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"), MISSISSIPPI VALLEY ADVISORS
INC., a Missouri corporation, having its principal place of business in St.
Louis, Missouri (hereinafter referred to as the "Sub-Advisor") and COVA SERIES
TRUST, a Massachusetts business trust (hereinafter referred to as the "Trust").
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 Balanced Portfolio,
Equity Income Portfolio and Growth & Income Equity Portfolio, each being a
sub-trust of the Trust (referred to individually as a "Sub-Trust" and
collectively as the "Sub-Trusts"), pursuant to the terms of an investment
advisory agreement dated as of ____________ 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 concerning its activities which Advisor or the
Trust is required to maintain 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 file
with the Securities and Exchange Commission, all as communicated by Advisor to
Sub-Advisor. Advisor hereby undertakes to provide Sub-Advisor with copies of
such Declaration of Trust and ByLaws and Registration Statement and exhibits as
well as any amendments as the same become available from time to time.
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.
The services furnished by Sub-Advisor hereunder are deemed not to be exclusive,
and nothing in this Agreement shall (i) prevent Sub-Advisor or any affiliated
person (as defined in the Act) of Sub-Advisor from acting as investment adviser
or manager for any other person or persons, including other management
investment companies with investment objectives and policies the same as or
similar to those of the Sub-Trusts, or (ii) limit or restrict Sub-Advisor or any
such affiliated person from buying, selling or trading any securities or other
investments (including any securities or other investments which the Sub-Trusts
are eligible to buy) for its or their own accounts or for the accounts of others
for whom it or they may be acting; provided, however, that Sub-Advisor agrees
that it will not undertake any activities which, in its reasonable judgment,
will adversely affect the performance of its obligations to the Sub-Trusts under
this Agreement and provided that all such activities are in conformity with all
applicable provisions of the Trust's Registration Statement.
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, other than
the cost of securities, commodities and other investments (including brokerage,
commissions and other charges, if any) purchased for the Sub-Trusts.
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 and shall
automatically terminate if not approved by a majority of the shares of the
Sub-Trust.
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
cancelled 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 each
Sub-Trust will at all times be invested in such a manner as to ensure compliance
with Section 817(h) of the Internal Revenue Code of 1986, as amended, and
Treasury Regulations, Section 1.817-5, relating to the diversification
requirements for variable annuity endowment, or life insurance contracts and any
amendments or other modifications to such Section or Regulation. Sub-Advisor
will be relieved of this obligation and shall be held harmless when direction
from the Advisor or Trustees causes non-compliance with Section 817(h) and/or
Regulation Section 1.817-5. 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 with said
Section or Regulations. In addition to the quarterly reports, Advisor may
request and Sub-Advisor agrees to provide Section 817 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.
Notwithstanding the foregoing, it is agreed that the relative investment
performance of the Sub-Trusts shall not constitute a breach by Sub-Advisor of
its obligations under this Agreement.
7. Portfolio Transactions Brokerage. Investment decisions for the Sub-Trusts
shall be made by Sub-Advisor independently from those for any other investment
companies and accounts advised or managed by Sub-Advisor. The Sub-Trusts 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 a Sub-Trust and/or another investment
company or account, the transaction will be averaged as to price, and available
investments allocated as to amount, in a manner which Sub-Advisor believes to be
equitable to the Sub-Trust and such other investment company or account. In some
instances, this investment procedure may adversely affect the price paid or
received by the Sub-Trust or the size of the position obtained or sold by the
Sub-Trust. To the extent permitted by law, Sub-Advisor may aggregate the
securities to be sold or purchased for the Sub-Trusts with those to be sold or
purchased for other investment companies or accounts in order to obtain best
execution.
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, as amended) provided to
the Sub-Trusts 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 the Sub-Trusts 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. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Illinois.
10. Registration as an Investment Advisor. Advisor and Sub-Advisor each hereby
acknowledges that it is registered as an investment adviser under the Investment
Advisers Act of 1940, that it will use its reasonable best efforts to maintain
such registration, and that 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: MISSISSIPPI VALLEY ADVISORS INC.
______________________________ 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 accrued daily and paid 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
------------ ------------------
Balanced Portfolio .75 of 1%
Equity Income Portfolio .75 of 1%
Growth & Income Equity Portfolio .75 of 1%
