INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, dated and effective as of the 12th day of January,
1990, is made and entered into by and between ATLAS ASSETS, INC., a Maryland
corporation (hereinafter called the "Company"), and ATLAS ADVISERS, INC., a
California corporation (hereinafter called the "Adviser").
WHEREAS, the Company 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 Company 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 Company intends to initially offer shares in five
series (the "Initial Series"):
Atlas Tax Free Money Fund
Atlas California Double Tax Free Money Fund
Atlas Tax Free Income Fund
Atlas California Double Tax Free Income Fund
Atlas U.S. Government and Mortgage Securities Fund.
The Company 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 Company 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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(b) Additional Series. In the event that the
Company 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 Company
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 Company.
2. (a) Subject to the supervision of the Company's
Board of Directors ("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 Company's Articles of Incorporation,
By-laws, 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 Directors of the
Company, 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
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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.
(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 Company are the property
of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records
which it maintains for the Company and which are required to
be maintained by Rule 31a-1 under the 1940 Act, and further
agrees to surrender promptly to the Company any records
which it maintains for the Company upon request by the
Company.
(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 Company and the Funds
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with such corporate, administrative and clerical personnel
(including offices of the Company) 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 Company 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 Company 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 Company 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 Articles of
Incorporation, By-Laws 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.
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 on or more agreements ("Sub-Advisory or Sub-Administration
Contract") with a sub-adviser or sub-administrator in which the Adviser
delegates to such sub-adviser or sub-administrator the performance of any or
all of the services specified in Section 2 and 3 of this Agreement, provided
that; (i) each Sub-Advisory and Sub-Administration Contract imposes on the
sub-adviser or sub-administrator 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 Sub-Advisory or
Sub-Administration Contract meets all requirements of the 1940 Act and rules
thereunder; and (iii) the Adviser shall not enter into a Sub-Advisory or
Sub-Administration 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:
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(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 Articles of Incorporation, 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 Articles of Incorporation,
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 Company for any fiscal year of the
Company, excluding interest, taxes and extraordinary
expenses, shall exceed the most stringent limits prescribed
by any state in which the Company 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 Company for any projected reduction hereunder
and corresponding amounts shall be withheld from the fees
paid by the Company 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
Company 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 Company 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 Company or any Series on any
subsequent occasion.
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.
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9. The Company 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 shall be
finally adjudged to have been guilty of willful misconduct or gross
negligence, or in violation of applicable law) or arising out of an act or
omission of the custodian, or of any broker or agent selected by the Adviser
in a commercially reasonable manner.
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 Company 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 Directors of the Company 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 Directors of the Company
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. However, the continuance of this
Agreement with respect to any Series is subject to the
approval of this Agreement by a majority (as defined in the
0000 Xxx) of the outstanding voting securities of such
Series on or before the next anniversary following the date
on which such Series becomes a Series hereunder.
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 Company, unless
such approval shall be required by any applicable law
or otherwise.
(b) This Agreement may be terminated with respect to any
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Series at any time, without payment of any penalty, by
the Board of Directors of the Company or by the vote of a
majority (as defined in the 0000 Xxx) of the outstanding
voting securities of the Company, on sixty (60) days'
written notice to the Adviser, or by the Adviser on like
notice to the Company.
(c) This Agreement shall automatically and immediately
terminate in the event of its assignment.
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 ASSETS, INC. ATLAS ADVISERS, INC.
By /s/ Xxxxx X. XxXxxxx By /s/ Xxxxx X. XxXxxxx
--------------------------- ----------------------------
Xxxxx X. XxXxxxx Xxxxx X. XxXxxxx
Chief Operating Officer and Chief Operating Officer and
Senior Vice President Senior Vice President
ATTEST: ATTEST:
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxx
---------------------------- --------------------------
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
Secretary Secretary
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Atlas Assets, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
This will confirm our agreement to modify the language of Section 9 of the
Investment Advisory Agreement between us dated January 12, 1990 to read in
full as set forth below. This modification will add the underlined words and
delete the bracketed words indicated below, in order to reflect accurately in
the Agreement the limitations of the Investment Company Act of 1940 with
respect to indemnification (which limitations we acknowledge are applicable
whether or not specifically referred to in Section 9).
"Section 9. The Company 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
[shall be finally adjudged to] have been guilty of willful [misconduct]
misfeasance, BAD BAITH, 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)
[or arising out of an act or omission of the custodian, or of any broker
or agent selected by the Adviser in a commercially reasonable manner]."
Very truly yours,
ATLAS ADVISERS, INC.
By: /s/ Xxxxx X. XxXxxxx Date: 11/1/91
------------------------ --------------------
Title: Sr. Vice President
------------------------------
Agreed: ATLAS ASSETS, INC.
By: /s/ Xxxxx X.XxXxxxx
---------------------------------
Title: Sr. Vice President
------------------------------
INVESTMENT ADVISORY AGREEMENT
APPENDIX A
AS AMENDED FEBRUARY 16, 1996
Atlas National Municipal Money Fund
(Formerly the Atlas Tax Free Money Fund);
Atlas California Municipal Money Fund
(Formerly the Atlas California Double Tax Free Money Fund);
Atlas U.S. Treasury Money Fund
-----------------------------------------------------------
On the Portion of
Daily Total Net Asset Value Annual Rate
--------------------------- -----------
Assets up to $500 million .50%
Assets over $500 million .47 1/2%
Atlas National Municipal Bond Fund
(Formerly the Atlas Tax Free Income Fund);
Atlas California Municipal Bond Fund
(Formerly the Atlas California Double Tax Free Income Fund);
Atlas U.S. Government Intermediate Fund
(Formerly the Atlas U.S. Treasury Intermediate Fund);
Atlas U.S. Government and Mortgage Securities Fund;
Atlas National Insured Intermediate Municipal Fund;
Atlas California Insured Intermediate Municipal Fund;
-----------------------------------------------------------
On the Portion of
Daily Total Net Asset Value Annual Rate
--------------------------- -----------
Assets up to $500 million .55%
Assets over $500 million .50%
Atlas Growth and Income Fund;
Atlas Balanced Fund;
Atlas Strategic Growth Fund;
----------------------------
On the Portion of
Daily Total Net Asset Value Annual Rate
--------------------------- -----------
Assets up to $100 million .70%
Assets between $100 million
and $500 million .60%
Assets over $500 million .50%
A-1
Atlas Global Growth Fund
------------------------
On the Portion of
Daily Total Net Asset Value Annual Rate
--------------------------- -----------
Assets up to $100 million .80%
Assets between $100 million
and $500 million .75%
Assets over $500 million .70%
Atlas Strategic Income Fund
---------------------------
On the Portion of
Daily Total Net Asset Value Annual Rate
--------------------------- -----------
Assets up to $100 million .75%
Assets between $100 million
and $500 million .70%
Assets over $500 million .65%
A-2
