INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
ATLAS ADVISERS, INC
AND
NEW YORK LIFE INVESTMENT MANAGEMENT, LLC
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made as of October 19, 2004 among Atlas Funds (the "Trust") on
behalf of Atlas Balanced Fund, Atlas Advisers, Inc. (the "Adviser"), and New
York Life Investment Management LLC (the "Sub-Adviser").
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Adviser has been appointed investment adviser to the Trust's Atlas
Balanced Fund (the "Fund");
WHEREAS, the Adviser desires to retain the Sub-Adviser to assist it in the
provision of a continuous investment program for the Fund and the Sub-Adviser is
willing to do so; and
WHEREAS, the Sub-Adviser is willing to furnish such services upon the terms and
conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
Appointment. The Adviser hereby appoints the Sub-Adviser to act as the
sub-adviser to the Fund as permitted by the Adviser's Advisory Agreement with
the Trust pertaining to the Fund. Intending to be legally bound, the Sub-Adviser
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided.
Sub-Advisory Services. Subject to the supervision of the Trust's Board of
Trustees and the Adviser, the Sub-Adviser will assist the Adviser in providing a
continuous investment program with respect to the Fund's portfolio, including
investment research and management with respect to all securities and
investments and cash equivalents in the Fund. The Sub-Adviser will provide
services under this Agreement in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Fund's prospectus,
statement of additional information, and resolutions of the Trust's Board of
Trustees applicable to the Fund, as provided to the Sub-Adviser by the Adviser.
Without limiting the generality of the foregoing, the Sub-Adviser further agrees
that it will, with respect to the Fund: determine from time to time what
securities and other investments will be purchased, retained or sold for the
Fund; place orders pursuant to its investment determinations for the Fund either
directly with the issuer or with any broker or dealer; not purchase shares of
the Fund for itself or for accounts with respect to which it exercises sole
investment discretion in connection with such transactions except as permitted
by the Trust's Board of Trustees or by federal, state and local law; manage the
Fund's overall cash position; attend regular business and investment-related
meetings with the Trust's Board of Trustees and the Adviser if requested to do
so by the Trust and/or the Adviser, and such other meetings as may be mutually
agreed; respond to requests from the Adviser or the Fund's custodian for
assistance in obtaining price sources or other information and analysis
pertinent to pricing determinations for securities held by the Fund, and
periodically review Fund security valuations for reasonableness; ensure that, if
required, securities are identified for proper segregation and
collateralization; maintain books and records with respect to the securities
transactions for the Fund, furnish to the Adviser and the Trust's Board of
Trustees such periodic and special reports as they may reasonably request with
respect to the Fund, and provide in advance to the Adviser all reports to the
Board of Trustees for examination and review within a reasonable time prior to
the Trust's Board meetings; and vote proxies in accordance with such proxy
policies and procedures as may be mutually agreed from time to time and provide
such information regarding such proxies and its exercise of proxy voting
authority as reasonably requested by the Adviser, including information
sufficient to prepare annual proxy voting record filings with the Securities and
Exchange Commission on Form N-PX.
Representations and Warranties by the Sub-Adviser. The Sub-Advisor represents,
warrants and agrees that it has all requisite power and authority to enter into
and perform its obligations under this Agreement, and has taken all necessary
corporate action to authorize its execution, delivery and performance of this
Agreement. The Sub-Advisor represents, warrants and agrees that it is registered
as an adviser under the Investment Advisers Act of 1940, as amended.
Covenants by the Sub-Adviser. The Sub-Adviser agrees with respect to the
services provided to the Fund that it will: conform with all Rules and
Regulations of the Securities and Exchange Commission; provide the Chief
Compliance Officer of the Trust and the Adviser with current copies of the
compliance policies and procedures of the Sub-Advisor in effect from time to
time (including prompt notice of any material changes thereto), and a summary of
such policies and procedures in connection with the annual review and approval
thereof by the Trust required under Rule 38a-1 of the 1940 Act; transmit by
facsimile or electronic mail trade information to the Adviser or its designee on
the first business day following the day of the trade and cause broker
confirmations to be sent directly to the Adviser or its designee;(1) to treat
confidentially and as proprietary information of the Fund (a) all records and
other information relative to the Fund's prior, present, or potential
shareholders (and clients of said shareholders) and (b) any Nonpublic Personal
Information, as defined under Section 248.3(t) of Regulation S-P ("Regulation
S-P"), promulgated under the Xxxxx-Xxxxx-Xxxxxx Act (the "G-L-B Act"), and (2)
except after prior notification to and approval in writing by the Trust, not to
use such records and information for any purpose other than the performance of
its responsibilities and duties hereunder, or as otherwise permitted by
Regulation S-P or the G-L-B Act, and if in compliance therewith, the privacy
policies adopted by the Trust and communicated in writing to the Sub-Advisor;
such written approval shall not be unreasonably withheld by the Trust and may
not be withheld where the Sub-Advisor may be exposed to civil or criminal
contempt or other proceedings for failure to comply after being requested to
divulge such information by duly constituted authorities; notify the Adviser and
the Trust immediately upon detection of (i) any material failure to manage the
Fund in accordance with its investment objectives and policies or any applicable
law; or (ii) any material breach of any of the Fund's or the Sub-Adviser's
policies, guidelines or procedures. To the extent the Sub-Adviser is responsible
for any material breach or failure, the Sub-Adviser agrees to correct any such
failure promptly and to take any action that the Board may reasonably request in
connection with any such breach; to the extent reasonably requested by the
Trust, the Sub-Advisor agrees to use its best efforts to assist the Trust and
the Fund in complying with the Xxxxxxxx-Xxxxx Act and implementing the Trust's
disclosure controls and procedures; the Sub-Advisor agrees to inform the Trust
of any material development related to the Fund that the Sub-Advisor reasonably
believes is relevant to the Fund's certification obligations under the
Xxxxxxxx-Xxxxx Act; comply with the Trust's policies in respect of the
prevention of frequent trading or market timing as they may exist from time to
time; promptly notify the Adviser and the Trust in the event (i) the Sub-Adviser
is served or otherwise receives notice of any action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court, public board, or
body, involving the affairs of the Trust (excluding class action suits in which
the Fund is a member of the plaintiff class by reason of the Fund's ownership of
shares in the defendant) or the compliance by the Sub-Adviser with the federal
or state securities laws or (ii) an actual change in control of the Sub-Adviser
resulting in an "assignment" (as defined in the 1940 Act) has occurred or is
otherwise proposed to occur.
Services Not Exclusive; Non-Compete. Except as provided herein, the services
furnished by the Sub-Adviser hereunder are deemed not to be exclusive, and
nothing in this Agreement shall (i) prevent the Sub-Adviser from acting as
investment adviser or manager for any other person or persons, including other
management investment companies, or (ii) limit or restrict the Sub-Adviser from
buying, selling or trading any securities or other investments (including any
securities or other investments which the Funds are eligible to buy) for its own
accounts or for the accounts of others for whom it may be acting; provided,
however, that the Sub-Adviser agrees that it will not undertake any activities
which, in its reasonable judgment, will adversely affect the performance of its
obligations to the Fund under this Agreement
Portfolio Transactions. Investment decisions for the Fund shall be made by the
Sub-Adviser independently from those for any other investment companies and
accounts advised or managed by the Sub-Adviser. The Fund and such investment
companies and accounts may, however, invest in the same securities. When a
purchase or sale of the same security is made at substantially the same time on
behalf of the Fund and/or another investment company or account whenever
practicable, the transaction will be averaged as to price, and available
investments allocated as to amount, in a manner which the Sub-Adviser believes
to be equitable to the Fund and such other investment company or account. The
Fund acknowledges that in some instances, this investment procedure may
adversely affect the price paid or received by the Fund or the size of the
position obtained or sold by the Fund. To the extent permitted by law, the
Sub-Adviser may aggregate the securities to be sold or purchased for the Fund
with those to be sold or purchased for other investment companies or accounts in
order to obtain best execution.
The Sub-Adviser shall place orders for the purchase and sale of portfolio
securities and shall solicit broker-dealers to execute transactions in
accordance with the Fund's policies and restrictions regarding brokerage
allocations. The Sub-Adviser shall place orders pursuant to its investment
determination for the Fund either directly with the issuer or with any broker or
dealer selected by the Sub-Adviser. In executing portfolio transactions and
selecting brokers or dealers, the Sub-Adviser shall use its reasonable best
efforts to seek the most favorable execution of orders, after taking into
account all factors the Sub-Adviser deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing basis.
Consistent with this obligation, the Sub-Adviser may, to the extent permitted by
law, purchase and sell portfolio securities to and from brokers and dealers who
provide brokerage and research services (within the meaning of Section 28(e) of
the Securities Exchange Act of 1934) to or for the benefit of the Fund and/or
other accounts over which the Sub-Adviser or any of its affiliates exercises
investment discretion. The Sub-Adviser is authorized to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities to the Fund and/or its
other accounts. In no instance will portfolio securities be purchased from or
sold to the Sub-Adviser, or the Fund's principal underwriter, or any affiliated
person thereof except as permitted by the 1940 Act or the rules of the
Securities and Exchange Commission thereunder.
Books and Records. In compliance with the requirements of Rule 3la-3 under the
1940 Act, the Sub-Adviser hereby agrees that all records which it maintains for
the Trust are the property of the Trust and further agrees to surrender promptly
to the Trust any of such records upon the Trust's request. The Sub-Adviser
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.
Expenses. During the term of this Agreement, the Sub-Adviser shall pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for the
Fund.
Compensation. As full compensation for the services provided and the expenses
assumed with respect to the Fund pursuant to this Agreement, the Sub-Adviser
will be entitled to a fee, computed daily and payable monthly by the Adviser,
calculated at the annual rate of 0.35% of the Fund's average daily net assets on
the first $100 million in assets, and 0.25% of the Fund's average daily net
assets above $100 million. In the case of termination of this Agreement with
respect to the Fund during any calendar month, the fee with respect to such
Portfolio accrued to, but excluding, the date of termination shall be paid
promptly following such termination.
Standard of Care; Limitation of Liability. The Sub-Adviser shall exercise due
care and diligence and use the same skill and care in providing its services
hereunder as it uses in providing services to other investment companies and
accounts, but shall not be liable for any action taken or omitted by it in the
performance of services rendered hereunder in the absence of its bad faith,
willful misconduct, gross negligence or reckless disregard of its duties.
Indemnification. The Sub-Adviser shall indemnify and hold harmless the Adviser,
the Trust and their officers and employees against any and all costs and
liabilities (including legal and other expenses) which the Adviser or the Trust
may incur, arising out of the Sub-Adviser's (a) gross negligence, willful
misconduct or bad faith in the performance of its duties, or reckless disregard
of its obligations and duties under this Agreement, or (b) untrue statement or
omission of a material fact required in the registration statement of the Trust,
proxy statements of the Trust, or other regulatory filings, if such statement or
omission was made in reliance upon information furnished in writing or
electronically by the Sub-Adviser for inclusion in such regulatory filings.
Reference to the Sub-Adviser. Neither the Adviser nor any of its affiliates or
agents shall make reference to or use the name of the Sub-Adviser or any of its
affiliates, or any of their clients, except references concerning the identity
of and services provided by the Sub-Adviser to the Fund, which references shall
not differ in substance from those included in the current registration
statement pertaining to the Fund, this Agreement and the Advisory Agreement
between the Adviser and the Trust with respect to the Fund, in any advertising
or promotional materials without the prior approval of the Sub-Adviser, which
approval shall not be unreasonably withheld or delayed.
Duration and Termination. Unless sooner terminated, this Agreement shall
continue for a period of two years from the date first set forth above, and
thereafter shall continue automatically for successive annual periods, provided
such continuance is specifically approved at least annually by the Trust's Board
of Trustees or vote of the lesser of (a) 67 % of the shares of the Fund
represented at a meeting if holders of more than 50% of the outstanding shares
of the Fund are present in person or by proxy, or (b) more than 50% of the
outstanding shares of the Fund, provided that in either event its continuance
also is approved by a majority of the Trust's Trustees who are not "interested
persons" (as defined in the 0000 Xxx) of any party to this Agreement (the
"Disinterested Trustees"), by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable at any time
without penalty, with respect to the Fund, on 60 days' notice, by the Adviser,
the Sub-Adviser or the Trust's Board of Trustees or by vote of the lesser of (a)
67% of the shares of the Fund represented at a meeting if holders of more than
50% of the outstanding shares of the Fund are present in person or by proxy, or
(b) more than 50% of the outstanding shares of the Fund. This Agreement will
terminate automatically in the event of its assignment (as defined in the 1940
Act).
Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, except by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. No amendment of this Agreement shall be effective
until approved by the vote of (i) a majority of the outstanding voting
securities of the Fund, if required by the 1940 Act or the rules of the
Securities and Exchange Commission thereunder, and (ii) a majority of the
Disinterested Trustees cast in person at a meeting called for the purpose of
voting on such approval.
Notice. Any notice, advice or report to be given pursuant to this Agreement
shall be delivered or mailed:
To The Sub-Adviser at:
New York Life Investment Management LLC
000 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx XX 00000
Attn: Xxxx Xxxxxxx
To the Adviser or the Trust at:
Atlas Advisers, Inc
Atlas Funds
000 Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Legal Department
Miscellaneous. The captions 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. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by the laws of the State of California (without
regard to conflict of law principles). 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.
Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Personal Liability. The names "Atlas Funds" and "Trustees" refer respectively to
the Trust created and to the Trustees, as trustees but not individually or
personally, acting from time to time under an Agreement and Declaration of Trust
dated as of May 15, 2003, as amended, to which reference is hereby made and a
copy of which is on file at the office of the Secretary of State of Delaware and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of "Atlas Funds" entered into in the name or on
behalf hereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders or representatives of the Trust personally, but bind only
the assets of the Trust and all persons dealing with any series of shares of the
Trust must look solely to the assets of the Trust belonging to such series for
the enforcement of any claims against the Trust.
[Signature Page Follows]
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.
Atlas Funds, by Sub-Adviser, by
/s/ X. Xxxxxxxx Key /s/ Xxxxx X. Xxxxx
------------------- ------------------
Name: X. Xxxxxxxx Key Name: Xxxxx X. Xxxxx
Title: President Title: Senior Managing Director
Atlas Advisers, Inc.
/s/ X. Xxxxxxxx Key
-------------------
Name: X. Xxxxxxxx Key
Title: President
