EXHIBIT 99(D).2
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 31st day of January 1992, by and
between Fortis Tax-Free Portfolios, Inc. (formerly AMEV Tax-Free Fund, Inc.), a
Minnesota corporation (the "Fund") and Fortis Advisers, Inc. (formerly AMEV
Advisers, Inc.), a Minnesota ("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 assets of the Fund's National Portfolio and any
other Portfolios other than Minnesota Portfolio or New York Portfolio from time
to time created by the Board of Directors of the Fund. Each such Portfolio is
herein individually referred to as a "Portfolio," and the Portfolios are herein
collectively referred to as the "Portfolios."
The investment of the assets of the Portfolios 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 Portfolios as set forth in the Registration Statement and
Prospectus and Statement of Additional Information as interpreted from time to
time by the Board of Directors of the Fund. Within the framework of the
investment policies of the Portfolios, Advisers shall have the sole and
exclusive responsibility for the management of the Portfolios and the making and
execution of all investment decisions for the Portfolios. 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
Portfolios.
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 Fund. 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 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 each 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 respective Portfolio und 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 fee on a monthly and annual basis:
Monthly Equivalent Average Asset
Rate Annual Rate Values of the Fund
---- ----------- ------------------
National Portfolio 1/12 of 0.80% 0.80% On the first $50,000,000
1/12 of 0.70% 0.70% On average net assets over
$50,000,000
The fee shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
The investment advisory fee for any future Portfolio(s) shall
be as determined by the Board of Directors of the Fund upon the creation of any
such Portfolio(s).
3. ALLOCATION OF EXPENSES.
In addition to the fee described in Section 2 hereof, the Fund
shall pay all its expenses which are not assumed by Advisers, Fortis Investors,
Inc. ("Investors") or any other person. 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 and Statements of Additional Information
annually to existing shareholders, custodian charges, auditing and legal
expenses, insurance expenses, association membership dues, and the expenses 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.
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.
3. LIMIT ON EXPENSES.
Advisers shall reimburse the Fund from the date of the initial
public offering and until the earlier of the date of the Fund's aggregate net
assets (for all Portfolios) first reach $10,000,000 or January 1, 1987, to the
extent that the aggregate expenses of the Fund (including the investment
advisory and management fee under paragraph 2 of this Agreement, but excluding
interest, taxes, brokerage fees and commissions) exceed an amount equal, on an
annual basis, to 1% of the average daily net assets of the Fund
Advisers reserves the right, but shall not be obligated, to
institute further voluntary expense reimbursement programs which shall e in such
amounts and based upon such terms and conditions as Advisers, i 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.
4. 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.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF
AGREEMENT.
. The effective date of this Agreement shall be January 31, 1992. Wherever
referred to in this Agreement, the vote or approval of the holders of a majority
of the outstanding voting securities of a Portfolio of 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 a particular Portfolio by the vote of the holders of a
majority of the outstanding voting securities of such 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
any of the Portfolios approves this Agreement, this Agreement shall continue in
effect with respect to such approving Portfolio whether or not the shareholders
of any other Portfolio 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 a particular 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 such 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.
6. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective
until approved by a vote of the holders of a majority of the outstanding voting
securities of the Portfolios which have approved and are subject to this
Agreement. In addition, if a majority of the outstanding voting securities of
any 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 Portfolio vote to adopt such amendment.
7. 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/ XXXXXX X. XXXXXXX
----------------------------
Its President
FORTIS ADVISERS, INC.
By /S/ XXXXXX X. XXXXXXX
----------------------------
Its President
