[FORM OF]
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of
______________, _____, as amended from time to time, by and between [Name], a
[Maryland corporation (the "Corporation")/Massachusetts business trust (the
"Trust")], and AIG SunAmerica Asset Management Corp., a Delaware corporation
(the "Adviser").
W I T N E S S E T H:
WHEREAS, the [Corporation/Trust] is registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end management investment
company and may issue shares of common stock, par value $._____ per share, in
separately designated Portfolio representing separate funds with their own
investment objectives, policies and purposes (each, a "Fund" and collectively,
the "Funds"); and
WHEREAS, the Adviser is engaged in the business of rendering investment
management, advisory and administrative services and is registered as an
investment adviser under the Investment Advisers Act of 1940; and
WHEREAS, the [Corporation/Trust] desires to retain the Adviser to furnish
investment management, advisory and administrative services to the
[Corporation/Trust] and the Funds and the Adviser is willing to furnish such
services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as follows:
1. Duties of the Adviser. The Adviser shall manage the affairs of the
Funds including, but not limited to, continuously providing the Funds with
investment management, including investment research, advice and supervision,
determining which securities shall be purchased or sold by the Funds, making
purchases and sales of securities on behalf of the Funds and determining how
voting and other rights with respect to securities owned by the Funds shall be
exercised, subject in each case to the control of the Board of
Directors/Trustees of the [Corporation/Trust] (the "Directors/Trustees") and in
accordance with the objectives, policies and principles set forth in
[Corporation/Trust]'s Registration Statement and the Funds' current Prospectus
and Statement of Additional Information, as amended from time to time, the
requirements of the Act and other applicable law. In performing such duties, the
Adviser (i) shall provide such office space, such bookkeeping, accounting,
clerical, secretarial and administrative services (exclusive of, and in addition
to, any such service provided by any others retained by the Funds or
[Corporation/Trust] on behalf of the Funds) and such executive and other
personnel as shall be necessary for the operations of the Funds, (ii) shall be
responsible for the financial and accounting records required to be maintained
by the Funds (including those maintained by [Corporation/Trust]'s custodian) and
(iii) shall oversee the performance of services provided to the Funds by others,
including the custodian, transfer and shareholder servicing agent. The
[Corporation/Trust] understands that the Adviser also acts as the manager of
other investment companies.
Subject to Section 36 of the Act, the Adviser shall not be liable to the
Funds or [Corporation/Trust] for any error of judgment or mistake of law or for
any loss arising out of any
investment or for any act or omission in the management of the Funds and the
performance of its duties under this Agreement except for willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Agreement.
2. Retention by Adviser of Sub-Advisers, etc. In carrying out its
responsibilities hereunder, the Adviser may employ, retain or otherwise avail
itself of the services of other persons or entities including, without
limitation, affiliates of the Adviser, on such terms as the Adviser shall
determine to be necessary, desirable or appropriate. Without limiting the
generality of the foregoing, and subject to the requirements of Section 15 of
the Act, the Adviser may retain one or more sub-advisers to manage all or a
portion of the investment portfolio of a Fund, at the Adviser's own cost and
expense. Retention of one or more sub-advisers, or the employment or retention
of other persons or entities to perform services, shall in no way reduce the
responsibilities or obligations of the Adviser under this Agreement and the
Adviser shall be responsible for all acts and omissions of such sub-advisers, or
other persons or entities, in connection with the performance of the Adviser's
duties hereunder.
3. Expenses. The Adviser shall pay all of its expenses arising from the
performance of its obligations under Section 1 and shall pay any salaries, fees
and expenses of the [Corporation/Trust]'s Directors/Trustees and Officers who
are employees of the Adviser. The Adviser shall not be required to pay any other
expenses of the Funds, including, but not limited to, direct charges relating to
the purchase and sale of portfolio securities, interest charges, fees and
expenses of independent attorneys and auditors, taxes and governmental fees,
cost of share certificates and any other expenses (including clerical expenses)
of issue, sale, repurchase or redemption of shares, expenses of registering and
qualifying shares for sale, expenses of printing and distributing reports,
notices and proxy materials to shareholders, expenses of data processing and
related services, shareholder recordkeeping and shareholder account service,
expenses of printing and filing reports and other documents filed with
governmental agencies, expenses of printing and distributing prospectuses,
expenses of annual and special shareholders meetings, fees and disbursements of
transfer agents and custodians, expenses of disbursing dividends and
distributions, fees and expenses of Directors/Trustees who are not employees of
the Adviser or its affiliates, membership dues in the Investment Company
Institute, insurance premiums and extraordinary expenses such as litigation
expenses.
4. Compensation of the Adviser. (a) As full compensation for the services
rendered, facilities furnished and expenses paid by the Adviser under this
Agreement, the [Corporation/Trust] agrees to pay to the Adviser a fee at the
annual rates set forth in Schedule A hereto with respect to each Fund indicated
thereon. Such fee shall be accrued daily and paid monthly as soon as practicable
after the end of each month (i.e., the applicable annual fee rate divided by 365
is applied to each prior days' net assets in order to calculate the daily
accrual). For purposes of calculating the Adviser's fee with respect to any
Fund, the average daily net asset value of a Fund shall be determined by taking
an average of all determinations of such net asset value during the month. If
the Adviser shall serve for less than the whole of any month the foregoing
compensation shall be prorated.
(b) Upon any termination of this Agreement on a day other than the
last day of the month, the fee for the period from the beginning of the month in
which termination occurs to the date of termination shall be prorated according
to the proportion which such period bears to the full month.
5. Portfolio Transactions. The Adviser is responsible for decisions to
buy or sell securities and other investments for a portion of the assets of each
Portfolio, broker-dealers and futures commission merchants' selection, and
negotiation of brokerage commission and futures commission merchants' rates. As
a general matter, in executing Portfolio transactions, the Adviser may employ or
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deal with such broker-dealers or futures commission merchants as may, in the
Adviser's best judgement, provide prompt and reliable execution of the
transactions at favorable prices and reasonable commission rates. In selecting
such broker-dealers or futures commission merchants, the Adviser shall consider
all relevant factors including price (including the applicable brokerage
commission, dealer spread or futures commission merchant rate), the size of the
order, the nature of the market for the security or other investment, the timing
of the transaction, the reputation, experience and financial stability of the
broker-dealer or futures commission merchant involved, the quality of the
service, the difficulty of execution, the execution capabilities and operational
facilities of the firm involved, and, in the case of securities, the firm's risk
in positioning a block of securities. Subject to such policies as the
Directors/Trustees may determine and consistent with Section 28(e) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the Adviser shall
not be deemed to have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of the Adviser's having caused a
Portfolio to pay a member of an exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange, broker or dealer would have charged
for effecting that transaction, if the Adviser 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 member of an exchange, broker
or dealer viewed in terms of either that particular transaction or the Adviser's
overall responsibilities with respect to such Portfolio and to other clients as
to which the Adviser exercises investment discretion. In accordance with Section
11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, and subject to any other
applicable laws and regulations including Section 17(e) of the Act and Rule
17e-1 thereunder, the Adviser may engage its affiliates or any other subadviser
to the [Corporation/Trust] and its respective affiliates, as broker-dealers or
futures commission merchants to effect Portfolio transactions in securities and
other investments for a Portfolio. The Adviser will promptly communicate to the
officers and the Directors/Trustees of the [Corporation/Trust] such information
relating to Portfolio transactions as they may reasonably request. To the extent
consistent with applicable law, the Adviser may aggregate purchase or sell
orders for the Portfolio with contemporaneous purchase or sell orders of other
clients of the Adviser or its affiliated persons. 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 Adviser in the manner the Adviser determines to
be equitable and consistent with its and its affiliates' fiduciary obligations
to the Portfolio and to such other clients. The Adviser hereby acknowledges that
such aggregation of orders may not result in more favorable pricing or lower
brokerage commissions in all instances.
6. Term of Agreement. This agreement shall continue in full force and
effect for two years from the date hereof, and shall continue in full force and
effect from year to year thereafter if such continuance is approved in the
manner required by the Act and the Adviser has not notified the
[Corporation/Trust] in writing at least 60 days prior to the anniversary date of
the previous continuance that it does not desire such continuance. With respect
to each Fund, this Agreement may be terminated at any time, without payment of
penalty by the Fund or the [Corporation/Trust], on 60 days written notice to the
Adviser, by vote of the Directors/Trustees, or by vote of a majority of the
outstanding voting securities (as defined by the Act) of the Fund, voting
separately from any other Portfolio of the [Corporation/Trust]. The termination
of this Agreement with respect to any Fund or the addition of any Fund to
Schedule A hereto (in the manner required by the Act) shall not affect the
continued effectiveness of this Agreement with respect to each other Fund
subject hereto. This Agreement shall automatically terminate in the event of its
assignment (as defined by the Act).
The [Corporation/Trust] hereby agrees that if (i) the Adviser ceases
to act as investment manager and adviser to the [Corporation/Trust] and (ii) the
continued use of the [Corporation/Trust]'s present name would create confusion
in the context of the Adviser's business, then the
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[Corporation/Trust] will use its best efforts to change its name in order to
delete the word "SunAmerica" from its name.
7. Liability of the Adviser. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of the Adviser (and its officers,
directors, agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Adviser) the Adviser shall not be subject
to liability to the [Corporation/Trust] or to any shareholder of the
[Corporation/Trust] for any act or omission in the course of, or connected with,
rendering services hereunder, including without limitation, any error of
judgment or mistake of law or for any loss suffered by any of them in connection
with the matters to which this Agreement relates, except to the extent specified
in Section 36(b) of the Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services. Except for such
disabling conduct, the [Corporation/Trust] shall indemnify the Adviser (and its
officers, directors, partners, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Adviser)
(collectively, the "Indemnified Parties") from any liability arising from the
Adviser's conduct under this Agreement.
Indemnification to the Adviser or any of its personnel or affiliates
shall be made when (i) a final decision on the merits rendered, by a court or
other body before whom the proceeding was brought, that the person to be
indemnified was not liable by reason of disabling conduct or, (ii) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the person to be indemnified was not liable by reason of
disabling conduct, by (a) the vote of a majority of a quorum of the
Directors/Trustees who are neither "interested persons" of the
[Corporation/Trust] as defined in section 2(a)(19) of the Act nor parties to the
proceeding ("disinterested, non-party Directors") or (b) an independent legal
counsel in a written opinion. The [Corporation/Trust] may, by vote of a majority
of the disinterested, non-party Directors advance attorneys' fees or other
expenses incurred by an Indemnified Party in defending a proceeding upon the
undertaking by or on behalf of the Indemnified Party to repay the advance unless
it is ultimately determined that he is entitled to indemnification. Such advance
shall be subject to at least one of the following: (1) the person to be
indemnified shall provide a security for his undertaking, (2) the
[Corporation/Trust] shall be insured against losses arising by reason of any
lawful advances, or (3) a majority of a quorum of the disinterested, non-party
Directors or an independent legal counsel in a written opinion, shall determine,
based on a review of readily available facts, that there is reason to believe
that the person to be indemnified ultimately will be found entitled to
indemnification.
8. Non-Exclusivity. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of the Adviser who may also be a
Director/Trustee, officer or employee of the [Corporation/Trust] to engage in
any other business or devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or dissimilar
nature, nor limit or restrict the right of the Adviser to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association.
9. Amendments. This Agreement may be amended by mutual consent in
writing, but the consent of the [Corporation/Trust] must be obtained in
conformity with the requirements of the Act.
10. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable provisions of the Act. To
the extent the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Act, the
latter shall apply.
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11. Separate Portfolio. Pursuant to the provisions of the Declaration,
each Fund is a separate Portfolio of the [Corporation/Trust], and all debts,
liabilities, obligations and expenses of a particular Fund shall be enforceable
only against the assets of that Fund and not against the assets of any other
Fund or of the [Corporation/Trust] as a whole.
IN WITNESS WHEREOF, the [Corporation/Trust] and the Adviser have caused
this Agreement to be executed by their duly authorized officers as of the date
first above written.
[NAME]
By: _____________________________
[Name]
[Title]
AIG SUNAMERICA ASSET MANAGEMENT CORP.
By: _____________________________
Xxxxx X. Xxxxxxx
President and CEO
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SCHEDULE A
FEE RATE
(as a % of average
PORTFOLIO daily net asset value)
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