Exhibit (g)(2)(a)
SUBADVISORY AGREEMENT
THIS SUBADVISORY AGREEMENT is made and entered into as of November 16,
2001, between SUNAMERICA ASSET MANAGEMENT CORP. (the "Adviser"), a Delaware
corporation registered under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and XXXXXXXXX CAPITAL PARTNERS LLC (the "Subadviser"), a
New York limited liability company 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, 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 Subadviser will have the power to vote, either
in person or by proxy, all matters related to Fund Investments from
time to time, and will not be required to seek instructions from the
Adviser or the Fund.
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 will be requested by brokers, dealers, counterparties
and other persons in connection with its management of the assets of
the Fund.
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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.
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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 in connection
with the due diligence review and documentation of transactions in Fund
assets and advice in connection with the 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 date of
termination, as the case may be, shall be prorated according to the
proportion which such
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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 York 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 Managing Directors or members, 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
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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
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cases fully protected in acting or refraining from acting hereunder or
thereunder in accordance with the instruction of the Adviser.
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
"Xxxxxxxxx Capital Partners LLC" 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
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c. the chief executive officer or controlling stockholder of the
Subadviser or the portfolio manager of the Fund changes.
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. In addition, subject to the duties to comply with any applicable
law, the Adviser agrees to treat as confidential any information concerning
the Subadviser, including its investment policies or objectives, that the
Adviser receives as the result of its actions under this Agreement.
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 Commonwealth of Massachusetts, or any of
the applicable provisions of the Investment Company Act. To the extent that
the laws of the Commonwealth of Massachusetts, 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.
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
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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.
SUNAMERICA ASSET MANAGEMENT CORP.
By: ____________________________________
Xxxxx X. Xxxxxxx
President
XXXXXXXXX CAPITAL
PARTNERS LLC
By: ____________________________________
Xxxxxxxxxxx X. Xxxxxx
Managing Partner
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