COVA SERIES TRUST
SUB-ADVISORY AGREEMENT
This Agreement is made between COVA INVESTMENT ADVISORY CORPORATION, an Illinois
corporation, having its principal place of business in Oakbrook Terrace,
Illinois (hereinafter referred to as the "Advisor"), Lord, Xxxxxx & Co., a New
York partnership, having its principal place of business in New York, New York
(hereinafter referred to as the "Sub-Advisor") and Cova Series Trust, a
Massachusetts business trust (hereinafter referred to as the "Trust") and is
effective _____________.
WHEREAS, the Trust, an open-end diversified management investment company, as
that term is defined in the Investment Company Act of 1940, as amended (the
"Act"), that is registered as such with the Securities and Exchange Commission
has appointed Advisor as investment adviser for and to the Bond Debenture
Portfolio, Mid-Cap Value Portfolio, Large Cap Research Portfolio, Developing
Growth Portfolio and Lord Xxxxxx Growth and Income Portfolio, each being a
sub-trust of the Trust (referred to individually as the "Sub-Trust"), pursuant
to the terms of an investment advisory agreement between the Trust and Advisor
("Investment Advisory Agreement");
WHEREAS, Sub-Advisor is engaged in the business of rendering investment
management services; and
WHEREAS, Advisor desires to retain Sub-Advisor to provide certain investment
management services for the Sub-Trusts as more fully described below;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. Retention of Sub-Advisor. Advisor hereby retains Sub-Advisor to assist
Advisor in its capacity as investment adviser for the Sub-Trusts. Subject to the
oversight and review of Advisor and the Board of Trustees of the Trust,
Sub-Advisor shall manage the investment and reinvestment of the assets of the
Sub-Trusts. Sub-Advisor will determine in its discretion, subject to the
oversight and review of Advisor, the investments to be purchased or sold, will
provide Advisor with records (if any) concerning its activities pursuant to the
agreement and will render regular reports to Advisor and to officers and
Trustees of the Trust concerning its discharge of the foregoing
responsibilities.
Sub-Advisor, in its supervision of the investments of the Sub-Trusts, will be
guided by the Sub-Trusts' investment objectives and policies and the provisions
and restrictions contained in the Declaration of Trust and By-Laws of the Trust
and as set forth in the Registration Statement and exhibits as may be on the
file with the Securities and Exchange Commission, all as communicated by Advisor
to Sub-Advisor.
Sub-Advisor shall be deemed to be an independent contractor under this Agreement
and, unless otherwise expressly provided or authorized, shall have no authority
to act for or represent the Trust or any Sub-Trust in any way or otherwise be
deemed an agent of the Trust or any Sub-Trust.
2. Fee. Advisor shall pay to Sub-Advisor, for all services rendered to the
Sub-Trusts by Sub-Advisor hereunder, the sub-advisory fees set forth in Exhibit
A attached hereto. During the term of this Agreement, Sub-Advisor will bear all
expenses incurred by it in the performance of its duties hereunder.
3. Term. The term of this Agreement shall begin on the date of its execution and
shall remain in effect for two years from that date and from year to year
thereafter, subject to the provisions for termination and all of the other terms
and conditions hereof, if such continuation is specifically approved at least
annually in the manner required by the Act. This Agreement shall be submitted to
the shareholders of the Trust and each Sub-Trust for approval at a shareholders'
meeting and shall automatically terminate if not approved by a majority of the
shares of the Sub-Trust present and voting at such meeting.
4. Termination. This Agreement may be terminated at any time without the payment
of any penalty, by a majority of the Board of Trustees of the Trust, by a vote
of the majority of the outstanding shares of beneficial interest of any
Sub-Trust or by the Sub-Advisor on sixty (60) days written notice to the
Advisor.
This Agreement will terminate automatically in the event of the termination of
the Investment Advisory Agreement
Notwithstanding any provision of this Agreement, this Agreement may not be
canceled by the Advisor without the approval of a majority of the Board of
Trustees of the Trust.
This Agreement shall automatically terminate in the event of its assignment. The
Sub-Advisor may employ or contract with any other person, persons, corporation,
or corporations at its own cost and expense as it shall determine in order to
assist it in carrying out its obligations and duties under this Agreement.
5. Sub-Advisor's Representations. Sub-Advisor represents and warrants that the
Sub-Trusts will at all times be invested in such a manner as to ensure
compliance with Subchapter M of the Internal Revenue Code, relating to the
diversification requirements for regulated investment companies. Sub-Advisor
will be held harmless when direction from the Advisor or Trust causes non-
compliance. Sub-Advisor agrees to provide quarterly reports to Advisor, executed
by a duly authorized officer of Sub-Advisor, within seven (7) days of the close
of each calendar quarter certifying as to compliance. In addition to the
quarterly reports, Advisor may request and Sub-Advisor agrees to provide
diversification compliance reports at more frequent intervals, as reasonably
requested by Advisor.
6. Liability. The Sub-Advisor shall not be liable for any error in judgment or
of law, or for any loss suffered by the Trust or any Sub-Trust in connection
with the matters to which this Agreement relates, except (1) a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of the
Sub-Advisor in the performance of its obligations and duties or (2) by reason of
its reckless disregard of its obligations and duties under this Agreement.
7. Brokerage. The Sub-Advisor shall place all orders for the purchase and sale
of portfolio securities for the accounts of the Sub-Trusts with broker-dealers
selected by the Sub-Advisor. In executing portfolio transactions and selecting
broker-dealers, the Sub-Advisor will use its best efforts to seek best execution
on behalf of the Sub-Trusts. In assessing the best execution available for any
transaction, the Sub-Advisor shall consider all factors it 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-dealer, and the
reasonableness of the commission, if any (all for the specific transaction and
on a continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, the Sub-Advisor
may also consider the brokerage and research services (as those terms are used
in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Sub-Trust and/or other accounts over which the Sub-Advisor or an affiliate of
the Sub-Advisor (to the extent permitted by law) exercises investment
discretion. The Sub-Advisor is authorized to cause the Sub-Trusts to pay a
broker-dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for a Sub-Trust which is in excess of the
amount of commission another broker-dealer would have charged for effecting that
transaction if, but only if, the Sub-Advisor determines in good faith that such
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker-dealer viewed in terms of that particular
transaction or in terms of all of the accounts over which investment discretion
is so exercised.
8. Amendment. This Agreement may be amended at any time by agreement of the
parties, provided that the amendment shall be approved in the manner required by
the Act.
9. Services to Other Customers and Accounts. It is understood that the services
of the Sub-Advisor are not deemed to be exclusive, and nothing in this Agreement
shall prevent the Sub-Advisor, or any officer, director, partner or employee
thereof, from providing similar services to other companies and other clients
(whether or not their investment objectives and policies are similar to those of
the Trust) or to engage in other activities. When other clients of the
Sub-Advisor desire to purchase or sell the same portfolio security at the same
time as the Trust, it is understood that such purchases and sales will be made
as nearly as practicable on a pro rata basis in proportion to the amounts
desired to be purchased or sold by each client.
10. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Illinois.
11. Registration as an Investment Advisor. Advisor and Sub-Advisor hereby
acknowledge each is registered as an investment adviser under the Investment
Advisers Act of 1940, it will use its reasonable best efforts to maintain such
registration, and it will promptly notify the other if it ceases to be so
registered, if its registration is suspended for any reason, or if it is
notified by any regulatory organization or court of competent jurisdiction that
it should show cause why its registration should not be suspended or terminated.
Witness the due execution hereof this _____ day of ___________.
Attest: COVA INVESTMENT ADVISORY
CORPORATION
______________________________ By: ___________________________
Attest: LORD, XXXXXX & CO.
______________________________ By: ___________________________
Attest: COVA SERIES TRUST
______________________________ By: ___________________________
EXHIBIT A
COVA SERIES TRUST
SUB-ADVISORY COMPENSATION
For all services rendered by Sub-Advisor hereunder, Advisor shall pay to
Sub-Advisor and Sub-Advisor agrees to accept as full compensation for all
services rendered hereunder, fees at the end of each calendar month equal to a
percentage of the average daily net assets of the Sub-Trusts as follows:
Portfolio % Per Annum
------------ ------------------
Bond Debenture Portfolio .50 of 1%
Mid-Cap Value Portfolio .75 of 1%
Large Cap Research Portfolio .75 of 1%
Developing Growth Portfolio .65 of 1%
Lord Xxxxxx Growth and Income Portfolio .40 of 1%
