INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 3rd day of June, 1996, by and between S.I.S. MERCATOR
FUND, INC., a Maryland corporation (the "Fund") and Strategic Investment
Services, Inc. a corporation organized under the laws of Pennsylvania
(the "Manager").
1.Duties of Advisor
The Fund hereby employs the Manager to manage the investment and
reinvestment of the assets of the Global Income Portfolio (the "Portfolio"),
to continuously review, supervise and administer the Portfolio's investment
program, to determine in its discretion the securities to be purchased or
sold and the portion of the Portfolio's assets to be uninvested, to provide
the Fund with records concerning the Manager's activities which the Fund is
required to maintain, and to render regular reports to the Fund's officers
and the Board of Directors of the Fund, all in compliance with the objectives,
policies and limitations set forth in the Fund's registration statement. The
Manager accepts such employment and agrees to provide, at its own expense,
the office space, furnishings and equipment and the personnel required by it
to perform the services described herein on the terms and for the
compensation provided herein.
2.Portfolio Transactions
The Manager is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Portfolio
and is directed to use its best efforts to obtain the best available price
and most favorable execution. It is understood, however, that the Manager
shall not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Portfolio, or be in breach
of any obligation owing to the Fund or in respect of the Portfolio under
this Agreement, or otherwise, solely by reason of its having caused the
Portfolio to pay a member of a securities exchange, a broker or a dealer a
commission for effecting a securities transaction for the Portfolio in
excess of the amount of commission another member of an exchange, broker or
dealer would have charged if the Manager determines in good faith that the
commission paid was reasonable in relation to the brokerage or research
services provided by such member, broker or dealer, viewed in terms of
that particular transaction or the Manager's overall responcibilities
with respect to its accounts, including the Fund, as to which it
exercises investment discretion. The Manager will promptly communicate
to the officers and directos of the Fund such information relating to
transactions for the Portfolio as they may reasonably request.
3.Compensation of the Manager
For the services to be rendered by the Manager as provided in Section 1 of
this Agreement, the Fund shall pay to the Manager, at the end of each
month, a fee equal to one-twelfth of .90 percent of the average daily net
assets of the Portfolio. In the event that this Agreement is terminated
at other than a month-end, the fee for such month shall be prorated.
4.Reports
The Fund and the Manager agree to furnish to each other information with
regard to their respective affairs as each may reasonably request.
5.Status of the Manager
The services of the Manager to the Fund or in respect of the Portfolio, are
not to be deemed exclusive, and the Manager shall be free to render similar
services to others as long as its services to the Fund, or in respect of
the Portfolio, are not impaired thereby. The Manager 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 Fund in any way
or otherwise be deemed an agent of the Fund.
6.Liability of Manager
The Manager shall not be liable to the Fund or any shareholder thereof for
errors of judgment or in absence of negligence in the performance of its
duties hereunder.
No provision of this Agreement shall be deemed to protect the Manager
against any liability to the Fund to which it might otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations
under this Agreement.
7.Duration and Termination
This Agreement shall become effective on June 3, 1996 (the "Effective Date")
and shall continue in effect until November 7, 1997 provided that it has
first been approved in accordance with Section 15 of the Investment Company
Act of 1940, as amended ("Act"). Thereafter, this Agreement may be
continued in effect for successive one-year periods provided each such
continuance is approved at least annually by a vote of the Fund's Board of
Directors, including the vote of a majority of the directors 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 such approval. In
addition, the question of continuance of this Agreement may be presented to
the shareholders of the Fund; in such event, such continuance shall be
effected only if approved by the affirmative vote of the holders of a
majority of the outstanding voting securities of the Portfolio.
This Agreement may at any time be terminated without payment of any
penalty either by vote of the Board of Directors of the Fund or by vote
of the holders of a majority of the outstanding voting securities of the
Portfolio, on sixty days written notice to the Manager.
This Agreement shall automatically terminate in the event of its assignment.
This Agreement may be terminated by the Manager after ninety days written
notice to the Fund.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such
party.
As used in this Section 9, the terms "assignment," "interested persons,"
and a "vote of the holders of a majority of the outstanding securities"
shall have the respective meanings set forth in Section 2(a)(4),
Section 2(a)(19), Section 2(a)(42) of the Act and Rule l8f-2 thereunder.
8.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.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed this 3rd day of June, 1996.
Strategic Investment Services
S.I.S. Mercator Fund, Inc.
By:_________________________ By:_________________________
President
