing
and mailing all information and documents, including without limitation all
notices, financial reports and proxy materials, to holders of Shares;
(1) All Costs of legal counsel for the Fund and for Trustees of the Fund in
connection with the rendering of legal advice to or on behalf of the Fund,
including, without limitation, legal services rendered in connection with the
Fund's existence, corporate and financial structure and relations with its
shareholders, registrations and qualifications of securities under federal,
state and other laws, issues of securities, expenses which the Fund has herein
assumed whether customary or not, and extraordinary matters, including, without
limitation, any litigation involving the Fund, Trustees, or officers of the Fund
relating to the affairs of the Fund, employees or agents of the Fund; and
(m) All Costs of filing annual and other reports with the SEC and other
regulatory authorities.
In the event that the Adviser provides any of the foregoing services or pays any
of these expenses, the Fund promptly shall reimburse the Adviser therefor.
5. Term; Termination.
5.1 This Agreement shall continue in effect, unless sooner terminated in
accordance with the provisions of Section 5.2 hereof, for a period of two years
beginning the date hereof, and shall continue in effect from year to year
thereafter (collectively, the "Term"); provided, however, that any such
continuation shall be expressly approved at least annually either by the Board
of Trustees of the Fund, including a majority of the directors who are not
parties hereto or Interested Persons of any such party, cast at a meeting called
for the purpose of voting on such renewal, or the affirmative vote of a majority
of the Outstanding Voting Securities (as such term is defined in Section
2(a)(42) of the 0000 Xxx) of the Fund.
(a) Any continuation of this Agreement pursuant to Section 5.1 hereof shall be
deemed to be specifically approved if such approval occurs:
(i) with respect to the first continuation hereof, during the 60 days prior to
and including the earlier of (A) the date specified herein for the termination
of this Agreement in the absence of such approval, or (B) the second anniversary
of the execution of this Agreement; and
(ii) with respect to any subsequent continuation hereof, during the 60 days
prior to and including the first anniversary of the date upon which the most
recent previous annual continuance of this Agreement became effective; or
(iii) at such other date or time provided in or permitted by Rule 15a-2 of the
1940 Act.
5.2 This Agreement may be terminated at any time, without penalty, as follows:
(a) By a majority of the Trustees of the Fund who are not parties hereto or
Interested Persons of any such party, or by the affirmative vote of a majority
of the Outstanding Voting Securities of the Fund, upon at least 60 days' prior
written notice to the Adviser at its principal place of business; and
(b) By the Adviser, upon at least 60 days' written notice to the Fund at its
principal place of business.
6. Retention of Control by Fund. The Fund acknowledges that the investment
advice and recommendations to be provided by the Adviser hereunder are advisory
in nature only. The Fund further acknowledges that, at all times during the Term
hereof, the Fund (and not the Adviser) shall retain full control over the
investment policies of the Fund. Nothing contained herein shall be deemed or
construed to limit, prohibit or restrict the right or ability of the trustees of
the Fund to delegate to the appropriate officers of the Fund, or to a committee
of trustees of the Fund, the power to authorize purchases, sales or other
actions affecting the portfolio of the Fund between meetings of the Board of
Trustees of the Fund; provided, however, that all such purchases, sales or other
actions so taken during such time shall be consistent with the investment policy
of the Fund and shall be reported to the Board of Trustees of the Fund at its
next regularly scheduled meeting.
7. Brokers and Brokerage Commissions.
7.1 For purposes of this Agreement, brokerage commissions paid by the Fund upon
the purchase or sale of the Fund's portfolio securities shall be considered a
cost of securities of the Fund and shall be paid by the Fund in accordance with
Section 4.1(e) hereof.
7.2 The Adviser shall place Fund portfolio transactions with brokers and dealers
who render satisfactory service in the execution of orders at the most favorable
prices and at reasonable commission rates; provided, however, that the Adviser
may pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting such transaction, if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, in terms
of either that particular transaction or the overall responsibilities of the
Adviser.
7.3 In placing portfolio business with broker-dealers for or on behalf of the
Fund, the Adviser shall seek the best execution of each such transaction, and
all such brokerage placements shall be consistent with the Rules of Conduct of
the National Association of Securities Dealers, Inc. Notwithstanding the
foregoing, the Fund shall retain the right to direct the placement of all
portfolio transactions for or on behalf of the Fund, and, in furtherance
thereof, the Fund may establish policies or guidelines to be followed by the
Adviser in its placement of Fund portfolio transactions pursuant to the
foregoing provisions. The Adviser shall report to the Board of Trustees of the
Fund at least on a quarterly basis regarding the placement of Fund portfolio
transactions.
7.4 The Adviser shall not deal with any affiliate in any transaction hereunder
in which such affiliate acts as a principal, nor shall the Adviser, in rendering
services to the Fund hereunder, execute any negotiated trade with any affiliate
if execution thereof involves such affiliate's acting as a principal with
respect to any part of an order for or on behalf of the Fund.
8. Purchases by Affiliates. Neither the Adviser nor any officer or director
thereof shall take a short position in Shares of the Fund. Any direct purchase
of Shares of the Fund by any officer or director of the Fund (or by any defined
benefit plan established for the benefit of such officer or director) shall be
made for investment purposes at the current price for such Shares available to
the public.
9. Assignment. This Agreement may not be assigned by either party hereto. This
Agreement shall terminate automatically in the event of any assignment (as such
term is defined in Section 2(a)(4) of the 1940 Act). Any attempted assignment of
this Agreement shall be of no force and effect.
10. Amendments. This Agreement may be amended in writing signed by both parties
hereto; provided, however, that no such amendment shall be effective unless
approved by a majority of the trustees of the Fund who are not parties hereto or
Interested Persons of any such party cast at a meeting called for the purpose of
voting on such amendment and by the affirmative vote of a majority of the
outstanding Voting Securities of the Fund.
11. Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, without
reference to the conflict of laws provisions thereof. In the event of any
inconsistency between this Agreement and the 1940 Act, the 1940 Act shall
govern, and the inconsistent provisions of this Agreement shall be construed so
as to eliminate such inconsistency.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
The Fund:
THIRD AVENUE TRUST, for the Third Avenue Value Fund series
By:
Xxxxx X. Xxxxx
Executive Vice President
The Adviser:
EQSF ADVISERS, INC.
By:
Xxxxxx X. Xxxxxxx
President
INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement (the "Agreement") made this 28th day of February
1997, by and between THIRD AVENUE TRUST, a Delaware trust (the "Trust"), on
behalf of the Third Avenue Small-Cap Value Fund series of the Trust (the
"Fund"), and EQSF ADVISERS, INC., a New York corporation (the "Adviser").
RECITALS:
The Fund and the Adviser wish to enter into an Agreement setting forth the terms
and conditions under which the Adviser will perform certain investment advisory
and management services for the Fund, and be compensated for such services by
the Fund.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the Fund and the Adviser hereby agree as follows:
1. Investment Advisory Services.
1.1 During the Term (as such term is defined in Section 5 hereof) of this
Agreement, the Adviser shall serve as the investment adviser (within the meaning
of the Investment Advisers Act of 1940, as amended) of the Fund. In such
capacity, the Adviser shall render the following services and perform the
following functions for and on behalf of the Fund:
(a) Furnish continuous advice and recommendations to the Fund with respect to
the acquisition, holding or disposition of any or all of the securities or other
assets which the Fund may own or contemplate acquiring from time to time;
(b) Cause its officers to attend meetings and furnish oral or written reports,
as the Fund reasonably may request, in order to keep the Trustees and
appropriate officers of the Fund fully informed regarding the investment
portfolio of the Fund, the investment recommendations of the Adviser, and the
considerations which form the basis for such recommendations; and
(c) Supervise the purchase and sale of securities in accordance with the
direction of the appropriate officers of the Fund.
1.2 The services of the Adviser to the Fund are not exclusive, and nothing
contained herein shall be deemed or construed to prohibit, limit, or otherwise
restrict the Adviser from rendering investment or other advisory services to any
third person, whether similar to those to be provided to the Fund hereunder or
otherwise.
2. Compensation of Adviser.
2.1 For its services hereunder, the Fund shall pay the Adviser a fee (the
"Fee"), payable monthly in arrears, in an amount which shall be calculated as
follows, subject to the provisions of Section 2.2 hereof:
(a) 1/12 of .90% of the average daily net assets of the Fund for such month.
2.2 Notwithstanding the provisions of Section 2.1 hereof, the amount of the Fee
to be paid with respect to the first and last months of this Agreement shall be
pro rated based on the number of calendar days in such quarter.
3. Expenses Paid by the Adviser.
3.1 Subject to the provisions of Section 3.2 hereof, the Adviser shall pay the
following expenses relating to the management and operation of the Fund:
(a) All reasonable fees, charges, costs and expenses (collectively, "Costs") and
all reasonable compensation of all officers and trustees of the Fund relating to
the performance of their duties to the Fund; provided, however, that the Adviser
shall not pay any such amounts to any Outside Trustees (for purposes of this
Agreement, an "Outside Trustee" is any trustee of the Fund who is not an
"Interested Person," within the meaning of Section 2(a)(19) of the Investment
Company Act of 1940, as amended (the "1940 Act")); and provided, further, that
in the event that any person serving as an officer of the Fund has both
executive duties attendant to such office and administrative duties to the Fund
apart from such office, the Adviser shall not pay any amounts relating to the
performance of such administrative duties;
(b) All Costs of office equipment and personnel necessary for and allocable to
the performance of the obligations of the Adviser hereunder.
3.2 Except as provided in this Section 3 hereof, nothing contained in this
Agreement shall be deemed or construed to impose upon the Adviser any obligation
to incur, pay, or reimburse the Fund for any other Costs of or relating to the
Fund.
4. Expenses Paid by the Fund.
4.1 Except as provided in Section 3 hereof, the Fund hereby assumes and shall
pay all fees, costs and expenses incurred by, or on behalf, or for the benefit
of the Fund, including without limitation:
(a) All Costs of any custodian or depository;
(b) All Costs for bookkeeping, accounting and auditors' services;
(c) All Costs of leased office space of or allocable to the Fund within the
offices of the Adviser or in such other place as may be mutually agreed upon
between the parties from time to time; and
(d) All Costs of any transfer agent and registrar of shares of the Fund
("Shares");
(e) All Costs incurred by any Outside Trustee of the Fund in connection with the
performance of his duties relating to the affairs of the Fund in such capacity
as an Outside Trustee of the Fund, and Costs relating to the performance by any
officer of the Fund, performing duties on behalf of the Fund apart from such
office, all in accordance with Section 3.1 (a) hereof;
(f) All brokers' commissions and other Costs incurred in connection with the
execution of Fund portfolio transactions;
(g) All taxes and other Costs payable by or on behalf of the Fund to federal,
state or other governmental agencies;
(h) All Costs of printing, recording and transferring certificates representing
Shares;
(i) All Costs in connection with the registration of the Fund and the Shares
with the Securities and Exchange Commission ("SEC"), and the continuous
maintenance of the effectiveness of such registrations, and the registration and
qualification of shares of the Fund under state or other securities laws,
including, without limitation, the preparation and printing of registration
statements, prospectuses and statements of additional information for filing
with the SEC and other authorities;
(j) All Costs of preparing, printing and mailing prospectuses, statements of
additional information and reports to holders of Shares;
(k) All Costs of shareholders' and Trustees' meetings and of preparing, printing
and mailing all information and documents, including without limitation all
notices, financial reports and proxy materials, to holders of Shares;
(1) All Costs of legal counsel for the Fund and for Trustees of the Fund in
connection with the rendering of legal advice to or on behalf of the Fund,
including, without limitation, legal services rendered in connection with the
Fund's existence, corporate and financial structure and relations with its
shareholders, registrations and qualifications of securities under federal,
state and other laws, issues of securities, expenses which the Fund has herein
assumed whether customary or not, and extraordinary matters, including, without
limitation, any litigation involving the Fund, Trustees, or officers of the Fund
relating to the affairs of the Fund, employees or agents of the Fund; and
(m) All Costs of filing annual and other reports with the SEC and other
regulatory authorities.
In the event that the Adviser provides any of the foregoing services or pays any
of these expenses, the Fund promptly shall reimburse the Adviser therefor.
5. Term; Termination.
5.1 This Agreement shall continue in effect, unless sooner terminated in
accordance with the provisions of Section 5.2 hereof, for a period of two years
beginning the date hereof, and shall continue in effect from year to year
thereafter (collectively, the "Term"); provided, however, that any such
continuation shall be expressly approved at least annually either by the Board
of Trustees of the Fund, including a majority of the directors who are not
parties hereto or Interested Persons of any such party, cast at a meeting called
for the purpose of voting on such renewal, or the affirmative vote of a majority
of the Outstanding Voting Securities (as such term is defined in Section
2(a)(42) of the 0000 Xxx) of the Fund.
(a) Any continuation of this Agreement pursuant to Section 5.1 hereof shall be
deemed to be specifically approved if such approval occurs:
(i) with respect to the first continuation hereof, during the 60 days prior to
and including the earlier of (A) the date specified herein for the termination
of this Agreement in the absence of such approval, or (B) the second anniversary
of the execution of this Agreement; and
(ii) with respect to any subsequent continuation hereof, during the 60 days
prior to and including the first anniversary of the date upon which the most
recent previous annual continuance of this Agreement became effective; or
(iii) at such other date or time provided in or permitted by Rule 15a-2 of the
1940 Act.
5.2 This Agreement may be terminated at any time, without penalty, as follows:
(a) By a majority of the Trustees of the Fund who are not parties hereto or
Interested Persons of any such party, or by the affirmative vote of a majority
of the Outstanding Voting Securities of the Fund, upon at least 60 days' prior
written notice to the Adviser at its principal place of business; and
(b) By the Adviser, upon at least 60 days' written notice to the Fund at its
principal place of business.
6. Retention of Control by Fund. The Fund acknowledges that the investment
advice and recommendations to be provided by the Adviser hereunder are advisory
in nature only. The Fund further acknowledges that, at all times during the Term
hereof, the Fund (and not the Adviser) shall retain full control over the
investment policies of the Fund. Nothing contained herein shall be deemed or
construed to limit, prohibit or restrict the right or ability of the trustees of
the Fund to delegate to the appropriate officers of the Fund, or to a committee
of trustees of the Fund, the power to authorize purchases, sales or other
actions affecting the portfolio of the Fund between meetings of the Board of
Trustees of the Fund; provided, however, that all such purchases, sales or other
actions so taken during such time shall be consistent with the investment policy
of the Fund and shall be reported to the Board of Trustees of the Fund at its
next regularly scheduled meeting.
7. Brokers and Brokerage Commissions.
7.1 For purposes of this Agreement, brokerage commissions paid by the Fund upon
the purchase or sale of the Fund's portfolio securities shall be considered a
cost of securities of the Fund and shall be paid by the Fund in accordance with
Section 4.1(e) hereof.
7.2 The Adviser shall place Fund portfolio transactions with brokers and dealers
who render satisfactory service in the execution of orders at the most favorable
prices and at reasonable commission rates; provided, however, that the Adviser
may pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting such transaction, if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, in terms
of either that particular transaction or the overall responsibilities of the
Adviser.
7.3 In placing portfolio business with broker-dealers for or on behalf of the
Fund, the Adviser shall seek the best execution of each such transaction, and
all such brokerage placements shall be consistent with the Rules of Conduct of
the National Association of Securities Dealers, Inc. Notwithstanding the
foregoing, the Fund shall retain the right to direct the placement of all
portfolio transactions for or on behalf of the Fund, and, in furtherance
thereof, the Fund may establish policies or guidelines to be followed by the
Adviser in its placement of Fund portfolio transactions pursuant to the
foregoing provisions. The Adviser shall report to the Board of Trustees of the
Fund at least on a quarterly basis regarding the placement of Fund portfolio
transactions.
7.4 The Adviser shall not deal with any affiliate in any transaction hereunder
in which such affiliate acts as a principal, nor shall the Adviser, in rendering
services to the Fund hereunder, execute any negotiated trade with any affiliate
if execution thereof involves such affiliate's acting as a principal with
respect to any part of an order for or on behalf of the Fund.
8. Purchases by Affiliates. Neither the Adviser nor any officer or director
thereof shall take a short position in Shares of the Fund. Any direct purchase
of Shares of the Fund by any officer or director of the Fund (or by any defined
benefit plan established for the benefit of such officer or director) shall be
made for investment purposes at the current price for such Shares available to
the public.
9. Assignment. This Agreement may not be assigned by either party hereto. This
Agreement shall terminate automatically in the event of any assignment (as such
term is defined in Section 2(a)(4) of the 1940 Act). Any attempted assignment of
this Agreement shall be of no force and effect.
10. Amendments. This Agreement may be amended in writing signed by both parties
hereto; provided, however, that no such amendment shall be effective unless
approved by a majority of the trustees of the Fund who are not parties hereto or
Interested Persons of any such party cast at a meeting called for the purpose of
voting on such amendment and by the affirmative vote of a majority of the
outstanding Voting Securities of the Fund.
11. Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, without
reference to the conflict of laws provisions thereof. In the event of any
inconsistency between this Agreement and the 1940 Act, the 1940 Act shall
govern, and the inconsistent provisions of this Agreement shall be construed so
as to eliminate such inconsistency.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
The Fund:
THIRD AVENUE TRUST, for the Third Avenue Small-Cap Value Fund series
By:
Xxxxx X. Xxxxx
Executive Vice President
The Adviser:
EQSF ADVISERS, INC.
By:
Xxxxxx X. Xxxxxxx
President
