SUB-MANAGEMENT AGREEMENT
This AGREEMENT made as of this 2nd day of April, 1998, between XXXXXX
ASSOCIATES, INC., a Delaware corporation ("Xxxxxx") and PERKINS, WOLF, XXXXXXXXX
& COMPANY, a Delaware corporation ("PWM").
WHEREAS, Xxxxxx has entered into an Investment Sub-Advisory Agreement
(the "Subadvisory Agreement") with Fortis Advisers, Inc. (the "Manager") with
respect to the Small Cap Value Series (the "Portfolio") of Fortis Series Fund,
Inc. (the "Company"); and
WHEREAS, PWM is engaged in the business of rendering investment
advisory services and is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, Xxxxxx desires to delegate to PWM its duties and
responsibilities for providing investment advisory services to the Portfolio,
and PWM is willing to accept such delegation and to render such investment
advisory services.
NOW, THEREFORE, the parties agree as follows:
1. DELEGATION. Pursuant to Section 9 of the Subadvisory Agreement,
a copy of which is attached hereto as Exhibit 1, Xxxxxx hereby delegates to PWM
all the duties and responsibilities required to be performed by Xxxxxx for the
Portfolio pursuant to Section 2 of the Subadvisory Agreement except the
placement of purchase and sale orders on behalf of the Portfolio. PWM hereby
accepts such delegation and agrees to perform such duties and assume such
responsibilities, subject to the oversight of Xxxxxx. No provision of this
Agreement shall relieve Xxxxxx of its duties or responsibilities under the
Subadvisory Agreement, and Xxxxxx shall appropriately oversee, monitor and
evaluate PWM's performance of its duties and responsibilities under this
Agreement.
2. FURTHER OBLIGATIONS.
(a) In all matters relating to the performance of this Agreement, PWM
shall act in conformity with the Company's Articles of Incorporation, the
investment objectives, policies and restrictions for the applicable Portfolio
set forth in the Company's then current prospectus and statement of additional
information, such policies as the Company may from time to time establish and
which have been furnished to PWM in writing, the provisions of the Internal
Revenue Code (the Code) applicable to "regulated investment companies" (as
defined in Section 851 of the Code), all as from time to time in effect, and
with all applicable laws governing
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such Portfolio's operations and investments including without limitation the
provisions of the Investment Company Act of 1940, as amended (the "1940 Act"),
and rules adopted thereunder and applicable federal and state securities, and
tax laws. The Company, the Manager and/or Xxxxxx may also place additional
limitations on PWM's investment decisions by written notice to PWM. PWM will be
subject to oversight by Xxxxxx and the Manager, provided, however, that such
oversight shall not require prior approval of discretionary investment decisions
made by PWM except as may be required by applicable law, the Portfolio's
investment policies and restrictions and/or any limitations imposed on PWM by
the Company, the Manager and/or Xxxxxx as set forth herein. Xxxxxx retains, and
PWM acknowledges that the Manager has, the right to instruct PWM to effect any
transaction necessary to ensure compliance with the Portfolio's investment
policies and restrictions as well as the requirements of Subchapter M of the
Internal Revenue Code and the provisions of Section 817(h) of the Internal
Revenue Code and the regulations promulgated thereunder. In the event PWM's
compliance with any amendment of the Portfolio's investment objectives, policies
and restrictions or other limitations placed on PWM's investment decisions with
respect to the Portfolio would interfere with the completion of any transaction
commenced on behalf of the Portfolio prior to PWM's knowledge of such amendment,
PWM may complete such transaction unless doing so would violate any applicable
law, rule or regulation and, in such an event, PWM will not be responsible for
any loss that may result from the completion of the transaction.
(b) PWM shall provide timely reports to Xxxxxx on its activities
under this Agreement as agreed on from time to time, and shall provide Xxxxxx
with all information or documents that Xxxxxx may reasonably request in
connection with this Agreement, including but not limited to:
(1) Information required by Xxxxxx to satisfy its reporting
obligations to the Manager and/or the Company arising from the Subadvisory
Agreement;
(2) Information required to determine PWM's compliance with Rule
17j-1 under the 1940 Act with respect to PWM's activities on behalf of the
Portfolio;
(3) Information required to determine compliance with Rule 10f-3
and Rule 17e-1 under the 1940 Act with respect to PWM's (or its affiliates')
activities on behalf of the Portfolio;
(4) Such other information with regard to its affairs as Xxxxxx
may reasonably request.
(c) PWM shall maintain, keep current and accurate, and preserve
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all books and 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. PWM 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 PWM under applicable law. Further, such records shall be open to inspection
by the Company. PWM will also assure that the Company will have the same access
as PWM 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.
(d) PWM will at all times 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. PWM
will immediately notify Xxxxxx if it becomes aware of the occurrence of any
event that would disqualify PWM 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.
(e) PWM agrees to advise Xxxxxx 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.
(f) PWM has provided Xxxxxx with a copy of its most recent and
complete Form ADV and will promptly furnish Xxxxxx with copies of any material
amendments to such Form ADV.
(g) If PWM's performance of its obligations under this Agreement
takes place in the United Kingdom, PWM shall be and shall remain during the
effectiveness of this Agreement, a member of the Investment Management
Regulatory Organization, Ltd. ("IMRO") and thereby regulated in the conduct of
Investment Business (as defined in IMRO's rules) by the IMRO. The Company and
the Manager will be treated as a Non-Private Customer (as defined in IMRO's
rules) of PWM.
(h) PWM shall furnish Xxxxxx with a certificate, signed by a duly
authorized officer of PWM that designates the officers or employees of PWM
having authority to act for and on behalf of PWM in connection with this
Agreement. PWM agrees that, until such time as Xxxxxx is otherwise informed in
writing by a duly authorized officer of PWM, Xxxxxx 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
Xxxxxx in good faith to be given by an authorized representative of PWM.
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3. DISCRETIONARY ACTIONS.
(a) PWM is hereby authorized, to the same extent Xxxxxx is authorized
pursuant to Section 3.4 of the Subadvisory Agreement, to take the actions set
forth in subsections (a), (b), and (d) of Section 3.4 of the Subadvisory
Agreement, and generally, to perform any other act necessary to enable PWM to
carry out its obligations under this Agreement.
(b) PWM 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 PWM, Xxxxxx, 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 PWM may deem necessary, appropriate or convenient for
the discharge of its obligations hereunder or as may otherwise be helpful to
Xxxxxx, the Manager or the Portfolio, or in the discharge of PWM's overall
responsibilities with respect to the other accounts for which it serves as an
investment manager or investment adviser. PWM's acquisition of information,
advice or assistance pursuant to this subsection shall be at PWM's own expense
and shall not relieve PWM of any of its obligations under this Agreement.
4. DISCLOSURE OF INFORMATION AND CONFIDENTIALITY.
(a) PWM, either during, or after the termination of, this Agreement,
is 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 PWM on behalf of the Portfolio.
(b) Subject to Section 4(a), PWM 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 PWM in
confidence. PWM 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 PWM or its affiliated firms or Xxxxxx 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 PWM, PWM may
disclose such investments without direct reference to the Portfolio. PWM may
also include the name of the Portfolio in a representative client list.
(c) PWM agrees that it shall not and its affiliates shall not refer
to
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the Manager, the Company, the Portfolio, or other Fortis affiliates in any
advertisement or other document without the Manager's prior consent, except as
may be necessary in regulatory and other legal filings. PWM agrees that it will
not unreasonably withhold permission to use its name or otherwise reference PWM
in materials used to describe the Portfolio and/or the Company.
5. COMPENSATION. Xxxxxx shall pay to PWM for its services under
this Agreement a fee, payable in United States dollars, at an annual rate of .25
of 1% (25 basis points) of the Portfolio's first $50 million of average daily
net assets and .225 of 1% (22 1/2 basis points) of the Portfolio's average daily
net assets in excess of $50 million. This fee shall be computed 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, and shall be payable monthly as soon as practicable
after the end of each month. For the month during which this Agreement becomes
effective and the month during which it terminates, however, there shall be an
appropriate proration of the fee payable for such month based on the number of
calendar days of such month during which this Agreement is effective.
6. EXPENSES AND EXCLUDED EXPENSES. PWM shall pay all its own costs
and expenses incurred in rendering the services required under this Agreement,
including without limitation, the costs of a representative of PWM to attend one
meeting per year of the Board of Directors of the Company. Notwithstanding any
other provision hereof, it is expressly agreed that PWM shall not be responsible
to pay any organizational, operational or business expenses of Xxxxxx or the
Company including, without limitation, brokerage commissions and other costs in
connection with the purchase or sale of securities or other investment
instruments with respect to the Portfolio.
7. TERM, RENEWAL AND TERMINATION. This Agreement shall continue in
full force and effect with respect to the Portfolio until two years from the
date hereof, and from year to year thereafter so long as such continuance is
specifically approved at least annually (i) by the vote of a majority of those
directors of the Company 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 the directors of the Company or by vote of
a majority of the outstanding voting securities of the Portfolio voting
separately from any other series of the Company.
With respect to the Portfolio, this Agreement may be terminated at any
time, without penalty, by vote of a majority of the directors of the Company, or
by Xxxxxx, on not less than 60 days' written notice to PWM, or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Portfolio, voting
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separately from any other series of the Company. This Agreement may be
terminated by PWM at any time, without the payment of any penalty, on 90 days'
written notice to Xxxxxx. This Agreement shall automatically terminate in the
event of its assignment (as defined by the 1940 Act). This Agreement will also
terminate in the event that the Subadvisory Agreement by and between Xxxxxx and
the Manager is terminated. On the effective date of any termination of this
Agreement or as close to such date as is reasonably possible, PWM shall provide
Xxxxxx with a final report for the Portfolio.
8. LIMIT OF LIABILITY; INDEMNIFICATION.
(a) None of PWM, its employees, officers, or directors will be liable
for any error of judgment or mistake of law or for any loss suffered by the
Company, the Manager, the Portfolio, its shareholders, Fortis Benefits Insurance
Company contract owners or First Fortis Life Insurance Company 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.
(b) Xxxxxx shall indemnify PWM against all claims which may be made
against PWM in connection with the exercise of the powers and discretion
conferred upon it pursuant to this Agreement, except insofar as such claims are
the result of the willful misfeasance, bad faith or gross negligence of PWM or
any of its employees, officers or directors or its or their material breach of
this Agreement or violation of applicable law. PWM shall indemnify Xxxxxx
against all claims resulting from the willful misfeasance, bad faith or gross
negligence of PWM or any of its employees, officers or directors or its or their
material breach of this Agreement or violation of applicable law.
(c) 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.
9. ACTIVITIES OF PWM. The investment advisory services provided by
PWM hereunder are not exclusive, and PWM is free to render similar services to
others so long as its services under this Agreement are not materially adversely
affected or otherwise impaired thereby. Nothing in this Agreement shall limit
or restrict the right of any director, officer, or employee of PWM 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 business, whether of a similar nature or a
dissimilar nature.
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10. INDEPENDENT CONTRACTOR. PWM shall for all purposes hereunder be
deemed to be an independent contractor and shall, unless otherwise provided or
authorized, have no authority to act for or represent Xxxxxx, the Manager, the
Portfolio or the Company in any way, nor otherwise be deemed an agent of,
partner or joint venturer with, Xxxxxx, the Portfolio or the Company.
11. PERMISSIBLE INTERESTS. It is understood that directors, officers
and shareholders of the Company are or may become interested in PWM as
directors, officers and shareholders of PWM, that directors, officers, employees
and shareholders of PWM are or may become similarly interested in the Company,
and that PWM may become interested in the Company as a shareholder or otherwise.
12. NOTICES. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
certified or registered mail, return receipt requested and postage prepaid:
(a) To Xxxxxx at:
Xxxxxx Associates, Inc.
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxx
(b) To PWM at:
Perkins, Wolf, XxXxxxxxx & Company
00 X. Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: President
13. AMENDMENTS. This Agreement may be amended by the parties
only in a written instrument signed by the parties to this Agreement and only if
such amendment, if so required, is approved by vote of a majority of the
outstanding voting securities of the Portfolio voting separately from any other
series of the Company.
14. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Colorado (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 Colorado conflict with the applicable provisions
of the 1940 Act, the latter shall control.
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15. MISCELLANEOUS. This Agreement may be executed in two or
more counterparts, which taken together shall constitute one and the same
instrument. The headings in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions thereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
XXXXXX ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx
President
PERKINS, WOLF, XXXXXXXXX & COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
President
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