EXHIBIT 99.(g)(2)
INVESTMENT SUB-ADVISORY AGREEMENT
This Investment Sub-Advisory Agreement ("Agreement") is made as of the 20th day
of April, 2006 by and among RMR Asia Pacific Real Estate Fund, a Massachusetts
business trust (the "Fund"), RMR Advisors, Inc. (the "Advisor") and
MacarthurCook Investment Managers Limited, (the "Sub-Advisor").
WHEREAS, the Advisor and the Sub-Advisor are each registered under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), as an
investment advisor and engage in the business of acting as an investment
advisor;
WHEREAS, the Advisor is responsible for developing, implementing and supervising
an investment program for the Fund, a non-diversified, closed-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act") pursuant to the Investment Advisory Agreement dated [ ], 2006
between the Fund and Advisor (the "Advisory Agreement");
WHEREAS, the Fund desires to employ the Sub-Advisor for, and the Sub-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, including the statement of
additional information ("Prospectus") 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 Sub-Advisor. The Fund agrees to provide
copies of all amendments to the Registration Statement and the Charter
to the Sub-Advisor on an on-going basis. The Fund hereby appoints the
Sub-Advisor to act as the sub-advisor to the Fund. The Sub-Advisor
accepts the appointment and agrees to furnish the services for the
compensation set forth below.
2. SERVICES AS SUB-ADVISOR. Subject to the supervision, direction and
approval of the Board and the Advisor, the Sub-Advisor will:
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(a) manage the Fund's holdings in accordance with the Fund's
investment objectives and policies as stated in the Charter,
Prospectus, and directions from the Board provided to the
Sub-Advisor;
(b) make investment decisions for the Fund in accordance with the
Fund's investment objectives and policies as stated in the
Charter, Prospectus, and directions from the Board provided to
the Sub-Advisor;
(c) place purchase and sale orders for portfolio transactions for the
Fund;
(d) provide research services to the Fund;
(e) vote all proxies and respond to all corporate actions for
portfolio securities in accordance with the Sub-Advisor's written
proxy voting policies and procedures, which policies and
procedures (including amendments thereof) are to be approved by
the Board, and provided to the Fund and the Advisor;
(f) report regularly to the Advisor and to the Board and provide such
information, and make appropriate persons available for the
purpose of reviewing with representatives of the Advisor and the
Board on a regular basis at reasonable times its activities
hereunder, including without limitation, review of the general
investment strategies of the Fund, the performance of the Fund in
relation to standard industry indices, stock market and interest
rate considerations and general conditions affecting the
marketplace, and the placement and execution of portfolio
transactions and provide various other reports and information
from time to time as reasonably requested by the Advisor or the
Board;
(g) act upon reasonable instructions from the Advisor which, in the
reasonable determination of the Sub-Advisor, are not inconsistent
with the Sub-Advisor's fiduciary duties under this Agreement;
(h) comply with its obligations as a service provider to the Fund in
accordance with Rule 38a-1 of the Rules and Regulation under the
1940 Act;
(i) provide the Advisor with the reports, documents and evidence
necessary for the Advisor to comply with its obligations as a
service provider to the Fund in accordance with Rule 38a-1 of the
Rules and Regulations under the 1940 Act;
(j) maintain books and records with respect to the Fund's securities
transactions and render to the Advisor and the Board such
periodic and special reports with respect thereto as they may
request;
(k) provide the necessary information and manage Fund assets in such
a manner as to (i) enable the Fund to satisfy the requirements
for qualification as a regulated investment company under
Subchapter M of
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the Internal Revenue Code of 1986, as amended, (ii) ensure the
Fund's compliance under Section 19(a) of the 1940 Act and the
rules thereunder with respect to the required written statement
to accompany certain dividend payments; and (iii) facilitate Fund
compliance with reporting and other tax-related provisions of
applicable law and the Fund policies and procedures; and
(l) furnish the Advisor from time to time with copies of all material
amendments to its Form ADV, if any.
In providing these services, the Sub-Advisor will (i) conduct a
continual program of investment, evaluation and, if appropriate, sale
and reinvestment of the Fund's assets, and (ii) conform with all
applicable provisions of Federal Securities Laws as defined in Rule
38a-1(e)(1) of the 1940 Act and rules and regulations of the SEC in
all material respects and in addition will conduct its activities
under this Agreement in accordance with any applicable laws and
regulations of any governmental authority pertaining to its investment
advisory activities.
3. COVENANTS OF THE SUB-ADVISOR. The Sub-Advisor shall:
(a) fully cooperate in any regulatory investigation, examination, or
inspection of the Fund. Subject to the approval of the Board, the
Fund will reimburse the Sub-Advisor for expenses incurred in
connection with such cooperation in the regulatory investigation,
examination or inspection with respect to matters other than the
Sub-Advisor's performance of responsibilities and duties under
this Agreement;
(b) provide such information to the Fund and the Advisor as the Fund
or the Advisor deems necessary for the Fund to comply with the
1940 Act and the rules and regulations thereunder and maintain
the effectiveness of Registration Statement;
(c) promptly notify the Fund and the Advisor: (1) in the event that
the Sub-Advisor becomes aware of any event that makes any
statement of a material fact relating to the Sub-Advisor in the
Fund's Registration Statement or any Prospectus contained therein
(or any amendment or supplement to any of the foregoing) untrue
or which requires the making of any additions to or changes in
the Fund's Registration Statement or Prospectus (or any amendment
or supplement to any of the foregoing) in order to state a
material fact relating to the Sub-Advisor required by the
Securities Act of 1933, as amended (the "1933 Act"), the 1940
Act, the Advisers Act, or the rules and regulations thereunder to
be stated therein or necessary in order to make the statements
relating to the Sub-Advisor therein (in the case of the
Prospectus, in the light of the circumstances under which they
were made), not misleading or of the necessity to amend or
supplement the Registration Statement or the Prospectus (or any
amendment or supplement to any of the foregoing) to comply with
the
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1933 Act, the 1940 Act, the Advisers Act, and the rules and
regulations thereunder, or any other law or order of any court or
regulatory body; or (2) if it (i) receives notice from any
governmental authority, agency or body of its ceasing to have
maintained its required status as a registered investment
advisor; (ii) receives notice that a governmental authority,
agency or body intends to investigate it under any law, rule, or
regulation applicable to the Sub-Advisor in connection with its
investment activities, including any routine examination or
proceeding in the ordinary course of business; (iii) will cease
to be a registered investment advisor under the Advisers Act; and
(iv) becomes aware of the commencement by any governmental,
regulatory or law enforcement authority, agency or body of any
investigation, examination or other proceeding directly involving
the Sub-Advisor, its members, managers, officers or employees,
that would affect the Sub-Advisor's ability to perform under this
Agreement;
(d) promptly notify the Fund and the Advisor of (1) any change in the
investment professionals of the Sub-Advisor providing services to
the Fund hereunder; (2) any prospective change in approach to the
Sub-Advisor's management of the Fund's assets; and (3) any other
material change in the Sub-Advisor's business activities or
circumstances that could reasonably be expected to adversely
affect the Sub-Advisor's ability to discharge its obligations
under this Agreement;
(e) treat confidentially and as proprietary information of the Fund
all records and other information relative to the Fund, and
pertaining to the Fund's prior, current or potential shareholders
with respect to their investment in the Fund, in a manner
consistent with the Privacy Policy of the Fund set forth in the
Registration Statement (as amended or supplemented from time to
time) and will not use such records and information for any
purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in
writing by the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Investment Advisor may
be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Fund;
(f) promptly notify the Fund of the occurrence of any event that
would disqualify it from serving as an investment advisor to an
investment company pursuant to Section 9(a) of the 1940 Act;
(g) notify the Fund of any change in the controlling shareholders of
the Sub-Advisor, or any change in ownership constituting an
"assignment" for purposes of the 1940 Company Act, immediately
upon the occurrence or public disclosure of the anticipated
occurrence of such change; and
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(h) procure the grant to the Fund of a royalty free license to the
Fund and the Advisor to display the trademarked "MacarthurCook"
logo during the term of this Agreement, on the condition that the
Sub-Advisor is provided with a copy of any material in which the
logo appears and if the use of the logo is reasonably deemed by
the Sub-Adviser to be materially adverse to its reputation, such
use shall cease.
4. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISOR. The Sub-Advisor
represents and warrants that it is registered with the SEC under the
Advisers Act. The Sub-Advisor will notify the Advisor immediately if
the Sub-Advisor ceases to be so registered as an investment advisor.
The Sub-Advisor further represents that the Sub-Advisor (a) is duly
organized and validly existing under the laws of the country of its
organization with the power to own and possess its assets and carry on
its business as it is now being conducted, (b) has the authority to
enter into and perform the services contemplated by this Agreement,
(c) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement, and (d) has
met, and will continue to seek to meet for the duration of this
Agreement, any other applicable federal or state requirements or
requirements under Australian law, and the applicable requirements of
any regulatory or industry self-regulatory agency, necessary to be met
in order to perform its services under this Agreement. In addition,
the Sub-Advisor represents that it has provided Advisor and the Fund
with a true and correct copy of the Sub-Advisor's Form ADV in the
entirety. The Sub-Advisor will furnish the Advisor from time to time
with copies of all material amendments to its Form ADV, if any.
5. STANDARD OF CARE. The Sub-Advisor shall give the Fund the benefit of
its best judgment and effort in rendering services. The Sub-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 Sub-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.
6. ADVISOR'S COVENANTS. The Advisor shall:
(a) if known to the Advisor, notify the Sub-Advisor of the existence
of a material event of default by the Fund under a material
agreement (including under any underwriting agreement), any
material dispute to which the Fund is a party, any material
litigation by or against the Fund, or any other material event
involving the Fund in each case of which the Advisor reasonably
believes the Sub-Advisor ought to be made aware; and
(b) at the Sub-Advisor's reasonable request, consult with the
Sub-Advisor on the Sub-Advisor's duties described in Section
2(k)(i) above.
7. SERVICES TO OTHER COMPANIES AND ACCOUNTS. The Fund understands that
the Sub-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
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advisor or property manager to other investment companies or trusts.
Nothing in this Agreement shall prevent the Sub-Advisor or any
director, officer, employee or other affiliate of the Sub-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 Sub-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 Sub-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 Sub-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 Sub-Advisor to
assist in the performance of the Sub-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 Sub-Advisor or any affiliate of the Sub-Advisor to engage
in and devote time and attention to other businesses or to render
services of whatever kind or nature. The Sub-Advisor acknowledges that
the 1940 Act and the Advisers Act contain provisions that apply to the
activities of the affiliates of the Sub-Advisor and undertakes to take
such steps and implement such procedures as are reasonably designed to
ensure compliance with such provisions.
8. PORTFOLIO TRANSACTIONS AND BROKERAGE. Subject to the supervision of
the Board, the Sub-Advisor is authorized, for the purchase and sale of
the Fund's portfolio securities and at the cost and expense of the
Fund, to employ such securities dealers and brokers and to negotiate
brokerage commissions on behalf of the Fund as may, in the judgment of
the Sub-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
Sub-Advisor may cause the Fund to pay a broker that provides research
services to the Sub-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 Sub-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 Sub-Advisor's ongoing responsibilities
under this Agreement. The Fund understands that research and
investment information provided at no cost to the
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Sub-Advisor by brokers that are paid by the Fund will be available to
benefit other accounts advised by the Sub-Advisor and its affiliates.
In the allocation of the Fund's brokerage business the Sub-Advisor is
authorized to consider (i) its use of statistical, research and other
services furnished by brokers, and (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). The
Sub-Advisor acknowledges that brokerage and principal transactions
between the Fund and the Sub-Advisor or its affiliates are strictly
regulated under the 1940 Act, the Advisers Act, and the rules
thereunder, and undertakes to take such steps and implement such
procedures as are reasonably designed to ensure compliance with such
provisions. Without limiting the foregoing, the Sub-Advisor undertakes
to provide the Fund and the Advisor a report summarizing the
Sub-Advisor's allocation of the Fund's brokerage transactions,
including such information as the Board or the Advisor may reasonably
request, on a quarterly basis or at such times as the Fund or the
Advisor may reasonably request.
9. COMPENSATION OF THE SUB-ADVISOR. In consideration of the sub-advisory
services rendered pursuant to this Agreement, the Advisor will pay to
the Sub-Advisor from the "Advisory Fee" as defined in the Advisory
Agreement an amount equal to 0.375% per annum of the value of the
Fund's managed assets as defined in the Prospectus. 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. Such fee
will be due and payable by the Advisor in arrears within ten business
days after the receipt thereof from the Fund.
10. FEE WAIVER. Pursuant to the Advisory Agreement, the Advisor has agreed
to waive a portion of the Advisory Fees for a period of five (5) years
following the closing of the Fund's first public offering of common
shares (the "Waiver Period"). Notwithstanding the provisions of the
above Section 9, during the Waiver Period, the Sub-Advisor likewise
agrees to waive a portion of the fee provided for in Section 9 such
that during the Waiver Period, the fee payable to the Sub-Advisor
should be equal to 0.25% per annum of the value of the Fund's managed
assets, which is to be payable in the same manner as in Section 9.
11. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
of the 1940 Act, the Sub-Advisor agrees that all books and records
which it maintains for the Fund are the property of the Fund and
further agrees to surrender promptly to the Advisor or the Fund any
such books, records or information upon the Advisor's or the Fund's
request. The Sub-Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
12. CODE OF ETHICS. The Sub-Advisor has adopted a written code of ethics
complying with the requirements of Rule 17j-l(b), (c), (d), and (e)
under the 1940 Act and will provide Advisor and the Fund with a copy
of such code (including any amendments thereof). Within 45 days of the
end of each calendar year during
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which this Agreement remains in effect, the chief compliance officer
of the Sub-Advisor shall certify to the Fund that the Sub-Advisor has
complied with the requirements of Rule 17j-1 during the previous year;
and that there have been no material violations of the Sub-Advisor's
code of ethics or, if any such violation has occurred, the nature of
such violation and of the action taken in response to such violation.
13. DURATION AND TERMINATION. This Agreement shall become effective on the
date first set forth above and continue until the second anniversary
of thereof. 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 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.
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 Sub-Advisor sixty days' notice and upon
payment by the Advisor of any unpaid compensation to the Sub-Advisor
described in Section 9, 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; or by the Sub-Advisor on 120
days' prior notice to the Fund, (ii) this Agreement shall terminate
automatically in the event of its assignment (as "assignment" is
defined in the 1940 Act).
14. 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.
15. NON-LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC. AND INDEMNIFICATION.
(a) 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
Sub-Advisor shall look solely to the Fund's assets for the
payment of any claim hereunder or for the performance of the
Fund's duties created by this Agreement.
(b) Other than by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of its or their duties, or by
reason of the reckless disregard of its or their obligations and
duties under this Agreement, none of the Sub-Advisor or any of
its officers, members,
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partners, stockholders, agents or employees shall have any
liability to the Fund or any security holder of the Fund for any
loss incurred in connection with recommendations or investments
made or other action taken on behalf of the Fund due to errors of
judgment or by reason of its advice, including action taken or
omitted prior to a written notice of termination. The Sub-Advisor
hereby indemnifies the Fund and Advisor and each of their
respective trustees, directors, officers, members, managers,
employees and agents for all damages, claims and/or losses
occasioned by reason of its 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
hereunder.
(c) Other than by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of its or their duties, or by
reason of the reckless disregard of its or their obligations and
duties under such this Agreement, none of the Advisor or any of
its officers, members, partners, stockholders, agents or
employees shall have any liability to the Sub-Advisor for any
loss incurred by the Sub-Advisor in connection with this
Agreement. The Advisor hereby indemnifies the Sub-Advisor and
each of its trustees, directors, officers, members, managers,
employees and agents for all damages, claims and/or losses
occasioned by reason of its 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
hereunder.
16. EXPENSES. During the term of this Agreement, the Sub-Advisor will bear
all costs and expenses of its employees and any overhead incurred in
connection with its duties hereunder and shall bear the costs of any
salaries, expenses or fees of affiliated persons (as defined in the
0000 Xxx) of the Sub-Advisor.
17. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts 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.
18. JURISDICTION; VENUE; CONSENT TO SERVICE OF PROCESS.
(a) Each of the Fund, the Advisor and Sub-Advisor (each, a "Party")
irrevocably and unconditionally submits to the exclusive
jurisdiction of the United States District Court for the District
of Massachusetts or if such court will not accept jurisdiction,
the Superior Court of the Commonwealth of Massachusetts, or any
court of competent civil jurisdiction sitting in Massachusetts
(all of the above courts, "Massachusetts Courts). In any action,
suit or other proceeding brought in the Massachusetts Courts,
each of the Parties irrevocably and unconditionally waives and
agrees not to assert by way of motion, as a defense or otherwise
any claims that it is not subject to the jurisdiction of
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the Massachusetts Courts, that such action, suit or other
proceeding is brought in an inconvenient forum or that the venue
of such action, suit or other proceeding is improper. Each of the
Parties also hereby agrees that any final and unappealable
judgment against a Party in connection with any action, suit or
other proceeding shall be conclusive and binding on such Party
and that such award or judgment may be enforced in any court of
competent jurisdiction, either within or outside of the United
States. A certified or exemplified copy of such award or judgment
shall be conclusive evidence of the fact and amount of such award
or judgment.
(b) Each Party irrevocably consents to the service of process in the
manner provided for the giving of notices pursuant to Section 19
of this Agreement. Nothing in this Section 18 shall affect the
right of any Party to serve process in any other manner permitted
by law.
19. 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.
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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.
The parties hereto have caused this Agreement to be executed as of the date and
year first above written.
MACARTHURCOOK INVESTMENT RMR ASIA PACIFIC REAL ESTATE
MANAGERS LIMITED FUND
By: /s/ XXXXX XXXXXXX By: /s/ XXXXXX X. X'XXXXX
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Name: Xxxxx Xxxxxxx Name: Xxxxxx X. X'Xxxxx
--------------------------
Title: Managing Director Title: President
-------------------------
RMR ADVISORS, INC.
By: /s/ XXXX XXXXXXXX
----------------------------------------
Name: Xxxx Xxxxxxxx
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Title: Treasurer
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[SIGNATURE PAGE TO ADVISORY AGREEMENT]
