IDEX II SERIES FUND
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
FOR THE IDEX II HIGH YIELD PORTFOLIO SERIES
This Agreement is entered into as of April 22, 1992 by and between IDEX II
Series Fund, a Massachusetts business trust (referred to herein as the "Trust"),
and InterSecurities, Inc., a Delaware corporation (referred to herein as
"InterSecurities"), to provide certain management and investment advisory
services to a certain series of shares of beneficial interest in the Trust,
namely, IDEX II High Yield Portfolio (the "Portfolio").
The Trust is registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and consists of
more than one series of shares, including the Portfolio. In managing the
Portfolio, as well as in the conduct of certain of its affairs, the Trust wishes
to have the benefit of the investment advisory services of InterSecurities and
its assistance in performing certain management, administrative and promotional
functions. InterSecurities desires to furnish such services for the Portfolio
and to perform the functions assigned to it under this Agreement for the
considerations provided. Accordingly, the parties have agreed as follows:
1. INVESTMENT ADVISORY SERVICES. In its capacity as investment adviser to
the Portfolio, InterSecurities shall have the following responsibilities:
(a) to furnish continuous advice and recommendations to the Trust as to the
acquisition, holding or disposition of any or all of the securities or other
assets which the Portfolio may own or contemplate acquiring from time to time;
(b) to cause the officers of InterSecurities to attend meetings and furnish
oral or written reports, as the Trust may reasonably require, in order to keep
the Trustees and appropriate officers of the Trust fully informed as to the
conditions of the investment portfolio of the Portfolio, the investment
recommendations of InterSecurities, and the investment considerations which have
given rise to those recommendations; and
(c) to supervise the purchase and sale of securities of the Portfolio as
directed by the appropriate officers of the Trust.
It is understood and agreed that InterSecurities may, and intends to, enter
into an Investment Counsel Agreement with a duly registered investment adviser
(the "Sub-Adviser") under which the Sub-Adviser would furnish investment
information and advice to assist InterSecurities in carrying out its
responsibilities under this Section 1. The compensation to be paid to the
Sub-Adviser for such services and the other terms and conditions under which the
services shall be rendered by the Sub-Adviser shall be set forth in the
Investment Counsel Agreement; provided, however, that such Agreement shall be
approved by the Board of Trustees and by the holders of the outstanding voting
securities of the Portfolio in accordance with the requirements of Section 15 of
the 1940 Act, and shall otherwise be subject to, and contain such provisions as
shall be required by, the 1940 Act.
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2. MANAGEMENT AND ADMINISTRATIVE SERVICES. InterSecurities shall furnish
and perform all administrative services, including recordkeeping, shareholder
relations, regulatory reporting and compliance, supervising and coordinating the
services of the Portfolio's custodian and transfer agent and such other
functions of the Portfolio, and of the Trust with respect to the Portfolio,
(other than the investment advisory services provided for in Section 1), as the
parties may agree. InterSecurities shall also assist in the preparation of
reports to shareholders of the Portfolio and prepare sales literature promoting
sale of the shares of the Portfolio as requested by the Trust.
3. INTERSECURITIES EXPENSES. In addition to the expenses which
InterSecurities may incur in the performance of its services pursuant to
Sections 1 and 2 above, InterSecurities shall incur and pay the following
expenses allocable to the Portfolio's operations:
(a) Reasonable compensation, fees and related expenses of officers of the
Trust and of those Trustees of the Trust who are interested persons (as that
term is defined in Section 2(a)(19) of the 0000 Xxx) of InterSecurities; and
(d) Rental of offices for the Portfolio.
4. OBLIGATIONS OF TRUST. The Trust shall have the following obligations
under this Agreement;
(a) to keep InterSecurities continuously and fully informed as to the
composition of the investment portfolio of the Portfolio and the nature of all
of its assets and liabilities from time to time;
(b) to furnish InterSecurities with a certified copy of any financial
statement or report prepared for the Portfolio by certified or independent
public accountants, and with copies of any financial statements or reports made
to its shareholders or to any governmental body or securities exchange;
(c) to furnish InterSecurities with any further materials or information
which InterSecurities may reasonably request to enable it to perform its
functions under this Agreement; and
(d) to compensate InterSecurities for its services in accordance with the
provisions of Section 5 hereof.
5. COMPENSATION. For its services under this Agreement, InterSecurities is
entitled to receive from the Portfolio a monthly fee, payable on the last day of
each month during which or part of which this Agreement is in effect, of 1/12 of
0.6% of that part of the average daily closing net asset value of the Portfolio
for such month. For the month during which this Agreement becomes effective and
the month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month based on the number of calendar days
of such month during which this Agreement is effective.
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6. EXPENSES PAID BY PORTFOLIO. Subject to the provisions of Section 7,
below, and except as provided in this paragraph, nothing in this Agreement shall
be construed to impose upon InterSecurities the obligation to incur, pay or
reimburse the Portfolio for any expenses not specifically assumed by
InterSecurities under Sections 1, 2 and 3 above. The Portfolio shall pay all of
its other expenses (or pay such expenses of the Trust attributable to the
Portfolio) including, but not limited to: custodian and transfer agent fees;
advisory fees; brokerage commissions and all other expenses in connection with
the execution of portfolio transactions; administrative, clerical,
recordkeeping, bookkeeping, legal, auditing and accounting expenses; interest
and taxes; expenses of preparing tax returns; expenses of shareholders' meetings
and of preparing, printing and mailing proxy statements (unless otherwise agreed
to by the Trust and InterSecurities); expenses of preparing and typesetting
periodic reports to its shareholders (except for those reports the Portfolio
permits to be used as sales literature); its allocable share of the fees and
expenses of the Trust's non-interested Trustees; and the costs, including filing
fees, of registering and renewing or maintaining registration of the Portfolio's
shares under federal and state law. Nothing in this Section 6 shall prohibit the
Trust from entering into other agreements or adopting plans which provide for
the allocation of expenses of the Trust or the Portfolio to other entities, or
the assumption of other expenses by the Trust or the Portfolio.
7. LIMITATION ON EXPENSES OF THE PORTFOLIO. Whenever, for any fiscal year,
the total cost to the Portfolio for normal operating expenses chargeable to its
income account, including, but not limited to, the fees of the Portfolio's
investment adviser, the compensation of its custodian, transfer agent,
registrar, auditors and legal counsel, printing expenses, expenses incurred in
complying with all laws applicable to the sale of shares of the Portfolio and
any compensation, fees, or reimbursements which the Portfolio pays to Trustees
of the Trust who are not interested persons (as that phrase is defined in
Section 2(a)(29) of the 1940 Act of InterSecurities, but excluding all interest
and all federal, state and local taxes (such as stamp, excise, income, franchise
and similar taxes), exceeds any expense limitation imposed by applicable state
law, InterSecurities shall reimburse the Portfolio for the amount of said excess
in the manner and to the extent required by state law.
8. TREATMENT OF INVESTMENT ADVICE. With respect to the Portfolio, the Trust
shall treat the investment advice and recommendations of InterSecurities as
being advisory only, and shall retain full control over its own investment
policies. However, the Trustees of the Trust may delegate to the appropriate
officers of the Trust, or to a committee of Trustees, the power to authorize
purchases, sales or other actions affecting the portfolio of the Portfolio in
the interim between meetings of the Trustees, provided such action is consistent
with the established investment policy of the Trustees and is reported to the
Trustees at their next meeting.
9. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by the Portfolio upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. InterSecurities is authorized and directed to place
the Portfolio's securities transactions, or to delegate to the Sub-Adviser the
authority and direction to place the Portfolio's securities transactions, only
with brokers and dealers who render satisfactory service in the execution of
orders at the most favorable prices and at reasonable commission rates;
provided, however, that InterSecurities or the Sub-Adviser, may pay
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a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if InterSecurities or the
Sub-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 broker or dealer viewed in terms of either that particular
transaction or the overall responsibilities of InterSecurities or the
Sub-Adviser. InterSecurities and the Sub-Adviser are also authorized to consider
sales of Portfolio shares by a broker-dealer or the recommendation of a
broker-dealer to its customers that they purchase Portfolio shares as a factor
in selecting broker-dealers to execute the Portfolio's securities transactions,
provided that in placing portfolio business with such broker-dealers,
InterSecurities and the Sub-Adviser shall seek the best execution of each
transaction and all such brokerage placement shall be consistent with the Rules
of Fair Practice of the National Association of Securities Dealers, Inc.
Notwithstanding the foregoing, the Trust shall retain the right to direct the
placement of all securities transactions of the Portfolio, and the Trustees may
establish policies or guidelines to be followed by InterSecurities and the
Sub-Adviser in placing securities transactions for the Portfolio pursuant to the
foregoing provisions. InterSecurities shall report on the placement of portfolio
transactions each quarter to the Trustees of the Portfolio.
10. USE OF NAME. The Trust acknowledges that Idex Management, Inc., an
affiliate of InterSecurities, may grant or has granted the Portfolio the right
to use the name "IDEX". If this Agreement is terminated and InterSecurities no
longer serves as investment adviser to the Portfolio, Idex Management reserves
the right to withdraw from the Portfolio the use of the name "IDEX" or any name
misleadingly implying a continuing relationship between the Portfolio and Idex
Management, Inc., InterSecurities or any of their affiliates.
11. LIABILITY OF INTERSECURITIES. InterSecurities may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be provided by the 1940 Act, neither InterSecurities nor its officers,
directors, employees or agents shall be subject to any liability to the Trust or
the Portfolio or any shareholder of the Portfolio for any error or judgment,
mistake of law or any loss arising out of any investment or other act or
omission in the course of, connected with or arising out of any service to be
rendered hereunder, except by reason of willful misfeasance, bad faith or gross
negligence in its performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement.
12. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust or by the shareholders of the Portfolio
acting by vote of at least a majority of its outstanding voting securities (as
that phrase is defined in Section 2(a)(42) of the 1940 Act), provided in either
case that 60 days' written notice of termination be given to InterSecurities at
its principal place of business. This Agreement may be terminated by
InterSecurities at any time by giving 60 days' written notice of termination to
the Trust, addressed to its principal place of business.
13. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as the term is defined in Section 2(a)(4) of the 0000 Xxx) of
this Agreement.
14. TERM. This Agreement shall continue in effect, unless sooner terminated
in accordance with its terms, for two years from the date hereof, and shall
continue in effect from year
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to year thereafter provided such continuance is specifically approved at least
annually by the vote of a majority of the Trustees of the Trust who are not
parties hereto or interested persons (as that term is defined in Section
2(a)(19) of the 0000 Xxx) of any such party, cast in person at a meeting called
for the purpose of voting on the approval of the terms of such renewal, and by
either the Trustees of the Trust or the affirmative vote of a majority of the
outstanding voting securities of the Portfolio (as that phrase is defined in
Section 2(a)(42) of the 1940 Act).
15. AMENDMENTS. The terms of this Agreement may be amended only with the
approval by the affirmative vote of a majority of the outstanding voting
securities of the Portfolio (as that phrase is defined in Section 2(a)(42) of
the 0000 Xxx) and the approval by the vote of a majority of Trustees of the
Trust who are not parties hereto or interested persons (as that phrase is
defined in Section 2(a)(19) of the 0000 Xxx) of any such party, cast in person
at a meeting called for the purpose of voting on the approval of such amendment,
unless otherwise permitted in accordance with the 1940 Act.
16. PRIOR AGREEMENTS. This Agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
17. LIMITATION OF LIABILITY. A copy of the Trust's Declaration of Trust is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed on behalf of the Trustees as
Trustees of the Trust and not individually, and that the obligations under this
Agreement are not binding upon any of the Trustees, officers, shareholders,
agents or employees of the Trust individually, but binding only upon the assets
and property of the Portfolio.
Attest: IDEX II SERIES FUND
/S/ XXXXXX X. XXXX /S/ XXXX X. XXXXXX
________________________ By: ______________________
Xxxxxx X. Xxxx, Secretary Xxxx X. Xxxxxx
Chairman of the Board
Attest: INTERSECURITIES, INC.
/S/ XXXXXXX X. XXXXXX /S/ G. XXXX XXXXXX
________________________ By: ______________________
Xxxxxxx X. Xxxxxx, Secretary G. Xxxx Xxxxxx
President and Chief
Executive Officer
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