EXHIBIT 5(a)
IDEX II SERIES FUND
ON BEHALF OF IDEX II C.A.S.E. PORTFOLIO
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of November 15, 1995, is between
IDEX II SERIES FUND, a Massachusetts business trust (referred to herein as the
"Fund") 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 Series Fund C.A.S.E. Portfolio (the "Portfolio").
The Fund 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 Fund 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. APPOINTMENT. The Fund hereby appoints InterSecurities as the
Portfolio's investment adviser and administrator for the period and on the terms
set forth in this Agreement. InterSecurities accepts such appointment and agrees
to render or cause to be rendered the services set forth for the compensation
herein specified. In all matters relating to the performance of this Agreement,
InterSecurities will act in conformity with the Fund's Declaration of Trust,
Bylaws and registration statement applicable to the Portfolio and with the
instructions and direction of the Board of Trustees of the Fund, and will
conform to and comply with the 1940 Act and all other applicable federal or
state laws and regulations.
2. 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 Fund 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, consistent with the
Fund's Declaration of Trust and the Portfolio's investment
objectives and policies adopted and declared by the Board of
Trustees and stated in the Portfolio's current Prospectus;
(b) to cause the officers of InterSecurities to attend meetings and
furnish oral or written reports, as the Fund may reasonably
require, in order to keep the Trustees and appropriate officers of
the Fund fully informed as to the conditions of the investment
securities 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 as directed by
the appropriate officers of the Fund, including the selection of
brokers and dealers to execute such transactions, consistent with
paragraph 10 hereof.
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It is understood and agreed that InterSecurities intends to enter into
an Investment Counsel Agreement with C.A.S.E. Management, Inc. ("C.A.S.E."), a
Pennsylvania corporation, under which C.A.S.E. would furnish investment
information and advice to assist InterSecurities in carrying out its
responsibilities under this Section 2. The compensation to be paid to C.A.S.E.
for such services and the other terms and conditions under which the services
shall be rendered by C.A.S.E. 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.
3. 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, (other than the investment advisory
services provided for in Section 2), 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 Portfolio shares as requested
by the Fund.
4. INTERSECURITIES EXPENSES. In addition to the expenses which
InterSecurities may incur in the performance of its services pursuant to
Sections 2 and 3 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 Fund and of those Trustees of the Fund who are interested
persons (as that term is defined in Section 2(a)(19) of the 0000
Xxx) of InterSecurities; and
(e) Rental of offices for the Portfolio.
5. OBLIGATIONS OF FUND. The Fund shall have the following
obligations under this Agreement:
(a) to keep InterSecurities continuously and fully informed as to the
composition of the investment securities 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
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(d) to compensate InterSecurities for its services in accordance
with the provisions of Section 6 hereof.
6. COMPENSATION. The Portfolio shall pay to InterSecurities for its
services an annual fee, computed daily and paid monthly, payable on the last day
of each month during which or part of which this Agreement is in effect, equal
to 1.00% of first $750 million of the Portfolio's average daily net assets, 0.9%
of the next $250 million of the Portfolio's average daily net assets, and 0.85%
of the average daily net assets of the Portfolio in excess of $1 billion. 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.
7. EXPENSES PAID BY PORTFOLIO. Subject to the provisions of Section 8,
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 2, 3 and 4 above. The Fund shall pay all of its
other expenses (or pay such expenses of the Fund 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 Fund
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 Fund'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 7 shall prohibit the Fund from entering
into other agreements or adopting plans which provide for the allocation of
expenses of the Fund or the Portfolio to other entities, or the assumption of
other expenses by the Fund or the Portfolio.
8. LIMITATION ON EXPENSES OF 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 Fund who are not interested persons (as that phrase is defined in Section
2(a)(29) of the 0000 Xxx) 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; provided, however, that
InterSecurities shall reimburse the Portfolio for the amount of such expenses,
exclusive of expenses incurred pursuant to the Fund's Plan of Distribution under
Rule 12b-1 of the 1940 Act, which exceed 2.5% of the Fund's average daily net
assets for the first full fiscal year of the Portfolio, and 1.5% thereafter.
9. TREATMENT OF INVESTMENT ADVICE. With respect to the Portfolio,
the Fund shall treat the investment advice and recommendations of
InterSecurities as being advisory only, and shall retain full
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control over its own investment policies. However, the Trustees of the Fund may
delegate to the appropriate officers of the Fund, or to a committee of Trustees,
the power to authorize purchases, sales or other actions affecting the
securities of the Portfolio in the interim between meetings of the Trustees,
provided such action is consistent with the established investment policy of the
Fund and is reported to the Trustees at their next meeting.
10. 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 C.A.S.E. 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 C.A.S.E., may pay 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 C.A.S.E. 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 C.A.S.E. InterSecurities and C.A.S.E. 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 C.A.S.E. 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 Fund 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 C.A.S.E. 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 Fund.
11. LIABILITY OF INTERSECURITIES. InterSecurities may rely on
information reasonable 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 Fund 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 Fund 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 Fund, addressed to its principal place of business.
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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 an initial term ending April 22,
1997, and shall continue in effect from year to year thereafter only so long as
such continuance is specifically approved at least annually by the vote of a
majority of the Trustees of the Fund 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 Fund 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 Fund
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 Fund'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 Fund 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 Fund individually, but binding only upon the assets
and property of the Portfolio.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of November 15, 1995.
ATTEST: INTERSECURITIES, INC.
By:
/s/ Xxxxxxx X. Xxxxxx /s/ G. Xxxx Xxxxxx
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Xxxxxxx X. Xxxxxx, Secretary G. Xxxx Xxxxxx
President and Chief Executive Officer
ATTEST: IDEX II SERIES FUND
/s/ Xxxxx X. Xxxxxxx By: /s/ G. Xxxx Xxxxxx
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Xxxxx X. Xxxxxxx, Secretary G. Xxxx Xxxxxx
President and Chief Executive Officer
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