Exhibit (g)(1)(a)
FORM OF
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of
______________, 2001, as amended from time to time, by and between SUNAMERICA
SENIOR FLOATING RATE FUND, INC., a Maryland corporation (the "Corporation"), and
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Corporation is registered under the Investment Company Act of
1940, as amended (the "Act"), as an closed-end management investment company and
may issue shares of common stock, par value $.01 per share; 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 desires to retain the Adviser to furnish
investment management, advisory and administrative services to the Corporation
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
Corporation including, but not limited to, continuously providing the
Corporation with investment management, including investment research, advice
and supervision, determining which securities shall be purchased or sold by the
Corporation, making purchases and sales of securities on behalf of the
Corporation and determining how voting and other rights with respect to
securities owned by the Corporation shall be exercised, subject in each case to
the control of the Board of Directors of the Corporation (the "Directors") and
in accordance with the objectives, policies and principles set forth in
Corporation's Registration Statement and the Corporations' 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 Corporation) and
such executive and other personnel as shall be necessary for the operations of
the Corporation, (ii) shall be responsible for the financial and accounting
records required to be maintained by the Corporation (including those maintained
by Corporation's custodian) and (iii) shall oversee the performance of services
provided to the Corporation by others, including
the custodian, transfer and shareholder servicing agent. The Corporation
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
Corporation 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
Corporation 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 the Corporation, 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's Directors and Officers who are employees of
the Adviser. The Adviser shall not be required to pay any other expenses of the
Corporation, 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 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 agrees to pay to the Adviser a fee at the annual
rates set forth in
Schedule A hereto. 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 the Corporation, the average daily net asset value 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 the
Corporation, 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
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 the Corporation 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 the Corporation 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 and
its respective affiliates, as broker-dealers or futures commission merchants to
effect Portfolio transactions in securities and other investments for the
Corporation. The Adviser will promptly communicate to the officers and the
Directors of the Corporation 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 Corporation 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 Corporation 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 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 the
Corporation, this Agreement may be terminated at any time, without payment of
penalty by the Corporation, on 60 days written notice to the Adviser, by vote of
the Directors, or by vote of a majority of the outstanding voting securities (as
defined by the Act) of the Corporation. This Agreement shall automatically
terminate in the event of its assignment (as defined by the Act).
The Corporation hereby agrees that if (i) the Adviser ceases to act as
investment manager and adviser to the Corporation and (ii) the continued use of
the Corporation's present name would create confusion in the context of the
Adviser's business, then the Corporation 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 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
Corporation 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 who are neither "interested
persons" of the Corporation 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 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
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, officer or employee of the Corporation 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 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.
IN WITNESS WHEREOF, the Corporation and the Adviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
SUNAMERICA SENIOR FLOATING RATE FUND, INC.
By: ______________________________________
[Name]
[Title]
SUNAMERICA ASSET MANAGEMENT CORP.
By: ______________________________________
[Name]
[Title]
SCHEDULE A
FEE RATE
(as a % of average
PORTFOLIO daily net asset value)
--------- ----------------------
SunAmerica Senior Floating Rate Fund, Inc. 0.85% on first $1 billion
0.80% on next $1 billion
0.75% in excess of $2 billion
