ROCHDALE CORE ALTERNATIVE STRATEGIES FUND INVESTMENT ADVISORY AGREEMENT
EXHIBIT G(i)
ROCHDALE
CORE ALTERNATIVE STRATEGIES FUND
THIS
AGREEMENT is made and entered into as of this 14th day of
December 2006, by and among
ROCHDALE
CORE ALTERNATIVE STRATEGIES FUND TEI, LLC, a Delaware limited liability company
(the “Tax-Exempt Fund”), ROCHDALE CORE ALTERNATIVE STRATEGIES FUND, LLC, a
Delaware limited liability company (the “Taxable Fund”), ROCHDALE CORE
ALTERTNATIVE STRATEGIES FUND (CAYMAN), LTD, a Cayman Islands limited duration
company (the “Offshore Fund”), ROCHDALE CORE ALTERNATIVE STRATEGIES MASTER FUND,
LLC, a Delaware limited liability company (the “Master Fund”), and ROCHDALE
INVESTMENT MANAGEMENT LLC, a Delaware limited liability company (the
“Advisor”)The Tax-Exempt Fund, the Taxable Fund, the Offshore Fund and the
Master Fund are sometimes referred to herein collectively the
“Funds”.
WITNESSETH:
WHEREAS,
the Tax-Exempt, Taxable and Master Funds are close-end management investment
companies, registered as such under the Investment Company Act of 1940, as
amended (the “Investment Company Act”); and
WHEREAS,
the Offshore fund is a Cayman Island Company,
that is
not required to register
under
the Investment Company Act; and
WHEREAS,
the Funds are each separate entities having separate assets and liabilities;
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 Master Fund desires to have the Advisor render investment advise and
the
Funds
desire to have the Advisor render related
services to the Funds;
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
Funds 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 Funds for the period and on the terms set forth in this Agreement, subject
to the supervision and direction of the Funds’ Board of Directors.
| 2. |
Duties
of Advisor.
|
(a) General
Duties.
The
Advisor shall act as investment advisor to the
Master
Fund and shall supervise investments of the Master
Fund
on
behalf of the Master
Fund in
accordance with the investment objectives, policies and restrictions of
the
Master 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.
1
Without
limiting the generality of the foregoing, the Advisor shall: (i) furnish
the
Master
Fund
with
advice and recommendations with respect to the investment of the Master
Fund’s assets
and the purchase and sale of portfolio securities for the Master
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 Master
Fund,
subject
to the ultimate supervision and direction of the Master
Fund’s
Board of
Directors; (iii) vote proxies for the Master
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.
(b) Brokerage.
The
Advisor shall be responsible for decisions to buy and sell securities for
the
Master
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
Master
Fund on
a continuing basis. The price to the
Master
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
Master
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 Master
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
Master
Fund. The Advisor is further authorized to allocate the orders placed by
it on
behalf of the Master
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
Master
Fund, indicating the broker-dealers to whom such allocations have been made
and
the basis therefor.
2
On
occasions when the Advisor deems the purchase or sale of a security to be
in the
best interest of one or more of the Funds
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.
(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 Funds, 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
Funds
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 Funds for the benefit of the Funds
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 Funds’
shareholders and the Fund’s Board of Directors that are properly payable by the
Funds; salaries and expenses of officers and fees and expenses of members
of the
Funds’ 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 each 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 Funds 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 Funds, if any; and all
other
charges and costs of its operation plus any extraordinary and non-recurring
expenses, except as herein otherwise prescribed.
3
(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 Funds are obligated to pay hereunder are performed
by the
Advisor, the Advisor shall be entitled to recover from the Funds 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.
4
7. Investment
Advisory and Management Fee and Performance Fee.
(a) Substantially
all of the
assets
of the Funds
shall be
maintained in the Master Fund. If
assets
are held in one of the other Funds,
they
shall be included as total assets in the Master Fund for Investment Advisory
and
Management Fee calculation purposes.
(b) The
Funds
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
Funds pursuant to this Agreement, an annual management fee
or
1.25%, 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) In
addition to the management fee, the Funds shall pay to the Advisor a Performance
fee in accordance with Schedule 2 of the Sub-Investment Advisory Agreement
between Rochdale and AIG, as long as the Sub Investment Advisory Agreement
is
approved by the Boards of Directors and the Sub-Investment Advisory Agreement
remains in effect and is not terminated or changed.
(f) The
fee
payable to the Advisor under this Agreement will be reduced to the extent
of any
receivable owed by the Advisor to the Funds and as required under any expense
limitation applicable to the Funds.
(g) 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.
(h) 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 Funds toward the operating expenses
for
such fiscal year (taking into account the reimbursement) do not exceed the
applicable limitation on the Funds’ expenses. Such reimbursement may be paid
prior to the Funds’ 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.
(i) 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 Funds. This prohibition shall not
prevent the purchase of such shares by any of the officers or employees of
the
Advisor or any trust, pension, profit-sharing or other benefit plan 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 Funds or pledge or use the Funds’
assets in connection with any borrowing not directly for such Funds’ 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 Funds’
Governing Documents and Applicable Laws.
Nothing
herein contained shall be deemed to require the Funds to take any action
contrary to the Funds’ Operating Agreements, or any applicable statute or
regulation, or to relieve or deprive the Boards
of
Directors of the Funds
of
their
responsibility for and control of the conduct of the affairs of the Funds.
In
this connection, the Advisor acknowledges that the Directors retain ultimate
plenary authority over the Funds and may take any and all actions necessary
and
reasonable to protect the interests of shareholders.
5
10. Reports
and Access.
The
Advisor agrees to supply such information to the Funds’ administrator and to
permit such compliance inspections by the Funds’ administrator as shall be
reasonably necessary to permit the administrator to satisfy its obligations
and
respond to the reasonable requests of the Trustees.
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 Funds’ offering
materials (including the prospectuses,
the
statements
of
additional information, advertising and sales materials), except for information
supplied by the administrator or the Funds or another third party for inclusion
therein.
(b) The
Advisor shall be liable to the Funds for any loss (including brokerage charges)
incurred by the Funds 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 Funds or to any shareholder
of
the Funds 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 Funds.
(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 Funds, 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
Funds’ 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 Funds 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. Sub-Advisor.
The
Advisor may contract with third parties to take on advisor responsibilities
for
a fee, with the approval of the Board of Directors of the Funds. In the event
of
a Sub-Advisor relationship, the Advisor will maintain its responsibilities
under
this agreement, the prospectuses any other applicable agreements and any
federal
or state regulations. The Advisor will submit to the Boards
of
Directors of the Funds a Sub-Investment Advisory Agreement for
approval.
6
14. 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
Funds
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 Funds shall cease to use such a name or any other
name connected with the Advisor.
15. Termination
and Assignment.
(a) This
Agreement may be terminated by the Funds at any time without payment of any
penalty, by the Boards
of
Directors of the Funds 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 Funds’ affairs and, at the request of the Board of Directors, transfer any
and all books and records of the Funds maintained by the Advisor on behalf
of
the Funds.
(b) This
Agreement shall terminate automatically in the event of any assignment
hereof,
as
defined in the Investment Company Act.
16. 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.
17. Notice
of Declaration of the Funds.
The
Advisor agrees that the Funds’ obligations under this Agreement shall be limited
to the Funds and to their assets, and that the Advisor shall not seek
satisfaction of any such obligation from the shareholders of the Funds nor
from
any director, officer, employee or agent of the Funds.
18. 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.
19. 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.
7
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ROCHDALE
CORE ALTERNATIVE
STRATEGIES
FUND, LLC
By:
/s/ Xxxxxxx
X'Xxxxxxxxxx
Name:
Xxxxxxx X'Xxxxxxxxxx
Title:
President
|
ROCHDALE
CORE ALTERNATIVE
STRATEGIES
FUND TEI, LLC
By:
/s/ Xxxxxxx
X'Xxxxxxxxxx
Name:
Xxxxxxx X'Xxxxxxxxxx
Title:
President
ROCHDALE
CORE ALTERNATIVE
STRATEGIES
MASTER FUND, LLC
By:
/s/ Xxxxxxx
X'Xxxxxxxxxx
Name:
Xxxxxxx X'Xxxxxxxxxx
Title:
President
ROCHDALE
CORE ALTERNATIVE
STRATEGIES
FUND (Cayman), LDC
By:
Rochdale
Core Alternative Strategies Fund TEI
LLC
By:
/s/ Xxxxxxx
X'Xxxxxxxxxx
Name:
Xxxxxxx X'Xxxxxxxxxx
Title:
President
ROCHDALE
INVESTMENT MANAGEMENT LLC
By:
/s/ Xxxx
Xxxxxxxxxx
Name:
Xxxx Xxxxxxxxxx
Title:
Executive Vice President
8
