Exhibit 99.B(d)(7)
FORM OF
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:
1. 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.
2. 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:
(a) determine from time to time what securities and other investments
will be purchased, retained or sold for the Fund;
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(b) place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or
dealer;
(c) 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;
(d) manage the Fund's overall cash position;
(e) 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;
(f) 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;
(g) ensure that, if required, securities are identified for proper
segregation and collateralization;
(h) 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
(i) 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.
3. 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.
4. COVENANTS BY THE SUB-ADVISER. The Sub-Adviser agrees with respect to
the services provided to the Fund that it will:
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(a) conform with all Rules and Regulations of the Securities and
Exchange Commission;
(b) 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;
(c) 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;
(d) (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;
(e) 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;
(f) 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
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is relevant to the Fund's certification obligations under the
Xxxxxxxx-Xxxxx Act;
(g) 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;
(h) comply with the Trust's Anti-Money Laundering Policy and the Bank
Secrecy Act, as amended, the USA PATRIOT Act, and any
implementing regulations thereunder, as the same may apply to the
Sub-Advisor, now and in the future; the he Sub-Advisor further
agrees to provide to the Trust and/or the Fund's administrator
such reports, certifications and contractual assurances as may be
reasonably requested by the Trust. The Trust may disclose
information regarding the Sub-Advisor to governmental and/or
regulatory or self-regulatory authorities to the extent required
by applicable law or regulation and may file reports with such
authorities as may be required by applicable law or regulation;
and
(i) 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.
5. 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
6. 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
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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.
7. 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.
8. 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.
9. 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
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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.
10. 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.
11. 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.
12. 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.
13. 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).
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14. 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.
15. 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
14. 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.
15. 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.
16. 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
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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]
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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
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Name Name
Title Title
Atlas Advisers, Inc.
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Name
Title
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