(d)(2)
FORM OF
SUBADVISORY AGREEMENT
AGREEMENT made as of February 23, 2007, among ATLAS ADVISERS,
Inc., a California corporation (the "Adviser"), ATLAS FUNDS, a Delaware
statutory trust (the "Trust") and BOSTON SAFE ADVISORS, INC., a Massachusetts
corporation (the "Subadviser").
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 is authorized to issue separate series (the "Funds"), each of which will
offer a separate class of shares of beneficial interest, each Fund having its
own investment objectives, policies and limitations;
WHEREAS, the Trust currently offers shares in four series: (the
"Funds"):
Atlas California Municipal Money Fund
Atlas California Municipal Bond Fund
Atlas National Municipal Bond Fund
Atlas Money Market Fund
WHEREAS, the Trust has retained the Adviser to render investment
management and related administrative services to the Funds;
WHEREAS, the Adviser and the Trust desire to retain the Subadviser
to furnish portfolio management services to the Funds in connection with the
Adviser's investment management activities on behalf of the Funds, and the
Subadviser is willing to furnish such services to the Adviser and the Trust;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Adviser, the Subadviser and the Trust
as follows:
1. Appointment. The Adviser and the Trust hereby appoint the
Subadviser to act as Portfolio Manager to the Funds under the supervision of the
Trust's Board of Trustees and the Adviser for the periods and on the terms set
forth in this Agreement. The Subadviser accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
In the event the Trust designates one or more portfolio series
("Additional Funds") other than the above named Funds with respect to which the
Adviser and the Trust desire to retain the Subadviser to render portfolio
management services hereunder, they shall notify the Subadviser in writing. If
the Subadviser is willing to render such services, it shall notify the Adviser
and the Trust in writing, whereupon such Additional Funds shall also be subject
to this Agreement.
2. Representations of the Trust. The Trust represents, warrants, and
agrees that:
A. The Adviser and Subadviser have been duly appointed by the
Board of Trustees of the Trust.
B. The Trust will deliver to the Subadviser a true and
complete copy of its then current prospectus as effective from time to time and
such other documents or instruments governing the investment of the Funds and
such other information as is necessary for the Subadviser to carry out its
obligations under this Agreement.
C. The Trust is currently in compliance and shall at all times
comply with the requirements imposed upon the Trust by the 1940 Act and
applicable state laws.
3. Representations of the Subadviser. The Subadviser represents,
warrants, and agrees that:
A. The Subadviser is registered as an "Investment Adviser"
under the Investment Advisers Act of 1940 ("Advisers Act") and under applicable
state laws, is currently in compliance and shall at all times comply with the
requirements imposed upon the Adviser by the Advisers Act and applicable state
laws.
B. The Subadviser has a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act, will provide the Trust with a
copy of the code of ethics and evidence of its adoption, and will make such
reports to the Trust as are required by Rule 17j-1 under the 1940 Act.
4. Portfolio Management Duties.
A. Subject to the supervision of the Adviser and the Trust's
Board of Trustees, the Subadviser will provide a continuous investment program
for the Funds' portfolios, including investment research and management, with
respect to all securities and investments and cash equivalents in the portfolio.
The Subadviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Funds and will place
orders for execution of such portfolio transactions in accordance with paragraph
B below to effectuate the investment decisions made. The Subadviser will provide
the services under this Agreement in accordance with the Funds' investment
objectives, policies and restrictions as stated in the Trust's registration
statement filed with the Securities and Exchange Commission ("SEC"), as amended
from time to time.
B. The Subadviser shall have authority and discretion to
select brokers and dealers to execute portfolio transactions for the Funds and
for the selection of the markets on or in which the transactions will be
executed. In placing orders with brokers and dealers, the Subadviser shall
generally place portfolio transactions with primary market makers for these
securities on a net basis, without any brokerage commission being paid by the
Funds. It is understood that transactions with dealers serving as primary market
makers reflect the spread between the bid and asked prices and that the
Subadviser may cause the Funds to pay fees to third parties for information as
to potential purchasers or sellers of securities but only if the Funds would
obtain the best price and execution, including such fee, on a particular
transaction. The Subadviser may make purchases of underwritten issues which
include an underwriting fee paid to the underwriter.
==============================================================================
Subadvisory Agreement among Atlas Advisers, Inc., Atlas Funds,
and Boston Safe Advisors, Inc.
Dated February 23, 2007
Page 2 of 7
The primary objective of the Subadviser in placing
orders for the purchase and sale of securities for the Funds shall be to obtain
the best price and execution taking into account such factors as price,
commission (negotiable in the case of national securities exchange
transactions), if any, size of order, difficulty of execution and skill required
of the executing broker/dealer. When it can be done consistently with the policy
of obtaining the best price and execution, the Subadviser, in circumstances in
which two or more broker/dealers offer comparable prices and executions, may
place such orders with broker/dealers who supply market quotations to the
custodian of the Funds (the "Custodian") for appraisal purposes, or who supply
research, market and statistical information to its clients including the Funds
or the Subadviser. The term "research, market and statistical information"
includes advice as to the value of securities, the advisability of investing in,
purchasing or selling securities; and the availability of securities or
purchasers or sellers of securities; and furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts. The Subadviser is not
authorized when placing portfolio transactions for a Fund to pay a brokerage
commission (to the extent applicable) in excess of that which another broker
might have charged for effecting the same transaction on account of the receipt
of research, market or statistical information although it may do so in seeking
to obtain the best execution with respect to a particular transaction. In
effecting transactions in over-the-counter securities, orders are placed with
the principal market-makers for the security being traded unless, after
exercising care, it appears that better prices or executions are available
otherwise.
C. All transactions will be consummated by payment to or
delivery by the Custodian for the Funds or such depositories or agents as may be
designated by the Custodian, of all cash and/or securities due to or from the
Funds, and the Subadviser shall not have possession or custody thereof or any
responsibility or liability with respect thereto. The Subadviser shall advise
the Custodian and the Trust daily of all investment orders placed by it with
broker/dealers pursuant to procedures agreed upon by the Subadviser and the
Trust. The Trust shall issue to the Custodian such instructions as may be
appropriate in connection with the settlement of any transaction initiated by
the Subadviser. The Trust shall be responsible for all custodial arrangements
and the payment of all custodial charges and fees, and, upon giving proper
instructions to the Custodian, the Subadviser shall have no responsibility or
liability with respect to custodial arrangements or the acts, omissions or other
conduct of the Custodian.
5. Expenses. During the term of this Agreement, the Subadviser will
pay all expenses incurred by it, its staff and their activities, in connection
with its portfolio management under this Agreement. This does not include costs
payable by the Trust or the Adviser.
6. Compensation. For the services provided, the Adviser will pay the
Subadviser a fee, payable monthly based on the average daily net assets, as
calculated by the Custodian, of each Fund (and Additional Funds, if applicable)
as provided in the Fee Schedule attached to the Agreement. The "average daily
net assets" is defined as the average of the values placed on the net assets as
of 4:00 p.m. (New York time), on each day on which the net asset value of a
Fund's portfolio is determined consistent with the provisions of Rule 22c-1
under the 1940 Act or, if the Trust lawfully determines the value of the net
assets of a Fund as of some other time on each business day, as of such time.
The value of net assets of a Fund shall be determined pursuant to the applicable
provisions of the Trust's current Registration Statement and the 1940 Act. If,
pursuant to such provisions, the determination of net assets value is suspended
for any particular business day, then for the purposes of this Section 6, the
value of the net assets of a Fund as last determined shall be deemed to be the
value of the net assets as of the close of the New York Stock Exchange, or as of
such other time as the value of the net assets of the Fund may lawfully be
determined on that day. If the determination of the net asset value of a Fund
has been suspended by the Trust pursuant to the Registration Statement and the
1940 Act for a period including such month, the Subadviser's compensation
payable at the end of such month shall be computed on the basis of the value of
the net assets of the Fund as last determined (whether during or prior to such
month). If the Trust determines the value of the net assets of a Fund more than
once on any day, the last such determination thereof on that day shall be deemed
to be the sole determination thereof on that day for the purposes of this
Section 6.
==============================================================================
Subadvisory Agreement among Atlas Advisers, Inc., Atlas Funds,
and Boston Safe Advisors, Inc.
Dated February 23, 2007
Page 3 of 7
7. Books and Records.
A. The Subadviser will make available to the Adviser and the
Trust promptly upon request its records and ledgers with respect to and relating
to the Funds' securities transactions to assist the Adviser and the Trust in
compliance with the 1940 Act and the Advisers Act, and other applicable laws.
The Subadviser will furnish the Trust's Board of Trustees with respect to the
Funds such periodic and special reports as the Adviser and the Trustees may
reasonably request.
B. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Subadviser hereby agrees that all records which it maintains for
the Funds are the property of the Trust and further agrees to surrender promptly
to the Trust any of such records upon the Trust's request. The Subadviser
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act
and to preserve the records required by Rule 204-2 under the Advisers Act to the
extent necessary or appropriate to comply with the period specified in the Rule.
8. Indemnification. The Subadviser agrees to indemnify and hold
harmless the Adviser, and its directors, officers and employees (absent the
Adviser's willful misfeasance, bad faith, gross negligence in the performance of
its duties or reckless disregard of its obligations and duties under this
Agreement with respect to the matter which is the subject of the
indemnification), and the Trust and its Trustees, officers and employees (absent
such person's willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his Office with respect to
the matter which is the subject of the indemnification), against any and all
losses, claims, damages, liabilities or litigation (including without limitation
all legal and other expenses) to which the Adviser or the Trust may become
subject, arising out of the Subadviser's responsibilities as portfolio manager
of the Municipal Funds (and Additional Funds, if applicable) which may be based
upon any (a) willful misfeasance, bad faith, gross negligence in the performance
of its duties or reckless disregard of its obligations and duties under this
Agreement with respect to the matter which is the subject of the indemnification
by the Subadviser or (b) untrue statement or alleged untrue statement of a
material fact contained in a Trust's Registration or Proxy Statement or other
regulatory filing or the omission or alleged omission to state a material fact
required to be stated in a Trust's Registration or Proxy Statement or other
regulatory filing to make such filing not misleading, if such statement or
omission was made in reliance upon information furnished by the Subadviser to
the Adviser or the Trust.
9. Duration and Termination.
A. The initial term of this Agreement shall begin on February
23, 2007 which term shall continue for two (2) years from the Effective Date if
the agreement is approved by the vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of each Fund, and shall be renewed
annually thereafter, unless terminated, if approved by (a) the vote of a
majority of the entire Board of Trustees of the Trust, or by the vote of a
majority of the entire Board of Trustees of the Trust, or by the vote of a
majority of the outstanding voting securities of each Fund (as defined in the
1940 Act), and (b) the vote of a majority of those Trustees of the Trust who are
not parties to this agreement or interested persons (as such term is defined in
the 0000 Xxx) of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
==============================================================================
Subadvisory Agreement among Atlas Advisers, Inc., Atlas Funds,
and Boston Safe Advisors, Inc.
Dated February 23, 2007
Page 4 of 7
B. Notwithstanding the foregoing, this Agreement may be
terminated at any time without payment of any penalty by (a) the Adviser, upon
sixty (60) days' written notice to the Subadviser and the Trust, (b) the Trust,
upon the vote of a majority of the Trust's Board of Trustees or a majority of
the outstanding voting securities of each Series, upon sixty (60) days' written
notice to the Adviser and the Subadviser, (c) the Subadviser upon one hundred
twenty (120) days' written notice to the Adviser and the Trust. The Agreement
shall automatically terminate in the event of its assignment (as such term is
defined in the 1940 Act).
10. 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 which enforcement of the change, waiver, discharge
or termination is sought and no amendment of this Agreement shall be effective
until approved by a vote of a majority of the outstanding voting securities of
the Fund, if such approval is required by applicable law.
11. Use of Name. It is understood that the name "Boston Safe
Advisors, Inc." or the name of any of its affiliates, or any derivative
associated with those names, are the valuable property of the Subadviser and its
affiliates and that the Trust and/or the Trust's distributor, Atlas Securities,
Inc., have the right to use such name(s) or derivative(s) in offering materials
and sales literature of the Trust so long as this agreement is in effect with
respect to any Fund or Additional Fund, provided that the manner of such use
shall have the Subadviser's prior written approval, which approval may not be
unreasonably withheld. Upon termination of the Agreement with respect to any or
all of the Funds or Additional Funds the Trust (or Fund) shall forthwith cease
to use such names(s) or derivative(s).
12. Miscellaneous.
A. This Agreement shall be governed by the laws of the State
of California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the 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 hereof 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.
==============================================================================
Subadvisory Agreement among Atlas Advisers, Inc., Atlas Funds,
and Boston Safe Advisors, Inc.
Dated February 23, 2007
Page 5 of 7
D. Except as expressly authorized and provided for in this
Agreement, the Subadviser shall be deemed to be an independent contractor and
shall not in any way be deemed an agent of the Adviser, the Trust or the Funds.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed as of the day and year first above written.
ATLAS ADVISERS, INC.
By:
--------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
ATLAS FUNDS
By:
--------------------------------
X. Xxxxxxxx Key
President and Chief Operating
Officer
BOSTON SAFE ADVISORS, INC.
By:
--------------------------------
Xxxx X. Xxxxxxx
==============================================================================
Subadvisory Agreement among Atlas Advisers, Inc., Atlas Funds,
and Boston Safe Advisors, Inc.
Dated February 23, 2007
Page 6 of 7
APPENDIX A
SUBADVISORY AGREEMENT - BOSTON SAFE ADVISORS, INC.
DATED: FEBRUARY 23, 2007
The provisions of the attached Subadvisory Agreement apply to the
following separate series of shares of the Trust:
1. Atlas California Municipal Money Fund
2. Atlas California Municipal Bond Fund
3. Atlas National Municipal Bond Fund
4. Atlas Money Market Fund
APPENDIX B - FEE SCHEDULE
DATED: FEBRUARY 23, 2007
FUND ANNUAL RATE
------------------------------------------------- -----------
Atlas Money Market Fund
On Daily Net Assets 0.10%
Atlas California Municipal Money Fund
On Daily Net Assets 0.14%
Atlas California Municipal Bond Fund and
Atlas National Municipal Bond Fund
On the Portion of Daily Total Net Asset Value
on Assets up to and including $100 million 0.20%
On the Portion of Daily Total Net Asset Value
on Assets over $100 million 0.15%
Agreed to February 23, 2007
ATLAS ADVISERS, INC. BOSTON SAFE ADVISORS, INC.
By: By:
-------------------------------- ------------------------------
Xxxxxxx X. Xxxxxx Xxxx Xxxxxxx
Senior Vice President
ATLAS FUNDS
By:
--------------------------------
X. Xxxxxxxx Key
President and Chief Operating
Officer
==============================================================================
Subadvisory Agreement among Atlas Advisers, Inc., Atlas Funds,
and Boston Safe Advisors, Inc.
Dated February 23, 2007
Page 7 of 7