INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT dated as of ________, by and between
COVA SERIES TRUST (the "Trust"), a Massachusetts business trust, and
COVA INVESTMENT ADVISORY CORPORATION (the "Advisor"), an Illinois corporation.
1. (a) Retention of Advisor by Trust. The Trust hereby employs the Advisor to
act as the investment advisor for and to (i) manage the investment and
reinvestment of the assets of the Quality Bond Portfolio, Small Cap Stock
Portfolio, Large Cap Stock Portfolio, Select Equity Portfolio, International
Equity Portfolio, Bond Debenture Portfolio, Mid-Cap Value Portfolio, Large Cap
Research Portfolio, Developing Growth Portfolio, Lord Xxxxxx Growth and Income
Portfolio, Balanced Portfolio, Equity Income Portfolio, Growth & Income Equity
Portfolio, Xxxxx Stock Portfolio and Xxxxx U.S. Government Securities
Portfolio, each being a sub-trust of the Trust (hereinafter referred to
individually as the "Sub-Trust"), in accordance with each such Sub-Trust's
investment objective and policies and limitations, or (ii) in the event the
Advisor shall retain a sub-advisor in accordance with the provisions of
sub-paragraph (b) hereunder, to supervise and implement the investment
activities of any Sub-Trust for which such sub-advisor has been retained,
including responsibility for overall management and administrative support
including managing, providing for and compensating any sub-advisors; and to
administer its affairs to the extent requested by, and subject to the review and
supervision of, the Board of Trustees of the Trust for the period and upon the
terms herein set forth. The Advisor shall select the entities with or through
which the purchase, sale or loan of securities is to be effected; provided that
the Advisor will place orders pursuant to its investment determinations either
directly with the issuer or with a broker or dealer, and if with a broker or
dealer, (a) will attempt to obtain the best net price and most favorable
execution of its orders, and (b) may nevertheless in its discretion purchase and
sell portfolio securities from and to brokers and dealers who provide the
Advisor with research, analysis, advice and similar services and pay such
brokers and dealers in return a higher commission or spread than may be charged
by other brokers or dealers.
The Trust hereby authorizes any entity or person associated with the Advisor or
any sub-advisor retained by Advisor pursuant to this Agreement, which is a
member of a national securities exchange, to effect any transaction on the
exchange for the account of the Trust which is permitted by Section 11(a) of the
Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust
hereby consents to the retention of compensation for such transactions in
accordance with Rule 11a2-2(T)(a)(iv).
The investment of funds shall be subject to all applicable restrictions of
applicable law and of the Declaration of Trust and By-Laws of the Trust, and
resolutions of the Board of Trustees of the Trust with respect to each Sub-Trust
as may from time to time be in force and delivered or made available to the
Advisor.
(b) Advisor's Acceptance of Employment. The Advisor accepts such employment and
agrees during such period to render such services, to select, retain and
compensate any sub-advisors, to supply investment research and portfolio
management (including without limitation the selection of securities for each
Sub-Trust to purchase, hold or sell and the selection of brokers through whom
such Sub-Trust's portfolio transactions are executed, in accordance with the
policies adopted by the Sub-Trust and its Board of Trustees), to administer the
business affairs of each Sub-Trust, to furnish offices and necessary facilities
and equipment to each Sub-Trust, to provide administrative services for each
Sub-Trust, to render periodic reports to the Board of Trustees of the Trust with
respect to each Sub-Trust, and to permit any of its officers or employees, or
those of any sub-advisor to serve without compensation as trustees or officers
of the Sub-Trust if elected to such positions.
(c) Independent Contractor. The Advisor and any sub-advisors shall be deemed to
be independent contractors under this Agreement and any sub-advisory agreements
with the Advisor and, unless otherwise expressly provided or authorized, shall
have no authority to act for or represent the Trust or any Sub-Trust in any way
or otherwise be deemed an agent of the Trust or any Sub-Trust.
(d) Non-Exclusive Agreement. The services of the Advisor to any Sub-Trust under
this Agreement are not to be deemed exclusive, and the Advisor shall be free to
render similar services or other services to others so long as its services
hereunder are not impaired thereby.
2. (a) Fee. For the services and facilities described in Section 1, each
Sub-Trust will pay to the Advisor at the end of each calendar month an
investment management fee equal to a percentage of the average daily net assets
of such Sub-Trust as set forth in Schedules A through O attached hereto and
incorporated by reference herein.
(b) Determination of Net Asset Value. The net asset value of each Sub-Trust
shall be calculated as of the close of the New York Stock Exchange (the
"Exchange") on each day the Exchange is open for trading or such other time or
times as the trustees may determine in accordance with the provisions of
applicable law and of the Declaration of Trust and By-Laws of the Trust, and
resolutions of the Board of Trustees of the Trust as from time to time in force.
For the purpose of the foregoing computations, on each day when net asset value
is not calculated, the net asset value of a share of beneficial interest of each
Sub-Trust shall be deemed to be the net asset value of such share as of the
close of business of the last day on which such calculation was made.
(c) Proration. For the month and year in which this Agreement becomes effective
or terminates, there shall be an appropriate proration of the Advisor's fee on
the basis of the number of days that the Agreement is in effect during such
month and year, respectively.
3. Expenses. In addition to the fee of the Advisor, the Sub-Trust shall assume
and pay any expenses for services rendered by a custodian for the safekeeping of
such Sub-Trust's securities or other property, for keeping its books of account,
for any other charges of the custodian and for calculating the net asset value
of the Sub-Trust as provided above. Neither the Advisor nor any sub-advisor
shall be required to pay, and each Sub-Trust shall assume and pay, the charges
and expenses of its operations, including compensation of the trustees of the
Trust (other than those who are interested persons of the Advisor or any
sub-advisor and other than those who are interested persons of the principal
underwriter of the Sub-Trust but not of the Advisor or any sub-advisor, if the
principal underwriter has agreed to pay such compensation), charges and expenses
of independent accountants, of legal counsel and of any transfer or dividend
disbursing agent, costs of acquiring and disposing of portfolio securities,
interest (if any) on obligations incurred by such Sub-Trust, costs of share
certificates, membership dues in the Investment Company Institute or any similar
organization, costs of reports and notices to shareholders, costs of registering
shares of such Sub-Trust under the federal securities laws, miscellaneous
expenses and all taxes and fees to federal, state or other governmental agencies
on account of the registration of securities issued by such Sub-Trust, filing of
corporate documents or otherwise. Neither the Trust nor any Sub-Trust shall pay
or incur any obligation for any management or administrative expenses for which
the Trust or such Sub-Trust intends to seek reimbursement from the Advisor
without first obtaining the written approval of the Advisor. The Advisor shall
arrange, if desired by the Trust, for officers or employees of the Advisor or
any sub-advisor to serve, without compensation from the Trust, as trustees,
officers or agents of the Trust if duly elected or appointed to such positions
and subject to their individual consent to any limitations imposed by law.
4. Interested Persons. Subject to applicable statutes and regulations, it is
understood that trustees, officers, shareholders and agents of the Trust or any
Sub-Trust are or may be interested in the Advisor or any sub-advisor as
trustees, directors, officers, shareholders, agents or otherwise and that the
trustees, directors, officers, shareholders and agents of the Advisor may be
interested in the Trust and any Sub-Trust as trustees, officers, shareholders,
agents or otherwise.
5. Liability. The Advisor shall not be liable for any error in judgment or of
law, or for any loss suffered by the Trust or any Sub-Trust in connection with
the matters to which this Agreement or any sub-advisory agreement relates,
except (1) a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Advisor in the performance of its obligations and
duties, or (2) by reason of its reckless disregard of its obligations and duties
under this Agreement.
6. (a) Term. This Agreement shall become effective on the date hereof and shall
remain in full force until _______________ unless sooner terminated
as hereinafter provided. This Agreement shall continue in force from
year to year thereafter, but only as long as such continuance is specifically
approved at least annually in the manner required by the Investment Company Act
of 1940, as amended (the "Investment Company Act"). Any sub-advisory agreement
between the Advisor and any sub-advisor shall remain in full force and effect
from its date of effectiveness until the second anniversary of such date unless
sooner terminated as hereinafter provided. Any such sub-advisory agreement shall
continue in force from year to year thereafter, but only as long as such
continuance is specifically approved at least annually in the manner required by
the Investment Company Act.
(b) Termination. This Agreement, and any sub-advisory agreement between the
Advisor and any sub-advisor, shall be submitted to the shareholders of the Trust
and each Sub-Trust for approval at a shareholders' meeting and shall
automatically terminate if not approved by a majority of the shares of the
Sub-Trust present and voting at such meeting. This Agreement, and any
sub-advisory agreement between the Advisor and any sub-advisor, shall
automatically terminate in the event of its assignment. This Agreement, and any
sub-advisory agreement between the Advisor and any sub-advisor, may be
terminated at any time without the payment of any penalty by a majority of the
Board of Trustees of the Trust, by vote of the outstanding shares of beneficial
interest of any Sub-Trust or, in the case of this Advisory Agreement only, by
the Advisor or, in the case of a sub-advisory agreement between the Advisor and
any sub-advisor, the sub-advisor, on sixty (60) days written notice to the other
party. The Trust or any Sub-Trust may effect termination by action of the Board
of Trustees or by vote of a majority of the outstanding shares of beneficial
interest of such Sub-Trust, accompanied by appropriate notice. No sub-advisory
agreement shall be cancelable by the Advisor without the approval of a majority
of the Board of Trustees of the Trust. Any sub-advisory agreement will terminate
automatically in the event of the termination of this Agreement.
(c) Payment upon Termination. Termination of this Agreement shall not affect the
right of the Advisor to receive payment on any unpaid balance of the
compensation described in Section 2 earned prior to such termination.
7. Consistency with Sub-Advisory Agreements. The Advisor shall not enter into
any sub-advisory agreement with any sub-advisor respecting the management of
assets of any Sub-Trust which is inconsistent with the terms hereof or with the
Investment Company Act or the Investment Advisers Act of 1940.
8. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder shall not
be thereby affected.
9. Notices. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
10. Disclaimer. The Advisor acknowledges and agrees that, as provided by Section
5.5 of the Declaration of Trust of the Trust, the shareholders, trustees,
officers, employees and other agents of the Trust and any Sub-Trust shall not
personally be bound by or liable hereunder, nor shall resort be had to their
private property for the satisfaction of any obligation or claim hereunder.
IN WITNESS WHEREOF, the Trust and the Advisor have caused this Agreement to be
executed on the day and year first above written.
COVA INVESTMENT ADVISORY CORPORATION
By:____________________________________________
COVA SERIES TRUST
By:____________________________________________
EXHIBIT A
COVA SERIES TRUST
BOND DEBENTURE PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_____________ , the Bond Debenture Portfolio shall pay to the Advisor at
the end of each calendar month an investment management fee equal to
.750 of 1% of the average daily net assets of the Bond Debenture Portfolio.
EXHIBIT B
COVA SERIES TRUST
QUALITY BOND PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
____________, the Quality Bond Portfolio shall pay to the Advisor at the end
of each calendar month an investment management fee equal to a percentage of
the average daily net assets of the Quality Bond Portfolio as follows:
Average Daily Net Assets % Per Annum
First $75 Million .550 of 1%
Over $75 Million .500 of 1%
EXHIBIT C
COVA SERIES TRUST
SELECT EQUITY PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
______________, the Select Equity Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to a
percentage of the average daily net assets of the Select Equity Portfolio
as follows:
Average Daily Net Assets % Per Annum
First $50 Million .750 of 1%
Over $50 Million .650 of 1%
EXHIBIT D
COVA SERIES TRUST
LARGE CAP STOCK PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_______________, the Large Cap Stock Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to .650 of 1% of
the average daily net assets of the Large Cap Stock Portfolio.
EXHIBIT E
COVA SERIES TRUST
SMALL CAP STOCK PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_______________, the Small Cap Stock Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to .850 of 1% of
the average daily net assets of the Small Cap Stock Portfolio.
EXHIBIT F
COVA SERIES TRUST
INTERNATIONAL EQUITY PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
______________ , the International Equity Portfolio shall pay to the Advisor
at the end of each calendar month an investment management fee equal
to a percentage of the average daily net assets of the International Equity
Portfolio as follows:
Average Daily Net Assets % Per Annum
First $50 Million .850 of 1%
Over $50 Million .750 of 1%
EXHIBIT G
COVA SERIES TRUST
MID-CAP VALUE PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_________________, the Mid-Cap Value Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee of 1.00% of the
average daily net assets of the Mid-Cap Value Portfolio.
EXHIBIT H
COVA SERIES TRUST
LARGE CAP RESEARCH PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
______________, the Large Cap Research Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee of 1.00% of the average
daily net assets of the Large Cap Research Portfolio.
EXHIBIT I
COVA SERIES TRUST DEVELOPING GROWTH PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
______________, the Developing Growth Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee of .90% of the average
daily net assets of the Developing Growth Portfolio.
EXHIBIT J
COVA SERIES TRUST
LORD XXXXXX GROWTH AND INCOME PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_________________, the Lord Xxxxxx Growth and Income Portfolio shall pay to the
Advisor at the end of each calendar month an investment management fee of .65%
of the average daily net assets of the Lord Xxxxxx Growth and Income Portfolio.
EXHIBIT K
COVA SERIES TRUST
BALANCED PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
______________, the Balanced Portfolio shall pay to the Advisor at the end of
each calendar month an investment management fee of 1.00% of the average
daily net assets of the Balanced Portfolio.
EXHIBIT L
COVA SERIES TRUST
EQUITY INCOME PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
__________________, the Equity Income Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee of 1.00% of the
average daily net assets of the Equity Income Portfolio.
EXHIBIT M
COVA SERIES TRUST
GROWTH & INCOME EQUITY PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_________________, the Growth & Income Equity Portfolio shall pay to the Advisor
at the end of each calendar month an investment management fee of 1.00% of the
average daily net assets of the Growth & Income Equity Portfolio.
EXHIBIT N
COVA SERIES TRUST
XXXXX STOCK PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_______________, the Xxxxx Stock Portfolio shall pay to the Advisor at the end
of each calendar month an investment management fee of .95% of the average daily
net assets of the Xxxxx Stock Portfolio.
EXHIBIT O
COVA SERIES TRUST
XXXXX U.S. GOVERNMENT SECURITIES PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_____________________, the Xxxxx U.S. Government Securities Portfolio shall pay
to the Advisor at the end of each calendar month an investment management fee of
.75% of the average daily net assets of the Xxxxx U.S. Government Securities
Portfolio.
