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INVESTMENT MANAGEMENT AGREEMENT
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The undersigned (the "Client"), being duly authorized, hereby appoints Xxxxx &
Steers Capital Management, Inc. (the "Investment Manager"), an investment
adviser registered under the Investment Advisers Act of 1940 located at 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as investment manager for certain of the
assets of the client (the "Account") on the following terms and conditions:
1. Investments.
A) Subject to the Investment Objectives and Guidelines referred to in
Exhibit A, the Investment Manager has full discretionary authority and is
authorized to manage and administer the Account without prior consultation
or approval of the Client. The Client understands and is willing to accept
the risk involved in such investments, and acknowledges that the Client has
been informed that there can be no assurance that such objectives can or
will be achieved.
B) Except as may be otherwise specified by written notice from the Client,
the Investment Manager's authority thereunder includes the power to: (i)
buy, sell, exchange, convert and otherwise trade in all real estate
securities subject to Exhibit A as the Investment Manager may deem
advisable and in the best interest for the Account, and (ii) open accounts
and place orders for the execution of such securities transactions through
such brokers or dealers as the Investment Manager may select. In compliance
with Section 28(e) of the Securities Exchange Act of 1934, the Investment
Manager shall use its best efforts in seeking the combination of best price
and execution in selecting brokers or dealers to execute such orders.
C) The Account shall consist of the (i) cash and other investment assets
designated by the Client at the time this Agreement becomes effective and
held in a separate account maintained by the Client with the custodian
designated in writing to the Investment Manager by the Client (the
"Custodian"), (ii) cash or assets added to the Account from time to time by
the Client, and (iii) any dividends, interest or other payments in respect
of assets held in the Account, including the proceeds of the sale or
disposition of any such assets. The Client may withdraw cash from the
Account on not less than five business days' written notice to the
Investment Manager. The Investment Manager shall maintain the Account in as
fully invested a position as is reasonably practicable, but shall not be
responsible for the investment and reinvestment of any cash balances
remaining overnight in the Account from time to time, it being understood
that the Client will make arrangements directly with the Custodian for the
investment and reinvestment from time to time of any cash balances in the
Account.
D) The Investment Manager will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Account are
invested. The Investment Manager will
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maintain appropriate records detailing its voting of proxies on behalf of
the Account and will provide to the Client at least annually a report
setting forth the proposals voted on and how the Account's securities were
voted since the prior report, including the name of the corresponding
issuers.
2. Transaction Procedures.
A) All transactions shall be consummated by payment to or delivery by the
Client, or to or by the Custodian, of cash or securities due to or from the
Account. The Investment Manager shall not act as a custodian for the
Account, and shall not take or have possession of any assets of the
Account.
B) Instructions of the Investment Manager to the Client shall be made in
writing, or if made orally shall be confirmed as soon as practicable
thereafter.
C) The Investment Manager shall instruct all brokers executing orders on
behalf of the Account to forward to the Client and/or the Custodian copies
of all brokerage confirmations promptly after execution of transactions.
3. Performance Reports; Benchmark; Client Meetings.
The Investment Manager, with the assistance of and in coordination with the
Custodian, shall maintain complete records of income and principal and
shall furnish to the Client: (i) monthly written statements of account and
valuation of the investment assets in the Account as of the last business
day of each month during the term of this Agreement and (ii) such other
reports as the Client may reasonably request from time to time. The Client
agrees that the index specified in Exhibit A shall be an appropriate index
for benchmarking the performance of the Account. The Investment Manager
will meet the Client at the Client's discretion, the timing of such
meetings to be reasonably acceptable to the Investment Manager.
4. Reports to the Investment Manager.
The Client shall instruct the Custodian to provide the Investment Manager
and the Client with such periodic reports concerning the status of the
Account as the Investment Manager may from time to time reasonably request.
5. Confidential Relationships.
All information and recommendations furnished by the Investment Manager
shall be regarded as confidential by the Client. The Investment Manager
shall regard as confidential all information concerning the affairs of the
Client. The Investment Manager agrees that the Client may share such
information and recommendations as it receives from the Investment Manager
with other investment managers retained by the Client, if deemed
appropriate by the Client in connection with the Client's overall
investment program. In addition, the Client may share such information and
recommendations as it receives from other investment managers with the
Investment Manager as the Client deems appropriate. The Client shall
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advise any other investment managers that they shall treat information and
recommendations obtained by the Investment Manager as confidential.
6. Fee.
For its services hereunder, the Investment Manager shall receive a
quarterly fee, payable in arrears, equal to one-fourth of the percentages
set forth in Exhibit B of the aggregate Fair Market Value (as hereinafter
defined) of all investment assets comprising the Account at the close of
business on the last day of the preceding calendar quarter (such aggregate
amount being hereinafter referred to as the "Quarter-End Fee Base"):
The Quarter-End Fee Base shall include cash balances in the Account,
notwithstanding that the investment and reinvestment of such cash balances
shall remain the responsibility of the Client and that such cash balances
may represent interests in a pooled cash-management vehicle into which cash
balances in the Account have been swept. The Quarter-End Fee Base shall be
calculated on a trade-date basis and shall include accrued but unpaid
dividends and interest and receivables net of payables.
Fair Market Value shall mean (i) with respect to a security listed on a
securities exchange, the last sale price on the final business day of the
period to be calculated on the principal securities exchange on which it is
traded, or, if no sale, the last available bid price on any such exchange,
as reported on a consolidated tape, as determined by the Custodian, and
(ii) with respect to any other asset, the fair market value as determined
in good faith by the Investment Manager in accordance with commercially
accepted accounting practices and such procedures as may be approved by the
Client.
The fee shall be pro-rated for any calendar quarter during which only a
portion of this Agreement is in effect. The Investment Manager will
promptly following the end of each quarter issue a statement to the Client
setting forth the fee for such quarter and the basis on which the fee
calculation was made. The Client shall pay the fee within 30 days of
receipt of the fee statement.
7. Representation by Client.
The execution and delivery of this Agreement by the Client shall constitute
the representation by the Client that the terms hereof do not violate any
obligation by which the Client is bound, whether arising by contract,
operation of law or otherwise, and that the Client has the power, capacity,
and authority to enter into this Agreement and to perform in accordance
herewith.
8. Manager's Standard of Care and Liability.
In making decisions affecting the Account, the Investment Manager shall be
guided by the fact that the objectives of the Client are long term in
nature, and shall be mindful of the constraints that are imposed on a
prudent investment manager of an institutional account. The Investment
Manager shall manage the assets of the Account with the care, skill,
prudence
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and diligence under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters would use in the
conduct of any enterprise of a like character and with like aims, having in
mind the fiduciary standards of care and prudence appropriate for the
management of an institutional account. The Client understands that the
Investment Manager does not warrant the performance of the portfolio or
individual components thereof, however, and that the Investment Manager
shall not be held liable merely because of adverse results in such
performance, provided the Investment Manager has acted without gross
negligence and in good faith.
9. Exemption from Liability.
The Client agrees not to hold the Investment Manager liable for any act or
omission of the Custodian or of a broker-dealer (including broker-dealers
selected by the Investment Manager in a prudent manner) unless the
Investment Manager: (i) knowingly participates in such act or omission;
(ii) has actual knowledge of such act or omission and fails to take
reasonable remedial action; or (iii) through gross negligence in performing
its own responsibilities hereunder, has enabled the Custodian or
broker-dealer to commit such act or omission.
10. Authorized Parties and Signatures.
Each party shall forward from time to time to the other a list and, upon
request, specimen signatures of the individuals and parties who are
authorized to act on its behalf, and shall maintain such list and specimens
current. Each such list shall be effective until revoked or modified in
writing. Each party shall be fully protected in relying upon any written
notice, instruction, direction or other communication that it reasonably
believes (based on the most current written list and specimen signatures
from the other party) to have been executed by an individual who is
authorized to act on behalf of the other party.
11. Service to Other Clients.
It is understood that the Investment Manager performs investment advisory
services for various clients, other than the Client, some of which have
investment objectives similar to those of the Client. The Investment
Manager may give advice and take action in the performance of its duties
with respect to any of its other clients that may differ from the advice
given to the Client or the timing or nature of action taken with respect to
investments in the Account. Nothing in this Agreement shall be deemed to
impose upon the Investment Manager any obligation to purchase or sell for
the Account any security or other property that the Investment Manager
purchases or sells for its own account or for the account of any other
client.
12. The Investment Manager Warranty; Insurance.
The Investment Manager warrants that it is duly registered as an investment
adviser under the Investment Advisers Act of 1940, and that it will
promptly advise the Client of any change in its registration or status
under that Act and under any other applicable law. In the event of
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any termination of such registration of the Investment Manager under said
Act, this Agreement may be terminated at once at the discretion of the
Client by written notice to the Investment Manager. The Investment Manager
agrees to maintain in force during the term of this Agreement insurance
and/or bonding coverage in commercially reasonable amounts as required by
law.
13. Termination.
This agreement may be terminated by either party giving to the other
written notice at least thirty (30) days prior to the date on which such
termination is to become effective; provided that the Client may at any
time, upon delivery of written notice to the Investment Manager, terminate
immediately the discretionary authority of the Investment Manager. In
addition, the Client may terminate this Agreement without such notice, but
if such termination is not for cause, the Client agrees to pay the
Investment Manager a termination fee determined as if the Investment
Manager had continued as investment manager for a period of thirty (30)
days after terminating, the date of termination being the valuation date
for purposes of computing such termination fee. For purposes of the
preceding sentence, termination for cause includes any termination
occurring due to an act of bad faith, fraud or gross negligence on the part
of the Investment Manager, or the termination or withdrawal of its
registration under the Investment Advisers Act of 1940.
14. Amendments.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought. The terms of this Agreement supersede all prior agreements or
understandings between the parties hereto.
15. Assignment.
No assignment (as that term is defined in the Investment Advisers Act of
1940) of this Agreement or of the Investment Manager's rights and duties
thereunder shall be made by the Investment Manager without the written
consent of the Client. The Client shall have no right to assign this
Agreement.
16. Notices.
All notices, instructions and advice with respect to securities
transactions, or any other matters contemplated by this Agreement, shall be
transmitted by any commercially reasonable means and shall be deemed to be
delivered upon receipt by the Investment Manager at the address first above
written, by the Client at the address appearing below, and by the Custodian
at such address as it may specify to the Investment Manager in writing, or
at such substituted address or addresses as shall be specified, in each
case, by the party whose address is changed, in a notice delivered in
writing to the other parties named in this paragraph.
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17. Law Governing.
Federal law and the law of the State of New York shall govern the
interpretation of this Agreement.
18. Warranty of Authority.
Each of the individuals whose signature appears below warrants that he has
full authority to execute this Agreement on behalf of the party on whose
behalf he has affixed his signature to this Agreement.
CLIENT: ___________________________________
DATE: ___________________________________
BY: ___________________________________
NAME: ___________________________________
TITLE: ___________________________________
ADDRESS: ___________________________________
___________________________________
___________________________________
Agreed to and accepted by Xxxxx & Steers Capital Management, Inc.
DATE: ___________________________________
BY: ___________________________________
NAME: ___________________________________
TITLE: ___________________________________
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EXHIBIT A
INVESTMENT OBJECTIVES AND GUIDELINES
EQUITY INCOME STRATEGY
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Investment Objective
The portfolio's investment objective is to achieve an attractive total return
with an emphasis high current income. The long-term performance objective of the
portfolio is to exceed the total return of the NAREIT Equity REIT Index.
Investment Restrictions and Guidelines
o Investments shall be limited to securities of real estate companies that
own income-producing properties, primarily real estate investment trusts
(REITs).
o The portfolio shall consist of securities of companies whose property
holdings are primarily in the United States.
o Eligible securities include: common and preferred stock, corporate debt
obligations and hybrid securities such as rights or warrants to purchase
common stock, convertible debt and convertible preferred stock.
o Policy ranges are as follows: common stock 50-100%; preferred stock,
corporate debt obligations and hybrid securities 0-50%.
o The portfolio will typically hold a minimum of 20 securities and have a
maximum investment in illiquid securities of 10%.
o No single security shall comprise more than the greater of 7% of the total
portfolio or 1.5x the security's weighting in the portfolio's benchmark,
unless this is the result of share price appreciation.
o No more than 50% of the portfolio will be invested in a single property
type or one of eight geographic regions as defined by NCREIF.
o The portfolio will seek to maintain a minimum average senior debt rating
of BBB-/BB+ from companies having a credit rating.
o A cash balance of up to 10% of assets is permitted as a function of
portfolio repositioning. The portfolio will typically be fully invested
with less than 5% cash.
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EXHIBIT B
INVESTMENT MANAGEMENT FEES
EQUITY INCOME STRATEGY
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0.50% of the first $100 million of the applicable Quarter-End Fee
Base; plus
0.25% of the next $150 million of the applicable Quarter-End Fee
Base; plus
0.20% of the applicable Quarter-End Fee Base in excess of $250
million.
