[FORM OF]
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of [Date], by and between AIG
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
[Subadviser], a ____________ corporation (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and [Corporation/Trust], a [Maryland
corporation/Massachusetts Trust] (the "Corporation/Trust"), have entered into an
Investment Advisory and Management Agreement dated as of January 1, 1999, (the
"Advisory Agreement") pursuant to which the Adviser has agreed to provide
investment management, advisory and administrative services to the
[Corporation/Trust]; and
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 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; and
WHEREAS, the Adviser desires to retain the Subadviser to furnish
investment advisory services to the investment series of the [Corporation/Trust]
listed on Schedule A attached hereto (the "Portfolio"), and the Subadviser is
willing to furnish such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:
1. Duties of the Subadviser. (a) The Adviser hereby engages the
services of the Subadviser in furtherance of its Investment Advisory and
Management Agreement with the [Corporation/Trust]. Pursuant to this Subadvisory
Agreement and subject to the oversight and review of the Adviser, the Subadviser
will 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 its activities which the Adviser or the [Corporation/Trust] is
required to maintain, and will render regular reports to the Adviser and to
officers and Directors/Trustees of the [Corporation/Trust] concerning its
discharge of the foregoing responsibilities. The Subadviser shall discharge the
foregoing responsibilities subject to the control of the officers and the
Directors/Trustees of the [Corporation/Trust] and in compliance with such
policies as the Directors/Trustees of the [Corporation/Trust] may from time to
time establish and communicate to Subadviser, and in
compliance with (a) the objectives, policies, and limitations for the Portfolio
set forth in the [Corporation/Trust]'s current prospectus and statement of
additional information as provided to Subadviser, and (b) applicable laws and
regulations.
The Subadviser represents and warrants to the Adviser that it will
manage the portion of the assets of each Portfolio set forth in Schedule A in
compliance with all applicable federal and state laws governing its operations
and investments. Without limiting the foregoing and subject to Section 11(c)
hereof, the Subadviser represents and warrants (1) that the Subadviser's
management of the portion of the assets of a Portfolio will be designed to
achieve qualification by each Portfolio to be treated as a "regulated investment
company" under subchapter M, chapter 1 of the Internal Revenue Code of 1986, as
amended (the "Code"), and (2) compliance with (a) the provisions of the Act and
rules adopted thereunder that relate to the investment of Portfolio assets,
including depositing those assets in custody with institutions designated by the
[Corporation/Trust]; and (b) federal and state securities and commodities laws
applicable to Subadviser's portfolio management responsibilities; provided that
for purposes of Section 17(a), (d) and (e) of the Act, the Subadviser shall
effect compliance only in relation to its own affiliates and to affiliated
persons identified to it by the Adviser. The Subadviser further represents and
warrants that to the extent any statements or omissions made in any Registration
Statement for shares of the [Corporation/Trust], or any amendment or supplement
thereto, are made in reliance upon and in conformity with 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 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.
The Subadviser accepts such employment 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.
(b) The Subadviser agrees: (i) to maintain a level of errors
and omissions or professional liability insurance coverage that, at all times
during the course of this Agreement, is appropriate given the nature of its
business, and (ii) from time to time and upon reasonable request, to supply
evidence of such coverage to the Adviser.
2. Portfolio Transactions. (a) The Subadviser is responsible for
decisions, and is hereby authorized, to buy or sell securities and other
investments for 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
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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 Subadviser 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/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 Subadviser will promptly communicate to the Adviser and to the
officers and the Directors/Trustees of the [Corporation/Trust] such information
relating to Portfolio transactions as they may reasonably request, including but
not limited to, reports prepared by independent third parties relating to the
execution costs of such transactions. To the extent consistent with applicable
law, the Subadviser may aggregate purchase or sell orders for the Portfolio with
contemporaneous purchase or sell orders of other clients of the Subadviser 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 Subadviser in the manner the Subadviser 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.
(b) Notwithstanding Section 2(a) above, for such purposes as
obtaining investment research products and services, covering fees and expenses,
and rewarding sales or distribution, the Adviser may request the Subadviser to
effect a specific percentage of the transactions in securities and other
investments it effects on behalf of the Portfolio with certain broker-dealers
and futures commission merchants. In designating the use of a particular
broker-dealer or futures commission merchant, the Adviser and Subadviser
acknowledge and agree that all brokerage transactions are subject to best
execution. As such, Subadviser will use its best efforts to direct non-risk
commission transactions to a particular broker-dealer or futures commission
merchant designated by the Adviser provided that the Subadviser obtains best
execution. Adviser acknowledges that Subadviser may be unable to fulfill the
Adviser's request for direction for a number of reasons, including, but not
limited to: 1) such direction may result in the Subadviser paying a higher
commission, depending upon the Subadviser's arrangements with the particular
broker-dealer or futures commission merchant, etc; 2) if the Subadviser
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directs payments of an excessive amount of commissions, the executions may not
be accomplished as rapidly; 3) the Subadviser may forfeit the possible advantage
derived from the aggregation of multiple orders as a single "bunched"
transaction where Subadviser would, in some instances, be in a better position
to negotiate commissions; and 4) Subadviser does not make commitments to
allocate fixed or definite amounts of commissions to brokers.
3. Compensation of the Subadviser. The Subadviser shall not be entitled
to receive any payment from the [Corporation/Trust] 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 to 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).
If the Subadviser shall provide its services under this Agreement for less than
the whole of any month, the foregoing compensation shall be prorated.
4. Other Services. At the request of the [Corporation/Trust] or the
Adviser, the Subadviser in its discretion may make available to the
[Corporation/Trust] 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/Trust] or the
Adviser at the Subadviser's cost.
5. Reports. The [Corporation/Trust], 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/Trust] as each may reasonably
request.
6. Status of the Subadviser. The services of the Subadviser to the
Adviser and the [Corporation/Trust] are not to be deemed exclusive, and the
Subadviser shall be free to render similar services to others. 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/Trust] in any way or otherwise be deemed an agent of the
[Corporation/Trust].
7. Advertising. Subadviser shall not provide or in any way distribute
any sales or advertising materials, whether or not related to the
[Corporation/Trust], to any employee or representative of AIG SunAmerica Capital
Services, Inc. ("SACS") or its affiliates, including wholesaling personnel,
unless such material has been received and approved, in writing, by the Adviser.
8. Proxy Voting. The Adviser will vote proxies relating to the
Portfolio's securities. The Adviser will vote all such proxies in accordance
with the proxy voting policies and procedures adopted by the Board of
Directors/Trustees of the [Corporation/Trust]. The Adviser may, on certain
non-routine matters, consult with the Subadviser before voting proxies relating
to the Portfolio's securities. The Adviser will instruct the custodian and other
parties providing
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services to the [Corporation/Trust] promptly to forward to the proxy voting
service copies of all proxies and shareholder communications relating to
securities held by each Portfolio (other than materials relating to legal
proceedings).
9. 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/Trust] pursuant to the requirements of Rule 31a-1
of that Act. Any records 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/Trust]
are the property of the [Corporation/Trust] and will be surrendered promptly to
the [Corporation/Trust] 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, the
[Corporation/Trust]'s auditors, the [Corporation/Trust] or any representative of
the [Corporation/Trust], the Adviser, or any governmental agency or other
instrumentality having regulatory authority over the [Corporation/Trust].
10. Reference to the Subadviser. Neither the [Corporation/Trust] nor
the Adviser or any affiliate or agent thereof shall make reference to or use the
name or logo 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.
11. 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 Adviser, its officers, directors, agents,
employees, controlling persons or shareholders or 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 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 and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) arising from the Subadviser's providing
services under this Agreement or the sale of securities of the
[Corporation/Trust].
(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,
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liabilities or litigation (including reasonable 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 are caused by Subadviser's disabling conduct; 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 its
officers, directors, agents, employees, controlling persons or shareholders or
to the [Corporation/Trust] or its shareholders 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 Subadviser and (ii) acts of the Subadviser
which result from or are based upon 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 Adviser or any other subadviser to a
Portfolio, which records are not also maintained by the Subadviser or, to the
extent such records relate to the portion of the assets managed by the
Subadviser, otherwise available to the Subadviser upon reasonable request. The
Adviser and Subadviser each agree 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 1of 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) only with respect to
the portion of assets of a Portfolio allocated to Subadviser. The Adviser shall
indemnify the Indemnified Parties from any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses)
arising from the conduct of the Adviser, the [Corporation/Trust] and any other
subadviser with respect to the portion of a Portfolio's assets not allocated to
the Subadviser and with respect to any other portfolio of the
[Corporation/Trust].
(d) Under no circumstances shall the Adviser or the Subadviser
be liable to any indemnitee for indirect, special or consequential damages, even
if the Adviser or the Subadviser is apprised of the likelihood of such damages.
12. Permissible Interests. Directors/Trustees and agents of the
[Corporation/Trust] 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/Trust] as Directors/Trustees, or
otherwise; and the Subadviser (or any successor) is or may be interested in the
[Corporation/Trust] in some manner.
13. 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/Trustees of the [Corporation/Trust] 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/Trustees of the [Corporation/Trust]
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or by vote of a majority of the outstanding voting securities of the Portfolio
voting separately from any other series of the [Corporation/Trust].
With respect to each Portfolio, this Agreement may be
terminated at any time, without payment of a penalty by the Portfolio or the
[Corporation/Trust], by vote of a majority of the Directors/Trustees, 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/Trust], 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/Trust]. 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/Trust] and the Adviser is
terminated.
14. Severability. This Agreement constitutes the entire Agreement
between the parties hereto. 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.
15. 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.
16. 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.
17. Separate Series. Pursuant to the provisions of the [Articles of
Incorporation and the General Laws of the State of Maryland or Declaration of
Trust and the General Laws of the State of Massachusetts], each Portfolio is a
separate series of the [Corporation/Trust], 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/Trust] as a whole.
18. Notices. All notices shall be in writing and deemed properly given
when delivered or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
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Subadviser:
Adviser: AIG SunAmerica Asset Management Corp.
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Senior Vice President and
General Counsel
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Agreement as of the date first above
written.
AIG SUNAMERICA ASSET MANAGEMENT CORP.
By:
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and CEO
By:
------------------------------------
Name:
Title:
SCHEDULE A
Fee Rate (as a percentage of daily net
assets the Subadviser manages for the
Portfolio Portfolio)
