INVESTMENT ADVISORY AGREEMENT
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THIS AGREEMENT is made this 9th day of April, 1986 by and
between LEPERCQ-ISTEL TRUST, a Massachusetts Business Trust (the "Trust") and
LEPERCQ, DE NEUFLIZE & CO. INCORPORATED, a New York corporation (the "Adviser"),
with respect to the following recital of fact:
R E C I T A L
WHEREAS, the Trust is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended, and is engaged in the
business of acting as an investment adviser; and
WHEREAS, the Trust offers its shares in one series; and
WHEREAS, the Trust and the Adviser desire to enter into an
agreement to provide for the management of the assets of Lepercq-Istel Fund (the
"Fund") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the receipt whereof
is hereby acknowledged, the parties hereto agree as follows:
1. Investment Management. The Adviser shall act as
investment adviser for the Fund and shall, in such capacity, supervise the
investment and reinvestment of the cash, securities or other properties
comprising the Fund's assets, subject at all times to the policies and control
of the Trust's Trustees. The Adviser shall give the Fund the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser.
2. Duties of Investment Adviser. In carrying out its
obligation under paragraph 1 hereof, the Adviser shall:
(a) 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 portfolio of the
Fund, and whether concerning the individual companies whose
securities are included in the Fund's portfolio or the
activities in which they engage, or with respect to
securities which the Adviser considers desirable for
inclusion in the Fund's portfolio;
(b) determine what industries and companies shall be
represented in the Fund's portfolio and regularly report
upon them to the Trust's Trustees;
(c) formulate and implement continuing programs for the
purchases and sales of the securities of such companies and
regularly report thereon to the Trust's Trustees; and
(d) take, on behalf of the Fund, all actions which appear
to the Fund necessary to carry into effect such purchase and
sale programs and supervisory functions as aforesaid,
including the placing of orders for the purchase and sale of
portfolio securities.
3. Broker-Dealer Relationships. The Adviser is responsible
for decisions to buy and sell securities for the Fund, broker-dealer selection,
and negotiation of its brokerage commission rates. The Adviser may select
Lepercq, de Neuflize Securities Inc. as the broker-dealer to effect security
transactions which are effected on The New York Stock Exchange, Inc. or the
American Stock Exchange or which are listed on NASDAQ. The Adviser's primary
consideration in effecting a security transaction will be execution at a price
that is reasonable and fair compared to the commission, fee or other
remuneration received or to be received by other brokers in connection with
comparable transactions including similar securities being purchased or sold on
a securities exchange during a comparable period of time.
In selecting a broker-dealer to execute each particular
transaction, the Adviser 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 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 portfolio
execution services offered. Subject to such policies and procedures as the
Trustees may determine, the Adviser 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 Adviser for the Fund's use an amount of
commission for affecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Adviser 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 Adviser's overall responsibilities with respect to
the Fund. The Adviser 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 or the Adviser for the
Fund's use. Such allocation shall be in such
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amounts and proportions as the Adviser shall determine and the Adviser will
report on said allocations regularly to the Trustees of the Trust indicating the
brokers to whom such allocations have been made and the basis therefore.
4. Control by Trustees. Any investment program undertaken by
the Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Adviser on behalf of the Fund thereto, shall at all times be
subject to any directives of the Trustees of the Trust.
5. Compliance with Applicable Requirements. In carrying out
its obligations under this Agreement, the Adviser shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any
rules and regulations adopted thereunder;
(b) the provisions of the Registration Statements of the
Trust under the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Declaration of Trust of the
Trust, as amended; and
(d) the provisions of the By-Laws of the Trust, as
amended; and
(e) any other applicable provisions of state and Federal
law.
6. Expenses. The expenses connected with the Fund shall be
allocable between the Fund and the Adviser as follows:
(a) The Adviser shall furnish, at its expense and without
cost to the Fund, the services of a President, Secretary and
one or more Vice Presidents of the Trust, to the extent that
such additional officers may be required by the Trust for
the proper conduct of its affairs.
(b) The Adviser shall further maintain, at its expense
and without cost to the Fund, a trading function in order to
carry out its obligations under subparagraph (d) of
paragraph 2 hereof to place orders for the purchase and sale
of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be construed
to require the Adviser to bear:
(i) any of the costs (including applicable office
space, facilities and equipment) of the services of a
principal financial officer of the Trust whose normal
duties consist of maintaining the
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financial accounts and books and records of the Fund;
including the reviewing of calculations of daily net
asset value and preparing tax returns; or
(ii) any of the costs (including applicable office
space, facilities and equipment) of the services of any
of the personnel operating under the direction of such
principal financial officer.
Notwithstanding the obligation of the Fund to bear the
expense of the functions referred to in clauses (i) and
(ii) of this subparagraph (c), the Adviser may pay the
salaries, including any applicable employment or payroll
taxes and other salary costs, of the principal financial
officer and other personnel carrying out such functions
and the Fund shall reimburse the Adviser therefore upon
proper accounting.
(d) All of the ordinary business expenses incurred in
the operations of the Fund and the offering of its shares
shall be borne by the Fund unless specifically provided
otherwise in this paragraph 6. These expenses include but
are not limited to brokerage commissions, legal,
auditing, taxes or governmental fees, the cost of
preparing share certificates, custodian, transfer and
shareholder service agent costs, expenses of issue, sale,
redemption and repurchase of shares, expenses of
registering and qualifying shares for sale, expenses
relating to trustee and shareholder meetings, the cost of
preparing and distributing reports and notices to
shareholders, the fees and other expenses incurred by the
Fund in connection with membership in investment company
organizations and the cost of printing copies of
prospectuses and statements of additional information
distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the
Trustees, the Adviser may perform services on behalf of the Fund which are not
required by this Agreement. Such services will be performed on behalf of the
Fund and the Adviser's cost in rendering such services may be billed monthly to
the Fund, subject to examination by the Fund's independent accountants. Payment
or assumption by the Adviser of any Fund expense that the Adviser is not
required to pay or assume under this Agreement shall not relieve the Adviser of
any of its obligations to the Fund nor obligate the Adviser to pay or assume any
similar Fund expense on any subsequent occasions.
8. Compensation. The Fund shall pay the Adviser in full
compensation for services rendered hereunder an annual investment advisory fee,
payable quarterly, of 3/4 of 1% of the average daily net assets of the Fund. The
average daily net assets of the Fund shall be determined in the manner set forth
in the Declaration of Trust and prospectus of the Trust.
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9. Expense Limitation. If, for any fiscal year, the total of
all ordinary business expenses of the Fund, including all investment advisory
fees but excluding brokerage commissions and fees, taxes, interest and
extraordinary expenses such as litigation, would exceed the expense limitations
applicable to the Fund imposed by the securities laws or regulations thereunder
of any state in which the Fund's shares are qualified for sale, the aggregate of
all such investment advisory fees shall be reduced by the amount of such excess.
The amount of any such reduction to be borne by the Adviser shall be deducted
from the quarterly investment advisory fee otherwise payable to the Adviser
during such fiscal year; and if such amount should exceed such quarterly fee,
the Adviser agrees to pay to the Fund such excess expenses no later than the
last day of the first month of the next succeeding fiscal year. For the purposes
of this paragraph, the term "fiscal year" shall exclude the portion of the
current fiscal year which shall have elapsed prior to the date hereof and shall
include the portion of the then current fiscal year which shall have elapsed at
the date of termination of this Agreement.
10. Non-Exclusivity. The services of the Adviser to the Fund
are not to be deemed to be exclusive, and the Adviser shall be free to render
investment advisory and corporate administrative or other services to others
(including other investment companies) and to engage in other activities. It is
understood and agreed that officers or directors of the Adviser may serve as
officers or trustees of the Trust, and that officers and trustees of the Trust
may serve as officers or directors of the Adviser to the extent permitted by
law; and that the officers and directors of the Adviser are not prohibited from
engaging in any other business activity or from rendering services to any other
person, or from serving as partners, officers or directors of any other firm or
corporation, including other investment companies.
11. Term and Approval. This Agreement shall become effective
at the close of business on the date set forth above (the "Effective Date") and
shall, unless terminated as hereinafter provided, continue in force and effect
for two years from the Effective Date and from year to year thereafter, provided
that such continuance is specifically approved at least annually:
(a) (i) by the Trustees or (ii) by the vote of a majority
of the outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Trustees
who are not parties to this Agreement or interested persons
of a party to this Agreement (other than as Trustees), by
votes cast in person at a meeting specifically called for
such purpose.
12. Termination. This Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Trustees or by vote of
a majority of the Fund's outstanding voting securities, or by the Adviser, on
sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by either party.
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This Agreement shall automatically terminate in the event of its assignment, the
term "assignment" for this purpose having the meaning defined in Section 2(a)(4)
of the 1940 Act.
13. Liability of Adviser and Indemnification. In the absence
of willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser or any of its
officers, directors or employees, it shall not be subject to liability to the
Fund or to any shareholder of the Fund for any act or omission in the course of,
or connected with, rendering services hereunder or for any losses that may, from
time to time, be sustained in the purchase, holding or sale of any security.
14. Liability Fund Shareholders and Trustees. The
Declaration of Trust establishing the Trust, dated March 7, 1986, a copy of
which, together with the amendments thereto ("Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts, provides that the
name "Lepercq-Istel Trust" refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of the Trust may be held to any personal
liability, nor may resort be had to their private property for the satisfaction
of any obligation or claim or otherwise in connection with the affairs of the
Fund but the Fund's property only shall be liable.
15. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other party at
such address as such other party may designate for the receipt of such notice.
Until further notice to the other party, it is agreed that the address of the
Trust and that of the Adviser shall be 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
16. 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 shall be
resolved by reference to such term or provision of the 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 Securities and Exchange Commission issued pursuant to said Act. In
addition, where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is released by rules, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation and order.
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IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed in duplicate by their respective officers on the
day and year first above written.
LEPERCQ-ISTEL TRUST
ATTEST:
By:____________________________
Xxxxxx Xxxxxx, Co-President
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Xxxxxx XxXxxxxx, Secretary By:____________________________
Xxxxxxx Xxxxx, Co-President
LEPERCQ, de NEUFLIZE & CO.
INCORPORATED
ATTEST:
By:____________________________
Xxxxx Xxxxxxxxx,
Managing Director
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Xxxxxx XxXxxxxx, Secretary
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