Exhibit 99.d.2
SUBADVISORY AGREEMENT
AGREEMENT made as of [DATE OF CLOSING] 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 three series, which invest
in municipal securities (the "Municipal Funds"):
Atlas California Municipal Money Fund
Atlas California Municipal Bond Fund
Atlas National Municipal Bond Fund
WHEREAS, the Trust has retained the Adviser to render investment
management and related administrative services to the Municipal Funds;
WHEREAS, the Adviser and the Trust desire to retain the Subadviser to
furnish portfolio management services to the Municipal Funds in connection with
the Adviser's investment management activities on behalf of the Municipal 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 Municipal 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 Municipal 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.
Subadvisory Agreement among Atlas Advisers, Inc., Atlas Funds, and
Boston Safe Advisors, Inc.
Dated [AS OF DATE OF CLOSING]
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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 Municipal
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 Municipal 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
Municipal 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 Municipal 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 Municipal
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
Municipal 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 Municipal Funds to pay fees to third parties
for information as to potential purchasers or sellers of securities but only if
the Municipal 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.
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The primary objective of the Subadviser in placing
orders for the purchase and sale of securities for the Municipal 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 Municipal Funds (the "Custodian") for appraisal purposes, or
who supply research, market and statistical information to its clients including
the Municipal 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
Municipal 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 Municipal Funds or such depositories or agents
as may be designated by the Custodian, of all cash and/or securities due to or
from the Municipal 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 Municipal 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
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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.
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 Municipal 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 Municipal 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 Municipal 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.
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9. DURATION AND TERMINATION.
A. The initial term of this Agreement shall begin on [DATE
OF CLOSING], which term shall continue until __________, 2004 if the agreement
is approved by the vote of a majority of the outstanding voting securities (as
defined in the ▇▇▇▇ ▇▇▇) of each Municipal 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 Directors of the Company, or by the vote of a majority of the
outstanding voting securities of each Municipal 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
▇▇▇▇ ▇▇▇) of any such party, cast in person at a meeting called for the purpose
of voting on such approval.
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 Municipal 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 Municipal 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.
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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. 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
Municipal 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:
------------------------------------------
▇. ▇▇▇▇▇▇▇▇ Key
Group Senior Vice President and
Chief Operating Officer
ATLAS FUNDS
By:
------------------------------------------
▇. ▇▇▇▇▇▇▇▇ Key
Group Senior Vice President and
Chief Operating Officer
BOSTON SAFE ADVISORS, INC.
By:
------------------------------------------
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BOSTON SAFE ADVISORS, INC.
SUBADVISORY AGREEMENT
FEE SCHEDULE
DATED [DATE OF CLOSING]
For the
Atlas Municipal Funds
FUND ANNUAL RATE
------------------------------------- -----------
Atlas Municipal Money Funds
On the Combined Daily Net Assets 0.14%
Atlas Municipal Bond Funds
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 [DATE OF CLOSING]
ATLAS ADVISERS, INC. BOSTON SAFE ADVISORS, INC.
By: By:
-------------------------------- -------------------------
▇. ▇▇▇▇▇▇▇▇ Key
Group Sr. Vice President and
Chief Operating Officer
ATLAS FUNDS
By:
--------------------------------
▇. ▇▇▇▇▇▇▇▇ Key
Group Senior Vice President and
Chief Operating Officer
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