ROCHDALE STRUCTURED CLAIMS INCOME FUND INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY
AGREEMENT
THIS
AGREEMENT is made and entered into as of this 10th day of November 2009, by and
among ROCHDALE STRUCTURED CLAIMS INCOME FUND LLC, a Delaware limited
liability company (the “Fund”), and ROCHDALE INVESTMENT MANAGEMENT
LLC, a Delaware limited liability company (the “Advisor”).
WITNESSETH:
WHEREAS,
the Fund is a close-end management investment company, registered as such under
the Investment Company Act of 1940, as amended (the “Investment Company Act”);
and
WHEREAS,
the Advisor is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended, and is engaged in the business of supplying investment
advice as an independent contractor; and
WHEREAS,
the Fund desires to have the Advisor render investment advice.
NOW,
THEREFORE, in consideration of the covenants and the mutual promises hereinafter
set forth, the parties to this Agreement, intending to be legally bound hereby,
mutually agree as follows:
1. Appointment
of Advisor. The Fund hereby employs the Advisor and the
Advisor hereby accepts such employment, to render investment advice and related
services with respect to the assets of the Fund for the period and on the terms
set forth in this Agreement, subject to the supervision and direction of the
Fund’s Board of Directors.
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2.
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Duties
of Advisor.
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(a) General
Duties. The Advisor shall act as investment advisor to the
Fund and shall supervise investments of the Fund on behalf of the Fund in
accordance with the investment objectives, policies and restrictions of the Fund
as set forth in the Funds’ governing documents, including, without limitation,
the Funds’ Operating Agreements; the Funds’ prospectuses, statements of
additional information and undertakings; and such other limitations, policies
and procedures as the Directors may impose from time to time in writing to the
Advisor. In providing such services, the Advisor shall at all times
adhere to the provisions and restrictions contained in the federal securities
laws, applicable state securities laws, the Internal Revenue Code, the Uniform
Commercial Code and other applicable law.
Without
limiting the generality of the foregoing, the Advisor shall: (i) furnish the
Fund with advice and recommendations with respect to the investment of the
Fund’s assets and the purchase and sale of portfolio securities for the Fund
including the taking of such steps as may be necessary to implement such advice
and recommendations (i.e.,
placing the orders); (ii) manage and oversee the investments of the Fund,
subject to the ultimate supervision and direction of the Fund’s Board of
Directors; (iii) vote proxies for the Fund (if applicable), file Section 13
ownership reports for the Funds, and take other actions on behalf of the Funds;
(iv) maintain the books and records required to be maintained by each Fund
except to the extent arrangements have been made for such books and records to
be maintained by the administrator or another agent of the Fund; (v) furnish
such reports, statements and other data on securities, economic conditions and
other matters related to the investment of each Fund’s assets as may be
reasonably requested by the Funds; and (vi) render to the Funds’ Boards of
Directors such periodic and special reports with respect to each Fund’s
investment activities as the Board may reasonably request, including at least
one in-person appearance annually before the Boards of Directors.
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(b) Brokerage. The
Advisor shall be responsible for decisions to buy and sell securities for the
Fund, for broker-dealer selection, and for negotiation of brokerage commission
rates. The Advisor may, consistent with its obligations hereunder,
direct orders to an affiliated person of the Advisor. The Advisor’s
primary consideration in effecting a securities transaction will be to obtain
the most favorable price and execution available. In selecting a
broker-dealer to execute each particular transaction, the Advisor may take the
following into consideration: the best net price available; the
reliability, integrity and financial condition of the broker-dealer; the size of
and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Fund on a
continuing basis. The price to the Fund in any transaction may be
less favorable than that available from another broker-dealer if the difference
is reasonably justified by other aspects of the portfolio execution services
offered.
Subject
to such policies as the Board of Directors of the Fund may determine, the
Advisor shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused Fund to pay a broker or dealer that provides (directly or indirectly)
brokerage or research services to the Advisor an amount of commission for
effecting a portfolio transaction in excess of the amount of commission another
broker or dealer 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 brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Advisor’s overall responsibilities with respect to the Fund. The
Advisor is further authorized to allocate the orders placed by it on behalf of
the Fund to such brokers or dealers who also provide research or statistical
material, or other services, to the Fund, the Advisor, or any affiliate of
either. Such allocation shall be in such amounts and proportions as
the Advisor shall determine, and the Advisor shall report on such allocations
regularly to the Fund, indicating the broker-dealers to whom such allocations
have been made and the basis therefor.
On
occasions when the Advisor deems the purchase or sale of a security to be in the
best interest of the Fund as well as of other clients, the Advisor, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Advisor in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Funds and to
such other clients.
3. Representations
of the Advisor.
(a) The
Advisor shall use its best judgment and efforts in rendering the advice and
services to the Funds as contemplated by this Agreement.
(b) The
Advisor shall maintain all licenses and registrations necessary to perform its
duties hereunder in good order.
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(c) In
performance of its duties hereunder, the Advisor shall conduct its operations at
all times in conformance with the Investment Advisers Act of 1940, the
Investment Company Act of 1940, and any other applicable state and/or
self-regulatory organization regulations.
4. Independent
Contractor. The Advisor shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized to do so, have no authority to act for or represent the
Funds in any way, or in any way be deemed an agent for the Funds. It
is expressly understood and agreed that the services to be rendered by the
Advisor to the Funds under the provisions of this Agreement are not be deemed
exclusive, and the Advisor shall be free to render similar or different services
to others so long as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
5. Advisor’s
Personnel. The Advisor shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting
the generality of the foregoing, the staff and personnel of the Advisor shall be
deemed to include persons employed or retained by the Advisor to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Advisor or the Funds’ Boards of Directors may desire and reasonably
request.
6. Expenses.
(a) With
respect to the operation of the Fund, the Advisor shall be responsible for (i)
providing the personnel, office space and equipment reasonably necessary for the
maintenance of the Funds’ principal office, (ii) the expenses associated with
the performance of its services hereunder, other than the expenses assumed by
other service providers to the Fund (including affiliates of the Advisor); and
(iii) the costs of any special Board of Directors meetings or shareholder
meetings convened for the primary benefit of the Advisor. If the
Advisor has agreed to limit the operating expenses of the Funds, the Advisor
shall also be responsible on a monthly basis for any operating expenses that
exceed the agreed upon expense limit.
(b) The
Fund are responsible for and have assumed the obligation for payment of all of
its expenses, other than as stated in Subparagraph 6(a) above, including but not
limited to: fees and expenses incurred in connection with the issuance,
registration and transfer of its shares; brokerage and commission expenses; all
expenses of transfer, receipt, safekeeping, servicing and accounting for the
cash, securities and other property of the Fund for the benefit of the Fund
including all fees and expenses of its custodian, shareholder services agent and
accounting services agent; interest changes on any borrowings; costs and
expenses of pricing and calculating its daily net asset value and of maintaining
its books of account required under the Investment Company Act; taxes, if any; a
pro rata portion of expenditures in connection with meetings of the Fund’s
shareholders and the Fund’s Board of Directors that are properly payable by the
Fund; salaries and expenses of officers and fees and expenses of members of the
Fund’s Boards of Directors or members of any advisory board or committee who are
not members of, affiliated with or interested persons of the Advisor; insurance
premiums on property or personnel of the Fund which inure to its benefit,
including liability and fidelity bond insurance; the cost of preparing and
printing reports, proxy statements, prospectuses and statements of additional
information of the Fund or other communications for distribution to existing
shareholders; legal, auditing and accounting fees; trade association dues; fees
and expenses (including legal fees) of registering and maintaining registration
of its shares for sale under federal and applicable state and foreign securities
laws; all expenses of maintaining and servicing shareholder accounts, including
all charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Fund, if any; and all other
charges and costs of its operation plus any extraordinary and non-recurring
expenses, except as herein otherwise prescribed.
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(c) The
Advisor may voluntarily absorb certain Fund expenses or waive the Advisor’s own
advisory fee.
(d) To
the extent the Advisor incurs any costs by assuming expenses which are an
obligation of a Fund as set forth herein, the Fund shall promptly reimburse the
Advisor for such costs and expenses, except to the extent the Advisor has
otherwise agreed to bear such expenses. To the extent the services
for which the Fund is obligated to pay hereunder are performed by the Advisor,
the Advisor shall be entitled to recover from the Fund to the extent of the
Advisor’s actual costs for providing such services. In determining
the Advisor’s actual costs, the Advisor may take into account an allocated
portion of the salaries and overhead of personnel performing such
services.
7. Investment
Advisory and Management Fee.
(a) Substantially
all of the assets of the Fund shall be maintained in the Fund. If assets are
held in one of the other Funds, they shall be included as total assets in the
Fund for Investment Advisory and Management Fee calculation
purposes.
(b) The
Fund shall pay to the Advisor, and the Advisor agrees to accept, as full
compensation for all investment management and advisory services furnished or
provided to the Fund pursuant to this Agreement, an annual management fee or
0.25%, computed on the value of the net assets of the Funds as of the close of
business each day.
(c) The
management fee shall be accrued daily and paid to the Advisor on or before the
tenth business day of the succeeding month.
(d) The
initial management fee under this Agreement shall be payable on or before the
tenth business day of the first month following the effective date of this
Agreement and shall be prorated as set forth below. If this Agreement
is terminated prior to the end of any month, the management fee to the Advisor
shall be prorated for the portion of any month in which this Agreement is in
effect which is not a complete month according to the proportion which the
number of calendar days in the month during which the Agreement is in effect
bears to the number of calendar days in the month, and shall be payable within
ten (10) days after the date of termination.
(e) The
fee payable to the Advisor under this Agreement will be reduced to the extent of
any receivable owed by the Advisor to the Fund and as required under any expense
limitation applicable to the Funds.
(f) The
Advisor voluntarily may reduce any portion of the compensation or reimbursement
of expenses due to it pursuant to this Agreement and may agree to make payments
to limit the expenses which are the responsibility of the Funds under this
Agreement. Any such reduction or payment shall be applicable only to
such specific reduction or payment and shall not constitute an agreement to
reduce any future compensation or reimbursement due to the Advisor hereunder or
to continue future payments.
(g) Any
fee withheld or voluntarily reduced and any Fund expense absorbed by the Advisor
voluntarily or pursuant to an agreed upon expense cap or under this Agreement,
shall be reimbursed by the Fund to the Advisor, if so requested by the Advisor,
in the first, second or third (or any combination thereof) fiscal year next
succeeding the fiscal year of the withholding, reduction or absorption if the
aggregate amount actually paid by the Fund toward the operating expenses for
such fiscal year (taking into account the reimbursement) do not exceed the
applicable limitation on the Fund’s expenses. Such reimbursement may
be paid prior to the Fund’s payment of current expenses if so requested by the
Advisor even if such practice may require the Advisor to waive, reduce or absorb
current Fund expenses.
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(h) The
Advisor may agree not to require payment of any portion of the compensation or
reimbursement of expenses otherwise due to it pursuant to this
Agreement. Any such agreement shall be applicable only with respect
to the specific items covered thereby and shall not constitute an agreement not
to require payment of any future compensation or reimbursement due to the
Advisor hereunder.
8. No
Shorting; No Borrowing. The Advisor agrees that neither it nor
any of its officers or employees shall take any short position in the shares of
the Fund. This prohibition shall not prevent the purchase of such
shares by any of the officers or employees of the Advisor or any trust, for such
persons or affiliates thereof, at a price not less than the net asset value
thereof at the time of purchase, as allowed pursuant to rules promulgated under
the Investment Company Act. The Advisor agrees that neither it nor
any of its officers or employees shall borrow from the Fund or pledge or use the
Fund’s assets in connection with any borrowing not directly for such Fund’s
benefit. For this purpose, failure to pay any amount due and payable
to the Funds for a period of more than thirty (30) days shall constitute a
borrowing.
9. Conflicts
with Fund’s
Governing Documents and Applicable Laws. Nothing herein
contained shall be deemed to require the Fund to take any action contrary to the
Fund’s Operating Agreements, or any applicable statute or regulation, or to
relieve or deprive the Boards of Directors of the Fund of their responsibility
for and control of the conduct of the affairs of the Fund. In this
connection, the Advisor acknowledges that the Directors retain ultimate plenary
authority over the Fund and may take any and all actions necessary and
reasonable to protect the interests of shareholders.
10. Reports
and Access. The Advisor agrees to supply such information to
the Fund’s administrator and to permit such compliance inspections by the Fund’s
administrator as shall be reasonably necessary to permit the administrator to
satisfy its obligations and respond to the reasonable requests of the
Directors.
11. Advisor’s
Liabilities and Indemnification.
(a) The
Advisor shall have responsibility for the accuracy and completeness (and
liability for the lack thereof) of the statements in the Fund’s offering
materials (including the prospectuses, the statements of additional information,
advertising and sales materials), except for information supplied by the
administrator or the Fund or another third party for inclusion
therein.
(b) The
Advisor shall be liable to the Fund for any loss (including brokerage charges)
incurred by the Fund as a result of any improper investment made by the
Advisor.
(c) In
the absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the obligations or duties hereunder on the part of the Advisor, the
Advisor shall not be subject to liability to the Fund or to any shareholder of
the Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security by the Fund.
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(d) Each
party to this Agreement shall indemnify and hold harmless the other party and
the shareholders, directors, officers and employees of the other party (any such
person, an “Indemnified Party”) against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel fees
incurred in connection therewith) arising out of the Indemnified Party’s
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties under this Agreement.
(e) No
provision of this Agreement shall be construed to protect any director or
officer of the Fund, or officer of the Advisor, from liability in violation of
Sections 17(h) and (i) of the Investment Company Act.
12. Non-Exclusivity;
Trading for Advisor’s Own Account. The Fund’s employment of
the Advisor is not an exclusive arrangement. The Funds may from time
to time employ other individuals or entities to furnish it with the services
provided for herein. Likewise, the Advisor may act as investment
adviser for any other person, and shall not in any way be limited or restricted
from buying, selling or trading any securities for its or their own accounts or
the accounts of others for whom it or they may be acting, provided, however,
that the Advisor expressly represents that it will undertake no activities which
will adversely affect the performance of its obligations to the Fund under this
Agreement; and provided further that the Advisor will adhere to a code of ethics
governing employee trading and trading for proprietary accounts that conforms to
the requirements of the Investment Company Act and the Investment Advisers Act
of 1940 and has been approved by the Fund’s Board of Directors.
13. Term.
(a) This
Agreement shall become effective as of the date first written above and shall
remain in effect for a period of two (2) years, unless sooner terminated as
hereinafter provided. This Agreement shall continue in effect
thereafter for additional periods not exceeding one (1) year so long as such
continuation is approved for the Funds at least annually by (i) the Boards of
Directors of the Funds or by the vote of a majority of the outstanding voting
securities of each Fund and (ii) the vote of a majority of the Directors of the
Funds who are not parties to this Agreement nor interested persons thereof, cast
in person at a meeting called for the purpose of voting on such
approval. The terms “majority of the outstanding voting securities,”
“assignment” and “interested persons” shall have the meanings as set forth in
the Investment Company Act.
(b) The
Fund may use the name “Rochdale” or any name derived from or using the name
“Rochdale” only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect. Within sixty (60) days from such
time as this Agreement shall no longer be in effect, the Fund shall cease to use
such a name or any other name connected with the Advisor.
14. Termination
and Assignment.
(a) This
Agreement may be terminated by the Fund at any time without payment of any
penalty, by the Boards of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Funds, upon sixty (60) days’ written notice
to the Advisor, and by the Advisor upon sixty (60) days’ written notice to the
Funds. In the event of a termination, the Advisor shall cooperate in
the orderly transfer of the Fund’s affairs and, at the request of the Board of
Directors, transfer any and all books and records of the Fund maintained by the
Advisor on behalf of the Funds.
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(b) This
Agreement shall terminate automatically in the event of any assignment hereof,
as defined in the Investment Company Act.
15. Severability. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute or rule, or shall be otherwise rendered invalid, the remainder
of this Agreement shall not be affected thereby.
16. Notice
of Declaration of the Fund. The Advisor agrees that the Fund’s
obligations under this Agreement shall be limited to the Fund and to their
assets, and that the Advisor shall not seek satisfaction of any such obligation
from the shareholders of the Fund nor from any director, officer, employee or
agent of the Fund.
17. Captions. The
captions in this Agreement are included for convenience of reference only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
18. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without giving effect to the
conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act and the Investment Advisers Act of
1940 and any rules and regulations promulgated thereunder.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
a duly authorized officer on one or more counterparts as of the date first above
written.
By:
________________________________
Name:
Title:
ROCHDALE
INVESTMENT MANAGEMENT LLC
By:
________________________________
Name:
Title:
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