SUB-ADVISORY AGREEMENT
AGREEMENT made as of the ____ day of _______, 1998, by and among THE
CATHOLIC ALLIANCE FUNDS, INC. a Maryland corporation (the "Fund Company"),
CATHOLIC FINANCIAL SERVICES CORPORATION, a Wisconsin corporation (the "Adviser"
and "Distributor"), and _________________________, a
____________________________ (the "Sub-Adviser").
W I T N E S S E T H
For good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and among the parties hereto as follows:
1. IN GENERAL
The Sub-Adviser agrees, as more fully set forth herein, to act as
Sub-Adviser to the Fund Company with respect to the investment and
reinvestment of the assets of the [INSERT NAME OF FUND]
_________________ and of any other series of common stock of the Fund
Company as the parties may mutually agree and specify from time to
time on EXHIBIT A hereto. The [INSERT NAME OF FUND] ________________
and each other such series is referred to herein as a "Fund". The
Sub-Adviser agrees to supervise and arrange the purchase of securities
and the sale of securities held in the investment portfolios of each
Fund specified on EXHIBIT A. It is understood that the Fund Company
may create one or more additional series of shares and that, if it
does so, this Agreement may be amended by the mutual written consent
of the parties to include such additional series under the terms of
this Agreement.
2. DUTIES AND OBLIGATIONS OF THE SUB-ADVISER WITH RESPECT TO INVESTMENTS
OF ASSETS OF THE FUNDS
(a) Subject to the succeeding provisions of this section and
subject to the oversight and review of the Adviser and the direction
and control of the Board of Directors of the Fund Company, the
Sub-Adviser shall:
(i) Determine what securities shall be purchased or sold by
each Fund specified on EXHIBIT A;
(ii) Arrange for the purchase and the sale of securities
held in each Fund specified on EXHIBIT A; and
(iii) Provide the Adviser and the Directors with such reports
as may reasonably be requested in connection with the
discharge of the foregoing responsibilities and the discharge of
the Adviser's responsibilities under its Investment Advisory
Agreement with the Fund Company and those of the Distributor
under its Distribution Agreement with the Fund Company.
(b) Any investment purchases or sales made by the Sub-Adviser
under this section shall at all times conform to, and be in accordance
with, any requirements imposed by: (1) the provisions of the
Investment Company Act of 1940 (the "Act") and of any rules or
regulations in force thereunder; and (2) the provisions of the
Articles of Incorporation and By-Laws of the Fund Company as amended
from time to time; (3) any policies and determinations of the Board of
Directors of the Fund Company; and (4) the fundamental investment
policies of the relevant Fund, as reflected in the Fund Company's
registration statement under the Act, or as amended by the
shareholders of the Fund Company; provided that copies of the items
referred to in clauses (2), (3) and (4) shall have been furnished to
the Sub-Adviser.
(c) The Sub-Adviser shall give the Fund Company the benefit of
its best judgment and effort in rendering services hereunder. In the
absence of willful misfeasance, bad faith, negligence or reckless
disregard of its obligations or duties ("disabling conduct") hereunder
on the part of the Sub-Adviser (and its officers, directors, agents,
employees, controlling persons, shareholders and any other person or
entity affiliated with the Sub-Adviser) the Sub-Adviser shall not be
subject to liability to the Fund Company or to any shareholder of the
Fund Company for any act or omission in the course of, or connected
with, rendering services hereunder, including without limitation any
error of judgment or mistake of law or for any loss suffered by any of
them in connection with the matters to which this Agreement relates,
except to the extent specified in Section 36(b) of the Act concerning
loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services. Except for such disabling
conduct, the Fund Company shall indemnify the Sub-Adviser (and its
officers, directors, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the
Sub-Adviser) against any liability arising from the Sub-Adviser's
conduct under this Agreement to the extent permitted by the Fund
Company's Articles of Incorporation, By-Laws and applicable law.
(d) Nothing in this Agreement shall prevent the Sub-Adviser or
any affiliated person (as defined in the Act) of the Sub-Adviser from
acting as investment advisor or manager for any other person, firm or
corporation and shall not in any way limit or restrict the Sub-Adviser
or any such affiliated person from buying, selling or trading any
securities for its or their own accounts or for the accounts of others
for whom it or they may be acting; except, however, the Sub-Adviser
expressly represents that while this Agreement is in effect it will
not undertake to manage the
assets of any other mutual fund sponsored by a Catholic organization,
without the prior written consent of the Fund Company. In addition,
the Sub-Adviser expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the
performance of its obligation to the Fund Company under this Agreement
or under the Act. It is agreed that the Sub-Adviser shall have no
responsibility or liability for the accuracy or completeness of the
Fund Company's Registration Statement under the Act and the Securities
Act of 1933, except for information supplied by the Sub-Adviser for
inclusion therein. The Sub-Adviser shall be deemed to be an
independent contractor and, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund Company
in any way or otherwise be deemed an agent of the Fund Company.
(e) In connection with its duties to arrange for the purchase
and sale of each Fund's portfolio securities, the Sub-Adviser shall
follow the principles set forth in any investment advisory agreement
in effect from time to time between the Fund Company and the Adviser,
provided that a copy of any such agreement shall have been provided to
the Sub-Adviser. The Sub-Adviser will promptly communicate to the
Adviser and to the officers and the Directors of the Fund Company such
information relating to portfolio transactions as they may reasonably
request.
Without limiting the generality of the foregoing, with respect to
the execution of transactions on behalf of a Fund, and except as
otherwise instructed from time to time by the Board of Directors of
the Fund Company, the Sub-Adviser shall place, or arrange for the
placement of, all orders for purchases, sales or loans either directly
with the issuer or with a broker-dealer, or other counterparty or
agent selected by the Sub-Adviser. In connection with the selection
of all such parties for the placement of all such orders, the
Sub-Adviser shall attempt to obtain most favorable execution and
price, but may nevertheless in its sole discretion, as a secondary
factor, purchase and sell portfolio securities from and to
broker-dealers who provide research and analysis to the Sub-Adviser
which the Sub-Adviser lawfully and appropriately may use in its
capacity as Sub-Adviser, whether or not such research and analysis
also may be useful to the Sub-Adviser in connection with its services
to other clients. In recognition of such research and analytical
services or brokerage services provided by a broker or dealer, the
Sub-Adviser is authorized to pay such broker or dealer a commission or
spread in excess of that which might be charged by another broker or
dealer for the same transaction if the Sub-Adviser determines in good
faith that the commission or spread is reasonable in relation to the
value of the services so provided.
The Fund Company hereby authorizes any entity or person
associated with the Sub-Adviser that is a member of a national
securities exchange to effect any transaction on the exchange for the
account of a
Fund to the extent permitted by and accordance with Section 11(a) of
the Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder.
The Fund Company hereby consents to the retention by such entity or
person of compensation for such transaction in accordance with Rule
11a2-2(T)(a)(iv).
The Sub-Adviser may, where it deems it to be advisable, aggregate
orders for its other customers together with any securities of the
same type to be sold or purchased for one or more Funds, and/or other
clients of the Sub-Adviser in order to obtain best execution or lower
brokerage commissions. In such event, the Sub-Adviser shall allocate
the shares so purchased or sold, as well as the expense incurred in
the transaction, in a manner it considers to be equitable and fair,
and consistent with its fiduciary obligations to the Fund Company, the
Funds and the Sub-Adviser's other customers.
(f) The Sub-Adviser shall, where it deems it appropriate, make
recommendations to the Fund Company as to the manner in which voting
rights, rights to consent to the Fund Company or Fund Action, and any
other rights pertaining to the Fund Company or any of the Funds shall
be exercised; provided that the Sub-Adviser shall have no obligation
nor any authority to execute any voting proxies or consents on behalf
of the Fund Company or any Fund, but rather shall promptly forward to
the Fund Company all proxy and other solicitation materials that the
Sub-Adviser may receive with respect to any such voting rights or
consents.
3. ALLOCATION OF EXPENSES
The Sub-Adviser agrees that it will furnish the Fund Company, at
the Sub-Adviser's expense, with all office space and facilities,
equipment and clerical personnel necessary for carrying out the
Sub-Adviser's duties under this Agreement. The Sub-Adviser will also
pay all compensation of those of the Fund Company's officers and
employees, if any, and of those Directors, if any, who in each case
are affiliated persons of the Sub-Adviser.
4. CERTAIN RECORDS
Any records required to be maintained and preserved pursuant to
the provisions of Rule 31a-1 and Rule 31a-2 under the Act which are
prepared or maintained by the Sub-Adviser on behalf of the Fund
company are the property of the Fund Company and will be surrendered
promptly to the Fund Company or the Adviser on request.
5. REFERENCE TO THE SUB-ADVISER
Neither the Fund Company nor the Adviser or any affiliate or
agent
thereof shall make reference to or use the name of the Sub-Adviser or
any of its affiliates in any advertising or promotional materials
without the prior approval of the Sub-Adviser, which approval shall
not be unreasonably withheld.
6. COMPENSATION OF THE SUB-ADVISER
The Adviser agrees to pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation for all services rendered by the
Sub-Adviser as such, a management fee as specified on EXHIBIT A.
7. DURATION AND TERMINATION
(a) This Agreement shall go into effect with respect to the
[INSERT NAME OF FUND] on the date specified on EXHIBIT A attached
hereto. In the event the parties hereto mutually agree that one or
more series of the Fund Company should be included as additional
"Fund(s)" hereunder, this Agreement shall become effective with
respect to each such additional Fund on the date specified on EXHIBIT
A hereto. Once effective with respect to any Fund(s), this Agreement
shall, unless terminated as hereinafter provided, continue in effect
for a period of two years with respect to such Fund, and thereafter
from year to year, but only so long as such continuance is
specifically approved at least annually by a majority of the Fund
Company's Board of Directors, or by the vote of the holders of a
"majority" (as defined in the Act) of the outstanding voting
securities of the relevant Fund(s), and, in either case, a majority of
the Directors who are not parties to this Agreement or "interested
persons" (as defined in the Act) of any such party cast in person at a
meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated by the Sub-Adviser in its
entirety or with respect to any one or more specifically identified
Funds at any time without penalty upon giving the Fund Company and the
Adviser sixty (60) days' written notice (which notice may be waived by
the Fund Company and the Adviser) and may be terminated by the Fund
Company or the Adviser in its entirety or with respect to any one or
more specifically identified Funds at any time without penalty upon
giving the Sub-Adviser sixty (60) days' written notice (which notice
may be waived by the Sub-Adviser), provided that such termination by
the Fund Company shall be directed or approved by the vote of a
majority of all of its Directors in office at the time or by the vote
of the holders of a "majority" (as defined in the Act) of the voting
securities of each Fund with respect to which the Agreement is to be
terminated. This Agreement shall automatically terminate in the event
of its "assignment" (as defined in the Act). This Agreement will also
automatically terminate in the event that the Investment Advisory
Agreement by and between the Fund Company and the Adviser is
terminated for any reason.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by their duly authorized officers and their seals to be hereto
affixed, all as of the day and year first above written.
THE CATHOLIC ALLIANCE FUNDS, INC. CATHOLIC FINANCIAL SERVICES
CORPORATION
By: By:
[INSERT NAME OF SUB-ADVISER]
By:
Its:
EXHIBIT A
THE CATHOLIC ALLIANCE FUNDS, INC.
[NAME OF SUB-ADVISER]
SUB-ADVISORY AGREEMENT
1. [NAME OF FUND]:
a. Effective Date: Effective date of The Catholic Alliance Funds, Inc.'s
SEC Registration Statement on Form N-1A.
b. Management Fee: computed daily and paid monthly at the annual rate of
_____ of one percent on the [Name of Fund]'s average daily net assets.
