EXHIBIT 99(D).1
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 1st day of February 1998, by and
between Fortis Tax-Free Portfolios, Inc. (formerly AMEV Tax-Free Fund), a
Minnesota corporation (the "Fund") and Fortis Advisers, Inc. (formerly AMEV
Advisers, Inc.), a Minnesota corporation ("Advisers").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES.
The Fund hereby engages Advisers, and Advisers hereby agrees to act, as
investment adviser for, and to manage the affairs, business and the investment
of the assets of the Fund's Minnesota Portfolio. Such Portfolio is herein
referred to as the "Portfolio" and other Portfolios of the Fund from time to
time created by the Board of Directors of the Fund are herein collectively
referred to as the "Portfolios."
The investment of the assets of the Portfolio shall at all times be
subject to the applicable provisions of the Articles of Incorporation, Bylaws,
Registration Statement and current Prospectus and Statement of Additional
Information of the Fund and shall conform to the policies and purposes of the
Fund and the Portfolio as set forth in the Registration Statement and Prospectus
and Statement of Additional Information and as interpreted from time to time by
the Board of Directors of the Fund. Within the framework of the investment
policies of the Portfolio, Advisers shall have the sole and exclusive
responsibility for the management of the Portfolio and the making and execution
of all investment decisions for the Portfolio. Advisers shall report to the
Board of Directors regularly at such times and in such detail as the Board may
from time to time determine to be appropriate, in order to permit the Board to
determine the adherence of Advisers to the investment policies of the Portfolio.
Advisers shall, at its own expense, furnish the Fund suitable office
space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Portfolio. Advisers shall arrange, if requested
by the Fund, for officers, employees, or other affiliates of Advisers to serve
without compensation from the Fund as directors, officers, or employees of the
Fund if duly elected to such positions by the shareholders or directors of the
Fund.
Advisers hereby acknowledges that all records necessary in the
operation of the Fund, including records pertaining to its shareholders and
investments, are the property of the Fund, and in the event that a transfer of
management or investment advisory services to someone other than Advisers should
ever occur, Advisers will promptly, and at its own cost, take all steps
necessary to segregate such records and deliver them to the Fund.
2. COMPENSATION FOR SERVICES.
In payment for all services, facilities, equipment and personnel, and
for other costs of
Advisers hereunder, the Fund shall pay to Advisers a monthly fee for the
Portfolio, which fee shall be paid to Advisers not later than the fifth business
day of the month following the month in which such services are rendered. Such
monthly fee shall be at the rate or rates set forth below and shall be based on
the average of the net asset values of all of 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 and Statement of Additional Information of the Fund. The following
table sets forth the fees on a monthly and annual basis:
Monthly Equivalent Average Asset
Rate Annual Rate Values of the Portfolio
---- ----------- -----------------------
Minnesota 1/12 of .72% .72% On the first $50,000,000
Portfolio 1/12 of .7% .7% On average assets over
$50,000,000
The fees shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, the Fund
shall pay all its expenses which are not assumed by Advisers and/or Fortis
Investors, Inc. ("Investors"). These Fund expenses include, by way of example,
but not by way of limitation, the fees and expenses of directors and officers of
the Fund who are not "affiliated persons" of Advisers, interest expenses, taxes,
brokerage fees and commissions, fees and expenses of registering and qualifying
the Fund and its shares for distribution under federal and state securities
laws, expenses of preparing prospectuses and of printing and distributing
prospectuses annually to existing shareholders, custodian charges, auditing and
legal expenses, insurance expense, association membership dues, and the expense
of reports to shareholders, shareholders' meetings, and proxy solicitations.
Advisers shall bear the costs of acting as the Fund's transfer agent, registrar,
and dividend disbursing agent.
(b) Advisers or Investors shall bear all promotional expenses in
connection with the distribution of the Fund's shares, including paying for
prospectuses and shareholder reports for new shareholders, and the costs of
sales literature.
4. LIMIT ON EXPENSES.
Advisers reserves the right, but shall not be obligated, to institute
further voluntary expense reimbursement programs, which shall be in such amounts
and based upon such terms and conditions as Advisers, in its sole and absolute
discretion, determines. Furthermore, Advisers reserves the absolute right to
discontinue any of such reimbursement programs at any time without notice to the
Fund.
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5. FREEDOM TO DEAL WITH THIRD PARTIES.
Advisers shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
6. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
The effective date of this Agreement shall be February 1, 1998.
Wherever referred to in this Agreement, the vote or approval of the holders of a
majority of the outstanding voting securities of the Portfolio or the Fund shall
mean the vote of 67% or more of such securities if the holders of more than 50%
of such securities are present in person or by proxy or the vote of more than
50% of such securities, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or with respect to the
Portfolio by the vote of the holders of a majority of the outstanding voting
securities of the Portfolio, and (b) by a majority of the directors who are not
interested persons of Advisers or of the Fund cast in person at a meeting called
for the purpose of voting on such approval; provided that, if a majority of the
outstanding voting securities of the Portfolio approves this Agreement, this
Agreement shall continue in effect with respect to such approving Portfolio
whether or not the shareholders of any other Portfolios of the Fund approve this
Agreement.
This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Fund or by Advisers, upon
sixty (60) days' written notice to the other party. This Agreement may be
terminated with respect to the Portfolio at any time without the payment of any
penalty by the vote of the holders of a majority of the outstanding voting
securities of the Portfolio, upon sixty (60) days' written notice to Advisers.
Any such termination may be made effective with respect to both the investment
advisory and management services provided for in this Agreement or with respect
to either of such kinds of services. This Agreement shall automatically
terminate in the event of its assignment.
7. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Portfolio which has approved and is subject to this Agreement.
In addition, if a majority of the outstanding voting securities of the Portfolio
of the Fund votes to amend this Agreement, such amendment shall be effective
with respect to such Portfolio whether or not the shareholders of any other
Portfolios of the Fund vote to adopt such amendment.
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8. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Advisers have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
FORTIS TAX-FREE PORTFOLIOS, INC.
By /S/ XXXX X. XXXXXXXX
--------------------
Xxxx X. Xxxxxxxx
Its President
FORTIS ADVISERS, INC.
By /S/ XXXX X. XXXXXXXX
--------------------
Xxxx X. Xxxxxxxx
Its Chief Executive Officer
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