FORM OF INVESTMENT ADVISORY AGREEMENT
FORM OF INVESTMENT ADVISORY AGREEMENT dated ___________, 2004 between
RMR Real Estate Securities Fund (the "Fund"), a Massachusetts business trust,
and RMR Advisors, Inc. (the "Advisor"), a Massachusetts corporation.
RECITALS
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a closed-end, non-diversified management
investment company;
WHEREAS, the Advisor is registered under the Investment Advisors Act of
1940, as amended (the "Advisors Act"), 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 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 Form N-2, 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 manager 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
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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
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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 (i) its use of
statistical, research and other services furnished by brokers;
(ii) payments made by brokers effecting transactions for the
Fund to other persons on the Fund's behalf for services (such
as custodial or professional fees); and (iii) sales of Fund
shares.
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 .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. Fee Waiver. Notwithstanding the provisions of the above
Section 6, during the five year period following the closing
of the Fund's first public offering of common shares, (i) the
Advisor agrees to waive a portion of its Advisory Fee equal to
an annual rate of .25% of Average Daily Total Assets.
8. Duration and Termination. This Agreement shall become
effective on the date first set forth and 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 Board (including a majority of the Trustees who are not
"interested persons" of the Advisor, 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.
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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 at the time outstanding and
entitled to vote; (ii) this Agreement shall terminate
automatically in the event of its assignment (as "assignment"
is defined in the 1940 Act).
9. 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.
10. Non-Liability of Shareholders, Trustees, etc. The Charter is
on file with the Secretary of State of The Commonwealth of
Massachusetts. This Agreement is executed on behalf of the
Fund, by the Trustees or by an officer or officers of the Fund
in their capacity as such and not individually, and neither
the shareholders nor the Fund's Trustees nor any officers,
employees or agents shall be liable thereunder and the Advisor
shall look solely to the Fund's estate for the payment of any
claim hereunder or for the performance of the Fund's duties
created by this Agreement.
11. 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.
12. Governing Law. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts for
contracts to be performed entirely
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therein without reference to choice of law principles and in
accordance with the applicable provisions of the 1940 Act.
13. 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.
14. License Agreement. The Fund shall have the non-exclusive right
to use the name "RMR Real Estate Securities 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, Inc. serves as investment manager or advisor to
the Fund.
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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 SECURITIES FUND
By:______________________________________
Xxxxxx X. X'Xxxxx, President
RMR ADVISORS, INC.
By:______________________________________
Xxxx X. Xxxxxxxx, Vice President
[SIGNATURE PAGE TO ADVISORY AGREEMENT]
