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EXHIBIT (d).12
INTERIM INVESTMENT SUB-ADVISORY AGREEMENT
Agreement dated this 2nd day of April, 2001 by and between HL
Investment Advisors, LLC, a Connecticut limited liability company (the
"Manager") and X. Xxxx Price International, Inc, a corporation organized under
the laws of Maryland (the "Sub-Adviser") whose principal office is located at
000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
WHEREAS, the Manager serves as the investment adviser and manager for
Fortis Series Fund, Inc. (the "Company"), an open-end, management investment
company registered with the Securities and Exchange Commission ("SEC") pursuant
to the Investment Company Act of 1940, as amended ("1940 Act"), that is
comprised of a number of separate series of investments that act as funding
vehicles for various variable annuity contracts and variable universal life
insurance policies issued by Fortis Benefits Insurance Company ("FBIC") and/or
First Fortis Life Insurance Company ("First Fortis");
WHEREAS, the Manager desires to retain the Sub-Adviser to assist the
Manager in furnishing an investment program to one series of the
Company, the International Stock Series II (the "Portfolio");
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Manager and the Sub-Adviser agree as follows:
1. APPOINTMENT AND EXPENSES OF THE SUB-ADVISER. The Manager hereby
appoints the Sub-Adviser to serve as sub-adviser with respect to the assets of
the Portfolio and to perform the services hereinafter set forth and the
Sub-Adviser hereby accepts such appointment. The Sub-Adviser agrees, for the
compensation herein provided, to assume all obligations herein provided and bear
all its personnel and other expenses associated with the performance of its
services hereunder. The Company shall be responsible for the Portfolio's
administrative and other direct expenses, including, but not limited to: (a)
fees pursuant to any plan of distribution that the Portfolio may adopt; (b) the
Portfolio's brokerage and commission expenses, including all ordinary and
reasonable transaction costs; (c) fees and expenses of pricing services used by
the Company to determine the value of the Portfolio's holdings; (d) Federal,
state, local and foreign taxes, including issue and transfer taxes incurred by
or levied on the Portfolio; (e) interest charges on any Portfolio borrowings;
(f) the Company's organizational and offering expenses; (g) the cost of the
Company's personnel, if any, providing services to the Company; (h) fees and
expenses of registering the Company's shares under the appropriate Federal
securities laws and of qualifying the Company's shares under applicable state
securities laws and pursuant to any foreign laws; (i) expenses of printing and
distributing reports to the Company's shareholders, proxy materials,
prospectuses and distribution of dividends; (j) costs of the Company's
shareholders' meetings and proxy solicitation; (k) charges and expenses of the
Company's custodian and registrar, transfer agent and dividend disbursing agent;
(l) compensation of the Company's officers, directors and employees that are not
"affiliated persons" or "interested persons" [as defined in Section 2(a) of the
1940 Act and the rules, regulations and releases relating thereto] of the
Sub-Adviser; (m) the Company's legal and auditing expenses; (n) cost of
certificates representing shares of the Portfolio; (o)
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the Company's costs of stationery and supplies; (p) the Company's insurance
expenses; (q) the Company's association membership dues; (r) travel expenses of
officers and employees of the Sub-Adviser to the extent such expenses relate to
the attendance of such persons at meetings at the request of the Board of
Directors of the Company (EXCEPT that a representative of the Sub-Adviser will
attend one Board meeting per year, at the Sub-Adviser's own expense); and (s)
travel expenses for attendance at Board of Directors meetings by members of the
Board of Directors of the Company who are not "interested persons" or
"affiliated persons" of the Sub-Adviser. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no authority to act
for or on behalf of the Company in any way or otherwise be deemed an agent of
the Company.
2. DUTIES OF THE SUB-ADVISER. The Sub-Adviser will use the same level
of professional skill, care and judgment in the performance of its duties under
this Agreement as it does in its management of those investment companies the
Sub-Adviser directly manages. In so doing, the Sub-Adviser shall formulate and
implement a continuing program for the management of the assets of the Portfolio
that is consistent with the Prospectus (as hereinafter defined) and the policies
adopted by the Board. The Sub-Adviser shall amend and update such program from
time to time as financial and other economic conditions warrant. The Sub-Adviser
shall make all determinations with respect to the investment of the assets of
the Portfolio and shall take such steps as may be necessary to implement the
same, including the placement of purchase and sale orders on behalf of the
Portfolio. The Manager shall be responsible for the administration of the
investment activities of the Company and the Portfolio, including compliance
with the requirements of the 1940 Act, except for the investment management
activities specifically delegated to the Sub-Adviser pursuant to this Agreement.
3. POWERS OF THE SUB-ADVISER.
3.1 The Sub-Adviser's power to direct the investment and
reinvestment of the assets of the Portfolio shall be exercised in accordance
with applicable law, the Company's Articles of Incorporation and the investment
objectives, policies and restrictions set forth in the then-current Prospectus
and Statement of Additional Information (collectively the "Prospectus") relating
to the Portfolio contained in the Company's Registration Statement under the
1940 Act and the Securities Act of 1933, as amended. Additional limitations may
be placed on the Sub-Adviser's investment decisions: (i) as required by
applicable law; (ii) by the Company's Board of Directors upon sixty (60) days
written notice to the Sub-Adviser; and/or (iii) by mutual agreement between the
Company, the Manager and the Sub-Adviser. The Company agrees to provide promptly
to the Sub-Adviser a copy of the documents mentioned above and all changes and
amendments made to such documents.
3.2 While the Sub-Adviser will have day-to-day responsibility
for the discretionary investment decisions to be made on behalf of the
Portfolio, the Sub-Adviser will be subject to oversight by the Manager. Such
oversight, however, shall not require prior approval of discretionary investment
decisions made by the Sub-Adviser except as may be required by applicable law,
the Portfolio's investment policies and restrictions and/or any limitations
imposed on the Sub-Adviser by the Company and/or the Manager pursuant to the
preceding paragraph. The Manager shall retain the right to instruct the
Sub-Adviser to effect any transactions necessary to ensure compliance with the
Portfolio's investment policies and restrictions as well as the requirements of
Subchapter M of the Internal Revenue
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Code and the provisions of Section 817(h) of the Internal Revenue Code and the
regulations promulgated thereunder.
3.3 In the event the Sub-Adviser's compliance with any
amendment of the Portfolio's investment objectives, policies and restrictions or
other limitations placed on the Sub-Adviser's investment decisions with respect
to the Portfolio would interfere with the completion of any transaction
commenced on behalf of the Portfolio prior to the Sub-Adviser's knowledge of
such amendment, the Sub-Adviser may complete such transaction unless doing so
would violate any applicable law, rule or regulation. In such an event, the
Sub-Adviser will not be responsible for any loss that may result from the
completion of the transaction.
3.4 Further, and except as may be qualified elsewhere in this
Agreement, the Sub-Adviser is hereby authorized, for and on behalf of the
Company, with respect to the Portfolio, in its discretion to:
(a) exercise any conversion and/or subscription
rights available in connection with any securities or other investments held in
the Portfolio;
(b) maintain all or part of the Portfolio's
uninvested assets in short-term income-producing instruments for such periods of
time as shall be deemed reasonable and prudent by the Sub-Adviser;
(c) instruct the Custodian, in accordance with the
Custodian Agreement, to deliver for cash received, securities or other cash
and/or securities instruments sold, exchanged, redeemed or otherwise disposed of
from the Portfolio, and to pay cash for securities or other cash and/or
securities instruments delivered to the Custodian and/or credited to the
Portfolio upon acquisition of the same for the Portfolio;
(d) determine how to vote all proxies received with
respect to securities held in the Portfolio and direct the Custodian as to the
voting of such proxies; and
(e) generally, perform any other act necessary to
enable the Sub-Adviser to carry out its obligations under this Agreement.
4. SELECTION OF BROKER-DEALERS. The Sub-Adviser shall select the
brokers and dealers through whom transactions on behalf of the Portfolio will be
executed and the markets on or in which such transactions will be executed and
shall place, in the name of the Portfolio or its nominee (or appropriate foreign
equivalent), all such orders. In selecting brokers and dealers to execute such
transactions, and in negotiating brokerage commissions, and in obtaining
research, statistical and other information from brokers and dealers in
connection with Portfolio transactions, the Sub-Adviser shall comply with the
description of the process contained in the Prospectus. The Sub-Adviser may
utilize its trading desk in performing its obligations under this Paragraph 4.
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4.1 The Subadviser 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; provided that,
on behalf of the Portfolio, the Subadviser 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 the
Subadviser 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 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 1934 Act). In no instance will portfolio securities be purchased from or
sold to the Subadviser, or any affiliated person thereof, except in accordance
with the federal securities laws and rules and regulations thereunder.
4.2 It is understood that certain other clients (including
other funds, portfolios and accounts) of the Sub-Adviser may have investment
objectives and policies similar to those of the Portfolio and that the
Sub-Adviser may, from time to time, make recommendations that result in the
purchase (or sale) of a particular security by its other clients and the
Portfolio during the same period of time. If transactions on behalf of more than
one client during the same period increase the demand for securities being
purchased or the supply of securities being sold, there may be an adverse effect
on price or quantity. In such event, the Sub-Adviser shall allocate the
securities or investments to be purchased or sold, as well as the expenses
incurred in the transactions (including price) in a manner the Sub-Adviser
considers equitable and consistent with its obligations to the Portfolio and the
Sub-Adviser's other clients.
4.3 The Sub-Adviser agrees that it will only enter into
transactions that are covered by Section 10(f) or Section 17(e) of the 1940 Act
if it has (i) complied with Rule 10f-3 or Rule 17e-1 thereunder, respectively,
or the terms of an appropriate exemptive order issued to the Company by the SEC,
and (ii) has complied with the procedures adopted thereunder by the Board of
Directors of the Company which may, pursuant to authority granted by the
Company, be supplemented by interpretive guidelines of the Manager. The Manager
shall promptly notify the Sub-Adviser of any parties with whom engaging in a
transaction for the Portfolio would result in a violation of the 1940 Act.
5. REPORTS AND INFORMATION TO BE PROVIDED BY THE SUB-ADVISER. The
Sub-Adviser shall furnish such information and reports relating to the
Portfolio, its holdings and transactions involving Portfolio securities as the
Manager and/or the Company may reasonably require to fulfill its or their legal
responsibilities or to meet regulatory requirements or discharge other duties
they may have and which information and reports the Sub-Adviser and the Manager
and/or the Company mutually agree that the Sub-Adviser shall provide. The
subjects of the reports and information to be provided by the Sub-Adviser as of
the date hereof are the following:
(a) Information concerning the Sub-Adviser's investment
activities that is required by the Manager to determine the Company's and
Portfolio's compliance with the 1940 Act, the Advisers Act, the Internal Revenue
Code, applicable federal and state securities and insurance laws and other
applicable laws and regulations or regulatory and taxing authorities in the
United States and other
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relevant countries, provided that nothing in this Agreement shall be deemed to
require the Sub-Adviser to perform fund accounting activities;
(b) Information required by the Manager to meet the accounting
and operational requirements of the Portfolio. Specific examples of the types of
reports and information that will be needed by the Manager and the Company are
set forth in Exhibit A, attached hereto;
(c) Information mutually agreeable to the Sub-Adviser and the
Manager and/or the Company that is required by the Manager to satisfy its
reporting obligations to the Company arising from the Investment Advisory and
Management Agreement between the Manager and the Company;
(d) Information reasonably requested by the Manager to
determine the adequacy of services provided to the Portfolio by foreign
custodians and sub-custodians;
(e) Information required by the Manager to determine the
Sub-Adviser's compliance with Rule 17j-1 under the 1940 Act with respect to the
Sub-Adviser's activities on behalf of the Portfolio, which shall consist of:
(i) a copy of the Sub-Adviser's current Code of Ethics, and any amendments
thereto; (ii) a quarterly certification from the Sub-Adviser that it and
relevant personnel have complied with the Sub-Adviser's Code of Ethics; and
(iii) in any circumstance where a violation of such Code of Ethics has occurred,
reasonable information pertaining to the facts and circumstances surrounding
such violation and the actions taken to remedy such violation;
(f) Information required by the Manager to determine
compliance with Rule 10f-3 and Rule 17e-1 under the 1940 Act with respect to the
Sub-Adviser's (or its affiliates') activities on behalf of the Portfolio; and
(g) Information reasonably necessary to respond to specific
inquiries from the Company's management and/or Board of Directors and as
mutually agreed upon by the Sub-Adviser and the Manager and/or the Company.
6. NON-EXCLUSIVE SERVICES, CONFLICTS OF INTEREST AND MATERIAL NONPUBLIC
INFORMATION. The Manager understands that the Sub-Adviser and its affiliates may
furnish investment management and advisory services to others, and that the
Sub-Adviser and its affiliates shall be at all times free, in their discretion,
to make recommendations to, and investments for, others which may or may not
correspond to investments made for the Portfolio. The Manager further
understands that the Sub-Adviser, its affiliates, and any officer, director,
stockholder, employee or any member of their families may or may not have an
interest in the securities whose purchase and sale the Sub-Adviser effects for
the Portfolio. Actions taken by the Sub-Adviser on behalf of the Portfolio may
be the same as, or different from, actions taken by the Sub-Adviser on its own
behalf or for others or from actions taken by the Sub-Adviser's affiliates,
officers, directors, partners, employees of the Sub-Adviser or its affiliates,
or the family members of such persons or other investors. The Sub-Adviser
represents that it has in effect a code of ethics that complies with Rule 17j-1
under the 1940 Act and has procedures in place that, taken together, provide
reasonable enforcement of the code's provisions. Similarly, the Sub-Adviser
represents that, with respect to the use of nonmaterial nonpublic information,
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it has complied, and will continue to comply, with Section 204A of the
Investment Advisers Act of 1940, as amended ("Advisers Act") and any rules
thereunder.
7. DISCLOSURE OF INFORMATION AND CONFIDENTIALITY.
7.1 The Sub-Adviser, the Company and the Manager, either
during or after the termination of this Agreement, are authorized with respect
to matters arising out of this Agreement to make any disclosures and/or
participate in any conduct required by any applicable law, rule, regulation,
self-regulating organization, investment exchange or any other body having
regulatory or enforcement responsibility with respect to any investment business
conducted by the Sub-Adviser on behalf of the Portfolio.
7.2 Subject to the preceding paragraph, the Sub-Adviser agrees
that all information which has or will come into its possession or knowledge
concerning the Portfolio or its investments in connection with this Agreement
shall be held by the Sub-Adviser in confidence. The Sub-Adviser shall make no
use of such information other than for the performance of this Agreement, shall
disclose such information only to the directors, officers or employees of the
Sub-Adviser or its affiliated firms or of any third party appointed pursuant to
this Agreement requiring such information and shall not disclose such
information to any other person without the written consent of the Company;
provided, however, that to the extent the investments for the Portfolio are
similar to investments for other clients of the Sub-Adviser, the Sub-Adviser may
disclose such investments without direct reference to the Portfolio. The
Sub-Adviser may also include the name of the Portfolio in a representative
client list.
7.3 Subject to the preceding paragraph, the Company and the
Manager agree that all information which has or will come into their possession
or knowledge concerning the operations and procedures of the Sub-Adviser shall
be held by the Company and the Manager in confidence. The Company and the
Manager shall make no use of such information other than for the performance of
this Agreement, shall disclose such information only to their directors,
officers or employees or those of its affiliated firms and shall not disclose
such information to any other person without the written consent of the
Sub-Adviser.
7.4 The Manager and the Company agree not to refer to the
Sub-Adviser or its affiliates in any advertisement or other document without
prior consent of the Sub-Adviser. Similarly, the Sub-Adviser and its affiliates
shall not refer to the Manager, the Company, the Portfolio, or any affiliate of
the Manager in any advertisement or other document without the Manager's prior
consent. Specifically, the Manager and the Company agree to furnish Sub-Adviser
with a copy of any such advertisement or other document at least five (5) days
prior to its first use, and the Manager and the Company agree to refrain from
such use if Sub-Adviser reasonably objects thereto. However, the Parties to this
Agreement agree that they may reference one another as necessary in regulatory
and other legal filings, subject to the terms of Paragraph 12(a) of this
Agreement. Further, the parties agree that they will not unreasonably withhold
permission to use their names or otherwise reference them in materials used to
describe the Portfolio and/or the Company.
8. DEALINGS WITH THE CUSTODIAN. The Manager shall notify the
Sub-Adviser of the appointment of the custodian(s) ("Custodian") for all or any
portion of the Portfolio's assets, shall
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provide the Sub-Adviser with a true and complete copy of each agreement with the
Custodian that deals with the Portfolio's assets ("Custodian Agreements"), and
shall provide the Sub-Adviser with the names of persons authorized to act on
behalf of the Custodian and such other information as the Sub-Adviser shall
reasonably require. The Company agrees to provide promptly to the Sub-Adviser a
copy of all relevant Custodian Agreements, and all changes made to such
documents.
9. DELEGATION OF THE SUB-ADVISER'S RESPONSIBILITIES. The Sub-Adviser
may not delegate its investment advisory responsibilities as Sub-Adviser to the
Portfolio. However, the Sub-Adviser may employ, retain or otherwise avail itself
of the services and facilities of persons and entities within its own
organization or any other organization for the purpose of providing the
Sub-Adviser, the Manager or the Portfolio with such information, advice or
assistance, including but not limited to advice regarding economic factors and
trends and advice as to transactions in specific securities, as the Sub-Adviser
may deem necessary, appropriate or convenient for the discharge of its
obligations hereunder or as may otherwise be helpful to the Manager or the
Portfolio, or in the discharge of the Sub-Adviser's overall responsibilities
with respect to the other accounts for which it serves as investment manager or
investment adviser. The Sub-Adviser's acquisition of information, advice or
assistance pursuant to this paragraph shall be at the Sub-Adviser's own expense
and shall not relieve the Sub-Adviser of any of its obligations under this
Agreement.
10. COMPENSATION. For the services to be rendered under this Agreement
and the facilities to be furnished, the Manager shall pay to the Sub-Adviser for
each fiscal year of the Company, a monthly management fee at the annual rate of
.75 of 1% of the Portfolio's first $20 million of average daily net assets; .60
of 1% of the Portfolio's average daily net assets between $20 million and $50
million; .50 of 1% of the Portfolio's average daily net assets between $50
million and $200 million. Once the Portfolio exceeds $200 million in average
daily net assets, the entire monthly management fee will become an annual rate
of .50 of 1% of the Portfolio's average daily net assets. The monthly management
fee shall be paid to the Sub-Adviser not later than the tenth business day of
the month following the month in which such services were rendered and shall be
based upon the average net asset values of all the issued and outstanding shares
of the Portfolio as determined as of the close of each business day of the month
pursuant to the Articles of Incorporation, Bylaws and currently effective
Prospectus of the Portfolio. Payments of the monthly management fee will be
accompanied by documentation that verifies the calculation of such fee. If the
management of the Portfolio by the Sub-Adviser commences or terminates at any
time other than the beginning or end of a month, the management fee shall be
prorated for that portion of such month during which this Agreement was in
force.
11. REPRESENTATIONS OF THE SUB-ADVISER. The Sub-Adviser represents and
agrees that:
(a) The Sub-Adviser is registered as an "investment adviser"
under the Advisers Act and is currently in compliance in all material respects
and shall at all times continue to comply in all material respects with the
requirements imposed upon it by the Advisers Act, the 1940 Act, the Internal
Revenue Code, state securities laws and all applicable rules and regulations
thereunder as they relate to the services provided under this Agreement. The
Sub-Adviser will immediately notify the Manager if it becomes aware of the
occurrence of any event that would disqualify the Sub-Adviser from serving as an
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investment adviser of an investment company pursuant to Section 9 of the 1940
Act or any other applicable law or regulation.
(b) The Sub-Adviser will maintain, keep current and accurate,
and preserve all records with respect to the Portfolio as are required of it
under the Advisers Act and the 1940 Act, in the manner provided by such Acts and
the rules thereunder. The Sub-Adviser agrees that such records are the property
of the Company, and following termination of this Agreement will be surrendered
to the Company promptly upon request except to the extent that they are required
to be retained by the Sub-Adviser under applicable law. Further, such records
shall be open to inspection by the Company. The Sub-Adviser will also assure
that the Company will have the same access as the Sub-Adviser has to records
relating to the Portfolio that are held by relevant third parties. Such
inspections will be at reasonable times during business hours and only upon
reasonable notice of the Company's desire to make an inspection.
(c) The Sub-Adviser agrees to advise the Manager of any
developments, such as the reassignment of a portfolio manager, that would
require Prospectus disclosure and to provide any necessary information related
to such developments.
(d) The Sub-Adviser has provided the Manager and the Company
with a copy of its most recent and complete Form ADV and will promptly furnish
them with copies of any material amendments to the Form.
(e) The Sub-Adviser shall furnish the Manager with a
certificate, signed by a duly authorized officer of the Sub-Adviser that
designates the officers or employees of the Sub-Adviser having authority to act
for and on behalf of the Sub-Adviser in connection with this Agreement. The
Sub-Adviser agrees that, until such time as the Manager is otherwise informed in
writing by a duly authorized officer of the Sub-Adviser, the Manager shall be
authorized and entitled to rely on any notice, instruction, request, order or
other communication, given either in writing or orally, and reasonably believed
by the Manager in good faith to be given by an authorized representative of the
Sub-Adviser.
12. REPRESENTATIONS OF THE MANAGER. The Manager represents and agrees
that:
(a) The Manager is registered as an "investment adviser" under
the Advisers Act and is currently in compliance in all material respects and
shall at all times continue to comply in all material respects with the
requirements imposed upon it by the Advisers Act, the 1940 Act, the Internal
Revenue Code, state securities laws and all applicable rules and regulations
thereunder as they relate to the services provided under this Agreement. The
Manager will immediately notify the Sub-Adviser if it becomes aware of the
occurrence of any event that would disqualify the Manager from serving as an
investment adviser of an investment company pursuant to Section 9 of the 1940
Act or any other applicable law or regulation. The Manager is registered as an
"investment adviser" under the Advisers Act and has provided to the Sub-Adviser
a copy of its most recent and complete Form ADV, along with a copy of the
Investment Advisory and Management Agreement between the Manager and the Company
and the current Company Prospectus regarding the Portfolio. After any amendment
to the documents referenced in this paragraph, the Manager will promptly furnish
a copy of such amended document to the Sub-Adviser. In addition, the Manager
will provide the Sub-Adviser with notice of proposed
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changes in the Prospectus that relate to the Sub-Adviser, the Portfolio or
procedures relating to the Sub-Adviser's management of the Portfolio and the
opportunity to review and comment upon such changes before they are finalized.
(b) The Manager and the Company are currently in material
compliance and shall at all times continue to be in material compliance with the
relevant requirements of the Advisers Act, the 1940 Act, all applicable state
securities and insurance laws, and the rules thereunder, as they pertain to the
Portfolio.
(c) The Manager shall furnish the Sub-Adviser with a
certificate, signed by a duly authorized officer of the Manager that designates
the officers or employees of the Manager having authority to act for and on
behalf of the Manager in connection with this Agreement. The Manager agrees
that, until such time as the Sub-Adviser is otherwise informed in writing by a
duly authorized officer of the Manager, the Sub-Adviser shall be authorized and
entitled to rely on any notice, instruction, request, order or other
communication, given either in writing or orally, and reasonably believed by the
Sub-Adviser in good faith to be given by an authorized representative of the
Manager.
(d) Except as qualified elsewhere in this Agreement, the
Manager shall continue to have responsibility for all services to be provided to
the Portfolio pursuant to the Advisory Agreement and, in any event, shall
oversee and review the Sub-Adviser's performance of its duties under this
Agreement.
(e) The Adviser has furnished the Sub-Adviser with copies of
each of the following documents and will furnish to the Sub-Adviser at its
principal office all future amendments and supplements to such documents, if
any, as soon as practicable after such documents become available:
(i) The Articles of Incorporation of the Company, as
filed with the State of Maryland Secretary of State, as in effect on the date
hereof and as amended from time to time ("Articles");
(ii) The Bylaws of the Company as in effect on the
date hereof and as amended from time to time ("Bylaws");
(iii) Certified resolutions of the Board of the
Company authorizing the appointment of the Adviser and the Sub-Adviser and
approving the form of the Advisory Agreement and this Agreement;
(iv) The Company's 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 Portfolio and its
shares and all amendments thereto ("Registration Statement");
(v) The Company's Prospectus (as defined above); and
(vi) Copies of any audited financial statements or
reports made by the Company to its shareholders or to any governmental body or
securities exchange, including the Company's annual and semi-annual reports to
shareholders.
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Further, the Manager shall furnish the Sub-Adviser with any further documents,
materials or information that the Company and/or the Manager mutually agree with
the Sub-Adviser will enable the Sub-Adviser to perform its duties under this
Agreement.
13. LIABILITY, INDEMNIFICATION AND FORCE MAJEURE.
13.1 The Sub-Adviser, its affiliated firms or its or their
employees, officers, or directors will not be liable for any error of judgment
or mistake of law or for any loss suffered by the Portfolio, its shareholders,
contract owners or First Fortis contract owners in connection with the
performance of their duties under this Agreement, except for loss resulting from
willful misfeasance, bad faith or gross negligence on their part in the
performance of their duties or from reckless disregard by them of their duties
under this Agreement.
13.2 The Manager shall indemnify the Sub-Adviser against all
claims which may be made against the Sub-Adviser in connection with the exercise
of the powers and discretions conferred upon it pursuant to this Agreement,
EXCEPT insofar as such claims allege or are the result of the willful
misfeasance, bad faith or gross negligence of the Sub-Adviser or any of its
affiliated firms or its or their employees, officers or directors or its or
their breach of this Agreement or violation of applicable law. Conversely, the
Sub-Adviser shall indemnify the Manager and the Company against all claims
alleging or resulting from the willful misfeasance, bad faith or gross
negligence of the Sub-Adviser or any of its affiliated firms or its or their
employees, officers or directors or its or their breach of this Agreement or
violation of applicable law.
13.3 Neither party shall be held responsible for their
non-performance of any of their obligations under this Agreement by reason of
any cause beyond their control, including any breakdown or failure of
transmission, communication or computer facilities, postal or other strikes or
similar industrial action and the failure of any relevant exchange, clearing
house and/or broker for any reason to perform its obligations.
14. TERM, RENEWAL AND TERMINATION.
14.1 This Agreement shall, with respect to the Portfolio,
become effective as of the date first above written and shall remain in force
for two years thereafter, and for successive annual periods thereafter but only
so long as each such continuance is specifically approved at least annually by
(1) a majority of the Directors of the Company who are not parties to this
Agreement or interested persons of any such parties (other than as Directors of
the Company), by vote cast in person at a meeting called for the purpose of
voting on such approval; or (2) a vote of the holders of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of such Portfolio. It
shall be the duty of the Directors of the Company to request and evaluate, and
the duty of the Manager and Sub-Adviser to furnish, such information as may be
reasonably necessary to evaluate the terms of this Agreement and any renewal
hereof.
14.2 This Agreement may be terminated with respect to the
Portfolio at any time without the payment of any penalty by the Portfolio (1) by
a vote of a majority of the entire Board of Directors
11
of the Company on sixty (60) days' written notice to the Manager and the
Sub-Adviser; (2) by vote of the holders of a majority of the outstanding voting
securities of such Portfolio (as defined in the 1940 Act); or (3) by the
Sub-Adviser on 60 days' written notice to the Manager and the Company.
14.3 This Agreement shall automatically terminate in the event
of its assignment, as that term is defined in Section 2(a)(4) of the 1940 Act
and the rules thereunder.
14.4 On the effective date of any termination of this
Agreement or as close to such date as is reasonably possible, the Sub-Adviser
shall provide the Manager with a final report for the Portfolio which will
include the fair market value for each of the Portfolio's investments, prepared
in the manner described in Exhibit A hereto.
14.5 Upon the Manager's receipt or service of any notice given
by or to the Company concerning the termination of the Manager's appointment as
the investment adviser to the Company, the Manager shall immediately forward a
copy of such notice to the Sub-Adviser and the Sub-Adviser's appointment under
this Agreement shall terminate on the same date as the termination of the
Manager's appointment.
15. AMENDMENT. No amendment to or modification of this Agreement shall
be effective unless and until it is set forth in a written amendment signed by
the Manager and the Sub-Adviser and approved by the vote of a majority of the
outstanding shares of the Portfolio, as defined in the 1940 Act.
16. AUTHORITY AND ENFORCEABILITY.
16.1 Each of the parties to this Agreement hereby represents
that it is duly authorized and empowered to execute, deliver, and perform this
Agreement and that such actions do not conflict with or violate any provision of
law, rule, regulation, other legal requirement, contract or other instrument to
which it is a party or to which it is subject and that this Agreement
constitutes a valid and binding obligation, inuring to the benefit of the
Manager and the Sub-Adviser and their respective successors, enforceable in
accordance with its terms.
16.2 If any provision of this Agreement shall be held or made
invalid or unenforceable by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby and any such invalid
or unenforceable provision shall be deemed to be replaced with a valid and
enforceable provision that most closely reflects the intention of the parties.
17. APPLICABLE LAW. To the extent that state law is not preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the State of
Minnesota.
18. NOTICES. All notices hereunder shall be in writing and shall be
delivered in person or by facsimile (followed by delivery in person) to the
parties at the addresses set forth below:
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If to the Manager: HL Investment Advisers, LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax #:
Attn: Legal Department
If to the Sub-Adviser: Xxxx X. Xxxxxxx
(cc: Xxxxx X. Xxxxxxx, Esq.)
X. Xxxx International, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or such other name or address as may be given in writing to the other party.
Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and if by facsimile and mail, on the date on which such facsimile is
sent.
19. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
13
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers.
HL INVESTMENT ADVISORS, LLC
By: /s/ Xxxxx X. Xxxxxxxxxxxx
---------------------------
Attest: /s/ Xxxxx X. Xxxx
------------------------
X. XXXX PRICE INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Attest: /s/ Xxxxxxx X. Xxx Xxxx
------------------------
14
EXHIBIT A
EXAMPLES OF THE ROUTINE ACCOUNTING AND OPERATIONAL INFORMATION AND
DOCUMENTATION REQUIREMENTS OF THE PORTFOLIO TO BE SATISFIED BY THE
SUB-ADVISER
The following information is to be provided to:
Fortis Series Fund, Inc.
ATTN: Fund Accounting
X.X. Xxx 00000
Xx. Xxxx, XX 00000
FAX: (000) 000-0000
PHONE: (000) 000-0000
1. DOCUMENTATION OF TRADES. On a daily basis, via facsimile before
11:00 a.m. eastern time, a listing of the previous day's executed trades. Detail
on short-term trades done for cash management purposes must be sent via
facsimile by 10:30 a.m. eastern time on trade date. With respect to trades for
which no DTC affirmation is available, the Sub-Adviser will instruct the broker
to provide the Company's Fund Accounting Department (the "Department") with
duplicate, hard copy confirmations for such trades.
2. PORTFOLIO HOLDINGS. On a monthly basis, via facsimile and mail, a
list of the Portfolio's holdings. The list should include the following
information, for each of the Portfolio's holdings, where applicable: long
description, cusip/sedol number, maturity date, par/principal amounts, average
cost and coupon rate. The Sub-Adviser will also notify the Department as soon as
practicable as to a discrepancy in the information the Sub-Adviser has provided
the Department concerning trading information and/or the composition of the
Portfolio.
3. SECURITY PRICING. On a monthly basis, by telephone or facsimile: (i)
review with the Department the prices of the Portfolio's securities, which shall
be provided by the Department; (ii) inform the Department of any material
disagreement with such prices; (iii) provide the Department with the basis for
any material disagreement it may have with respect to a particular security's
price; and (iv) in any instance, and on any given business day, where the
pricing services utilized by the Department do not provide a price for a
security held by the Portfolio, provide the Department with reasonable
assistance in determining a price for such security provided that the Department
shall have used reasonable efforts to determine the price.
