[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").
WITNESSETH:
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
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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 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
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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 [Corporation/Trust] will use
its best efforts to change its name in order to delete the word "SunAmerica"
from its name.
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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
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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.
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.
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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:
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Name
Title
AIG SUNAMERICA ASSET MANAGEMENT
CORP.
By:
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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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