IDEX II SERIES FUND
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
FOR THE IDEX II TAX-EXEMPT PORTFOLIO SERIES
This Management and Investment Advisory Agreement is entered into as of
April 22, 1992, by and between IDEX II Series Fund, a Massachusetts business
trust (referred to herein as the "Trust"), and InterSecuritiest, Inc., a
Delaware corporation (referred to herein as "InterSecurities"), to provide
certain management and investment advisory services to a certain series of
shares of beneficial interest in the Trust, namely, IDEX II Tax-Exempt Portfolio
(the "Portfolio").
The Trust is registered as an open-end investment company under the
Investment Company Act of 1940, as amended, (the "1940 Act") and consists of
more than one series of shares, including the Portfolio. In managing the
Portfolio, as well as in the conduct of certain of its affairs, the Trust wishes
to have the benefit of the investment advisory services of InterSecurities and
its assistance in performing certain management, administrative, and promotional
functions. InterSecurities desires to furnish such services for the Portfolio
and to perform the functions assigned to it under this Agreement for the
considerations provided. Accordingly, the parties have agreed as follows:
1. INVESTMENT ADVISORY SERVICES. In its capacity as investment adviser to
the Portfolio, InterSecurities shall have the following responsibilities:
(a) to furnish continuous advice and recommendations to the Trust as
to the acquisition, holding or disposition of any or all of the securities
or other assets which the Portfolio may own or contemplate acquiring from
time to time;
(b) to cause the officers of InterSecurities to attend meetings and
furnish oral or written reports, as the Trust may reasonably require, in
order to keep the Trustees and appropriate officers of the Trust fully
informed as to the conditions of the investment portfolio of the Portfolio,
the investment recommendations of InterSecurities, and the investment
considerations which have given rise to those recommendations; and
(c) to supervise the purchase and sale of securities of the Portfolio
as directed by the appropriate officers of the Trust.
It is understood and agreed that InterSecurities intends to enter into an
Investment Counsel Agreement with a duly registered investment adviser (the
"Sub-Adviser") under which the Sub-Adviser would furnish investment information
and advice to assist InterSecurities in carrying out its responsibilities under
this Section 1. The compensation to be paid to Sub-Adviser for such services and
the other terms and conditions under which the services shall be rendered by the
Sub-Adviser shall be set forth in the Investment Counsel Agreement; provided,
however, that such Agreement shall be approved by the Board of Trustees and by
the holders of the outstanding voting securities of the Portfolio in accordance
with the requirements of Section 15 of the 1940 Act, and shall otherwise be
subject to, and contain such provisions as shall be required by, the 1940 Act.
2. MANAGEMENT AND ADMINISTRATIVE SERVICES. InterSecurities shall furnish
and perform all administrative services, including recordkeeping, shareholder
relations, regulatory
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reporting and compliance, supervising and coordinating the services of the
Portfolio's custodian and transfer agent and such other functions of the
Portfolio (other than the investment advisory services provided for in Section
1), as the parties may agree. InterSecurities shall also assist in the
preparation of reports to shareholders of the Portfolio and prepare sales
literature promoting sale of the shares of the Portfolio as requested by the
Trust.
3. INTERSECURITIES EXPENSES. In addition to the expenses which
InterSecurities may incur in the performance of its services pursuant to
Sections 1 and 2 above, InterSecurities shall incur and pay the following
expenses allocable to the Portfolio's operations:
(a) Reasonable compensation, fees and related expenses of the officers
and Trustees of the Trust and of those Trustees of the Trust who are
interested persons (as that term is defined in Section 2(a)(19) of the 0000
Xxx) of InterSecurities; and
(b) Rental of offices for the Portfolio.
4. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement;
(a) to keep InterSecurities continuously and fully informed as to the
composition of the investment portfolio of the Portfolio and the nature of
all of its assets and liabilities from time to time;
(b) to furnish InterSecurities with a certified copy of any financial
statement or report prepared for the Portfolio by certified or independent
public accountants, and with copies of any financial statements or reports
made to its shareholders or to any governmental body or securities
exchange;
(c) to furnish InterSecurities with any further materials or
information which InterSecurities may reasonably request to enable it to
perform its functions under this Agreement; and
(d) to compensate InterSecurities for its services in accordance with
the provisions of Section 5 hereof.
5. COMPENSATION. For its services under this Agreement, InterSecurities is
entitled to receive from the Portfolio a monthly fee, payable on the last day of
each month during which or part of which this Agreement is in effect, of 1/12 of
0.6% of that part of the average daily closing net asset value of the Portfolio
for such month. For the month during which this Agreement becomes effective and
the month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month bawsed on the number of calendar
days of such month during which this Agreement is effective.
6. EXPENSES PAID BY PORTFOLIO. Subject to the provisions of Section 7,
below, and except as provided in this paragraph, nothing in this Agreement shall
be construed to impose upon InterSecurities the obligation to incur, pay or
reimburse the Portfolio for any expenses not specifically assumed by
InterSecurities under Sections 1, 2 and 3 above. The Portfolio shall pay all of
its other
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expenses (or pay such expenses of the Trust attributable to the Portfolio)
including, but not limited to: custodian and transfer agent fees; advisory fees;
brokerage commissions and all other expenses in connection with the execution of
portfolio transactions; administrative, clerical, recordkeeping, bookkeeping,
legal, auditing and accounting expenses; interest and taxes; expenses of
preparing tax returns; expenses of shareholders' meetings and of preparing,
printing and mailing proxy statements (unless otherwise agreed to by the Trust
and InterSecurities); expenses of preparing and typesetting periodic reports to
its shareholders (except for those reports the Portfolio permits to be used as
sales literature); its allocable share of the fees and expenses of the Trust's
non-interested Trustees; and the costs, including filing fees, of registering
and renewing or maintaining registration of the Portfolio's shares under federal
and state law. Nothing in this Section 6 shall prohibit the Trust from entering
into other agreements or adopting plans which provide for the allocation of
expenses of the Trust or the Portfolio to other entities, or the assumption of
other expenses by the Trust or the Portfolio.
7. LIMITATION ON EXPENSES OF THE PORTFOLIO. Whenever, for any fiscal year,
the total cost to the Portfolio for normal operating expenses chargeable to its
income account, including, but not limited to, the fees of the Portfolio's
investment adviser, the compensation of its custodian, transfer agent,
registrar, auditors and legal counsel, printing expenses, expenses incurred in
complying with all laws applicable to the sale of shares of the Portfolio and
any compensation, fees, or reimbursements which the Portfolio pays to its
Trustees who are not interested persons (as that phrase is defined in Section
2(a)(29) of the 1940 Act, of InterSecurities, but excluding all interest and all
federal, state and local taxes (such as stamp, excise, income, franchise and
similar taxes), exceeds any expense limitation imposed by applicable state law,
InterSecurities shall reimburse the Portfolio for the amount of said excess in
the manner and to the extent required by state law.
8. TREATMENT OF INVESTMENT ADVICE. With respect to the Portfolio, the Trust
shall treat the investment advice and recommendations of InterSecurities as
being advisory only, and shall retain full control over its own investment
policies. However, the Trustees of the Trust may delegate to the appropriate
officers of the Trust, or to a committee of Trustees, the power to authorize
purchases, sales or other actions affecting the portfolio of the Portfolio in
the interim between meetings of the Trustees, provided such action is consistent
with the established investment policy of the Trustees and is reported to the
Trustees at their next meeting.
9. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by the Portfolio upon the purchase or sale of its Portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. InterSecurities is authorized and directed to place
the Portfolio's securities transactions, or to delegate to the Sub-Adviser the
authority and direction to place the Portfolio transactions, only with brokers
and dealers who render satisfactory service in the execution of orders at the
most favorable prices and at reasonable commission rates; provided, however,
that InterSecurities or the Sub-Adviser, may pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if InterSecurities or the Sub-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 broker or dealer viewed in
terms of either that particular transaction or the overall responsibilities of
InterSecurities or the Sub-Adviser. InterSecurities and the Sub-Adviser are also
authorized to consider sales of Portfolio shares by a broker-dealer or the
recommendation of a broker-dealer to its
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customers that they purchase Portfolio shares as a factor in selecting
broker-dealers to execute the Portfolio transactions, provided that in placing
Portfolio business with such broker-dealers, InterSecurities and the Sub-Adviser
shall seek the best execution of each transaction and all such brokerage
placement shall be consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. Notwithstanding the foregoing, the
Portfolio shall retain the right to direct the placement of all Portfolio
transactions, and the Trustees may establish policies or guidelines to be
followed by InterSecurities and the Sub-Adviser in placing Portfolio
transactions for the Portfolio pursuant to the foregoing provisions.
InterSecurities shall report on the placement of Portfolio transactions each
quarter to the Trustees of the Portfolio.
10. USE OF NAME. The Trust acknowledges that Idex Management, Inc., an
affiliate of InterSecurities, may grant or has granted the Trust the right to
use the name "IDEX". If this Agreement is terminated and InterSecurities no
longer serves as investment adviser to the Portfolio, Idex Management reserves
the right to withdraw from the Portfolio the use of the name "IDEX" or any name
misleadingly implying a continuing relationship between the Portfolio and
InterSecurities, Inc. or any of their affiliates.
11. LIABILITY OF INTERSECURITIES. InterSecurities may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be provided by the 1940 Act, neither InterSecurities nor its officers,
directors, employees or agents shall be subject to any liability to the Trust or
the Portfolio or any shareholder of the Portfolio for any error of judgment,
mistake of law or any loss arising out of any investment or other act or
omission in the course of, connected with or arising out of any service to be
rendered hereunder, except by reason of willful misfeasance, bad faith or gross
negligence in its performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement.
12. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust or by the shareholders of the Portfolio
acting by vote of at least a majority of its outstanding voting securities (as
that phrase is defined in Section 2(a)(42) of the 1940 Act), provided in either
case that 60 days' written notice of termination be given to InterSecurities at
its principal place of business. This Agreement may be terminated by
InterSecurities at any time by giving 60 days' written notice of termination to
the Trust, addressed to its principal place of business.
13. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as the term is defined in Section 2(a)(4) of the 0000 Xxx) of
this Agreement.
14. TERM. This Agreement shall continue in effect, unless sooner terminated
in accordance with its terms, for two years from the date hereof, and shall
continue in effect from year to year thereafter provided such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons (as that
term is defined in Section 2(a)(19) of the 0000 Xxx) of any such party, cast in
person at a meeting called for the purpose of voting on the approval of the
terms of such renewal, and by either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
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15. AMENDMENTS. The terms of this Agreement may be amended only with the
approval by the affirmative vote of a majority of the outstanding voting
securities of the Portfolio (as that phrase is defined in Section 2(a)(42) of
the 0000 Xxx) and the approval by the vote of a majority of Trustees of the
Trust who are not parties hereto or interested persons (as that phrase is
defined in Section 2(a)(19) of the 0000 Xxx) of any such party, cast in person
at a meeting called for the purpose of voting on the approval of such amendment,
unless otherwise permitted in accordance with the 1940 Act.
16. PRIOR AGREEMENTS. This Agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
17. LIMITATION OF LIABILITY. A copy of the Trust's Declaration of Trust is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed on behalf of the Trustees as
Trustees of the Trust and not individually, and that the obligations under this
Agreement are not binding upon any of the Trustees, officers, shareholders,
agents or employees of the Trust individually, but binding only upon the assets
and property of the Portfolio.
Attest: IDEX II SERIES FUND
/S/ XXXXXX X. XXXX /S/ XXXX X. XXXXXX
________________________ By: ______________________
Xxxxxx X. Xxxx, Secretary Xxxx X. Xxxxxx
Chairman of the Board
Attest: INTERSECURITIES, INC.
/S/ XXXXXXX X. XXXXXX /S/ G. XXXX XXXXXX
________________________ By: ______________________
Xxxxxxx X. Xxxxxx, Secretary G. Xxxx Xxxxxx
President and Chief
Executive Officer
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ASSIGNMENT
MidAmerica Management Corporation ("MidAmerica") does hereby assign,
transfer and convey, and InterSecurities, Inc., ("ISI") does hereby consent to
the assignment, transfer and conveyance of, effective October 1, 1992, the
Investment Counsel Agreement between MidAmerica and ISI with respect to the IDEX
II Tax-Exempt Portfolio of IDEX II Series Fund dated April 22, 1992, to AEGON
USA Investment Management, Inc., which owns 100% of the outstanding stock of
MidAmerica.
Executed this 30th day of September, 1992.
MidAmerica Management Corporation
/S/ XXXXXX X. XXXXX
By: ________________________________
Xxxxxx X. Xxxxx
Title: President
InterSecurities, Inc.
/S/ G. XXXX XXXXXX
By: ________________________________
G. Xxxx Xxxxxx
Title: President and Chief Executive Officer
Accepted:
AEGON USA Investment Management, Inc.
/S/ XXXXX X. XXXXXXX
By: ________________________________
Xxxxx X. Xxxxxxx
Title: Vice President
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