Exhibit D
INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated as of October 31, 2006, by and among Clarion Value Fund,
Inc., a Maryland corporation (the "Fund"), and ING Clarion Capital, LLC, a
registered investment adviser organized as a limited liability company under the
laws of the State of New York (the "Adviser").
1. DUTIES OF ADVISER. The Fund hereby appoints the Adviser to act as
discretionary investment adviser to the Fund for the period and on such terms as
set forth in this Agreement. The Fund employs the Adviser to (a) manage the
investment and reinvestment of the assets, xxxxxx and liabilities of the Fund in
accordance with the Fund's investment objectives detailed in the offering
memorandum, (b) continuously review, supervise and administer the investment
program of the Fund, (c) determine the investments to be purchased or sold and
the portion of the Fund's assets to be held uninvested, (d) provide the Fund
with records concerning the Adviser's activities which the Fund is required to
maintain, (e) take all other actions advisable or appropriate relating to the
investments and other assets of the Fund, and (f) render regular reports to the
Fund's officers and Board of Directors concerning the Adviser's discharge of the
foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the officers and the Board of Directors of the Fund, and in
compliance with the objectives, policies and limitations set forth in the Fund's
prospectus and any investment guidelines from time to time furnished to the
Adviser by the Board of Directors of the Fund and applicable laws and
regulations. The Adviser accepts as a part of its responsibilities, the duty to
manage the Fund consistent with the Fund's intent to qualify annually to be
taxed as a regulated investment company under subchapter M of the Internal
Revenue Code of 1986, as amended. The Adviser accepts such employment and agrees
to render the services and to provide, at its own expense, the office space,
furnishings and equipment and the personnel required by it to perform the
services on the terms and for the compensation provided herein. The Adviser will
only be reimbursed for out of pocket due diligence and other expenses incurred
in managing the Fund's investments.
2. FUND TRANSACTIONS. The Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of investments of the Fund and
is directed to use its best efforts to obtain the best available price and most
favorable execution, provided, however, that, subject to policies established
from time to time by the Board of Directors of the Fund, the Adviser may effect
securities transactions at commission rates (or "xxxx-up" to dealers) in excess
of the minimum commission rates (or "xxxx-up" to dealers) available, if the
Adviser determines in good faith that such amount of commission (or "xxxx-up" to
dealers) is reasonable in relation to the value of the brokerage, research or
other services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect to
the Fund. The execution of such transactions shall not be deemed to represent an
unlawful act or breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors of the Fund such
information relating to portfolio transactions as they may reasonably request.
The Adviser is authorized to execute all transactions and form all
affiliates and strategic relationships necessary to achieve objectives of the
Fund, as detailed in the offering memorandum.
3. COMPENSATION OF THE ADVISER. The Fund is a feeder fund in a
master-feeder fund structure and, accordingly, invests all of its assets in the
Clarion Value Fund Master, LLC (the "Master Fund"). For the services to be
rendered by the Adviser as provided in Section 1 of this Agreement, the Master
Fund and/or the Fund shall pay to the Adviser in quarterly installments an
overall advisory fee (when measured on a combined basis at both the Master Fund
and Fund levels) calculated by applying the following annual percentage rate to
the Fund's average monthly net assets for the month: 0.63%. For the avoidance of
doubt, and to effectuate the combined basis fee calculations contemplated by the
preceding sentence, a portion of any fee paid to the Adviser under the Adviser's
advisory agreement with the Master Fund ("Master Fund Fees") shall be offset
against, and thereby automatically reduce, the fee otherwise payable to the
Adviser under this Section 3, such offset portion to be calculated for any
relevant period by multiplying the Master Fund Fees paid to the Adviser for the
period by that ratio realized by dividing (a) the average value of the net
assets of the Master Fund attributable to shares held by the Fund for the period
by (b) the average value of the total net assets of the Master Fund for the
period.
4. OTHER SERVICES. At the request of the independent directors of the
Fund, the Adviser in its discretion may make available to the Fund office
facilities, equipment, personnel and other services not contemplated in the
ordinary course of managing the Fund at the Fund's expense. Such office
facilities, equipment, personnel and services shall be provided for or rendered
by the Adviser and billed to the Fund at the Adviser's cost.
5. REPORTS. The Fund and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.
6. STATUS OF ADVISER. The Adviser has represented to the Fund that it is a
registered investment adviser under the Investment Advisers Act of 1940. The
Fund acknowledges receipt from the Adviser, at least 48 hours prior to entering
into this Agreement, of Part II of the Adviser's Form ADV as filed with the
Securities and Exchange Commission. The services of the Adviser to the Fund are
not to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Fund are not impaired in any
material respect thereby.
7. LIABILITY OF ADVISER. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940 ("1940
Act")), the Adviser shall not be subject to any liability whatsoever to the
Fund, or to any shareholder of the Fund, for any error of judgment, mistake of
law or any other act or omission in the course of, or connected with, rendering
services hereunder including, without limitation, for any losses that may be
sustained in connection with the purchase, holding, redemption or sale of any
security on behalf of the portfolio. The Adviser shall be protected with respect
to actions which it takes or forbears from taking in reliance on advice of
unaffiliated agents or counsel prudently selected. The foregoing shall not
constitute a waiver or limitation on any right of any person under Federal or
state securities laws.
8. PERMISSIBLE INTEREST. Subject to and in accordance with the Articles of
Incorporation of the Fund and the LLC Agreement of the Adviser, Directors,
officers, agents and shareholders of the Fund are or may be interested in the
Adviser (or any successor thereof) as members, officers, agents, investors or
otherwise; and members, officers, agents, investors or otherwise of the Adviser
(or any successor) are or may be interested in the Fund as shareholders or
otherwise. The effect of any such interrelationships shall be governed by said
Articles of Incorporations and LLC Agreement and the provisions of the 1940 Act.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall continue for periods of one year so long as such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Board of Directors of the Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Directors of the Fund or (c) by vote of a majority of the
outstanding voting securities of the Fund; however, if the Shareholders of the
Fund fail to approve the Agreement as provided herein, the Adviser may continue
to serve in such capacity in the manner and to the extent permitted by the 1940
Act and rules thereunder. This Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by vote of a majority of the entire
Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Fund on 60 days' written notice to the Adviser. This
Agreement may be terminated by the Adviser at any time, without the payment of
any penalty, upon 90 days' written notice to the Fund. This Agreement will
automatically and immediately terminate in the event of its assignment. Any
notice under this Agreement shall be given in writing, addressed and delivered
or mailed postpaid, to the other party at the principal office of such party.
As used in this Section 9, the terms "assignment", "interested persons"
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) by vote of a
majority of the outstanding voting securities of the Fund.
11. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
12. ASSIGNABILITY. This Agreement shall not be assigned by either party
without the prior written consent of the other party, provided, however, that
the Investor consents to the transfer of any interest in the Adviser to ING
Group or its affiliates.
13. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York, subject to the supremacy of the federal securities laws
governing the terms of this Agreement.
14. NOTICES.
Notices to the Fund shall be delivered to
Xxxx Xxxxxx
Chief Financial Officer
Clarion Value Fund, Inc.
c/o ING Clarion Capital, LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxx
President and Chief Executive Officer
ING Clarion Capital, LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.
CLARION VALUE FUND, INC. ING CLARION CAPITAL, LLC
By: ____________________________ By: ________________________________________
Name: Xxxx Xxxxxx Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer Title: President and Chief Executive Officer
