Exhibit D
INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated as of June 24, 2002, by and among Clarion CMBS Value
Fund, Inc., a Maryland corporation (the "Fund"), and 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. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in quarterly installments an advisory fee calculated by applying the
following annual percentage rate to the Fund's average monthly net assets for
the month: 0.63%.
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 such 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
Groep 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:
Xxxxxxxx X. Xxxxxxxxx
Treasurer
Clarion CMBS Value Fund, Inc.,
c/o Clarion Capital, LLC
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Notices to the Adviser shall be sent to:
Xxxxxx Xxxxxx
President and Chief Executive Officer
Clarion Capital, LLC
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.
CLARION CMBS VALUE FUND, INC. CLARION CAPITAL, LLC
By:__________________________ By:__________________________
Name: Xxxxxxxx X. Xxxxxxxxx Name: Xxxxxx Xxxxxx
Title: Treasurer Title: President and Chief Executive Officer
