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
427724.01-Chicago Server 1A - MSW
