INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, dated and effective as of February 27, 2004, is made
and entered into by and between ATLAS FUNDS, a Delaware statutory trust
(hereinafter called the "Trust"), and ATLAS ADVISERS, INC., a California
corporation (hereinafter called the "Adviser").
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, the Adviser is engaged principally in the business of
rendering investment management services and is so registered under the
Investment Advisers Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of capital stock in
separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust intends to initially offer shares in 16 series
(the "Initial Series"):
Atlas Balanced Fund
Atlas Emerging Growth Fund
Atlas Fund of Funds
Atlas Global Growth Fund
Atlas Growth Opportunities Fund
Atlas S&P 500 Index Fund
Atlas Strategic Growth Fund
Atlas Value Fund
Atlas American Enterprise Bond Fund
Atlas California Municipal Bond Fund
Atlas National Municipal Bond Fund
Atlas Strategic Income Fund
Atlas U.S. Government and Mortgage Securities Fund
Atlas California Municipal Money Fund
Atlas Money Market Fund
Atlas U.S. Treasury Money Fund
The Trust desires to retain the Adviser to render investment advisory services
as described hereunder with respect to the Initial Series being herein
collectively referred to as a "Series" and the Adviser is willing so to do.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. (a) Initial Series. The Trust hereby appoints the Adviser to act as
adviser and investment manager to the Initial Series for the period and on the
terms herein set forth. The Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
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Investment Advisory Agreement between Atlas Funds and Atlas Advisers, Inc.
Dated February 27, 2004; Page 1 of 8
(b) Additional Series. In the event that the Trust establishes one
or more series of shares other than the Initial Series with respect to which it
desires to retain the Adviser to render management and investment advisory
services hereunder, it shall so notify the Adviser in writing, indicating the
advisory fee which will be payable with respect to the additional series of
shares. If the Adviser is willing to render such services, it shall so notify
the Trust in writing, whereupon such series of shares shall become a Series
hereunder.
The Adviser shall, for all purposes herein, be deemed an independent
contractor and not an agent of the Trust.
2. (a) Subject to the supervision of the Trust's Board of Trustees
("Board"), the Adviser agrees to provide supervision of the portfolio of each
Series and to determine what securities or other property shall be purchased or
sold by each Series, giving due consideration to the policies of each Series as
expressed in the Trust's Declaration of Trust, Bylaws, Form N-1A Registration
Statement ("Registration Statement") under the 1940 Act and under the Securities
Act of 1933, as amended (the "1933 Act"), and prospectus as in use from time to
time, as well as to the factors affecting the status of each Series as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended. In its duties hereunder, the Adviser shall further be bound by any and
all determinations by the Board relating to investment policy, which
determinations shall in writing be communicated to the Adviser.
(b) (i) The Adviser shall provide adequate facilities and qualified
personnel for the placement of, and shall place orders for the purchase, or
other acquisition, and sale, or other disposition, of portfolio securities for
each Series. With respect to such transactions, the Adviser, subject to such
direction as may be furnished from time to time by the Board of Trustees of the
Trust, shall endeavor as the primary objective to obtain the most favorable
prices an executions of orders. Subject to such primary objective, the Adviser
may place orders with brokerage firms which have sold shares of any Series or
which furnish statistical and other information to the Adviser, taking into
account the value and quality of the brokerage services of such brokerage firms,
including the availability and quality of such statistical and other
information. Receipt by the Adviser of any such statistical and other
information and services shall not be deemed to give rise to any requirement for
abatement of the advisory fee payable to the Adviser pursuant to Section 4
hereof.
(ii) On occasions when the Adviser deems the purchase or sale of a
security to be in the best interests of a Series as well as other clients of the
Adviser, the Adviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be so sold or purchased when the
Adviser believes that to do so will be in the best interests of the Series. In
such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
the Adviser considers to be the most equitable and consistent with its fiduciary
obligations to the Series and to such other clients.
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Investment Advisory Agreement between Atlas Funds and Atlas Advisers, Inc.
Dated February 27, 2004; Page 2 of 8
(c) The Adviser will oversee the maintenance of all books and
records with respect to the securities transactions of the Series, and will
furnish the Board with such periodic and special reports as the Board reasonably
may request. In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Adviser hereby agrees that all records which it maintains for the Trust
are the property of the Trust, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records which it maintains for the Trust and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Trust any records which it maintains
for the Trust upon request by the Trust.
(d) The Adviser will oversee the computation of the net asset value
and the net income of each Fund as described in the currently effective
Registration Statement or as more frequently requested by the Board.
3. Administrative Duties of the Adviser. The Adviser will administer the
affairs of each Fund subject to the supervision of the Board and the following
understandings:
(a) The Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency, custodial, pricing and
accounting services, except as hereinafter set forth; provided, however, that
nothing herein contained shall be deemed to relieve or deprive the Board of its
responsibility for control of the conduct of the affairs of the Funds.
(b) The Adviser will provide the Trust and the Funds with such
corporate, administrative and clerical personnel (including offices of the
Trust) and services as are reasonably deemed necessary or advisable by the
Board.
(c) The Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of each Fund's
prospectus, statement of additional information, proxy material, tax returns and
required reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) The Adviser will provide the Trust and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
The Trust will reimburse the Adviser for the expenses it incurs in
providing the administrative services provided by the Adviser at the end of each
calendar quarter upon presentation to the Trust of an itemized schedule of such
expenses.
4. Further Duties. In all matters relating to the performance of this
Contract, the Adviser will act in conformity with the Declaration of Trust,
Bylaws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
and rules thereunder, and all other applicable federal and state laws and
regulations.
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Investment Advisory Agreement between Atlas Funds and Atlas Advisers, Inc.
Dated February 27, 2004; Page 3 of 8
5. Delegation of the Adviser's Duties as Investment Manager and
Administrator. With respect to one or more of the Funds, the Adviser may enter
into one or more agreements ("Subadvisory or Subadministration Contract") with a
subadviser or subadministrator in which the Adviser delegates to such subadviser
or subadministrator the performance of any or all of the services specified in
Section 2 and 3 of this Agreement, provided that; (i) each Subadvisory and
Subadministration Contract imposes on the subadviser or subadministrator bound
thereby all the duties and conditions to which the Adviser is subject with
respect to the delegated services under Sections 2, 3 and 4 of this Agreement;
(ii) each Subadvisory or Subadministration Contract meets all requirements of
the 1940 Act and rules thereunder; and (iii) the Adviser shall not enter into a
Subadvisory or Subadministration Contract unless it is approved by the Board
prior to implementation.
6. (a) Each Series shall pay to the Adviser on or before the tenth (10th)
day of each month, as compensation for the services rendered by the Adviser
during the preceding month, an amount to be computed by applying to the total
net asset value of such Series the applicable annual rates set forth on Appendix
A hereto:
(b) The fees on Appendix A shall be computed and accrued daily at
one three-hundred-sixty-fifth (1/365th) of the applicable rates set forth
therein. The net asset value of each Series shall be determined in the manner
set forth in the Declaration of Trust, Prospectus and Statement of Additional
Information of the Company after the close of the New York Stock Exchange on
each day on which said Exchange is open, and in the case of Saturdays, Sundays,
and other days on which said exchange shall not be open, in the manner further
set forth in said Declaration of Trust, Prospectus and Statement of Additional
Information. In the event of termination other than at the end of a calendar
month, the monthly fee shall be prorated for the portion of the month prior to
termination and paid on or before the tenth (10th) day subsequent to
termination.
7. (a) The Adviser agrees to reduce the fee payable to it under this
Agreement by the amount which the ordinary operating expenses of the Trust for
any fiscal year of the Trust, excluding interest, taxes and extraordinary
expenses, shall exceed the most stringent limits prescribed by any state in
which the Trust shares are offered for sale; provided that, within such limits,
the Adviser shall be entitled to recover any such excess fees over any
twelve-month period. Costs incurred in connection with the purchase or sale of
portfolio securities, including brokerage fees and commissions, which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, shall be accounted for as capital items and
not as expenses. Proper accruals shall be made by the Trust for any projected
reduction hereunder and corresponding amounts shall be withheld from the fees
paid by the Trust to the Adviser. Any additional reduction computed at the end
of the fiscal year shall be deducted from the fee for the last month of such
fiscal year.
(b) The above provision in subsection (a) with respect to expense
limitation shall be calculated and administered separately with respect to each
Series, as opposed to the Trust in the aggregate, if and to the extent so
required by state securities authorities.
(c) The payment or assumption by the Adviser of any expense of the
Trust or any Series that the Adviser is not required by this Agreement to pay or
assume shall not obligate the Adviser to pay or assume the same or any similar
expense of the Trust or any Series on any subsequent occasion.
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Investment Advisory Agreement between Atlas Funds and Atlas Advisers, Inc.
Dated February 27, 2004; Page 4 of 8
8. Nothing contained in this Agreement shall be construed to prohibit the
Adviser from performing investment advisory, management, or distribution
services for other investment companies and other persons or companies, or to
prohibit affiliates of the Adviser from engaging in such businesses or in other
related or unrelated businesses.
9. The Trust agrees (i) not to hold the Adviser or any of its officers or
employees liable for, and (ii) to indemnify or insure the Adviser and its
officers and employees ("Indemnified Parties") against, any costs and
liabilities the Indemnified Parties may incur as a result of any claim against
the Indemnified Parties in the good faith exercise of their powers hereunder
(excepting matters as to which the Indemnified Parties have been guilty of
willful misfeasance, bad faith, or gross negligence in the performance of their
duties, or by reason of their reckless disregard of their obligations and duties
under this Agreement, or in violation of applicable law).
10. (a) This Agreement shall become effective with respect to the Initial
Series on the date hereof (the "Effective Date") and, with respect to any
additional Series, on the date of receipt by the Trust of notice from the
Adviser in accordance with Section 1(b) hereof that the Adviser is willing to
serve as Adviser with respect to such Series. Unless terminated as herein
provided, this Agreement shall remain in full force and effect for two (2) years
from the Effective Date with respect to the Initial Series and, with respect to
each additional Series, until the day and month following the first anniversary
of the date on which such Series becomes a Series hereunder, and shall continue
in full force and effect for periods of one year thereafter with respect to each
Series so long as such continuance with respect to any such Series is approved
at least annually (i) by either the Trustees of the Trust or by a vote of a
majority (as defined in the 0000 Xxx) of the outstanding voting securities of
such Series, and (ii) in either event by the vote of a majority of the Trustees
of the Trust who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of any such party, cast in person at a meeting called
for the purpose of voting on such approval.
Any approval of this Agreement by a majority (as defined in the 0000
Xxx) of the outstanding voting securities of any Series shall be effective to
continue this Agreement with respect to any such Series notwithstanding (i) that
this Agreement has not been approved by the holders of a majority (as defined in
the 0000 Xxx) of the outstanding voting securities of any other Series affected
thereby, and (ii) that this Agreement has not been approved by the vote of a
majority (as defined in the 0000 Xxx) of the outstanding voting securities of
the Trust, unless such approval shall be required by any applicable law or
otherwise.
(b) This Agreement may be terminated with respect to any Series at
any time, without payment of any penalty, by the Board of Trustees of the Trust
or by the vote of a majority (as defined in the 0000 Xxx) of the outstanding
voting securities of the Trust, on sixty (60) days' written notice to the
Adviser, or by the Adviser on like notice to the Trust.
(c) This Agreement shall automatically and immediately terminate in
the event of its assignment.
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Investment Advisory Agreement between Atlas Funds and Atlas Advisers, Inc.
Dated February 27, 2004; Page 5 of 8
11. (a) This Agreement supersedes any prior agreement relating to the
subject matter hereof between the parties.
(b) 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.
12. This Agreement shall be construed in accordance with the laws of the
State of California and the 1940 Act. To the extent that the applicable laws of
the State of California conflict with the applicable provisions of the 1940 Act,
the latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in duplicate originals by their officers thereunto duly authorized
as of the date first above written.
ATLAS FUNDS ATLAS ADVISERS, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
Senior Vice President Senior Vice President
ATTEST: ATTEST:
/s/ Xxxxxx X. X'Xxxxxxx /s/ Xxxxxx X. X'Xxxxxxx
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Xxxxxx X. X'Xxxxxxx Xxxxxx X. X'Xxxxxxx
Secretary Secretary
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Investment Advisory Agreement between Atlas Funds and Atlas Advisers, Inc.
Dated February 27, 2004; Page 6 of 8
INVESTMENT ADVISORY AGREEMENT
BETWEEN ATLAS FUNDS
AND ATLAS ADVISERS, INC.
APPENDIX A
FEE SCHEDULE
DATED NOVEMBER 18, 2005
ATLAS MONEY MARKET FUND
ATLAS CALIFORNIA MUNICIPAL MONEY FUND
ATLAS U.S. TREASURY MONEY FUND
On the Portion of Annual
Daily Total Net Asset Value Rate
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Assets up to $500 million .50%
Assets over $500 million .475%
ATLAS AMERICAN ENTERPRISE BOND FUND
ATLAS NATIONAL MUNICIPAL BOND FUND
ATLAS CALIFORNIA MUNICIPAL BOND FUND
ATLAS U.S. GOVERNMENT AND MORTGAGE SECURITIES FUND
On the Portion of Annual
Daily Total Net Asset Value Rate
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Assets up to $500 million .55%
Assets over $500 million .50%
ATLAS GROWTH OPPORTUNITIES FUND
ATLAS BALANCED FUND
ATLAS STRATEGIC GROWTH FUND
On the Portion of Annual
Daily Total Net Asset Value Rate
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Assets up to $100 million .70%
Assets over $100 million
and up to $500 million .60%
Assets over $500 million .50%
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Investment Advisory Agreement between Atlas Funds and Atlas Advisers, Inc.
Dated February 27, 2004; Page 7 of 8
ATLAS VALUE FUND
ATLAS GLOBAL GROWTH FUND
ATLAS EMERGING GROWTH FUND
On the Portion of Annual
Daily Total Net Asset Value Rate
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Assets up to $100 million .80%
Assets over $100 million
and up to $500 million .75%
Assets over $500 million .70%
ATLAS STRATEGIC INCOME FUND
On the Portion of Annual
Daily Total Net Asset Value Rate
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Assets up to $100 million .75%
Assets over $100 million
and up to $500 million .70%
Assets over $500 million .65%
ATLAS INDEPENDENCE FLAGSHIP FUND (FORMERLY ATLAS FUND OF FUNDS)
ATLAS INDEPENDENCE EAGLE BOND FUND
ATLAS INDEPENDENCE STAR SPANGLED FUND
ATLAS S&P 500 INDEX FUND
On the Portion of Annual
Daily Total Net Asset Value Rate
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Assets up to $500 million .25%
Assets over $500 million .23%
Agreed to November 18, 2005
ATLAS FUNDS ATLAS ADVISERS, INC.
By: /s/ X. Xxxxxxxx Key By: /s/ Xxxxxxx X. Xxxxxx
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X. Xxxxxxxx Key Xxxxxxx X. Xxxxxx
President and Senior Vice President
Chief Operating Officer
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Investment Advisory Agreement between Atlas Funds and Atlas Advisers, Inc.
Dated February 27, 2004; Page 8 of 8
