EX-99.(g)(2)(A)
SUBADVISORY AGREEMENT
THIS SUBADVISORY AGREEMENT is made and entered into as of January
12, 2005, between AIG SUNAMERICA ASSET MANAGEMENT CORP. (the "Adviser"), a
Delaware corporation registered under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), and AIG GLOBAL INVESTMENT CORP. (the
"Subadviser"), a New Jersey corporation also registered under the Advisers Act.
W I T N E S S E T H
WHEREAS, the Adviser, pursuant to an Advisory Agreement (the
Advisory Agreement") with SunAmerica Senior Floating Rate Fund, Inc., a
Maryland Corporation (the "Fund"), has been retained to act as
investment adviser for the Fund; and
WHEREAS, the Fund is registered with the Securities and Exchange
Commission (the "SEC") as a closed-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Adviser desires to retain the Subadviser to provide
a continuous investment program for the Fund, and the Subadviser is
willing to render those services subject to the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT AS SUBADVISER
The Fund desires to employ its capital by investing and
reinvesting in securities of the kind and in accordance with the
limitations specified in the Fund's Prospectus and Statement of
Additional Information relating to the Fund as may be in effect from
time to time (collectively, the "Prospectus") and which are filed with
the SEC as part of the Fund's Registration Statement on Form N-2, as
amended from time to time, and in such manner and to such extent as may
be approved by the Board of Directors of the Fund. A copy of the
Prospectus has been provided to the Subadviser. The Adviser retains the
Subadviser to act as investment adviser for and to manage the Fund's
Assets subject to the supervision of the Adviser and the Board of
Directors of the Fund and subject to the terms of this Agreement, and
the Subadviser accepts that employment. In this capacity, the
Subadviser will be responsible for the investment management of the
Fund's assets. It is recognized that the Subadviser now acts, and that
from time to time hereafter may act, as investment adviser to one or
more other investment companies and to fiduciary or other managed
accounts and that the Adviser and the Fund have no objection to those
activities and such other activities as more fully described in the
Subadviser's Part II of its Form ADV referenced in Section 7(d).
2. DUTIES OF THE SUBADVISER
a. INVESTMENTS. The Subadviser is authorized and directed and
agrees, subject to the stated investment policies and
restrictions of the Fund as set forth in the Prospectus and
subject to the directions of the Adviser and the Fund's Board of
Directors, to purchase, hold and sell investments for the Fund
("Fund Investments") and to monitor on a continuous basis the
performance of such Fund Investments. Subject to the supervision
of the Board of Directors and the Adviser and the terms and
conditions of this Agreement, including without limitation
section 2(b), the Subadviser will: (1) manage the Fund
Investments in accordance with the Fund's investment objective,
policies and limitations as stated in the Prospectus; (2) make
investment decisions for the Fund; (3) place purchase and sale
orders for portfolio transactions for the Fund, including the
manner,
1
method and timing of such investment transactions; and (4) manage
otherwise uninvested Fund cash. In providing these services, the
Subadviser will formulate and implement a continuous program of
investment, evaluation and, if appropriate, sale and reinvestment
of the Fund Investments. The Adviser agrees to provide to the
Subadviser such assistance as may be reasonably requested by the
Subadviser in connection with its activities under this
Agreement, including, without limitation, information concerning
the Fund, its funds available (or to become available) for
investment, and generally as to the condition of the Fund's
affairs.
b. COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. In the
performance of its duties and obligations under this Agreement,
the Subadviser will act in conformity with the Prospectus and
with the instructions and directions received in writing from the
Adviser or the Board of Directors of the Fund and will comply
with the requirements of the 1940 Act, the Advisers Act, the
Internal Revenue Code of 1986, as amended (the "Code") (including
the requirements for qualification as a regulated investment
company) and all other federal and state laws and regulations
applicable to its services under this Agreement.
The Adviser will provide the Subadviser with reasonable advance
notice of any change in the Fund's investment objectives,
policies and restrictions as stated in the Prospectus, and the
Subadviser will, in the performance of its duties and obligations
under this Agreement, manage the Fund Investments consistent with
such changes. The Adviser acknowledges and agrees that the
Prospectus will at all times be in compliance with all disclosure
requirements under all applicable federal and state laws and
regulations relating to the Fund, including, without limitation,
the 1940 Act and the rules and regulations under this Agreement,
and that the Subadviser will have no liability in connection
therewith, except as to the accuracy of material information
furnished in writing by the Subadviser to the Fund or to the
Adviser specifically for inclusion in the Prospectus. The
Subadviser hereby agrees to provide to the Adviser in a timely
manner such information relating to the Subadviser and its
relationship to, and actions for, the Fund as may be required to
be contained in the Prospectus.
In fulfilling these requirements and its other requirements and
obligations under this Agreement, the Subadviser will be entitled
to rely on and act in accordance with (1) information provided to
it by the Fund's administrator, fund accountant, custodian or
other service provider and (2) instructions, which may be
standing instructions, from the Adviser. The Adviser agrees to
provide or cause to be provided to the Subadviser on an ongoing
basis upon request by the Subadviser, such information as is
requested by the Subadviser for the performance of its
obligations under this Agreement, and the Subadviser will not be
in breach of any term of this Agreement or be deemed to have
acted negligently if the Adviser fails to provide or cause to be
provided such information and the Subadviser relies on the
information most recently provided to it.
c. VOTING OF PROXIES. The Fund has appointed Investor Responsibility
Research Center as the proxy-voting agent and will vote all such
proxies in accordance with the proxy voting policies and
procedures adopted by the Board of Directors. With respect to
certain vote items, a Fund may request guidance or a
recommendation from the adviser, administrator or subadviser of
the Fund. The Subadviser shall not have responsibilities in
connection with proxy voting for a Fund unless it is
affirmatively requested to make a proxy voting recommendation.
d. AGENT. Subject to any other written instructions of the Adviser
or the Fund, the Subadviser is hereby appointed the Adviser's and
the Fund's agent and attorney-in-fact for the limited purposes of
executing account documentation, agreements, contracts and other
documents as the Subadviser
2
will be requested by brokers, dealers, counterparties and other
persons in connection with its management of the assets of the
Fund.
e. PORTFOLIO TRANSACTIONS. Subject to the approval of the Board of
Directors of the Fund, the Subadviser, in carrying out its duties
hereunder, may cause the Fund to pay a broker-dealer which
furnishes brokerage or research services as such services are
defined under Section 28(e) of the Securities Exchange Act of
1934, as amended (the "34 Act"), a higher commission than that
which might be charged by another broker- dealer which does not
furnish brokerage or research services or which furnishes
brokerage or research services deemed to be of lesser value, if
such commission is deemed reasonable in relation to the brokerage
and research services provided by the broker-dealer, viewed in
terms of either that particular transaction or the overall
responsibilities of the Subadviser with respect to the accounts
as to which it exercises investment discretion (as such term is
defined under Section 3(a)(35) of the 34 Act).
It is recognized that the services provided by such brokers or
other entities may be useful to the Subadviser in connection with
the Subadviser's services to other clients.
On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interests of the Fund as well as other
clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but is under
no obligation to, aggregate the securities to be sold or
purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In that event,
allocation of securities so sold or purchased, as well as the
expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most
equitable and consistent with its fiduciary obligations to the
Fund and to its other clients over time. It is recognized that in
some cases, this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtainable for,
or disposed of by, the Fund.
f. CERTAIN TRANSACTIONS. The Subadviser and any affiliated person of
the Subadviser will not purchase securities or other instruments
from or sell securities or other instruments to the Fund;
PROVIDED, HOWEVER, the Subadviser may purchase securities or
other instruments from or sell securities or other instruments to
the Fund if the transaction is permissible under applicable laws
and regulations, including, without limitation, the 1940 Act and
the Advisers Act and the rules and regulations promulgated under
both those acts.
The Subadviser, including its Access Persons (as defined in Rule
17j-1(e) under the 1940 Act), agrees to observe and comply with
Rule 17j-1 and its Code of Ethics (which will comply in all
material respects with Rule 17j-1, as amended from time to time).
On a quarterly basis, the Subadviser will either (i) certify to
the Adviser that the Subadviser and its Access Persons have
complied with the Subadviser's Code of Ethics with respect to the
Fund's assets or (ii) identify any material violations that have
occurred with respect to the Fund's assets. In addition, the
Subadviser will report at least annually to the Adviser
concerning any other violations of the Subadviser's Code of
Ethics that required significant remedial action and that were
not previously reported.
g. BOOKS AND RECORDS. Pursuant both to the 1940 Act and the Advisers
Act and the rules and regulations promulgated under those acts,
the Subadviser will maintain separate books and records of all
matters pertaining to its management of the Fund's assets. The
Fund's books and records will be available to the Adviser at any
time upon reasonable request during normal business hours and
will be available for telecopying without unreasonable delay to
the Adviser during any day that the Fund is open for business.
3
h. INFORMATION CONCERNING FUND INVESTMENTS AND SUBADVISER. From time
to time as the Adviser or the Fund may reasonably request (but no
less often than quarterly), the Subadviser will furnish or cause
to be furnished the requesting party reports on portfolio
transactions and reports on Fund Investments held in the
portfolio, all in such detail as the Adviser or the Fund may
reasonably request. The Subadviser will also inform the Adviser
promptly of changes in portfolio managers responsible for
Subadviser Assets or of changes in the control of the Subadviser.
The Subadviser will make available its officers and employees to
meet with the Fund's Board of Directors in person on reasonable
notice to review the Fund Investments and the Subadviser will
report to the Board of Directors in writing on the Fund
Investments monthly.
i. CUSTODY ARRANGEMENTS. The Subadviser will on each business day
provide the Adviser and the Fund's custodian such information as
the Adviser and the Fund's custodian may reasonably request
relating to all transactions concerning the Fund Investments
including, without limitation, recommendations, in accordance
with policies and procedures established by the Directors, as to
the fair value of securities for which market quotes are not
available.
3. INDEPENDENT CONTRACTOR
In the performance of its duties under this Agreement, the
Subadviser is an independent contractor and unless otherwise expressly
provided in this Agreement or otherwise authorized in writing, will
have no authority to act for or represent the Fund or the Adviser in
any way or otherwise be deemed an agent of the Fund or the Adviser.
4. EXPENSES
During the term of this Agreement, Subadviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other
investments (including brokerage fees and commissions and other
transaction charges, if any) purchased for the Fund. The Subadviser
will not be responsible for any expenses of the operations of the Fund
including, without limitation, brokerage fees and commissions and other
transaction charges, if any. The Subadviser will not be responsible for
the Fund's or the Adviser's expenses. The Subadviser shall be
responsible for travel expenses (airfare, meals, lodging and other
transportation) undertaken at the request of the Adviser ("Travel
Expenses") in an amount not to exceed $50,000 per annum. Travel
Expenses in excess of $50,000 per annum shall be borne by the Adviser.
In addition, it is understood and acknowledged that the Subadviser
shall not be responsible for legal fees and expenses incurred for
advice in connection with the actual or pending bankruptcy,
restructuring or default of Fund assets.
5. COMPENSATION
a. The Adviser will pay the Subadviser a fee, computed daily and
paid monthly on or before the last business day of the month, at
the following annualized rate: 0.25% of the Fund's average daily
net assets for average daily net assets up to and including $1
billion; and 0.20% of the Fund's average daily net assets in
excess of $1 billion. In calculating the net assets of the Fund,
for purposes of this computation, all liabilities of the Fund
will be deducted from gross assets except the principal amount of
any indebtedness for money borrowed, including debt securities
issued by the Fund.
b. If this Agreement becomes effective or terminates before the end
of any month, the fee for the period from the effective date to
the end of such month or from the beginning of such month to the
4
date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full
month in which the effectiveness or termination occurs.
c. Notwithstanding any other provision of this Agreement, the
Subadviser may from time to time agree not to impose all or a
portion of its fee otherwise payable under this Agreement (in
advance of the time such fee or portion of the fee would
otherwise accrue). Any such fee reduction may be discontinued or
modified by the Subadviser at any time.
d. The waiver, if any, by the Adviser of its Advisory Fee from the
Fund shall not affect the payment of the fee to the Subadviser
set forth in subsection (a) above.
6. REPRESENTATION AND WARRANTIES OF SUBADVISER
The Subadviser represents and warrants to the Adviser and the
Fund as follows:
a. The Subadviser is registered as an investment adviser under the
Advisers Act;
b. The Subadviser is a corporation duly organized and validly
existing under the laws of the State of New Jersey with the power
to own and possess its assets and carry on its business as it is
now being conducted;
c. The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly
authorized by its Board of Directors or shareholders, and no
action by or in respect of, or filing with, any governmental
body, agency or official is required on the part of the
Subadviser for the execution, delivery and performance by the
Subadviser of this Agreement, and the execution, delivery and
performance by the Subadviser of this Agreement do not contravene
or constitute a default under (i) any provision of applicable
law, rule or regulation, (ii) the Subadviser's governing
instruments, or (iii) any material agreement, judgment,
injunction, order, decree or other instrument binding upon the
Subadviser;
d. The Form ADV of the Subadviser previously provided to the Adviser
is a true and complete copy of the form filed with the SEC and
the information contained therein is accurate and complete in all
material respects.
7. REPRESENTATIONS AND WARRANTIES OF ADVISER
The Adviser represents and warrants to the Subadviser as
follows:
a. The Adviser is registered as an investment adviser under the
Advisers Act;
b. The Adviser is a corporation duly organized and validly existing
under the laws of the State of Delaware with the power to own and
possess its assets and carry on its business as it is now being
conducted;
c. The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly
authorized by its Board of Directors or shareholders, and no
action by or in respect of, or filing with, any governmental
body, agency or official is required on
5
the part of the Adviser for the execution, delivery and
performance by the Adviser of this Agreement, and the execution,
delivery and performance by the Adviser of this Agreement do not
contravene or constitute a default under (i) any provision of
applicable law, rule or regulation, (ii) the Adviser's governing
instruments, or (iii) any material agreement, judgment,
injunction, order, decree or other instrument binding upon the
Adviser;
d. The Form ADV of the Adviser previously provided to the Subadviser
is a true and complete copy of the form filed with the SEC and
the information contained therein is accurate and complete in all
material respects;
e. The Adviser acknowledges that it has received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement;
f. The Fund is in compliance in all material respects, and during
the term of this Agreement will remain in compliance in all
material respects, with all federal and state laws, rules and
regulations applicable to the Fund and the operation of its
business (other than those related to investment objectives,
policies and restrictions over which the Subadviser has
discretion pursuant to the terms hereof), including, without
limitation, applicable disclosure and filing obligations for
prospectuses, statements of additional information, registration
statements, periodic reports to shareholders and regulatory
bodies, proxy statements and promotional materials and
advertisements; and
g. The Fund is in compliance in all material respects, and during
the term of this Agreement will remain in compliance in all
material respects, with the terms and conditions of the
Prospectus (other than those related to investment objectives,
policies and restrictions over which the Subadviser has
discretion pursuant to the terms hereof), including, without
limitation, provisions relating to the computation of the Fund's
net asset value and those relating to processing purchase,
exchange and repurchase requests.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION
All representations and warranties made by the Subadviser and the
Adviser pursuant to Sections 6 and 7, respectively, will survive for
the duration of this Agreement and the parties to this Agreement will
promptly notify each other in writing upon becoming aware that any of
the foregoing representations and warranties are no longer true.
9. LIABILITY
Neither the Subadviser nor any of its officers, directors, or
employees, nor any person performing executive, administrative,
trading, or other functions for the Fund (at the direction or request
of the Subadviser) or the Adviser in connection with the Subadviser's
discharge of its obligations undertaken or reasonably assumed with
respect to this Agreement, shall be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with
the matters to which this Agreement relates, except for loss resulting
from willful misfeasance, bad faith, or gross negligence in the
performance of its or his or her duties on behalf of the Fund or from
reckless disregard by the Subadviser or any such person of the duties
of the Subadviser under this Agreement.
As to any matters not expressly provided for by this Agreement,
the Subadviser shall be in all cases fully protected in acting or
refraining from acting hereunder or thereunder in accordance with the
instruction of the Adviser.
6
10. DURATION AND TERMINATION
a. This Agreement shall become effective as of the date hereof, and
unless sooner terminated as provided herein, shall continue in
effect for two years from its effective date. Thereafter, this
Agreement shall continue in effect, subject to the termination
provisions and all other terms and conditions hereof, only so
long as such continuance is approved at least annually by the
vote of a majority of the Board of Directors who are not parties
to this Agreement or interested persons of any such parties, cast
in person at a meeting called for the purpose of voting on such
approval.
b. This Agreement may be terminated at any time, without the payment
of any penalty, by the Directors of the Fund, by the Adviser, or
by the vote of a majority of the outstanding voting securities of
the Fund, on sixty days' written notice to the Subadviser; or by
the Subadviser on sixty days' written notice to the Fund and the
Adviser. This Agreement may be terminated immediately in the
event of a material breach of any provision of this Agreement by
the other party to this Agreement. This Agreement will
automatically terminate, without the payment of any penalty, in
the event of its assignment (as defined in the Investment Company
Act), or on termination of the Advisory Agreement.
11. REFERENCE TO ADVISER AND SUBADVISER
Neither the Adviser, the Fund nor any affiliated person or agent
of the Adviser or the Fund will make reference to or use the name of
"AIG Global Investment Corp." or any derivative thereof or logo
associated with that name, except references concerning the identity of
and services provided by the Subadviser to the Fund, which references
will not differ in substance from those included in the Prospectus and
this Agreement, in any advertising or promotional materials without the
prior approval of the Subadviser, which approval will not be
unreasonably withheld or delayed.
Upon termination of this Agreement in accordance with Section
10(b) hereof, the Adviser, the Fund and the Fund and their affiliates
will cease to make such reference or use such name (or derivative or
logo).
The Adviser consents to the use of its name in materials produced
by the Subadviser which lists the Adviser as a client utilizing the
services of the Subadviser.
12. PROVISION OF CERTAIN INFORMATION BY SUBADVISER
The Subadviser will promptly notify the Fund in writing of the
occurrence of any of the following events:
a. the Subadviser fails to be registered as an investment adviser
under the Investment Advisers Act or under the laws of any
jurisdiction in which the Adviser is required to be registered as
an investment adviser in order to perform its obligations under
this Agreement;
b. the Subadviser is served or otherwise receives notice of any
action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, public board or body, involving
the affairs of the Fund; and
c. the chief executive officer or controlling stockholder of the
Subadviser or the portfolio manager of the Fund changes.
7
13. AMENDMENT
This Agreement may be amended by written amendment signed by the
parties, provided that the terms of any material amendment shall be
approved (i) by the vote of a majority of the outstanding voting
securities of the Fund and (ii) by the vote of a majority of the
Directors of the Fund who are not interested persons of any party to
this Agreement, cast in person at a meeting called for the purpose of
voting on such approval, if such approval is required by law.
14. CONFIDENTIALITY
Subject to the duties of the Subadviser to comply with applicable
law, including any demand of any regulatory or taxing authority having
jurisdiction, the Subadviser will treat as confidential all records and
other information pertaining to the Fund or the Adviser that the
Subadviser maintains or receives as a result of its responsibilities
under this Agreement. The Subadviser will not disclose or use any
records or information obtained pursuant to this Agreement in any
manner whatsoever except as expressly authorized in this Agreement or
as reasonably required to execute transactions on behalf of the
Portfolios, and will keep confidential any non-public information
obtained directly as a result of this service relationship, and the
Subadviser shall disclose such non-public information only if the
Adviser or the Board of Directors has authorized such disclosure by
prior written consent, or if such information is or hereafter otherwise
is known by the Subadviser or has been disclosed, directly or
indirectly, by the Adviser or the Fund to others becomes ascertainable
from public or published information or trade sources, or if such
disclosure is expressly required or requested by applicable federal or
state regulatory authorities, or to the extent such disclosure is
reasonably required by auditors or attorneys of the Subadviser in
connection with the performance of their professional services or as
may otherwise be contemplated by this Agreement. Notwithstanding the
foregoing, the Subadviser may disclose the total return earned by the
Portfolios and may include such total return in the calculation of
composite performance information.
15. NOTICE
All notices required to be given pursuant to this Agreement will
be delivered or mailed to the last known business address of the Fund,
the Adviser, or the Subadviser in person or by registered mail or a
private mail or delivery service providing the sender with notice of
receipt. Notice will be deemed given on the date delivered or mailed in
accordance with this section.
16. GOVERNING LAW
The provisions of this Agreement will be construed and
interpreted in accordance with the laws of the State of New York, or
any of the applicable provisions of the Investment Company Act. To the
extent that the laws of the State of New York, or any of the provisions
in this Agreement, conflict with applicable provisions of the
Investment Company Act, the latter will control.
17. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each
of which will be deemed an original, all of which will together
constitute one and the same instrument.
8
18. CERTAIN DEFINITIONS
For the purposes of this Agreement, "interested person,"
"affiliated person", "majority of outstanding voting securities" and
"assignment" have their respective meanings as set forth in the 1940
Act, subject, however, to such exemptions as may be granted by the SEC.
19. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and will not constitute a part of this
Agreement.
20. SEVERABILITY
If any provision of this Agreement is held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this
Agreement will not be affected.
21. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of
the parties.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first written above.
AIG SUNAMERICA ASSET MANAGEMENT CORP.
By:
-------------------------
Xxxxx X. Xxxxxxx
President and CEO
AIG GLOBAL INVESTMENT CORP.
By:
-------------------------
Xxxxxx Xxxxxxxx
Attorney-in-Fact
9
