MONTEAGLE FUNDS SUBADVISORY AGREEMENT
AGREEMENT
made
as
of the 1st
day of
December, 2006, by and among Monteagle Funds, a Delaware business trust, with
its principal office and place of business at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxx,
Xxxxx 00000, (the “Trust”); Nashville Capital Corporation, a Tennessee
corporation, with its principal office and place of business at 000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000 (the “Adviser”); and Xxxx and
Xxxxxxx, Inc., a New York Corporation, with its principal office and place
of
business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the
“Subadviser”).
WHEREAS,
Adviser
has entered into an Investment Advisory Agreement dated the 1st
day of
July, 2006 (“Advisory Agreement”) with the Trust;
WHEREAS
the
Trust
is registered under the Investment Company Act of 1940, as amended, (the “1940
Act”), as an open-end, management investment company and may issue its shares of
beneficial interest, no par value (the “Shares”), in separate
series;
WHEREAS,
pursuant to the Advisory Agreement, and subject to the direction and control
of
the Board of Trustees of the Trust (the “Board”), the Adviser acts as investment
adviser for each series of the Trust listed on Appendix A hereto (each, a “Fund”
and, collectively, the “Funds”);
WHEREAS,
the
Trust and Adviser desire to retain the Subadviser to perform investment advisory
services for the Fund and Subadviser is willing to provide those services on
the
terms and conditions set forth in this Agreement;
NOW
THEREFORE,
for and
in consideration of the mutual covenants and agreements contained herein, the
Trust, the Adviser and the Subadviser hereby agree as follows:
SECTION
1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The
Trust
and the Adviser hereby employ Subadviser, subject to the direction and control
of the Board, to manage the investment and reinvestment of the assets in each
Fund and, without limiting the generality of the foregoing, to provide other
services as specified herein. The Subadviser accepts this employment and agrees
to render its services for the compensation set forth herein.
(b) In
connection therewith, the Trust has delivered to the Subadviser copies of (i)
the Trust’s Trust Instrument and Bylaws (collectively, as amended from time to
time, “Organic Documents”), (ii) the Trust’s Registration Statement, all
exhibits thereto, and all amendments thereto filed with the U.S. Securities
and
Exchange Commission (“SEC”) pursuant to the Securities Act of 1933, as amended
(the “Securities Act”), or the 1940 Act (the “Registration Statement”), (iii)
the Trust’s current Prospectuses and Statements of Additional Information of
each Fund (collectively, as currently in effect and as amended or supplemented,
the “Prospectus”), and (iv) all procedures adopted by the Trust with respect to
any Fund (i.e.,
repurchase agreement procedures), and shall promptly furnish the Adviser with
all amendments of or supplements to the foregoing. The Trust shall deliver
to
the Subadviser (x) a certified copy of the resolution of the Board appointing
the Subadviser and authorizing the execution and delivery of this Agreement,
(y)
a copy of all proxy statements and related materials relating to any Fund,
and
(z) any other documents, materials or information that the Subadviser shall
reasonably request to enable it to perform its duties pursuant to this
Agreement. The Trust shall furnish to the Subadviser a copy of each amendment
of
or supplement to the foregoing promptly after the adoption of each amendment
or
supplement.
(c) The
Subadviser has delivered to the Adviser and the Trust (i) a copy of its Form
ADV
as most recently filed with the SEC and (ii) a copy of its code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act (the “Code”).
The Subadviser shall promptly furnish the Adviser and Trust with all amendments
of or supplements to the foregoing at least annually.
SECTION
2. DUTIES OF THE TRUST AND ADVISER
(a) In
order
for the Subadviser to perform the services required by this Agreement, the
Trust
and the Adviser (i) shall, cause all service providers to the Trust to furnish
information relating to any Fund to the Subadviser and assist the Subadviser
as
may be required and (ii) shall ensure that the Subadviser has reasonable access
to all records and documents maintained by the Trust, or any service provider
to
the Trust.
(b) In
order
for the Subadviser to perform the services required by this Agreement, the
Adviser shall deliver to the Subadviser all material it provides to the Board
in
accordance with the Advisory Agreement.
SECTION
3. DUTIES OF THE SUBADVISER
(a) The
Subadviser will make decisions with respect to all purchases and sales of
securities and other investment assets in each Fund to the extent such authority
is delegated by the Adviser. To carry out such decisions, the Subadviser is
hereby authorized, as agent and attorney-in-fact for the Trust, for the account
of, at the risk of and in the name of the Trust, to place orders and issue
instructions with respect to those transactions of the Funds. In all purchases,
sales and other transactions in securities and other investments for the Funds,
the Subadviser is authorized to exercise full discretion and act for the Trust
in the same manner and with the same force and effect as the Trust might or
could do with respect to such purchases, sales or other transactions, as well
as
with respect to all other things necessary or incidental to the furtherance
or
conduct of such purchases, sales or other transactions.
Consistent
with Section 28(e) of the Securities Exchange Act of 1934, as amended, the
Subadviser
may
allocate brokerage on behalf of the Funds to broker-dealers who provide research
services. The Subadviser may aggregate sales and purchase orders of the assets
of the Funds with similar orders being made simultaneously for other accounts
advised by the Subadviser or its affiliates. Whenever the Subadviser
simultaneously places orders to purchase or sell the same asset on behalf of
a
Fund and one or more other accounts advised by the Subadviser, the orders will
be allocated as to price and amount among all such accounts in a manner believed
to be equitable over time to each account.
(b) The
Subadviser will report to the Board at each meeting thereof as requested by
the
Adviser or the Board all material changes in each Fund since the prior report,
and will also keep the Board informed of important developments affecting the
Trust, the Funds and the Subadviser, and on its own initiative, will furnish
the
Board from time to time with such information as the Subadviser may believe
appropriate for this purpose, whether concerning the individual companies whose
securities are included in the Funds' holdings, the industries in which they
engage, the economic, social or political conditions prevailing in each country
in which the Funds maintain investments, or otherwise. The Subadviser will
also
furnish the Board with such statistical and analytical information with respect
to investments of the Funds as the Subadviser may believe appropriate or as
the
Board reasonably may request. In making purchases and sales of securities and
other investment assets for the Funds, the Subadviser will bear in mind the
policies set from time to time by the Board as well as the limitations imposed
by the Organic Documents and Registration Statement, the limitations in the
1940
Act, the Securities Act, the Internal Revenue Code of 1986, as amended, and
other applicable laws and the investment objectives, policies and restrictions
of the Funds.
(c) The
Subadviser will from time to time employ or associate with such persons as
the
Subadviser believes to be particularly fitted to assist in the execution of
the
Subadviser's duties hereunder, the cost of performance of such duties to be
borne and paid by the Subadviser. No obligation may be incurred on the Trust's
or Adviser’s behalf in any such respect.
(d) The
Subadviser will report to the Board all material matters related to the
Subadviser. On an annual basis, the Subadviser shall report on its compliance
with its Code to the Adviser and to the Board and upon the written request
of
the Adviser or the Trust, the Subadviser shall permit the Adviser and the Trust,
or their respective representatives to examine the reports required to be made
to the Subadviser under the Code. The Subadviser will notify the Adviser and
the
Trust of any change of control of the Subadviser and any changes in the key
personnel who are either the portfolio manager(s) of the Fund or senior
management of the Subadviser, in each case prior to or promptly after such
change.
(e) The
Subadviser will maintain records relating to its portfolio transactions and
placing and allocation of brokerage orders as are required to be maintained
by
the Trust under the 1940 Act. The Subadviser shall prepare and maintain, or
cause to be prepared and maintained, in such form, for such periods and in
such
locations as may be required by applicable law, all documents and records
relating to the services provided by the Subadviser pursuant to this Agreement
required to be prepared and maintained by the Subadviser or the Trust pursuant
to applicable law. To the extent required by law, the books and records
pertaining to the Trust which are in possession of the Subadviser shall be
the
property of the Trust. The Subadviser may make and retain for its own use a
copy
of such books and records. The Adviser and the Trust, or their respective
representatives, shall have access to such books and records at all times during
the Subadviser's normal business hours. Upon the reasonable request of the
Adviser or the Trust, copies of any such books and records shall be provided
promptly by the Subadviser to the Adviser and the Trust, or their respective
representatives.
(f) The
Subadviser will cooperate with each Fund’s independent public accountants and
shall take reasonable action to make all necessary information available to
the
accountants for the performance of the accountants’ duties.
(g) The
Subadviser will provide the Funds’ custodian and fund accountant on each
business day with such information relating to all transactions concerning
the
Funds’ assets under the Subadviser’s control as the custodian and fund
accountant may reasonably require. In accordance with procedures adopted by
the
Board, the Subadviser is responsible for assisting in the fair valuation of
all
Fund assets and will use its reasonable efforts to arrange for the provision
of
prices from parties who are not affiliated persons of the Subadviser for each
asset for which the Funds’ fund accountant does not obtain prices in the
ordinary course of business.
(h) The
Subadviser shall authorize and permit any of its directors, officers and
employees who may be elected as Trustees or officers of the Trust to serve
in
the capacities in which they are elected.
(i) Except
as
otherwise agreed to by the Trust, the Adviser and the Subadviser, during any
period in which a Fund invests all (or substantially all) of its investment
assets in a registered, open-end management investment company, or separate
series thereof, in accordance with Section 12(d)(1)(E) under the 1940 Act,
the
Subadviser shall have no duties or obligations pursuant to this Agreement with
respect to the Fund.
SECTION
4. COMPENSATION; EXPENSES
(a) In
consideration of the foregoing, the Adviser shall pay the Subadviser, with
respect to each Fund, a fee at an annual rate as listed in Appendix A hereto.
Such fees shall be accrued by the Adviser daily and shall be payable monthly
in
arrears on the first day of each calendar month for services performed hereunder
during the prior calendar month. If fees begin to accrue in the middle of a
month or if this Agreement terminates before the end of any month, all fees
for
the period from that date to the end of that month or from the beginning of
that
month to the date of termination, as the case may be, shall be prorated
according to the proportion that the period bears to the full month in which
the
effectiveness or termination occurs. Upon the termination of this Agreement
with
respect to a Fund, the Adviser shall pay to the Subadviser such compensation
as
shall be payable prior to the effective date of termination.
(b) The
Subadviser may agree to waive all or part of its fees by separate
agreement.
(c) No
fee
shall be payable hereunder with respect to a Fund during any period in which
the
Fund invests all (or substantially all) of its investment assets in a
registered, open-end, management investment company, or separate series thereof,
in accordance with Section 12(d)(1)(E) under the 1940 Act.
SECTION
5. STANDARD OF CARE
(a) The
Trust
and Adviser shall expect of the Subadviser, and the Subadviser will give the
Trust and Adviser the benefit of, the Subadviser's best judgment and efforts
in
rendering its services hereunder. The Subadviser shall not be liable to the
Adviser or the Trust hereunder for any mistake of judgment or in any event
whatsoever, except for lack of good faith, provided that nothing herein shall
be
deemed to protect, or purport to protect, the Subadviser against any liability
to the Adviser or the Trust to which the Subadviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of the Subadviser's duties hereunder, or by reason of the
Subadviser's reckless disregard of its obligations and duties
hereunder.
(b) The
Subadviser shall not be liable to the Adviser or the Trust for any action taken
or failure to act in good faith reliance upon: (i) information, instructions
or
requests, whether oral or written, with respect to a Fund that the Subadviser
reasonably believes were made by a duly authorized officer of the Adviser or
the
Trust, (ii) the advice of counsel to the Trust, and (iii) any written
instruction or certified copy of any resolution of the Board.
(c) The
Subadviser shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties (other than those related to the Subadviser’s
employees), fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
SECTION
6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This
Agreement shall become effective with respect to a Fund immediately upon the
later of approval by a majority of the Trust's trustees who are not parties
to
this Agreement or interested persons of any such party (other than as trustees
of the Trust) and, if required by applicable law, by a vote of a majority of
the
outstanding voting securities of the Fund.
(b) This
Agreement shall remain in effect with respect to a Fund for a period of two
(2)
years from the date of its effectiveness and may only continue in effect for
successive annual periods with respect to the Fund under such separate
Agreement; provided that such continuance is specifically approved (i) by the
Board or by the vote of a majority of the outstanding voting securities of
the
Fund, and, in either case, (ii) by a majority of the Trust's trustees who are
not parties to this Agreement or interested persons of any such party (other
than as trustees of the Trust); provided further, however, that if new Agreement
is not approved as to a Fund, the Subadviser may continue to render to that
Fund
the services described herein in the manner and to the extent permitted by
the
1940 Act and the rules and regulations thereunder.
(c) This
Agreement may be terminated with respect to a Fund at any time, without the
payment of any penalty, (i) by the Board, by a vote of a majority of the
outstanding voting securities of the Fund or by the Adviser on 30 days' written
notice to the Subadviser or (ii) by the Subadviser on 30 days' written notice
to
the Trust. This Agreement shall terminate immediately (x) upon its assignment
or
(y) upon termination of the Advisory Agreement.
SECTION
7. ACTIVITIES OF THE SUBADVISER
Except
to
the extent necessary to perform its obligations hereunder, nothing herein shall
be deemed to limit or restrict the Subadviser's right, or the right of any
of
the Subadviser's directors, officers or employees to engage in any other
business or to devote time and attention to the management or other aspects
of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, trust, firm, individual or
association.
SECTION
8. REPRESENTATIONS OF SUBADVISER.
The
Subadviser represents and warrants that (i) it is either registered as an
investment adviser under the Investment Advisers Act of 1940, as amended
(“Advisers Act”) (and will continue to be so registered for so long as this
Agreement remains in effect) or exempt from registration under the Advisers
Act,
(ii) is not prohibited by the 1940 Act or the Advisers Act from performing
the
services contemplated by this Agreement, (iii) has met, and will seek to
continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of
any
self-regulatory agency, necessary to be met in order to perform the services
contemplated by this Agreement, and (iv) will promptly notify the Adviser and
the Trust of the occurrence of any event that would disqualify the Subadviser
from serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
SECTION
10. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The
Trustees of the Trust and the shareholders of each Fund shall not be liable
for
any obligations of the Trust or of the Funds under this Agreement, and the
Subadviser agrees that, in asserting any rights or claims under this Agreement,
it shall look only to the assets and property of the Trust or the Fund to which
the Subadviser's rights or claims relate in settlement of such rights or claims,
and not to the Trustees of the Trust or the shareholders of the
Funds.
SECTION
11. MISCELLANEOUS
(a) No
provisions of this Agreement may be amended or modified in any manner except
by
a written agreement properly authorized and executed by all parties hereto
and
approved by the Trust in the manner set forth in Section 6(b)
hereof.
(b) No
amendment to this Agreement or the termination of this Agreement with respect
to
a Fund shall effect this Agreement as it pertains to any other Fund, nor shall
any such amendment require the vote of the shareholders of any other
Fund.
(c) No
party
to this Agreement shall be liable to the any other party for consequential
damages under any provision of this Agreement.
(d) THIS
AGREEMENT SHALL BE GOVERNED BY, AND THE PROVISIONS OF THIS AGREEMENT SHALL
BE
CONSTRUED AND INTERPRETED UNDER AND IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF
DELAWARE.
(e) This
Agreement constitutes the entire agreement between the parties hereto and
supersedes any prior agreement with respect to the subject matter hereof,
whether oral or written.
(f) This
Agreement may be executed by the parties hereto on any number of counterparts,
and all of the counterparts taken together shall be deemed to constitute one
and
the same instrument.
(g) If
any
part, term or provision of this Agreement is held to be illegal, in conflict
with any law or otherwise invalid, the remaining portion or portions shall
be
considered severable and not be affected, and the rights and obligations of
the
parties shall be construed and enforced as if the Agreement did not contain
the
particular part, term or provision held to be illegal or invalid.
(h) Section
headings in this Agreement are included for convenience only and are not to
be
used to construe or interpret this Agreement.
(i) Notices,
requests, instructions and communications received by the parties at their
respective principal places of business, or at such other address as a party
may
have designated in writing, shall be deemed to have been properly
given.
(j) Notwithstanding
any other provision of this Agreement, the parties agree that the assets and
liabilities of each Fund are separate and distinct from the assets and
liabilities of any other series of the Trust and that no Fund or other series
of
the Trust shall be liable or shall be charged for any debt, obligation or
liability of any other Fund or series, whether arising under this Agreement
or
otherwise.
(k) No
affiliated person, employee, agent, director, officer or manager of the
Subadviser shall be liable at law or in equity for the Subadviser’s obligations
under this Agreement.
(l) The
terms
“vote of a majority of the outstanding voting securities”, “interested person”,
“affiliated person”, “control” and “assignment” shall have the meanings ascribed
thereto in the 1940 Act.
(m) Each
of
the undersigned warrants and represents that they have full power and authority
to sign this Agreement on behalf of the party indicated and that their signature
will bind the party indicated to the terms hereof and each party hereto warrants
and represents that this Agreement, when executed and delivered, will constitute
a legal, valid and binding obligation of the party, enforceable against the
party in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the
rights and remedies of creditors and secured parties.
IN
WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed all as of the
day
and year first above written.
|
By:
/s/ Xxxx X.
Xxxxxxxx
Xxxx
X. Xxxxxxxx
President
NASHVILLE
CAPITAL CORPORATION
By:
/s/ Xxxxx
Xxxxxxx
Xxxxx
Xxxxxxx
President
XXXX
AND XXXXXXX, INC.
By:
/s/ Xxxxx
Xxxxxx
Xxxxx
Cairns
President
|
Appendix
A
|
Funds
of the Trust
|
Annual
Average Daily
Net
Assets of the Fund
|
Fee
rate
|
|
Monteagle
Fixed Income Fund
|
$1-25
MM
$25-50
MM
$50-100
MM
>$100
MM
|
0.30%
0.25%
0.20%
0.20%
|
