CENTURION FUNDS, INC
On behalf of the
Centurion U.S. Contra Fund
INVESTMENT SUB-ADVISORY AGREEMENT
December 6, 2001
Credit Suisse Asset Management, LLC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Under an investment management agreement (the
Management Agreement) between Centurion Funds, Inc., a
Maryland corporation (the Fund), and Centurion Trust Company
(the Manager), the Manager serves as investment manager to
the Centurion U.S. Contra Fund (the Portfolio), a series of
the Fund. The Manager hereby confirms its agreement with
Credit Suisse Asset Management, LLC. (the Sub-adviser) with
respect to the Sub-adviser's serving as an investment sub-
adviser to the Portfolio, as follows:
Section 1. Investment Description; Appointment
(a) The Fund desires to employ the Portfolio's
capital by investing and reinvesting in investments of the
kind and in accordance with the investment objectives,
policies and limitations specified in the Fund's Articles of
Incorporation dated August 20, 1998, as amended from time to
time (the Articles), in the prospectus (the Prospectus) and
in the statement of additional information (the Statement of
Additional Information) filed with the Securities and
Exchange Commission (the SEC) as part of the Fund's
Registration Statement on Form N-1A, as amended from time to
time (the Registration Statement), and in such manner and to
such extent as may from time to time be approved by the
Fund's Board of Directors. Copies of the Prospectus, the
Statement of Additional Information and the Articles have
been or will be submitted to the Sub-adviser.
(b) The Manager, with the approval of the Fund,
hereby appoints the Sub-adviser to act as an investment sub-
adviser to the Portfolio for the periods and on the terms
set forth in this Agreement. The Sub-adviser accepts such
appointment and agrees to furnish the services set forth
below for the compensation herein provided.
Section 2. Services as Sub-adviser
(a) Subject to the supervision and written
direction of the Manager, the Sub-adviser will manage the
Portfolio's assets (Assets) in accordance with: (1) the
Articles, (2) the Investment Company Act of 1940, as amended
(the Act), the Investment Advisers Act of 1940, as amended
(the Advisers Act), all applicable rules and regulations
thereunder and all other applicable laws and regulations,
(3) the Portfolio's investment objective and policies as
stated in the Prospectus and Statement of Additional
Information, and (4) investment parameters provided in
writing by the Manager from time to time and procedures
adopted by the Fund's Directors. In connection therewith,
the Sub-adviser will:
(i) provide a continuous investment program for
the Assets, including investment research and
determining whether to purchase, retain or sell
securities and other investments on behalf of the
Portfolio. The Sub-adviser is hereby authorized to
execute, or place orders for the execution of, all
transactions on behalf of the Portfolio;
(ii) assist the Fund's custodians and accounting
agent in determining or confirming, consistent with the
procedures and policies stated in the Prospectus and
Statement of Additional Information, the value of any
portfolio securities or other portfolio assets
represented in the Portfolio for which the custodians
and accounting agent seek assistance from or identify
for review by the Sub-adviser;
(iii) monitor the execution of transactions
and the settlement and clearance of the Portfolio's
securities transactions;
(iv) exercise voting rights in respect of the
Portfolio's portfolio securities; and
(v) provide reports to the Fund's Directors for
consideration at quarterly meetings of the Board on the
investment program for the Portfolio and the issuers and
securities represented in the Portfolio, and furnish the
Manager and the Fund's Directors with such periodic and
special reports as the Fund or the Manager may reasonably
request.
(b) In connection with the performance of the
services of the Sub-adviser provided for herein, the Sub-
adviser may contract at its own expense with third parties
for the acquisition of research, clerical services and other
administrative services that would not require such parties
to be required to register as an investment adviser under
the Advisers Act; provided that the Sub-adviser shall remain
responsible and liable for the performance of its duties
hereunder.
Section 3. Execution of Transactions
(a) The Sub-adviser agrees that it will execute
transactions for the Portfolio only through brokers or
dealers appearing on a list of brokers and dealers approved
by the Manager. The Sub-adviser may place orders with
respect to the Portfolio with Mutual Management Corp. or its
affiliates in accordance with Section 11(a) of the
Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, Section 17(e) of the Act and Rule 17e-1
thereunder and other applicable laws and regulations.
(b) In executing transactions for the Portfolio,
selecting brokers or dealers and negotiating any brokerage
commission rates, the Sub-adviser will use its best efforts
to seek the best overall terms available. In assessing the
best overall terms available for any portfolio transaction,
the Sub-adviser will consider all factors it deems relevant
including, but not limited to, 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 any commission for the specific
transaction and for transactions executed through the broker
or dealer in the aggregate.
(c) In selecting brokers or dealers to execute a
particular transaction and in evaluating the best overall
terms available, to the extent that the execution and price
offered by more than one broker or dealer are comparable the
Sub-adviser may consider any brokerage and research services
(as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Sub-adviser
or to the Manager for use on behalf of the Portfolio and/or
other accounts over which the Sub-adviser or Manager, or an
affiliate of either, exercise investment discretion.
(d) The Sub-adviser will not effect orders for
the purchase or sale of securities on behalf of the
Portfolio through brokers or dealers as agents.
(e) In connection with the purchase and sale of
securities for the Portfolio, the Sub-adviser will provide
such information as may be reasonably necessary to enable
the Fund's custodians and administrator to perform their
administrative and recordkeeping responsibilities with
respect to the Portfolio.
Section 4. Information Provided to the Manager and the
Fund;
Certain Representations of the Sub-adviser
(a) The Sub-adviser agrees that it will make
available to the Manager and the Fund promptly upon their
request copies of all of its investment records and ledgers
with respect to the Portfolio, including without limitation
records relating to trading by employees of the Sub-adviser
for their own accounts and on behalf of other clients, to
assist the Manager and the Fund in monitoring compliance
with the Act and the Advisers Act, as well as other
applicable laws and guidelines. The Sub-adviser agrees to
cooperate with the Fund and the Manager and their respective
representatives in connection with any such monitoring
efforts. The Sub-adviser will furnish the Fund's Directors
with respect to the Portfolio such periodic and special
reports as the Manager and the Directors may reasonably
request.
(b) The Sub-adviser agrees that it will
immediately notify the Manager and the Fund: (i) in the
event that the Sub-adviser or any of its affiliates becomes
subject to a statutory disqualification that prevents the
Sub-adviser from serving as an investment sub-adviser
pursuant to this Agreement, or becomes or expects to become
the subject of an administrative proceeding or enforcement
action by the SEC or other regulatory authority; (ii) of a
change in the Sub-adviser, financial or otherwise, that
adversely affects its ability to perform services under this
Agreement; (iii) of any reorganization or change in the Sub-
adviser, including any change in its ownership or key
employees; or (iv) upon having a reasonable basis for
believing that, as a result of the Sub-adviser's managing
the Assets, the Portfolio's investment portfolio has ceased
to adhere to the Portfolio's investment objectives, policies
and restrictions as stated in the Prospectus or Statement of
Additional Information or is otherwise in violation of
applicable law.
(c) The Sub-adviser has provided the information
about itself set forth in the Registration Statement and has
reviewed the description of its operations, duties and
responsibilities as stated therein and acknowledges that
they are true and correct and contain no material
misstatement or omission; and it further agrees to notify
the Manager and the Fund immediately of any material fact
known to the Sub-adviser respecting or relating to the Sub-
adviser that is not contained in the Prospectus or Statement
of Additional Information, or any amendment or supplement
thereto, or any statement contained therein that becomes
untrue in any material respect.
(d) The Sub-adviser represents and warrants that
it is an investment adviser registered under the Advisers
Act and other applicable laws and has obtained all necessary
licenses and approvals in order to perform the services
provided in this Agreement. The Sub-adviser has supplied the
Manager and the Fund copies of its Form ADV with all
exhibits and attachments thereto and will hereinafter supply
the Manager and the Fund, promptly upon preparation thereof,
copies of all amendments or restatements of such document.
The Sub-adviser further represents that the statements
contained in its Form ADV, as of the date hereof, are true
and correct and do not omit to state any material fact
required to be stated therein or necessary in order to make
the statement therein not misleading. The Sub-adviser
agrees to maintain the completeness and accuracy of its
registration on Form ADV in accordance with all legal
requirements relating to that Form and to maintain all
necessary registrations, licenses and approvals in effect
during the term of this Agreement. The Sub-adviser
acknowledges that it is an "investment adviser" to the
Portfolio within the meaning of the Act and the Advisers
Act.
(e) The Sub-adviser represents that it has
adopted a written Code of Ethics in compliance with Rule 17j-
1 under the Act and will provide the Fund with any
amendments to such Code.
Section 5. Books and Records
(a) In compliance with the requirements of Rule
31a-3 under the Act, the Sub-adviser hereby agrees that all
records that it maintains for the Fund are the property of
the Fund and further agrees to surrender promptly to the
Fund copies of any such records upon the Fund's request.
The Sub-adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the Act the records required
to be maintained by Rule 31a-1 under the Act and to preserve
the records required by Rule 204-2 under the Advisers Act
for the period specified therein
(b) The Sub-adviser hereby agrees to furnish to
regulatory authorities having the requisite authority any
information or reports in connection with services that the
Sub-adviser renders pursuant to this Agreement which may be
requested in order to ascertain whether the operations of
the Portfolio are being conducted in a manner consistent
with applicable laws and regulations.
Section 6. Proprietary and Confidential Information
(a) The Sub-adviser agrees on behalf of itself
and its employees to treat confidentially and as proprietary
information of the Fund all records and other information
relative to the Portfolio, the Manager and prior, present or
potential shareholders of the Fund and not to use such
records and information for any purpose other than
performance of its responsibilities and duties hereunder
except after prior notification to and approval in writing
of the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Sub-adviser may
be exposed to civil or criminal contempt proceedings for
failure to comply or when requested to divulge such
information by duly constituted authorities.
(b) The Sub-adviser represents and warrants that
neither it nor any affiliate will use the name of the Fund,
the Portfolio, the Manager or any of their affiliates in any
prospectus, sales literature or other material in any manner
without the prior written approval of the Fund or the
Manager, as applicable.
Section 7. Compensation
(a) In consideration of services rendered
pursuant to this Agreement, the Manager will pay the Sub-
adviser a fee that is computed daily and paid monthly at the
annual rate of 0.85% of the average daily net assets of the
Portfolio (the Portfolio Advisory Fee).
(b) The Portfolio Advisory Fee for the period
from the date of this Agreement becomes effective to the end
of the month during which this Agreement becomes effective
shall be prorated according to the proportion that such
period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the
fee for such part of that month shall be prorated according
to the proportion that such period bears to the full monthly
period and shall be payable upon the date of termination of
this Agreement.
(c) For the purpose of determining fees payable
to the Sub-adviser, the value of the Portfolio's net assets
shall be computed at the time and in the manner specified in
the Prospectus and/or the Statement of Additional
Information.
(d) The Sub-adviser shall have no right to obtain
compensation directly from the Portfolio or the Fund for
services provided hereunder and agrees to look solely to the
Manager for payment of fees due.
Section 8. Costs and Expenses
During the term of this Agreement, the Sub-adviser
will pay all expenses incurred by it and its staff in
connection with the performance of its services under this
Agreement, including the payment of salaries of all officers
and employees who are employed by it and the Fund.
Section 9. Standard of Care
The Sub-adviser shall exercise its best judgment
in rendering the services provided by it under this
Agreement. The Sub-adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered
by the Manager or the Fund in connection with the matter to
which this Agreement relates, except that the Sub-adviser
shall be liable for a loss resulting from a breach of
fiduciary duty by the Sub-adviser with respect to the
receipt of compensation for services; provided that nothing
in this Agreement shall be deemed to protect or purport to
protect the Sub-adviser against any liability to the Manager
or the Fund or to holders of the Fund's shares representing
interests in the Portfolio to which the Sub-adviser would
otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of
its duties or by reason of the Sub-adviser's reckless
disregard of its obligations and duties under this
Agreement.
Section 10. Services to Other Companies or Accounts
(a) It is understood that the services of the Sub-
adviser are not exclusive, and nothing in this Agreement
shall prevent the Sub-adviser from providing similar
services to other investment companies (whether or not their
investment objectives and policies are similar to those of
the Portfolio) or from engaging in other activities,
provided that those activities do not adversely affect the
ability of the Sub-adviser to perform its services under
this Agreement.
(b) On occasions when the Sub-adviser deems the
purchase or sale of a security to be in the best interest of
the Portfolio as well as of other investment advisory
clients of the Sub-adviser, the Sub-adviser may, to the
extent permitted by applicable laws and regulations, but
shall not be obligated to, aggregate the securities to be so
sold or purchased with those of its other clients. 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 Sub-adviser in a manner that is fair and
equitable in the exercise of its fiduciary obligations to
the Portfolio and to such other clients. The Sub-adviser
shall provide to the Manager and the Fund all information
reasonably requested by the Manager and the Fund relating to
the decisions made by the Sub-adviser regarding allocation
of securities purchased or sold, as well as the expenses
incurred in a transaction, among the Portfolio and the Sub-
adviser's other investment advisory clients.
(c) The Fund and the Manager understand and
acknowledge that the persons employed by the Sub-adviser to
assist in the performance of its duties under this Agreement
will not devote their full time to that service. Nothing
contained in this Agreement will be deemed to limit or
restrict the right of the Sub-adviser or any affiliate of
the Sub-adviser to engage in and devote time and attention
to other businesses or to render services of whatever kind
or nature, provided that those activities do not adversely
affect the ability of the Sub-adviser to perform its
services under this Agreement.
Section 11. Duration and Termination
(a) This Agreement shall become effective on
December 6, 2001 or, if a later date, the date it is
approved by shareholders of the Portfolio, and shall
continue for two years from that date, and thereafter shall
continue automatically for successive annual periods,
provided such continuance is specifically approved at least
annually by (i) the Fund's Board of Directors or (ii) a vote
of a majority of the Portfolio's outstanding voting
securities (as defined in the Act), provided that the
continuance is also approved by a majority of the Directors
who are not interested persons (as defined in the Act) of
any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval.
(b) Notwithstanding the foregoing, this Agreement
may be terminated, without penalty (i) by the Manager at any
time, upon sixty (60) days' written notice to the Sub-
adviser and the Fund, (ii) at any time by vote of a majority
of the Fund's Directors or by vote of the majority of the
Portfolio's outstanding voting securities, upon notice to
the Manager and the Sub-adviser, or (iii) by the Sub-adviser
at any time upon sixty (60) days' written notice to the
Manager and the Fund.
(c) This Agreement will terminate automatically
in the event of its assignment (as defined in the Act and in
rules adopted under the Act) by any party hereto.
(d) In the event of termination of this Agreement
for any reason, all records relating to the Portfolio kept
by the Sub-adviser shall promptly be returned to the Manager
or the Fund, free from any claim or retention of rights in
such records by the Sub-adviser.
Section 12. Amendments
No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination
is sought, and no amendment of this Agreement shall be
effective until approved in accordance with applicable law.
Section 13. Notices
All communications hereunder shall be given (a) if
to the Sub-adviser, to Credit Suisse Asset Management, LLC.
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (Attention: Xxx
Xxxxxx, Esq.), telephone: 000-000-0000, telecopy: 646-658-
0817, and (b) if to the Manager or the Fund, c/o Centurion
Trust Company, 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000-0000 (Attention: Xxxxxx X. Xxxxxx, Xx.),
telephone: (000)000-0000 (x236), telecopy: (000)000-0000.
Section 14. Miscellaneous
(a) This Agreement shall be governed by the laws
of the State of New York, provided that nothing herein shall
be construed in a manner inconsistent with the Act, the Sub-
advisers Act, or rules or orders of the SEC thereunder.
(b) The captions of this Agreement are included
for convenience only and in no way define or limit any of
the provisions thereof or otherwise affect their
construction or effect.
(c) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as
constituting the Sub-adviser as an agent of the Fund or the
Manager.
(e) This Agreement may be executed in
counterparts, with the same effect as if the signatures were
upon the same instrument.
If the terms and conditions described above are in
accordance with your understanding, kindly indicate your
acceptance of this Agreement by signing and returning to us
the enclosed copy of this Agreement.
CENTURION TRUST COMPANY
By:______________________
_______
Name: Xxxxxx X.
Xxxxxx, Xx.
Title:
Accepted:
Credit Suisse Asset Management, LLC.
By: ______________________________
Name:
Title:
