SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of by and
between , a Delaware corporation (the "Adviser"), and
a Maryland corporation (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and a Maryland
corporation (the "Corporation"), have entered into an Investment Advisory and
Management Agreement dated as of , 199 , (the "Advisory Agreement")
pursuant to which the Adviser has agreed to provide investment management,
advisory and administrative services to the Corporation; and
WHEREAS, the Corporation 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 $.0001 per share, in separately
designated series representing separate funds with their own investment
objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the business of rendering
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended;
WHEREAS, the Adviser desires to retain the Subadviser to furnish
investment advisory services to the investment series of the Corporation listed
on Schedule A attached hereto (the "Portfolio"), and the Subadviser is willing
to furnish such services; and
WHEREAS, one-third of all purchases into the Portfolio listed on
Schedule A attached hereto and one-third of all redemptions from such Portfolio
will be allocated to the Subadviser;
NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:
1. Duties of the Subadviser. The Adviser hereby appoints the
Subadviser, in furtherance of its Investment Advisory and Management Agreement
with the Corporation, to manage the investment and reinvestment of a portion of
the assets of each Portfolio listed on Schedule A attached hereto. The
Subadviser will determine in its discretion and subject to the oversight and
review of the Adviser, the securities to be purchased or sold, will provide the
Adviser with records concerning the Portfolio's investment activity which the
Subadviser is required to maintain in connection therewith, and will render
regular reports to the Adviser and to officers and Directors of the Corporation
concerning its discharge of the foregoing responsibilities. The Subadviser
shall discharge the foregoing responsibilities subject to the control of the
officers and the Directors of the Corporation and in compliance with such
policies as the Directors of the Corporation may from time to time establish,
and in compliance with (a) the objectives, policies, and limitations for the
Portfolio set forth in the Corporation's current prospectus and statement of
additional information, and (b) applicable laws and regulations.
The Subadviser agrees that it will operate and manage the
portion of the assets allocated to it of each of the Portfolio set forth in
Schedule A at all times in compliance with applicable federal and state laws
governing its operations and investments. The Subadviser agrees to manage such
allocated assets in the Portfolio in compliance with (a) the provisions of the
Act and rules adopted thereunder; (b) the diversification requirements specified
in Subchapter M, Chapter 1 of the Code; and (c) applicable federal and state
securities, commodities and banking laws, provided that the Adviser shall
provide the Subadviser with written direction as to the requirements of
applicable federal and state banking laws. For purposes of the preceding
sentence, disclosure in the Corporation's prospectus and/or statement of
additional information of applicable state insurance laws and regulations and
applicable federal and state banking laws and regulations shall constitute
"written direction" thereof. The Subadviser represents and warrants that to the
extent that any statements or omissions regarding the Subadviser made in any
Registration Statement for the shares of the Corporation, or any amendment or
supplement thereto, are made in reliance upon and in conformity with written
information furnished by the Subadviser expressly for use therein, such
Registration Statement and any amendments or supplements thereto will, when they
become effective, conform in all material respects to the requirements of the
Securities Act of 1933 and the rules and regulations of the
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Commission thereunder (the "1933 Act") and the Act and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading. In addition, the Adviser represents and warrants that the
Registration Statement for the shares of the Corporation, or any amendment or
supplement thereto, other than statements or omissions regarding the Subadviser
provided in writing by the Subadviser expressly for use therein, will, when
they become effective, conform in all material respects to the requirements of
the 1933 Act and the Act and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
The Subadviser accepts such appointment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
2. Portfolio Transactions. The Subadviser 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
Subadviser may employ or deal with such broker-dealers or futures commission
merchants as may, in the Subadviser'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 Subadviser 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 may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), the Subadviser
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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 Subadviser'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 Subadviser 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
Subadviser's overall responsibilities with respect to such Portfolio and to
other clients as to which the Subadviser 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 Subadviser may engage its affiliates, the
Adviser and its affiliates or any other subadviser to the Corporation and its
respective affiliates, as broker-dealers or futures commission merchants to
effect Portfolio transactions in securities and other investments for a
Portfolio. The Subadviser will promptly communicate to the Adviser and to the
officers and the Directors of the Corporation such information relating to
Portfolio transactions as may be mutually agreed with the Subadviser.
3. Compensation of the Subadviser. The Subadviser shall not be
entitled to receive any payment from the Corporation and shall look solely and
exclusively to the Adviser for payment of all fees for the services rendered,
facilities furnished and expenses paid by it hereunder. As full compensation
for the Subadviser under this Agreement, the Adviser agrees to pay the
Subadviser a fee at the annual rates set forth in Schedule A hereto with respect
to the portion of the assets managed by the Subadviser for each Portfolio listed
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 applied to each prior days' net assets in order to calculate the
daily accrual), but in no event later than the 15th day of the following month.
If the Subadviser shall provide its services under this Agreement for less than
the whole of any month, the foregoing compensation shall be prorated.
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4. Other Services. At the request of the Corporation or the
Adviser, the Subadviser in its discretion may make available to the Corporation,
office facilities, equipment, personnel and other services. Such office
facilities, equipment, personnel and services shall be provided for or rendered
by the Subadviser and billed to the Corporation or the Adviser at the
Subadviser's cost.
5. Reports. The Corporation, the Adviser and the Subadviser
agree to furnish to each other, if applicable, current prospectuses, statements
of additional information, proxy statements, reports of shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs and that of the Corporation as each may reasonably request.
6. Status of the Subadviser. The services of the Subadviser to
the Adviser and the Corporation are not to be deemed exclusive, and the
Subadviser shall be free to render similar services to others so long as its
services to the Corporation are not impaired thereby. The Subadviser shall be
deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the
Corporation in any way or otherwise be deemed an agent of the Corporation.
7. Services to Other Clients. Nothing contained in this
Agreement shall limit or restrict (i) the freedom of the Subadviser, or any
affiliated persons thereof, to render investment management and corporate
administrative services to other investment companies, to act as investment
manager or investment counselor to other persons, firms, or corporations, or to
engage in any other business activities, or (ii) the right of any director,
officer, or employee of the Subadviser, who may also be a director, officer, or
employee of the Company, to engage in any other business or to devote his or her
time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
8. Certain Records. The Subadviser hereby undertakes and agrees
to maintain, in the form and for the period required by Rule 31a-2 under the
Act, all records relating to the investments of the Portfolio that are required
to be maintained by the Corporation pursuant to the requirements of Rule 31a-1
of the Act. Any records
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required to be maintained and preserved pursuant to the provisions of Rule 31a-1
and Rule 31a-2 promulgated under the Act which are prepared or maintained by the
Subadviser on behalf of the Corporation are the property of the Corporation and
will be surrendered promptly to the Corporation or the Adviser on request.
The Subadviser agrees that all accounts, books and other
records maintained and preserved by it as required hereby shall be subject at
any time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, or any governmental
agency or other instrumentality having regulatory authority over the
Corporation, and upon reasonable request and during normal business hours the
Corporation's auditors, the Corporation or any representative of the
Corporation, the Adviser.
9. Reference to the Subadviser. Subject to the terms of a
separate Logo Licensing Agreement, neither the Corporation nor the Adviser or
any affiliate or agent thereof shall make reference to or use the name of the
Subadviser or any of its affiliates in any advertising or promotional materials
without the prior approval of the Subadviser, which approval shall not be
unreasonably withheld.
10. Liability of the Subadviser. (a) 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 Subadviser (and its
officers, directors, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Subadviser) the Subadviser shall
not be subject to liability to the Corporation or to any shareholder of the
Corporation 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 Adviser shall indemnify the Subadviser (and its officers,
directors, partners, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Subadviser) (collectively, the
"Indemnified Parties") from any liability arising from the Subadviser's conduct
under this Agreement. Subadviser hereby
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indemnifies, defends and protects Adviser and holds Adviser harmless, from and
against any and all liability arising out of Subadviser's disabling conduct.
(b) The Subadviser agrees to indemnify and hold harmless
the Adviser and its affiliates and each of its directors and officers and each
person, if any, who controls the Adviser within the meaning of Section 15 of the
1933 Act against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses), to which the Adviser or its affiliates or
such directors, officers or controlling person may become subject under the 1933
Act, under other statutes, at common law or otherwise, which may be based upon
(i) any wrongful act or material breach of this Agreement by the Subadviser
arising from the Subadviser's disabling conduct, or (ii) any failure by the
Subadviser to comply with the representations and warranties set forth in
Section 1 of this Agreement; provided, however, that in no case is the
Subadviser's indemnity in favor of any person deemed to protect such other
persons against any liability to which such person would otherwise be subject by
reasons of willful misfeasance, bad faith, or gross negligence in the
performance of his, her or its duties or by reason of his, her or its reckless
disregard of obligation and duties under this Agreement.
(c) The Subadviser shall not be liable to the Adviser for
(i) any acts of the Adviser or any other subadviser to the Portfolio with
respect to the portion of the assets of a Portfolio not managed by the
Subadviser and (ii) acts of the Subadviser which result from acts of the
Adviser, including, but not limited to, a failure of the Adviser to provide
accurate and current information with respect to any records maintained by the
Adviser or any other subadviser to a Portfolio, which records are not also
maintained by the Subadviser. The Adviser agrees that the Subadviser shall
manage the portion of the assets of a Portfolio allocated to it as if it was a
separate operating Portfolio and shall comply with subsections (a) and (b) of
Section I of this Subadvisory Agreement (including, but not limited to, the
investment objectives, policies and restrictions applicable to a Portfolio and
qualifications of a Portfolio as a regulated investment company under the Code)
with respect to the portion of assets of a Portfolio allocated to the Subadviser
as if it was a separate operating Portfolio. The Adviser shall defend,
indemnify and hold harmless the Indemnified Parties from any liability arising
from the conduct of the Adviser
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or other subadviser with respect to the portion of a Portfolio's assets not
allocated to the Subadviser.
11. Permissible Interests. Directors and agents of the
Corporation are or may be interested in the Subadviser (or any successor
thereof) as directors, partners, officers, or shareholders, or otherwise;
directors, partners, officers, agents, and shareholders of the Subadviser are or
may be interested in the Corporation as directors, or otherwise; and the
Subadviser (or any successor) is or may be interested in the Corporation in some
manner.
12. Term of the Agreement. This Agreement shall continue in full
force and effect with respect to each Portfolio until two years from the date
hereof, and from year to year thereafter so long as such continuance is
specifically approved at least annually (i) by the vote of a majority of those
Directors of the Corporation 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 (ii) by the Directors of the Corporation or by vote
of a majority of the outstanding voting securities of the Portfolio voting
separately from any other series of the Corporation.
With respect to each Portfolio, this Agreement may be
terminated at any time, without payment of a penalty by the Portfolio or the
Corporation, by vote of a majority of the Directors, or by vote of a majority of
the outstanding voting securities (as defined in the Act) of the Portfolio,
voting separately from any other series of the Corporation, or by the Adviser,
on not less than 30 nor more than 60 days' written notice to the Subadviser.
With respect to each Portfolio, this Agreement may be terminated by the
Subadviser at any time, without the payment of any penalty, on 90 days' written
notice to the Adviser and the Corporation; provided, however, that this
Agreement may not be terminated by the Subadviser unless another subadvisory
agreement has been approved by the Corporation in accordance with the Act, or
after six months' written notice, whichever is earlier. In the event of such a
termination, the Adviser will use its best efforts, and cause the Corporation to
use its best efforts, to engage another subadviser for the Portfolio as soon as
possible. Notwithstanding the foregoing, the Subadviser may terminate the
Agreement on 60 days' written notice to the Adviser and the
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Corporation, in the event of a breach of this Agreement by the Adviser. The
termination of this Agreement with respect to any Portfolio or the addition of
any Portfolio 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
Portfolio subject hereto. This Agreement shall automatically terminate in the
event of its assignment (as defined by the Act).
This Agreement will also terminate in the event that the
Advisory Agreement by and between the Corporation and the Adviser is terminated.
13. 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.
14. Amendments. This Agreement may be amended by mutual consent
in writing, but the consent of the Corporation must be obtained in conformity
with the requirements of the Act.
15. 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 control.
16. Separate Series. Pursuant to the provisions of the Articles
of Incorporation, each Portfolio is a separate series of the Corporation, and
all debts, liabilities, obligations and expenses of a particular Portfolio shall
be enforceable only against the assets of that Portfolio and not against the
assets of any other Portfolio or of the Corporation as a whole.
18. Notices. All notices shall be in writing and deemed properly
given when delivered or express delivery service by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
Subadviser:
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Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx
Senior Vice President and
General Counsel
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IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Agreement as of the date first above
written.
SUNAMERICA ASSET MANAGEMENT CORP.
By: ____________________________________
Name: Xxxxx X. Xxxxxxx
Title: President
By: ____________________________________
Name:
Title:
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SCHEDULE A
Fee
(as percentage of average
daily net assets the Subadviser
Portfolio manages for the Portfolio)
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