SUB-ADVISORY AGREEMENT
Agreement made this __th day of _____, 199_, by and between
CHARTWELL INVESTMENT PARTNERS, a Partnership under the laws of the
Commonwealth of Pennsylvania, and registered investment adviser ("Sub-
Adviser") and PEGASUS ADVISORY GROUP, INC. and registered investment
adviser ("Adviser").
WHEREAS, The Sports Funds Trust, a Delaware business trust
("Trust") is an open-end management investment company registered under
the Investment Company Act of 1940, as amended ("1940 Act"), the shares
of beneficial interest of the initial series of which are called The
Pegasus Motorsports Growth & Income Fund ("Fund") and are registered
under the Securities Act of 1933, as amended ("1933 Act");
WHEREAS, the Trust has retained the Adviser to render to it
investment advisory and management services pursuant to an Investment
Management Agreement, dated February 23, 1998 ("Management Agreement");
and
WHEREAS, the Adviser desires at this time to retain the Sub-Adviser
to render investment advisory and management services for the Fund and
the Sub-Adviser is willing to render such services;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as
follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser, and the
Sub-Adviser accepts the appointment, to manage the investment and
reinvestment of the assets of the Fund and to furnish other services for
the period and on the terms set forth herein.
2. Delivery of Documents.
(a) Adviser has furnished Sub-Adviser with copies properly
certified or authenticated of each of the following:
(I) Certificate of Trust, as filed with the Secretary of
State of Delaware on November 4, 1997, and all amendments
thereto or restatements thereof;
(ii) Trust Instrument and Trust's By-Laws and amendments
thereto;
(iii) resolutions of Trust's Board of Trustees
authorizing the appointment of Sub-Adviser and approving this
Agreement;
(iv) Trust's Notification of Registration on Form N-8A
under the 1940 Act as filed with the Securities and Exchange
Commission ("SEC") on December 18, 1997 and all amendments
thereto; and
(v) Trust's Registration Statement on Form N-1A under
the 1933 Act (File No. 333-42583) and under the 1940 Act as
filed with the SEC and all amendments thereto.
Adviser will furnish Sub-Adviser from time to time with copies of
all amendments of or supplements to the foregoing and Trust's most
recent Prospectus and Statement of Additional Information (such
Propsectus and Statement of Additional Information, as presently in
effect, and all amendments and supplements thereto are herein
collectively called the "Prospectus").
(b) By executing this Agreement, the Adviser acknowledges prior
receipt of the Sub-Adviser's Part II of Form ADV filed with the
Securities and Exchange Commission.
3. Management. The Sub-Adviser will: (i) manage the investment and
reinvestment of the Fund's assets in accordance with the applicable
investment objectives, policies and limitations set forth in the Trust's
Prospectus and applicable laws and regulations; (ii) be subject to the
supervision of the Adviser and the Board of Trustees; and (iii) place
orders for the purchase or sale of securities for the Fund's account
with brokers or dealers selected by the Sub-Adviser. The Sub-Adviser
is authorized, on behalf of the Fund to give instructions to the
custodian of the Fund as to the deliveries of securities and payments
of cash for the account of the Fund. The Sub-Adviser shall have access
to such reports and records of the Fund it deems necessary to perform
it services hereunder.
Except as specifically stated in this Section 3 and Section 10, the
Sub-Adviser shall not be responsible for providing (I) compliance
monitoring, reporting or testing; (ii) record maintenance or
preparation; or (iii) accounting, tax or other services to the Fund.
The Sub-Adviser will prepare and maintain the following: trade orders
and written correspondence with brokers or dealers regarding such trade
orders, written correspondence with the custodian(s) and accountants for
the Fund and all communications with issuers regarding the voting of
securities.
In connection with the selection of brokers or dealers by the Sub-Adviser
and the placing of orders with said brokers or dealers, the Sub-
Adviser will seek for the Fund best execution of orders. The Sub-
Adviser shall not be deemed to have acted unlawfully or to have breached
any duty, created by this Agreement or otherwise, solely by reason of
its having caused the Fund to pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction, if the Sub-Adviser determined in good faith
that such amount of commission was reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer
viewed in terms of either that particular transaction or the Sub-Adviser's
overall responsibilities with respect to the clients of the
Sub-Adviser as to which the Sub-Adviser exercises investment discretion.
The Adviser recognizes that all research services and research that the
Sub-Adviser receives or generates are available for all clients and that
the Fund and other clients may benefit thereby.
The Sub-Adviser shall for all purposes herein provided be deemed
to be an independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent the Fund
or the Adviser in any way or otherwise be deemed an agent of the Fund
or the Adviser.
4. Additional Series. In the event that the Trust establishes one or
more additional series with respect to which the Adviser desires to
retain the Sub-Adviser to render investment advisory and management
services hereunder, the Adviser shall notify the Sub-Adviser in writing.
If the Sub-Adviser is willing to render such services, it shall notify
the Adviser in writing whereupon such series shall become subject to
this Agreement.
5. Compensation. For the services described in Section 3, the Adviser
will pay to the Sub-Adviser as of the close of business on the last
business day of each month, a sub-advisory fee computed at an annual
rate of .70 of the Fund's average daily net assets.
The fee as computed above shall be computed separately for each
series of the Trust subject to this Agreement based on the average daily
net assets of such series. For the month and year in which this
Agreement becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement is in
effect during the month and year, respectively.
All sub-advisory fees hereunder will be invoiced directly to the
Adviser at the address immediately below and be due no later than thirty
(30) days after the date of the invoice.
Pegasus Advisory Group, Inc.
5-H Xxx Xxxxxx Xxxxx
Xxxxxxxxxx XX 00000
6. Non-Exclusivity. The services of the Sub-Adviser under this
Agreement are not to be deemed exclusive, and the Sub-Adviser shall be
free to render similar services or other services to others so long as
its services hereunder are not impaired thereby.
7. Net Asset Value. The net asset value for each series of the Trust
shall be calculated in accordance with the provisions of the Prospectus.
On each day when net asset value is not calculated, the net asset value
of a series shall be deemed to be the net asset value of such series as
of the close of business on the last day on which such calculation was
made for the purpose of the foregoing computations.
8. Limitation of Liability. The Sub-Adviser shall not be liable for
any error of judgment or of law or for any loss suffered by the Trust
or the Adviser in connection with the matters to which this Agreement
relates, except loss resulting from willful misfeasance, bad faith or
gross negligence on the part of the Sub-Adviser in the performance of
its obligations and duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
9. Duration and Termination. This Agreement shall become effective
with respect to the Fund on the date hereof and shall remain in full
force for two years thereafter, unless sooner terminated as hereinafter
provided. This Agreement shall continue in force from year to year
thereafter with respect to each series subject to this Agreement, but
only as long as such continuance is specifically approved for each
series at least annually in the manner required by the 1940 Act and the
rules and regulations thereunder; provided, however, that if the
continuation of this Agreement is not approved for a series, the Sub-
Adviser may continue to serve in such capacity for such series in the
manner and to the extent permitted by the 1940 Act and the rules and
regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Management
Agreement and may be terminated at any time with respect to any series
without the payment of any penalty by the Adviser or by the Sub-Adviser
on sixty (60) days written notice to the other party. The Trust may
effect termination with respect to any series without payment of any
penalty by action of the Board of Trustees or by vote of a majority of
the outstanding voting securities of such series on sixty (60) days
written notice to the Adviser and the Sub-Adviser.
This Agreement may be terminated with respect to any series at any
time without the payment of any penalty by the Board of Trustees of the
Trust, by vote of a majority of the outstanding voting securities of
such series or by the Adviser in the event that it shall have been
established by a court of competent jurisdiction that the Sub-Adviser
or any officer or director of the Sub-Adviser has taken any action which
results in a breach of the covenants of the Sub-Adviser set forth
herein.
The terms "assignment" and "vote" of a majority of the outstanding
voting securities" shall have the meanings set forth in the 1940 Act and
the rules and regulations thereunder.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the
compensation described in Section 5 earned prior to such termination.
10. Proxies, Tender Offers, Class Actions, Etc. The Sub-Adviser will
act as the Trust's agent and attorney-in-fact to vote, tender, convert,
endorse, transfer and deliver securities in the Fund, to elect the form
of dividend payments and to execute proxies, waivers, consents and other
instruments with respect to such securities, subject to any written
instructions received from the Adviser or the Trust within a reasonable
period prior to the action. The Sub-Adviser shall disclose to the
Adviser any material conflict of interest it or its affiliates may have
with respect to the vote or other requested action, within a reasonable
period prior to the action.
11. 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.
12. Notice. 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.
13. Governing Law. This Agreement shall be construed in accordance
with applicable federal law and the laws of the State of Delaware and
the Commonwealth of Pennsylvania, without giving effect to the conflicts
of law principles thereof, and in accordance with the 1940 Act. To the
extent that the applicable laws of the State of Delaware or the
Commonwealth of Pennsylvania conflict with the applicable provisions of
the 1940 Act, the latter shall control.
14. Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by a written instrument signed
on behalf of each of the parties.
15. Entire Agreement. This Agreement is the entire contract between
the parties relating to the subject matter hereof and supersedes all
prior agreements between the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused
this Agreement to be executed as of the day and year first above
written.
CHARTWELL INVESTMENT PARTNERS
By:____________________________
Title:
PEGASUS ADVISORY GROUP, INC.
By:____________________________
Title:_________________________
