INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, Made this 1st day of March, 1995, by and between
Advantus Mortgage Securities Fund, Inc., a Minnesota corporation (the "Fund")
and Advantus Capital Management, Inc., a Minnesota corporation ("Management").
WITNESSETH:
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES.
The Fund hereby engages Management, and Management hereby agrees to
act, as investment adviser for, and to manage the affairs, business, and the
investment of the assets of the Fund.
The investment of the assets of the Fund shall at all times be subject
to the applicable provisions of the Articles of Incorporation, the Bylaws, the
Registration Statement, the current Prospectus and the Statement of Additional
Information, if any, of the Fund and shall conform to the investment objective
and policies of the Fund as set forth in such documents and as interpreted from
time to time by the Board of Directors of the Fund. Within the framework of the
objective and investment policies and restrictions of the Fund, Management shall
have the sole and exclusive responsibility for the management of the Fund's
portfolio and the making and execution of all investment decisions for the Fund.
Management shall report to the Board of Directors regularly at such times and in
such detail as the Board may from time to time determine to be appropriate, in
order to permit the Board to determine the adherence of Management to the
investment policies of the Fund.
Management shall, at its own expense, furnish the Fund office space and
all necessary office facilities, equipment, and personnel for servicing the
investments of the Fund. Management shall arrange for officers or employees of
Management to serve without compensation from the Fund as directors, officers,
or employees of the Fund if duly elected to such positions by the shareholders
or directors of the Fund.
Management shall arrange for the services of a transfer agent, dividend
disbursing (including reinvestment) agent and redemption agent to be provided to
the Fund, which services shall be provided at the expense of Management and
without compensation from the Fund.
Management hereby acknowledges that all records necessary in the
operation of the Fund, including records pertaining to its shareholders and
investments, are the property of the Fund, and in the event that a transfer of
management or investment advisory services to someone other than Management
should ever occur, Management will promptly, and at its own cost, take all steps
necessary to segregate such records and deliver them to the Fund.
2. COMPENSATION FOR SERVICES.
In payment for the investment advisory and other services to be
rendered by Management hereunder, the Fund shall pay to Management a quarterly
fee, which fee shall be paid to Management not later than the fifth business day
following the end of each calendar quarter in which said services were rendered.
Said quarterly fee shall be based on the average of the net asset values of all
of the issued and outstanding shares of the Fund as determined as of the close
of each business day of the quarter pursuant to the Articles of Incorporation,
Bylaws and currently effective Prospectus and Statement of Additional
Information, if any, of the Fund and shall be equal to an annual rate of .575 of
1.0% of the Fund's average daily net assets. The fee shall be pro rated for any
fraction of a month at the commencement or termination of this Agreement.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, the Fund
shall pay all its costs and expenses which are not assumed by
Management. The Fund expenses include, by way of example, but not
by way of limitation, all expenses incurred in the operation of the
Fund and any public offering of its shares, including, among others,
interest, taxes, brokerage fees and commissions, fees of the
directors who are not employees of Management or MIMLIC Sales
Corporation, underwriter of the Fund's shares (the "Underwriter"),
or any of their affiliates, expenses of directors' and shareholders'
meetings, including the
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cost of printing and mailing proxies, expenses of insurance premiums
for fidelity and other coverage, expenses of redemption of shares,
expenses of issue and sale of shares (to the extent not borne by the
Underwriter under its agreement with the Fund), expenses of printing
and mailing stock certificates representing shares of the Fund,
association membership dues, charges of custodians, and bookkeeping,
auditing, and legal expenses. The Fund will also pay the fees and
bear the expense of registering and maintaining the registration of
the Fund and its shares with the Securities and Exchange Commission
and registering or qualifying its shares under state or other
securities laws and the expense of preparing and mailing
Prospectuses and reports to shareholders.
(b) The Underwriter shall bear all advertising and promotional
expenses in connection with the distribution of the Fund's shares,
including paying for Prospectuses and Statements of Additional
Information (if any) for new shareholders, shareholder reports for
new shareholders, and the costs of sales literature.
4. FREEDOM TO DEAL WITH THIRD PARTIES.
Management shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
The effective date of the Agreement shall be March 1, 1995. Wherever
referred to in this Agreement, the vote or approval of the holders of a majority
of the outstanding voting securities of the Fund shall mean the vote of 67% or
more of such securities if the holders of more than 50% of such securities are
present in person or by proxy or the vote of more than 50% of such securities,
whichever is the lesser.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect until the next annual meeting of the Fund's shareholders and
from year to year thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of
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Directors of the Fund, including the specific approval of a majority of the
directors who are not interested persons of Management, the Underwriter, or the
Fund, cast in person at a meeting called for the purpose of voting on such
approval, or by the vote of the holders of a majority of the outstanding voting
securities of the Fund.
This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Fund or by the vote of the
holders of a majority of the outstanding voting securities of the Fund, or by
Management, upon 60 days' written notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment as such term is defined by the Investment Company Act of 1940, as
amended.
6. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Fund.
7. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, The Fund and Management have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
Advantus Mortgage Securities Fund, Inc.
By /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
Its President
Advantus Capital Management, Inc.
By /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Its Senior Vice President
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