Exhibit (G)
LEND LEASE HYPERION HIGH-YIELD CMBS FUND, INC.
FORM OF INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated as of August 12, 2003 between Lend Lease Hyperion
High-Yield CMBS Fund, Inc. (the "Fund"), a Maryland corporation, and Hyperion
Capital Management, Inc. (the "Adviser"), a Delaware corporation.
WHEREAS, the Fund is engaged in business as a non-diversified, closed-end
management investment company registered under the Investment Company Act of
1940 (collectively, with the rules and regulations promulgated thereunder, the
"1940 Act");
WHEREAS, the Adviser is a registered investment adviser under the
Investment Adviser's Act of 1940, with the rules and regulations promulgated
thereunder;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Fund with respect to the investment and the
reinvestment of the Fund's assets.
2. Duties and Obligations of the Adviser with Respect to Investments of
Assets of the Fund
(a) Subject to the succeeding provisions of this paragraph and subject
to the direction and general control of the Fund's Board of Directors, the
Adviser shall act as investment adviser for and supervise and manage the
investment and reinvestment of the portfolio's assets and in connection
therewith have complete discretion in purchasing and selling securities and
other assets for the Fund and in voting and exercising all other rights
appertaining to such securities and other assets on behalf of the Fund. To
carry out such decisions, the Adviser is hereby authorized, as agent for
the Fund and attorney-in-fact for the Fund's account and at the Fund's risk
and in the Fund's name, to place such orders for the investment and
reinvestment of the Fund's assets.
(b) In the performance of its duties under this Agreement, the Adviser
shall at all times conform to, and act in accordance with, any requirements
imposed by (i) the provisions of the 1940 Act, and of any rules or
regulations in force thereunder; (ii) any other applicable provision of
law; (iii) the provisions of the Articles of Incorporation and By-Laws of
the Fund, as such documents are amended from time to time; (iv) the Fund's
Registration Statement filed with the 1940 Act and the Securities Act of
1933, including the Prospectus and Statement of Additional Information
forming a part thereof (the "Registration Statement"); and (v) any policies
and determinations established by the Board of Directors of the Fund.
(c) The Adviser shall report to the Fund's Board of Directors at each
meeting thereof all changes in the Fund's portfolio and will also keep the
Fund in touch with important developments affecting the portfolio and, on
the Adviser's initiative, will furnish the Fund from time to time with such
information as the Adviser may believe appropriate for this purpose,
whether concerning the individual entities whose securities are included in
the portfolio, the activities in which such entities engage, Federal income
tax policies applicable to the Fund's investments, or the conditions
prevailing in the financial markets or the economy generally. The Adviser
shall also furnish the Fund with such statistical and analytical
information with respect to the portfolio securities as it may believe
appropriate or as the Fund may reasonably request.
(d) The Adviser may from time to time employ, subcontract with or
otherwise associate itself with entirely at its expense, such persons as it
believes to be particularly fitted to assist it in the execution of its
duties hereunder.
(e) The Adviser will bear all costs and expenses of its partners and
employees and any overhead incurred in connection with its duties hereunder
and shall bear the costs of any salaries or directors' fees of any officers
or directors of the Fund who are affiliated persons (as defined in the Act)
of the Adviser.
(f) The Adviser shall give the Fund the benefit of its best judgment
and effort in rendering services hereunder, but the Adviser 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 a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(g) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as
investment adviser for any other person, firm or corporation, or from
engaging in any other lawful activity, and shall not in any way limit or
restrict the Adviser or any of its partners, 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 Adviser will undertake no activities which, in
its judgment, will adversely affect the performance of its obligations
under this Agreement.
3. Fund Transactions and Brokerage
The Adviser is authorized, for the purchase and sale of the Fund's
portfolio securities, to employ such securities dealers as may, in the
judgment of the Adviser, implement the investment objectives and policies
of the Fund to obtain the best net results taking into account such factors
as price, including dealer spread, the size, type and difficulty of the
transaction involved, the firm's general execution and operational
facilities and the firm's risk in positioning the securities involved.
Consistent with these investment objectives and policies, the Adviser is
authorized to direct the execution of the Fund's portfolio transactions to
dealers and brokers furnishing statistical information or research deemed
by the Adviser to be useful or valuable to the performance of its
investment advisory functions for the Fund.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Fund or be in
breach of any obligation owing to the Fund under this Agreement, or
otherwise, solely by reason of its having directed a securities transaction
on behalf of the Fund to a broker-dealer in compliance with the provisions
of Section 28(e) of the Securities Exchange Act of 1934.
4. Compensation of the Adviser
(a) The Fund agrees to pay to the Adviser for all services rendered a
fee computed and payable monthly in an amount equal to 0.50% of the Fund's
average weekly net assets on an annualized basis, for the then-current
fiscal year. 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. The Adviser may use any portion of this fee for distribution of Fund
shares or for making servicing payments to organizations whose customers or
clients are Fund shareholders. The Adviser may waive its right to any fee
to which it is entitled hereunder, provided such waiver is delivered to the
Fund in writing. Any reimbursement of expenses to which the Fund may become
entitled to pursuant to paragraph 2(c) hereof, will be paid to the Fund at
the same time as the Fund pays the Adviser hereunder.
(b) For purposes of this Agreement, the average daily net assets of
the Fund shall mean the average daily value of the total assets of the
Fund, minus the accrued liabilities (including accrued expenses) of the
Fund. The average daily net assets of the Fund shall be calculated as set
forth in the current prospectus or pursuant to the procedures adopted by
resolutions of the Fund's Board of Directors for calculating the net asset
value of the Fund's shares or delegating such calculations to third
parties.
5. Duration and Termination
(a) This Agreement will become effective on the date hereof and shall
continue in effect until August 12, 2005, and thereafter for successive
twelve-month periods (computed from each May 1st), provided that such
continuation is specifically approved at least annually by (i) the Board of
Directors and by a majority of those directors who are neither party to
this Agreement nor, other than by their service as directors of the Fund,
interested persons (as defined in the 1940 Act and the rules thereunder) of
any such person who is party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the vote of
more than 75% of the outstanding shares of the Fund's Common Stock. Upon
the effectiveness of this Agreement, it shall supersede all previous
agreements between the Adviser and the Fund covering the subject matter
hereof. This Agreement may be terminated at any time, without the payment
of any penalty, (i) by vote of a majority of the Fund's outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, or (ii) by
a vote of a majority of the entire Board of Directors, on sixty days'
written notice to the Adviser, or (iii) by the Adviser on sixty days'
written notice to the Fund.
(b) This Agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by either party and this Agreement shall
terminate automatically in the event of any such transfer, assignment,
sale, hypothecation or pledge by either party. The terms "transfer",
"assignment" and "sale" as used in this paragraph shall have the meanings
ascribed thereto by governing law and in applicable rules or regulations of
the Securities and Exchange Commission.
6. Amendment
This Agreement may not be amended without the approval of the holders
of more than 75% of the Fund's outstanding Common Stock.
7. 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 such notice 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.
8. Governing Law
This Agreement shall be construed in accordance with the laws of the
State of New York and in accordance with the applicable provisions of the
1940 Act.
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.
[SEAL]
LEND LEASE HYPERION HIGH-YIELD CMBS FUND, INC.
By:___________________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
[SEAL]
HYPERION CAPITAL MANAGEMENT, INC.
By:___________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Secretary and Compliance Officer
