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INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN
XXX XXXXXX AMERICAN CAPITAL ASSET MANAGEMENT, INC.
AND
XXXXX INTERESTS REALTY ADVISORS LIMITED PARTNERSHIP
This Agreement is entered into this 19th day of August, 1995, between XXX XXXXXX
AMERICAN CAPITAL ASSET MANAGEMENT, INC., ("VKAC") and XXXXX INTERESTS REALTY
ADVISORS LIMITED PARTNERSHIP ("Hines"), to provide certain investment advisory
services with respect to Xxx Xxxxxx American Capital Real Estate Securities Fund
("Fund").
WHEREAS, VKAC has entered into an Investment Advisory Agreement (the "Advisory
Agreement"), dated this date, with the Fund, under which VKAC has agreed, among
other things, to act as investment adviser to the Fund; and
WHEREAS, the Advisory Agreement provides that VKAC may engage a subadviser to
furnish requested investment information and advice with respect to real estate
matters to assist VKAC in carrying out its responsibilities under the Advisory
Agreement; and
WHEREAS, it is the purpose of this Sub-Advisory Agreement (the "Agreement") to
express the agreements and understandings of the parties with respect to the
services to be provided by Xxxxx to VKAC with respect to the Fund and the terms
and conditions under which such services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, it is agreed as follows:
1. Services of Xxxxx.
Xxxxx shall act as sub-adviser to VKAC to assist VKAC in the performance of its
investment advisory responsibilities to the Fund. In this capacity, Hines shall
have the following responsibilities:
(a) to provide regional economic analysis of the areas in which properties
owned by real estate investment trusts are located;
(b) to provide analysis and information concerning the relative attractiveness
of the various property types within the several geographic regions;
(c) to evaluate and assess real estate valuations and the condition of
properties;
(d) to evaluate property managers and sponsors of real estate investment
trusts;
(e) to review and monitor the real estate investments in the
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Fund's portfolio; and
(f) to furnish such other information and reports as may reasonably be
requested by VKAC from time to time.
2. Obligations of VKAC.
VKAC shall have the following obligations under this Agreement:
(a) to keep Xxxxx fully informed as to the composition of the Fund's
investment securities;
(b) to keep Xxxxx fully advised of the Fund's investment objectives, and any
modifications and changes thereto, as well as any specific investment
restrictions or limitations by sending Xxxxx copies of each registration
statement;
(c) to furnish Xxxxx with a copy of any financial statement or report prepared
for the Fund by independent public accountants, and with copies of any
financial statements or reports made by the Fund to shareholders or to any
governmental body or securities exchange and to inform Xxxxx of the results of
any audits or examinations by regulatory authorities pertaining to the Fund;
(d) to furnish Xxxxx with any further materials or information which Xxxxx may
reasonably request to enable it to perform its functions under this Agreement;
and
(e) to compensate Xxxxx for its services under this Agreement by the payment
of fees equal to (i) 50% of the fees received by VKAC for services rendered
under the Advisory Agreement by VKAC to the Fund during the term of this
Agreement, less (ii) 50% of the amount paid by VKAC on behalf of the Fund
pursuant to any expense limitation or the amount of any other reimbursement
made by VKAC to the Fund. In the event that this Agreement shall be effective
for only part of a period to which any such fee received by VKAC is
attributable, then an appropriate pro-ration of the fee that would have been
payable to Xxxxx under this Agreement shall be made. The fees payable to Xxxxx
from VKAC shall be payable upon receipt by VKAC of advisory fees from the Fund.
3. Best Efforts.
It is understood and agreed that in furnishing the investment advice and other
services as provided in this Agreement, Xxxxx shall use its best professional
judgment to recommend actions which will provide favorable results for the
Fund. Xxxxx shall not be liable to the Fund or to any shareholder of the Fund
to any greater degree than VKAC. Hines shall be free to render similar services
to others and otherwise to engage in the real estate business and related
activities so long as the services rendered to the Fund are not impaired.
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4. Compliance With Laws.
Xxxxx represents that it is, and will continue to be throughout the term of
this Agreement, an investment adviser registered under all applicable federal
and state laws. In all matters relating to the performance of this Agreement,
Xxxxx will act in conformity with the Fund's Agreement and Declaration of
Trust, Bylaws, and current registration statement and with the instructions and
direction of VKAC and the Fund's Trustees, and will conform to and comply with
the Investment Company Act of 1940, as amended (the "1940 Act"), and all other
applicable federal or state laws and regulations.
5. Termination.
This Agreement shall terminate automatically upon the termination of the
Advisory Agreement. This Agreement may be terminated at any time, without
penalty, by VKAC or by the Fund by giving 30 days' written notice of such
termination to Xxxxx at its principal place of business, provided that such
termination is approved by the Trustees of the Fund or by vote of a majority of
the outstanding voting securities (as that phrase is defined in Section
2(a)(42) of the 0000 Xxx) of the Fund. This Agreement may be terminated at any
time by Xxxxx by giving 30 days' written notice of such termination to the Fund
and VKAC at their respective principal places of business.
6. Assignment.
This Agreement shall terminate automatically in the event of its assignment (as
that term is defined in Section 2(a)(4) of the 1940 Act).
7. Term.
This Agreement shall continue in effect, unless sooner terminated in accordance
with its terms, for an initial term of two years and shall continue in effect
from year to year thereafter provided continuance is specifically approved at
least annually by the vote of a majority of the Trustees of the Fund who are
not parties hereto or interested persons (as the term is defined in Section
2(a)(19) of the 0000 Xxx) of any such party, cast in person at a meeting called
for the purpose of voting on the approval of the terms of such renewal, and by
either the Trustees of the Fund or the affirmative vote of a majority of the
outstanding voting securities of the Fund (as that phrase is defined in Section
2(a)(42) of the 1940 Act).
8. Amendments.
This Agreement may be amended only with the approval by the affirmative vote of
a majority of the outstanding voting securities
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of the Fund (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) and
the approval by the vote of a majority of the Trustees of the Fund who are not
parties hereto or interested persons (as that term is defined in Section
2(a)(19) of the 0000 Xxx) of any such party, cast in person at a meeting called
for the purpose of voting on the approval of such amendment, unless otherwise
permitted in accordance with the 1940 Act.
9. Applicable Laws.
This Agreement shall be construed according to, and the rights and liabilities
of the parties hereto shall be governed by, the laws of the United States and
the State of Texas.
The execution of this Agreement has been authorized by the Fund's Trustees and
by the sole shareholder. This Agreement is executed on behalf of the Fund or
the Trustees of the Fund as Trustees and not individually and that the
obligations of this Agreement are not binding upon any of the Trustees,
officers or shareholders of the Fund individually but are binding only upon the
assets and property of the Fund. A Certificate of Trust in respect of the Fund
is on file with the Secretary of State of Delaware.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.
XXX XXXXXX AMERICAN CAPITAL ASSET MANAGEMENT, INC.
Name: Xxxx X. Xxxxxx
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Its: Vice President
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By: /s/ XXXX X. XXXXXX
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XXXXX INTERESTS REALTY ADVISORS LIMITED PARTNERSHIP
Name: Xxxxxxx X. Xxxxxxx, Xx.
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Its: President
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By: /s/ XXXXXXX X. XXXXXXX, XX.
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