EXHIBIT 99.B5-3
EXHIBIT (d) (2) (jj)
FORM OF INVESTMENT COUNSEL AGREEMENT
FOR THE BLUE CHIP FUND
FORM OF
IDEX SERIES FUND
INVESTMENT COUNSEL AGREEMENT
This Agreement is entered into as of March 1, 1999 between IDEX
MANAGEMENT, INC., a Delaware corporation (referred to herein as "Idex
Management"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, a separate operating division
of ▇▇▇▇▇▇▇ Sachs & Co., a limited liability partnership organized and existing
under the laws of the State of New York (referred to herein as "▇▇▇▇▇▇▇ ▇▇▇▇▇").
WHEREAS, Idex Management entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement"), dated as of March 1,
1999 with IDEX Series Fund, a Massachusetts business trust (herein referred to
as "IDEX") on behalf of the IDEX Blue Chip Fund (the "Fund"), under which Idex
Management has agreed, among other things, to act as investment adviser to the
Fund.
WHEREAS, the Advisory Agreement provides that Idex Management may engage
▇▇▇▇▇▇▇ Sachs to furnish investment information and advice to assist Idex
Management in carrying out its responsibilities under the Advisory Agreement as
investment adviser to the Fund.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
▇▇▇▇▇▇▇ ▇▇▇▇▇ to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF ▇▇▇▇▇▇▇ SACHS. ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall act as investment
counsel to Idex Management with respect to the Fund. In this capacity, ▇▇▇▇▇▇▇
Sachs shall have the following responsibilities:
(A) (a) provide a continuous investment program for the Fund including
advice as to the acquisition, holding or disposition of any or all
of the securities or other assets which the Fund may own or
contemplate acquiring from time to time;
(b) to cause its officers to attend meetings of Idex Management or IDEX
and furnish oral or written reports, as Idex Management may
reasonably require, in order to keep Idex Management and its
officers and the Trustees of IDEX and appropriate officers of IDEX
fully informed as to the condition of the investment portfolio of
the Fund, the investment recommendations of ▇▇▇▇▇▇▇ ▇▇▇▇▇, and the
investment considerations which have given rise to those
recommendations;
(c) to furnish such statistical and analytical information and reports
as may reasonably be required by Idex Management from time to time;
and
(d) to supervise the purchase and sale of securities as directed by the
appropriate officers of IDEX or of Idex Management.
(e) INVESTMENT SUB-ADVISORY SERVICES. ▇▇▇▇▇▇▇ Sachs shall act as the
investment sub-adviser and shall supervise and direct the
investments of the Fund in accordance with the Fund's investment
objective, policies, and restrictions as provided in the Prospectus
and Statement of Additional Information, as currently in effect and
as amended or supplemented from time to time (hereinafter referred
to as the "Prospectus"), and such other limitations as directed by
the appropriate officers of IDEX Management or IDEX by notice in
writing to ▇▇▇▇▇▇▇ ▇▇▇▇▇; provided that ▇▇▇▇▇▇▇ Sachs shall be
entitled to rely on and comply with the Prospectus most recently
furnished to ▇▇▇▇▇▇▇ ▇▇▇▇▇ by Idex Management. ▇▇▇▇▇▇▇ Sachs shall
obtain and evaluate such information relating to the economy,
industries, businesses, securities markets, and securities as it
may deem necessary or useful in the discharge of its obligations
hereunder and shall formulate and implement a continuing program
for the management of the assets and resources of the Fund in a
manner consistent with the Fund's investment objective, policies,
and restrictions. In furtherance of this duty, ▇▇▇▇▇▇▇ ▇▇▇▇▇, on
behalf of the Fund, is authorized, in its discretion and without
prior consultation with IDEX or Idex Management, to:
(1) Buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds and other securities or assets; and
(2) Place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as ▇▇▇▇▇▇▇
Sachs may select.
(B) ADDITIONAL DUTIES OF SUB-ADVISER. In addition to the above, Sub-Adviser
shall:
(a) furnish continuous investment information, advice and recommendations
to IDEX as to the acquisition, holding or disposition of any or all of the
securities or other assets which the Fund may own or contemplate acquiring
from time to time; and
(b) cause its officers to attend meetings of IDEX and furnish oral or
written reports, as IDEX may reasonably require, in order to keep IDEX and
its officers and Board fully informed as to the condition of the
investment securities of the Fund, the investment recommendations of
▇▇▇▇▇▇▇ ▇▇▇▇▇, and the investment considerations which have given rise to
those recommendations.
2. OBLIGATIONS OF IDEX MANAGEMENT. Idex Management shall have the
following obligations under this Agreement:
(a) to keep ▇▇▇▇▇▇▇ Sachs continuously and fully informed as to the
composition of the Fund's investment portfolio and the nature of the
Fund's assets and liabilities from time to time;
(b) Idex Management to furnish ▇▇▇▇▇▇▇ ▇▇▇▇▇ with copies of each of the
following documents and will furnish to ▇▇▇▇▇▇▇ Sachs at its principal
office all future amendments and supplements to such documents, if
any, as soon as practicable after such documents become available;
(1) The Agreement and Declaration of Trust of IDEX, as filed with the
State of Massachusetts, as in effect on the date hereof and as amended
from time to time ("Articles");
(2) The By-Laws of IDEX as in effect on the date hereof and as amended
from time to time ("By-Laws");
(3) Certified resolutions of the Board of IDEX authorizing the
appointment of Idex Management and ▇▇▇▇▇▇▇ ▇▇▇▇▇ and approving the
form of the Advisory Agreement and this Agreement;
(4) IDEX Registration Statement under the 1940 Act and the Securities
Act of 1933, as amended, on Form N-1A, as filed with the Securities
and Exchange Commission ("SEC") relating to the Fund and its shares
and all amendments thereto ("Registration Statement");
(5) The Notification of Registration of the Fund under the 1940 Act on
Form N-8A as filed with the SEC and any amendments thereto;
(6) The Fund's Prospectus (as defined above); and
(7) A certified copy of any publicly available financial statement or
report prepared for the Fund by certified or independent public
accountants, and copies of any financial statements or reports made by
the Fund to its shareholders or to any government body or securities
exchange.
(c) to furnish ▇▇▇▇▇▇▇ Sachs with any further materials or information
which ▇▇▇▇▇▇▇ ▇▇▇▇▇ may reasonably request to enable it to perform its
functions under this Agreement;
(d) to compensate ▇▇▇▇▇▇▇ Sachs for its services under this Agreement by
the payment of a monthly fee equal to 0.50% of the average daily net
assets of the first $50 million in assets, 0.45% of the next $50 - $100
million in assets and 0.40% of assets in excess of $100 million for the
Fund. In the event that this Agreement shall be effective for only part of
a period to which any such fee received by Idex Management is
attributable, then an appropriate pro-ration of the fee that would have
been payable hereunder if this Agreement had remained in effect until the
end of such period shall be made, based on the number of calendar days in
such period and the number of calendar days during the period in which
this Agreement was in effect. The fees payable to ▇▇▇▇▇▇▇ ▇▇▇▇▇ hereunder
shall be payable upon receipt by Idex Management from the Fund of fees
payable to Idex Management under Section 6 of the Advisory Agreement;
3. BROKERAGE.
▇. ▇▇▇▇▇▇▇ Sachs agrees that, in placing orders with broker-dealers for
the purchase or sale of portfolio securities, it shall attempt to obtain quality
execution at favorable security prices (best price and execution); provided
that, on behalf of the Fund, ▇▇▇▇▇▇▇ ▇▇▇▇▇ may, in its discretion, agree to pay
a broker-dealer that furnishes brokerage or research services as such services
are defined under Section 28(e) of the Securities Exchange Act of 1934, as
amended ("1934 Act"), a higher commission than that which might have been
charged by another broker-dealer for effecting the same transactions, if ▇▇▇▇▇▇▇
Sachs determines in good faith that such commission is 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
▇▇▇▇▇▇▇ ▇▇▇▇▇ with respect to the accounts as to which it exercises investment
discretion (as such term is defined under Section 3(a)(35) of the 1934 Act). In
no instance will portfolio securities be purchased from or sold to ▇▇▇▇▇▇▇
Sachs, or any affiliated person thereof, except in accordance with the federal
securities laws and the rule and regulations thereunder.
B. On occasions when ▇▇▇▇▇▇▇ ▇▇▇▇▇ deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of
▇▇▇▇▇▇▇ Sachs, ▇▇▇▇▇▇▇ ▇▇▇▇▇, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by ▇▇▇▇▇▇▇ Sachs in the manner ▇▇▇▇▇▇▇ ▇▇▇▇▇ considers
to be most equitable and consistent with its fiduciary obligations to the Fund
and to its other clients.
C. In addition to the foregoing, ▇▇▇▇▇▇▇ Sachs agrees that orders with
broker-dealers for the purchase or sale of portfolio securities by the Fund
shall be placed in accordance with the standards set forth in the Advisory
Agreement, subject to compliance with applicable laws and procedures adopted by
the Trustees of IDEX.
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ is authorized to place orders on behalf of the Fund through the
▇▇▇▇▇▇▇ Sachs or any affiliate thereof if ▇▇▇▇▇▇▇ ▇▇▇▇▇ or its affiliate is
registered as a broker or dealer with the SEC or as a FCM with the Commodities
Futures Trading Commission ("CFTC"), to any of its affiliates that are brokers
or dealers or FCBs or such other entities which provide similar services in
foreign countries, or to such brokers or dealers that also provide research or
statistical research and material, or other services to the Funds or ▇▇▇▇▇▇▇
Sachs. Such allocation shall be in such amounts and proportions as ▇▇▇▇▇▇▇ ▇▇▇▇▇
shall determine consistent with the above standards, and, upon, request, ▇▇▇▇▇▇▇
Sachs will report on said allocation to Idex Management and Board of Trustees of
IDEX, indicating the brokers, dealers or FCBs to which such allocations have
been made and the basis therefor.
4. TREATMENT OF INVESTMENT ADVICE. Idex Management may direct ▇▇▇▇▇▇▇
▇▇▇▇▇ to furnish its investment information, advice and recommendations directly
to officers of IDEX.
5. PURCHASES BY AFFILIATES. Neither ▇▇▇▇▇▇▇ Sachs nor any of its officers
or Directors shall take a long or short position in the securities issued by the
Fund. This prohibition, however, shall not prevent the purchase from the Fund of
shares issued by the Fund on behalf of the Fund by the officers and Directors of
▇▇▇▇▇▇▇ ▇▇▇▇▇ (or deferred benefit plans established for their benefit) at the
current price available to the public, or at such price with reductions in sales
charge as may be permitted in the Fund's current prospectus in accordance with
Section 22(d) of the Investment Company Act of 1940, as amended (the "1940
Act").
6. SERVICES TO OTHER CLIENTS. Nothing contained in this Agreement shall
limit or restrict (i) the freedom of ▇▇▇▇▇▇▇ Sachs, or any affiliated person
thereof, to render investment management and corporate administrative services
to other investment companies, to act as investment manager or investment
counselor to other persons, firms, or corporations, or to engage in any other
business activities, or (ii) the right of any director, officer, or employee of
▇▇▇▇▇▇▇ ▇▇▇▇▇, who may also be a trustee, officer, or employee of IDEX, to
engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any other business, whether of a similar
nature or a dissimilar nature.
7. SUB-ADVISER'S USE OF THE SERVICES OF OTHERS. ▇▇▇▇▇▇▇ Sachs may (at its
cost except as contemplated by paragraph 7 of this Agreement) employ, retain, or
otherwise avail itself of the services or facilities of other persons or
organizations for the purpose of obtaining such statistical and other factual
information, such advice regarding economic factors and trends, such advice as
to occasional transactions in specific securities, or such other information,
advice, or assistance as ▇▇▇▇▇▇▇ ▇▇▇▇▇ may ▇▇▇▇ necessary, appropriate, or
convenient for discharge of its obligations hereunder or otherwise helpful to
the Fund, as appropriate, or in the discharge of ▇▇▇▇▇▇▇ Sachs overall
responsibilities with respect to the other accounts that it serves as investment
manager or counselor, provided that ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall at all times retain
responsibility for making investment recommendations with respect to the Fund.
8. LIMITATION OF LIABILITY OF THE SUB-ADVISER. Neither ▇▇▇▇▇▇▇ Sachs 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 ▇▇▇▇▇▇▇ Sachs) or the Sub-Adviser in
connection with ▇▇▇▇▇▇▇ ▇▇▇▇▇' 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 Company or Fund or
any error of facts or mistake of law contained in any report or date provided by
▇▇▇▇▇▇▇ Sachs, except for any error, mistake or loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of its duties on
behalf of the Fund or from reckless disregard by ▇▇▇▇▇▇▇ ▇▇▇▇▇ or any such
person of the duties of ▇▇▇▇▇▇▇ Sachs pursuant to this Agreement.
9. REPRESENTATIONS. The parties hereto represent, warrant, and agree as
follows:
A. Idex Management and ▇▇▇▇▇▇▇ ▇▇▇▇▇ each: (i) is registered as an
investment adviser under the Advisers Act and any applicable state
laws and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940
Act or the Advisers Act from performing the services contemplated
by this Agreement; (iii) has met, and will continue to meet for so
long as this Agreement remains in effect, any applicable federal
or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be met
in order to perform the services contemplated by this Agreement;
(iv) has the authority to enter into and perform the services
contemplated by this Agreement; and (v) will immediately notify
the other party of the occurrence of any event that would
disqualify such other party from serving as an investment adviser
of an investment company pursuant to Section 9(a) of the 1940 Act
or otherwise.
▇. ▇▇▇▇▇▇▇ Sachs has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and, if it has
not already done so, will provide the Investment Adviser and the
Fund with a copy of such code of ethics, together with evidence of
its adoption.
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ has provided Idex Management and IDEX with a copy of
its Form ADV as most recently filed with the SEC and will,
promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to Idex Management.
10. TERM OF AGREEMENT. This Agreement shall become effective upon the date
first above written, provided that this Agreement shall not take effect unless
it has first been approved (i) by a vote of a majority of those Trustees who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of the Fund's outstanding voting securities. Unless sooner
terminated as provided herein, this Agreement shall continue in effect for an
initial term ending April 30, 2000. Thereafter, this Agreement shall continue in
effect from year to year, with respect to the Fund, subject to the termination
provisions and all other terms and conditions hereof, so long as such
continuation shall be specifically approved at least annually (a) by either the
Board, or by vote of a majority of the outstanding voting securities of the
Fund; and (b) in either event, by the vote, cast in person at a meeting called
for the purpose of voting on such approval, of a majority of the Trustees of
IDEX who are not parties to this Agreement or interested persons of any such
party. ▇▇▇▇▇▇▇ Sachs shall furnish to IDEX, promptly upon its request such
information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal, or amendment hereof.
11. TERMINATION OF AGREEMENT. Notwithstanding the foregoing, this
Agreement may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Fund on at least 60 days' prior written notice to ▇▇▇▇▇▇▇
▇▇▇▇▇. This Agreement may also be terminated by Idex Management: (i) on at least
60 days' prior written notice to ▇▇▇▇▇▇▇ Sachs, without the payment of any
penalty; or (ii) if ▇▇▇▇▇▇▇ ▇▇▇▇▇ becomes unable to discharge its duties and
obligations under this Agreement. ▇▇▇▇▇▇▇ Sachs may terminate this Agreement at
any time, or preclude its renewal without the payment of any penalty, on at
least 60 days' prior notice to Idex Management. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the Advisory
Agreement.
12. AMENDMENT OF AGREEMENT. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge,
or termination is sought, and no amendment of this Agreement shall be effective
until approved by vote or a majority of the Fund outstanding voting securities
and a vote of a majority of those Trustees of IDEX who are no parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, unless otherwise permitted
in accordance with the 1940 Act.
13. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York without giving effect to the conflicts of laws
principles thereof, and the 1940 Act. To the extent that the applicable laws of
the State of New York conflict with the applicable provisions of the 1940 Act,
the latter shall control.
B. CAPTIONS. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
C. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understanding of the parties hereto and shall supersede any prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements shall be deemed terminated upon the effectiveness of this Agreement.
D. INTERPRETATION. Nothing herein contained shall be deemed to require
IDEX to take any action contrary to its Articles or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of its responsibility for and control
of the conduct of the affairs of IDEX.
E. DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the SEC validly issued pursuant to the 1940
Act. As used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the SEC by any rule, regulation, or order. Where the effect
of a requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, regulation, or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation, or order, unless Idex
Management and ▇▇▇▇▇▇▇ ▇▇▇▇▇ agree to the contrary.
14. COMPLIANCE WITH LAWS.
(a) In all matters relating to the performance of this Agreement, ▇▇▇▇▇▇▇
Sachs will act in conformity with the IDEX Declaration of Trust,
Bylaws, and current prospectus and with the instructions and direction
of Idex Management and the Fund's Trustees.
(b) ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall conform with (1) the 1940 Act and all rules and
regulations thereunder, and releases and interpretations thereto
(including any no-action letters and exemptive orders which have been
granted by the SEC to the Fund, Idex Management and/or ▇▇▇▇▇▇▇ Sachs
and (2) with all other applicable federal and state laws and
regulations pertaining to management of investment companies.
(c) Idex Management shall perform quarterly and annual tax compliance
tests to ensure that the Fund is in compliance with Subchapter M of
the Internal Revenue Code ("IRC"). In connection with such compliance
tests, Idex Management shall prepare and provide reports to ▇▇▇▇▇▇▇
Sachs within 10 business days of a calendar quarter end relating to
the diversification of the Fund under Subchapter ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
shall review such reports for purposes of determining compliance with
such diversification requirements. If it is determined that the Fund
is not in compliance with the requirements noted above, ▇▇▇▇▇▇▇ Sachs,
in consultation with Idex Management, will take prompt action to bring
the Fund back into compliance within the time permitted under the IRC.
15. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as that term is defined in Section 2(a)(4) of the ▇▇▇▇ ▇▇▇)
of this Agreement.
16. REFERENCE TO SUB-ADVISER. Neither Idex Management nor IDEX will
publish or distribute any information, including but not limited to registration
statements, advertising or promotional material, regarding the provision of
investment advisory services by ▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to this Agreement, or use
in advertising, publicity or otherwise the name of ▇▇▇▇▇▇▇ Sachs or any of its
affiliates, or any trade name, trademark, trade device, service ▇▇▇▇, symbol or
any abbreviation, contraction or simulation thereof of ▇▇▇▇▇▇▇ Sachs or its
affiliates, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇. Notwithstanding
the foregoing, Idex Management may distribute information regarding the
provision of investment advisory services by ▇▇▇▇▇▇▇ Sachs to the Fund's Board
of Trustees ("Board Materials") without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇. Idex Management will provide copies of the Board Materials to ▇▇▇▇▇▇▇
Sachs within a reasonable time following distribution to the IDEX Board of
Trustees.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ATTEST: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ASSET MANAGEMENT,
A separate Operating Division of ▇▇▇▇▇▇▇,
Sachs & Co.
_____________________________ By:______________________________________
Secretary Title:
ATTEST: IDEX MANAGEMENT, INC.
_____________________________ By:______________________________________
Assistant Secretary G. ▇▇▇▇ ▇▇▇▇▇▇
President and Chief Executive Officer