EXHIBIT D(2)
ADVISORY AGREEMENT
ADVISORY AGREEMENT, dated June 14, 1999, between SAMCO Fund, Inc., a
Maryland corporation (the "Fund"), and Seix Investment Advisors Inc., a New
Jersey corporation (the "Adviser").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. ATTORNEY-IN-FACT. The Fund appoints the Adviser as its attorney-in-fact
to invest and reinvest the assets of the SAMCO Intermediate Fixed Income Fund
(the "Portfolio"), as fully as the Fund itself could do. The Adviser hereby
accepts this appointment.
2. DUTIES OF THE ADVISER. (a) The Adviser shall be responsible for
managing the investment assets of the Portfolio, including, without limitation,
providing investment research, advice and supervision, determining which
portfolio securities shall be purchased or sold by the Portfolio, purchasing
and selling securities on behalf of the Portfolio and determining how voting
and other rights with respect to portfolio securities of the Portfolio shall be
exercised, subject in each case to the control of the Board of Directors of the
Fund (the "Board") and in accordance with the objective, policies and
principles of the Portfolio set forth in the Registration Statement, as
amended, of the Fund, the requirements of the Investment Company Act of 1940,
as amended, (the "Act") and other applicable law. In performing such duties,
the Adviser shall provide such office space, and such executive and other
personnel as shall be necessary for the investment operations of the Portfolio.
In managing the Portfolio in accordance with the requirements set forth in this
paragraph 2, the Adviser shall be entitled to act upon advice of counsel to the
Fund or counsel to the Adviser.
(b) Subject to Section 36 of the Act, the Adviser shall not be liable to
the Fund 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
Portfolio and the performance of its duties under this Agreement except for
losses arising out of the Adviser's willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement. It is agreed that
the Adviser shall have no responsibility or liability for the accuracy or
completeness of the Fund's Registration Statement under the Act and the
Securities Act of 1933 except for information about the Adviser contained in
the Prospectus included as part of such Registration Statement supplied by the
Adviser for inclusion therein. The Fund agrees to indemnify and hold the
Adviser harmless from and against all claims, losses, costs, damages and
expenses, including reasonable fees and expenses for counsel, incurred by it
resulting from any claim, demand, action or suit in connection with or arising
out of any action or omission by the Adviser in the performance of this
Agreement except for those claims, losses, costs, damages and expenses
resulting from the Adviser's willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
(c) The Adviser and its officers may act and continue to act as investment
advisers and managers for others (including, without limitation, other
investment companies), and nothing in this Agreement will in any way be deemed
to restrict the right of the Adviser to perform investment management or other
services for any other person or entity, and the performance of such services
for others will not be deemed to violate or give rise to any duty or obligation
to the Fund.
(d) Except as provided in Section 5, nothing in this Agreement will limit
or restrict the Adviser or any of its officers, affiliates or employees from
buying, selling or trading in any securities for its or their own account or
accounts. The Fund acknowledges that the Adviser and its officers, affiliates
or employees, and its other clients may at any time have, acquire, increase,
decrease or dispose of positions in investments which are at the same time
being acquired or disposed of for the account of the Portfolio. The Adviser
will have no obligation to acquire for the Portfolio a position in any
investment which the Adviser, its officers, affiliates or employees may acquire
for its or their own accounts or for the account of another client, if in the
sole discretion of the Adviser, it is not feasible or desirable to acquire a
position in such investment for the account of the Portfolio, provided that the
Adviser shall have acted in good faith and in a manner deemed equitable to the
Portfolio. The Adviser represents that it has adopted a code of ethics
governing personal trading that complies in all material respects with the
recommendations contained in the Investment Company Institute "Report of the
Advisory Group on Personal Investing," dated May 9, 1994, and the Adviser
agrees to furnish a copy of such code of ethics to the Directors of the Fund.
(e) If the purchase or sale of securities consistent with the investment
policies of the Portfolio and one or more other clients serviced by the Adviser
is considered at or about the same time, transactions in such securities will
be allocated among the Portfolio and clients in a manner deemed fair and
reasonable by the Adviser. Although there is no specified formula for
allocating such transactions, the various allocation methods used by the
Adviser, and the results of such allocations, are subject to periodic review by
the Board.
3. EXPENSES. The Adviser shall pay all of its expenses arising from the
performance of its obligations under this Agreement. Except as provided below,
the Adviser shall not be required to pay any other expenses of the Fund
(including out-of-pocket expenses, but not including the Adviser's overhead or
employee costs), including without limitation, organization expenses of the
Fund; brokerage commissions; maintenance of books and records which are
required to be maintained by the Fund's custodian or other agents of the Fund;
telephone, telex, facsimile, postage and other communications expenses;
expenses relating to investor and public relations; freight, insurance and
other charges in connection with the shipment of the Fund's portfolio
securities; indemnification of Directors and officers of the Fund; travel
expenses (or an appropriate portion thereof) of Directors and officers of the
Fund to the extent that such expenses relate to attendance at meetings of the
Board of Directors of the Fund or any committee thereof or advisors thereto
held outside of the Adviser's offices; interest, fees and expenses of
independent attorneys, auditors, custodians, accounting agents, transfer
agents, dividend disbursing agents and registrars; payment
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for portfolio pricing or valuation service to pricing agents, accountants,
bankers and other specialists, if any; taxes and government fees; cost of stock
certificates and any other expenses (including clerical expenses) of issue,
sale, repurchase or redemption of shares; expenses of registering and
qualifying shares of the Fund under Federal and state laws and regulations;
expenses of printing and distributing reports, notices, dividends and proxy
materials to existing stockholders; expenses of printing and filing reports and
other documents filed with governmental agencies, expenses of printing and
distributing prospectuses; expenses of annual and special stockholders'
meetings; costs of stationery, fees and expenses (specifically including travel
expenses relating to Fund business) of Directors of the Fund 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. (a) As compensation for the services performed and the
facilities and personnel provided by the Adviser pursuant to this Agreement,
the Fund will pay to the Adviser promptly at the end of each calendar month, a
fee, calculated on each day during such month, at an annual rate of 0.25% of
the Portfolio's average daily net assets. The Adviser shall be entitled to
receive during any month such interim payments of its fee hereunder as the
Adviser shall request, provided that no such payment shall exceed 50% of the
amount of such fee then accrued on the books of the Portfolio and unpaid.
(b) If the Adviser shall serve hereunder for less than the whole of any month,
the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net assets" of the
Portfolio shall mean the average of the values placed on the Portfolio's net
assets on each day pursuant to the applicable provisions of the Fund's
Registration Statement, as amended.
5. PURCHASE AND SALE OF SECURITIES. The Adviser shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers as the Adviser shall deem appropriate in order to carry out the policy
with respect to the allocation of portfolio transactions as set forth in the
Registration Statement of the Fund, as amended, or as the Board may direct from
time to time. The Adviser will use its reasonable efforts to execute all
purchases and sales with dealers and banks on a best net price basis. The
Adviser will consider the full range and quality of services offered by the
executing broker or dealer when making these determinations. Neither the
Adviser nor any of its officers, affiliates or employees will act as principal
or receive any compensation from the Portfolio in connection with the purchase
or sale of investments for the Portfolio other than the fee referred to in
Paragraph 4 hereof.
6. TERM OF AGREEMENT. This Agreement shall continue in full force and
effect until two years from the date hereof, and will continue in effect from
year to year thereafter if such continuance is approved in the manner required
by the Act, provided that this Agreement is not otherwise terminated. The
Adviser may terminate this Agreement at any time, without the payment
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of any penalty, upon 60 days' written notice to the Fund. The Fund may
terminate this Agreement with respect to the Portfolio at any time, without the
payment of any penalty, on 60 days' written notice to the Adviser by vote of
either the majority of the non-interested members of the Board or a majority of
the outstanding voting securities (as defined in Section 2(a)(42) of the Act)
of the Portfolio. This Agreement will automatically terminate in the event of
its assignment (the term "assignment" for this purpose having the meaning
defined in Section 2(a)(4) of the Act).
7. CHANGES IN MEMBERSHIP. The Adviser is a corporation duly existing under
the laws of the State of New Jersey. In the event the Adviser changes
ownership, the Adviser shall notify the Fund of such change within a reasonable
time after the change.
8. NOTICES. Any notice or other communication authorized or required
hereunder shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed to the Fund at c/o
Investors Capital Services, Inc., 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, Attention: Xx. Xxxx Xxxxxxxxx, Treasurer; and to Seix Investment
Advisors Inc., Whiteweld Corporate Centre 000 Xxxx Xxxxxxxxx, Xxxxxxxxx Xxxx,
XX 00000-0000, Attention: Xx. Xxxxxxxxx Xxxx. Either party may designate a
different address by notice to the other party. Any such notice or other
communication shall be deemed given when actually received.
9. AMENDMENT. This Agreement may be amended by the parties hereto with
respect to the Portfolio only if such amendment is specifically approved (i) by
the Board of Directors of the Fund or by the vote of a majority of outstanding
shares of the Portfolio ("Shares"), and (ii) by the Director(s) who are not
interested persons (the term "non interested" for this purpose having the
meaning defined in section 2 (a) (19) of the Act) of the Fund ("Non-Interested
Director(s)"), which vote must be cast in person at a meeting called for the
purpose of voting on such approval.
10. RIGHT OF ADVISER IN CORPORATE NAME. The Adviser and the Fund each
agree that the phrase "SAMCO" which comprises a component of the Fund's
corporate name, is a property right of the Adviser. The Fund agrees and
consents that (i) it will only use the phrase "SAMCO" as a component of its
corporate name and for no other purpose; (ii) it will not purport to grant to
any third party the right to use the phrase "SAMCO" for any purpose; (iii) the
Adviser or any corporate affiliate of the Adviser may use or grant to others
the right to use the phrase "SAMCO" or any combination or abbreviation thereof,
as all or a portion of a corporate or business name or for any commercial
purpose, including a grant of such right to any other investment company, and
at the request of the Adviser, the Fund will take such action as may be
required to provide its consent to such use or grant; and (iv) upon the
termination of any investment advisory agreement into which the Adviser and the
Fund may enter, the Fund shall, upon request by the Adviser, promptly take such
action, at its own expense, as may be necessary to change the Fund's corporate
name to one not containing the phrase "SAMCO" and following such a change,
shall not use the phrase "SAMCO" or any combination thereof, as part of the
Fund's corporate name or for any other commercial purpose, and shall use its
reasonable efforts to cause its officers, directors and
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stockholders to take any and all actions which the Adviser may request to
effect the foregoing and recovery to the Adviser any and all rights to such
phrase.
11. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require or
to impose any duty upon either of the parties to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed by their duly authorized officers as of the date first written
above.
ATTEST SAMCO FUND, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxxx, Treasurer
ATTEST SEIX INVESTMENT ADVISORS INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxxxx Xxxx
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Xxxxx X. Xxxxxx Xxxxxxxxx Xxxx, Chairman & CIO
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