INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY
AGREEMENT dated September 7, 2018, between
RMR Real Estate Income Fund (the "Fund"), a
Maryland statutory trust, and RMR Advisors LLC
(the "Advisor"), a Maryland limited liability
company (this "Agreement").
RECITALS
WHEREAS, the Fund is registered under the
Investment Company Act of 1940, as amended (the
"1940 Act"), as a closed-end, diversified
management investment company;
WHEREAS, the Advisor is registered under
the Investment Advisers Act of 1940, as amended,
as an investment advisor and engages in the
business of acting as an investment advisor;
WHEREAS, the Fund desires to employ the
Advisor for, and the Advisor desires to provide,
investment advisory services to the Fund upon 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 and
sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Investment Description, Appointment.
The Fund desires to employ its capital by investing
and reinvesting in investments of the kind and in
accordance with the investment objectives, policies
and limitations specified in its Agreement and
Declaration of Trust, as amended from time to time
("Charter"), its prospectus ("Prospectus") and
statement of additional information ("Statement")
filed with the Securities and Exchange Commission
("SEC") as part of the Fund's Registration
Statement on Forms N-2 and N-14, as amended
from time to time ("Registration Statement"), and in
the manner and to the extent as may from time to
time be approved by the Board of Trustees of the
Fund (the "Board"). Copies of the Prospectus, the
Statement and the Charter have been or will be
submitted to the Advisor. The Fund agrees to
provide copies of all amendments to the
Registration Statement and the Charter to the
Advisor on an on-going basis. The Fund hereby
appoints the Advisor to act as the investment
advisor to the Fund. The Advisor accepts the
appointment and agrees to furnish the services for
the compensation set forth below.
2. Services as Investment Advisor. Subject
to the supervision, direction and approval of the
Board, the Advisor will (a) manage the Fund's
holdings in accordance with the Fund's investment
objectives and policies as stated in the Charter and
the Registration Statement; (b) make investment
decisions for the Fund; (c) place purchase and sale
orders for portfolio transactions for the Fund; and
(d) provide research services to the Fund. In
providing those services, the Advisor will conduct a
continual program of investment, evaluation and, if
appropriate, sale and reinvestment of the Fund's
assets. In compliance with applicable law, the
Advisor is hereby authorized to retain third parties
and to delegate some or all of its duties and
obligations under this paragraph 2 to such persons
provided that such persons shall remain under the
general supervision of the Advisor.
3. Standard of Care. The Advisor shall
give the Fund the benefit of its best judgment and
effort in rendering services. The Advisor shall not
be liable for any act or omission or for any loss
sustained by the Fund in connection with the
matters to which this Agreement relates, except
those involving the Advisor's willful misfeasance,
bad faith or gross negligence in the performance of
its duties, or the reckless disregard of its obligations
and duties under this Agreement.
4. Services to Other Companies and
Accounts. The Fund understands that the Advisor
and its affiliates now act, will continue to act and
may in the future act as investment advisor or
fiduciary to other managed accounts and as
investment advisor or property manager to other
investment companies or trusts. Nothing in this
Agreement shall prevent the Advisor or any director,
officer, employee or other affiliate of the Advisor
from acting as investment advisor, property
manager, fiduciary or administrator for any other
person, firm or corporation, or from engaging in any
lawful activity, and shall not in any way limit or
restrict the Advisor or any of its directors, officers,
employees or agents from buying, selling or trading
any securities for its or their own accounts or for the
accounts of others for whom it or they may be
acting; provided, however, that the Advisor will
undertake no activities which, in its judgment, will
adversely affect the performance of its obligations
under this Agreement and further provided that that
whenever the Fund and one or more other clients
advised by the Advisor have available funds for
investment, investments suitable and appropriate for
each will be allocated in accordance with a formula
believed to be equitable to each client. The Fund
recognizes that in some cases this procedure may
adversely affect the size of the position obtainable
for the Fund. In addition, the Fund understands that
the persons employed by the Advisor to assist in the
performance of the Advisor's duties under this
Agreement will not devote their full time to such
service and nothing contained in this Agreement
shall be deemed to limit or restrict the right of the
Advisor or any affiliate of the Advisor to engage in
and devote time and attention to other businesses or
to render services of whatever kind or nature.
5. Portfolio Transactions and Brokerage.
Subject to the supervision of the Board, the Advisor
is authorized, for the purchase and sale of the
Fund's portfolio securities, to employ such
securities dealers and brokers and to negotiate
brokerage commissions on behalf of the Fund as
may, in the judgment of the Advisor, implement the
policy of the Fund to obtain the best net results
taking into account such factors as: the net price
available; the reliability, integrity and financial
condition of the broker; the size of and difficulty in
executing the order; and the value of the expected
contribution of the broker to the Fund's investment
performance on a continuing basis. The Fund
understands that the cost of the brokerage
commissions in any transaction may be greater than
that available from other brokers if the difference is
reasonably justified by other aspects of the services
offered. Subject to such policies and procedures as
the Board may determine, the Advisor may cause
the Fund to pay a broker that provides research
services to the Advisor an amount of commission
for effecting a portfolio investment transaction in
excess of the amount of commission another broker
would have charged for effecting that transaction, if
the Advisor determines in good faith that such
amount of commission was reasonable in relation to
the value of the research service provided by such
broker viewed in terms of either that particular
transaction or the Advisor's ongoing responsibilities
under this Agreement. The Fund understands that
research and investment information provided at no
cost to the Advisor by brokers that are paid by the
Fund will be available to benefit other accounts
advised by the Advisor and its affiliates. In the
allocation of the Fund's brokerage business the
Advisor is authorized to consider, subject to any
policies and procedures as the Board may determine
and applicable law, such factors as necessary to
ensure the continued receipt of research or
brokerage services the Advisor believes are useful
in its decision-making or trade execution processes.
6. Compensation of the Advisor. In
consideration of the advisory services pursuant to
this Agreement, the Fund agrees to pay to the
Advisor, on the first business day of each month a
fee ("Advisory Fee") for the previous month, and
the Advisor agrees to accept as full compensation
for all services rendered by the Advisor, computed
at the annual rate of 0.85% of the sum of the Fund's
net asset value attributable to the Fund's outstanding
common shares, plus the liquidation preference of
the Fund's outstanding preferred shares plus the
principal amount of any borrowings evidenced by
notes, commercial paper or other similar
instruments issued by the Fund ("Average Daily
Managed Assets"). The value of the Fund's Average
Daily Managed Assets shall be computed at the
times and in the manner specified by the
Registration Statement. For any period less than a
month during which this Agreement is in effect, the
fee shall be prorated according to the proportion
which such period bears to a full month of 28, 29,
30 or 31 days, as the case may be.
7. Duration and Termination. This
Agreement shall become effective on the date first
set forth above and continue for two (2) years.
Thereafter, this Agreement will continue from year
to year, or for such longer terms as may be
approved by the Board (including a majority of the
Trustees who are not "interested persons" of the
Fund, as defined by the 0000 Xxx) and as may be
permitted by the 1940 Act, but only so long as such
continuation is specifically approved at least as
often as required by the 1940 Act, as it may be
amended from time to time.
So long as the 1940 Act requires
these provisions respectively: (i) this Agreement
may be terminated by the Fund at any time without
penalty upon giving the Advisor sixty days' notice
and payment of any unpaid compensation to the
Advisor described in Section 6, above, earned prior
to such termination, provided that such termination
by the Fund shall be directed or approved by the
vote of a majority of the Trustees of the Fund in
office at the time or by the vote of the holders of a
"majority" (as defined in the 0000 Xxx) of the
voting securities of the Fund outstanding as of the
record date for such vote and entitled to vote; (ii)
this Agreement shall terminate automatically in the
event of its assignment (as "assignment" is defined
in the 1940 Act).
8. Amendment. No amendment of this
Agreement shall be effective unless it is in writing
and signed by the party against which enforcement
of the amendment is sought.
9. Expenses. The Advisor will bear all the
expenses in connection with the performance of its
advisory services under this Agreement. The Fund
will bear all other expenses incurred in the
operations of the Fund including, but not limited to
the fees payable under this Agreement, brokerage
commissions, taxes, interest, distributions, legal,
auditing, SEC, blue sky qualification or other
governmental fees, rating agency fees, the cost of
preparing share certificates, custodian, transfer and
shareholder service agent costs, accounting costs,
administration services costs (including those fees
charged by any party under any administration or
sub-administration agreements approved by the
Board) expenses of issue, sale, redemption and
repurchase of shares, dividend disbursing expenses,
expenses of registering and qualifying shares for
sale, the Fund's and its Board members'
proportionate share of insurance premiums, fees of
the Board members of the Fund who are not
"affiliated persons" (as defined in the 0000 Xxx) of
the Advisor or any affiliate of the Advisor, expenses
relating to Board and shareholder meetings, the cost
of preparing and distributing reports, notices and
proxy statements to shareholders, the fees and other
expenses incurred related to the Fund's membership
in investment company organizations and the cost
of printing copies of prospectuses and statements of
additional information for regulatory purposes and
for distribution to the Fund's shareholders and any
extraordinary expenses.
10. Governing Law. This Agreement shall
be construed in accordance with the laws of the
State of Maryland (without giving effect to the
principles of conflicts of law) for contracts to be
performed entirely therein without reference to
choice of law principles and in accordance with the
applicable provisions of the 1940 Act.
11. Notices. Any notice under this
Agreement shall be in writing to the other party at
such address as the other party may designate from
time to time for the receipt of notices and shall be
deemed to be received on the earlier of the date
actually received or on the fourth day after the
postmark if such notice is mailed first class postage
prepaid.
12. License Agreement. The Fund shall
have the non-exclusive right to use the name "RMR
Real Estate Income Fund" to designate any current
or future series of shares and may use the term
"RMR", including marks and symbols containing
such term or variations thereof as considered
appropriate, only so long as RMR Advisors LLC
serves as investment manager or advisor to the Fund.
IN WITNESS WHEREOF, the parties
hereto have caused the foregoing instrument to be
executed by their duly authorized officers and their
respective seals to be hereunto affixed, all as of the
day and the year first above written.
RMR Real Estate Income Fund
By: /s/ Xxxxxxxx Xxxx
Xxxxxxxx Xxxx, President
RMR ADVISORS LLC
By: /s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx, President and Chief Executive
Officer
